EPA420-D-99-001

EPA

Draft Regulatory Impact Analysis

Control of Air Pollution from 

New Motor Vehicles: 

Tier 2 Motor Vehicle Emissions Standards 

and Gasoline Sulfur Control Requirements

U.S. Environmental Protection Agency

Office of Air and Radiation

Office of Mobile Sources

April 1999

Executive Summary

iii

Executive Summary

Proposed Vehicle Standards

Today’s notice proposes new federal emission standards (“Tier 2 standards") for passenger

cars and light trucks. The program is designed to reduce vehicle emissions of nitrogen oxides

(NOx) and non-methane organic gases (NMOG) (which consist primarily of hydrocarbons (HC)

and volatile organic compounds (VOCs)); NOx and NMOG contribute to the formation of ozone

and particulate matter (PM) which are harmful air pollutants. The program would also, for the

first time, apply the same federal standards to passenger cars and all light trucks (“light LDTs”

and “heavy LDTs”).

The proposed Tier 2 standards would reduce new vehicle NOx levels to an average of 0.07

grams per mile (g/mi). For new passenger cars and light LDTs, these standards would phase in

beginning in 2004, with the standards to be fully phased in by 2007. For heavy LDTs, the

proposed Tier 2 standards would be phased in beginning in 2008, with full compliance in 2009. 

During the phase-in period from 2004-2007, all passenger cars and light LDTs not certified to

Tier 2 standards would have to meet an interim average standard of 0.30 g/mi NOx, equivalent to

the current NLEV standards for LDVs. During the period 2004-2008, heavy LDTs not certified

to Tier 2 standards would phase in an average standard of 0.20 g/mi NOx, with an emissions cap

of 0.60 g/mi NOx

Manufacturers would be allowed to comply with the very stringent proposed new standards

in a flexible way, assuring that the average emissions of a company’s production met the target

emission levels while allowing the manufacturer to choose from several more- and less-stringent

emission categories for certification. The proposed requirements also include more stringent PM

standards, which primarily affect diesel vehicles, and more stringent hydrocarbon controls

(exhaust NMOG and evaporative emissions standards).

Proposed Gasoline Sulfur Requirements

The other major part of today’s proposal would significantly reduce average gasoline sulfur

levels nationwide beginning in 2004, and likely earlier due to the proposed incentive program to

encourage early sulfur reductions. Refiners would generally install advanced refining equipment

to remove sulfur in their refining processes. Importers of gasoline would be required to import

and market only gasoline meeting the proposed sulfur limits. Temporary, less stringent

standards would apply to certain small refiners. 

EPA is proposing that gasoline produced by refiners and sold by gasoline importers

generally meet an average sulfur standard of 30 ppm and a cap of 80 ppm. The proposed

program builds upon the existing regulations covering gasoline content as it relates to emissions

performance. It includes provisions for trading of sulfur credits, increasing the flexibility
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

iv

available to refiners for complying with the new requirements. The proposed credit program is

intended to ease compliance uncertainties by providing refiners the flexibility to phase in early

controls in 2000-03 and use credits generated in these years to delay some control to 2006. As

proposed, the program would achieve expected environmental benefits while providing

substantial flexibility to refiners. The effect of the credit program is that those refiners that

participate would have the opportunity for more overall lead-time to attain the final sulfur levels.

Cost-Effectiveness of the Proposed Tier2/Sulfur Program

A comparison of the costs of our proposed program with the emission reductions it is

estimated to achieve leads us to conclude that it is a cost-effective means of reducing pollution. 

The cost-effectiveness of the Tier 2/gasoline sulfur proposal, considering only the NOx and

hydrocarbon reductions which it will yield, ranges from $1,800 to $2,180 per ton. This range

compares favorably with other mobile and stationary source controls. For example, both the Tier

1 and NLEV vehicle standards had similar cost-effectiveness to the standards we are proposing

today. For stationary sources, similar levels of reductions in NOx and hydrocarbon emissions

could cost up to $10,000 per ton. We believe that the program we are proposing today will be an

efficient and significant step towards reaching attainment and maintenance of the NAAQS.

Highlights of the Benefit-Cost Analysis

We also made an assessment of the monetary value of the health and general welfare

benefits that would result from our proposed standards. This assessment made use of many of

the same data sets, models, and assumptions already used in previous EPA rulemakings. As a

result, our benefits assessment included methods which have already received review by the

public, other Federal agencies, and/or the independent Science Advisory Board. 

In our benefits assessment, we estimated that our proposed standards would, in the long

term, result in the yearly avoidance approximately 800 to 2400 premature deaths, approximately

4700 to 8000 cases of bronchitis, and significant numbers of hospital visits, lost work days, and

an assortment of respiratory ailments. Our proposed standards will also produce welfare benefits

relating to agricultural crop damage, visibility, and nitrogen deposition in rivers and lakes. The

results indicate that, based on the particular assumptions, models, and data used in this

preliminary benefit-cost analysis, the range of monetary benefits realized after full turnover of

the fleet to Tier 2 vehicles would be approximately 3.3 billion to 19.5 billion dollars per year. 

Comparing this estimate of the economic benefits with the adjusted cost estimate indicates that

the net economic benefit of the proposed standards to society could be from a net cost of 0.2

billion to a net benefit of 16.0 billion dollars per year. Our benefit-cost analysis should be

considered preliminary due to limitations in the data and models available for analysis in

advance of today’s proposal. Additional, more refined analysis will be conducted prior to

issuance of final standards. 
Table of Contents

v

Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

List of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi

List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv

List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xx

Chapter I: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

A. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

B. Overview of the Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

1. Vehicle Emission Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

2. Gasoline Sulfur Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Chapter II: Health and Welfare Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

A. Ozone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

1. Health and Welfare Effects of Ozone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2

B. Particulate Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4

1. Health and Welfare Effects of Particulate Matter . . . . . . . . . . . . . . . . . . . . . . . II-5

C. Carbon Monoxide ................................................... II-6

D. Visibility and Regional Haze .......................................... II-7

Chapter II. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-9

Chapter III: Environmental Impact ............................................. III-1

A. Inventory Impacts of Tier 2/Sulfur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

1. NOx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5

a. Light-Duty NOx Trends Without Tier 2/Sulfur ..................... III-5

b. NOx Reductions Due To Tier 2/Sulfur . . . . . . . . . . . . . . . . . . . . . . . . . . III-10

c. NOx Emission Reductions From Other Options . . . . . . . . . . . . . . . . . . . III-15

2. VOC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-17

a. Light-Duty VOC Trends Without Tier 2/Sulfur ................... III-17

b. VOC Reductions Due To Tier 2/Sulfur . . . . . . . . . . . . . . . . . . . . . . . . . . III-21

c. VOC Emission Reductions From Other Options . . . . . . . . . . . . . . . . . . . III-26

3. SOx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-27

a. Light-Duty SOx Trends Without Sulfur Control ................... III-27

b. SOx Reductions Due To Sulfur Control . . . . . . . . . . . . . . . . . . . . . . . . . III-29

4. Particulate Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-30

a. “No Growth” Diesel Sales Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-31

b. “Increased Growth” Sales Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-35

B. Air Quality Measures ............................................... III-39
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

vi

1. Ozone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-40

a. Measures of Current Attainment and Non-attainment . . . . . . . . . . . . . . . III-40

b. General Description of Ozone Modeling in the OTAG Domain to Estimate the

Effect of Tier 2/Sulfur Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-42

c. The “Rollback Method” for Estimating Design Values Resulting from Control

Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-43

d. Specific Simulations Used to Evaluate Tier 2/Sulfur . . . . . . . . . . . . . . . III-46

e. Results of the NOX-only and VOC-only Runs . . . . . . . . . . . . . . . . . . . . . III-46

f. Details of the Tier 2/Sulfur Ozone Modeling Runs . . . . . . . . . . . . . . . . . III-47

2. Visibility/Regional Haze ......................................... III-49

C. Air Toxics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-50

1. Health Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-51

a. Benzene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-51

b. 1,3-Butadiene .............................................. III-53

c. Formaldehyde ............................................. III-53

d. Acetaldehyde .............................................. III-54

e. Diesel Particulate Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-55

2. Assessment of Emissions and Exposure ............................. III-57

a. Emissions Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-57

b. Nationwide Toxic Emissions Estimates – Baseline Scenario . . . . . . . . . III-62

c. Exposure – Baseline Scenario ................................. III-63

d. Impact of Potential Vehicle and Fuel Controls . . . . . . . . . . . . . . . . . . . . III-65

e. Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-69

Chapter III. References ..................................................... III-70

Chapter IV: Technological Feasibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

A. Feasibility of Tier 2 Exhaust Emission Standards for LDVs and LDTs . . . . . . . . . IV-1

1. NMOG and NOx Emissions from Gasoline-Fueled Vehicles . . . . . . . . . . . . . . IV-1

a. Technology Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

b. Data Supporting Tier 2 Technical Feasibility . . . . . . . . . . . . . . . . . . . . . IV-14

c. Lean-Burn Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-25

2. CO Emissions from Gasoline Fueled Vehicles . . . . . . . . . . . . . . . . . . . . . . . . IV-25

3. Formaldehyde Emissions from Gasoline Fueled Vehicles . . . . . . . . . . . . . . . IV-26

4. Evaporative Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-27

5. Diesel Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-28

B. Feasibility of Removing Sulfur from Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-29

1. Source of Gasoline Sulfur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-29

2. Current Levels of Sulfur in Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-30

3. Feasibility of Meeting the Proposed Gasoline Sulfur Standards . . . . . . . . . . . IV-32

4. Meeting a Low Sulfur Gasoline Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-33

5. Improved Gasoline Desulfurization Technology . . . . . . . . . . . . . . . . . . . . . . IV-37

6. Expected Desulfurization Technology to be Used by Refiners . . . . . . . . . . . IV-40

7. Feasibility for a Low Gasoline Sulfur Standard in 2004 . . . . . . . . . . . . . . . . . IV-40

8. Phase In of Compliance with the Proposed Sulfur Standards . . . . . . . . . . . . . IV-45
Table of Contents

vii

Chapter IV. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-51

Chapter V: Economic Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

A. Impact of Tier 2 Standards on Vehicle Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

1. Manufacturer Costs for Tier 2 Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

a. Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

b. Hardware Costs for Exhaust Emissions Control . . . . . . . . . . . . . . . . . . . . V-3

c. Hardware Costs for Evaporative Emissions Control . . . . . . . . . . . . . . . . V-15

d. Assembly Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-17

e. Development and Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-17

f. Total Near-term and Long-term Manufacturer Costs . . . . . . . . . . . . . . . V-19

2. Tier 2 Vehicle Consumer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-22

3. Annual Total Nationwide Costs for Tier 2 Vehicles . . . . . . . . . . . . . . . . . . . . V-23

a. Overview of Nationwide Vehicle Costs . . . . . . . . . . . . . . . . . . . . . . . . . V-23

b. Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-24

c. Estimates of Total Nationwide Vehicle Costs by Vehicle Class . . . . . . . V-26

B. Gasoline Desulfurization Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-30

1. Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-30

a. Cost Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-33

b. Determination of Blendstock Sulfur Levels . . . . . . . . . . . . . . . . . . . . . . V-41

2. The Cost of Desulfurizing Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-46

a. The Cost of the Averaging Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-46

b. Verification of the Desulfurization Cost Based on the Improved 

Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-50

c. Future Cost of Desulfurization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-52

d. Comparison with Previous Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . V-55

3. Other Effects of This Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-58

a. Effect of the Cap Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-58

b. Other Effects on the Refining Industry . . . . . . . . . . . . . . . . . . . . . . . . . . V-60

c. Refinery Energy and Global Warming Impacts . . . . . . . . . . . . . . . . . . . . V-62

4. Per Vehicle Life-Cycle Fuel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-70

5. Aggregate Annual Fuel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-73

a. Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-74

b. Explanation of Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-75

C. Combined Vehicle and Fuel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-80

1. Combined Costs Per Vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-80

2. Combined Total Annual Nationwide Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . V-80

Chapter V. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-83

Chapter VI: Cost-Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

A. Overview of the Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

1. Temporal and Geographic Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

2. Baselines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-2
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

viii

B. Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-4

1. Near and Long-Term Cost Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-4

2. Vehicle and Fuel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

3. Cost Crediting for PM and SO2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

C. Emission Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-7

1. NOx and NMHC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-7

2. Irreversibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-11

3. Primary Particulate Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-13

4. Sulfur Dioxide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-14

D. Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-15

APPENDIX VI-A : Discounted Lifetime Tonnage Values for Exhaust Emissions . . . . . VI-20

APPENDIX VI-B : Discounted Lifetime Tonnage Values for Evaporative Emissions . VI-24

Chapter VI. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-25

Chapter VII: Benefit-Cost Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1

A. Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2

B. Air Quality Impacts ................................................ VII-6

1. Ozone Air Quality Estimates ...................................... VII-6

a. Modeling Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-7

b. Simulation Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-8

c. UAM-V Model Output . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-8

d. Converting Episode Estimates to Full-Season Profiles .............. VII-8

e. Extrapolating from Monitored to Unmonitored Locations . . . . . . . . . . . VII-9

f. Ozone Air Quality Results ................................... VII-10

2. PM Air Quality Estimates ....................................... VII-11

a. Climatological Regional Dispersion Model . . . . . . . . . . . . . . . . . . . . . VII-12

b. Development of the S-R Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-12

c. Fugitive Dust Adjustment Factor .............................. VII-13

d. Normalizing S-R Matrix Results to Measured Data . . . . . . . . . . . . . . . VII-14

e. Development of Annual Median PM2.5 Concentrations . . . . . . . . . . . . . VII-15

f. PM Air Quality Results ..................................... VII-15

3. Nitrogen Deposition Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-16

4. Visibility Degradation Estimates Using the S-R Matrix ................ VII-18

C. Benefits Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-19

1. Overview of Benefits Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-20

2. Issues in Estimating Changes in Health Effects . . . . . . . . . . . . . . . . . . . . . . VII-27

a. Baseline Incidences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-31

b. Thresholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-31

3. PM- and Ozone-related Health Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-31

a. Premature Mortality ........................................ VII-32

b. Chronic Bronchitis ......................................... VII-37

c. Hospital Admissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-39
Table of Contents

ix

d. Acute Bronchitis .......................................... VII-43

e. PM-related Upper Respiratory Symptoms . . . . . . . . . . . . . . . . . . . . . . . VII-43

f. PM-related Lower Respiratory Symptoms . . . . . . . . . . . . . . . . . . . . . . VII-44

g. Ozone-related Any of 19 Respiratory Symptoms . . . . . . . . . . . . . . . . . VII-45

h. Work Loss Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-46

i. Minor Restricted Activity Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-46

j. Worker Productivity ....................................... VII-47

4. Ozone- and PM-Related Welfare Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-48

a. Commodity Agricultural Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-48

b. Nitrogen Deposition ........................................ VII-49

c. Household Soiling Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-52

d. Visibility ................................................ VII-53

e. Ozone- and PM-related Welfare Effect Benefits Estimation . . . . . . . . . VII-57

5. Total Aggregated Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-57

6. Sensitivity Analyses ........................................... VII-58

7. Limitations of the Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-60

a. PM Mortality Risk and Health Effects ......................... VII-62

b. Unquantifiable Benefits ..................................... VII-63

c. Potential Disbenefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-66

d. Projected Income Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-68

D. Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-68

Chapter VII References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-70

Chapter VIII: Regulatory Flexibility ......................................... VIII-1

A. Requirements of the Regulatory Flexibility Act .......................... VIII-1

B. Description of Affected Entities ...................................... VIII-2

1. Small Refiners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-3

2. Small Petroleum Marketers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-4

3. Small Certifiers of Covered Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-4

C. Projected Costs of the Proposed Gasoline Sulfur Standards ................ VIII-5

D. The Types and Number of Small Entities to Which the Proposed Rule 

Would Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-5

E. Projected Reporting, Recordkeeping, and Other Compliance Requirements of the

Proposed Rule .................................................... VIII-6

F. Other Relevant Federal Rules Which May Duplicate, Overlap, or Conflict with the

Proposed Rule .................................................... VIII-7

G. Regulatory Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-7

1. Small Refiners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-7

a. Interim Sulfur Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-8

b. Hardship Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-10

2. Small Certifiers of Covered Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-11

Chapter VIII. References .................................................. VIII-13
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

x

Appendix A: 47-State and Four-Cities Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

Appendix B: Evidence Supporting the Irreversibility of Sulfur's Emission Impact . . . . . . . . . B-1

A. Exhaust Emission Sensitivity to Sulfur Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

B. Theory Supporting the Reversibility and Irreversibility of Sulfur’s Emission Impact B-3

C. Results of Sulfur Reversibility Test Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

1. Coordinating Research Council (CRC) Sulfur Reversibility Program . . . . . . . . B-6

2. American Petroleum Institute Sulfur Reversibility Program . . . . . . . . . . . . . . . B-8

3. Johnson Matthey Sulfur Reversibility Program . . . . . . . . . . . . . . . . . . . . . . . . B-13

4. Other Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-15

D. Criteria for Evaluating Sulfur Reversibility Data . . . . . . . . . . . . . . . . . . . . . . . . . . . B-15

E. Projected Levels of Sulfur Irreversibility In-Use . . . . . . . . . . . . . . . . . . . . . . . . . . . B-18

Appendix C: One-Hour and Eight-Hour County Design Values . . . . . . . . . . . . . . . . . . . . . . . C-1

Appendix D: EPA’s Legal Authority for Proposing Gasoline Sulfur Controls . . . . . . . . . . . D-1

A. EPA’s Current Regulatory Requirements for Gasoline . . . . . . . . . . . . . . . . . . . . . . D-1

B. How the Proposed Gasoline Sulfur Control Program Meets the CAA Section 211(c)

Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-2

1. Health and Welfare Concerns of Air Pollution Caused by Sulfur in Gasoline . D-2

2. Impact of Gasoline Sulfur Emission Products on Emission Control Systems . D-3

3. Sulfur Levels that Tier 2 Vehicles Can Tolerate . . . . . . . . . . . . . . . . . . . . . . . . D-4

4. Sulfur Sensitivity of Other Catalysts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-6

5. Effect of Gasoline Sulfur Control on the Use of Other Fuels or Fuel Additives D-7
Acronyms, Tables, and Figures

xi

List of Acronyms

A/F air/fuel ratio

AML acute myeloid leukemia

ANPRM Advanced Notice of Proposed Rulemaking

API American Petroleum Institute

ASTM American Society for Testing and Materialss

bbl barrel

BCA benefit-cost analysis

BTU British Thermal Unit

C-R concentration response

CAA or the Act Clean Air Act

CAP Compliance Assurance Program (2000)

CARB California Air Resources Board

CASAC Clean Air Science Advisory Committee

CG conventional gasoline

CML chronic myeloid leukemia

CO carbon monoxide

COI cost of illness

COPD chronic obstructive pulmonary disease

cpsi cells per square inch

CRC Coordinating Research Council

CRDM Climatological Regional Dispersion Model

DOE U.S. Department of Energy

EGR exhaust gas recirculation

EHC electrically heated catalyst

EIA Energy Information Administration

EPA or the Agency U.S. Environmental Protection Agency

ERIC Emissions Reduction and Intercept Control (system)

FCC fluidized catalytic cracker

FTP Federal Test Procedure

GDI gasoline direct injection

GVWR gross vehicle weight rating

HAPEM Hazardous Air Pollutant Exposure Model
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

xii

HC hydrocarbon

HDV heavy-duty vehicle

HEGO heated exhaust gas oxygen (sensor)

I/M inspection/maintenance

ICI independent commercial importer

IRFA initial regulatory flexibility analysis

LDT light-duty truck

LDV light-duty vehicle

LEV low emission vehicle

LPG liquid petroleum gas

MDV medium-duty vehicle

MECA Manufacturers of Emission Controls Association

MLE maximum likelihood estimate

MRAD minor restricted activity days

MSCF thousand standard cubic feet

MTBE methyl tertiary-butyl ether

NAAQS National Ambient Air Quality Standards

NAPAP National Acid Precipitation Assessment Program

NFRAQS Northern Front Range Air Quality Study

NLEV national low emission vehicle

NMHC non-methane hydrocarbons

NMOG non-methane organic gases

NO2 nitrogen dioxide

NOx oxides of nitrogen

NPC National Petroleum Council

NPRA National Petrochemical & Refiners Association

NPRM Notice of Proposed Rulemaking

OAQPS Office of Air Quality Planning and Standards

OBD on-board diagnostics

OMB Office of Management and Budget

OMS Office of Mobile Sources

OMS Office of Mobile Sources

ORNL Oak Ridge National Laboratory

OSTP (White House) Office of Science and Technology Policy

OTAG Ozone Transport Assessment Group
Acronyms, Tables, and Figures

xiii

PADD Petroleum Administrative Districts for Defense

PCM powertrain control module

Pd palladium

PM particulate matter

PNGV Partnership for a New Generation of Vehicles

ppm part per million

Pt platinum

R&D research and development

RFA Regulatory Flexibility Act

RfC reference concentration

RFG reformulated gasoline

Rh rhodium

ROI return on investment

ROTR Regional Ozone Transport Rule

RPE retail price equivalent

RVP Reid Vapor Pressure

S-R Matrix Source-Receptor Matrix

S&P DRI Standard & Poor’s Data Research International

SAB Science Advisory Board

SBA U.S. Small Business Administration

SBARP or the Panel Small Business Advocacy Review Panel

SBREFA Small Business Regulatory Enforcement Fairness Act

SCR selective catalytic reduction

SER Small Entity Representative

SFTP Supplemental Federal Test Procedure

SIC Standard Industrial Classification

SIGMA Society of Independent Gasoline Marketers of America

SIP State Implementation Plan

SO2 sulfur dioxide

SOx oxides of sulfur

SULEV super ultra low emission vehicle

SVM small volume manufacturer

SVM small volume manufacturer (of vehicles)

SwRI Southwest Research Institute

TOG total organic gases
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

xiv

TW test weight

UAM Urban Airshed Model

UCL upper confidence limit

UEGO universal exhaust gas oxygen (sensor)

ULEV ultra low emission vehicle

UV ultra violet

VMT vehicle miles traveled

VNA Voronoi Neighbor Averaging

VOC volatile organic compound

WLD work loss days

WTP willingness to pay
Acronyms, Tables, and Figures

xv

List of Tables

Table III-1. 47-State Light Duty NOx Emissions Without Tier 2/Sulfur ................ III-6

Table III-2. Four-City Light-Duty NOx Emissions Without Tier 2/Sulfur .............. III-7

Table III-3. Light-Duty Contribution to Total NOx Inventory Without Tier 2/Sulfur ..... III-10

Table III-4. 47-State Light-Duty NOx Reductions Due To Tier 2/Sulfur .............. III-10

Table III-5. Four-City Light-Duty NOx Emissions With Tier 2/Sulfur ................ III-12

Table III-6. Percent Reduction From Light-Duty and 

Total Baseline NOx Emissions in Four Cities ................................ III-13

Table III-7. Light-Duty Contribution to Total NOx Inventory With Tier 2/Sulfur ....... III-15

Table III-8. 47-State Light-Duty NOx Reductions From Alternative Control Options .... III-16

Table III-9. NOx Reduction Shortfall From Alternative Control 

Options Relative to Today’s Proposal ...................................... III-17

Table III-10. 47-State Light-Duty VOC Emissions Without Tier 2/Sulfur ............. III-18

Table III-11. Four-City Light-Duty VOC Emissions Without Tier 2/Sulfur ............ III-19

Table III-12. Light-Duty Contribution to Total VOC Inventory Without Tier 2/Sulfur . . . III-21

Table III-13. 47-State Light-Duty VOC Reductions Due to Tier 2/Sulfur .............. III-21

Table III-14. Four-City Light-Duty VOC Reductions Due To Tier 2/Sulfur ............ III-23

Table III-15. Percent Reduction From Light-Duty and 

Total Baseline VOC Emissions in Four Cities ................................ III-24

Table III-16. Light-Duty Contribution to Total VOC Inventory With Tier 2/Sulfur ...... III-26

Table III-17. 47-State Light-Duty VOC Reductions From Alternative Control Options . . . III-26

Table III-18. VOC Reduction Shortfall From Alternative 

Control Options Relative to Today’s Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-27

Table III-19. 47-State SOx Emissions Without Sulfur Control ...................... III-28

Table III-20. 47-State Light-Duty SOx Reductions Due To Sulfur Control ............ III-29

Table III-21. 47 State Light-Duty Direct Exhaust PM2.5 Emissions Without Tier 2/Sulfur

No Growth in Diesel Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-32

Table III-22. 47-State Light-Duty Direct Exhaust PM2.5 Reductions Due To Tier 2/Sulfur 

No Growth in Diesel Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-33

Table III-23. 47-State Light-Duty PM10 Emissions With and Without Tier 2/Sulfur Control 

No Growth in Diesel Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-35

Table III-24. Diesel LDT Sales Penetration Under Increased Growth Scenario ......... III-36

Table III-25. 47 State Light-Duty Direct Exhaust PM2.5 Emissions Without Tier 2/Sulfur 

Increased Diesel Growth Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-37

Table III-26. 47-State Light-Duty Direct Exhaust PM2.5 Reductions Due To Tier 2/Sulfur 

Increased Diesel Growth Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-38

Table III-27. Percent Reductions for Tier 2/Sulfur Ozone Modeling Runs ............. III-46

Table III-28. Percentage Reductions from the 2007 Post-ROTR Inventory of NOx and NMHC

.................................................................... III-48

Table III-29. NFRAQS Compositional Analysis of PM2.5 Samples . . . . . . . . . . . . . . . . . . . III-49

Table III-30. Percentage of PM2.5 Coming from Gasoline Vehicles . . . . . . . . . . . . . . . . . . III-49

Table III-31. Percentage of Total PM2.5 From Gasoline Vehicles . . . . . . . . . . . . . . . . . . . . III-50

Table III-32. Example of Data File Format for Toxic Adjustment Factors ............. III-59
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

xvi

Table III-33. Average Nationwide Highway Vehicle Toxic Emission Rates (mg/mi)

In 1990, 1996, 2007, and 2020, for Baseline Scenarios. ........................ III-62

Table III-34. Average Nationwide Highway Vehicle Toxic Exposure (:g/m3

)

In 1990, 1996, 2007, and 2020, for Baseline Scenarios. ........................ III-64

Table III-35. Average Nationwide Highway Vehicle 

Toxic Emission Rates (mg/mi) in 2007, for Various Scenarios ................... III-67

Table III-36. Average Nationwide Highway Vehicle 

Toxic Emission Rates (mg/mi) in 2020, for Various Scenarios ................... III-67

Table III-37. Average Nationwide Highway Vehicle Toxic Exposures for the Entire Population

(:g/m3

) in 2007, for Various Scenarios ..................................... III-68

Table III-38. Average Nationwide Highway Vehicle Toxic Exposures for the Entire Population

(:g/m3

) in 2020, for Various Scenarios ..................................... III-68

Table IV-1. Emission Control Hardware and Techniques Projected to Meet Proposed Tier 2

Vehicle Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

Table IV-2. Number of Engine Families with One or More Engine/Vehicle Configurations with

Low Full-life NOx Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-15

Table IV-3. 1999 Engine Families with One or More Vehicle Configurations 

with Full-life NOx Certification Levels at or below 0.07 g/mile NOx . . . . . . . . . . . . . IV-15

Table IV-4. MECA Test Program: Emissions with Catalysts Aged to 100,000 Miles . . . . IV-19

Table IV-5. ARB Production LEV LDV Passenger Car Emission Data. . . . . . . . . . . . . . . . IV-19

Table IV-6. ARB Modified Passenger Car Emission Data . . . . . . . . . . . . . . . . . . . . . . . . . IV-20

Table IV-7. ARB Ford Expedition Baseline Emission Test Results . . . . . . . . . . . . . . . . . . IV-20

Table IV-8. ARB Expedition Emission Results with Advanced Catalyst Systems . . . . . . . IV-21

Table IV-9. Emission Technology Gaps Between LDVs and LDTs . . . . . . . . . . . . . . . . . . IV-23

Table IV-10. CO Emissions from California LEVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-26

Table IV-11. Formaldehyde Emissions from California LEVs . . . . . . . . . . . . . . . . . . . . . . IV-27

Table IV-12. Average Sulfur Levels by PADD and for the Nation. . . . . . . . . . . . . . . . . . . IV-32

Table IV-13. Leadtime Required Between Promulgation of the Final Rule and Implementation

of the Gasoline Sulfur Standard (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-41

Table IV-14. Distribution of Refineries by Current Gasoline Sulfur Level . . . . . . . . . . . . . IV-46

Table IV-15. Effect of Phase-In of Sulfur Control to Meet Sulfur Caps in 2004 and 2005 . IV-49

Table V-1. Main or Underfloor Catalyst Cost Breakdown . . . . . . . . . . . . . . . . . . . . . . . . . . . V-6

Table V-2. Total Estimated Per Vehicle Manufacturer 

Incremental Hardware Costs for the Tier 2 Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . V-9

Table V-3. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDV Compared to

NLEV LDV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

Table V-4. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT1 Compared to

NLEV LDT1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

Table V-5. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT2 Compared to

NLEV LDT2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12

Table V-6. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT3 Compared to

Tier 1 LDT3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-13

Table V-7. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT4 Compared to

Tier 1 LDT4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-14

Table V-8. Potential Evaporative Improvements and Their Costs to Manufacturers . . . . . . V-16
Acronyms, Tables, and Figures

xvii

Table V-9. Per Vehicle Fixed Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-19

Table V-10. Total Per Vehicle Manufacturer Costs - Near Term . . . . . . . . . . . . . . . . . . . . V-20

Table V-11. Long-term Total Incremental Per Vehicle Manufacturer Costs . . . . . . . . . . . . V-22

Table V-12. Incremental Per Vehicle Costs to Consumers for Tier 2 Vehicles . . . . . . . . . . V-23

Table V-13. Estimated Annual Nationwide Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-24

Table V-14. Estimated Annual 49-State Vehicle Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-25

Table V-15. Projected Overall Industry Phase-in of Tier 2 Vehicles and Improved Evaporative

Emissions Controls For Purposes of the Aggregate Cost Analysis . . . . . . . . . . . . . . . V-26

Table V-16. Annual Nationwide Costs For Tier 2 LDVs . . . . . . . . . . . . . . . . . . . . . . . . . . . V-27

Table V-17. Annual Nationwide Costs For Tier 2 LDT1s . . . . . . . . . . . . . . . . . . . . . . . . . . V-27

Table V-18. Annual Nationwide Costs For Tier 2 LDT2s . . . . . . . . . . . . . . . . . . . . . . . . . . V-28

Table V-19. Annual Nationwide Costs For Tier 2 LDT3s . . . . . . . . . . . . . . . . . . . . . . . . . . V-28

Table V-20. Annual Nationwide Costs For Tier 2 LDT4s . . . . . . . . . . . . . . . . . . . . . . . . . . V-29

Table V-21. Annual Nationwide Costs For Tier 2 LDVs and LDTs . . . . . . . . . . . . . . . . . . V-29

Table V-22. Raw Material and Utility Needs and Desulfurization Capabilities for Several

Desulfurization Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-34

Table V-23. Offsite Factors for Different Sized Refineries . . . . . . . . . . . . . . . . . . . . . . . . . V-36

Table V-24. Labor Costs in Selected Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-37

Table V-25. Capital Cost Factors Which Vary by PADD . . . . . . . . . . . . . . . . . . . . . . . . . . V-37

Table V-26. Economic Cost Factors Used and the Resulting Capital Amortization Factor . V-39

Table V-27. Summary of Costs Taken From EIA and NPC Data Tables . . . . . . . . . . . . . . V-40

Table V-28. PADD 1 Blendstock Sulfur Levels and Gasoline Pool Fraction . . . . . . . . . . . V-43

Table V-29. PADD 2 Blendstock Sulfur Levels and Gasoline Pool Fraction . . . . . . . . . . . V-44

Table V-30. PADD 3 Blendstock Sulfur Levels and Gasoline Pool Fraction . . . . . . . . . . . V-44

Table V-31. PADD 4 Blendstock Sulfur Levels and Gasoline Pool Fraction . . . . . . . . . . . V-45

Table V-32. PADD 5 Outside of California Blendstock 

Sulfur Levels and Gasoline Pool Fraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-45

Table V-33. Projected Volume of Gasoline Produced by an Average Refinery in each PADD, by

Each PADD of Refineries and for the U.S.* in 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . V-46

Table V-34. Per-Gallon Cost of Desulfurizing Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . V-47

Table V-35. Estimated Average Per-Refinery Capital and Operating Cost of Desulfurizing

Gasoline to 150 ppm and 30 ppm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-48

Table V-36. Aggregate Cost of Desulfurizing Gasoline to 150 ppm and 30 ppm . . . . . . . . V-49

Table V-37. Summary of the Cost of Desulfurization by the CDTECH Process Based on 90

percent Desulfurization Severity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-51

Table V-38. Projected Future Average Per-Gallon National Cost of Desulfurizing 

Gasoline to 30 ppm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-55

Table V-39. Cost of Desulfurizing Gasoline by Refiners in PADDs 1 & 3 Reported in the “EPA

Staff Paper on Gasoline Sulfur Issues,” and our Current Costs. . . . . . . . . . . . . . . . . . . V-56

Table V-40. A Comparison of the Per-Gallon Gasoline Desulfurization Cost of Improved

Desulfurization Technologies to that of the Earlier Mobil Octgain Process for PADD 3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-57

Table V-41. Energy Consumed by PADD 3 Refineries in 1994, Projected to 1997 . . . . . . . V-63

Table V-42. Estimated Yearly Energy and Hydrogen Demand of CDTECH

 Desulfurization Units in PADD 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-64
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

xviii

Table V-43. Estimated Yearly Energy and Hydrogen Demand of OCTGAIN

 Desulfurization Units in PADD 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-65

Table V-44. Undiscounted Per-vehicle Costs of 

Low Sulfur Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-71

Table V-45. Discounted Per-vehicle Costs of 

Low Sulfur Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-72

Table V-46. Fleet Average Per-vehicle Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-73

Table V-47. Increased Annualized Fuel Cost as a Result of Today’s Proposed Tier 2 Gasoline

Sulfur Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-74

Table V-48. Stratification of Heavy-Duty Gasoline Fleet using Vehicle Count Projections V-77

Table V-49. Calculation of Gasoline Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-78

Table V-50. Aggregate Annualized Fuel Costs per Year from 2004 to 2020 . . . . . . . . . . . V-79

Table V-51. Total Incremental Per Vehicle Costs to Consumers 

Over the Life of a Tier 2 Vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-80

Table V-52. Total Annualized Costs to the Nation for Tier 2 Vehicles 

and Low Sulfur Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-82

Table VI-1. Fleet-average, Per-vehicle Costs Used in Cost-effectiveness . . . . . . . . . . . . . . . VI-5

Table VI-2. Fleet Average Per-vehicle Costs Used in Cost-effectiveness . . . . . . . . . . . . . . . VI-7

Table VI-3. Weighting Factors for NOx and NMHC Lifetime Tonnage Values . . . . . . . . . . VI-9

Table VI-4. Vehicle Class Sales Weighting Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-10

Table VI-5. Fleet-average, Per-vehicle Discounted 

Lifetime Tons for the NLEV Baseline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-10

Table VI-6. Fleet-average, Per-vehicle Discounted Lifetime Tons 

for Proposed Tier 2 Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-10

Table VI-7. Fleet-average, Per-vehicle Discounted Lifetime Tons 

Used in Cost-effectiveness Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-13

Table VI-8. Cost-effectiveness of the Proposed Standards . . . . . . . . . . . . . . . . . . . . . . . . . VI-15

Table VI-9. Alternative program options evaluated by EPA . . . . . . . . . . . . . . . . . . . . . . . . VI-16

Table VI-10. Cost-effectiveness of Previously Implemented 

Mobile Source Programs (Costs Adjusted to 1997 Dollars) . . . . . . . . . . . . . . . . . . . . . VI-17

Table VII-1. Emission Estimates by Vehicle Type and Reductions Associated with Adoption of

the Tier 2 Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-5

Table VII-2. Summary of UAM-V Derived Hourly Ozone Air Quality .............. VII-11

Table VII-3. Summary of S-R Matrix Derived PM Air Quality .................... VII-16

Table VII-4. Summary of 2010 Nitrogen Deposition in Selected Estuaries ........... VII-17

Table VII-5. Summary of 2010 Visibility Degradation Estimates ................... VII-19

Table VII-6. Unquantified Benefit Categories .................................. VII-25

Table VII-7. Quantified and Monetized Primary Health and Welfare Effects . . . . . . . . . . VII-26

Table VII-8. Key Differences Between Low and High Assumption Sets . . . . . . . . . . . . . VII-27

Table VII-9. PM and Ozone Health Concentration-Response Function Summary Data . . VII-29

Table VII-10. Summary of Mortality Valuation Estimates ........................ VII-36

Table VII-11. Derivation of Cost of Illness (COI) and Total WTP Estimates for Hospital

Admissions Endpoints ................................................. VII-42

Table VII-12. Quantified Welfare Effects Included in the Benefits Analysis .......... VII-48

Table VII-13. Class I Areas Included in Visibility Study By Region ................ VII-55
Acronyms, Tables, and Figures

xix

Table VII-14. Estimated Coefficients Used in the Valuation of 

WTP for Improved Visibility ............................................ VII-56

Table VII-15. Welfare Endpoint Monetary Benefits ............................. VII-57

Table VII-16. Avoided Incidence and Monetized Benefits Associated with the 

 Tier 2 Rule for a Range of Assumption Sets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-59

Table VII-17. Sources of Uncertainty in the Benefit Analysis ...................... VII-61

Table VII-18. PM Health Effects and Benefits (No Lag and Lag of up to Five Years) . . . VII-63

Table VII-19. Adjusted Cost for Comparison to Benefits ......................... VII-69

Table VIII-1. Industries Containing Small Businesses 

Potentially Affected by Today’s Proposed Rule ............................. VIII-3

Table VIII-2. Costs for a 19,000 bbls gasoline/day 

Refinery to Produce 30 ppm Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-5

Table VIII-3. Types and Number of Small Entities to 

Which the Proposed Tier 2/Gasoline Sulfur Rule Would Apply ................. VIII-6

Table VIII-4. Federal Gasoline Sulfur Program with Sulfur 

Standards of 30 ppm on Average and an 80 ppm Per-Gallon Cap . . . . . . . . . . . . . . . . VIII-9

Table VIII-5. Federal Gasoline Sulfur Program with Sulfur 

Standards Above 30 ppm on Average and an 80 ppm Per-Gallon Cap . . . . . . . . . . . . VIII-9
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

xx

List of Figures

Figure III-1. 47-State Light-Duty NOx Emissions Without Tier 2/Sulfur (Annual Tons) . . . III-6

Figure III-2: Breakdown of Total 2020 47 State NOx Inventory Without Tier 2 .......... III-9

Figure III-3. Breakdown of Total 2020 Atlanta NOx Inventory Without Tier 2 .......... III-9

Figure III-4. 47-State Light-Duty NOx Emissions With Tier 2/Sulfur ................ III-11

Figure III-5. Breakdown of Total 2020 47-State NOx Inventory With Tier 2/Sulfur ..... III-14

Figure III-6. Breakdown of Total 2020 Atlanta NOx Inventory With Tier 2/Sulfur ...... III-14

Figure III-7. 47-State Light-Duty VOC Emissions Without Tier 2/Sulfur ............. III-18

Figure III-8. Breakdown of Total 2020 47-State VOC Inventory Without Tier 2/Sulfur . . III-20

Figure III-9. Breakdown of Total 2020 Atlanta VOC Inventory Without Tier 2/Sulfur . . . III-20

Figure III-10. 47-State Light-Duty VOC Emissions With Tier 2/Sulfur ............... III-22

Figure III-11. Breakdown of Total 2020 47 State VOC Inventory With Tier 2/Sulfur .... III-25

Figure III-12. Breakdown of Total 2020 Atlanta VOC Inventory With Tier 2/Sulfur ..... III-25

Figure III-13. 47-State Light-Duty SOx Emissions Without Sulfur Control ............ III-28

Figure III-14. 47-State Light-Duty SOx Emissions With Tier 2/Sulfur ................ III-30

Figure III-15. 47-State Light-Duty Direct Exhaust PM2.5 Emissions Without Tier 2/Sulfur -

No Diesel Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-32

Figure III-16. 47-State Light-Duty Direct Exhaust PM2.5 Emissions With Tier 2/Sulfur - 

No Diesel Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-33

Figure III-17. 47-State Light-Duty Direct Exhaust PM2.5 Without Tier 2/Sulfur - 

Increased Diesel Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-37

Figure III-18. 47-State Light-Duty Direct Exhaust PM2.5 Emissions With Tier 2/Sulfur Increased

Diesel Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-38

Figure III-19. Example Plot of Target Fuel Benzene Versus 

Baseline Fuel TOG under FTP Conditions .................................. III-60

Figure IV-1. Impact of Coating Architecture on HC and NOx Emissions . . . . . . . . . . . . . . IV-10

Figure IV-2. Map of U.S. Petroleum Administrative Districts for Defense . . . . . . . . . . . . . IV-31

Figure IV-3. Diagram of a Typical Complex Refinery . . . . . . . . . . . . . . . . . . . . . . . . IV-34

Figure V-1. Distribution of Progress Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-21

Figure V-2. Cost of Reducing Gasoline Sulfur in PADD 1 . . . . . . . . . . . . . . . . . . . . . . . . . . V-67

Figure V-3. Cost of Reducing Gasoline Sulfur in PADD 2 . . . . . . . . . . . . . . . . . . . . . . . . . . V-67

Figure V-4. Cost of Reducing Gasoline Sulfur in PADD 3 . . . . . . . . . . . . . . . . . . . . . . . . . . V-68

Figure V-5. Cost of Reducing Gasoline Sulfur in PADD 4 . . . . . . . . . . . . . . . . . . . . . . . . . . V-68

Figure V-6. Cost of Reducing Gasoline Sulfur in PADD 5 Outside of California . . . . . . . . V-69

Figure V-7. National Cost of Reducing Gasoline Sulfur Outside of California . . . . . . . . . . V-69

Figure V-8. Total Annualized Costs of Tier 2 Vehicles and Low Sulfur Gasoline. . . . . . . . V-81

Figure VII-1. UAM-V Modeling Domain for Eastern U.S. . . . . . . . . . . . . . . . . . . . . . . . . . VII-7

Figure VII-2. VNA Spatial Interpolation ........................................ VII-9

Figure VII-3. Example Benefits Analysis Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-22
Chapter I: Introduction

I-1

Chapter I: Introduction

The U.S. Environmental Protection Agency (EPA, the Agency) prepared this Regulatory

Impact Analysis (RIA) for its proposed rule on Tier 2 Motor Vehicle Emissions Standards and

Gasoline Sulfur Control Requirements. The purpose of this RIA is to present EPA’s estimates of

the likely costs, benefits, and industry impacts associated with the implementation of both the

Tier 2 vehicle standards and the gasoline sulfur requirements. 

The remainder of this chapter summarizes the background information and provisions of the

proposed rulemaking. Subsequent chapters in this RIA present the following information:

• Chapter II presents the health and welfare concerns of motor vehicle emissions including,

ozone (and ozone precursors), particulate matter, and carbon monoxide.

• Chapter III summarizes our analysis of the impact of the Tier 2/Sulfur proposal on

emission inventories, ozone and visibility levels, and air toxics emissions and exposures.

• Chapter IV examines the technological feasibility of the proposed Tier 2 exhaust emissions

standards for light-duty vehicles (LDVs) and light-duty trucks (LDTs), as well as the

feasibility of removing sulfur from gasoline.

• Chapter V talks about the economic impact of the proposed rule, including the impact of

the proposed Tier 2 standards on vehicle costs, the impact of the gasoline sulfur

requirements on gasoline desulfurization costs, and the combined vehicle and fuel costs per

vehicle and nationwide.

• Chapter VI discusses the cost-effectiveness of the proposed vehicle and fuel standards. 

The analysis in this chapter focuses on the costs and emission reductions associated with a

single vehicle meeting the Tier 2 emissions standards while operating on low sulfur fuel. 

• Chapter VII analyzes and estimates the economic impact of the proposed standards by

defining and quantifying the various expected consequences and representing those

consequences in terms of dollars. This analysis provides a means for comparing the

expected benefits of the proposed standards to the expected costs.

• Chapter VIII concludes this RIA with a presentation of the Initial Regulatory Flexibility

Analysis for the proposed rule. This analysis evaluates the impacts of the proposed Tier 2

motor vehicle and gasoline sulfur standards on small businesses.

A. Background

On July 31, 1998, EPA submitted its Tier 2 Report to Congress, a formal report which
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

a On April 28, 1998, EPA published a notice of availability announcing the release of a draft of the Tier 2

study and requesting comments on the draft. The final report to Congress included a summary and analysis of the

comments EPA received. 

I-2

contained the results of its draft Tier 2 Study.a

 The purpose of the Tier 2 Study was to examine

the appropriateness of requiring more stringent emission standards for new passenger cars and

light-duty trucks. More specifically, EPA was directed by Congress to assess the air quality

need, technical feasibility, and cost-effectiveness of more stringent motor vehicle emission

standards–emission standards more stringent than federal “Tier 1" standards.

The results of the study indicated that, beginning in 2004, emission reductions will be

necessary to meet and maintain the National Ambient Air Quality Standards (NAAQS) for both

ozone and particulate matter (PM). Air quality modeling showed that during 2007-10, when Tier

2 standards would be fully implemented, several areas in the U.S. would still be in nonattainment

for ozone and PM, even after the implementation of existing emission controls. EPA also found

ample evidence that technologies would be available to meet more stringent Tier 2 standards. In

addition, the Tier 2 Study provided evidence that such standards could be implemented at a cost

(per ton of reduced pollutants) comparable to the costs of other programs designed for similar air

quality problems. Finally, the study identified several additional issues in need of further

examination, including the relative stringency of car and light truck emission standards, the

appropriateness of identical versus different standards for gasoline and diesel vehicles, and the

effects of sulfur in gasoline on vehicle catalyst efficiency.

On May 1, 1998, EPA released its Staff Paper on Gasoline Sulfur Issues which presented its

understanding of the impact of gasoline sulfur on emissions from motor vehicles and explored

what gasoline producers and automobile manufacturers could do to reduce sulfur’s impact on

emissions. The staff paper noted that gasoline sulfur is a catalyst poison and that high sulfur

levels in commercial gasoline could affect the ability of future automobiles to meet more

stringent standards in use. It also pointed out that sulfur control would provide additional

benefits by lowering emissions from the current fleet of vehicles. 

Based on the statutory requirements described above and the evidence provided in the Tier 2

Study, as updated in the Preamble, EPA is proposing its determination that new, more stringent

emission standards are indeed needed, technologically feasible, and cost effective. 

B. Overview of the Proposal

Although the nation’s air quality is improving, tens of millions of Americans will continue

to be exposed to unhealthy air pollution levels in the future if new emission controls are not

imposed on motor vehicles. EPA is therefore proposing a major, comprehensive program

designed to significantly reduce emissions from passenger cars and light trucks (including sportutility vehicles, minivans, and pickup trucks). Under the proposed program, automakers would

produce vehicles designed to have very low emissions when operated on low-sulfur gasoline,
Chapter I: Introduction

b

By comparison, the NOx standards for the National Low Emission Vehicle (NLEV) program, which will

be in place nationally in 2001, range from 0.30 g/mi for passenger cars to 0.50 g/mi for medium-sized light trucks. 

For further comparison, the standards met by today’s Tier 1 vehicles range from 0.60 g/mi to 1.53 g/mi. 

c

There are also NMOG standards associated with both the interim and Tier 2 standards. The NMOG

standards vary depending on which of various individual sets of emission standards manufacturers choose to use in

complying with the average NOx standard. This “bin” approach is described more fully in section IV.B.

I-3

and oil refiners would provide that cleaner gasoline nationwide. In the proposed rule, EPA

refers to this comprehensive program as the “Tier 2/Gasoline Sulfur Control Program” or simply

as the “Tier 2/Sulfur Program.” 

1. Vehicle Emission Standards

Today’s notice proposes new federal emission standards (“Tier 2 standards") for passenger

cars and light trucks. The program is designed to reduce vehicle emissions of nitrogen oxides

(NOx) and non-methane organic gases (NMOG) (which consist primarily of hydrocarbons (HC)

and volatile organic compounds (VOCs)); NOx and NMOG contribute to the formation of ozone

and particulate matter (PM) which are harmful air pollutants. The program would also, for the

first time, apply the same federal standards to passenger cars and all light trucks (“light LDTs”

and “heavy LDTs”).

The proposed Tier 2 standards would reduce new vehicle NOx levels to an average of 0.07

grams per mile (g/mi). For new passenger cars and light LDTs, these standards would phase in

beginning in 2004, with the standards to be fully phased in by 2007.b

 For heavy LDTs, the

proposed Tier 2 standards would be phased in beginning in 2008, with full compliance in 2009. 

During the phase-in period from 2004-2007, all passenger cars and light LDTs not certified to

Tier 2 standards would have to meet an interim average standard of 0.30 g/mi NOx, equivalent to

the current NLEV standards for LDVs.c During the period 2004-2008, heavy LDTs not certified

to Tier 2 standards would phase in an average standard of 0.20 g/mi NOx, with an emissions cap

of 0.60 g/mi NOx.

Manufacturers would be allowed to comply with the very stringent proposed new standards

in a flexible way, assuring that the average emissions of a company’s production met the target

emission levels while allowing the manufacturer to choose from several more- and less-stringent

emission categories for certification. The proposed requirements also include more stringent PM

standards, which primarily affect diesel vehicles, and more stringent hydrocarbon controls

(exhaust NMOG and evaporative emissions standards).

2. Gasoline Sulfur Standards

The other major part of today’s proposal would significantly reduce average gasoline sulfur

levels nationwide beginning in 2004, and likely earlier due to the proposed incentive program to
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

I-4

encourage early sulfur reductions. Refiners would generally install advanced refining equipment

to remove sulfur in their refining processes. Importers of gasoline would be required to import

and market only gasoline meeting the proposed sulfur limits. Temporary, less stringent

standards would apply to certain small refiners. 

EPA is proposing that gasoline produced by refiners and sold by gasoline importers

generally meet an average sulfur standard of 30 ppm and a cap of 80 ppm. The proposed

program builds upon the existing regulations covering gasoline content as it relates to emissions

performance. It includes provisions for trading of sulfur credits, increasing the flexibility

available to refiners for complying with the new requirements. The proposed credit program is

intended to ease compliance uncertainties by providing refiners the flexibility to phase in early

controls in 2000-03 and use credits generated in these years to delay some control to 2006. As

proposed, the program would achieve expected environmental benefits while providing

substantial flexibility to refiners. The effect of the credit program is that those refiners that

participate would have the opportunity for more overall lead-time to attain the final sulfur levels.
Chapter II: Health and Welfare Concerns

d

 Carbon monoxide also participates in the production of ozone, albeit at a much slower rate than most

VOC and NOx compounds.

II-1

Chapter II: Health and Welfare Concerns

This chapter describes the public health and welfare concerns associated with the pollutants

impacted by this rulemaking, including ozone, particulate matter, carbon monoxide, air toxics,

and regional haze.

 A. Ozone

Ground-level ozone, the main ingredient in smog, is formed by complex chemical reactions

of volatile organic compounds (VOC) and nitrogen oxides (NOx) in the presence of heat and

sunlight. Ozone forms readily in the lower atmosphere, usually during hot summer weather. 

VOCs are emitted from a variety of sources, including motor vehicles, chemical plants,

refineries, factories, consumer and commercial products, and other industrial sources. VOCs

also are emitted by natural sources such as vegetation. NOx is emitted largely from motor

vehicles, nonroad equipment, power plants, and other sources of combustion. 

The science of ozone formation, transport, and accumulation is complex. Ground-level

ozone is produced and destroyed in a cyclical set of chemical reactions involving NOx, VOC,

heat, and sunlight.d

 As a result, differences in NOx and VOC emissions and weather patterns

contribute to daily, seasonal, and yearly differences in ozone concentrations and differences from

city to city. Many of the chemical reactions that are part of the ozone-forming cycle are

sensitive to temperature and sunlight. When ambient temperatures and sunlight levels remain

high for several days and the air is relatively stagnant, ozone and its precursors can build up and

produce more ozone than typically would occur on a single high temperature day. Further

complicating matters, ozone also can be transported into an area from pollution sources found

hundreds of miles upwind, resulting in elevated ozone levels even in areas with low VOC or

NOx emissions.

Emissions of NOx and VOC are necessary for the formation of ozone in the lower

atmosphere. For example, small amounts of NOx enable ozone to form rapidly when VOC

levels are high, but ozone production is quickly limited by removal of the NOx. Under these

conditions, NOx reductions are highly effective in reducing ozone while VOC reductions have

little effect. Such conditions are called “NOx limited.” Because the contribution of VOC

emissions from biogenic (natural) sources to local ambient ozone concentrations can be

significant, even some areas where man-made VOC emissions are low can be NOx limited.

When NOx levels are high and VOC levels relatively low, NOx forms inorganic nitrates but

little ozone. Such conditions are called “VOC limited.” Under these conditions, VOC
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

II-2

reductions are effective in reducing ozone, but NOx reductions can actually increase local ozone. 

 The highest levels of ozone are produced when both VOC and NOx emissions are present in

significant quantities.

Rural areas are almost always NOx limited, due to the relatively large amounts of biogenic

VOC emissions in such areas. Urban areas can be either VOC or NOx limited, or a mixture of

both, in which ozone levels exhibit moderate sensitivity to changes in either pollutant.

Ozone concentrations in an area also can be lowered by the reaction of nitric oxide with

ozone, forming nitrogen dioxide (NO2); as the air moves downwind and the cycle continues, the

NO2 forms additional ozone. The importance of this reaction depends, in part, on the relative

concentrations of NOx, VOC, and ozone, all of which change with time and location. 

1. Health and Welfare Effects of Ozone

Based on a large number of recent studies, EPA has identified several key health effects

caused when people are exposed to levels of ozone found today in many areas of the country.1, 2

Short-term exposures (1-3 hours) to high ambient ozone concentrations have been linked to

increased hospital admissions and emergency room visits for respiratory problems. For example,

studies conducted in the northeastern U.S. and Canada show that ozone air pollution is

associated with 10-20 percent of all of the summertime respiratory-related hospital admissions. 

Repeated exposure to ozone can make people more susceptible to respiratory infection and lung

inflammation and can aggravate preexisting respiratory diseases, such as asthma. Prolonged

exposure to ozone can cause repeated inflammation of the lung, impairment of lung defense

mechanisms, and irreversible changes in lung structure, which could lead to premature aging of

the lungs and/or chronic respiratory illnesses such as emphysema and chronic bronchitis. 

Children are most at risk from ozone exposure because they typically are active outside,

playing and exercising, during the summer when ozone levels are highest. For example, summer

camp studies in the eastern U.S. and southeastern Canada have reported significant reductions in

lung function in children who are active outdoors. Further, children are more at risk than adults

to ozone exposure because their respiratory systems are still developing. Adults who are

outdoors and moderately active during the summer months, such as construction workers and

other outdoor workers, also are among those most at risk. These individuals, as well as people

with respiratory illnesses such as asthma, especially asthmatic children, can experience reduced

lung function and increased respiratory symptoms, such as chest pain and cough, when exposed

to relatively low ozone levels during periods of moderate exertion. 

Several recent studies have shown a possible relationship between exposure to ambient

ozone and premature mortality. This literature has been evolving rapidly. Of the 28 time-series

epidemiology studies identified in the literature that report results on a possible association

between daily ozone concentrations and daily mortality3

, 21 were published or presented since

1995. In particular, a series of studies published in 1995 through 1997 (after closure on the

current ozone NAAQS Criteria Document) from multiple cities in western Europe has increased
Chapter II: Health and Welfare Concerns

II-3

significantly the body of studies finding a positive association. Fifteen of the 28 studies report a

statistically significant relationship between ozone and mortality; the more recent studies tended

to find statistical significance more often than the earlier studies. The ozone-mortality datasets

also have tended to become larger in more recent studies, as longer series of air quality

monitoring data have become available over time. This suggests that it may take many years of

data before the ozone effect can be separated from the daily weather and seasonal patterns with

which it tends to be correlated. 

In 1997, as a part of the Regulatory Impact Analysis (RIA) for the ozone NAAQS

promulgation, EPA staff reviewed this recent literature. They identified nine studies that met a

defined set of selection criteria, and conducted a meta-analysis of the results of the nine studies. 

(U.S. EPA, 1997). See Chapter VII.C.3.a. for a further discussion of this meta-analysis.

In addition to human health effects, ozone adversely affects crop yield, vegetation and forest

growth, and the durability of materials. Because ground-level ozone interferes with the ability of

a plant to produce and store food, plants become more susceptible to disease, insect attack, harsh

weather and other environmental stresses. Ozone causes noticeable foliar damage in many

crops, trees, and ornamental plants (i.e., grass, flowers, shrubs, and trees) and causes reduced

growth in plants. Studies indicate that current ambient levels of ozone are responsible for

damage to forests and ecosystems (including habitat for native animal species). Ozone

chemically attacks elastomers (natural rubber and certain synthetic polymers), textile fibers and

dyes, and, to a lesser extent, paints. For example, elastomers become brittle and crack, and dyes

fade after exposure to ozone. 

VOC emissions are detrimental not only for their role in forming ozone, but also for their

role as air toxics. Some VOCs emitted from motor vehicles are toxic compounds. At elevated

concentrations and exposures, human health effects from air toxics can range from respiratory

effects to cancer. Other health impacts include neurological, developmental and reproductive

effects. Chapter III contains more information about air toxics.

Besides their role as an ozone precursor, NOx emissions produce a wide variety of health

and welfare effects.45 These problems are caused in part by emissions of nitrogen from motor

vehicles. Nitrogen dioxide can irritate the lungs and lower resistance to respiratory infection

(such as influenza). NOx emissions are an important precursor to acid rain and may affect both

terrestrial and aquatic ecosystems. Atmospheric deposition of nitrogen leads to excess nutrient

enrichment problems (“eutrophication”) in the Chesapeake Bay and several nationally important

estuaries along the East and Gulf Coasts. Eutrophication can produce multiple adverse effects

on water quality and the aquatic environment, including increased algal blooms, excessive

phytoplankton growth, and low or no dissolved oxygen in bottom waters. Eutrophication also

reduces sunlight, causing losses in submerged aquatic vegetation critical for healthy estuarine

ecosystems. Deposition of nitrogen-containing compounds also affects terrestrial ecosystems. 

Nitrogen fertilization can alter growth patterns and change the balance of species in an

ecosystem. In extreme cases, this process can result in nitrogen saturation when additions of

nitrogen to soil over time exceed the capacity of plants and microorganisms to utilize and retain

the nitrogen. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

e

Sulfuric acid is a particulate, while nitric acid is a gas at ambient conditions.

II-4

Elevated levels of nitrates in drinking water pose significant health risks, especially to

infants. Studies have shown that a substantial rise in nitrogen levels in surface waters are highly

correlated with human-generated inputs of nitrogen in those watersheds.6

 These nitrogen inputs

are dominated by fertilizers and atmospheric deposition.

Nitrogen dioxide and airborne nitrate also contribute to pollutant haze, which impairs

visibility and can reduce residential property values and tourism revenues. Section II.D. further

describes information about visibility impairment and regional haze.

B. Particulate Matter

Particulate matter (PM) is the general term for the mixture of solid particles and liquid

droplets found in the air. Particulate matter includes dust, dirt, soot, smoke, and liquid droplets

that are directly emitted into the air from natural sources (such as windblown dust and fires) and

manmade sources (such as motor vehicles, construction sites, factories, and driving on unpaved

roads). Secondary PM is formed in the atmosphere through a number of physical and chemical

processes that transform gases such as sulfur dioxide, NOx, and VOC into particles.

Particulate matter is distinguished between larger or "coarse" particles (larger than 2.5

micrometers) and smaller or "fine" particles (smaller than 2.5 micrometers). The characteristics,

sources, and potential health effects of coarse and fine particles are very different. Coarse

particles primarily come from natural sources, such as windblown dust and sea salt. They

remain in the atmosphere a relatively short period of time. Fine particles primarily consist of

secondary particles formed by gaseous emissions and often come from human sources, such as

industrial and residential combustion, vehicle exhaust, and agriculture (including silvicultural

prescribed burning). Fine PM consists primarily of sulfate-based particles (produced from sulfur

oxides (SOx)), nitrate-based particles (produced from NOx), and carbon-based particles emitted

directly from combustion processes and created through transformation of VOC emissions. 

Particles directly emitted from motor vehicles, and those formed by the transformation of motor

vehicle gaseous emissions, tend to be in the fine particle range. 

The formation and fate of secondary PM involves complex processes which are sensitive to

sunlight, temperature, humidity, and other reactants. SOx, NOx, and VOC emissions are

photochemically oxidized and react with water vapor to form sulfuric and nitric acids.e

 Sulfuric

acid reacts with ammonia to form mostly ammonium sulfate and some ammonium bisulfate,

while nitric acid reacts with ammonia to form ammonium nitrate. Ammonia gas is emitted from

biogenic sources and biomass burning, both natural and anthropogenic. If ammonia is in limited

supply, it will react to form sulfate rather than nitrate since sulfuric acid has a higher chemical

affinity for ammonia than does nitric acid. Furthermore, ammonium nitrate reacts with ammonia

and nitric acid in an equilibrium reaction, so nitric acid removal processes such as dry deposition

will also lower the concentration of nitrate PM.
Chapter II: Health and Welfare Concerns

II-5

As a result, a much higher fraction of SOx is converted to PM than is the case for NOx. 

Conversion rates vary depending on local meteorology and the amount of ammonia, NOx, and

SOx in the local atmosphere. However, mobile sources reasonably can be estimated to

contribute to ambient secondary sulfate and nitrate in proportion to their contribution to total

NOx and SOx emissions in a given area geographically.

Mobile sources are significant producers of carbonaceous PM, which consists largely of

elemental carbon directly emitted by diesel vehicles and poorly maintained gasoline vehicles. 

Secondary carbonaceous PM results when VOCs or their photochemical reaction products

adsorb to existing particles. 

In the eastern U.S., based on limited monitoring data, sulfate is the largest single component

of fine PM, closely followed by carbonaceous PM. Nitrate is the third-largest component of fine

PM, accounting for roughly 10 percent of the total. Most of the rest is soil dust. In the West,

again based on limited monitoring data, carbonaceous PM is generally the largest fraction of fine

PM. Sulfate forms a smaller fraction of fine PM than in the East, probably because SOx

emissions are lower. Sulfate still comprises a larger fraction of the total than nitrate, however,

except in parts of California. Soil dust is a more important component of fine PM in the West

than in the East, but is still smaller than nitrate in most places. Throughout the U.S., rural areas

have lower fine PM levels than urban areas.

1. Health and Welfare Effects of Particulate Matter

Scientific studies have linked particulate matter (alone or in combination with other air

pollutants) with a series of health effects.7

 Coarse particles can accumulate in the respiratory

system and aggravate health problems such as asthma. Fine particles penetrate deeply into the

lungs and are more likely than coarse particles to contribute to a number of the health effects. 

These health effects include premature death and increased hospital admissions and emergency

room visits, increased respiratory symptoms and disease, decreased lung function, and alterations

in lung tissue and structure and in respiratory tract defense mechanisms. Children, the elderly,

and people with cardiopulmonary disease, such as asthma, are most at risk from these health

effects. Chapter III contains a discussion of the toxic health effects from particulate matter in

diesel fuel exhaust.

Particulate matter also causes a number of adverse effects on the environment. Fine

particulate matter is the major cause of reduced visibility in parts of the U.S., including many of

our national parks and wilderness areas. (Section II.D. further describes visibility impairment

and regional haze). Other environmental impacts occur when particles deposit onto soil, plants,

water, or materials. For example, particles containing nitrogen and sulfur that deposit onto land

or water bodies may change the nutrient balance and acidity of those environments, leading to

changes in species composition and buffering capacity.

Particles that are deposited directly onto leaves of plants can, depending on their chemical

composition, corrode leaf surfaces or interfere with plant metabolism. When deposited in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

f

This value of the CO concentration decrease is measured by the composite average of the annual second

highest 8-hour concentration.

II-6

sufficient quantities, such as near unpaved roads, tilled fields, or quarries, particles block

sunlight from reaching the leaves, stressing or killing the plant. Finally, particulate matter

causes soiling and erosion damage to materials, including culturally important objects, such as

carved monuments and statues. 

C. Carbon Monoxide

Carbon monoxide (CO) is a colorless, odorless gas produced though the incomplete

combustion of carbon-based fuels. Carbon monoxide enters the bloodstream through the lungs

and reduces the delivery of oxygen to the body’s organs and tissues. The health threat from CO

is most serious for those who suffer from cardiovascular disease, particularly those with angina

or peripheral vascular disease. Healthy individuals also are affected, but only at higher CO

levels. Exposure to elevated CO levels is associated with impairment of visual perception, work

capacity, manual dexterity, learning ability and performance of complex tasks. 

Several recent epidemiological studies have shown a link between CO and premature

mortality and morbidity (including angina, congestive heart failure, and other cardiovascular

diseases). EPA currently is in the process of reviewing these studies as part of the CO Criteria

Document process.

Since 1979, the number of areas in the nation violating the CO NAAQS has decreased by a

factor of almost ten, from 48 areas in 1979 to five areas (covering seven counties) in 1995 and

1996. In 1997, three counties, with a total population of nine million people, failed to meet the

CO standard.

In addition to the substantial decrease in the number of areas where the NAAQS is

exceeded, the severity of the exceedances also has decreased significantly. Nationally, CO

concentrations decreased 38 percent during the past 10 years.f

 From 1979 to 1996, the measured

atmospheric concentrations of CO during an exceedance decreased from 20-25 ppm at the

beginning of the period to 10-12 ppm at the end of the period. Expressed as a multiple of the

standard, atmospheric concentration of CO during an exceedance was two to almost three times

the standard in 1979. By 1996, the CO levels present during an exceedance decreased to 10-30

percent over the nine ppm standard.

Unlike the case with ozone and PM, EPA has not made any recent comprehensive

projections of future ambient CO levels and attainment and maintenance of the CO NAAQS. 

However, section 202(j) of the CAA requires a separate study of the need for more stringent cold

CO standards. EPA is currently conducting this study.
Chapter II: Health and Welfare Concerns

II-7

D. Visibility and Regional Haze

Visibility impairment is the haze that obscures what we see, and is caused by the presence

of tiny particles in the air. These particles cause light to be scattered or absorbed, thereby

reducing visibility. Visibility impairment, also called regional haze, is a complex problem that

relates to several pollutants. Visibility in our national parks and monuments, and many urban

areas of the country, continues to be obscured by regional and local haze.

The principle cause of visibility impairment is fine particles, primarily sulfates, but also

nitrates, organics, and elemental carbon and crustal matter. Particles between 0.1 and one

micrometers in size are most effective at scattering light, in addition to being of greatest concern

for human health. Of the pollutant gases, only NO2 absorbs significant amounts of light; it is

partly responsible for the brownish cast of polluted skies. However, it is responsible for less

than ten percent of visibility reduction. 

In the eastern U.S., reduced visibility is mainly attributable to secondary particles,

particularly those less than a few micrometers in diameter. Based on data collected by the

Interagency Monitoring of Protected Visual Environments (IMPROVE) network for visibility

monitoring, sulfate particles account for about 50-70 percent of annual average light extinction

in eastern locations. Sulfate plays a particularly significant role in the humid summer months,

most notably in the Appalachian, northeast, and mid-south regions. Nitrates, organic carbon, and

elemental carbon each account for between 10–15 percent of total light extinction in most

eastern locations. Rural areas in the eastern U.S. generally have higher levels of impairment

than most remote sites in the western U.S., generally due to the eastern U.S.’s higher levels of

man-made pollution, higher estimated background levels of fine particles, and higher average

relative humidity levels.

The relative contribution of individual pollutants to visibility impairment vary

geographically. While secondary particles still dominate in the West, direct particulate emissions

from sources such as woodsmoke contribute a larger percentage of the total particulate load than

in the East. In the rural western U.S., sulfates also play a significant role, accounting for about

25–40 percent of total light extinction in most regions. In some areas, such as the Cascades

region of Oregon, sulfates account for over 50 percent of annual average light extinction. 

Organic carbon typically is responsible for 15–35 percent of total light extinction in the rural

western U.S. and elemental carbon (absorption) accounts for about 15–25 percent, so the total

carbonaceous contribution is between 30 and 60 percent. Soil dust (coarse PM) accounts for

about 10–20 percent. Nitrates typically account for less than 10 percent of visibility

impairment.8

The CAA requires EPA to protect visibility, or visual air quality, through a number of

programs. These programs include the national visibility program under sections 169a and 169b

of the Act, the Prevention of Significant Deterioration program for the review of potential

impacts from new and modified sources, and the secondary NAAQS for PM10 and PM2.5. The

national visibility program established in 1980 requires the protection of visibility in 156

mandatory Federal Class I areas across the country (primarily national parks and wilderness
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

II-8

areas). The CAA established as a national visibility goal, “the prevention of any future, and the

remedying of any existing, impairment of visibility in mandatory Federal class I areas in which

impairment results from manmade air pollution.” The Act also calls for state programs to make

“reasonable progress” toward the national goal. In July 1997, EPA proposed a program to

address regional haze in the nation’s most treasured national parks and wilderness areas (see 62

FR 41137, July 31, 1997). 

Since mobile sources contribute to visibility-reducing PM, control programs that reduce the

mobile source emissions of direct and indirect PM will have the effect of improving visibility. 

Western Governors, in commenting on the Regional Haze Rule and on protecting the 16 Class I

areas on the Colorado Plateau, stated that, “...the federal government must do its part in

regulating emissions from mobile sources that contribute to regional haze in these areas...” and

called on EPA to make a “binding commitment to fully consider the Commission’s

recommendations related to the ... federal national mobile source emissions control strategies”,

including Tier 2 vehicle emissions standards.9

 The Grand Canyon Visibility Transport

Commission’s report found that reducing total mobile source emissions is an essential part of

any program to protect visibility in the Western U.S.10 The Commission identifies mobile source

pollutants of concern as VOC, NOX, and elemental and organic carbon.
Chapter II: Health and Welfare Concerns

II-9

1. U.S. EPA, 1996, Review of National Ambient Air Quality Standards for Ozone, 

Assessment of Scientific and Technical Information, OAQPS Staff Paper, EPA-452/R96-007.

2. U.S. EPA, 1996, Air Quality Criteria for Ozone and Related Photochemical Oxidants, 

EPA/600/P-93/004aF.

3. U.S. EPA, 1997, Regulatory Impact Analysis for the Ozone NAAQS, Appendix J, 

“Assessment and Synthesis of Available Epidemiological Evidence of Mortality 

Associated with Ambient Ozone from Daily Time-series Analyses”.

4. U.S. EPA, 1995, Review of National Ambient Air Quality Standards for Nitrogen 

Dioxide, Assessment of Scientific and Technical Information, OAQPS Staff

Paper, 

EPA-452/R-95-005

5. U.S.EPA, 1993, Air Quality Criteria for Oxides of Nitrogen, EPA/600/8-91/049aF.

6. Vitousek, Pert M., John Aber, Robert W. Howarth, Gene E. Likens, et al. 1997. Human 

Alteration of the Global Nitrogen Cycle: Causes and Consequences. Issues in Ecology. 

Published by Ecological Society of America, Number 1, Spring 1997.

7. U.S. EPA, 1996, Air Quality Criteria for Particulate Matter, EPA/600/P-95/001aF.

8. “National Air Quality and Emissions Trends Report, 1996", EPA Document Number 

454/R-97-013.

9. Letter from Governor Michael Leavitt of Utah, on behalf of the Western Governors' 

Association, to EPA Administrator Carol Browner, dated June 29, 1998.

10. “Report of the Grand Canyon Visibility Transport Commission to the United States 

Environmental Protection Agency”, June 1996.

Chapter II. References
Chapter III: Environmental Impact

g

Today’s proposal includes a provision for the averaging, banking and trading (ABT) of sulfur levels which

would allow average sulfur levels to be higher than 30 ppm in 2004/2005 in exchange for sulfur control prior to

2004 (See Section IV.C.3.c.i of the preamble for a detailed discussion of this program). We expect that overall

emission reductions from the ABT program between 2001 and 2005 would be consistent with implementation of 30

ppm in 2004 without prior sulfur reduction, and hence assumed the latter schedule for the control case results

presented here.

h

The 47-state region comprised of the U.S. minus California, Alaska and Hawaii is interchangeably referred

to as “nationwide” throughout this section. Although excluded from this analysis, emission reductions will be

realized in each of these states. Today’s action applies fully to Alaska, Hawaii, and U.S. territories; California,

although subject to a separate vehicle and fuel control program, will benefit from lower-emitting Federal vehicles

migrating to and/or traveling within the state, as well as California vehicles operating on cleaner non-California fuel.

III-1

Chapter III: Environmental Impact

A. Inventory Impacts of Tier 2/Sulfur

Today’s proposal, if adopted, would reduce NOx, VOC, particulate, SOx, carbon

monoxide, and hazardous air pollutant emissions from cars and light trucks by lowering the

VOC, NOx, and PM emission standards for these vehicles and requiring that gasoline sulfur

levels be reduced. Over time, the projected benefits of today’s proposal would grow as vehicles

meeting the new standards replace older, higher-emitting vehicles and as total VMT continues to

grow. The results of our analysis of light-duty inventory levels with and without today’s action

are presented and discussed for each pollutant in the following sections. In all cases, “without

Tier 2/Sulfur" refers to continuation of National LEV on in-use fuel as currently specified; sulfur

levels for Conventional Gasoline are estimated at 330 ppm, summertime Phase 2 RFG levels are

estimated at 150 ppm (i.e., baseline case). “With Tier 2/Sulfur" refers to implementation of a 30

ppm sulfur standard nationwide in 2004 and the phase-in of NOx, VOC, and PM standards

proposed under today’s action (i.e., control case).g

For this proposal, EPA developed new inventory projections for the United States excluding

California, Alaska, and Hawaii.h These inventory projections can be divided into three major

types of sources for the purpose of describing the methodologies used: stationary and area

sources, nonroad mobile sources, and highway motor vehicles. To assess air quality need and

the impact of today’s proposal on urban areas, separate inventory analyses were also performed

on four high ozone cities: New York, Chicago, Atlanta and Charlotte. Inventory estimates for

each city were developed using the same data sources as the 47-state inventory discussed below,

except where noted. Comprehensive inventories (47-state and four city) are presented in

Appendix A with and without Tier 2/sulfur control, in 2005 (47-state only), 2007, 2010, 2015,

2020 and 2030.

These 47-state inventory projections are described more fully in this section. These

projections differ in some respects from the inventory projections used for the ozone analyses

described in Section B.1. and the inventory projections used for the benefit/cost analyses
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-2

described in Chapter VII. The methods used to develop the inventory projections presented in

this section are described below. Subsequently, the differences between those methods and the

methods used to develop the inventories used for the ozone analyses and benefit/cost analyses

are described.

The 47-state inventory projections include updated emission estimates for the stationary,

area, nonroad, and highway mobile source sectors.1 For stationary and area sources, we relied on

a set of 47-state projection inventories developed for this analysis by E.H. Pechan and

Associates. Pechan used state inventories developed for the Regional Ozone Transport Rule

(ROTR, 63 FR 57356, October 27, 1998) and Trends inventories for the non-OTAG states to

develop a base year stationary and area source inventory. For sources not covered by emissions

caps, the total emissions were grown using BEA-based growth factors. Emissions for large

electric utilities were held constant at projected 2005 levels, consistent with emissions cap

requirements in OTAG states and projections of shifts in types of fuel used in other states.

For nonroad mobile sources (except locomotives, aircraft, and commercial marine), we

developed 47-state emission inventories using EPA’s Draft NONROAD emissions model. This

model is a significant update in data sources and methodologies compared to the NEVES

inventories which have been the basis for nonroad emission estimates since 1992. Although

NONROAD has only been released in draft form, the emissions estimation data and methods

incorporated in it represent our most recent analysis of nonroad emission levels. For this reason,

we chose to use the draft NONROAD model to develop our nonroad mobile source emission

estimates used to evaluate the impact of the Tier 2/Sulfur proposal on emission inventories. The

methods and data used in NONROAD are also consistent with the methods and data used in

recent EPA proposed and final rules on nonroad engine standards and the nonroad emissions

projections used here reflect all final and proposed standards for nonroad engines and equipment. 

Growth estimates in NONROAD are based on a linear projection of historical populations of

nonroad equipment.

Because NONROAD does not yet include locomotives, aircraft, or commercial marine

vessels, we had to use different sources to project emission inventories for these sources. 

Estimates of projected locomotive emissions were based on estimates in EPA’s Final Rule on

locomotive standards, adjusted to reflect the 47-state basis of the inventory described above. 

Commercial marine emissions were based on estimates in EPA’s proposed commercial marine

rule. Aircraft emissions estimates were based on Trends estimates adjusted to reflect a 47-state

basis and grown using FAA growth estimates.

The most critical piece of our 47-state inventory analysis is the light-duty on-highway

vehicle inventory. We are in the process of updating the on-highway mobile source emission

factor models MOBILE (NOx, VOC and CO) and PART (PM and SOx), and the latest versions

of these models (MOBILE6 and PART6) are not yet available. However, many of the modified

inputs and assumptions which will be used in these models have at least been developed in draft

form; thus, we were able to develop an up-to-date assessment of light-duty vehicle and truck

emission inventory for today’s proposal using a model which incorporated available elements

which have or will be proposed as part of the MOBILE6 and PART6 models. This model,
Chapter III: Environmental Impact

i The Tier 2 Model is the next generation of Modified MOBILE5b (T2AT), the inventory model used in the

Tier 2 Study. Since the study, the model has been transferred to a Microsoft Excel platform, updated extensively

and expanded to include SOx and PM emissions. The development of this model and generation of light-duty

inventory results presented in this section are outlined in the technical report “Development of Light-Duty

Emissions Inventory Estimates in the Notice of Proposed Rulemaking for Tier 2 and Sulfur Standards” contained in

Docket No. A-97-10. The Tier 2 Model is being made available in concurrence with the publication of today’s

proposal.

III-3

referred to as the Tier 2 Modeli, reflects updated assessments of in-use emission deterioration

and off-cycle emissions, fuel sulfur impacts, and the increase in truck sales relative to cars. The

model also reflects existing national and local motor vehicle control programs including National

LEV (NLEV), Supplemental Federal Test Procedure (SFTP), On-Board Diagnostics (OBD),

reformulated gasoline (RFG) and Inspection/Maintenance (I/M) programs. We used this model

to develop baseline emission estimates assuming that NLEV program continued in perpetuity

(.e., that there would be no Tier 2/Sulfur standards implemented) and to develop emission

estimates for various control scenarios.2

The 47-state nonexhaust VOC emission inventory was developed using MOBILE5b, since

MOBILE6 estimates of evaporative emissions were not available at the time of the analysis. 

However, we incorporated available elements of MOBILE6 where possible, including mileage

accumulation, VMT mix, and age distribution.3 A modified version of MOBILE5b was also

developed to estimate the benefits of today’s proposed evaporative standards.4

47-state inventory estimates for heavy-duty gasoline, heavy-duty diesel and motorcycles

also incorporated available aspects of MOBILE6 and PART6, including new base emission

rates, defeat device emissions for heavy-duty diesel vehicles, off-cycle emissions, mileage

accumulation and age distribution. New standards recently finalized for heavy-duty diesel

vehicles were accounted for in these inventories, as were standards expected to be proposed for

heavy-duty gasoline vehicles.5,6

To generate inventory projections, we needed to combine the on-highway emission factors

generated using the Tier 2 Model or other means described above with estimates of on-highway

vehicle miles traveled (VMT). For our 47-state inventory analysis, VMT estimates through 2010

were based on EPA’s Trends Report through 2010. Beyond 2010, we developed VMT estimates

for light-duty cars and trucks based on current trends in VMT growth as reported by NHTSA. 

From 2010 through 2015, we project that 47-state light-duty VMT will grow at a rate of 2.1

percent per year compounded; beyond 2015, we estimate VMT growth will be reduced to a

linear 2.1 percent per year (i.e, 2.1 percent of 2015 VMT added incrementally in successive

years). Projected 47-state VMT levels for heavy-duty gasoline and diesel vehicles were

developed based on data from EPA’s Trends Report.

Consistent with EPA’s Trends Report, the 47-state inventory estimates were developed on

the basis of annual tons emitted. Annual VMT estimates were used in conjunction with emission

factors which reflected seasonal fuel control (i.e., low sulfur RFG in the summer only). Because

of limitations in the Tier 2 Model, however, seasonal temperature adjustments were not made. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-4

Thus, the annual tonnages developed for the 47-state inventories are annual tonnages assuming

summertime temperatures year-round. The effect of using summertime conditions to estimate

year-round emissions is to understate annual NOx emissions by about seven percent. Estimates

of NOx emission reductions from changes in standards will be similarly underestimated. EPA

does not consider this small error to be material.

The urban (four-city) analysis was performed on the basis of summertime (May through

September) emissions. Stationary and area source inventories were provided by E.H. Pechan

and Associates and were based on state inventories developed for the Regional Ozone Transport

Rule (ROTR). Emissions from nonroad equipment were estimated using the NONROAD model,

which includes the capability to allocate emissions to the county level. For nonroad equipment

not included in the NONROAD model (locomotives, aircraft, and commercial marine) we did

not have enough information to directly allocate the 47 inventories described above down to the

county level for these urban areas. However, E.H. Pechan has calculated national and local

inventories for these categories and areas using older assumptions about future emissions

standards. We used those older inventories to calculate the proportion of national emissions

from locomotives, aircraft, and commercial marine engines in the four urban areas. We then

applied those proportions to the our newer national inventories for the three categories to

estimate emissions for locomotives, aircraft, and commercial marine engines in the four urban

areas using our latest assumptions about the effects of new standards.

Summertime VMT estimates for each area used in generation of OTAG inventories were

provided by Pechan for 1995 and 2007; in order to more closely match localized VMT growth

trends, the values were linearly interpolated between these years, and extrapolated linearly

beyond 2007. Emission factors for highway vehicles were derived using the same methods

described above for the 47-state inventories, but with local specific inputs, such as I/M programs

or reformulated gasoline, where applicable. 

The emission inventories used for the ozone analyses described in Section B.1. of this

chapter and the benefit/cost analyses described in Chapter VII were developed prior to the 47-

state inventory described in this section. The ozone analysis and benefit/cost analysis

inventories differ from one another and from the 47-state inventories in several respects. It

should be noted, however, that we used the emission inventory analyses described in this section

to determine the change in emissions from the proposed Tier 2/Sulfur standards for both of these

analyses.

The inventories used for the ozone modeling are described more fully in Section B.1. To

develop the car and light truck baseline inventories (the inventories that would result if the Tier

2/Sulfur proposal were not adopted), we used the car and light truck inventories developed for

the ROTR; these inventories were based on MOBILE5 inputs and emission factors. To estimate

the change in emissions from cars and light trucks that would occur if the proposed Tier 2/Sulfur

standards were implemented, we used the same methods used to develop the 47-state emission

inventories (as described in this section). The inventories for highway heavy-duty engine

emissions and nonroad emissions were based on the emission modeling tools that were available

to the Ozone Transport Assessment Group (OTAG) and were used during that process and the
Chapter III: Environmental Impact

III-5

subsequent rulemaking process that resulted in promulgation of the ROTR. The highway heavyduty engine emissions were based on MOBILE5 inputs and emission factors; the nonroad

emissions were based on NEVES inputs.

The benefit/cost analyses described in Chapter VII used an even earlier set of estimates for

highway, nonroad, and stationary and area source emissions that was developed before the

ROTR was proposed or promulgated. These estimates were developed using the emission

modeling tools available at the time the Regulatory Impact Analyses for the revised ozone and

PM NAAQS rules were developed.7

 The inventories used in the benefit/cost analyses are

described more fully in Chapter VII.

1. NOx

a. Light-Duty NOx Trends Without Tier 2/Sulfur

Total NOx emissions produced annually in the 47 states by cars and trucks without Tier

2/Sulfur controls are shown in Table III-1 and Figure III-1, broken down by relative contribution

of cars (light-duty vehicles, or LDVs), LDT1s and 2s (light pickup trucks, minivans and most

sport utility vehicles), and LDT3s and 4s (heavier pickup trucks and sport utility vehicles). As

shown, total light-duty emissions decline from approximately 3.9 million tons to 3.0 million tons

between 2000 and 2010 due to turnover of Tier 1 and NLEV vehicles and the phase in of offcycle standards (SFTP). By 2014, however, the effect of these control programs begins to be

offset by increases in overall VMT, in conjunction with the shift of VMT from cars to trucks. 

Light-duty emissions increase to 3.2 million tons by 2020 and 3.8 million tons by 2030, such that

the gains from the Tier 1, NLEV and SFTP control programs are almost completely eradicated

by VMT growth. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-6

Table III-1. 47-State Light Duty NOx Emissions Without Tier 2/Sulfur (Annual Tons)

Year Light-Duty

Emissions

Contribution by Vehicle Class

LDV LDT1/2 LDT3/4

2000 3,869,383 48.0% 35.6% 16.4%

2004 3,539,655 41.4% 39.9% 18.7%

2007 3,218,530 36.3% 42.2% 21.5%

2010 3,041,639 32.0% 43.6% 24.4%

2015 3,020,806 27.7% 44.3% 28.0%

2020 3,221,151 25.9% 44.8% 29.3%

2030 3,790,840 25.4% 45.1% 29.5%

0

1,000,000

2,000,000

3,000,000

4,000,000

2000 2005 2010 2015 2020 2025 2030

LDV LDT1/2 LDT3/4

Figure III-1. 47-State Light-Duty NOx Emissions Without Tier 2/Sulfur (Annual Tons)

The impact of steady truck growth on overall light-duty NOx emissions is clearly
Chapter III: Environmental Impact

III-7

demonstrated in the preceding figure. In 2000, we project that trucks will produce 50 percent of

overall NOx emissions. Over the next 30 years, trucks will grow to dominate light-duty NOx

emissions due to the combined effects of sales migration, higher mileage accumulation rates,

longer lifespan, and more relaxed emission standards relative to LDVs. By 2010, we project

trucks will make up two-thirds of light-duty NOx emissions; by 2020, nearly three-quarters of all

light-duty NOx emissions will be produced by trucks. As shown in Figure III-1, the decrease in

overall light-duty emission levels is due solely to reductions in LDV emissions. The benefits

from Tier 1, NLEV and SFTP are not as pronounced for trucks, and are offset almost

immediately by growth in truck VMT. As a result, truck emissions are stable through 2010 and

begin increasing steadily beyond this as VMT growth overtakes the gains from existing control

programs.

The emission trends for the four urban areas we analyzed show similar behavior. 

Although the presence of localized control programs (I/M and in some cases, RFG) do serve to

delay the upturn in light-duty emissions, they are not sufficient to counteract the effects of VMT

growth. As shown in Table III-2, light-duty emissions decrease steadily in each city through

2010. Emission trends beyond 2010 depend on the rate of VMT growth in each city. In New

York, which is projected to have relatively low VMT growth, emissions continue to decrease

steadily through 2015 before leveling off and then turning upwards by 2017. In Chicago,

Atlanta, and Charlotte, emissions begin to level off by 2010. Emissions start to increase in 2017

in Chicago, 2015 in Atlanta, and 2013 in Charlotte. For the latter two cities, emissions increase

at a rapid rate beyond these years. We project that Atlanta’s emission reductions achieved from

programs currently in place will be almost fully offset by rapid VMT growth by 2030, while we

project Charlotte’s rapid VMT growth to cause emissions in 2030 to be over 10 percent higher

than in 2000.

Table III-2. Four-City Light-Duty NOx Emissions Without Tier 2/Sulfur (Summer Tons)

Year New York Chicago Atlanta Charlotte

2000 78,287 37,037 33,267 4,714

2004 66,857 32,314 30,912 4,526

2007 57,753 28,399 28,313 4,230

2010 51,811 25,958 26,846 4,081

2015 47,634 24,440 26,384 4,109

2020 48,033 25,080 27,721 4,402

2030 52,280 28,165 32,018 5,239

Figures III-2 and III-3 show our projections of the contribution of light-duty vehicles and

trucks to the total NOx inventory (i.e., NOx emission from all sources, including stationary, area,
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-8

nonroad) in the 47 states and in Atlanta, in 2020. Table III-3 shows this same contribution

across the 47 states and all four cities from 2007 through 2030. Across the 47 states, cars and

trucks produce nearly one-fifth of total NOx emissions across all years. In urban areas, however,

this contribution can be significantly higher. Atlanta provides the most striking example of this;

we project that roughly 40 percent of all NOx emissions will be produced by cars and trucks

through 2030. While less than Atlanta, the light-duty contribution in New York is significantly

higher than the national estimates; from 2007 through 2030, we project that 27 to 29 percent of

all emissions in this area will be produced by light-duty cars and trucks. We estimate the

contribution in Chicago and Charlotte to be slightly higher but comparable to the 47-state

estimate of one-fifth of the total NOx inventory.

Light-duty NOx contribution in urban areas is generally higher than the 47-state region

because of the increased concentration of VMT, in conjunction with the decreased prevalence of

significant NOx contributors which are largely in non-urban areas (primarily utilities and

agricultural nonroad sources). We expect that this trend will be consistent across many highozone urban areas.
Chapter III: Environmental Impact

III-9

Light-Duty 

Vehicles and 

Trucks

18%

Other OnHighway

7%

Nonroad

16%

Stationary and 

Area

59%

Figure III-2: Breakdown of Total 2020 47 State NOx Inventory Without Tier 2

Stationary and 

Area

20%

Light-Duty 

Vehicles and 

Trucks

40%

Other OnHighway

14%

Nonroad

26%

Figure III-3. Breakdown of Total 2020 Atlanta NOx Inventory Without Tier 2
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-10

Table III-3. Light-Duty Contribution to Total NOx Inventory Without Tier 2/Sulfur

Year 47-state New York Chicago Atlanta Charlotte

2007 17% 29% 19% 38% 18%

2010 17% 28% 18% 38% 19%

2015 17% 27% 18% 39% 19%

2020 18% 27% 19% 40% 21%

2030 20% 28% 19% 42% 22%

b. NOx Reductions Due To Tier 2/Sulfur

Today’s proposal would provide substantial reductions in NOx emissions from cars and

trucks. The implementation of low sulfur fuel in 2004 would afford an immediate drop in NOx

emissions, while the phase-in of tighter vehicle standards would continue to reduce emissions

over time, serving to mitigate through at least 2030 the projected upward trend in light-duty

NOx emissions that would occur with no control. Table III-4 contains annual tons of NOx we

project would be reduced by today’s proposal, encompassing benefits of low sulfur fuel and the

introduction of Tier 2 light-duty vehicle and light-duty truck standards. Figure III-4 shows

annual 47-state light-duty NOx emissions with implementation of the Tier 2/Sulfur program,

broken down by LDV, LDT1/2 and LDT3/4 categories.

Table III-4. 47-State Light-Duty NOx Reductions Due To Tier 2/Sulfur (Annual Tons)

Year

 Light-Duty

Emissions Without 

Tier 2/Sulfur

Light-Duty

Emissions With

Tier 2/Sulfur

Emissions

Reduced 

Percent Reduction in

Baseline Inventory

Light-Duty All Sources*

2004 3,539,655 3,037,144 502,511 14% -

2007 3,218,530 2,422,796 795,734 25% 4%

2010 3,041,639 1,859,316 1,182,323 39% 7%

2015 3,020,806 1,241,925 1,778,881 59% 10%

2020 3,221,151 1,023,038 2,198,113 68% 12%

2030 3,790,840 1,004,495 2,786,345 74% 15%

* Includes emission reductions from Heavy-Duty Gasoline Vehicles due to sulfur control
Chapter III: Environmental Impact

d

i.e., vehicles that would be on the road in the absence of Tier 2/Sulfur control. 

III-11

0

1,000,000

2,000,000

3,000,000

4,000,000

2000 2005 2010 2015 2020 2025 2030

LDV LDT1/2 LDT3/4

WITHOUT TIER 2/SULFUR CONTROLS

Figure III-4. 47-State Light-Duty NOx Emissions With Tier 2/Sulfur (Annual Tons)

As shown, the implementation of reduced sulfur levels in 2004 would result in an

immediate benefit of over one-half million tons, a 14 percent drop in uncontrolled 2004 lightduty emissions; this is the equivalent of emissions produced by over 26 million pre-Tier 2 cars

and trucks.d,8 In 2004, nearly all of the benefits would be due to reduced emissions from Tier 0,

Tier 1 and NLEV vehicles.

After 2004, emission are reduced further as the fleet turns over to predominantly Tier 2

vehicles operating on low sulfur fuel, versus NLEVs and Tier 1 trucks operating on current inuse sulfur levels. By 2020, the projected benefit represents a two-thirds reduction in 2020 lightduty emissions without Tier 2/Sulfur, equivalent to the emissions from over 166 million pre-Tier

2 cars and trucks. NOx emissions from all sources would be reduced by 12 percent. 

We project that light-duty emissions would continue to decrease beyond 2020, reversing

the upward emissions trend in the baseline case brought on by VMT growth. By 2030,

essentially the entire fleet would consist of Tier 2 vehicles. The projected benefit of 2.8 million

tons in this year represents a nearly three-quarters reduction in 2030 light-duty emissions without

Tier 2/Sulfur, equivalent to the emissions from 213 million pre-Tier 2 cars and trucks. These

emission reductions would amount to 15 percent of total man-made NOx emissions in that year
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-12

in the absence of today’s proposal. 

The estimated percentage reductions in total inventory presented in Table III-4 include

benefits that would be realized on heavy-duty gasoline vehicles due to sulfur control. We

estimate these heavy-duty emission reductions to be on the order of approximately 30,000 tons

per year for every year starting in 2004, as shown in Appendix A.

NOx reductions due to today’s proposal would be of a similar scope in urban areas. 

Table III-5 shows NOx emissions reduced due to Tier 2/Sulfur control, and light-duty highway

vehicle emissions remaining, for each of the four cities. Table III-6 presents these reductions in

terms of the percentage of baseline light-duty and total inventory reduced.

Table III-5. Four-City Light-Duty NOx Emissions With Tier 2/Sulfur (Summer Tons) 

Year

New York Chicago Atlanta Charlotte

Reduced Remain Reduced Remain Reduced Remain Reduced Remain

2004 7,368 59,489 3,062 29,252 4,550 26,362 666 3,860

2007 12,139 45,614 5,546 22,853 7,346 20,967 1,098 3,133

2010 18,432 33,380 8,915 17,043 10,975 15,871 1,668 2,413

2015 27,544 20,089 14,020 10,421 16,483 9,901 2,567 1,542

2020 33,177 14,857 17,296 7,784 20,188 7,534 3,206 1,196

2030 39,488 12,792 21,259 6,906 25,160 6,857 4,117 1,122
Chapter III: Environmental Impact

III-13

Table III-6. Percent Reduction From Light-Duty and 

Total Baseline NOx Emissions in Four Cities

Year

New York Chicago Atlanta Charlotte

 LightDutyAll

Sources*

 LightDutyAll

Sources*

 LightDutyAll

Sources*

 LightDuty

All

Sources*

2004 11% - 9% - 15% - 15% -

2007 21% 6% 20% 4% 26% 10% 26% 5%

2010 36% 10% 34% 6% 41% 16% 41% 8%

2015 58% 16% 57% 10% 62% 25% 62% 12%

2020 69% 19% 69% 13% 73% 30% 73% 15%

2030 76% 21% 75% 15% 79% 33% 79% 18%

* Includes emission reductions from Heavy-Duty Gasoline Vehicles due to sulfur control

The magnitude of reductions in urban areas reflect those nationally. An immediate

reduction in light-duty emission would result from sulfur control, even in RFG areas (New York

and Chicago). Over one-third of baseline light-duty emissions would be reduced by 2010 in

each city. Light-duty emissions would be reduced by roughly 70 percent in 2020 and over 75

percent in 2030. Reductions in Atlanta and Charlotte are consistently larger in percentage

terms than in New York and Chicago because they are not RFG areas; emission reductions in

non-RFG urban areas would be particularly large since these areas would tend to have highersulfur fuel than RFG areas in the absence of today’s proposal. We project that emissions would

continue to decrease through at least 2028 in all four cities, indicating that today’s program

would be successful in reducing light-duty NOx emissions in the face of high VMT growth rates.

The impact on total inventory would also be significant, particularly in New York and

Atlanta. By 2020, we project that the total NOx inventory would be reduced by nearly one-fifth

in New York and one-third in Atlanta due to Tier 2/Sulfur control.

Concurrently, we project that the light-duty contribution to total NOx emissions would

drop significantly. Figures III-5 and III-6 show our 2020 projections of this contribution in the

47 states and in Atlanta with Tier 2/Sulfur control. Table III-7 shows this same contribution

across the 47 states and all four cities from 2007 through 2030. In 2020, we project that the

light-duty contribution would drop to seven percent nationally, from 18 percent without Tier

2/Sulfur control. This trend is similar across the four cities, depending on the level of

contribution without Tier 2/Sulfur control. We project that with Tier 2/Sulfur control, car and

truck emissions would contribute 10 percent of total emissions in New York (down from 27

percent), seven percent in Chicago and Charlotte (down from 19 percent and 21 percent), and 16

percent in Atlanta (down from 40 percent) in 2020. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-14

 

Stationary and 

Area

67%

Light-Duty 

Vehicles and 

Trucks

7%

Other OnHighway

8%

Nonroad

18%

Figure III-5. Breakdown of Total 2020 47-State NOx Inventory With Tier 2/Sulfur

 

Stationary and 

Area

29%

Light-Duty 

Vehicles and 

Trucks

16%

Other OnHighway

18%

Nonroad

37%

Figure III-6. Breakdown of Total 2020 Atlanta NOx Inventory With Tier 2/Sulfur
Chapter III: Environmental Impact

e

The API/NPRA fuel proposal is discussed in detail in the Preamble, Section IV.C.1

III-15

Table III-7. Light-Duty Contribution to Total NOx Inventory With Tier 2/Sulfur

Year 47 State New York Chicago Atlanta Charlotte

2007 14% 24% 16% 31% 14%

2010 11% 20% 13% 27% 12%

2015 8% 14% 9% 20% 8%

2020 7% 10% 7% 16% 7%

2030 6% 9% 6% 13% 6%

c. NOx Emission Reductions From Other Options

We developed 47-state light-duty emission inventory projections for three alternative

vehicle/fuel control options to allow comparison with the emission reductions projected to result

from today’s action. These alternative options are: 

1) Car and truck emission standards and implementation schedule as proposed in today’s

action in conjunction with sulfur control proposed to EPA by the American Petroleum

Institute (API) and National Petroleum Refiners Association (NPRA). Under this plan,

sulfur would be reduced in 2004 to 150 ppm in the eastern half of the U.S., referred to as

the “API NOx Control Region”, and 300 ppm in the remainder of the 49-state region.e

2) Option (1) above with implementation of a “rebuttable” element of the API/NPRA

proposal in which sulfur would be reduced to 30 ppm in 2010 in the API NOx Control

Region, while the remainder of the country remains at 300 ppm.

3) Sulfur control as proposed in today’s action in conjunction with the default Tier 2 car

and truck emission standards contained in the Clean Air Act. Under this alternative,

LDVs and LDT1s would be required to meet full useful life emission standards of 0.125

g/mi NMHC and 0.20 g/mi NOx, assumed for this analysis to follow the implementation

schedule for Tier 2 standards contained in today’s proposal. LDT2s would be subject to

California’s applicable LEV I standards in 2004, while LDT3s and LDT4s would remain

at Tier 1 levels. 

For Options 1 and 2, the effects of sulfur irreversibility were accounted for using the

methodology described in detail in Appendix B. In short, all cars and trucks complying with the

Supplemental Federal Test Procedure (SFTP) were assigned an irreversibility effect of 50
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

f

The baseline emission inventory estimates presented here do not account for sulfur irreversibility effects in

RFG areas. Although vehicles in these areas will likely experience irreversibility effects due to exposure to higher

sulfur levels during winter months, the overall impact on baseline emissions are expected to be small because a)

LDT2/3/4s are less sensitive to sulfur under NLEV than expected under the standards proposed in today’s action,

and b) vehicles operating on summertime RFG make up a relatively small portion (less than 15%) of annual VMT in

the 47-state region. Accounting for this effect would serve to increase the estimated benefits of today’s proposal. 

g

Although not shown, Options 1 and 2 will also increase emissions from heavy-duty gasoline vehicles

relative to today’s action due to higher sulfur levels.

III-16

percent, meaning that vehicles within the API NOx Control Region exposed to higher sulfur

levels outside the region would experience a permanent degradation in emissions performance

equivalent to the average of emissions generated on fuel in and outside of the API Region. It

was assumed that at any given time 25 percent of cars and trucks in the API NOx Control Region

fleet would have traveled outside of the region, and hence been exposed to higher sulfur fuel.f

47-state light-duty NOx emissions projected for these options are shown in Tables III-8,

in comparison with today’s proposal. Table III-9 provide a direct comparison to today’s

proposal in terms of shortfall (i.e., emission reductions “lost” by the three options compared to

today’s proposal) and total benefits relative to the Tier 2/Sulfur proposal.

Table III-8. 47-State Light-Duty NOx Reductions From Alternative Control Options

(Annual Tons)g

Option: Today’s

Proposal 123

Vehicle Program: Proposed Tier 2 Proposed Tier 2 Proposed Tier 2 Clean Air Act

Default

Fuel Program: Proposed Tier 2 API

No 30 ppm

API

30 ppm API Region

2010

Proposed Tier 2

2007 795,733 397,886 397,886 611,020

2010 1,182,323 750,100 1,020,812 740,258

2020 2,198,113 1,713,531 2,000,129 1,026,690
Chapter III: Environmental Impact

III-17

Table III-9. NOx Reduction Shortfall From Alternative Control 

Options Relative to Today’s Proposal

Option: 1 2 3

Vehicle Program: Proposed Tier 2 Proposed Tier 2 Clean Air Act Default

Fuel Program: API

No 30 ppm

API

30 ppm API Region 2010 Proposed Tier 2

Year

Shortfall

(Annual

Tons)

Benefit

Relative to

Tier 2/Sulfur

Proposal

Shortfall

(Annual

Tons)

Benefit

Relative to

Tier 2/Sulfur

Proposal

Shortfall

(Annual

Tons)

Benefit

Relative to

Tier 2/Sulfur

Proposal

2007 397,848 50% 397,848 50% 184,713 77%

2010 432,223 63% 162,012 86% 442,066 63%

2020 484,582 78% 197,984 91% 1,171,423 47%

2. VOC

a. Light-Duty VOC Trends Without Tier 2/Sulfur

Total VOC emissions produced nationwide by cars and trucks without Tier 2/Sulfur

control are shown in Table III-10 and Figure III-7, broken down by relative contribution of

evaporative emissions (across all cars and trucks), and exhaust emissions for LDVs, LDT1/2s

and LDT3/4s. We project VOC emissions from light-duty vehicles will decline from

approximately 3.8 million tons to 2.0 million tons between 2000 and 2015 as the fleet becomes

increasingly dominated by cars and trucks complying with NLEV, Enhanced Evaporative control

and SFTP requirements. Beginning in 2016, however, light-duty VOC emissions are projected

to begin an upward trend due to VMT and vehicle fleet growth, increasing to 2.1 million tons by

2020 and 2.5 million tons by 2030. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-18

Table III-10. 47-State Light-Duty VOC Emissions Without Tier 2/Sulfur (Annual Tons)

Year Light-Duty

Emissions 

Contribution by Emission Source / Vehicle Class

Evaporative

(All LDV/LDT)

Exhaust

LDV LDT1/2 LDT3/4

2000 3,771,569 44.3% 22.6% 20.1% 13.0%

2004 2,969,912 46.8% 18.3% 21.1% 13.7%

2007 2,503,855 50.4% 15.3% 20.4% 14.0%

2010 2,227,593 52.1% 12.6% 19.8% 15.5%

2015 2,080,284 54.1% 9.9% 18.2% 17.8%

2020 2,132,070 54.7% 9.1% 18.0% 18.2%

2030 2,475,783 54.8% 8.8% 18.1% 18.2%

0

1,000,000

2,000,000

3,000,000

4,000,000

2000 2005 2010 2015 2020 2025 2030

Evap (All LD) LDV Exhaust LDT1/2 Exhaust LDT3/4 Exhaust

Figure III-7. 47-State Light-Duty VOC Emissions Without Tier 2/Sulfur (Annual Tons)
Chapter III: Environmental Impact

III-19

Although evaporative emissions are projected to grow to over half of the light-duty

inventory, exhaust emissions from trucks play an increasingly significant role in shaping the

overall VOC trend. In 2000, we project that trucks will produce approximately 60 percent of

exhaust VOC emissions; by 2020, trucks account for 80 percent of these emissions, while overall

emissions produced by trucks increase steadily. The benefits from Tier 1, NLEV and SFTP are

not as pronounced for trucks relative to cars, and are offset almost immediately by growth in

truck VMT. As a result, exhaust VOC emissions from trucks see only modest initial reductions

due to these programs before being offset by VMT growth.

The emission trends for the four urban areas we analyzed show similar behavior to the

national trends. As shown in Table III-11, light-duty emissions decrease steadily in each city

through 2010. In all cities, the decline in emissions due to existing vehicle standards essentially

ends by 2020, after which VOC emissions are projected to increase if today’s proposal is not

adopted. 

Table III-11. Four-City Light-Duty VOC Emissions Without Tier 2/Sulfur (Summer Tons)

Year New York Chicago Atlanta Charlotte

2000 56,782 27,145 28,791 4,080

2004 40,063 19,768 22,166 3,245

2007 30,609 15,404 18,139 2,710

2010 25,732 13,151 15,869 2,412

2015 22,062 11,386 14,239 2,217

2020 21,124 11,061 14,195 2,254

2030 22,744 12,264 16,149 2,642

Figures III-8 and III-9 show our projections of the contribution of light-duty vehicles and

trucks to the total anthropogenic (i.e., human-caused) 2020 VOC inventory in the 47 states and

in Atlanta. Table III-12 shows this same contribution across the 47 states and all four cities from

2007 through 2030. Nationally, cars and trucks produce nearly one-fifth of total VOC emissions

in 2007; this percentage declines subsequent years before stabilizing at 14 percent by 2015 and

increasing after 2020. The light-duty contribution in New York, Chicago, and Charlotte are

slightly lower than the national average, but significantly higher in Atlanta, where we project

that one-fourth of all VOC emissions will be produced by cars and trucks in 2020. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-20

Stationary and 

Area

65%

Light-Duty 

Vehicles and 

Trucks

14%

Other OnHighway

3%

Nonroad

18%

Figure III-8. Breakdown of Total 2020 47-State VOC Inventory Without Tier 2/Sulfur

Stationary and 

Area

50%

Light-Duty 

Vehicles and 

Trucks

26%

Other OnHighway

Nonroad 8%

16%

Figure III-9. Breakdown of Total 2020 Atlanta VOC Inventory Without Tier 2/Sulfur
Chapter III: Environmental Impact

III-21

Table III-12. Light-Duty Contribution to Total VOC Inventory Without Tier 2/Sulfur

Year 47 State New York Chicago Atlanta Charlotte

2007 18% 15% 12% 33% 15%

2010 16% 13% 11% 31% 14%

2015 14% 11% 10% 28% 12%

2020 14% 10% 9% 26% 12%

2030 15% 10% 9% 26% 12%

b. VOC Reductions Due To Tier 2/Sulfur

Table III-13 contains annual nationwide tons of VOC we project would be reduced due to

today’s proposal, encompassing the effects of low sulfur fuel and the introduction of Tier 2

light-duty vehicle and light-duty truck standards for both exhaust and evaporative emissions. 

Figure III-10 shows projected 47-state emissions with Tier 2/Sulfur control, broken down by

light-duty evaporative emissions and exhaust emissions from LDVs, LDT1/2s and LDT3/4s. 

Table III-13. 47-State Light-Duty VOC Reductions Due to Tier 2/Sulfur (Annual Tons)

Year

 Light-Duty

Emissions Without

Tier 2/Sulfur 

Light-Duty

Emissions With

Tier 2/Sulfur 

Emissions

Reduced 

Percent Reduction in

Baseline Inventory

Light-Duty All

Sources*

2004 2,969,912 2,865,843 104,069 4% -

2007 2,503,855 2,372,427 131,428 5% 1.0%

2010 2,227,593 2,050,465 177,128 8% 1.3%

2015 2,080,284 1,821,904 258,380 12% 1.8%

2020 2,132,070 1,800,394 331,676 16% 2.3%

2030 2,475,783 2,039,802 435,981 18% 2.7%

* Includes emission reductions from Heavy-Duty Gasoline Vehicles due to sulfur control
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-22

0

1,000,000

2,000,000

3,000,000

4,000,000

2000 2005 2010 2015 2020 2025 2030

Evap (All LD) LDV Exhaust LDT1/2 Exhaust LDT3/4 Exhaust

WITHOUT TIER 2/SULFUR CONTROLS

\

Figure III-10. 47-State Light-Duty VOC Emissions With Tier 2/Sulfur (Annual Tons)

We project that lower sulfur levels in 2004 would reduce light-duty emissions four

percent, due almost entirely to reduced emission from Tier 0, Tier 1 and NLEV vehicles; this is

the equivalent of emissions produced by 6.5 million pre-Tier 2 cars and trucks. After 2004, the

introduction of LDT2s, LDT3s, and LDT4s complying with the Tier 2 NMOG standard and

operating on low sulfur fuel reduce emission further. By 2020, baseline light-duty VOC

emissions are reduced 16 percent due to Tier 2/Sulfur control, the equivalent of emissions from

38 million pre-Tier 2 cars and trucks. This represents a 2.3 percent reduction of the total

anthropogenic VOC inventory. With Tier 2/Sulfur, we project that the upturn in light-duty VOC

emissions will begin in 2021, five years later than the baseline case.

In addition to emission benefits on light-duty vehicles and trucks, we project that heavyduty gasoline vehicles would decrease emissions by approximately 7,000 tons per year

beginning in 2004, growing to 12,000 tons in 2030. These reductions are shown in Appendix A,

and are included in the estimates of mobile source and all source percent reduction contained in

Table III-13.

Tables III-14 and III-15 show VOC reductions in the four cities in both tonnage and

percentage terms; the percentage reductions are expressed relative to light-duty emissions and

total anthropogenic emissions if today’s proposal were not adopted. VOC reductions would be

larger in these areas in percentage terms than is the average throughout the 47 states. In 2020,
Chapter III: Environmental Impact

h

The approach used for developing I/M benefits for Tier 2 vehicles is discussed in detail in the technical

report “Development of Light-Duty Emission Inventory Estimates in the Notice of Proposed Rulemaking for Tier 2

and Sulfur Standards” 

III-23

we project that 23 percent of light-duty VOC emissions would be reduced in these cities, versus

16 percent for the 47-state region. This difference is driven by the presence of I/M in each area

and RFG in some of these areas. As modeled, vehicles with malfunctioning emission control

systems do not realize the full benefit of the proposed Tier 2 vehicle standards. With I/M, it is

assumed that a good portion of these vehicles are identified and repaired, thus increasing the

relative benefit of the Tier 2/Sulfur program.h

 The reductions in total anthropogenic VOC

inventory are generally consistent with the 47-state results, although in Atlanta the reductions are

larger; by 2020, we project that 6.1 percent of Atlanta’s total VOC emission would be reduced

by today’s action, versus 2.3 percent nationally.

Table III-14. Four-City Light-Duty VOC Reductions Due To Tier 2/Sulfur (Summer Tons)

Year

New York Chicago Atlanta Charlotte

Reduced Remain Reduced Remain Reduced Remain Reduced Remain

2004 1,282 38,781 611 19,157 1,110 21,056 163 3,083

2007 1,870 28,739 913 14,490 1,462 16,677 218 2,492

2010 2,675 23,057 1,333 11,818 1,860 14,009 283 2,130

2015 3,919 18,143 2,007 9,380 2,592 11,648 404 1,814

2020 4,919 16,205 2,568 8,493 3,240 10,955 515 1,740

2030 6,031 16,713 3,247 9,017 4,184 11,965 685 1,958
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-24

Table III-15. Percent Reduction From Light-Duty and 

Total Baseline VOC Emissions in Four Cities

Year

New York Chicago Atlanta Charlotte

 LightDutyAll

Sources*

 LightDutyAll

Sources*

LightDutyAll

Sources*

LightDuty

All

Sources*

2004 3% - 3% - 5% - 5% -

2007 6% 0.9 % 6% 0.8% 8% 2.8% 8% 1.3%

2010 10% 1.4% 10% 1.1% 12% 3.7% 12% 1.7%

2015 18% 2.0% 18% 1.7% 18% 5.1% 18% 2.3%

2020 23% 2.4% 23% 2.1% 23% 6.1% 23% 2.8%

2030 27% 2.8% 26% 2.4% 26% 6.9% 26% 3.3%

* Includes emission reductions from Heavy-Duty Gasoline Vehicles due to sulfur control

Figures III-11 and III-12 show the contribution of light-duty cars and trucks to total 2020

VOC inventory in the 47 states and in Atlanta with Tier 2/Sulfur control. Table III-16 shows this

same contribution across the 47 states and all four cities from 2007 through 2030. In 2020, the

light-duty contribution would drop to 12 percent nationally, from 14 percent without Tier

2/Sulfur control. This trend would be similar across the four cities, depending on the level of

light-duty contribution without Tier 2/Sulfur control. We project that with Tier 2/Sulfur control,

car and truck emissions would contribute eight percent of total emissions in New York (down

from 10 percent), seven percent in Chicago (down from nine percent), ten percent in Charlotte

(down from 12 percent), and 22 percent in Atlanta (down from 26 percent). 
Chapter III: Environmental Impact

III-25

Stationary and 

Area

67%

Light-Duty 

Vehicles and 

Trucks

12% Other OnHighway

3%

Nonroad

18%

Figure III-11. Breakdown of Total 2020 47 State VOC Inventory With Tier 2/Sulfur

Stationary and 

Area

54%

Light-Duty 

Vehicles and 

Trucks

22%

Other OnHighway

7%

Nonroad

17%

Figure III-12. Breakdown of Total 2020 Atlanta VOC Inventory With Tier 2/Sulfur
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-26

Table III-16. Light-Duty Contribution to Total VOC Inventory With Tier 2/Sulfur

Year 47 State New York Chicago Atlanta Charlotte

2007 17% 14% 12% 32% 14%

2010 15% 12% 10% 28% 12%

2015 13% 9% 8% 24% 10%

2020 12% 8% 7% 22% 10%

2030 13% 8% 7% 21% 10%

c. VOC Emission Reductions From Other Options

VOC reductions for the three alternative options discussed under Section III.A.1.c above

are shown in Tables III-17 and III-18, in comparison to reductions projected from today’s

proposal. It it assumed for this analysis that the evaporative controls contained in today’s action

would be included in each option.

Table III-17. 47-State Light-Duty VOC Reductions From Alternative Control Options

(Annual Tons)

Option: Today’s

Proposal 123

Vehicle Program: Proposed Tier 2 Proposed Tier 2 Proposed Tier 2 Clean Air Act

Default

Fuel Program: Proposed Tier 2 API

No 30 ppm

API

30 ppm API Region

2010

Proposed Tier 2

2007 131,428 74,331 74,331 101,706

2010 177,128 118,809 155,750 107,955

2020 331,676 264,220 305,361 131,552
Chapter III: Environmental Impact

III-27

Table III-18. VOC Reduction Shortfall From Alternative 

Control Options Relative to Today’s Action

Scenario: 1 2 3

Vehicle Program: Proposed Tier 2 Proposed Tier 2 Clean Air Act Default

Fuel Program: API

No 30 ppm

API

30 ppm API Region 2010 Proposed Tier 2

Year

Shortfall

(Annual

Tons)

Benefit

Relative to

Tier 2/Sulfur

Proposal

Shortfall

(Annual

Tons)

Benefit

Relative to

Tier 2/Sulfur

Proposal

Shortfall

(Annual

Tons)

Benefit

Relative to

Tier 2/Sulfur

Proposal

2007 57,097 57% 57,097 57% 29,722 77%

2010 58,319 67% 21,378 88% 69,173 61%

2020 67,456 80% 26,315 92% 200,123 40%

3. SOx

a. Light-Duty SOx Trends Without Sulfur Control

Gaseous SOx emissions are formed by the combustion of fuel sulfur, and hence depend

entirely on the level of sulfur in the fuel. SOx emissions without sulfur control are shown in

Table III-19 and Figure III-13, broken down by LDV, LDT1/2 and LDT3/4. As shown, we

project that SOx emission levels will increase unabated through 2030 in conjunction with VMT

growth in the absence of any action to reduce fuel sulfur levels. In 2000, we project light-duty

vehicles and trucks will emit 194,000 tons of SOx; by 2020, this level is projected to be nearly

300,000 tons, an increase of 55 percent.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-28

Table III-19. 47-State SOx Emissions Without Sulfur Control (Annual Tons)

Year

Emissions

From All

Sources 

 Light-Duty

Emissions

Light-Duty 

Contribution

to All

Sources

Contribution by Vehicle Class

LDV LDT1/2 LDT3/4

2000 - 193,467 - 48% 39% 13%

2004 - 211,072 - 41% 44% 15%

2005 18,045,277 215,659 1.2% 40% 45% 15%

2010 18,350,974 240,694 1.3% 33% 50% 17%

2015 18,773,428 270,174 1.4% 29% 53% 18%

2020 19,161,564 299,959 1.6% 28% 54% 18%

2030 20,099,769 357,611 1.8% 27% 55% 18%

0

100,000

200,000

300,000

400,000

2000 2005 2010 2015 2020 2025 2030

LDV LDT1/2 LDT3/4

Figure III-13. 47-State Light-Duty SOx Emissions Without Sulfur Control (Annual Tons)

Trucks, primarily LDT1s and LDT2s, are responsible for the steady increase in light-duty

SOx emissions. While LDV SOx emissions are relatively stable, SOx emissions from trucks

(and hence the contribution to light-duty inventory produced by trucks) are projected to increase
Chapter III: Environmental Impact

III-29

steadily. In 2000, trucks account for roughly half of light-duty SOx emissions, growing to over

70 percent by 2020.

b. SOx Reductions Due To Sulfur Control

We project that today’s proposal would immediately and substantially reduce SOx

emissions from cars and trucks once its fuel sulfur provisions take effect. Table III-20 contains

annual nationwide tons of gaseous SOx we project will be reduced from light-duty vehicles and

trucks due to sulfur control. Figure III-14 shows SOx emissions after sulfur control, broken

down by LDV, LDT1/2 and LDT3/4.

Table III-20. 47-State Light-Duty SOx Reductions Due To Sulfur Control (Annual Tons)

Year

 Light-Duty

Emissions

Without Sulfur

Control

Light-Duty

Emissions

With Sulfur

Control

 Emissions 

Reduced

Percent Reduction in

Baseline Inventory

Light-Duty All Sources*

2004 211,072 21,426 189,646 90% -

2005 215,659 21,899 193,760 90% 1.3%

2010 240,694 24,257 216,437 90% 1.4%

2015 270,174 27,210 242,964 90% 1.5%

2020 299,959 30,203 269,756 90% 1.6%

2030 357,611 36,002 321,609 90% 1.8%

* Includes reductions from Heavy-Duty Gasoline Vehicles, Motorcycles and Nonroad Sources 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-30

0

100,000

200,000

300,000

400,000

2000 2005 2010 2015 2020 2025 2030

LDV LDT1/2 LDT3/4

WITHOUT SULFUR CONTROL

Figure III-14. 47-State Light-Duty SOx Emissions With Tier 2/Sulfur (Annual Tons)

As shown, a 90 percent reduction in light-duty SOx emissions would be realized

beginning in 2004. This relative reduction remains constant beyond 2004, since SOx emissions

are not reduced further as new Tier 2 VOC, NOx, and PM standards are phased in. The absolute

level of emission reductions would become larger with time, however, due to VMT growth.

SOx emission reductions will also occur from heavy-duty gasoline vehicles and

motorcycles due to sulfur control; we estimate this reduction to be approximately 10,000 tons in

2005, growing to 14,000 tons by 2020. In addition, emissions from all gasoline-powered

nonroad equipment would be reduced due to sulfur control. Based on our NONROAD model, 

we estimate this benefit would be approximately 25,000 tons per year on average between 2005

and 2020. These reductions, shown in Appendix A, are included in the percent reductions from

all sources in Table III-20.

4. Particulate Matter

Trends in particulate matter emissions will depend very strongly on the prevalence of

diesel vehicles in the light-duty fleet. Currently, diesels make up a very small portion (less than

one percent) of overall car and truck sales. However, sharp increases in diesel sales are a

reasonable possibility given the focus on diesel technology for improving fuel economy under
Chapter III: Environmental Impact

III-31

the Partnership for a New Generation of Vehicles (PNGV). Thus, we assessed PM emissions

under two sales scenarios: a “no growth” scenario, for which current diesel sales trends were

assumed to continue, and an “increased growth” scenario, for which diesels grow to 50 percent

of light-duty truck sales by 2010. The effects of Tier 2/Sulfur control were assessed for both

scenarios. The results presented here are for direct exhaust PM, comprising carbonaceous PM

and sulfate emitted directly from the tailpipe and a subset of Total PM (which also includes

direct non-exhaust PM from tire and brake wear, and indirect PM caused by secondary reactions

to emitted NOx and SOx in the atmosphere). Direct PM2.5 and PM10 emissions are presented

separately for the “no growth” scenario. 

a. “No Growth” Diesel Sales Scenario

i. Light-Duty Direct Exhaust PM2.5 Trends Without Tier 2/Sulfur

In general, gasoline vehicles emit PM at rates much lower than their diesel counterparts. 

Under the no growth scenario, direct PM emissions are driven largely by sulfate emissions from

gasoline vehicles, which depend primarily on gasoline fuel sulfur level. Without Tier 2/Sulfur

control, these emissions increase at a steady rate in conjunction with VMT, as shown in Tables

III-21 and Figure III-15. In 2005, we project that approximately 35,000 tons will be emitted

annually by light-duty cars and trucks. This level is projected to exceed 47,000 tons in 2020 and

56,000 tons in 2030. 

Table III-21. 47 State Light-Duty Direct Exhaust PM2.5 Emissions Without Tier 2/Sulfur

No Growth in Diesel Sales

(Annual Tons)

Year

Emissions

From All

Sources*

 LightDuty

Exhaust

Emissions 

Light-Duty 

Contribution

to All

Sources

Contribution by Fuel Type / Vehicle Class

Diesel

LDV/LDT

Gas

LDV

Gas

LDT1/2

Gas

LDT3/4

2000 - 34,072 - 5% 45% 34% 17%

2004 - 34,612 - 3% 42% 41% 14%

2005 2,071,897 35,051 1.7% 3% 40% 42% 15%

2010 2,108,058 38,409 1.8% 2% 34% 48% 16%

2015 2,217,074 42,724 1.9% 2% 30% 51% 17%

2020 2,318,805 47,397 2.0% 2% 28% 53% 17%

2030 2,544,434 56,505 2.2% 2% 28% 53% 17%

* Excludes natural and miscellaneous sources (e.g., fugitive dust), but includes indirect sources such as tire and

brake wear.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-32

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2005 2010 2015 2020 2025 2030

Diesel LDV Gas LDT1/2 Gas LDT3/4 Gas

Figure III-15. 47-State Light-Duty Direct Exhaust PM2.5 Emissions Without Tier 2/Sulfur

-No Diesel Growth (Annual Tons)

As expected, the diesel contribution to overall emissions in the no growth scenario is

relatively small. Rather, gasoline trucks (primarily LDT1s and LDT2s) are responsible for the

steady increase in PM emissions. Under this scenario, we project the contribution of gasoline

trucks to light-duty PM2.5 inventory to grow to 70 percent by 2020.

ii. Direct Exhaust PM2.5 Reductions Due To Tier 2/Sulfur Control

Under the no growth scenario, today’s proposal would provide an immediate and

substantive reduction in direct PM emissions from cars and trucks, due primary to sulfur control. 

Table III-22 contains annual nationwide tons of direct exhaust PM2.5 we project would be

reduced from light-duty vehicles and trucks due to Tier 2/Sulfur control. Figure III-16 shows

PM2.5 emissions after Tier 2/Sulfur control broken down by diesel (all light-duty cars and trucks)

and gasoline LDV, LDT1/2 and LDT3/4.
Chapter III: Environmental Impact

III-33

Table III-22. 47-State Light-Duty Direct Exhaust PM2.5 Reductions Due To Tier 2/Sulfur 

No Growth in Diesel Sales

(Annual Tons)

Year

 Light-Duty

Emissions Without

Tier 2/Sulfur

Light-Duty

Emissions With

Tier 2/Sulfur

Emissions

Reduced

Percent Reduction in

Baseline Inventory

Light-Duty All Sources*

2004 34,612 14,703 19,909 58% -

2005 35,051 14,509 20,542 59% 1.0%

2010 38,409 14,999 23,410 61% 1.1%

2015 42,724 16,129 26,595 62% 1.2%

2020 47,397 17,690 29,707 63% 1.3%

2030 56,505 20,956 35,549 63% 1.4%

* Includes emission reductions from Heavy-Duty Gasoline Vehicles due to sulfur control

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2005 2010 2015 2020 2025 2030

Diesel LDV Gas LDT1/2 Gas LDT3/4 Gas

WITHOUT TIER 2/SULFUR CONTROLS

Figure III-16. 47-State Light-Duty Direct Exhaust PM2.5 Emissions With Tier 2/Sulfur - 

No Diesel Growth (Annual Tons)
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-34

Reductions from gasoline vehicles would result almost entirely from sulfur control, rather

than the proposed PM2.5 exhaust standards. PM2.5 emissions on current technology gasoline

vehicles are much lower than diesel vehicles, and gasoline vehicle emissions are not expected to

be reduced in response to the PM2.5 standards contained in today’s proposal. As such, we project

that an immediate emission reduction of 58 percent from baseline levels would be realized due to

sulfur control, increasing to 63 percent by 2020. 

In addition to light-duty PM benefits, sulfur control would reduce PM2.5 emissions from

heavy-duty gasoline vehicles. We estimate these benefits would be approximately 700 tons per

year beginning in 2004, increasing to 1,000 tons by 2020. Across all sources, we project Tier

2/Sulfur control would reduce direct PM2.5 from all non-natural sources by about one percent.

iii. Direct Exhaust PM10 Reductions Due To Tier 2/Sulfur Control

Direct exhaust PM10 emissions exhibit similar trends to PM2.5, and are thus shown here

only for the no growth diesel case; PM10 emissions with and without Tier 2/Sulfur control are

shown in Table III-23.

Table III-23. 47-State Light-Duty PM10 Emissions With and Without Tier 2/Sulfur Control 

No Growth in Diesel Sales

(Annual Tons)

Year

Emissions

From All

Sources

Without 

Tier 2/Sulfur**

 Light-Duty

Exhaust

Emissions

Without 

Tier 2/Sulfur

Light-Duty 

Contribution

to All

Sources

Light-Duty

Exhaust 

Emissions

With 

Tier 2/Sulfur

Emissions

Reduced

Percent Reduction

in Baseline

Inventory

LightDutyAll

Sources*

2004 - 37,323 - 15,861 21,462 58% -

2005 2,985,623 37,794 1.3% 15,649 22,145 59% 0.8%

2010 3,060,154 41,412 1.4% 16,173 25,239 61% 0.9%

2015 3,207,687 46,064 1.4% 17,390 28,674 62% 0.9%

2020 3,345,810 51,102 1.5% 19,071 32,031 63% 1.0%

2030 3,659,928 60,922 1.7% 22,591 38,331 63% 1.1%

* Includes emission reductions from Heavy-Duty Gasoline Vehicles due to sulfur control

** Excludes natural and miscellaneous sources (e.g., fugitive dust), but includes indirect sources such as tire and

brake wear.

b. “Increased Growth” Sales Scenario

The “increased growth” scenario was developed with the intent of analyzing an upper
Chapter III: Environmental Impact

III-35

bound for diesel growth. We developed this scenario by assuming that the percent of diesels

making up total light-duty truck sales increase to five percent in 2001, adding five percentage

points per subsequent year until diesels represent 50 percent of light-duty truck sales in 2010;

beyond 2010, the diesel engine share of the light truck market was assumed to stay at 50 percent. 

Within the period of diesel sales growth, we assumed that light duty truck classes were

“converted” to diesels in a sequential manner starting with the heaviest trucks; i.e., LDT4s

became diesels first, then LDT3s, etc. This methodology resulted in the diesel sales penetrations

shown in Table III-24.

Table III-24. Diesel LDT Sales Penetration Under Increased Growth Scenario

Model Year

Diesel Sales Penetration

All LDT LDT2 LDT3 LDT4

2001 5% 0% 0% 63%

2002 10% 0% 12% 100%

2003 15% 0% 41% 100%

2004 20% 0% 71% 100%

2005 25% 0% 100% 100%

2006 30% 9% 100% 100%

2007 35% 18% 100% 100%

2008 40% 26% 100% 100%

2009 45% 35% 100% 100%

2010 and later 50% 44% 100% 100%

i. Light-Duty Direct Exhaust PM2.5 Trends Without Tier 2/Sulfur

Our projections for light-duty direct exhaust PM2.5 under the increased diesel sales

scenario are down in Table III-25 and Figure III-17. As expected, this scenario is projected to

result in dramatic increases in light-duty PM2.5 emissions. 2005 baseline emissions are

approximately 43,000 tons, 23 percent higher than the 35,000 tons projected in the no growth

diesel case from Table III-21. However, by 2020, we project this scenario would result in direct

PM emissions of 138,000 tons, nearly three times the emissions projected for the no growth

scenario in the same year. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-36

Table III-25. 47 State Light-Duty Direct Exhaust PM2.5 Emissions Without Tier 2/Sulfur 

Increased Diesel Growth Scenario

(Annual Tons)

Year

 Light-Duty

Emissions Without

Tier 2/Sulfur

Contribution by Fuel Type

Diesel LDV/LDT Gasoline LDV/LDT

2000 34,072 5% 95%

2004 39,932 19% 81%

2005 43,439 25% 75%

2010 72,626 56% 44%

2015 109,622 72% 28%

2020 138,177 77% 23%

2030 175,068 80% 20%

0

30,000

60,000

90,000

120,000

150,000

180,000

2000 2005 2010 2015 2020 2025 2030

Diesel Gasoline

Figure III-17. 47-State Light-Duty Direct Exhaust PM2.5 Without Tier 2/Sulfur - 

Increased Diesel Sales (Annual Tons)
Chapter III: Environmental Impact

III-37

As shown, the rapid growth of diesels in conjunction with high per-vehicle PM emissions

from diesels drive overall direct PM emissions under this scenario. In 2005, we project diesels

would already account for 25 percent of all light-duty emissions. Diesel contribution grows to

over 50 percent by 2010 and over 75 percent by 2020. 

ii. Direct Exhaust PM2.5 Reductions Due To Tier 2/Sulfur

Tier 2/Sulfur control would effectively neutralize excess PM emissions generated under

our increased diesel penetration scenario. Table III-26 contains reductions in direct exhaust

PM2.5 emissions due to Tier 2/Sulfur standards for the increased diesel sales penetration case. 

Figure III-18 shows these emissions with Tier 2/Sulfur control, broken down by diesel and

gasoline.

Table III-26. 47-State Light-Duty Direct Exhaust PM2.5 Reductions Due To Tier 2/Sulfur 

Increased Diesel Growth Scenario

(Annual Tons)

Year

 Light-Duty

Emissions Without

Tier 2/Sulfur

Light-Duty

Emissions With

Tier 2/Sulfur

Emissions

Reduced

Percent Reduction in

Baseline Inventory

Light-Duty All Sources*

2004 39,932 19,700 20,232 51% -

2005 43,439 20,696 22,743 52% 1.1%

2010 72,626 22,542 50,084 69% 2.4%

2015 109,622 23,275 86,347 79% 3.8%

2020 138,177 24,754 113,423 82% 4.7%

2030 175,068 28,393 146,675 84% 5.6%
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-38

0

30,000

60,000

90,000

120,000

150,000

180,000

2000 2005 2010 2015 2020 2025 2030

Diesel Gasoline

WITHOUT TIER 2/SULFUR CONTROLS

Figure III-18. 47-State Light-Duty Direct Exhaust PM2.5 Emissions With Tier 2/Sulfur

Increased Diesel Growth (Annual Tons)

In 2005, the fleet would still be comprised primarily of gasoline vehicles under this

scenario; thus, significant benefits from gasoline sulfur control would be realized immediately,

as with the no growth case. The rapid growth of diesel market penetration in conjunction with

implementation of the proposed Tier 2 PM standards would result in a diesel fleet comprised

almost exclusively of vehicles compliant with Tier 2. Thus, a large share of the baseline

inventory would be reduced very soon after implementation of the Tier 2/Sulfur standards. In

2010, nearly 70 percent of baseline light-duty exhaust PM2.5 inventory is reduced; by 2020, we

project 82 percent of baseline emissions would be reduced. Today’s proposal would serve to

mitigate the large increases in direct PM emissions which would occur without control due to

increased growth in diesel penetration, effectively stabilizing these emissions through at least

2030.

B. Air Quality Measures

This section describes the analyses performed to evaluate the impact of the Tier 2/Sulfur

proposal on ozone and visibility levels, as discussed in Section III of the preamble. These

analyses were performed using different emission inventories, control assumptions, ozone and

visibility models, and analysis years than the air quality modeling we conducted for the

benefit/cost analysis described in Chapter VII. As a result, the ozone and visibility modeling

results presented in Section III of the preamble and described more fully in this section are not
Chapter III: Environmental Impact

III-39

directly comparable to the ozone and visibility modeling results used for the benefit/cost

analysis.

This section does not discuss the impact of the Tier 2/Sulfur proposal on PM levels, since

the PM air quality modeling we performed was conducted for the benefit/cost analysis described

in Chapter VII. This section also does not discuss the impact of the Tier 2/Sulfur proposal on

CO levels since we have not quantified the proposal’s impact on CO emission levels at this time.

1. Ozone

Current air quality with respect to ozone can be expressed in terms of formal designation

of attainment or nonattainment of the 1-hour standard (there is as yet no such designation for the

8-hour standard) and in terms of measured ambient design values (defined below) for both the 1-

hour and 8-hour standards. Estimates of the ozone impact of today’s proposal and the expected

future ozone concentrations after its implementation can be obtained by modeling a base case

(before control measures) and a control case (after control measures). The outputs of these and

other model runs are used in combination with measured design values to project future design

values. Other metrics described in this section are also used to compare one model run to

another. The structure of this section is as follows:

- Subsection B.1.a. presents the data supporting the discussion in the preamble of

current nonattainment status, including an explanation of design values. 

- Subsection B.1.b. describes in general terms the ozone modeling that we used to

estimate the effects of Tier 2/Sulfur controls and the way we used that modeling

to estimate the resulting design values.

- Subsection B.1.c. explains the “rollback method,” used to estimate future design

values based on measured historical ozone levels and ozone modeling results.

- Subsection B.1.d. describes the ozone modeling simulations used to evaluate the

impact of Tier 2/Sulfur controls on future ozone levels.

- Subsection B.1.e. presents the results of two ozone simulations that were used to

explore the relative effects of NOX and VOC controls on ozone levels.

- Subsection B.1.f. describes two ozone simulations that were used to estimate the

effects of today’s proposal on ozone levels.

a. Measures of Current Attainment and Non-attainment

Measures of attainment and non-attainment consist of both the formal attainment and

nonattainment designations and the most recent set of ambient design values, which are based on

measurements from 1995 to 1997. Formal attainment/nonattainment status applies only to the 1-

hour standard, since such designations have not yet been made for the 8-hour standard.

Outside of California, the 1990 census showed 72 million people living in areas that were

formally designated as non-attainment for the 1-hour standard as of August 10, 1998. The
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

i The procedure described in this paragraph can also be used to isolate the effects of a particular control

program on design values. To do so, one needs to apply the procedure twice: once for a future year without

applying the control program of interest, and once for a future year with the control program of interest applied. The

impact of the control program on ozone design values is given by the difference between the design values

calculated for the two different cases.

III-40

individual areas, their populations, and their nonattainment classifications are listed in Table C-1

in Appendix C.

Design values

An ozone design value is the concentration or average of concentrations that determines

whether a monitoring site meets the NAAQS for ozone. Because of the way they are defined,

design values can only be determined for three-year monitoring periods. We estimate the design

values, and therefore the attainment effects, resulting from control programs by using a

combination of modeling results and measured design values. Air quality model runs for a base

year and a future year are used to determine the relative change in ozone levels produced by the

controls that would be implemented between the base and future years. This relative change is

used to adjust the measured historical design values in the region being analyzed, as described in

detail below.i

A 1-hour design value is the fourth highest daily maximum 1-hour average ozone

concentration measured over a three-year period at a given monitor. An 8-hour design value is

the three-year average of the annual fourth highest daily maximum 8-hour average ozone

concentration at a given monitor. The full details of these determinations (including accounting

for missing values and other complexities) are given in Appendices H and I of 40 CFR Part 50. 

As discussed in these appendices, design values are truncated to whole ppb. Due to the precision

with which the standards are expressed (0.12 ppm for the 1-hour, 0.08 ppm for the 8-hour),

nonattainment of the 1-hour standard is defined as a design value greater than or equal to 125

ppb and nonattainment of the 8-hour standard is defined as a design value greater than or equal

to 85 ppb.

For the 1-hour standard, the design value for a county is the highest design value of the

monitors within that county. Typically, there is one or zero monitors per county. If a county

does not contain an ozone monitor, it cannot have a design value. For most of our analyses,

county design values are consolidated where possible into design values for metropolitan areas. 

The design value for a metropolitan area is the highest design value among the included

counties. Counties that are not in metropolitan areas are listed separately. For the purposes of

the analyses described in this section, we have assumed that the definition of county and

metropolitan area design values for the 8-hour standard will be the same as for the 1-hour

standard. It should be noted, however, that we have not yet determined how county and

metropolitan area design values will be defined for the 8-hour standard.

To simulate the air quality effects of today’s proposal, design values are estimated or

projected from measured 1995-1997 county design values by the method described in Subsection
Chapter III: Environmental Impact

III-41

B.1.c. Projected design values are determined only for counties that have measured design

values. The measured 1995-1997 design values that exceeded the 1-hour standard in

metropolitan areas and rural counties in the 37 states that participated in OTAG are shown in

Table C-2 in Appendix C. Similar measured design values for the 8-hour standard are shown in

Table C-3.

b. General Description of Ozone Modeling in the OTAG Domain to Estimate

the Effect of Tier 2/Sulfur Controls

We used the considerable development work done for the ROTR as a foundation to

estimate the impact of the proposed Tier 2/Sulfur controls on ozone levels in the OTAG domain. 

A method for estimating the design values that result from a given control scenario was also

developed for the ROTR and has been extended to estimate the effects of Tier 2/Sulfur controls. 

Further details of the modeling work are presented below and in a technical memorandum to

Docket A-97-10, “Photochemical Air Quality Simulations in Support of Tier 2/Sulfur,” by

Harvey Michaels.

The basic method of using modeling

The modeling methodology requires running two simulations, a base case (without Tier

2/Sulfur controls) and a control case (with Tier 2/Sulfur controls). The effects of the control

program are then evaluated by comparing the modeling results of the control case with those of

the base case. The base case for our Tier 2/Sulfur ozone analysis is the 2007 post-ROTR

scenario. We used two versions of this base case; the first was published with the ROTR’s

Supplemental Notice of Proposed Rulemaking (SNPR) and used the SNPR emission inventories,

while the second used the ROTR Final Inventory (September 1998), which was updated based

on public comments. Table III-27 indicates which of our Tier 2/Sulfur simulations correspond to

which base case.

Emissions inventories and meteorology were developed for four historical ozone

episodes, each about 10 days long, from 1988, 1991, 1993, and 1995. When the photochemical

grid model was judged to satisfactorily reproduce the historical episodes, the meteorology was

retained and emission inventories for the base and control cases were substituted for the

historical emission inventories. The base and control cases were then run for all four episodes.

The model output is hourly average ozone concentrations in all grid cells of the modeling

domain for all hours of the simulation. A large number of different metrics have been developed

to compare the ozone concentrations in the base case with those in the control case. One of the

most useful of these, because of its relationship to measured design values used to determine

attainment and nonattainment, is projected design values. Design values were projected using
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

j This method, and the reasons why 1991, 1993, and 1995 were used, are discussed in “Procedures for

Estimating the Impact of the OTAG Strategy Run 5 on Attainment of the 8-Hr Ozone NAAQS.” Draft: October

1997. Staff Report, Air Quality Modeling Group, Emissions, Monitoring and Analysis Division, Office of Air

Quality Planning and Standards, U.S. EPA. EPA Air Docket A-96-56, II-A-24.

III-42

the modeling results from three episodes: 1991, 1993, and 1995.j

 The calculation of projected

design values is described in the next section.

To facilitate the ozone modeling, the emission reduction due to Tier 2/Sulfur controls

was expressed as a percentage reduction from the 2007 post-ROTR emission inventory for all

highway mobile sources. The procedure used to do this is described in a technical memo to

Docket No. A-97-10 (“Methodology for Developing Inventory Reductions Used in Ozone

Modeling,” by John Koupal). These percentage reductions were applied everywhere in the

modeling domain to all on-highway emissions in the base case. The proposed Tier 2/Sulfur

program would achieve almost all of its emission reductions from cars and light trucks, but

converting these reductions to a percentage of all on-highway emissions greatly streamlined the

process of modeling the proposed Tier 2/Sulfur controls.

The standard ozone metrics applied to the modeling results are relatively simple and selfexplanatory. For example, “Grid Cell Days Above the Standard” is a count of all the grid cells

on all simulation days (except for 2 or 3 startup days in each episode) that the daily maximum

ozone concentration (either 1- or 8-hour average, depending on the specific metric) exceeded the

standard. The “rollback method” of projecting design values is considerably more complicated,

because it uses both measured design values and simulations. This method is described below.

c. The “Rollback Method” for Estimating Design Values Resulting from

Control Measures

Because of the way they are defined, design values can only be determined for three-year

monitoring periods. We estimate the design values resulting from a given control program by

beginning with the measured design values and then using two model runs to determine the

relative change produced by the control program. The first model run is the base year case and

uses an emissions inventory that corresponds to the measured design values. For 1995-1997

design values, we used the 1995/96 Base Year emissions inventory. The second model run is the

control case and employs the inventories for which we are projecting resulting design values. 

We projected design values for three control cases: 2007 ROTR, 2007 Tier 2/Sulfur (OMS4) and

2020 Tier 2/Sulfur (OMS3). The relative change between the base year case and control case is

used to adjust the measured design values, as described in this section. This process, called the

“rollback method,” was used in the ROTR rulemaking and is more fully described in the

document: “Procedures for Estimating the Impact of OTAG Strategy Run 5 on Attainment of the
Chapter III: Environmental Impact

k

 In keeping with Appendices H and I of 40 CFR Part 50, projected design values are truncated to whole

ppb. Nonattainment of the 1-hour standard is defined as a design value greater than or equal to 125 ppb. 

Nonattainment of the 8-hour standard is defined as a design value greater than or equal to 85 ppb.

III-43

8-Hr Ozone NAAQS”, Staff Report, Draft October 1997, (EPA Air Docket A-96-56, II-A-24).k

There are three ozone episodes that are used in the modeling. Each corresponds to the

meteorological conditions of a historical air pollution episode and is approximately 10 days long. 

The actual episodes occurred in 1991, 1993, and 1995. When we refer to running those three

episodes for the ROTR in 2007, for example, we mean using the meteorology of those three

episode with the emissions inventory we expect in 2007 following the ROTR.

The following procedure, referred to as the rollback method, was used to estimate the

effects of control strategies on 1-hr and 8-hr ozone design values. Note that, except for Step

1(a), the procedures for treating 1-hr and the 8-hr design values are the same. The base year case

refers to the 1995/96 Base Year inventory, which corresponds to the 1995-1997 period used to

determine measured design values. The control case refers to one of the three cases for which

we are projecting design values: either the 2007 post-ROTR scenario or the 2007 Tier 2/Sulfur

case or the 2020 Tier 2/Sulfur case. 

Step 1: Calculate ambient design values

(a) For each monitor in a county determine the monitor-specific 1-hr design values

by taking the 4th highest daily maximum value from ozone data collected at the

monitoring site for the period 1995-1997. For determining an 8-hr design value,

calculate the 3-year average of the 4th highest daily maximum 8-hr value in each

year at the monitor.

(b) Select the highest design value from all monitors within the county as the

county-specific design value.

Step 2: Generate model predictions for three OTAG episodes (July 1991, 1993 and 1995) for the 

base year case and for the control case.

(a) The base year case model predictions reflect emissions levels in the 1995-1997

time period.

(b) The control case model predictions reflect a future year control scenario.

Step 3: Calculate an adjustment factor for each grid cell

Notes: 

(1) The adjustment factor is based on the percent difference in ozone predictions

between the base year case and the control case. These factors will be used in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-44

Step 5 to "rollback" ambient design values to reflect the impacts of the control

case.

(2) Step 3 must be followed separately for the base year case and the control case.

For each grid cell:

(a) Calculate daily maximum ozone concentrations for every day simulated

(excluding the ramp up days for each episode) for the three OTAG episodes

identified in Step 2. The ramp up days are one and two for the 1993 episode and

one, two, and three for the other episodes.

(b) For each episode select the 1st, 2nd, and 3rd highest daily maximum values.

(c) For each of these "ranks" (i.e., 1st, 2nd, and 3rd ranked values), average the

concentrations across the episodes (e.g., sum all 1st ranked values and divide by

number of episodes). This yields an average value for each rank (i.e., the average

of the highest, the average of the 2nd highest, and the average of the 3rd highest

concentrations).

(d) For each of the average ranks, calculate the ratio of the control case to the base

year case. This yields a set of three ratios, one for each rank.

(e) Average these three ratios to get the Adjustment Factor, which is multiplied times

the 1995-1997 design value for a given grid cell to get the new design value for

that grid cell.

Step 4: Assign a unique grid cell adjustment factor to each individual county

(a) The cell with the largest portion of its area in the county is assigned to that

county. If more than one cell is completely contained in the county, the cell with

the highest base year case value is assigned to the county. The 1990 Base Year

OTAG model predictions were used in those cases where it was necessary to

chose among multiple grid cells for assigning a grid cell to a county. 

(b) The step of assigning a unique grid cell to each county yields the county-specific

adjustment factor. Note that only one grid cell is assigned to a county. Thus,

there is no spatial averaging or spatial weighting of adjustment factors using

multiple grid cells in determining the county-specific factors.

Step 5: Calculate the rollback ambient design value 

(a) This step adjusts the ambient design values in each county to reflect the ozone

reductions estimated to result from the control case.

(b) Multiply the county-specific ambient design value from Step 1 times the
Chapter III: Environmental Impact

III-45

county-specific adjustment factor from Step 4.

d. Specific Simulations Used to Evaluate Tier 2/Sulfur

Four simulations were performed in support of the Tier 2/Sulfur rulemaking. They are

listed in the following table with the percentage reduction in highway vehicle emissions that

were modeled for each run.

Table III-27. Percent Reductions for Tier 2/Sulfur Ozone Modeling Runs

Run

% Reduction from Base Case

Base Case

NOX VOC

OMS1 0% 30.3% 2007 Post-ROTR published

with SNPR

OMS2 54.2% 0%

OMS3 50.2% 10.5% 2007 Post-ROTR Final

Inventory, September 1998 OMS4 18.5% 4.3%

OMS1 and OMS2 were intended to explore the relative effect on ozone of VOC and NOX

reductions. OMS3 was intended to model the effect of Tier 2/Sulfur in 2020, when it would

affect a large portion of the fleet. OMS4 was intended to model Tier 2/Sulfur in 2007, which is

an important year for ozone attainment and is also a year for which a large body of ROTRrelated modeling results are available.

As mentioned previously, the percentage reductions in Table III-27 are those that when

applied to the whole highway mobile source fleet will reproduce the reductions expected to

result from Tier 2/Sulfur controls. The emissions modeling used to obtain the percent reductions

from the base case are described in a technical memo to the Docket A-97-10 from John Koupal,

titled “Methodology for Developing Inventory Reductions Used in Ozone Modeling.”

e. Results of the NOX-only and VOC-only Runs (OMS1 and OMS2)

While today’s proposal decreases both NOx and VOC, NOx is decreased preferentially

because it has a far greater effect on ozone. Most areas are NOX-limited—their ozone

concentrations respond more to decreases in NOX than to decreases in VOCs. Only a few, highly

localized areas are VOC-limited. For this reason, the Ozone Transport Assessment Group

reached a broad consensus that regional ozone reductions in the eastern U.S. are best

accomplished by reducing NOX. This consensus is reflected in the ROTR, which only reduces

NOX.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

l

 For comparison, we estimate that today’s proposal will actually reduce mobile source NOX 50.0 percent

and VOC 10.2 percent in 2020.

III-46

We have demonstrated that this conclusion is still valid even after the large NOx

reductions resulting from the ROTR are taken into account. The demonstration used two

OTAG-domain modeling runs that simulated the separate effects of mobile source VOC and

NOX reductions. OMS2 simulated a 54 percent reduction in highway mobile source NOX and

OMS1 a 30 percent reduction in highway mobile source VOC.l

The results of the OMS1 and OMS2 runs demonstrate that mobile source NOX reductions

are much more effective at reducing ozone than are mobile source VOC reductions. The number

of grid cell days on which the daily maximum 1-hour average ozone concentration exceeded 124

ppb fell 46% for the NOX reductions but only 2% for the VOC reductions. The number of grid

cell days on which the daily maximum 8-hour average ozone concentration exceeded 84 ppb fell

40% for the NOX reductions but only 1% for the VOC reductions.

f. Details of the Tier 2/Sulfur Ozone Modeling Runs (OMS3 and OMS4)

The results of our modeling of Tier 2/Sulfur have been summarized in the preamble. In

this section, we discuss the detailed methods and results that were not covered there. The

design-value results for all counties are listed in Appendix C.

As stated above, OMS3 and OMS4 were intended to model Tier 2/Sulfur in 2020 and

2007, respectively. For these two runs, the emission inventory for the base case, to which they

are compared, is the ROTR budget case. This base case inventory uses the OTAG nonroad,

highway heavy-duty, and highway light-duty emission estimates, as updated for the ROTR final

rule based on public comment as of September 1998. This inventory is a newer version than the

base case inventory used for the OMS1 and OMS2 runs. For both base case inventories, the

nonroad inventories are based on the NEVES study, and the highway mobile source inventories

are based on MOBILE5 emission factors, vehicle distributions, and mileage accumulation

patterns. The fact that these inventories do not reflect the more recent information incorporated

in the emission inventory analyses presented in Section A. of this chapter creates some

uncertainty as to the absolute values of design values and which counties are in attainment or

nonattainment under the base case.

Emissions and ozone levels were modeled for 2007 and 2020. The 2007 case is

straightforward because we produced a full emission inventory for 2007 for the ROTR. For

2020, we assumed that total emissions (under ROTR plus current vehicle standards and fleet

turnover) would be the same as in 2007, i.e., that emission reductions from fleet turnover and

emission increases from growth in all sectors balance each other. This assumption is not exactly

correct, but is close. Our best estimate is that without Tier 2/Sulfur NOx emissions from all

human sources actually would be about 3% lower in 2020, and VOC emissions would be about

5% higher. The details of these estimates are in Section A of this chapter, “Inventory Impacts of
Chapter III: Environmental Impact

III-47

Tier 2/Sulfur.”

A relatively minor caveat is that the Tier 2/Sulfur NOX and VOC reductions were

distributed evenly over all highway mobile sources, which have a different spatial distribution

from light-duty vehicles.

After OMS3 and OMS4 had been run and design values calculated by the rollback

method, our proposal was refined, resulting in slightly different percent reductions from the base

case. These two sets of percent reductions are shown in Table III-28.

Table III-28. Percentage Reductions from the 2007 Post-ROTR Inventory of NOx and

NMHC for OMS3 (2020), OMS4 (2007), and for Today’s Proposal in 2007, 2010, and 2020.

Year OMS3 and OMS4 Today’s Proposal

NMHC NOX NMHC NOX

2007 4.3% 18.5% 4.0% 18.1%

2010 – – 5.4% 26.9%

2020 10.5% 50.2% 10.2% 50.0%

Because OMS3 and OMS4 were so close to today’s proposal, we obtained the design

values for today’s proposal by linearly interpolating or extrapolating slightly based on the

differences in NOX alone. Interpolations and extrapolations were also used to determine design

values in 2010, which was not modeled, and to estimate design values in 2010 without Tier

2/Sulfur. The percentage reduction in total highway NOX emissions between the 2007 baseline

and 2010 without Tier 2/Sulfur was 4.3%.

For discussing the effects of today’s proposal on one- and eight-hour design values, we

projected county design values using the rollback method for three modeling runs: 2007 post

ROTR, OMS3, and OMS4. All other projected design values have been linearly interpolated

based on NOX. As we have discussed previously, the primary effect on ozone has been produced

by NOX.

All measured and projected county design values are in Appendix C. In addition, the

preamble indicates counts of metropolitan areas and rural counties whose measured or projected

design values meet various criteria with respect to the one and eight-hour standards. Appendix C

contains the lists of these metropolitan areas and counties together with their design values and

populations.

2. Visibility/Regional Haze
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-48

The Northern Front Range Air Quality Study (NFRAQS) report collected numerous

ambient PM2.5 samples in various areas around Denver, including urban areas such as Welby and

rural areas such as Brighton, during the winter of 1997. The samples were analyzed for their

composition, including the contribution of carbon-based, sulfate, nitrate, and crustal matter

particles to each sample. The results of that analysis are summarized in Table III-29.

Table III-29. NFRAQS Compositional Analysis of PM2.5 Samples

Site Carbon-based

PM2.5

Sulfate-based

PM2.5

Nitrate-based

PM2.5

Crustal Matter

PM2.5

Welby 49% 10% 25% 16%

Brighton 42% 15% 32% 11%

The study used a variety of techniques to determine how much of the carbon-based,

sulfate, and nitrate PM found in the PM2.5 samples came from gasoline vehicles. Organic tracer

compounds were used to determine how much of the carbonaceous PM2.5 came from gasoline

vehicles and to separate the contribution of normal emitting vehicles and higher emitting

vehicles. A combination of inventory analysis, dispersion modeling, atmospheric chemistry, and

analysis of compositional variation over time were used to determine the contribution of gasoline

vehicles to sulfate and nitrate PM2.5. The study reported the following average percentages of

sulfates and nitrates coming from gasoline vehicles. The proportion of each type of PM2.5

determined to come from gasoline vehicles is shown in Table III-30.

Table III-30. Percentage of PM2.5 Coming from Gasoline Vehicles

Site Carbon-Based Sulfate-Based Nitrate-Based

Welby 57% 20% 36%

Brighton 62% 14% 38%

From these two sets of numbers, one can calculate the contribution of each type of PM2.5

from gasoline vehicles to total PM2.5, as shown in the middle three columns of Table III-34. The

results can be summed to derive the contribution of gasoline vehicles to total PM2.5, as shown in

the last column in Table III-31.

Table III-31. Percentage of Total PM2.5 From Gasoline Vehicles

Site Carbon-Based Sulfate-Based Nitrate-Based Total

Welby 28% 2% 9% 39%

Brighton 26% 2% 12% 40%
Chapter III: Environmental Impact

m Light extinction is a measure of visibility impairment.

III-49

This section presents the analytic basis for the preamble discussion of the impact of

mobile sources on visibility impairment in the U.S. In this context, “visibility impairment”

refers to the reduction in the distance that one can see as the result of air pollution. As discussed

in the preamble, fine particles suspended in the atmosphere are the primary cause of visibility

impairment.

As discussed in the preamble, the Grand Canyon Visibility Transport Commission

examined visibility impairment on the Colorado Plateau. Figures II-4 and II-5 in the

Commission’s June 10, 1996 report titled “Recommendations for Improving Western Vistas”

contain estimates for the contribution of 11 different sources to the man-made visibility

impairment at Hopi Point. Figure II-4 is for annual average light extinctionm and Figure II-5 for

the worst days. Each figure gives estimates for 1990, 2000, 2010, and 2040. In 2000, for both

annual average and worst days, the contribution from “Mobile” to light extinction is about 10

percent. EPA understands this category to consist of highway vehicles only, since there is a

separate category for “Non Road Diesel.” Furthermore, the “Mobile” category must exclude

dust caused by highway vehicle travel since there is a separate category for “Road Dust.” The

road dust category is estimated to be responsible for about 30 percent of light extinction at Hopi

Point.

It is generally recognized that the traditionally-used emission factors and transport

assumptions for road dust have considerable uncertainty. Therefore, the contribution of road

dust may be overstated in these figures. If light extinction from highway vehicles is expressed as

a percentage of all light extinction not attributable to road dust, the highway vehicle contribution

is 14 percent. Hence efforts to reduce highway vehicle emissions that cause light extinction can

contribute significantly to improved visibility on the Colorado Plateau.

The benefit/cost analysis in Chapter VII includes the visibility-related economic benefits

that would result from implementation of the Tier 2/Sulfur proposal.

C. Air Toxics

This section summarizes our analysis of the impact of the proposed Tier 2/Sulfur

standards on emissions of and exposure to air toxics. Section C.1. reviews the effects of selected

air toxics emissions on human health. Section C.2. describes our analysis of air toxics emissions

and exposure and the effect that the proposed Tier 2/Sulfur standards may have on air toxics

emissions and exposure.

1. Health Effects

Our assessment of motor vehicle toxics focused on the following compounds with cancer
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

n

Leukemia is a blood disease in which the white blood cells are abnormal in type or number. Leukemia

may be divided into nonlymphocytic (granulocytic) leukemias and lymphocytic leukemias. Nonlymphocytic

leukemia generally involves the types of white blood cells (leukocytes) that are involved in engulfing, killing, and

digesting bacteria and other parasites (phagocytosis) as well as releasing chemicals involved in allergic and immune

responses. This type of leukemia may also involve erythroblastic cell types (immature red blood cells). 

Lymphocytic leukemia involves the lymphocyte type of white bloods cell that are responsible for the immune

responses. Both nonlymphocytic and lymphocytic leukemia may, in turn, be separated into acute (rapid and fatal)

and chronic (lingering, lasting) forms. For example; in acute myeloid leukemia (AML) there is diminished

production of normal red blood cells (erythrocytes), granulocytes, and platelets (control clotting) which leads to

death by anemia, infection, or hemorrhage. These events can be rapid. In chronic myeloid leukemia (CML) the

leukemic cells retain the ability to differentiate (i.e., be responsive to stimulatory factors) and perform function; later

there is a loss of the ability to respond.

III-50

potency estimates that have or could have significant emissions from cars and light trucks:

benzene, 1,3-butadiene, formaldehyde, acetaldehyde, and diesel PM. It should be noted,

however, that the EPA does not have an official quantitative estimate of diesel emissions

potency at present. The current estimate is still draft, as discussed below. A brief summary of

health effects information on these compounds follows. The information in this section is based

on our preliminary study of motor vehicle toxics emissions. The study will be peer reviewed in

the near future. We anticipate updating our estimates once the study completes peer review.

a. Benzene

Benzene is an aromatic hydrocarbon which is present as a gas in both exhaust and

evaporative emissions from motor vehicles. Benzene in the exhaust, expressed as a percentage

of total organic gases (TOG), varies depending on control technology (e.g., type of catalyst) and

the levels of benzene and aromatics in the fuel, but is generally about three to five percent. The

benzene fraction of evaporative emissions depends on control technology (i.e., fuel injector or 

carburetor) and fuel composition (e.g., benzene level and Reid Vapor Pressure, or RVP) and is

generally about one percent.

The EPA has recently reconfirmed that benzene is a known human carcinogen by all

routes of exposure.9

 Respiration is the major source of human exposure. At least half of this

exposure is by way of gasoline vapors and automotive emissions (EPA 1998a). Long-term

exposure to high levels of benzene in air has been shown to cause cancer of the tissues that form

white blood cells. Among these are acute nonlymphocyticn leukemia, chronic lymphocytic

leukemia and possibly multiple myeloma (primary malignant tumors in the bone marrow),

although the evidence for the latter has decreased with more recent studies.10,11 Leukemias,

lymphomas, and other tumor types have been observed in experimental animals that have been

exposed to benzene by inhalation or oral administration (EPA 1985, Clement 1991). Exposure

to benzene and/or its metabolites has also been linked with genetic changes in humans and

animals12 and increased proliferation of mouse bone marrow cells.13 Furthermore, the occurrence

of certain chromosomal changes in individuals with known exposure to benzene may serve as a

marker for those at risk for contracting leukemia.14
Chapter III: Environmental Impact

o

Pancytopenia is the reduction in the number of all three major types of blood cells (erythrocytes, or red blood

cells, thrombocytes, or platelets, and leukocytes, or white blood cells). In adults, all three major types of blood cells are

produced in the bone marrow of the vertebra, sternum, ribs, and pelvis. The bone marrow contains immature cells,

known as multipotent myeloid stem cells, that later differentiate into the various mature blood cells. Pancytopenia results

from a reduction in the ability of the red bone marrow to produce adequate numbers of these mature blood cells.

p

 Aplastic anemia is a more severe blood disease and occurs when the bone marrow ceases to function, i.e.,

these stem cells never reach maturity. The depression in bone marrow function occurs in two stages - hyperplasia, or

increased synthesis of blood cell elements, followed by hypoplasia, or decreased synthesis. As the disease progresses, the

bone marrow decreases functioning. This myeloplastic dysplasia (formation of abnormal tissue) without acute leukemia

is known as preleukemia. The aplastic anemia can progress to AML (acute mylogenous leukemia).

III-51

The latest assessment by EPA places the excess risk of developing acute nonlymphocytic

leukemia at 2.2 × 10-6 to 7.7 × 10-6/:g/m3

. In other words, there is a risk of two to eight excess

acute nonlymphocytic leukemia cases in one million people exposed to 1:g/m3 benzene over a

lifetime (70 years). These numbers represent the maximum likelihood (MLE) estimate of risk,

not an upper confidence limit (UCL).

A number of adverse noncancer health effects, blood disorders such as preleukemia and

aplastic anemia, have also been associated with low-dose, long-term exposure to benzene (EPA

1985, Clement 1991, 15). People with long-term exposure to benzene may experience harmful

effects on the blood-forming tissues, especially the bone marrow. These effects can disrupt

normal blood production and cause a decrease in important blood components, such as red blood

cells and blood platelets, leading to anemia (a reduction in the number of red blood cells),

leukopenia (a reduction in the number of white blood cells), or thrombocytopenia (a reduction in

the number of blood platelets, thus reducing the ability for blood to clot). Chronic inhalation

exposure to benzene in humans and animals results in pancytopeniao

,a condition characterized by

decreased numbers of circulating erythrocytes (red blood cells), leukocytes (white blood cells),

and thrombocytes (blood platelets).16,17 Individuals that develop pancytopenia and have

continued exposure to benzene may develop aplastic anemia,p whereas others exhibit both

pancytopenia and bone marrow hyperplasia (excessive cell formation), a condition that may

indicate a preleukemic state.18,19 The most sensitive noncancer effect observed in humans is the

depression of absolute lymphocyte counts in the circulating blood.20 A draft reference

concentration (RfC) has been developed for benzene. The reference concentration (RfC) is an

estimate of a continuous inhalation exposure to the human population (including sensitive

subgroups) that is likely to be without an appreciable risk of deleterious noncancer effects during

a lifetime; these estimates frequently have uncertainty levels that span perhaps an order of

magnitude. The benzene RfC is 9 :g/m3, which means that long-term exposures to benzene

should be kept below 9 :g/m3

 to avoid appreciable risks of these non-cancer effects.21

b. 1,3-Butadiene

1,3-Butadiene is formed in vehicle exhaust by the incomplete combustion of the fuel. It

is not present in vehicle evaporative and refueling emissions, because it is not present in any

appreciable amount in gasoline. 1,3-Butadiene accounts for 0.4 to 1.0 percent of total exhaust
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-52

TOG, depending on control technology and fuel composition.

EPA recently prepared a draft assessment that would determine sufficient evidence exists

to consider 1,3-butadiene a known human carcinogen.22 However, the Environmental Health

Committee of EPA’s Scientific Advisory Board (SAB), in reviewing the draft document, issued

a majority opinion that 1,3-butadiene should instead be classified as a probable human

carcinogen.23 In the draft EPA assessment, the MLE estimate of a lifetime extra cancer risk from

continuous 1,3-butadiene exposure is about 3.9 × 10-6/:g/m3. In other words, it is estimated that

approximately 4 persons in one million exposed to 1 :g/m3

 1,3-butadiene continuously for their

lifetime (85 years in this case) would develop cancer as a result of their exposure. Lower

exposures are expected to result in risks that are lower.

1,3-Butadiene also causes a variety of reproductive and developmental effects in mice

and rats (no human data) when exposed to long-term, low doses of butadiene (EPA 1998c). The

most sensitive effect was reduced litter size at birth and at weaning. These effects were observed

in studies in which male mice exposed to 1,3-butadiene were mated with unexposed females. In

humans, such an effect might manifest itself as an increased risk of spontaneous abortions,

miscarriages, still births, or very early deaths. Long-term exposures to 1,3-butadiene should be

kept below its reference concentration of 0.33 :g/m3

 to avoid appreciable risks of these

reproductive and developmental effects (EPA 1998c).

c. Formaldehyde

Formaldehyde is the most prevalent aldehyde in vehicle exhaust. It is formed from

incomplete combustion of both gasoline and diesel fuel and accounts for one to four percent of

total exhaust TOG emissions, depending on control technology and fuel composition. It is not

found in evaporative emissions.

Formaldehyde exhibits extremely complex atmospheric behavior.24 It is present in emissions and is also formed by the atmospheric oxidation of virtually all organic species, including

biogenic (produced by a living organism) hydrocarbons. Mobile sources contribute both primary

formaldehyde (emitted directly from motor vehicles) and secondary formaldehyde (formed from

photooxidation of other VOCs emitted from vehicles). The mobile source contribution is

difficult to quantify, but it appears that at least 30 percent of formaldehyde in the ambient air

may be attributable to motor vehicles (EPA 1993a).

EPA has classified formaldehyde as a probable human carcinogen25 based on limited

evidence for carcinogenicity in humans and sufficient evidence of carcinogenicity in animal

studies, rats, mice, hamsters, and monkeys. Epidemiological studies in occupationally exposed

workers suggest that long-term inhalation of formaldehyde may be associated with tumors of the

nasopharyngeal cavity (generally the area at the back of the mouth near the nose), nasal cavity,

and sinus (Clement 1991, EPA 1993a). Studies in experimental animals provide sufficient

evidence that long-term inhalation exposure to formaldehyde causes an increase in the incidence

of squamous (epithelial) cell carcinomas (tumors) of the nasal cavity (Clement 1991, EPA
Chapter III: Environmental Impact

III-53

1993a, EPA 1987). The distribution of nasal tumors in rats suggests that not only regional

exposure but also local tissue susceptibility may be important for the distribution of

formaldehyde-induced tumors (Clement 1991, EPA 1993a). Research has demonstrated that

formaldehyde produces mutagenic activity in cell cultures.

The MLE estimate of a lifetime extra cancer risk from continuous formaldehyde

exposure is about 1.3 × 10-6/:g/m3. In other words, it is estimated that approximately 1 person in

one million exposed to 1 :g/m3 formaldehyde continuously for their lifetime (70 years) would

develop cancer as a result of their exposure. Lower exposures are expected to result in risks that

are lower.

Formaldehyde exposure also causes a range of noncancer health effects. At low

concentrations (0.05-2.0 ppm), irritation of the eyes (tearing of the eyes and increased blinking)

and mucous membranes is the principal effect observed in humans. At exposure to 1-11 ppm,

other human upper respiratory effects associated with acute formaldehyde exposure include a dry

or sore throat, and a tingling sensation of the nose. Sensitive individuals may experience these

effects at lower concentrations. Forty percent of formaldehyde-producing factory workers

reported nasal symptoms such as rhinitis (inflammation of the nasal membrane), nasal

obstruction, and nasal discharge following chronic exposure.26 In persons with bronchial

asthma, the upper respiratory irritation caused by formaldehyde can precipitate an acute

asthmatic attack, sometimes at concentrations below 5 ppm;27 formaldehyde exposure may also

cause bronchial asthma-like symptoms in nonasthmatics.28,29 However, it is unclear whether

asthmatics are more sensitive than nonasthmatics to formaldehyde's effects.30

Immune stimulation may occur following formaldehyde exposure, although conclusive

evidence is not available. Also, little is known about formaldehyde's effect on the central

nervous system. Several animal inhalation studies have been conducted to assess the

developmental toxicity of formaldehyde: The only exposure-related effect noted was decreased

maternal body weight gain at the high-exposure level but no adverse effects on reproductive

outcome of the fetuses that could be attributed to treatment were noted. An inhalation reference

concentration (RfC), below which long-term exposures would not pose appreciable non-cancer

health risks, is not available for formaldehyde at this time.

d. Acetaldehyde

Acetaldehyde is a saturated aldehyde that is found in vehicle exhaust and is formed as a

result of incomplete combustion of both gasoline and diesel fuel. It is not a component of

evaporative emissions. Acetaldehyde comprises 0.4 to 1.0 percent of exhaust TOG, depending

on control technology and fuel composition.

The atmospheric chemistry of acetaldehyde is similar in many respects to that of

formaldehyde (Ligocki et al., 1991, 31). Like formaldehyde, it can be both produced and

destroyed by atmospheric chemical transformation, so mobile sources contribute to ambient

acetaldehyde levels both by their primary emissions and by secondary formation resulting from
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-54

their VOC emissions. Data from emission inventories and atmospheric modeling indicate that

roughly 40 percent of the acetaldehyde in ambient air may be attributable to mobile sources.

Acetaldehyde emissions are classified as a probable human carcinogen. The MLE

estimate of a lifetime extra cancer risk from continuous acetaldehyde exposure is about 0.78 ×

10-6/:g/m3. In other words, it is estimated that less than 1 person in one million exposed to 1

:g/m3 acetaldehyde continuously for their lifetime (70 years) would develop cancer as a result of

their exposure.

Non-cancer effects in studies with rats and mice showed acetaldehyde to be moderately

toxic by the inhalation, oral, and intravenous routes.32,33,34 The primary acute effect of exposure

to acetaldehyde vapors is irritation of the eyes, skin, and respiratory tract. At high

concentrations, irritation and pulmonary effects can occur, which could facilitate the uptake of

other contaminants. Little research exists that addresses the effects of inhalation of acetaldehyde

on reproductive and developmental effects. The in vitro and in vivo studies provide evidence to

suggest that acetaldehyde may be the causative factor in birth defects observed in fetal alcohol

syndrome, though evidence is very limited linking these effects to inhalation exposure Longterm exposures should be kept below the reference concentration of 9 :g/m3

 to avoid appreciable

risk of these non-cancer health effects.35

e. Diesel Particulate Matter

The particulate matter (PM) from diesel exhaust typically consists of a solid core,

composed mainly of elemental carbon, which has a coating of various organic and inorganic

compounds. The diameter of diesel particles is very small with typically 75-95 percent of the

particle mass having a diameter smaller than 1.0 :m. The characteristically small particle size

increases the likelihood that the particles and the attached compounds will reach and lodge in the

deepest and more sensitive areas of the human lung. Both the diesel particle and the attached

compounds may be influential in contributing to a potential for human health hazard from long

term exposure.

The heavy-duty highway and off-road diesel engines, as a group, account for most of the

diesel particulate emissions currently released into ambient air.36 Diesel particulate matter is

mainly attributable to the incomplete combustion of fuel hydrocarbons, though some may be due

to engine oil or other fuel components.

In two human studies on railroad workers, and one on truckers, occupationally exposed

to diesel exhaust (EPA 1998d), it was observed that long-term inhalation of diesel exhaust

produced an excess risk of lung cancer. Taken together, the human studies show a positive

association between diesel exhaust exposure and lung cancer. Studies in experimental animals

provide additional evidence that long-term inhalation exposure to high levels of diesel

particulate may pose a significant cancer risk. Research has demonstrated that exposure to high

diesel exhaust levels causes an increase in lung tumors in two strains of rats and two strains of

mice (EPA 1998d). Also, as a result of extensive studies, the direct-acting mutagenic activity of
Chapter III: Environmental Impact

III-55

both the particle and gaseous fractions of diesel exhaust has been shown (EPA 1998d). 

EPA’s draft Diesel Health Assessment identifies both lung cancer as well as several other

adverse respiratory health effects including respiratory tract irritation, immunological changes,

and changes in lung function, as possible concerns for long term exposure to diesel exhaust. The

evidence in both cases comes from the studies involving occupational exposures and or high

exposure animal studies mentioned above, and the Health Assessment, when completed, will

recommend how the data should be interpreted for lower environmental levels of exposure. The

draft Health Assessment is currently being revised to address comments from a peer review

panel of the Clean Air Science Advisory Committee. Based on human epidemiology studies, the

draft MLE estimate of a lifetime extra cancer risk from continuous diesel exhaust particulate

exposure ranges from 3.0 × 10-4 to 1.0 × 10-3/:g/m3. In other words, it is estimated that

approximately 300 to 1000 persons in one million exposed to 1 :g/m3 diesel exhaust particulate

continuously for their lifetime (70 years) would develop cancer as a result of their exposure.

The California Air Resources Board has identified diesel exhaust PM as a “toxic air

contaminant” under the state’s air toxics program, based on the information available on cancer

and non-cancer health effects. California is in the process of determining the need for, and

appropriate degree of, control measures for diesel exhaust particulate matter. Note that

California limited its finding to diesel particulate matter, as opposed to diesel exhaust. EPA’s

assessment activities of diesel exhaust PM are coincident with, but independent from,

California’s evaluation.

Particulates (i.e, particulate matter, PM) are a prominent part of diesel exhaust and play a

role in contributing to total ambient PM, especially PM 2.5 (PM less than 2.5 :m in diameter). 

This means that EPA’s new National Ambient Air Quality Standard for PM2.5 provides another

health-based reference point. Diesel exhaust particles may pose a particularly serious health risk

since more than 75 percent of the particles can be less than 1:m and the smaller diesel particles

can be inhaled and deposited deeper in the lung. Diesel particles also have a large surface area

per unit mass and carry a coating of organic compounds with them which may contribute to the

health effects observed from particles. At the present time, EPA believes that for many people,

keeping long term exposures to diesel particulate matter at or below 5 :g/m3

 provides an

adequate margin of safety for the noncancer respiratory hazards.37

2. Assessment of Emissions and Exposure

In 1993, EPA released the "Motor Vehicle-Related Air Toxics Study" to meet the

requirements of Section 202(l)(1) of the Clean Air Act, which required EPA to complete a study

of the need for, and feasibility of, controlling emissions of toxic air pollutants associated with

motor vehicles and motor vehicle fuels (EPA 1993a). In 1998, EPA updated the emissions and

exposure analyses done for this study to account for new information38,39 Base scenarios for

1990, 1996, 2007, and 2020 were included in the assessment, as well as several control scenarios

in 2007 and 2020. Toxic emissions and exposure were modeled for the following urban areas: 

Chicago, Denver, Houston, Minneapolis, New York, Philadelphia, Phoenix, Spokane, and St.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-56

Louis. Results for these urban areas were extrapolated nationwide. As mentioned previously,

EPA has assessed emissions, and exposure from the following air toxics: benzene,

formaldehyde, acetaldehyde, 1,3-butadiene, and diesel particulate matter. An assessment of the

cancer and non-cancer effects of mobile source emissions of these compounds has not yet been

completed as part of the updated analyses.

This subsection describes the analysis we have conducted to update our 1993 study. 

Subsection C.2.a. discusses the emission modeling conducted for mobile source gaseous air

toxics (including both exhaust and nonexhaust air toxics) and diesel PM. Subsection C.2.b.

describes how we calculated nationwide air toxic emissions for our baseline scenario, which

assumed continuation of the National Low Emission Vehicle program indefinitely. Subsection

C.2.c. describes our analysis of air toxics exposure for our baseline scenario. Subsection C.2.d.

describes our analysis of the effects of various vehicle and fuel control scenarios on air toxics

emissions and exposure. It also describes how we used those analyses to estimate the effect of

the proposed Tier 2/Sulfur standards on air toxics emissions. This subsection also reviews our

analysis of the potential impact of increased diesel engine use in light trucks on diesel PM

emissions and exposure.

a. Emissions Modeling

i. Gaseous Air Toxics Emissions Modeling

In these analyses, emissions of benzene, formaldehyde, acetaldehyde, and 1,3-butadiene

were estimated using a toxic emission factor model, MOBTOX5b. This model is based on a

modified version of MOBILE5b, which estimates emissions of regulated pollutants, and

essentially applies toxic fractions to TOG estimates. The TOG basic emission rates used in this

modeling were similar, but not identical, to the rates used for previous modeling studies. The

model accounted for differences in toxic fractions between technology groups, driving cycles,

and normal versus high emitters. Impacts of fuel formulations were also addressed in the

modeling. Motor vehicle toxic emissions were modeled for the following urban areas: Chicago,

Denver, Houston, Minneapolis, New York, Philadelphia, Phoenix, Spokane, and St. Louis. 

Exhaust Emissions

Analysis of speciation data from 1990 technology light-duty gasoline vehicles done for

the EPA Complex Model for Reformulated Gasoline showed that the fraction of toxic emissions

relative to TOG differs among eight technology groups within the Complex Model as well as

between normal emitters and high emitters.40 This difference is especially significant for 1,3-

butadiene; its TOG fraction is about three times larger for high emitters than for normal emitters. 

If this difference is not taken into account, the impact of I/M programs and fleet turnover to

vehicles with lower deterioration rates will be underestimated. Thus, the input format for

exhaust toxic adjustment factors in MOBTOX5b was structured to allow input of high and

normal emitter toxic emission rates for a given “target” fuel. These toxic emission rates were

then weighted to come up with a composite toxic emission factor, based on a distribution of
Chapter III: Environmental Impact

III-57

normal and high emitters. This distribution is not supplied directly by the MOBILE model. 

Instead, this distribution was determined from the fleet average TOG emission rate on baseline

fuel as determined by MOBILE and average normal and high TOG emission rates on baseline

fuel derived from the Complex Model. Essentially, “toxic-TOG curves” were developed that

plot the target fuel toxic emission rate against the base fuel TOG emission rate.

To construct these curves, the distribution of normal and high emitters was determined in

the following manner for each model year. A TOG gram per mile emission rate for normal

emitters (TOG-N) and a TOG emission rate for high emitters (TOG-H) on baseline fuel were

input into MOBTOX5b. TOG-N from newer technology light-duty gasoline vehicles and trucks

were obtained from an unconsolidated version of the Complex Model, which provides output for

normal emitters in each of eight technology groups. The Complex Model provides estimates for

mass of exhaust VOC, which is TOG minus the mass of methane and ethane. TOG was

estimated by applying a conversion factor which accounts for the mass of these compounds. The

conversion factor was derived by analysis of weight percent emissions of methane and ethane

from available speciation data. Based on the distribution of technology groups in given model

year, the individual TOG estimates were weighted appropriately to obtain a composite estimate

for all normal emitters. Since the unconsolidated model’s TOG-N emission rates are applicable

only to Tier 0 light duty vehicles, they had to be adjusted for Tier 1 and later vehicles. This

adjustment was performed by multiplying the unconsolidated model results by the ratio of the

emission standard for these later vehicles to the Tier 0 emission standard. TOG-H was also

obtained from the unconsolidated version of the Complex Model. TOG-H was assumed to be

the same for all Tier 0 and later vehicles.

For benzene, 1,3-butadiene, formaldehyde, and acetaldehyde, milligram per mile toxic

emission rates for normal and high emitters running on a given fuel formulation were also

entered into MOBTOX5b, using output from the unconsolidated version of the Complex Model.

An example of the data file format is provided in Table III-32. Using the information in

the data file, an overall FTP toxic emission rate for each vehicle class in a given model year is

calculated. This overall rate takes into account the distribution of normal and high emitters by

calculating the slope and intercept of a straight line (the “toxic-TOG” curve), where the FTP

toxic emission rates for a vehicle class in a given model year are a linear function of the baseline

fuel TOG emission rate:

TOXFlt, Fuel A, FTP = A + B*TOGBaseline fuel, FTP (1)

A and B are determined as follows:

A = (TOG-H*TOX-N - TOG-N*TOX-H)/(TOG-H - TOG-N) (2)

B = (TOX-H - TOX-N)/(TOG-H - TOG-N) (3)

where:
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-58

TOX-N = toxic emission rate for normal emitters derived from the Complex Model

TOX-H = toxic emission rate for high emitters derived from the Complex Model

Table III-32. Example of Data File Format for Toxic Adjustment Factors

IV MYA MYB TOG-N TOG-H BZ-N BZ-H AC-N AC-H FR-N FR-H BD-N BD-H

1 1965 1974 0.000 10.00 0.00 276.93 0.00 109.72 0.00 224.28 0.00 93.15

1 1975 1980 0.000 10.00 0.00 263.61 0.00 108.70 0.00 173.41 0.00 44.57

1 1981 1987 0.640 4.03 28.63 113.23 5.07 32.89 7.16 44.59 2.14 25.84

1 1988 1999 0.570 4.03 17.49 116.45 4.02 28.65 5.67 36.68 2.04 30.82

IV = vehicle class, MYA = initial model year, MYB = final model year, TOG-N = TOG for

normal emitters running on baseline fuel in g/mi, TOG-H = TOG for high emitters on baseline

fuel in g/mi, BZ = benzene in mg/mi for vehicles running on fuel A, AC = acetaldehyde in

mg/mi on fuel A, FR = formaldehyde in mg/mi on fuel A, BD = 1,3-butadiene in mg/mi on fuel

A

These relationships can be thought of graphically, as illustrated in Figure III-19, below.

Hypothetical Benzene-TOG Curve

0

20

40

60

80

100

120

140

0 0.5 1 1.5 2 2.5

Baseline Fuel TOG (g/mi)

Target Fuel Benzene (mg/mi)

TOG

Normal

TOG

High

Figure III-19. Example Plot of Target Fuel Benzene Versus 

Baseline Fuel TOG under FTP Conditions

An issue related to the above methodology is whether the linear assumption is valid for baseline
Chapter III: Environmental Impact

III-59

TOG values above the high emitter point and below the normal emitter point. This is

particularly relevant in cases where A and B values are determined from Tier 0 vehicles (e.g., the

Complex model), but the results are applied to Tier 1 and LEV-category vehicles. For the simple

example presented above, negative benzene emissions are estimated for the target fuel when the

baseline fleet-average TOG emission rate falls below 0.295 g/mi. Thus, for fleet-average

emission rates below (and above) the normal (and high) emitter values, a different methodology

was needed. In those cases, it was assumed that the toxic emission rate was the same on a

fractional basis. For the example above, the benzene emission rate for a baseline TOG value of

0.1 g/mi would be calculated as follows:

BZ(TOG=0.1 g/mi) = 0.1 g/mi * (16 mg/mi BZ / 0.5 g/mi TOG) = 3.2 mg/mi

This has the effect of forcing the toxic-TOG curve from the normal-emitter point back through

the origin and thus avoids negative toxic emission rate estimates for Tier 1 and LEV-category

vehicles. The same approach is used in cases where the fleet-average baseline TOG emission

rate is above the high emitter point. 

For non-light duty vehicle classes and older technology light-duty vehicles, such as noncatalyst and oxidation catalyst vehicles, adequate toxic emissions data were not available to

distinguish between emission rates of normal and high emitters. In such cases, the toxic fraction

was assumed to be constant.

Next, aggressive driving corrections were applied to the FTP toxic emission rates for

light duty vehicles. These corrections were provided in an external data file and were

multiplicative in form. Several recent studies suggest that toxic fractions of TOG differ between

FTP and aggressive driving conditions41,42,43 Thus, another adjustment to the toxic emission rates

was applied to take into account this difference in toxic fractions. This adjustment took the form

of the ratio of the toxic mass fraction over the unified cycle (FTP and off-cycle) to the toxic mass

fraction over the FTP. The adjustment was obtained from an analysis of unpublished CARB

data as described in Sierra Research et al. (Sierra 1998). The toxic emission rate under the

unified cycle (FTP and off-cycle) was calculated in the model as follows:

TOXUC = TOXFTP * ADJAggressive Driving * ADJTOX UC/FTP (4)

where

TOXUC = Unified Cycle toxic emission rate

TOXFTP = FTP toxic emission rate

ADJAggressive Driving = Adjustment to TOG emissions for aggressive driving

ADJTOX UC/FTP = Adjustment for difference in toxic mass fraction over the UC versus FTP

Next, toxic emission rates were adjusted in the model to take into account air

conditioning effects on light duty vehicles. In the absence of data, we assumed that FTP-based

toxic fractions will apply to the increased TOG mass as a result of air conditioning usage. Thus,

the increase in TOG mass as a result of air conditioner usage was estimated from model yearspecific corrections for air conditioner use on TOG emissions. The corrections were provided in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-60

an external data file in the model. The model calculates the increase in toxic emissions as a

result of air conditioner use as follows:

TOXA/C = TOXFTP * ADJA/C (5)

where

TOXA/C = increase in toxic emissions as a result of air conditioning usage

TOXFTP = toxic emission rate under FTP conditions

ADJA/C = Air conditioner usage adjustment for TOG

This result was then added to the TOXUC estimate for an overall in-use toxic emission rate. 

MOBTOX5b then applies temperature, speed, humidity and load corrections.

Evaporative, Refueling, Running Loss, and Resting Loss Emissions

MOBTOX5b estimated evaporative, refueling, running loss, and resting loss toxic

emissions for benzene. (1,3-Butadiene, formaldehyde, and acetaldehyde are not found in fuel

and hence are not found in nonexhaust emissions. Because their nonexhaust emissions are zero,

they were not included in the portions of MOBTOX5b used to estimate nonexhaust emissions.) 

Benzene fractions of total hydrocarbons were entered in an external data file. Separate fractions

were entered for hot soak, diurnal, refueling, running loss, and resting loss. Toxic fractions for

evaporative, refueling and running loss benzene from gasoline vehicles were obtained from the

Complex Model (EPA 1994). The Complex Model does not estimate resting loss emissions. 

EPA assumed that the benzene fractions of diurnal and resting loss emissions were the same.

ii. Diesel PM Emissions Modeling

To estimate diesel PM emissions, we used EPA’s PART5 model. PART5 is similar in

structure and function to the MOBILE series of models. It calculates exhaust and non-exhaust

(e.g., road dust) particulate emissions for each vehicle class included in the MOBILE models. 

Only primary exhaust PM emission rates from diesel vehicles were included in these analyses

since cancer potencies are not available for PM emissions such as tire and brake wear or for

secondary PM formed through transformation of diesel engine emissions of SOx, NOx, and

VOC. A particle size cut-off of 10 :m was specified in the model inputs since essentially all

primary exhaust PM from diesel engines is smaller than 10 :m. 

b. Nationwide Toxic Emissions Estimates – Baseline Scenario

Nationwide urban emission estimates were developed by mapping each county in the

United States to one of the modeled urban areas, based primarily on geographic considerations

(Sierra, 1998). The resulting county level emission rates were weighted by VMT estimates to

come up with average nationwide rates. Average nationwide emission rates for baseline

scenarios in 1990, 1996, 2007, and 2020 are given in Table III-33. The baseline scenario
Chapter III: Environmental Impact

III-61

assumed implementation of NLEV standards (0.09 g/mi) for light-duty gasoline vehicles and

light duty trucks under 6000 lbs. gross vehicle weighting, Tier 1 standards for light-duty trucks

over 6000 lbs., and a mix of conventional gasoline and Phase 2 reformulated gasoline with no

additional sulfur control.

Table III-33. Average Nationwide Highway Vehicle Toxic Emission Rates (mg/mi)

In 1990, 1996, 2007, and 2020, for Baseline Scenarios.

Toxic CY 1990 CY 1996 CY2007 CY2020

Benzene 126 62 26 16

Acetaldehyde 19 14 6 3

Formaldehyde 61 35 14 8

1,3-Butadiene 17 9 3 2

Diesel PM 93 62 23 17

A number of rough approximations had to be made due to the small number of cities

actually modeled. For instance, most of the South was mapped to Houston, a reformulated

gasoline area, even though most Southern cities do not require reformulated gasoline. Also, all

of California was mapped to Phoenix, which does not take into account the California LEV

program. EPA plans to perform additional modeling prior to the final rulemaking to improve the

national estimate. Despite these limitations, however, the nationwide exposure estimates should

provide reasonable approximations.

c. Exposure – Baseline Scenario

Exposure modeling was done for 1990 using the Hazardous Air Pollutant Exposure

Model for Mobile Sources, Version-3, or HAPEM-MS3.44 This model uses CO as a tracer for

toxics. Since most ambient CO comes from cars and light trucks, we believe CO exposure is an

reasonable surrogate for exposure to other motor vehicle emissions, including toxics emissions. 

The HAPEM model links human activity patterns with ambient CO concentration to arrive at

average exposure estimates for 22 different demographic groups (e.g., outdoor workers, children

0 to 17, working men 18 to 44, women 65+, etc.) and for the total population. The model

simulates the movement of individuals between home and work and through a number of

different microenvironments. The CO concentration in each microenvironment is determined by

multiplying ambient concentration by a microenvironmental factor.

With the 1990 CO exposure estimates generated by HAPEM model for each urban area,

EPA determined the fraction of exposure that was a result of on-road motor vehicle emissions. 

This calculation was accomplished by scaling the exposure estimates (which reflect exposure to
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-62

total ambient CO) by the fraction of the 1990 CO emissions inventory from on-road motor

vehicles, determined from the EPA Emission Trends database.45 Nationwide urban CO exposure

from on-road motor vehicles was estimated by first calculating a population-weighted average

CO exposure for the nine modeled areas. This number was adjusted by applying a ratio of

population-weighted annual average CO for urban areas in the entire country versus average

ambient CO concentration for the modeled areas. To estimate rural exposure, the urban estimate

was scaled downward using rough estimates of urban versus rural exposure from the 1993 Motor

Vehicle-Related Air Toxics Study (EPA 1993a).

 Modeled onroad CO exposure for 1990 was divided by 1990 CO grams per mile emission

estimates to create a conversion factor. The conversion factor was applied to modeled toxic

emission estimates (in grams per mile terms) to determine exposure to onroad toxic emissions, as

shown in Equation 6:

TOXExposure(:g/m3) = [COExposure(:g/m3)/COEF(g/mi)]1990 × TOXEF(g/mi) (6)

where TOX reflects one of the six toxic pollutants considered in this study.

 The exposure estimates for calendar years 1996, 2007, and 2020 were adjusted for VMT

growth relative to 1990. 1,3-Butadiene exposure was adjusted for atmospheric transformation. 

The multiplicative factors used were 0.44 for summer, 0.70 for spring and fall, and 0.96 for

winter.46 In contrast, estimated exposure to formaldehyde and acetaldehyde was based on direct

emissions. For these pollutants, removal of direct emissions in the afternoon was assumed to be

offset by secondary formation. Table III-34 presents annual average exposure estimates for the

entire population. Estimates were also developed for outdoor workers, and children 0 - 17 years

of age. Exposure among outdoor workers was higher than for the entire population, and among

children it was slightly lower.

Table III-34. Average Nationwide Highway Vehicle Toxic Exposure (:g/m3)

In 1990, 1996, 2007, and 2020, for Baseline Scenarios.

Toxic CY 1990 CY 1996 CY2007 CY2020

Benzene 1.35 0.90 0.46 0.36

Acetaldehyde 0.20 0.20 0.10 0.08

Formaldehyde 0.66 0.51 0.26 0.20

1,3-Butadiene 0.14 0.09 0.04 0.04

Diesel PM 0.99 0.89 0.42 0.40

It should be noted that recent California-EPA studies estimated a population-weighted

average outdoor diesel exhaust PM10 (particulate matter < 10 :m) exposure for 1995.47
Chapter III: Environmental Impact

q

The difference in toxic reductions would not be exactly the same, since fleet average toxic emissions are

affected differently by such factors the distribution of normal and high emitters, and the mix of vehicle control

technologies.

III-63

California also estimated indoor and total exposure concentrations for 1995. The 1995 indoor

and total air exposure concentrations were estimated to be 1.47 :g/m3

 and 1.54 :g/m3,

respectively. This estimate compares to the estimated annual average nationwide diesel PM

1996 exposure estimate of 0.89 :g/m3

 in Table III-37. The difference may be due to differences

in estimates of emission rates, exposure patterns, the concentration of diesel vehicle traffic, or

the spatial distribution of diesel engine emissions.

d. Impact of Potential Vehicle and Fuel Controls

The following control scenarios for 2007 and 2020 were assessed:

• base fuels and emissions with NLEV and a 40 ppm sulfur standard.

• NLEV, 40 ppm sulfur, and 0.055 NMHC standard in 2004 for light duty gasoline

vehicles and trucks.

• NLEV, 40 ppm sulfur, 0.055 NMHC standard, and light duty diesel trucks 50 percent of

light duty truck sales in 2004 (phased in starting in 2001)

Although none of these scenarios represent the standards actually being proposed, the

assessment shows that VOC emission reductions would reduce the health risk posed by many of

the hazardous air pollutants emitted by light-duty vehicles and trucks beyond what was projected

under baseline conditions. Estimates of the impact of VOC reductions from a 0.055 gram per

mile NMHC standard for the full useful life of the vehicle, combined with a 40 ppm sulfur

standard, on toxics emissions and exposure, are provided in Tables III-35 through III-39. Actual

reductions under the standards being proposed would be smaller, since the VOC emission

standards being proposed are less stringent. Under the proposed standards, VOC emissions

would be about 20 percent larger than under the 0.055 NMHC/40 ppm sulfur scenario modeled;

thus a similar difference would be expected for gaseous toxics emissions and exposure.q

 Table

III-39 presents gaseous toxics exposure under the proposed standards, assuming the impact on

toxics exposure is equivalent to the impact on VOC emissions.

The 1998 revision to the 1993 Motor Vehicle-Related Air Toxics Study also evaluated the

potential increase in diesel PM emissions and exposure due to increased use of diesel engines in

light trucks. Diesel engines are used in a very small portion of the cars and light-duty trucks in

service today. However, engine and vehicle manufacturers have projected that diesel engines are

likely to be used in an increasing share of light trucks. Some manufacturers have announced

capital investments to build such engines. The 1998 study evaluated the potential increase in

diesel PM emissions and exposure associated with introducing more diesel engines into the lightduty fleet, absent any action by EPA to mitigate those risks. An extreme case was modeled,

with light duty diesel trucks accounting for 50 percent of light-duty truck sales in 2004, phased
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-64

in starting in 2001.

The impact of such increased diesel penetration on emissions and exposure are provided

in Tables III-35 through III-39. Based on the exposure estimates for 2020, the potential

nationwide cancer risk from diesel particulate matter would increase by 137 percent under this

scenario. Beyond 2020, the health risks would be even greater for two reasons. First, the

proportion of light trucks equipped with diesel engines would continue to increase as the older,

gasoline-powered trucks are replaced by a mix of gasoline and diesel trucks. Second, continued

growth in the total number of miles driven would increase diesel PM emissions. 

It should be noted that this increase in diesel sales is more rapid than the increase in

diesel sales analyzed for its effect on direct and secondary PM levels, which assumes that diesel

engines do not reach 50 percent of light truck sales until 2010. However, both analyses assume

that diesel engines’ share of light truck sales eventually reach the same level, and the two

analyses’ estimates of the total number of diesel trucks on the road tend to converge after 2010. 

Under this more gradual phase-in schedule, the increase in nationwide cancer risk would be

slightly lower, about 128 percent. This estimate was developed by adjusting the estimated

potential increase in risk for the more rapid phase-in to reflect the approximately four percent

decrease in projected diesel PM emissions in 2020 that would result from the more gradual

phase-in schedule.

Under both phase-in scenarios, we have estimated that the proposed Tier 2 standards for

PM emissions from light-duty gasoline vehicles and trucks would reduce the potential increase

in diesel PM cancer risk from cars and light trucks by over 85 percent. The potential number of

cancers avoided would be even larger in future years as the proportion of diesel-powered lightduty trucks, and the number of miles they are driven, increased.
Chapter III: Environmental Impact

III-65

Table III-35. Average Nationwide Highway Vehicle 

Toxic Emission Rates (mg/mi) in 2007, for Various Scenarios

Toxic

No New

Controls

Scenario

40 ppm Sulfur

Scenario

0.055 NMHC

Standard w/40

ppm Sulfur

Scenario

0.055 NMHC

Standard, 40

ppm Gasoline

Sulfur, & High

Diesel Sales

Scenario (50%

of 2004 Sales)

Benzene 25.54 24.43 23.44 20.89

Acetaldehyde 5.54 5.43 5.29 5.23

Formaldehyde 14.30 14.38 14.04 14.15

1,3-Butadiene 3.26 2.96 2.86 2.82

Diesel PM 23.36 23.36 23.36 38.69

Table III-36. Average Nationwide Highway Vehicle 

Toxic Emission Rates (mg/mi) in 2020, for Various Scenarios

Toxic

No New

Controls

Scenario

40 ppm Sulfur

Scenario

0.055 NMHC

Standard w/40

ppm Sulfur

Scenario

0.055 NMHC

Standard, 40

ppm Gasoline

Sulfur, & High

Diesel Sales

Scenario (50%

of 2004 Sales)

Benzene 15.61 14.68 11.36 9.02

Acetaldehyde 3.39 3.29 2.82 2.77

Formaldehyde 8.42 8.45 7.29 7.45

1,3-Butadiene 2.29 2.04 1.69 1.53

Diesel PM 17.42 17.42 17.42 41.29
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-66

Table III-37. Average Nationwide Highway Vehicle Toxic Exposures for the Entire

Population (:g/m3) in 2007, for Various Scenarios

Toxic

No New

Controls

Scenario

40 ppm Sulfur

Scenario

0.055 NMHC

Standard w/40

ppm Sulfur

Scenario

0.055 NMHC

Standard, 40

ppm Gasoline

Sulfur, & High

Diesel Sales

Scenario (50%

of 2004 Sales)

Benzene 0.46 0.44 0.42 0.37

Acetaldehyde 0.10 0.10 0.095 0.094

Formaldehyde 0.26 0.26 0.26 0.26

1,3-Butadiene 0.044 0.040 0.038 0.038

Diesel PM 0.42 0.42 0.42 0.70

Table III-38. Average Nationwide Highway Vehicle Toxic Exposures for the Entire

Population (:g/m3) in 2020, for Various Scenarios

Toxic No Tier 2/Sulfur

Scenario

40 ppm Sulfur

Scenario

0.055 NMHC

Standard w/40

ppm Sulfur

Scenario

0.055 NMHC

Standard, 40

ppm Gasoline

Sulfur, & High

Diesel Sales

Scenario (50%

of 2004 Sales)

Benzene 0.36 0.34 0.26 0.21

Acetaldehyde 0.078 0.075 0.064 0.064

Formaldehyde 0.20 0.20 0.17 0.17

1,3-Butadiene 0.039 0.035 0.029 0.026

Diesel PM 0.40 0.40 0.40 0.96
Chapter III: Environmental Impact

III-67

Table III-39. Average Nationwide Highway Vehicle Gaseous Toxic Exposures for the

Entire Population (:g/m3) in 2020, under proposed Tier 2 standards.

Toxic Exposure (:g/m3

)

Benzene 0.25

Acetaldehyde 0.077

Formaldehyde 0.21

1,3-Butadiene 0.031

e. Limitations

The analysis referenced above was conducted by Sierra Research for the Office of

Mobile Sources. It will undergo formal scientific peer review in the near future. Once that

review is complete and the peer review comments are addressed, OMS expects to conduct a

formal risk assessment on health risk of toxic emissions from mobile sources for the final rule.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-68

1. “Development of Nonroad, Stationary, and Area Source Emissions for the Tier 2/Sulfur

NPRM”, Memorandum from Gary Dolce to Docket No. A-97-10

2. Koupal, J., “Development of Light-Duty Emission Inventory Estimates in the Notice of

Proposed Rulemaking for Tier 2 and Sulfur Standards”, EPA Report No. EPA420-R-99-

005, Docket No. A-97-10

3. Ibid.

4. “A Modified Version of MOBILE5 for Evaluation of Proposed Tier 2 Evaporative

Emission Standards”, Memorandum from David Brzezinksi to Docket No. A-97-10

5. “Development of Heavy-Duty Gasoline Emissions Inventories for the Tier 2/Sulfur

NPRM”, Memorandum from John Koupal to Docket No. A-97-10

6. “Development of Motorcycle and Heavy-Duty Diesel Emissions Inventories for the Tier

2/Sulfur NPRM”, Memorandum from Gary Dolce to Docket No. A-97-10

7. “Regulatory Impact Analyses for the Particulate Matter and Ozone National Ambient Air

Quality Standards and Proposed Regional Haze Rule,” Innovative Strategies and

Economics Group, Office of Air Quality Planning and Standards, U.S. Environmental

Protection Agency, Research Triangle Park, NC, July 17, 1997.

8. “Determination of Tier 2/Sulfur Emission Reductions in Terms of Equivalent Baseline

Vehicles”, Memorandum from John Koupal to Docket No. A-97-10

9. EPA 1998a. Environmental Protection Agency, Carcinogenic Effects of Benzene: An

Update, National Center for Environmental Assessment, Washington, DC. 1998.

10. EPA 1985. Environmental Protection Agency, Interim quantitative cancer unit risk

estimates due to inhalation of benzene, prepared by the Office of Health and

Environmental Assessment, Carcinogen Assessment Group, Washington, DC. for the

Office of Air Quality Planning and Standards, Washington, DC., 1985.

11. Clement Associates, Inc., Motor vehicle air toxics health information, for U.S. EPA

Office of Mobile Sources, Ann Arbor, MI, September 1991.

12. International Agency for Research on Cancer, IARC monographs on the evaluation of

carcinogenic risk of chemicals to humans, Volume 29, Some industrial chemicals and

dyestuffs, International Agency for Research on Cancer, World Health Organization,

Lyon, France, p. 345-389, 1982.

13. Irons, R.D., W.S. Stillman, D.B. Colagiovanni, and V.A. Henry, Synergistic action of the

benzene metabolite hydroquinone on myelopoietic stimulating activity of

Chapter III. References
Chapter III: Environmental Impact

III-69

granulocyte/macrophage colony-stimulating factor in vitro, Proc. Natl. Acad. Sci.

89:3691-3695, 1992.

14. Lumley, M., H. Barker, and J.A. Murray, Benzene in petrol, Lancet 336:1318-1319,

1990.

15. EPA 1993a. Motor Vehicle-Related Air Toxics Study, U.S. Environmental Protection

Agency, Office of Mobile Sources, Ann Arbor, MI, EPA Report No. EPA 420-R-93-005,

April 1993.

16. Aksoy, M. 1991. Hematotoxicity, leukemogenicity and carcinogenicity of chronic

exposure to benzene. In: Arinc, E.; Schenkman, J.B.; Hodgson, E., Eds. Molecular

Aspects of Monooxygenases and Bioactivation of Toxic Compounds. New York:

Plenum Press, pp. 415-434.

17. Goldstein, B.D. 1988. Benzene toxicity. Occupational medicine. State of the Art

Reviews. 3: 541-554.

18. Aksoy, M., S. Erdem, and G. Dincol. 1974. Leukemia in shoe-workers exposed

chronically to benzene. Blood 44:837.

19. Aksoy, M. and K. Erdem. 1978. A follow-up study on the mortality and the development

of leukemia in 44 pancytopenic patients associated with long-term exposure to benzene. 

Blood 52: 285-292.

20. Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E. Marti, Y.Z. Wang, M. Linet,

L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-Holland, L.P. Zhang, W. Blot, S.N. Yin, and

R.B. Hayes. 1996. Hematotoxicity among Chinese workers heavily exposed to benzene. 

Am. J. Ind. Med. 29: 236-246.

21. EPA 1998b. Environmental Protection Agency, Toxicological Review of Benzene (NonCancer Effects), July 1998 draft. National Center for Environmental Assessment,

Washington, DC.

22. EPA 1998c. Environmental Protection Agency, Health Risk Assessment of

1,3-Butadiene. EPA/600/P-98/001A, February 1998

23. Scientific Advisory Board. 1998. An SAB Report: Review of the Health Risk

Assessment of 1,3-Butadiene. EPA-SAB-EHC-98, August, 1998.

24. Ligocki, M.P., G.Z. Whitten, R.R. Schulhof, M.C. Causley, and G.M. Smylie,

Atmospheric transformation of air toxics: benzene, 1,3-butadiene, and formaldehyde,

Systems Applications International, San Rafael, CA (SYSAPP-91/106), 1991.

25. EPA 1987. Environmental Protection Agency, Assessment of health risks to garment

workers and certain home residents from exposure to formaldehyde, Office of Pesticides
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

III-70

and Toxic Substances, April 1987.

26. Wilhelmsson, B. and M. Holmstrom. 1987. Positive formaldehyde PAST after prolonged

formaldehyde exposure by inhalation. The Lancet:164.

27. Burge, P.S., M.G. Harries, W.K. Lam, I.M. O'Brien, and P.A. Patchett. 1985. 

Occupational asthma due to formaldehyde. Thorax 40:225-260.

28. Hendrick, D.J., R.J. Rando, D.J. Lane, and M.J. Morris. 1982. Formaldehyde asthma:

Challenge exposure levels and fate after five years. J. Occup. Med. 24:893-897.

29. Nordman, H., H. Keskinen, and M. Tuppurainen. 1985. Formaldehyde asthma - rare or

overlooked? J. Allergy Clin. Immunol. 75:91-99.

30. EPA 1991a. Environmental Protection Agency. Formaldehyde risk assessment update.

June 11, 1991. Office of Toxic Substances, U.S. Environmental Protection Agency,

Washington, DC. External review draft, June 11, 1991.

31. Ligocki, M.P., and G.Z. Whitten, Atmospheric transformation of air toxics: acetaldehyde

and polycyclic organic matter, Systems Applications International, San Rafael, CA,

(SYSAPP-91/113), 1991.

32. EPA. 1987. Health Assessment Document for Acetaldehyde -- External Review Draft. 

Office of Health and Environmental Assessment, Research Triangle Park, NC. Report

No. EPA 600/8-86/015A.

33. California Air Resources Board, Preliminary Draft: Proposed identification of

acetaldehyde as a toxic air contaminant, Part B Health assessment, California Air

Resources Board, Stationary Source Division, August, 1992.

34. EPA 1997b. Environmental Protection Agency, Integrated Risk Information System

(IRIS), Office of Health and Environmental Assessment, Environmental Criteria and

Assessment Office, Cincinnati, OH, 1997.

35. EPA 1991b. Environmental Protection Agency, Integrated Risk Information System

(IRIS), Office of Health and Environmental Assessment, Environmental Criteria and

Assessment Office, Cincinnati, OH.

36. EPA 1998d. Environmental Protection Agency, Health assessment document for diesel

emissions; National Center for Environmental Assessment, Washington, DC., EPA

Report No. EPA-600/8-90/057A and B, (External Review Draft), 1998.

37. EPA 1993b. Environmental Protection Agency, Integrated Risk Information System

(IRIS), Office of Health and Environmental Assessment, Environmental Criteria and

Assessment Office, Cincinnati, OH.
Chapter III: Environmental Impact

III-71

38. Sierra Research, Inc., Radian International Corp., and Energy & Environmental Analysis,

Inc. 1998. Estimation of Motor Vehicle Toxic Emissions and Exposure in Selected

Urban Areas. Prepared for U. S. EPA, Office of Mobile Sources, Assessment and

Modeling Division, Ann Arbor, MI, October 15, 1998.

39. Sierra Research, Inc. 1998. On-Road Motor Vehicle National Toxics Exposure

Estimates. Memorandum from Philip Heirigs to Rich Cook, U.S. EPA. October 15,

1998.

40. EPA. 1994. Regulatory Impact Analysis for the Final Rule on Reformulated and

Conventional Gasoline, February, 1994.

41. Auto/Oil Air Quality Improvement Research Program. Technical Bulletin No. 19:

Dynomometer Study of Off-Cycle Exhaust Emissions; April, 1996.

42. Black, F.; Tejada, S.; Gurevich, M. “Alternative Fuel Motor Vehicle Tailpipe and

Evaporative Emissions Composition and Ozone Potential”, J. Air & Waste Manage.

Assoc. 1998, 48, 578-591.

43. CARB. 1998. Unpublished data.

44. Glen, G. and Shadwick, D., “Final Technical Report on the Analysis of Carbon

Monoxide Exposure for Fourteen Cities Using HAPEM-MS3,” Prepared by Mantech

Environmental Technology, Inc. for the U.S. Environmental Protection Agency, March

1998.

45. E. H. Pechan and Associates, Inc. 1997. Determination of Annual Average CO

Inventories and the Mobile Source Contribution in Selected Areas Using the 1990

OAQPS Trends Database. Prepared for U. S. EPA, Office of Mobile Sources,

Assessment and Modeling Division, September, 1997. 

46. Systems Applications International. 1994. Projected Emission Trends and Exposure

Issues for 1,3-Butadiene. Prepared for the American Automobile Manufacturers

Association, March, 1994.

47. California-EPA and the California Air Resources Board, Proposed Identification of

Diesel Exhaust as a Toxic Air Contaminant, Appendix III, Part A, Exposure Assessment,

April 22, 1998.
Chapter IV: Technological Feasibility

IV-1

Chapter IV: Technological Feasibility

A. Feasibility of Tier 2 Exhaust Emission Standards for LDVs and LDTs

1. NMOG and NOx Emissions from Gasoline-Fueled Vehicles

Emission control technology has evolved rapidly since the passing of the CAA

Amendments of 1990. Emission standards applicable to 1990 model year vehicles required

roughly 90 percent reductions in exhaust HC and CO emissions and a 75 percent reduction in

NOx emissions compared to the uncontrolled emissions. Some vehicles currently in production

show overall reductions in these three pollutants of more than 99 percent. These vehicles

emissions are well below those necessary to meet the current federal Tier 1 and even California

LEV standards. 

A number of technological advances and breakthroughs have allowed these significant

emission reductions to occur without the need for expensive, exotic equipment and fuels. For

example, ARB originally projected that many vehicles would require electrically heated catalysts

to meet their LEV program requirements. Today, no manufacturer is expected to use these

devices to comply with the LEV program requirement. EPA projected that alternative fuels,

such as methanol or natural gas, may be needed to meet these low emission levels. Today, while

vehicles using these alternative fuels are capable of meeting the California LEV requirements, 

so are vehicles fueled with gasoline. 

The most significant improvements which have facilitated these low emission levels have

been to traditional catalysts, which now warm up very rapidly and are substantially more durable

than past technology, and to fuel metering, which is more precise and accurate than previous

systems. Improvements have also been made to base engine designs, which have resulted in

lower engine-out emissions. Reduction of combustion chamber crevice volumes and oil

consumption are examples of improvements to base engine designs.

Table IV-1 below lists specific types of emission controls which EPA projects will be

needed in order for LDVs and LDTs to meet the proposed Tier 2 standards. It is important to

point out that the use of all of the following technologies is not necessarily required to meet the

proposed Tier 2 standards. The choices and combinations of technologies will depend on several

factors, such as current engine-out emission levels, effectiveness of existing emission control

systems, and individual manufacturer preferences. In some cases, such as projected increases in

catalyst volume and precious metal loading, EPA believes that most, if not all, LDVs and LDTs

will use the specified emission control technique.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-2

Table IV-1. Emission Control Hardware and Techniques 

Projected to Meet Proposed Tier 2 Vehicle Standards

Emission Control Technologies

Fast Light-Off Exhaust Gas Oxygen Sensor Injection of Air into Exhaust

Universal Exhaust Gas Oxygen Sensor Heat Optimized Exhaust Pipe

Retarded Spark Timing at Start-Up Leak-Free Exhaust System

More Precise Fuel Control Close-Coupled Catalyst

Faster Microprocessor Improved Catalyst Washcoats

Individual Cylinder Air-Fuel Control Increased Catalyst Volume and PGM

Loading

Manifold with Low Thermal Capacity Full Electronic Exhaust Gas Recirculation

Air-Assisted Fuel Injection Engine Modifications

a. Technology Description

The following descriptions provide an overview of the latest technologies capable of

reducing exhaust emissions. The descriptions will also discuss the state of development and

current production usage of the various technologies. The technology descriptions are divided

into four categories - base engine improvements, improved fuel control, improved fuel

atomization, and improved catalyst performance.

i. Base Engine Improvements

There are several design techniques that can be used for reducing engine-out emissions,

especially for HC and NOx. The main causes of excessive engine-out emissions are unburned

HC’s and high combustion temperatures for NOx. Methods for reducing engine-out HC

emissions include the reduction of crevice volumes in the combustion chamber, reducing the

combustion of lubricating oil in the combustion chamber and developing leak-free exhaust

systems. Leak-free exhaust systems are considered to be base engine improvements because any

modifications or changes made to the exhaust manifold can directly affect the design of the base

engine. Base engine control strategies for reducing NOx include the use of “fast burn”

combustion chamber designs, multiple valves with variable-valve timing, and exhaust gas

recirculation.

Combustion Chamber Design
Chapter IV: Technological Feasibility

IV-3

 Unburned fuel can be trapped momentarily in crevice volumes (i.e., the space between

the piston and cylinder wall) before being subsequently released. Since trapped and re-released

fuel can increase engine-out HC, the reduction of crevice volumes is beneficial to emission

performance. One way to reduce crevice volumes is to design pistons with reduced top “land

heights” (The distance between the top of the piston and the first piston ring). The reduction of

crevice volume is especially desirable for vehicles with larger displacement engines, since they

typically produce greater levels of engine-out HC than smaller displacement engines.

Another cause of excess engine-out HC emissions is the combustion of lubricating oil

that leaks into the combustion chamber, since heavier hydrocarbons in oil do not oxidize as

readily as those in gasoline. Oil in the combustion chamber can also trap gaseous HC from the

fuel and release it later unburned. In addition, some components in lubricating oil can poison the

catalyst and reduce its effectiveness. To reduce oil consumption, vehicle manufacturers will 

tighten tolerances and improve the surface finishes of cylinders and pistons, improve piston ring

design and material, and improve exhaust valve stem seals to prevent excessive leakage of

lubricating oil into the combustion chamber. 

As discussed above, engine-out NOx emissions result from high combustion

temperatures. Therefore, the main control strategies for reducing engine-out NOx are designed

to lower combustion temperature. The most promising techniques for reducing combustion

temperatures, and thus engine-out NOx emissions, are the combination of increasing the rate of

combustion, reducing spark advance, and adding a diluent to the air-fuel mixture, typically via

exhaust gas recirculation (EGR). The rate of combustion can be increased by using “fast burn”

combustion chamber designs. A fast burn combustion rate provides improved thermal efficiency

and a greater tolerance for dilution from EGR resulting in better fuel economy and lower NOx

emissions. There are numerous ways to design a fast burn combustion chamber. However, the

most common approach is to induce turbulence into the combustion chamber which increases the

surface area of the flame front and thereby increases the rate of combustion, and to locate the

spark plug in the center of the combustion chamber. Locating the spark plug in the center of the

combustion chamber promotes more thorough combustion and allows the ignition timing to be

retarded, decreasing the dwell time of hot gases in the combustion chamber and reducing NOx

formation. Many engine designs induce turbulence into the combustion chamber by increasing

the velocity of the incoming air-fuel mixture and having it enter the chamber in a swirling

motion (known as “swirl”).

Improved EGR Design

One of the most effective means of reducing engine-out NOx emissions is exhaust gas

recirculation. By recirculating spent exhaust gases into the combustion chamber, the overall airfuel mixture is diluted, lowering peak combustion temperatures and reducing NOx. As

discussed above, the use of high swirl, high turbulence combustion chambers can allow the

amount of EGR to be increased from current levels of 15 to 17 percent to levels possibly as high
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

r

 Some manufacturers have stated that EGR impacts the ability to control net air-fuel ratios tightly due to

dynamic changes in exhaust back pressure and temperature, and that the advantages of increasing EGR flow rates

are lost partly in losses in air-fuel ratio control even with electronic control of EGR. Higher EGR flow rates can be

tolerated by modern engines with more advanced combustion chambers, but EGR cooling may be necessary to

achieve higher EGR flow rates within acceptable detonation limits without significant loss of air-fuel control.

IV-4

as 20 to 25r

 percent, resulting in a 15 to 20 percent reduction in engine-out NOx emissions. 

Many EGR systems in today’s vehicles utilize a control valve that requires vacuum from

the intake manifold to regulate EGR flow. Under part-throttle operation where EGR is needed,

engine vacuum is sufficient to open the valve. However, during throttle applications near or at

wide-open throttle, engine vacuum is too low to open the EGR valve. While EGR operation

only during part-throttle driving conditions has been sufficient to control NOx emissions for

most vehicles in the past, more stringent NOx standards and emphasis on controlling off-cycle

emission levels may require more precise EGR control and additional EGR during heavy throttle

operation to reduce NOx emissions. Many manufacturers now use electronic EGR in place of

mechanical back-pressure designs. By using electronic solenoids to open and close the EGR

valve, the flow of EGR can be more precisely controlled.

 While most manufacturers agree that electronic EGR gives more precise control of EGR

flow rate, not all manufacturers are using it. Numerous LEV vehicles certified for the 1998

model year still use mechanical EGR systems, and in some cases, no EGR at all. Nonetheless,

the use of EGR remains a very important tool in reducing engine-out NOx emissions, whether

mechanical or electronic.

Multiple Valves and Variable-Valve Timing

Conventional engines have two valves per cylinder, one for intake of the air-fuel mixture

and the other for exhaust of the combustion products. The duration and lift (distance the valve

head is pushed away from its seat) of valve openings is constant regardless of engine speed. As

engine speed increases, the aerodynamic resistance to pumping air in and out of the cylinder for

intake and exhaust also increases. By doubling the number of intake and exhaust valves,

pumping losses are reduced, improving the volumetric efficiency and useful power output. 

In addition to gains in breathing, the multiple-valve (typically 4-valve) design allows the

spark plug to be positioned closer to the center of the combustion chamber (as discussed above)

which decreases the distance the flame must travel inside the chamber. In addition, the two

streams of incoming gas can be used to achieve greater mixing of air and fuel, further increasing

combustion efficiency which lowers engine-out HC emissions. 

Even greater improvements to combustion efficiency can be realized by using valve

timing and lift control to take advantage of the 4-valve configuration. Conventional engines

utilize fixed-valve timing and lift across all engine speeds. Typically the valve timing is set at a

level that is a compromise between low speed torque and high engine speed horsepower. At light

engine loads it would be desirable to close the intake valve earlier to reduce pumping losses. 
Chapter IV: Technological Feasibility

IV-5

Variable valve timing can enhance both low speed torque and high speed horsepower with no

necessary compromise between the two. Variable valve timing can allow for increased swirl and

intake charge velocity, especially during low load operating conditions where sufficient swirl

and turbulence tend to be lacking. By providing a strong swirl formation in the combustion

chamber, the air-fuel mixture can mix sufficiently, resulting in a faster, more complete

combustion, even under lean air-fuel conditions, thereby reducing emissions. Variable valve

technology by itself may have somewhat limited effect on reducing emissions. Several vehicle

manufacturers estimated emission reductions of 3 percent-10 percent for both NMHC and NOx,

but reductions could be increased when variable valve timing is combined with optimized spark

plug location and additional EGR. 

Multi-valve engines already exist in numerous federal and California certified vehicles

and are projected by ARB to become even more common. ARB also projects that in order to

meet LEV II and ULEV II standards, more vehicles will have to make improvements to the

induction system, including the use of variable valve timing. 

Leak-Free Exhaust System

Leaks in the exhaust system can result in increased emissions, but not necessarily from

emissions escaping from the exhaust leak to the atmosphere. With an exhaust system leak,

ambient air is typically sucked into the exhaust system by the pressure difference created by the

flowing exhaust gases inside the exhaust pipe. The air that is sucked into the exhaust system is

unmetered and, therefore, unaccounted for in the fuel system’s closed-loop feedback control. 

The excess air in the exhaust causes the computer to increase fuel to the engine, resulting in

erratic and/or overly rich fuel control. This results in increased emission levels and potentially

poor driveability. In addition, an air leak can cause an oxidation environment to exist in a threeway catalyst at low speeds that would hamper reduction of NOx and lead to increased NOx

emissions.

Some vehicles currently use leak-free exhaust systems today. These systems consist of an

improved exhaust manifold/exhaust pipe interface plus a corrosion-free flexible coupling

inserted between the exhaust manifold flange and the catalyst to reduce stress and the tendency

for leakage to occur at the joint. In addition, improvements to the welding process for catalytic

converter canning could ensure less air leakage into the converter and further reduce emissions.

ARB and MECA project that vehicle manufacturers will continue to incorporate leak-free

exhaust systems as emission standards become more stringent.

ii. Improvements in Air-Fuel Ratio Control

Modern three-way catalysts require the air-fuel ratio (A/F) to be as close to stoichiometry

(the amount of air and fuel just sufficient for nearly complete combustion) as possible. This is

because three-way catalysts simultaneously oxidize HC and CO, and reduce NOx. Since HC and

CO are oxidized during A/F operation slightly lean of stoichiometry, while NOx is reduced

during operation slightly rich of stoichiometry, there exists a very small A/F window of
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-6

operation around stoichiometry where catalyst conversion efficiency is maximized for all three

pollutants (i.e., less than 1 percent deviation in A/F or roughly ± 0.15). Contemporary vehicles

have been able to maintain stoichiometry, or very close to it, by using closed-loop feedback fuel

control systems. At the heart of these systems has been a single heated exhaust gas oxygen

(HEGO) sensor. The HEGO sensor continuously switches between rich and lean readings. By

maintaining an equal number of rich readings with lean readings over a given period, and by

limiting the degree to which the exhaust is rich or lean at any point in time, the fuel control

system is able to maintain stoichiometry. While this fuel control system is capable of

maintaining the A/F with the required accuracy under steady-state operating conditions, the

system accuracy is challenged during transient operation where rapidly changing throttle

conditions occur. Also, as the sensor ages, its accuracy decreases. 

Dual Oxygen Sensors

Many vehicle manufacturers have placed a second HEGO sensor(s) downstream of one

or more catalysts in the exhaust system as a method for monitoring the catalyst effectiveness of

the federally and California mandated on-board diagnostic (OBD II) system. In addition to

monitoring the effectiveness of the catalyst, the downstream sensors can also be used to monitor

the primary control sensor and adjust for deterioration, thereby maintaining precise A/F control

at higher mileages. Should the front primary HEGO sensor, which operates in a higher

temperature environment, begin to exhibit slow response or drift from its calibration point, the

secondary downstream sensor can be relied upon for modifying the fuel system controls to

compensate for the aging effects. By placing the second sensor further downstream from the hot

engine exhaust, where it is also less susceptible to poisoning, the rear sensor is less susceptible to

aging over the life of the vehicle. As a result, the use of a dual oxygen sensor fuel control

system can ensure more robust and precise fuel control, resulting in lower emissions.

Currently, all vehicle manufacturers use a dual oxygen sensor system for monitoring the

catalyst as part of the OBD II system. As discussed above, most manufacturers also utilize the

secondary HEGO sensor for trim (i.e., adjustments to) of the fuel control system. It is

anticipated that all manufacturers will soon use the secondary sensor for fuel trim.

Universal Oxygen Sensors

The universal exhaust gas oxygen (UEGO) sensor, also called a "linear oxygen sensor”,

could replace conventional HEGO sensors. Conventional HEGO sensors only determine if an

engine's A/F is richer or leaner than stoichiometric, providing no indication of the exact level of

the A/F. In contrast, UEGO's are capable of recognizing both the direction and magnitude of

A/F transients since the voltage output of the UEGO is "proportional" with changing A/F (i.e.,

each voltage value corresponds to a certain A/F). Therefore, proportional A/F control is possible

with the use of UEGO sensors, facilitating faster response of the fuel feedback control system

and tighter control of A/F. 

Although some manufacturers are currently using UEGO sensors, discussions with

various manufacturers suggest that some manufacturers are of mixed opinion as to the future
Chapter IV: Technological Feasibility

IV-7

applicability of UEGO sensors. Because of their high cost, manufacturers claim that it may be

cheaper to improve HEGO technology rather than utilize UEGO sensors. An example of this is

the use of a “planar” design for HEGO sensors. Planar HEGO sensors (also known as “fast

light-off” HEGO sensors) have a thimble design that is considerably lighter than conventional

designs. The main benefits are shorter heat-up time and faster sensor response. 

Individual Cylinder A/F Control

Another method for tightening fuel control is to control the A/F in each individual

cylinder. Current fuel control systems control the A/F for the entire engine or a bank of

cylinders. By controlling A/F for the entire engine or a bank of cylinders, any necessary

adjustments made to fuel delivery for the engine are applied to all cylinders simultaneously,

regardless of whether all cylinders need the adjustment. For example, there is usually some

deviation in A/F between cylinders. If a particular cylinder is rich, but the "bulk" A/F indication

for the engine is lean, the fuel control system will simultaneously increase the amount of fuel

delivered to all of the cylinders, including the rich cylinder. Thus, the rich cylinder becomes

even richer having a potentially negative effect on the net A/F.

Individual cylinder A/F control helps diminish variation among individual cylinders. 

This is accomplished by modeling the behavior of the exhaust gases in the exhaust manifold and

using sophisticated software algorithms to predict individual cylinder A/F. Individual cylinder

A/F control requires use of an UEGO sensor in lieu of the traditional HEGO sensor, and requires

a more powerful engine control computer.

Adaptive Fuel Control Systems

The fuel control systems of virtually all current vehicles incorporate a feature known as

"adaptive memory" or "adaptive block learn." Adaptive fuel control systems automatically

adjust the amount of fuel delivered to compensate for component tolerances, component wear,

varying environmental conditions, varying fuel compositions, etc., to more closely maintain

proper fuel control under various operating conditions. 

For most fuel control systems in use today, the adaption process affects only steady-state

operation conditions (i.e., constant or slowly changing throttle conditions). Because transient

operating conditions have always provided a challenge to maintaining precise fuel control, the

use of adaptive fuel control for transient operation would be extremely valuable. Accurate fuel

control during transient driving conditions has traditionally been difficult because of

inaccuracies in predicting the air and fuel flow under rapidly changing throttle conditions. Air

and fuel dynamics within the intake manifold (fuel evaporation and air flow behavior), and the

time delay between measurement of air flow and the injection of the calculated fuel mass, result

in temporarily lean A/F during transient operation. Variation in fuel properties, particularly

distillation characteristics, also increases the difficulty in predicting A/F during transients. These

can all lead to poor driveability and an increase in NOx emissions.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-8

Electronic Throttle Control Systems

As mentioned above, the time delay between the air mass measurement and the

calculated fuel delivery presents one of the primary difficulties in maintaining accurate fuel

control and good driveability during transient driving conditions. With the conventional

mechanical throttle system (a metal linkage connected from the accelerator pedal to the throttle

blade in the throttle body), quick throttle openings can result in a lean A/F spike in the

combustion chamber. Although algorithms can be developed to model air and fuel flow

dynamics to compensate for these time delay effects, the use of an electronic throttle control

system, known as “drive-by-wire” or “throttle-by-wire,” may better synchronize the air and fuel

flow to achieve proper fueling during transients (e.g., the driver moves the throttle, but the fuel

delivery is momentarily delayed to match the inertial lag of the increased airflow).

While this technology is currently used on several vehicle models, it is considered

expensive and those vehicles equipped with the feature are expensive, higher end vehicles. 

Because of its high cost, it is not anticipated that drive-by-wire technology will become

commonplace in the near future. 

iii. Improvements in Fuel Atomization

In addition to maintaining a stoichiometric A/F ratio, it is also important that a

homogeneous air-fuel mixture be delivered at the proper time and that the mixture is finely

atomized to provide the best combustion characteristics and lowest emissions. Poorly prepared

air-fuel mixtures, especially after a cold start and during the warm-up phase of the engine, result

in significantly higher emissions of unburned HC since combustion of the mixture is less

complete. By providing better fuel atomization, more efficient combustion can be attained,

which should aid in improving fuel economy and reducing emissions. Sequential multi-point

fuel injection and air-assisted fuel injectors are examples of the most promising technologies

available for improving fuel atomization.

Sequential Multi-Point

Typically, conventional multi-point fuel injection systems inject fuel into the intake

manifold by injector pairs. This means that rather than injecting fuel into each individual

cylinder, a pair of injectors (or even a whole bank of injectors) fires simultaneously, sending fuel

into several cylinders. Since only one of the cylinders is actually ready for fuel at the moment of

injection, the other cylinder(s) gets too much or too little fuel. With this less than optimum fuel

injection timing, fuel puddling and intake manifold wall wetting can occur, both of which can

hinder complete combustion. Sequential injection, on the other hand, delivers a more precise

amount of fuel that is required by each cylinder to each cylinder at the appropriate time. 

Because of the emission reductions and other performance benefits “timed” fuel injection offers,

sequential fuel injection systems are very common on today’s vehicles and are expected to be

incorporated in all vehicles soon.

Air-Assisted Fuel Injectors
Chapter IV: Technological Feasibility

IV-9

Another method to further homogenize the air-fuel mixture is through the use of airassisted fuel injection. By injecting high pressure air into the fuel injector, and subsequently, the

fuel spray, greater atomization of the fuel droplets can occur. Since achieving good fuel

atomization is difficult when the air flow into the engine is low, air-assisted fuel injection can be

particularly beneficial in reducing emissions at low engine speeds. In addition, industry studies

have shown that the short burst of additional fuel needed for responsive, smooth transient

maneuvers can be reduced significantly with air-assisted fuel injection due to a decrease in wall

wetting in the intake manifold. 

iv. Improvements to Exhaust Aftertreatment Systems

Over the last five years or so, there have been tremendous advancements in exhaust

aftertreatment systems. Catalyst manufacturers are progressively moving to palladium as the

main precious metal in automotive catalyst applications. Improvements to catalyst thermal

stability and washcoat technologies, the design of higher cell densities, and the use of two-layer

washcoat applications are just some of the advancements made to catalyst technology. There has

also been much development in HC and NOx absorber technology. The advancements to

exhaust aftertreatment systems are probably the single most important area of emission control

development.

Catalysts

As previously mentioned, significant changes in catalyst formulation, size and design

have been made in recent years and additional advances in these areas are still possible. 

Palladium (Pd) is likely to continue as the precious metal of choice for close-coupled

applications and will start to see more use in underfloor applications. Some manufacturers, for

example, have suggested that they will use Pd/Rh in lieu of tri-metal or conventional Pt/Rh

catalysts for underfloor applications. Palladium catalysts, however, are less resistant to poisoning

by oil-and fuel-based additives than conventional platinum/rhodium (Pt/Rh) catalysts. Based on

current certification trends and information from vehicle manufacturers and catalyst suppliers, it

is expected that Pd-only and Pd/Rh catalysts will be used in the close-coupled locations while

conventional or tri-metal (Pd/Pt/Rh) catalysts will continue to be used in underfloor applications.

As palladium technology continues to improve, it may be possible for a single close-coupled

catalyst to replace both catalysts. If fact, at least one vehicle manufacturer currently uses a

single Pd-only catalyst for one of their models. According to MECA, new Pd-based catalysts are

now capable of withstanding exposure to temperatures as high as 1100°C and, as a result, can be

moved very close to the exhaust manifold to enhance catalyst light-off performance.

 In addition to reliance on Pd and tri-metal applications, catalyst manufacturers have

developed “multi-layered” washcoat technologies. Automotive catalysts consist of a cylindrical

or oval shaped substrate, typically made of ceramic or metal. The substrate is made up of

hundreds of very small, but long cells configured in a shape similar to a honey-comb. The

substrate is coated with a substance containing precious metals, rare earth metals, and basemetal oxides, that is known as the catalyst washcoat. Typical washcoat formulations consist of
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-10

precious metals which either oxidize or reduce pollutants, base-metal oxides, such as alumina,

which provide the surface area support for the precious metals to adhere to, and base components

(rare earth metals) such as lanthanum, ceria, and zirconia, which act as promoters, stabilizers,

and encourage storage and reduction of oxygen. Conventional catalysts have a single layer of 

washcoat and precious metals applied to the catalyst substrate. More advanced catalysts use

multi-layered washcoats with two or more layers of different combinations of washcoat and

precious metals. The washcoat can be applied to the substrate such that one layer can be applied

on top of another. The use of multi-layered washcoat technology allows precious metals that

have adverse reactions together to be separated such that catalyst durability and emission

reduction performance are significantly enhanced. For example, Pd and Rh can have adverse

reactions when combined together in a single washcoat formulation. A multi-layer washcoat

architecture that uses Pd and Rh could have the Pd on the bottom layer and the Rh on the top

layer. Rh is particularly used at reducing NOx. It is generally preferable to reduce NOx in the

top layer while CO and HC are still present and then oxidize CO and HC in the bottom layer. 

Figure IV-1 illustrates the impact coating architecture (multi-layered washcoat technology) can

have on emission performance.

 

0

2

4

6

8

10

12

14

16

THC NOx

% breakthrough in European 

driving cycle

Single layer Pd/Rh

Two layer - Pd top

Two layer - Pd bottom

SAE 960802: 1.8 liter 4 cyl; 100 h aged; Pd/Rh=5/1 @ 50 g/cu. ft.

Figure IV-1. Impact of Coating Architecture on HC and NOx Emissions.

Manufacturers have also been developing catalysts with substrates which utilize thinner

walls in order to design higher cell density, low thermal mass catalysts for close-coupled

applications (improves mass transfer at high engine loads and increases catalyst surface area as

well as speeding up light-off during cold starts). The greater the number of cells there are, the

more surface area that exists for washcoat components and precious metals to adhere to,

resulting in more precious metal sites available for oxidizing and reducing pollutants. Cell

densities of 600 cells per square inch (cpsi) have already been commercialized, and research on

900 cpsi catalysts has been progressing. Typical cell densities for conventional catalysts are 400

cpsi. 
Chapter IV: Technological Feasibility

IV-11

We have projected that in order to meet the proposed Tier 2 emission standards catalyst

volumes will increase. Current California LEV and ULEV passenger car catalyst volume to

engine displacement ratios are approximately 0.7 to over 1.0 while many trucks only have ratios

of 0.6 or less. We believe that in order to comply with proposed Tier 2 standards, most vehicle

will likely need catalyst volumes equal to the displacement of the engine, or in some cases, even

greater. As mentioned above, higher cell density substrates effectively provide more surface

area for pollutant conversion, therefore catalyst volumes may not need to be increased as

significantly if higher cell density substrates are used.

We have also projected that some level of increased catalyst loading will be necessary to

meet proposed Tier 2 standards. Typical catalyst loading for current LEVs and ULEVs range

from 50 g/cu ft to 300 g/cu ft. We believe that, based on input from catalyst suppliers and

vehicle manufacturers, depending on the vehicle, catalysts meeting Tier 2 standards will need

loadings in the 100 - 300 g/cu ft range. However, catalyst suppliers have also indicated to us that

they and vehicle manufacturers are constantly working on ways to reduce the amount of precious

metal loading ( a process they refer to as “thrifting”). Thrifting is achieved in several ways. One

of the most common is matching the catalyst to the attributes of the vehicle. By working in

unison, vehicle manufacturers and catalyst suppliers are able to thrift or reduce the amount of

precious metal used in a given application by attempting to optimize the vehicle fuel control

strategy, exhaust mass flow rate, and exhaust temperature with various catalyst parameters, such

as catalyst location, substrate design, cell density, oxygen storage capability, and precious metal

and base metal dispersion, to name a few. Other methods of thrifting are the constant

improvements being made to washcoat architecture - that is, constant improvement to the

materials used in the washcoat formulation so that the precious metals and other components

better adhere to the substrate surface. Finally, improvements to washcoat application processes

can also significantly improve catalyst performance while allowing thrifting of precious metals. 

Improvements to processes consist of advancements to the process used to coat the substrate

with washcoat materials - allowing precious metals, base metals, and ceria to better dispersed. 

Better dispersion means that rather than relatively large “clumps” of precious metals unevenly

dispersed throughout the catalyst surface, many smaller precious metal sites are dispersed

uniformly throughout the catalyst surface increasing the chance for pollutants to come into

contact with the precious metal and react into a harmless emission. Therefore, as thrifting

continues, it is possible that precious metal loading may actually decrease rather than increase.

The largest source of HC emissions continues to be cold start operation where the

combination of rich A/F operation and the ineffectiveness of a still relatively cool catalyst result

in excess HC emissions. One of the most effective strategies for controlling cold start HC

emissions is to reduce the time it takes to increase the operating temperature of the catalyst

immediately following engine start-up. The effectiveness or efficiency of the catalyst increases

as the catalyst temperature increases. One common strategy is to move the catalyst closer to the

exhaust manifold where the exhaust temperature is greater (e.g., a close-coupled catalyst). In

addition to locating the catalyst closer to the engine, retarding the spark timing and increasing

idle speed are other possible approaches. Retarding spark timing, causes combustion to occur

later in the power stroke, allowing more heat to escape into the exhaust manifold during the

exhaust stroke. Increased idle speed leads to a greater amount of combustion per unit time,
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-12

providing a greater quantity of heat for heating the exhaust manifold, headpipe, and catalyst.

Another strategy is to use an electrically-heated catalyst (EHC). The EHC consists of a

small electrically heated catalyst placed directly in front of a conventional catalyst. Both

substrates are located in a single can or container. The EHC is powered by the alternator, or

solely from the vehicle’s battery, or from a combination of the alternator and battery. The EHC

is capable of heating up almost immediately, assisting the catalyst that directly follows it to also

heat up and obtain light-off temperature (e.g., the catalyst temperature where catalyst efficiency

is 50 percent) quickly. Manufacturers have indicated that EHC’s will probably only be

necessary for a limited number of LEV II/ULEV II engine families, mostly larger displacement

V-8's where cold start emissions are difficult to control. 

Adsorbers/Traps

Other potential exhaust aftertreatment systems that are used in conjunction with a catalyst

or catalysts, are the HC and NOx adsorbers or traps. Hydrocarbon adsorbers are designed to trap

HC while the catalyst is cold and unable to sufficiently convert the HC. They accomplish this by

utilizing an adsorbing material which holds onto the HC. Once the catalyst is warmed up, the

trapped HC are automatically released from the adsorption material and are converted by the

fully functioning downstream three-way catalyst. There are three principal methods for

incorporating an adsorber into the exhaust system. The first is to coat the adsorber directly on

the catalyst substrate. The advantage is that there are no changes to the exhaust system required,

but the desorption process cannot be easily controlled and usually occurs before the catalyst has

reached light-off temperature. The second method locates the adsorber in another exhaust pipe

parallel with the main exhaust pipe, but in front of the catalyst and includes a series of valves

that route the exhaust through the adsorber in the first few seconds after cold start, switching

exhaust flow through the catalyst thereafter. Under this system, mechanisms to purge the

adsorber are also required. The third method places the trap at the end of the exhaust system, in

another exhaust pipe parallel to the muffler, because of the low thermal tolerance of adsorber

material. Again a purging mechanism is required to purge the adsorbed HC back into the

catalyst, but adsorber overheating is avoided. 

NOx adsorbers are also being developed, but according to MECA, are generally

recognized as a control for NOx resulting from reduced EGR. They are typically used for leanburn applications and are not applicable to engines that attempt to maintain stoichiometry all the

time.

Secondary Air Injection

Secondary injection of air into exhaust ports after cold start (e.g., the first 40-60 seconds)

when the engine is operating rich, coupled with spark retard, can promote combustion of

unburned HC and CO in the exhaust manifold and increase the warm-up rate of the catalyst. By

means of an electrical pump, secondary air is injected into the exhaust system, preferably in

close proximity of the exhaust valve. Together with the oxygen of the secondary air and the hot

exhaust components of HC and CO, oxidation ahead of the catalyst can bring about an efficient
Chapter IV: Technological Feasibility

IV-13

increase in the exhaust temperature which helps the catalyst to heat up quicker. The exothermic

reaction that occurs is dependent on several parameters (secondary air mass, location of

secondary air injection, engine A/F ratio, engine air mass, ignition timing, manifold and

headpipe construction, etc.), and ensuring reproducibility demands detailed individual

application for each vehicle or engine design. 

Insulated or Dual Wall Exhaust System

Insulating the exhaust system is another method of furnishing heat to the catalyst to

decrease light-off time. Similar to close-coupled catalysts, the principle behind insulating the

exhaust system is to conserve heat generated in the engine to aid the catalyst warm-up. Through

the use of laminated thin-wall exhaust pipes, less heat will be lost in the exhaust system,

enabling quicker catalyst light-off. 

v. Improvements in Engine Calibration Techniques

Of all the technologies discussed above, one of the most important emission control

strategies is not hardware-related. Rather, it is software related and, more specifically, involves

the algorithms and calibrations contained within the software that are used in the power-train

control module (PCM) which control how the various engine and emission control components

and systems operate. Advancements in software along with refinements to existing algorithms

and calibrations can have a major impact in reducing emissions. Confidential discussions

between manufacturers and EPA have suggested that manufacturers believe emissions can be

further reduced by improving and updating their calibration techniques. As computer

technology and software continues to advance, so does the ability of the automotive engineer to

use these advancements in ways to better optimize the emission control systems. For example,

as processors become faster, it is possible to perform calculations quicker, thus allowing for

faster response times for controlling engine parameters, such as fuel rate and spark timing. As

the PCM becomes more powerful with greater memory capability, algorithms can become more

sophisticated. Manufacturers have found that as computer processors, engine control sensors

and actuators, and computer software become more advanced, and, in conjunction with their

growing experience with developing calibrations, as time passes, their calibration skills will

continue to become more refined and robust, resulting in even lower emissions.

 Manufacturers have suggested to EPA that perhaps the single most effective method for

controlling NOx emissions will be tighter A/F control which could be accomplished with

advancements in calibration techniques without necessarily having to use advanced technologies,

such as UEGO sensors. Manufacturers have found ways to improve calibration strategies such

that meeting federal cold CO requirements, as well as, complying with LEV standards, have not

required the use of advanced hardware, such as EHCs or adsorbers.

Since emission control calibrations are typically confidential, it is difficult to predict

what advancements will occur in the future, but it is clear that improved calibration techniques

and strategies are a very important and viable method for further reducing emissions.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-14

b. Data Supporting Tier 2 Technical Feasibility

Automobile manufacturers generally design vehicles to meet emission targets which are

50-70 percent of the emission standards, even after the catalytic converter has been aged to full

useful life (e.g., 100,000-120,000 miles). The manufacturer desires this 30-50 percent safety

margin in order to reduce the probability that in-use vehicles will exceed the standard to an

acceptable level. Thus, the emission design targets for proposed Tier 2 standards for full useful

life would be 0.045-0.063 g/mi NMOG and 0.035-0.049 g/mi NOx at full useful life.

With this in mind, we will present data from several sources that establish our proposed

Tier 2 standards to be feasible. The data ranges from certification emission levels to feasibility

evaluation programs undertaken in the last year by ARB and MECA. Even though these

programs were directed towards the LEV II program, the data and information resulting from

these programs are useful to EPA in establishing feasibility of Tier 2 emission standards since

our proposed Tier 2 standards are the same as the LEV II standards.

i. Certification Emission Levels

Manufacturers report certification results for engine families. Those engine families are

used in a variety of vehicle models and configurations. Manufacturers are required to report

certification test results for at least two vehicle configurations and often report results for five or

six or more models or configurations within an engine family. Manufacturers, for example, will

report certification test results for both automatic and manual transmission versions of a vehicle.

Table IV-2 below indicates the number of engine families with at least one vehicle configuration

at or below full-life NOx levels of 0.04, 0.07, and 0.1 g/mile. Of those at or below 0.04 and 0.07

g/mile NOx, 16 and 35, respectively, also have HC levels below 0.09 g/mile. There are

approximately 400 engine families total.

Table IV-2. Number of Engine Families with One or More Engine/Vehicle Configurations

with Low Full-life NOx Levels

NOx level Vehicles Below 6,000 pounds

(LDVs, LDT1s, LDT2s)

Vehicles Above 6,000 pounds

(LDT3s, LDT4s)

# 0.04 20 2

# 0.07 45 3

# 0.1 150 11

Table IV-3 provides a listing of engine families with one or more vehicle configurations

at or below 0.07 g/mile NOx. The table also provides the HC certification levels for those

configurations. Where a range is shown, there is more than one configuration within the engine
Chapter IV: Technological Feasibility

IV-15

family with full-life NOx certification levels at or below 0.07. The same vehicle models appear

in the table more than once because multiple engine families are often certified for the same

vehicle models. EPA assembled this list by reviewing 1999 model year certification data for

engine families certified to nationwide Tier 1 standards, NLEV program standards, and the

California program standards. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-16

Table IV-3. 1999 Engine Families with One or More Vehicle Configurations 

with Full-life NOx Certification Levels at or below 0.07 g/mile NOx

Manufacturer Models NOx level HC level Standard

LDVs (passenger cars)

Hyundai Elantra Wagon, Tiburon 0.01 - 0.02 0.05 LEV

Ford Contour, Mystique, Cougar 0.02 - 0.05 0.12 - 0.17 Tier 1

Ford Contour, Mystique, Cougar 0.02* 0.12 Tier 1

Volkswagon, Audi Passat, Passat wagon

A4

0.03 - 0.07* 0.06 - 0.07 TLEV

Volvo V70, S70 0.03 0.06 - 0.08 TLEV

Volvo S70, V70, C70 0.03 - 0.04 0.05 - 0.07 LEV

Hyundai Elantra, Tiburon 0.03 - 0.04*+ 0.04 - 0.06 Tier 1

Daimler Chrysler Cirrus, Stratus, Breeze 0.04*+ 0.06 LEV

Mitsubishi Diamante 0.04*+ 0.05 LEV

Mitsubishi Gallant, Mirage 0.04 + 0.03 LEV

Suzuki Metro 0.04 0.03 TLEV

Ford Mustang 0.04 0.17 - 0.21 Tier 1

Ford Contour, Mystique, Cougar 0.04 - 0.05 0.07 - 0.08 TLEV

Daimler Chrysler S320 0.04 + 0.07 Tier 1

Hyundai Sonata 0.04 - 0.06* 0.07 TLEV

Volkswagon Jetta, Golf, Cabriolet 0.04 - 0.06 0.04 -0.07 TLEV

Nissan Altima 0.05 0.03 LEV

Ford Sable, Taurus 0.05 - 0.06 0.13 - 0.14 Tier 1

Ford Mustang 0.05 - 0.06 0.07 TLEV

Ford Contour, Mystique, Cougar 0.06 0.07 Tier 1

Daimler Chrysler E430, SL500 0.06 - 0.07 0.02 LEV

Daimler Chrysler SL600 0.06 0.12 Tier 1

Hyundai Accent 0.06* 0.08 - 0.1 TLEV

Hyundai Sonata 0.06* 0.04 - 0.05 TLEV

Volkswagon New Beetle, New Golf, New Jetta 0.06* 0.06 LEV

Mazda MX-5 Miata 0.07 0.07 TLEV
Chapter IV: Technological Feasibility

IV-17

Mitsubishi Mirage 0.07 0.05 LEV

Volvo S80 0.06 - 0.07* 0.07 - 0.08 TLEV

Volvo S80 0.04 - 0.05 0.11 TLEV

Daimler Chrysler C230 Kompressor 0.07 0.03 TLEV

Honda Accord 0.07* 0.04 - 0.05 LEV

Honda Civic HX 0.07* 0.09 TLEV

Honda Civic 0.07* 0.07 - 0.08 TLEV

Infiniti Q45 0.07* 0.11 Tier 1

LDT 1

Daimler Chrysler Jeep Cherokee 2WD, 4WD 0.03*+

 0.06 Tier 1

Ford Ranger 0.04 - 0.07 0.09 - 0.18 Tier 1

Mazda B2500, B3000 0.04 - 0.06 0.08 - 0.13 Tier 1

Ford Ranger 0.05* 0.11 Tier 1

LDT2

Ford Explorer 0.03 - 0.04 0.07 - 0.10 Tier1

Ford, Mazda Ranger, B3000 0.04 - 0.07 0.12 - 0.15 Tier 1

Ford F-150 0.05* 0.08 - 0.10 Tier 1

Mazda B3000 0.05* 0.06 - 0.07 Tier 1

Ford, Mazda Ranger, B3000 0.05 - 0.07 0.07 - 0.12 Tier 1

Daimler Chrysler Caravan, Voyager 0.07 LEV

Nissan Frontier 0.07* 0.07 LEV

LDT3

Ford F-150 0.04 - 0.06 0.07 - 0.08 Tier 1

Ford F-150 0.05 - 0.06 0.11 - 0.12 Tier 1

LDT4

Ford Expedition, Navigator, F-250 0.04* 0.16 - 0.17 Tier 1

* Other model configurations have NOx certification levels above 0.07 g/mile

+ The official NOx certification result reported was 0 for these vehicles due to rounding. The

values shown are the unrounded results.

A review of the Table above shows that most of the engine families with configurations
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-18

certified at 0.07 g/mile NOx or less are passenger cars and lighter weight LDTs . This is

understandable since all LDT classes except LDT1 have emission standards considerably higher

than LDVs. Thus, to this point, there has been no motivation for vehicle manufacturers to design

and produce light-duty trucks with emission control systems on par with light-duty vehicle

systems. Even so, there are several light-duty trucks with certification levels at or very close to

the proposed Tier 2 requirements.

ii. Industry Sulfur Test Program

The Coordinating Research Council (CRC), automobile manufacturers and the American

Petroleum Institute (API) all tested a number of vehicles capable of complying with the

California LEV or ULEV standards. The primary purpose of these test programs was to estimate

how higher fuel sulfur levels affected emissions. However, the test results with low sulfur fuel

(i.e., 30-40 ppm sulfur) provide an indication of the emission control potential of these vehicles. 

Of the 20 unique vehicle models tested in these programs, four models met both of the Tier 2

NMOG and NOx design targets mentioned above. An additional three models had NMOG

levels below the design targets and NOx levels above the design targets, but below the proposed

NOx standard. All of these low emitting models were LDVs with 100K catalyst systems.

iii. MECA Test Program

The Manufacturers of Emission Controls Association (MECA) sponsored vehicle

emission testing at the Southwest Research Institute (SwRI)1

 for the purpose of demonstrating

the performance of advanced emission control systems in meeting proposed California LEV II

and our proposed Tier 2 light-duty vehicle standards. SwRI took two LDVs (a 1997 3.8L Buick

LeSabre and a 1997 4.6L Ford Crown Vic) and one LDT2 (3.4L Toyota T100) certified to the

federal Tier 1 standards and replaced the original catalytic converters with more advanced

catalytic converters provided by MECA members. The catalysts were thermally aged to roughly

50,000 mile of in-use operation. SwRI then attempted to optimize the emission performance by

modifying the existing secondary air and exhaust gas recirculation (EGR) strategies. This was

accomplished by using a computer controlled intercept system (Emissions Reduction Intercept

and Control system or ERIC). This computer intercept methodology was used to recognize and

modify only driving modes associated with high tailpipe emission modes, thereby minimizing

the level of modifications to the base vehicle control system. The control tuning approach

developed for each vehicle was unique to the individual vehicle. The computer intercept

techniques used in this program were capable of modifying secondary air and EGR without

setting any on-board diagnostic codes. The modified control strategies also did not have any

measurable impact on fuel economy, nor were any detectable changes to vehicle driveability

observed during FTP evaluations.

After these modifications, all three vehicles met the Tier 2 NMOG usefull life design

targets. The LeSabre and T100 both met the NOx design target. The Crown Victoria, however

was a little short of the design target, but did meet the proposed Tier 2 standard with a headroom
Chapter IV: Technological Feasibility

IV-19

of 23 percent. The actual test results are summarized in Table IV-4 below.

Table IV-4. MECA Test Program: Emissions with Catalysts Aged to 100,000 Miles (g/mi).

NMOG NOx

Tier 2 Design Targets 0.045-0.063 0.035-0.049

Crown Victoria (LDV) 0.049 0.057

Buick LeSabre (LDV) 0.038 0.037

Toyota T100 (LDT2) 0.052 0.014

iv. ARB Test Program

ARB tested five different 1997-98 model year production LEV LDV models. Two of the

six models met the proposed Tier 2 design targets for NMOG and NOx. Each vehicle was tested

for baseline emissions at approximately 1K miles before any modifications to the vehicle’s

emission controls were made. Table IV-5 lists the average emissions from these FTP tests.

Table IV-5. ARB Production LEV LDV Passenger Car Emission Data.

Test Vehicle NMHC (g/mi) CO (g/mi) NOx (g/mi)

1997 Mercury Sable 0.035 0.9 0.072

1998 Mercury Grand Marquis 0.048 0.6 0.014

1998 Nissan Altima 0.031 0.7 0.040

1998 Honda Accord EX 0.025 0.3 0.066

1998 Toyota Avalon 0.044 0.4 0.111

After the baseline FTP results were complete, new advanced catalysts supplied by

various catalyst suppliers were installed on each test vehicle. In general, the advanced catalysts

were placed in the same position as the OEM catalysts. Two of the vehicles had small closecoupled catalysts added to the OEM configuration. FTP tests were then conducted. If the

emission results were not below the proposed LEV II standards with a reasonable margin, engine

calibration modifications such as spark retard at engine start, O2 sensor biasing (typically rich),

or secondary air injection modifications were made to reduce tailpipe emission levels further. In

a couple of instances, approximately 4K miles were accumulated on the “green” catalysts before

FTP tests were conducted again. All of the vehicles, once modified, had emission levels well

below the proposed Tier 2 NMOG and NOx design targets. While these results are not with

catalysts aged tofull usefull life, we believe these results are still very promising, since in-use
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-20

deterioration rates have been steadily declining. Even if these emissions were to double, they

would still be very close to or below the proposed Tier 2 standards. Table IV-6 lists the modified

passenger car emission results. 

Table IV-6. ARB Modified Passenger Car Emission Data

(advanced catalysts with modifications to fuel and/or spark & secondary air)

Manufacturer Model Mileage NMOG

(g/mi)

CO

(g/mi)

NOx

(g/mi)

Mercury Sable 0 0.029 1.0 0.036

Mercury Grand

Marquis 4000 0.033 0.5 0.004

Nissan Altima 0 0.028 0.7 0.033

Honda Accord EX 0 0.026 0.4 0.035

ARB also tested two identical 1998 Ford Expeditions (LDT4). Both vehicles were tested

in the baseline OEM configuration at 2,000 miles with promising results. Table IV-7 lists the

baseline emission results for the two Expeditions.

Table IV-7. ARB Ford Expedition Baseline Emission Test Results

Vehicle No. of Tests NMHC 

(g/mi)

CO 

(g/mi)

NOx 

(g/mi)

#2 8 0.090 1.69 0.030

#3 6 0.077 1.57 0.031

ARB installed advanced Pd/Rh catalyst systems bench aged to 50,000 miles along with

50,000 mile bench aged oxygen sensors on both vehicles and were able to reduce NOx emissions

about 50 percent from the NOx certification level of 0.14 g/mi. ARB also added secondary air to

the vehicles and made some modifications to the spark timing (retarded) and oxygen sensor bias

(rich) and found that they were able to further reduce emissions. Table IV-8 lists the emission

results of the Expeditions with advanced catalyst systems.
Chapter IV: Technological Feasibility

s

C.C Webb, B.B. Bykowski, P.A. Weber, D.L. McKinnon; “Using Advanced Emissions Control Systems to

Demonstrate LEV II ULEV on Light-Duty Gasoline Vehicles”. SAE Technical Paper Series, Paper No. 1999-01-

0774, 1999.

IV-21

Table IV-8. ARB Expedition Emission Results with Advanced Catalyst Systems

Vehicle No. Of Tests NMHC 

(g/mi)

CO 

(g/mi)

NOx 

(g/mi)

#2 4 0.111 3.32 0.048

#3 7 0.112 2.91 0.052

C EPA Test Program

Our test program was aimed at lowering the emissions of a large 1999 LDT3 vehicle. 

This vehicle has a high horsepower engine, four wheel drive, and a curb weight of 4,500 pounds

(GVW of 6,000 lbs). The exhaust system of the pickup was modified to incorporate two close

coupled and two underfloor catalytic converters provided by MECA. The catalytic converters

used for these tests were nearly identical to the system used on “Vehicle 1” in the work by Webb

et al.s The only modifications from the specification used by Webb et al. were insulation of the

close coupled catalytic converters using a woven ceramic fiber mesh, and the use of a somewhat

larger exhaust pipe diameter (same as OEM) to limit exhaust backpressure. All of the catalyst

“bricks” were constructed of a 4-mil ceramic monolithic material. The two close coupled

catalytic converters each used two “bricks”and were mounted immediately downstream of each

exhaust manifold. The first “brick” in each close coupled catalytic converter had a diameter of

7.6 cm, was 7.6 cm long, with a cell density of 600 cpsi, and was coated with 250 g/ft3 of Pd. 

The second “brick” in each close coupled catalytic converter had a diameter of 10.2 cm, was 8.5

cm long, with a cell density of 400 cpsi, and was coated with Pd/Rh at a 9:1 ratio to 150 g/ft3. 

The two underfloor catalytic converters each contained a single “brick” with a diameter of 10.2

cm, was 11.1 cm long, with a cell density of 400 cpsi, and was coated with Pd/Rh at a 9:1 to 80

g/ft3.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-22

NOx and NMHC Full Useful Life Emissions Levels for 

3 Different Configurations of a 1999 Chevrolet Silverado Pickup

(5.3 L V-8)

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

0.22

0.24

0.26

0.28

0.3

0.32

0.34

0.36

0.38

0.4

0.42

0.44

0.46

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1

NOx Emissions (g/mi)

NMHC/NMOG Emissions

Federal Tier 1 LDT3 Certification Standard

California LEV I MDV2

Tier 2 Target

Research Goal

Current Status

Initial Certification Level

Figure IV-2: Certification Emissions and Initial Research and Development Results for a

Large 1999 LDT3 Pickup, as Compared to Federal Tier 1 Emissions Standards, California

LEV-I Emissions Standards, and a Tier 2 Corporate Average Target. 

Initially, no attempts were made to alter the calibration of the electronic engine controls. 

Figure IV-2 shows emissions results from testing of the LDT3 vehicle. In this configuration, the

pickup achieved emissions levels of 0.060 ± 0.002 g/mi NOx and 0.09 ± 0.01 g/mi NMHC. 

Based on initial modal emissions results, EPA staff engineers have indicated that the research

targets of 0.04 g/mi NOx and 0.06 g/mi NMHC will likely be reached through elimination of

fuel cut-offs during decelerations, slight increases in EGR, and a minor degree of air-injection

during cold-start. 

v. Summary of Technical Feasibility Data

It is very apparent from the data presented above that it is technically feasible for LDVs

to meet our proposed Tier 2 emission standards in the proposed time frame. Although the bulk

of the data is for LDVs with smaller displacement engines, there are examples of vehicles with

larger displacement engines - the 1999 Ford Mustang Convertible and the Ford Crown Vic and

Buick LeSabre modified by MECA. Neither of the MECA or ARB test programs modified the

basic engine calibrations of the vehicles tested. In general, the engine calibration is designed

specifically to match the engine exhaust to the catalytic converter being used on the vehicle. 
Chapter IV: Technological Feasibility

IV-23

Since recalibrations optimize engine performance, durability, emissions and safety

simultaneously, neither MECA nor ARB modified the original engine calibration. However, it is

very likely that such recalibration could better match engine operation and the advanced catalytic

converters being tested and reduce emissions beyond the emission levels measured in the test

programs. Therefore, we are confident that by 2004, all LDVs should be capable of meeting

Tier 2 standards.

Fewer data are available addressing the ability of LDTs to meet the design targets

implied by the proposed Tier 2 NMOG and NOx standards. No current LDTs have been

certified at such low emission levels. However, this is partially due to the fact that their current

emission standards are generally well above those for LDVs. Also, the number of LDTs

required to comply with ARB’s current LEV and ULEV standards is much lower than the

number of LDVs (and LDT1s). Thus, manufacturers have focused their early LEV and ULEV

development efforts on LDVs.

The fact that a number of LDTs have been certified at emission levels near the proposed

Tier 2 standards indicates that control technology has developed to the point where the

differences between LDV and LDT emissions are shrinking.

 As highlighted by MECA at the November 1998 annual meeting between EPA and

MECA to discuss recent emission control technology developments, there are several areas

where technology gaps exist between LDV and LDT technology. Table IV-9 lists these gaps. 

Table IV-9. Emission Technology Gaps Between LDVs and LDTs

LEV LDVs Tier 1 LDTs

Tight A/F control Relatively loose A/F control

Close-coupled + underfloor catalyst

combination

Underfloor catalyst with long pipe runs

Ratio of catalyst volume to engine

displacement Vcat/Veng = 1-1.5

Vcat/Veng = 0.5 or less

Catalysts with advanced washcoats and

higher cell density substrates

Less sophisticated catalysts on standard

substrates

These differences have been due to the fact that LDT standards were less stringent than

those applicable to LDVs. However, there are no technological reasons why LDTs cannot

employ the exact same technology, or even better technology, as LDVs.

The Toyota T100 pick-up (LDT2) modified by MECA and optimized by SwRI had very

impressive emission results at 50,000 miles - considerably lower than the Tier 2 design targets.

The ARB Ford Expedition had emission reductions of over 50 percent from certification levels,
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-24

achieving results just at the LEV II and Tier 2 NOx standard (NMOG was below the design

target) with the addition of an advanced catalyst system and the introduction of secondary air at

start-up. Finally, our own LDT3 test program had emission results below Tier 2 standards. As

stated above, none of the above mentioned test programs modified the basic engine calibrations

of the vehicles tested. The modifications they made were minor compared to what vehicle

manufacturers are capable of doing. For example, the 1999 certification results for the Ford

Expedition show a slight increase in NMOG levels relative to the 1998 model, but a 50 percent

reduction in NOx levels at 50,000 miles. The full usefull life NOx certification level in 1998

was 0.14 g/mi but only 0.07 g/mi in 1999. The only difference between the two model years is

engine calibration - both model years have the same catalyst system. This highlights the

importance of engine calibration on emission control system performance. 

Traditionally LDTs have had higher standards because they tend to generate more

emissions due to larger displacement engines and the fact that they have typically been operated

under high loads. The greatest concern with controlling emissions for LDTs has always been

that catalysts couldn’t be placed close enough to the engine to reduce cold start emissions

because of concerns over thermal damage to the catalyst resulting from the high levels of heat

generated by the trucks when under load. But as discussed above, catalysts are now capable of

withstanding much higher temperatures, and this is no longer an issue.

Another reason why the emission standards for LDT3s and LDT4s were set so much

higher than those for LDVs and lighter LDTs was that the heavier LDTs were tested at adjusted

loaded vehicle weight, not loaded vehicle weight. Adjusted loaded vehicle weight is the

vehicle’s curb weight plus half of its maximum payload capacity. Loaded vehicle weight is the

vehicle’s curb weight plus 300 pounds. This was done in the past because the LDT3s and

LDT4s were believed to be used primarily as cargo carrying vehicles and should be regulated

under these conditions. While their weight during emission testing generally increases

emissions, the applicable emission standards were numerically increased to compensate for this.

As part of the Tier 2 proposal, LDT3s and LDT4s will be tested like LDVs and the

lighter LDTs, at the vehicle’s curb weight plus 300 pounds. This change represents the recent

trend for these trucks to be used predominantly as passenger carrying vehicles. This change

would also reduce the certified emission level of any current LDT3 or LDT4 simply by reducing

the amount of fuel the vehicle consumes over the test cycle. Under the proposed test procedure,

all current LDT3s and LDT4s would be closer to the design targets for the proposed Tier 2

standards. Likewise, the difference between the current Tier 1 standards for these vehicles and

the proposed Tier 2 standards is actually much smaller than a comparison of the numerical

standards would indicate.

Overall, several certified and research LDVs have met the design targets for the proposed

Tier 2 standards in 1998 with, in many cases, considerable margin to spare. This indicates that

significant margin exists with which to accommodate the greater weight and aerodynamic drag

of LDT3s and LDT4s when meeting the same design targets. In addition, significant LDT

emission reductions were achieved from vehicles emitting well below the applicable LEV design

targets by primarily just changing catalysts (in the case of MECA and ARB) or just changing
Chapter IV: Technological Feasibility

IV-25

engine calibration (in the case of Ford). This confirms indicates that the benefits of advanced

emission control technology on LDTs has not been exhausted in meeting current LEV emission

standards. Overall, these findings indicate that the proposed Tier 2 standards for LDTs should

be feasible with the same basic types of emission controls as required by LDVs. The heavier

LDTs will likely require somewhat larger catalysts than LDVs and the lighter LDTs and possibly

also incorporate a greater number of supporting technologies, such as a low-thermal capacity

manifold, in order to meet the same numerical emission standard.

c. Lean-Burn Technology

The above discussion focused on advancements in emission control technology. New

gasoline engines designs are also being developed to reduce fuel consumption. In particular,

gasoline direct-injection (GDI) engines have been developed (and are being sold in Japan and

Europe) which operate on 10-20 percent less fuel than today’s gasoline engines. 

One of the reasons that these engines use less fuel is that they use much more air than is

needed just to burn the fuel. In this respect, they operate similar to a diesel engine. While this is

advantageous for fuel efficiency, it makes it more difficult to eliminate NOx emission using

aftertreatment technology. Highly efficient 3-way catalysts require that there be little excess

oxygen in the exhaust stream in order to convert NOx emissions to nitrogen and oxygen. 

Unfortunately, if a GDI engine is operated in this way, nearly all of its fuel efficiency benefits

are lost. 

A number of potential techniques are being developed to control NOx emissions when

excess air are present. These techniques are discussed in more detail in Section 5. below. The

most promising of these techniques for GDI engines are the lean NOx catalyst and the NOx

adsorber. A GDI engine may be able to meet the highest NOx bin of 0.2 g/mi with a lean NOx

catalyst and 30 ppm sulfur gasoline. However, this is dependent on achieving engine out

emissions below 0.4 g/mi, and this is likely to be a very difficult challenge. NOx adsorbers are

potentially more efficient than lean NOx catalysts. Thus, the required engine out NOx emission

levels are likely to be well within the capability of GDI engine technology. However, the NOx

adsorber is in an earlier stage of development relative to the lean NOx catalyst. Much

development work is still necessary in order for this technology to be applied commercially. 

Also, even 30 ppm sulfur levels degrade long-term performance of NOx adsorbers. Thus, either

methods to regenerate the NOx adsorber onboard the vehicle must be developed or even lower

sulfur levels will be required. 

2. CO Emissions from Gasoline Fueled Vehicles

EPA is only proposing tighter CO emission standards for LDT2s, LDT3s and LDT4s. 

Basically, CO emissions from these vehicles must be reduced to the levels now required for

LDVs and LDT1s under the NLEV program. Also, LDVs and LDTs must comply with the

NLEV CO standards over a slightly longer useful life of 120,000 miles instead of the current
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-26

useful life of 100,000 miles. 

Compliance with the proposed Tier 2 CO emission standards should not be difficult given

compliance with the proposed Tier 2 NMOG standards. The control of both pollutants utilizes

much of the same technology and the proposed Tier 2 NMOG standards are the more stringent of

the two sets of standards. In addition, the above mentioned change in test weight should make it

even more easy to meet the proposed Tier 2 CO emission standards. The following table IV-10

summarizes CO emissions from vehicles certified to the LEV standards in California.

Table IV-10. CO Emissions from California LEVs (g/mi)

LDV/LDT LDT2 LDT3 LDT4

0.8 1.13 2.35 2.95

As can be seen, the CO emissions from all of these vehicles are well below the proposed

Tier 2 CO standard of 4.2 g/mi. While CO emissions from LDT3s and LDT4s are more than half

the proposed 4.2 g/mi standard, the current LEV standards for these vehicles is more than twice

the proposed Tier 2 NMOG standard of 0.09 g/mi. As NMOG emissions are reduced to meet the

0.09 g/mi standard, CO emissions will decrease further, as well. CO emission control is also not

a problem for GDI engines. Thus, compliance with the proposed Tier 2 CO standard should not

add any additional burden to manufacturers relative to compliance with the proposed NMOG and

NOx standards. 

3. Formaldehyde Emissions from Gasoline Fueled Vehicles

EPA is only proposing tighter formaldehyde emission standards for LDT2s, LDT3s and

LDT4s. Basically, formaldehyde emissions from these vehicles must be reduced to the levels

now required for LDVs and LDT1s under the NLEV program. Also, LDVs and LDT1s would

have to comply with the NLEV formaldehyde standards over a slightly longer useful life of

120,000 miles versus the current 100,000 mile useful life.

Again, as with CO emissions, compliance with the proposed Tier 2 formaldehyde

emission standards should not be difficult given compliance with the proposed Tier 2 NMOG

standards. The control of both pollutants utilizes much of the same technology and the proposed

Tier 2 NMOG standards are the more stringent of the two sets of standards. Table IV-11, below, 

summarizes formaldehyde emissions from vehicles certified to the LEV standards in California.
Chapter IV: Technological Feasibility

IV-27

Table IV-11. Formaldehyde Emissions from California LEVs (g/mi) 

LDV LDV/LDT1 LDT2 LDT3 LDT4

0.0012 0.0016 0.0013 0.002 0.002

As can be seen, formaldehyde emissions from current California vehicles are roughly a

factor of 10 below the proposed Tier 2 formaldehyde standard of 0.018 g/mi. Thus, compliance

with the proposed Tier 2 formaldehyde standard should not add any additional burden to

manufacturers relative to compliance with the proposed NMOG and NOx standards. 

4. Evaporative Emissions

The standards we are proposing today for evaporative emissions are technologically

feasible now. Many designs have been certified by a wide variety of manufacturers that already

meet these standards. A review of the 1999 model year certification results indicates that the

average family is certified at less than 1.0 grams per test on the 3 day diurnal plus hot soak test,

i.e. at less than half the current 2.0 g/test standard. 

The standards we are proposing will not require the development of new materials or, in

many cases, even the new application of existing materials. Low permeability materials and low

loss connections and seals are already used to varying degrees on current vehicles. Today’s

standards will likely ensure their consistent use and discourage manufacturers from switching to

cheaper materials or designs to take advantage of the large safety margins they have under

current standards (“backsliding”).

There are two approaches to reducing evaporative emissions for a given fuel. One is to

minimize the potential for permeation and leakage by reducing the number of hoses, fittings and

connections. The second is to use less permeable hoses and lower loss fittings and connections. 

Manufacturers are already employing both approaches.

Most manufacturers are moving to “returnless” fuel injection systems, and at least one

major manufacturer utilizes returnless systems on all of their vehicles. Through more precise

fuel pumping and metering, these systems eliminate the return line in the fuel injection system

which carries unneeded fuel from the fuel injectors, which has been heated from its close

proximity to the hot engine, back to the fuel tank. Returned fuel is a significant source of fuel

tank heat and vapor generation. The elimination of return lines also reduces the total length of

hose on the vehicle and also reduces the number of fittings and connections which can leak.

Low permeability hoses and seals as well as low loss fittings are available and are

already in use on many vehicles. Fluoropolymer materials can be added as liners to hose and

component materials to yield large reductions in permeability over such conventional materials

as monowall nylon. In addition, fluoropolymer materials can greatly reduce the adverse impact
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-28

of alcohols in gasoline on permeability of evaporative components, hoses and seals. 

5. Diesel Vehicles

Very few LDVs and LDTs are currently sold with diesel engines. Out of annual sales of

more than 15 million vehicles, roughly only 30,000 are equipped with diesel engines. This is in

part due to the low price of gasoline over the past decade. Recently, a number of vehicle

manufacturers have announced aggressive programs to increase the sales of diesel LDVs and

LDTs. These programs are scheduled to begin between model year 2000 and 2002 and appear to

be aimed at easing manufacturers’ compliance with the corporate fuel economy standards,

particularly for LDTs. 

NOx and PM are the two biggest emission-related challenges for diesel engines. Diesels

have inherently low emissions of CO and NMOG and should have no problem meeting the

proposed Tier 2 standards for these pollutants. Therefore, the remainder of this discussion will

focus on NOx and PM.

Considerable progress has been made over the past 10 years in reducing engine-out

emissions from diesel engines. In heavy trucks and buses, PM emission standards which were

projected to require the use of exhaust aftertreatment devices were met with only engine

modifications. NOx emissions from heavy trucks and buses sold starting in 2002 will also

reflect deep reductions from emission levels typical of engines produced in the mid-1980's. 

However, the benefits of improved diesel engine design appear to be reaching their limits. EPA

projects that diesel LDVs and LDTs could only meet NOx emissions standards of roughly 0.5-

0.6 g/mi and PM emission standards of roughly 0.05-0.08 g/mi without aftertreatment. These

levels are well above the highest allowable certification emission levels included in today’s

proposal.

In order to comply with the proposed Tier 2 emission standards for NOx and PM, diesels

will require the use of effective aftertreatment devices. For NOx emissions, these devices

include lean NOx catalysts, selective catalytic reduction (SCR) and NOx adsorbers. Lean NOx

catalysts are still under development and appear capable of reducing NOx emissions by 15-30

percent. Therefore, they are unlikely to be sufficiently effective to enable compliance with the

proposed Tier 2 standards. 

SCR has been demonstrated commercially on stationary diesel engines and can reduce

NOx emissions by 80-90 percent. However, SCR requires that the chemical urea be injected into

the exhaust before the catalyst. This means that vehicle owners would have to periodically

refuel their vehicle with urea, as well as diesel fuel. Ammonia emissions also occasionally occur

with use of SCR, which has a very objectionable odor. 

Finally, NOx adsorbers can be up to 90 percent efficient at removing NOx from the

exhaust. However, these adsorbers are quickly poisoned by sulfur in the fuel and would require

reductions in diesel fuel sulfur content. Their use also requires that the engine be run with
Chapter IV: Technological Feasibility

IV-29

excess fuel occasionally, so that the stored NOx can be converted to nitrogen and oxygen. These

adsorbers, coupled with techniques for introducing fuel into the exhaust periodically are still at

the research stage.

Overall, use of either SCR or a NOx adsorber should be able to enable compliance with

the proposed Tier 2 standards. The issue of reducing diesel fuel sulfur levels to enable NOx

adsorbers and other technologies is discussed in a separate ANPRM.

Regarding PM, applicable aftertreatment devices tend to fall into two categories:

oxidation catalysts and traps. Diesel oxidation catalysts look very similar to the 3-way catalysts

used on gasoline vehicles. Diesel catalysts convert the hydrocarbon compounds in the exhaust to

water and carbon dioxide. This reduces exhaust NMOG emissions and heavier HC compounds

which comprise about 30 percent of total PM mass emissions. The oxidation catalyst can be

from 50 percent to 90 percent effective at converting HC. Thus, an oxidation catalyst can reduce

total PM emissions by roughly 15-27 percent. By itself, the oxidation catalyst is not likely to be

sufficient to enable compliance with the proposed Tier 2 standards without further advancements

in engine technology.

Traps can eliminate up to 90 percent of diesel PM emissions. The trap first filters the

carbonaceous particles from the exhaust. Then, periodically, this trapped PM must be burned, or

the trap will fill up and cause problems in operating the engine. Diesel traps are currently being

used on buses in an number of U.S. cities. It appears that these traps can regenerate frequently

enough given the operating temperatures of bus engines and over-the-road trucks. However,

there is some question whether or not these traps could regenerate frequently enough with the

somewhat lower operating temperatures of diesel engines in LDVs and LDTs. Regeneration can

be enhanced at lower exhaust temperatures through the use of more active catalysts on the

surface of the trap. However, these catalytic materials convert sulfur dioxide in the exhaust to

sulfuric acid. Thus, their use requires the removal of most of the sulfur in the fuel. Research

indicates that low temperature regeneration may also be enhanced through the use of catalytic

fuel additives comprised of cerium or iron. However, particulate containing these chemicals can

be emitted from the tailpipe, raising some health concerns. Use of these catalytic fuel additives

does not require the removal of sulfur from diesel fuel. An efficient trap should enable

compliance with the proposed Tier 2 PM standards.

B. Feasibility of Removing Sulfur from Gasoline

1. Source of Gasoline Sulfur 

Sulfur is in gasoline because it naturally occurs in crude oil. Crude oil contains anywhere

from fractions of a percent of sulfur, such as less than 0.05 weight percent (0.05 percent is the

same as 500 ppm) to as much as several percent.2

 The average amount of sulfur in crude oil

refined in the U.S. is about one percent.3

 Most of sulfur in crude oil is in the heaviest part, or in

the heaviest petroleum compounds, of the crude oil (outside of the gasoline boiling range). In

the process of refining crude oil into finished products, such as gasoline, some of the heavy
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-30

compounds are broken up into smaller compounds and the embedded sulfur ends up in gasoline. 

Thus, the refinery units which converts the heavy parts of crude oil into gasoline are the units

most responsible for putting sulfur into gasoline. 

The fluidized catalytic cracker (FCC) unit is the refinery processing unit most responsible

for moving sulfur into gasoline. The FCC unit cracks large carbon molecules into smaller ones

and produces anywhere from 30 to 50 percent of the gasoline in most refineries. Because the

FCC unit makes gasoline out of the heavier, higher sulfur-containing compounds, more than 90

percent of sulfur in gasoline comes from that unit.4

 Another refinery unit which is responsible

for a significant amount of sulfur in gasoline is the coker unit. These units produce coke from

the heavy part of the crude oil. In the process of producing coke, some gasoline blendstocks are

produced and some of these blendstocks are blended directly into gasoline. While the volume of

gasoline blendstock produced by the coker is small (normally less than one percent of the

gasoline pool), this stream usually contains more than 3000 ppm sulfur,5

 so the contribution of

sulfur to gasoline is significant. 

Another gasoline blendstock which contributes sulfur to gasoline is the straight run. 

Straight run is the portion of the crude oil which falls in the gasoline boiling range which is

blended directly into gasoline. Usually only the light straight run is blended into gasoline which

has a small amount of sulfur (i.e., on the order of 100 ppm sulfur), although in trying to meet a

low sulfur standard, even this amount sulfur of becomes significant. The heaviest portion of

straight run, which would have more sulfur, is normally desulfurized and reformed in the

reformer (to improve its octane), so its contribution to the gasoline pool is virtually nil. Alkylate

is another stream which can have enough sulfur worth mentioning. Most refineries have less

than five ppm sulfur in this pool, however, some refineries which feed coker naphtha to the

alkylate plant can have much more. On average, alkylate probably has about 10 ppm sulfur. 

Other gasoline blendstock streams with either very low or no sulfur are alkylate, hydrocrackate,

and isomerate. Oxygenates which are blended into gasoline usually have no sulfur, however,

during shipping through pipelines, they can pick up some sulfur. The implementation of a low

gasoline sulfur standard, though, would reduce much of the sulfur which oxygenates could pick

up in the pipeline. 

Since FCC units and cokers contribute so much sulfur to gasoline, then a reasonable

conclusion which could be reached would be that refineries could simply shut down these units

to meet a low sulfur standard. This conclusion is not reasonable considering the quality of crude

oil which is used today and the products demanded of the oil industry. Much of volume of crude

oil is composed of heavy compounds which has no end use, and thus is not usable without

processing by these units. Thus, these units make marketable products from what would

otherwise be a waste oil stream. 

2. Current Levels of Sulfur in Gasoline

It is important to know the average level of sulfur in gasoline because it helps determine

the most effective removal methods which should be used. The American Petroleum Institute
Chapter IV: Technological Feasibility

IV-31

(API) and the National Petrochemical Refiners Association (NPRA) surveyed gasoline producers

to gather information concerning refining operations during the Summer of 1996.6

 They

collected information on the qualities of gasoline for various regions called Petroleum

Administrative Districts for Defense (PADDs), as well as for the country as a whole. (These

PADDs are illustrated below in Figure IV-2). Their study showed that the gasoline sulfur,

outside of California, averaged 340 ppm during the Summer of 1996. 

 

Figure IV-2. Map of U.S. Petroleum Administrative Districts for Defense

When looking closer at the information provided in the report, we discovered that some

PADD sulfur levels calculated from the API/NPRA data were not in agreement with some of the

average blendstock sulfur levels presented within the same report, nor was it consistent with data

reported to EPA for the RFG program in 1995 and 1996. One possible reason for the

disagreement between the API/NPRA gasoline pool sulfur level and that reported to the RFG

data base is that API and NPRA only surveyed refiners for their summertime gasoline qualities. 

Other possible reasons for the discrepancy are, that some refiners did not participate with the

API/NPRA survey (especially in PADDs 1 and 5), while data handling complications also

precluded the inclusion of gasoline sulfur data from some refiners from being reported in the

RFG data base. However, because the RFG data base contains year-round data and because it

often represents a larger portion of the gasoline sulfur pool, when the sulfur levels were

compared between the two data bases, or when the API/NPRA information was compared

internally, and there was disagreement, then the RFG data were used over the API/NPRA survey

information. The methodology for adjusting the average sulfur levels is described in more detail

below in the section on fuel costs. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-32

After adjusting the sulfur values for each PADD, the national average gasoline sulfur

level for domestically produced gasoline is 305 ppm. Table IV-12 below summarizes the U.S.

sulfur levels by PADD, and for the country as a whole. Because California has it own low sulfur

gasoline program, gasoline produced there was excluded from consideration in this analysis.

Table IV-12. Average Sulfur Levels by PADD and for the Nation. 

PADD 1 PADD 2 PADD 3 PADD 4 PADD 5

OC*

U.S.

Avg.*

Estimated Average

Sulfur Levels 215 338 308 265 506 305

* Outside of California 

It is important to note that the gasoline sulfur values reported in Table IV-12 are an

attempt to estimate the average gasoline sulfur level for estimating the cost of desulfurization. In

actuality, each sulfur value represents the volumetric average of a range of sulfur values with

each refinery representing a single data point. This range can vary from the tens of ppm to

almost 1000 ppm. The 1000 ppm sulfur level is the upper limit of the amount of sulfur permitted

to be shipped in pipelines in accordance with the American Society for Testing Materiels

(ASTM) consensus standards.7

3. Feasibility of Meeting the Proposed Gasoline Sulfur Standards

The feasibility of meeting the proposed standards for low sulfur gasoline can be

demonstrated in two distinct ways. The first way is to assess whether there is technology

available, or that can reasonably be expected to be available in the lead time provided, to the

refining industry to meet the proposed standard. The second way is to determine if refiners are

already demonstrating that they can meet a low sulfur gasoline standard similar to this proposed

rule. Evidence that refiners are already meeting a stringent gasoline sulfur program is a more

compelling example of feasibility since the technology must already be available if low sulfur

gasoline is already being produced. 

It is indeed the case that there are low sulfur gasoline programs already in place. The

State of California requires gasoline sold in the State to meet a 30 ppm gasoline sulfur standard

on average and a 80 ppm cap, among a number of other fuel standards.8

 Furthermore, refiners

can produce gasoline which varies in composition, provided that the California Predictive

Emissions Model (which, like EPA’s Complex Model, estimates vehicle emissions from fuels of

varying composition) confirms that the proposed fuel formulation meets or exceeds the

emissions reduction that would occur based on the default fuel requirements. California

refineries are using the flexibility provided by the Predictive Model to surpass the prescriptive

standards for gasoline sulfur and are producing gasoline which contains 20 ppm sulfur on

average.9

 They are making this very low sulfur gasoline despite using Californian and Alaskan

crude oils which are poorer quality than most other crude oils being used today. Thus, the
Chapter IV: Technological Feasibility

IV-33

experience in California demonstrates that commercial technologies already exist to permit

refiners to produce low sulfur gasoline. 

In addition to the California experience here in the U.S., a low sulfur requirement in

Japan provides additional evidence that reducing gasoline sulfur levels to low levels is feasible. 

Japanese refineries must meet a 100 ppm per-gallon cap. Based on the gasoline sulfur cap

established there, gasoline in Japan averages about 20 ppm sulfur.

4. Meeting a Low Sulfur Gasoline Standard

The methodology that would be used refiners to lower their sulfur level depends on a

number of factors specific to their refinery. These factors include: 

• The gasoline sulfur level prior to the start of the gasoline sulfur program

• The refinery configuration (A typical complex refinery is illustrated in Figure IV-3,

below.)

• The amount of excess refinery desulfurization equipment on hand

• The quality of feedstocks available, especially crude oil

• The quality and types of products produced

• Any plans to change the feedstocks or products of the refinery 

• The desulfurization technologies available and their cost

• Other regulatory programs affecting refinery operations in the same time frame
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-34

Aromatic

Natural

Gas

Crude 

Oil

Fuel Gas

LPGGasolineKerosineJet Fuel

Off-roadDies

Fuel Oil

ResidCoke

Gas Plant

Polymerization

Alkylation

Coker

Crude Tower

Vacuum Tower

Aromatics

Extraction

Hydrocracker

Hydrotreater Reformer

Distillate

Hydrotreater

Fluidized Cat

Cracker

Hydrogen

Plant

H2

H2H2

H2

Isomerization

Straight Run

Splitter

Naphtha 

Splitter

H2

H2

Figure IV-3. Diagram of a Typical Complex Refinery
Chapter IV: Technological Feasibility

IV-35

A refinery’s average gasoline sulfur level is the most important factor determining

whether a refiner would need to make a substantial capital investment to meet a sulfur standard. 

After numerous discussions with refiners, we believe that those refiners with low gasoline sulfur

levels to begin with (i.e., gasoline sulfur levels lower than, perhaps, 60 ppm) will probably not

need to invest in expensive capital. These refineries have such low sulfur levels due to one or

more of a number of possible reasons. For example, some of these refiners may not have certain

refining units, such as a fluidized catalytic cracker (FCC) unit, or a coker, which convert heavy

boiling stocks to gasoline (Figure IV-3 shows these where these units are placed in a refinery). 

As stated above, these units push more sulfur into gasoline and their absence means less sulfur in

gasoline. Alternatively, refiners may use a low sulfur (sweet) crude oil, which results in lower

sulfur gasoline. Or, these refiners may have already installed a hydroprocessing unit, such as

FCC feed hydrotreating, to improve the operations of their refinery which uses a heavier, higher

sulfur (more sour) crude oil. This unit removes much of the sulfur from the heaviest portion of

the heavy gas oil before it is converted into gasoline. 

Of the refiners in this first category, the refineries with sulfur levels below the proposed

sulfur standard would not have to do anything. On the other hand, those refineries with sulfur

levels above the proposed standard, but below some level, such as 60 ppm, could probably meet

the standard employing operational changes only, which means avoiding capital investments if

this is desirable. For example, these refiners may be able to meet the proposed sulfur standard

by running existing desulfurization units harder, at capacity if the unit has headroom, or by

debottlenecking the unit, perhaps by using more effective catalyst. Alternatively, these refineries

may be able to meet the proposed sulfur standard by using a slightly sweeter crude oil. Refiners

also have FCC additives available to them which could allow them to reduce their FCC gasoline

sulfur level by 15 to 35 percent.10 Another strategy that these refiners could use to meet the

proposed gasoline sulfur standard would be to undercut the FCC gasoline. By cutting out the

heaviest 10 volume percent of FCC gasoline and sending that part to on-road diesel before

hydrotreating, to off-road diesel or to heating oil, refiners would be able to cut out 40 percent or

even more of the sulfur from this high sulfur blendstock. However, the refiners which choose to

undercut their FCC gasoline would then produce less volume of gasoline which generally

provides the highest profit margin. For this reason undercutting the FCC gasoline would likely

be a short term strategy. Finally, these refinery may be able to meet the sulfur standard by

blending in low sulfur oxygenates. Refiners may be able to employ several of these

desulfurization strategies together in varying degrees. These refiners with very low gasoline

sulfur levels to begin with produce only a small portion of the gasoline consumed in this country,

on the order of five percent.11 

The vast majority of gasoline is produced by refineries with higher sulfur levels, and

refiners are expected to install capital equipment in these refineries to meet the proposed

gasoline sulfur standard. As stated above, the FCC unit is responsible for most of the sulfur in

gasoline. Thus, investments for desulfurizing gasoline would likely involve the FCC unit to

maximize the sulfur reduction, and to minimize the cost. This desulfurization capital investment

can be installed to treat the gas oil feed to the FCC unit, or treat the gasoline blendstock which is

produced by the FCC unit. Each method has advantages and disadvantages.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-36

FCC feed hydrotreating can be accomplished by a hydrotreater or a mild hydrocracker. 

These units are designed to operate at high pressures and temperatures to treat a number of

contaminants in gas oil. Besides sulfur, FCC feed hydrotreating also reduces nitrogen and

certain metals such as vanadium and nickel. These nonsulfur contaminants adversely affect the

FCC catalyst, so the addition of this unit would improve the yield of higher profit-making

products such as gasoline and diesel. While FCC feed hydrotreating provides these benefits

which partially offsets the costs of adding this type of desulfurization, the costs are still high

enough that many refiners would have a hard time justifying the installation of this sort of unit. 

For a medium to large refinery, the capital costs may exceed $100 million. Because of the

higher temperatures and pressures involved, operating costs are expensive relative to other forms

of hydrotreating explained below. Refiners may be better able to justify this approach if they

switch to a heavier, more sour crude oil. These crude oils are less expensive per barrel and can

offset the increased cost of the FCC desulfurization unit, providing that the combiniation of

reduced crude oil costs and higher product revenues justify the switch. Another benefit for using

FCC feed hydrotreating is that the portion of the distillate pool which comes from the FCC unit

would be hydrotreated as well. While this distillate blendstock, termed light cycle oil, comprises

a relatively small portion of the total distillate produced in the refinery (about 20 percent of onroad diesel comes from light cycle oil), like gasoline, it contributes a larger portion of the total

sulfur which ends up in distillate. Thus, FCC hydrotreating would allow a refiner to produce

more low sulfur onroad diesel or meet a lower sulfur standard for onroad diesel, which could

apply in the future.

A less expensive alternative to hydrotreating the FCC feed for gasoline desulfurization is

FCC gasoline hydrotreating. FCC gasoline hydrotreating only treats the gasoline produced by

the FCC unit. Understandably, this unit is much smaller because only about 60 percent of the

feed to the FCC unit ends up as gasoline produced by the FCC unit. The unit is often smaller

than that as refiners typically only treat the heavier, higher sulfur portion of that stream. FCC

gasoline hydrotreaters operate at lower temperatures and pressures as well which further reduces

the capital and operating costs associated with this type of desulfurization equipment. For a

medium to large refinery, the capital costs would be on the order of $50 million for a

conventional hydrotreater. One drawback of this process is that octane value and some of the

gasoline yield is lost during desulfurization. The loss of this octane must be made up by

additional octane production by other units in the refinery or by oxygenate addition, and the

volume loss can be made up by additional throughput to gasoline producing units, or also by

oxygenate addition. 

The loss of octane and gasoline yield caused by FCC gasoline hydrotreating is much

lower with gasoline desulfurization technologies which were recently introduced. CDTECH and

Mobil Oil each have developed new or improved technologies for desulfurizing gasoline. 

CDTECH calls its two hydrotreating units for treating FCC full range gasoline CDHydro and

CDHDS. Mobil Oil calls its process OCTGAIN 220. These processes preserve much of the

octane and gasoline yield because they were designed for treating gasoline blendstocks. One

reason why these processes preserve octane and yield is that they operate at lower temperature

and pressure compared to conventional hydrotreating processes. The less severe conditions also
Chapter IV: Technological Feasibility

IV-37

lowers the capital and operating costs for this process. The capital cost for these improved

processes ranges from $20 to $40 million for a medium to large sized refinery. While the capital

costs are somewhat less than conventional hydrotreaters, much more cost savings arise out of the

reduced utility and ancillary costs. For example, because these processes are less severe, there is

much less saturation of olefins, which means that there is much less hydrogen used. Less olefin

saturation also translates into less octane loss which would otherwise have to be made up by

octane boosting processing units in the refinery. 

While these improved gasoline desulfurization technologies have been in the limelight

for over a year now, we have also learned that other desulfurization processes are under

development. In conversations with several refiners, they shared with us that they are in the

process of developing their own desulfurization technology. We would expect them to use their

technologies if their development work is completed in time. Furthermore, other refining

process licensing firms shared with us that they are developing their own desulfurization

technology. We recently became aware that biodesufurization, which is the removal of sulfur

from petroleum using biological means, is on the verge of commercialization for the

desulfurization of diesel.12 The vendor of this technology informed us that the process will be set

up and running in about two years in a Petrostar refinery in Alaska. The vendor also shared that

gasoline desulfurization is a little further behind, and they believe that they could be ready to

market that process for desulfurizing gasoline within the next two years. Two important

advantages of this technology are that hydrogen is not needed and that the feed to the unit does

not need to be heated to high temperature and compressed to high pressures. The cost savings of

these benefits are offset, though, by the need for extensive mixing to maintain an oxygen-rich

environment for the bacteria to work effectively. We anticipate that this processes will receive

much more attention in the near future as the vendor completes its initial pilot plant work. Our

initial assessment is that this process, given time, may be cost competitive with any of the

improved gasoline desulfurization technologies. However, at this time, we are only focusing on

the improved gasoline desulfurization technologies for which we were given cost information

that allowed us to estimate the cost of gasoline desulfurization. 

5. Improved Gasoline Desulfurization Technology

 We will briefly describe the improved gasoline desulfurization technologies below, but

first we’ll describe conventional desulfurizing technology to establish a point of reference. 

Conventional desulfurization occurs in a fixed bed reactor.13 The reactor is termed fixed bed

because a catalyst, which helps to improve the reaction rate and specificity, is contained in a

stationary bed within the reactor. The high sulfur gasoline blendstock is heated to a high

temperature (on the order of 600 degrees Fahrenheit) and pressure, to maintain the stream as a

liquid, and is combined with hydrogen before it enters the reactor. The reactions occur over the

bed of the catalyst. While the petroleum is in contact with the catalyst in the reaction vessel, the

sulfur is removed from the petroleum compounds and is converted to hydrogen sulfide. Also,

most or all of the olefin compounds which are present in the cracked stream are saturated. Since

olefin compounds are much higher in octane than their saturated counterparts, their saturation

causes a significant octane loss in any stream with a high olefinic content. Conventional
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-38

hydrotreating has generally been used for streams with little or no olefins, such as for virgin gas

oil which is treated by the FCC unit, or for feed streams to the reformer and isomerizer. Thus,

octane loss upon hydrotreating these streams is not a problem. However, FCC gasoline is very

rich in olefins such that hydrotreating this stream normally causes a large reduction in octane (up

to 8 octane numbers units can be lost if the entire FCC gasoline stream is treated). The

saturation of olefins also substantially increases the need for hydrogen. 

The catalyst also tends to cause some of the petroleum compounds to “crack, ”

converting them from gasoline boiling range compounds to compounds too light for keeping in

gasoline, which is termed yield loss. After the reactor, the gaseous compounds, which include

unreacted hydrogen, hydrogen sulfide, and any light end petroleum compounds which may have

been produced in the reactor, are separated from the liquid compounds. The hydrogen sulfide

must be stripped out from the other compounds and then converted to elemental sulfur which is

then sold off. If there is enough hydrogen and it can be economically recovered, it is separated

from the remaining hydrocarbon stream and recycled. Otherwise it is burned with the light

hydrocarbons as fuel gas. 

Mobil Octgain will be discussed next since the process is similar to a conventional

hydrotreater. This gasoline desulfurization process is the third generation of this process for

Mobil, and it is called Octgain 220. Like a conventional hydrotreater, Mobil uses a fixed bed of

catalyst for its Octgain process.14 One primary difference between Octgain and conventional

hydrotreating is that Mobil Oil has developed its own catalyst for the reactor. The catalyst not

only causes the desulfurization of petroleum, it also causes isomerization reactions to occur

(straight chain petroleum compounds are changed to branched chain compounds) which

increases the octane of the resultant stream.15 The octane improvement caused by the catalyst

compensates for octane loss resulting from olefin saturation. Mobil designed this generation of

Octgain process to operate over a range in severity. If less desulfurization is needed, then the

process temperature and pressure are reduced. The less severe operating conditions reduces the

saturation of olefins, which in turn reduces less hydrogen consumption and utility use, in

addition to causing less octane loss. Under the less severe conditions, much or all of the octane

loss can be made up by the isomerization reactions caused by the catalyst. The less severe

operating conditions also causes less yield loss, as the conditions are less favorable for causing

cracking of the larger petroleum compounds to smaller compounds. Most of these benefits

would be negated if extensive desulfurization, on the order of 99 percent, is necessary. The steps

of the process following the reactor are the same for conventional FCC gasoline hydrotreaters. 

One advantage of the Octgain process is that the reactor vessel for the process is the same as

vessels used for conventional hydrotreating. Thus, refiners can save on capital costs by using a

spare hydrotreating unit which it may have on hand in the refinery. 

The CDTECH process is significantly different from either conventional hydrotreating or

Octgain, which makes it a little more complex to describe. The CDTECH process utilizes

catalytic distillation.161718 Catalytic distillation is a technology which has been applied for a

number of different purposes. CDTECH is currently licensing the technology to produce MTBE

and selective hydrogenation processes. Based on their experience and success with that process,

they applied the same technology to desulfurizing gasoline. As the name implies, distillation and
Chapter IV: Technological Feasibility

IV-39

desulfurization, via a catalyst, take place in the same vessel. This design feature may save the

need to add a separate distillation column in some refineries. All refineries have a distillation

column after the FCC unit (called the main fractionation column) which separates the gasoline

from the most volatile components (such as liquid petroleum gases), the distillate or diesel (light

cycle oil), and the heavy ends or residual oil. However, if a refiner only wishes to treat a portion

of the FCC gasoline, then he may have to add a second distillation column to be able to separate

off the portion of the FCC gasoline which he wishes not to treat. With the CDTech process, the

refiner can choose to treat the entire pool or a portion of the pool, but choosing to treat a part of

the pool can be an option in how the CDTech hardware is applied, thus negating any need for an

additional distillation column. The choice is realized by setting up the distillation and associated

catalyst to treat only the portion of the pool which needs to be treated. 

The most important portion of the CDTech desulfurization process is two distillation

columns loaded with desulfurization catalyst in a packed structure. The first vessel, called

CDHydro, treats the lighter compounds of FCC gasoline, while the second column, called

CDHDS, treats the heavier compounds of FCC gasoline. All of the FCC gasoline is fed to the

CDHydro column. The five- and six-carbon petroleum compounds boil off and head up through

the catalyst mounted in the column, along with hydrogen which is also injected in the bottom of

the column. The reactions in this column are unique in that the sulfur in the column are not

hydrotreated to hydrogen sulfide, but they instead are reacted with dienes in the feed to form

thioethers. Their higher boiling temperature causes the thioethers to fall to the bottom of the

column. They join the heavier petroleum compounds at the bottom of the column and sent to the

CDHDS column. Because the pressure and temperature of the first column is much lower than

conventional hydrotreating, saturation of olefins is reduced to very low levels (according to

CDTECH, the saturation which does occur is desirable to eliminate diolefins). Thus, little

excess hydrogen is consumed. An option for the refiner is to put in an additional catalyst section

in the CDHydro column to increase octane. This octane enhancing catalyst isomerizes the some

of the olefins which increases the octane of this stream by about three octane numbers.

The seven-carbon and heavier petroleum compounds leave the bottom of the CDHydro

unit and are fed into the CDHDS column. There, the heavier compounds head down the column,

and the lighter compounds head up. Both sections of the CDHDS column have catalyst loaded

into them which serve as hydrotreating reaction zones. Similar to how hydrogen is fed to the

CDHydro column, hydrogen is fed to the bottom of the CDHDS column.

The temperature and pressure of the CDTech process columns are lower than Mobil Oil’s

Octgain process. These operating conditions minimize yield and octane loss. While the CDTech

process is very different from conventional hydrotreating, the catalyst used for removing the

sulfur compounds is the same. Thus, if concerned about the reliability of the process, refiners

can look at the track record of the catalyst in conventional hydrotreating to get an indication of

its expected life, and then adjust that expectation based on the milder conditions involved. One

important different between the CDTech process and conventional hydrotreating is that CDTech

mounts its catalyst in a unique support system, while conventional catalyst is simply dumped

into the fixed bed reactor. Although the CDTech desulfurization process is different from

conventional hydrotreating processes, the use of a distillation column as the basis for the process
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-40

is very familiar to refiners. Every refinery has distillation in its refinery, thus, refiners are very

skilled in its application. 

6. Expected Desulfurization Technology to be Used by Refiners 

If the proposed gasoline sulfur standard is finalized, refiners which produce gasoline

would have to meet the standard to be able to continue participating in the U.S. gasoline market. 

As stated above, most refiners will have to invest in desulfurization technology. Arguably,

refiners would try to minimize the cost to their business. As stated above, the improved gasoline

desulfurization technology costs of CDTECH and Mobil Oil Octgain provide refiners a lower

cost option for meeting a gasoline sulfur standard. However, many refiners have shared with

EPA that they may be hesitant to use these improved, but recently developed technologies for

gasoline desulfurization. They claim that until the technologies have been installed in one or

more refineries and operated for a while, that there will continue to be a significant measure of

uncertainty. This uncertainty could tip the balance away from using these improved

desulfurization technologies, to applying more expensive conventional desulfurization

technology. 

While there is a concern now on the part of some refiners about using these improved,

but not commercially tested desulfurization technologies, we believe that much of this concern

will dissipate shortly. Both processes are expected to be installed and operated in refineries later

on this year. Mobil Oil has an Octgain hydrotreater installed at its Joliet, Illinois refinery. Up to

now, though, only the second generation Octgain catalyst (Octgain 125) was demonstrated at

that site. However, Mobil Oil plans to load its new Octgain 220 catalyst in the hydrotreater at

Joliet to determine how it runs in a full scale hydrotreater. This experience should start to occur

sometime before midyear of 1999.19 CDTech has years of accumulated service with its

CDHydro unit. In its present service, certain olefins called dienes are reduced and octane is

improved. While this service is not intended for desulfurization, these units do in fact combine

sulfur compounds together much like how the process will operate in a desulfurization service. 

Thus, this unit has extensive operational experience already. The CDHDS unit, on the other

hand, has not been installed in any refinery. It is to be installed in a Motiva refinery (which was

Star) in Port Arthur, Texas, with a start-up date sometime around the third quarter of 1999. 

Another refinery, which is Transamerican in Louisiana, is also planning to install the CDHDS

unit, followed by the CDHydro unit for desulfurization, sometime in the first half of the year

2000. 

7. Feasibility for a Low Gasoline Sulfur Standard in 2004

We believe that sufficient evidence exists which supports the conclusion that it is feasible

for the U.S. refining industry to meet the 30 ppm average standard in four years or less. We

discussed the possibility of meeting a stringent gasoline sulfur program with refiners. The

American Petroleum Institute (API) communicated to us that a minimum of four years is needed

between when a fuel regulatory requirement is promulgated and when the requirement must be
Chapter IV: Technological Feasibility

IV-41

implemented.20 In API’s comments on this issue, it provided a schematic of a typical refinery

project development timeline. This schematic showed that a “best estimate” of installation time

would be 4.5 years. However, if contingencies are considered, then 5 years would be required. 

In more detail and without contingencies, API’s project timing schedule without contingencies is

summarized here relative to date of the final rule (FR). The table also shows EPA’s estimates

for the same process steps.

Table IV-13. Leadtime Required Between Promulgation of the Final Rule and

Implementation of the Gasoline Sulfur Standard (years)

EPA API (without contingencies)

Time for

Individual Step

Cumulative

Time

Time for

Individual Step

Cumulative

Time

Scoping Studies 0.5-1.0* 0.5 1.5* 1.0

Process Design 0.75-1.5 1.25-2.0 1.5 2.0

Permitting 0.5-1.0 1.75-2.5 1.5 2.5

Detailed Engineering 0.5-1.0 2.0-3.0 1.25 2.75

Field Construction 0.75-1.25 2.25-3.5 1.5 4

Start-up/Shakedown 0.25-0.5 2.5-4.0 0.75 4.5

* Can begin before FRM

Scoping and screeening studies refer to the process whereby refiners investigate various

approaches to sulfur control. These studies involve discussions with firms which supply

gasoline desulfurization and other refining technology, as well as studies by the refiner to assess

the economic impacts of various approaches to meeting the sulfur standard. In the case of

gasoline desulfurization, a refiner would likely send samples of their FCC gasoline to the firms

marketing gasoline desulfurization technology to determine how well each technology removed

the sulfur from that particular type of FCC gasoline (e.g., sulfur removal efficiency, octane and

yield loss, hydrogen consumption, etc.). 

API projects that these studies can start 6 months prior to the final rule and would

continue for a year after the final rule. Based on discussions with both refiners and technology

providers, it is clear that many refiners have already been conducting these studies for at least a

year. We believe that by the time of the final rule, refiners will already have a very good idea of

the performance and economics of the various gasoline desulfurization technologies at the pilot

plant level. Some time will be required to process the details of the final rule. More

importantly, however, is that many of the new gasoline desulfurization technologies will be

demonstrated in actual refinery applications this year. Refiners naturally desire as much

demonstrated experience with any new technology as possible prior to investing significant

amounts of capital in these technologies. As discussed above, we believe that these new
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-42

technologies are sufficiently similar to existing gasoline desulfurization technology that longterm performance will not be an issue if the process operates as designed initially. Thus, we

believe that sufficient performance data will be available within 6 months after the final rule to

allow refiners to initiate process design. This is the same time period estimated by API, though

API estimates that the scoping studies will extend 6 months into the process design period.. As

this does not affect the total leadtime needed, the ability to modify the design during the process

design period simply gives a refiner more flexibility to optimize its design.

API then estimates that process design, permitting and detailed engineering will require

almost two and a half years. While not shown in the table, API estimates that the major

appropriation decision will be made two and a half years into the process, or just after receiving

the final permit approval and just before detailed engineering is completed. 

The time required for process design will depend on the extent of the refinery

modifications planned. We expect that the great majority of refiners will hydrotreat their FCC

gasoline. If no existing equipment is used, this primarily involves building the hydrotreater and

its associated equipment (distillation columns, furnaces, pumps, compressors). The refiner

would also require a source of a hydrogen for the desulfurization unit. This could come from

hydrogen already being generated in the refinery, or from an outside source. In the extreme, the

refiner would have to build its own hydrogen plant. Finally, the refiner will have to ensure that

the hydrogen sulfide being generated from the desulfurization equipment can be processed in the

refinery’s existing sulfur recovery plant. Given the small amount of sulfur being removed from

gasoline compared to the amount of sulfur already being processed in the refinery, this is likely

to be possible with little change to the sulfur recovery plant. However, some expansion could be

required in the extreme.

All of this equipment is already common to refineries. Gasoline desulfurzation units are

either very similar to existing distillation columns or gasoline and diesel fuel hydrotreaters

already being used in essentially every refinery. Hydrogen plants are widely used throughout the

refining and chemical industries and can be purchased from vendors as basically stand alone

units. The same is true for sulfur recovery plants. Also, design and construction time has been

reduced by up to 40 percent between 1991 and 1996 alone by computerized design and

improving construction scheduling using state of the art methods.21 For example, CDTECH

estimates that 10 - 12 weeks are needed for the basic process design of their equipment. While

this estimate for basic process design may not represent all the technologies which may be used,

even if the process design for these other technologies is 2 or even three times longer, this time

would still be significantly less than API’s estimate. API does not mention any recent reductions

in required project schedules associated with computerization and standardization in design and

construction improvements. They do make comparisons to past leadtimes provided for RFG, but

only indicate that the leadtime required has increased, not decreased. Thus, it is not clear why

API is estimating the need for so much more time for process design and engineering.

It is possible that some refiners might decide to implement more major changes to the

refinery, such as adding a FCC feed hydrotreater. This equipment is more unique to each

refinery and could require some additional time to design. However, this equipment would
Chapter IV: Technological Feasibility

IV-43

significantly reduce a variety of emissions from the FCC unit. This should ease permitting and

compensating for any emission increases elsewhere in the refinery. The upper limits of our

estimates shown in Table IV-13 apply to the limited number of these more major modifications

which might occur.

API also indicates that the time necessary for permitting has increased even since the

mid-1990's when refineries made modifications for RFG production. EPA recognizes that

permitting is a necessary step in the process and that it is often outside of the refiner’s control. 

EPA has committed to working with states and local agencies to streamline this process as much

as possible. We believe that the permitting can be reduced to as short as six months and to at

most a year. 

According to a general estimate for construction time for about the 1980 time frame, 18

to 42 months should be allowed for large construction projects over $10 million, which could

range up to the installation of an entire refinery or plant.22 Smaller projects are projected to

require substantially less time. The projected capital cost of gasoline desulfurization is near the

lower end of the cost range cited, considering inflation. Thus, the 18 month estimate should be

considered applicable, which is the same as API’s estimate. However, this estimate was well

prior to the 35-40% reductions cited above. Also, the construction time for those refiners

planning to install demonstration units of the advanced desulfurization technology are well

below 18 months. Thus, we estimate the time of construction to be a year, plus or minus three

months.

Overall, shortening the permitting and basic process design has a dramatic impact on

API’s estimated four year time for complying. Based on this analysis, we estimate that refiners

should be able to complete the process of designing and installing gasoline desulfurization

hardware, and make other refinery changes, in about 21⁄2 to four years. Again, the upper end of

this range should only apply to a small number of refiners which will be making major changes

to their refinery configuration as a result of gasoline desulfurization.

API estimates that up to an additional year is needed for contingencies. Those refiners

which would need that extra time will have added flexibility to meet the proposed program

implementation date by participating in the averaging, banking and trading program. Those

which can meet the proposed implementation date sooner will be able to generate credits which

can be traded to those which need more time to comply. For those refiners which would like to

install their own gasoline desulfurization processing units, but are not yet very far along, the

trading program would potentially allow them more time to develop their processes.

Several different fuel programs already in place suggest that a stringent gasoline

desulfurization program can be phased-in sooner than what API claims. The California sulfur

control program which was promulgated in June of 1975, started to phase in only six months

after promulgation, and was fully phased in 41⁄2 years later.23 Similarly, the Phase II California

Reformulated Gasoline Program was promulgated in November 1991 and took effect about 41⁄2

years after promulgation.24 However, in addition to a stringent sulfur control standard, refiners

also had to meet stringent controls for aromatics, olefins, Reid vapor pressure, and distillation
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-44

index. Thus, if California refiners began to meet the low sulfur program within six months, and

the very stringent RFG requirements in 41⁄2 years, then, this argues that if only a stringent

gasoline sulfur standard were to be finalized, that most refiners should be able to meet that

requirement in less than four years. Also, because the refining industry already has extensive

experience with meeting the California low sulfur requirement, it likely could meet a similar

standard sooner.

The On-Road diesel sulfur rulemaking provides an example of refiners meeting a much

shorter compliance period. Refiners nationwide met the on-highway low sulfur diesel standards

in three years time; since the rulemaking was promulgated August 1990 and took effect October

1993.25 That rulemaking required refiners to reduce diesel sulfur levels from over 2000 ppm

down to under 500 ppm. Diesel hydrotreaters are fixed bed hydrotreaters which, as described

above, are essentially the same design as Octgain units 

For the Reformulated Gasoline Program, EPA proposed to give refiners 4 years to meet

the Complex Model requirements of the Reformulated Gasoline program. We felt that 4 years

was necessary so that refines could take time to understand how to most cost-effectively use the

Complex Model, and to install whatever capital which needed to be installed. However, this

rulemaking specifies a single specification and not require the use of a complex emissions

model. 

Refiners will have a minimum of four years leadtime to comply with the gasoline sulfur

standard if the final rule is promulgated by the end of 1999. However, the sulfur averaging

banking and trading program provides up to an extra two years for those refiners participating in

the program. Thus, the leadtime provided in this proposal should be sufficient, with one

exception. 

Small refiners may need more time to comply with a sulfur control program. Small

refiners generally have a more difficult time obtaining funding for capital projects, and must plan

further in advance of when the funds are needed. We contracted a study of the refining industry

which included assessing the time required for small refiners to obtain loans for capital

investments. The simple survey revealed that small refiners would need two to three months

longer than large refiners to obtain funding. If small refiners are forced to or prefer to seek

funding through public means, such as through bond sales, then the time to obtain funding could

be longer yet, by up to one third longer.26 In addition, because of the more limited engineering

expertise of many small refiners, the design and construction process for these refineries is

relatively more difficult and time consuming. We also think that the contractors which design

and install refinery processing units will likely focus first on completing the more expensive

upgrade projects for large refiners. Thus the design and construction of desulfurization hardware

in the refinery would take longer as well. For this and other economic reasons, we are proposing

to delay the implementation of the low sulfur program for small refiners. 

8. Phase In of Compliance with the Proposed Sulfur Standards
Chapter IV: Technological Feasibility

IV-45

In the previous section, we estimated that it would take 2.5-4 years (30-48 months) to

design and construct sulfur desulfurization equipment. The lower end of this range was more

relevant to those refiners choosing to desulfurize FCC gasoline, while the upper end of the range

would more likely apply to more significant changes, possibly involving the construction of a

FCC feed hydrotreater and changes to other units in the refinery to accommodate a change in

crude oil which the FCC feed hydrotreater enabled. 

The proposed gasoline sulfur requirements begin on October 1, 2003. On October 1,

2003, the per gallon cap of 300 ppm takes effect, followed by similar caps of 180 ppm and 80

ppm which take effect on January 1, 2005 and January 1, 2006, respectively. Also, refiners'

actual gasoline production must contain less than 120, 90 and 30 ppm sulfur on average during

calendar years 2004, 2005 and 2006 (and beyond). Finally, refiners must also meet a refinery

average sulfur standard of 30 ppm starting on January 1, 2004. 

Between January 1, 2004 and December 31, 2005, the 30 ppm refinery average standard

can be met using credits generated or purchased. Between January 1, 2000 and December 31,

2003, credits can be generated by selling gasoline (conventional or reformulated) that contains

no more than 150 ppm sulfur. The credit is the difference between the sulfur content of the fuel

produced and the refinery's 1997-1998 sulfur baseline in the case of conventional gasoline or

wintertime RFG, multiplied by the volume of gasoline produced. In the case of summertime

RFG, the credit is the difference between the sulfur content of the fuel produced and 150 ppm,

again multiplied by the volume of gasoline produced. Starting in 2004, credits (and debits) are

the product of the difference between the sulfur content of the fuel produced (whether

conventional or reformulated) and 30 ppm.

The phase in of both the per gallon sulfur caps and the actual average sulfur standards

between 2004 and 2006 and the ability to generate sulfur credits starting in 2000 is intended to

allow refiners to stagger their investment in desulfurization technology while protecting Tier 2

vehicles from unreasonable sulfur levels and getting substantial emission reductions from both

Tier 2 and existing vehicles. In order to estimate the rate at which individual refineries must

install desulfurization equipment, we estimated each refinery's current sulfur level and compared

this to the proposed requirements. We based our estimates of refinery's current sulfur levels on

these refinery's official 1990 baselines, which were developed in support of the EPA's RFG and

antidumping programs. These 1990 baselines were updated using 1997 data which refiners

submit, again as part of the RFG and antidumping programs. When the 1997 data were available

for an individual refinery, it was used in lieu of the 1990 baseline. However, in some cases,

1997 data were only available for all of a corporation's refineries on an aggregate basis. In this

case, each refinery's 1990 sulfur level was multiplied by the ratio of the refiner's 1997 corporate

average sulfur level to its 1990 corporate average sulfur level. This procedure assumes that any

change in sulfur between 1990 and 1997 occurred proportionately at each refinery. In a few

cases, 1997 data were not yet available for a specific refiner, so the 1990 baseline was used

unchanged. 

We used these sulfur estimates along with estimates of each refinery's gasoline

production to develop a profile of the industry. We grouped refineries by current sulfur level
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-46

and determined the amount of gasoline produced by non-California refineries in each sulfur

grouping. Refiners meeting the definition of a small business were also excluded, as they would

have more time to comply with the proposed sulfur requirements than other refiners. The results

of this analysis are shown in Table IV-14.

Table IV-14. Distribution of Refineries by Current Gasoline Sulfur Level

Refinery Groupings

1234

Range of Gasoline Sulfur (ppm) 0-40 41-180 181-300 >300

Average Baseline Sulfur (ppm) 17 105 246 476

Percentage of total fuel produced 2% 26% 26% 47%

Number of Refineries 10 33 25 39 

Starting with this information, we projected the actions which refiners could take in

meeting the proposed gasoline sulfur requirements. This analysis revealed that the per gallon

caps of 300 and 180 ppm applicable nominally in 2004 and 2005 were the most constraining

features of the proposal in these early years of the program. Thus, this discussion will begin

with compliance with those caps, followed by a discussion of compliance with the absolute

corporate average standards of 120 and 90 ppm in 2004 and 2005 and compliance with the 30

ppm standard, which can be met with credits.

A refiner can take two basic types of actions to meet the 2004 and 2005 sulfur caps. It

can make operational changes without adding or substantially modifying its current refining

equipment or, it can add new capital equipment. Operational modifications include switching to

a low sulfur crude oil, operating existing FCC feed and naptha hydrotreaters more severely,

debottle-necking these units to process more volume, and shifting the heaviest portion of FCC

gasoline (which contains a disproportionate share of FCC gasoline sulfur) to the distillate pool. 

As an alternative to the last approach, a refiner could hydrotreat this heavy FCC gasoline in its

distillate hydrotreater, desulfurize it, separate it from the hydrotreated distillate and then reblend

the desulfurized FCC gasoline back into the gasoline pool. We believe that these techniques

would enable refiners to reduce sulfur levels in the near term. However, the degree of this

reduction is difficult to estimate. Also, refiners have to meet the Phase 2 requirement of the RFG

program in 2000, which is generally expected to require RFG to contain roughly 150 ppm sulfur

during the summer months. 

Very few refiners have built new gasoline desulfurization equipment in order to meet this

requirement. Thus, they appear to be planning to meet the 150 ppm level with operational

changes or by reblending. Reblending would involve the production of two distinct gasolines 

within the refinery, one with lower sulfur levels for the RFG market and another gasoline with

higher sulfur levels for the conventional gasoline market. The antidumping requirements which

apply to non-RFG gasoline implicitly limit the degree to which this can occur, but it still possible

that many refiners will use blending strategies to at least partially meet the Phase 2 RFG

requirements. In any event, the Phase 2 RFG requirements are likely to utilize some of refiner's
Chapter IV: Technological Feasibility

IV-47

existing ability to reduce gasoline sulfur without new capital equipment. This, plus the

uncertainty in the degree that operational changes can reduce sulfur levels, led us to believe that

refiners would not rely on operational changes as the primary means of meeting the 2004 and

2005 per gallon sulfur caps of 300 and 180 ppm. As a result of this, for the purpose of this

analysis, we assumed that any major reductions in gasoline sulfur needed to meet the per gallon

caps, as well as the eventual 30 ppm standard, would be met through the construction of new

desulfurization equipment. 

This uncertainty in the way in which refiners will meet the Phase 2 RFG requirements

also led us to assume that the pool average sulfur level will not decrease in 2000 due to these

requirements. In fact, some reduction is likely. However, this reduction would only serve to

delay the timing of investments in desulfurization equipment. In this respect, the projections

made below probably overestimate the number of refineries which must invest in the near term

to some degree. 

In most cases, the overall costs of desulfurization equipment is minimized when its

construction is conducted in one step (enabling the production of 30 ppm gasoline), as opposed

to a two step process involving some intermediate sulfur level. Thus, we also assumed that if a

refinery had to install new equipment to meet a particular sulfur standard, it built equipment

sufficient to comply with the 30 ppm standard and 80 ppm cap. There are some situations,

particularly those involving higher baseline sulfur levels, where the equipment needed to meet

the final 30 ppm standard involves more than one desulfurizing unit. In this case, it may be

possible to install the major unit prior to October 1, 2003 and meet the 2004 requirements and

delay the other unit(s) until 2005 or 2006. This possibility was not accounted for here. 

Sulfur group #4 in Table IV-14 shows that 39 refineries have current sulfur levels above

300 ppm. These refineries must reduce their gasoline sulfur levels to 300 ppm or less by

October 1, 2003, due to the per gallon cap taking effect at that time. In accordance with the

above premises, the 39 refineries in this group would require fully operational desulfurization

equipment by this date. In fact, this is likely an overestimation. Some of the refineries in this

group are within 10-15 ppm of the 300 ppm cap. It is likely that these refineries could reduce

their sulfur levels by a few ppm without installing new equipment. However, regular grade

gasoline tends to contain more sulfur than premium grade. Meeting a per gallon cap with regular

grade gasoline may require the refinery average sulfur level to be somewhat below 300 ppm. 

Also, refineries do not produce identical gasoline each day; there is some variation in the quality

of gasoline produced throughout the year. Since the 300 ppm cap applies to each and every

batch of gasoline produced, this variation also requires that the average sulfur level be below 300

ppm. 

This implies that some of the refineries in Group #3 would also have install

desulfurization units to meet the 300 ppm cap. However, this ignores the possibility of sulfur

reductions from operational refining modifications and reducing historic variation in gasoline

quality given an economic incentive to do so. We project that these more modest modifications,

along with improved blending techniques, would be sufficient for those refineries currently near

the 300 ppm level to produce regular and premium grades of gasoline under the 300 ppm cap. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-48

Thus, we project that 39 desulfurization units would have to be installed and operating

prior to October 1, 2003. We also project that six of these units would be installed by mid-2002,

12 would be installed by January 1, 2003 and the remaining 21 units would be installed by

October 1, 2003. The projection of the 6 early units reflects the fact that technology vendors

wishing to license their technology to refiners will need to demonstrate this technology early in

the process. EPA projects that at least six technologies will be competing in this timeframe. We

are already aware of at least three plants which will be in operation during 2000 or early 2001,

two CDTech units and one Mobil Octgain unit. Assuming that EPA issues its final Tier 2/Sulfur

rule by the end of 1999, mid-2002 is exactly 30 months later, which is generally the minimum

time EPA projects for installing such equipment. Of course, given the commercial purposes for

constructing and operating this equipment, plans could begin well before the final rule is signed,

as indicated by the two projects mentioned above. 

The 12/21 split between the 2003 and 2004 units was based on the premise that some

refiners would want to generate credits for use in their other refineries in 2004 and 2005 or for

sale to other refiners. We also expect that refiners, process design firms, and construction firms

would want to spread out the design and construction of this new equipment as much as possible. 

Installing this new equipment within 36 months of the final rule (i.e., by January 1, 2003) is

certainly feasible, given the projections made in the previous section. Thus, EPA believes that

there would be an economic incentive to begin construction at some refineries sooner than at

others.

Using the same assumptions, those refineries with current sulfur levels between 180 and

300 ppm would have to install equipment for use by January 1, 2005. As shown in Table IV-14,

this group includes 25 refineries. Finally, the 30 ppm standard effective in 2006 would require

another 33 refineries to install desulfurization equipment. Ten refineries out of the total of 107

refineries located in the U.S. outside of California already have sufficiently low sulfur levels to

avoid the need for new equipment. 

Table IV-15 shows the effect of the phase-in of this new equipment on average sulfur

levels in the non-California U.S. gasoline pool. As can be seen, pool average sulfur levels in

2004 and 2005 are 105 and 49 ppm, respectively, well below the proposed 120 and 90 ppm

corporate average standards. Thus, no additional controls should be required to meet these

average standards if sufficient credits are available either from within the corporation or on the

open market. This conclusion presumes that refineries with current sulfur levels in between the

corporate average standard and the per gallon cap (e.g., 120-300 ppm in 2004) are a part of a

corporation which has another refinery at 30 ppm, so that its actual corporate average sulfur level

is below 120 or 90 ppm, as applicable, since these standards must be met without the use of

credits. 
Chapter IV: Technological Feasibility

IV-49

Table IV-15. Effect of Phase-In of Sulfur Control to Meet Sulfur Caps in 2004 and 2005

2000 2001 2002 2003 2004 2005 2006

Pool Average

Sulfur Level

(ppm)

312 312 296 216 105 49 30

Number of

Refineries

Building Sulfur

Units

0 0 6 * 12 21 28 30

Percentage

Controlled to 30

ppm

0 0 7% 22% 47% 73% 100% **

Credits (ppm over the entire U.S. gasoline pool for an entire year)

Credits Generated

from Winter RFG

20 20 20 20 0 0 0

Credits Generated

from Sulfur Units

0 0 16 96 0 0 0

Credits Used to

Allow Sale of >30

ppm Gasoline 

0 0 0 0 -75 -19 0

Cumulative Credit

Balance

+20 +40 +76 +192 +117 +98 +98

* Units only operate during second half of 2002.

** Includes 2% of fuel which is currently below 40 ppm sulfur.

This table also shows the sulfur credits generated and used by refineries between 2002

and 2006. As can be seen, 112 ppm of credits were generated by the 18 units operating before

January 1, 2004. This amount is greater than the 94 ppm of credits which are needed by the 58

refineries which did not begin operating sulfur units until 2005 or 2006. 

Table IV-15 also shows a series of 20 ppm credits under the heading of wintertime RFG. 

The proposed credit provisions allow winter RFG to generate sulfur credits if its sulfur level is

below the individual refinery’s baseline sulfur level, which on average is 312 ppm. Summer

RFG is expected to contain 150 ppm sulfur or less. EPA projects that the cost of extending this

control (or reblending) to the winter months would be minimal and that refiners would likely

choose to generate credits in this way. The 20 ppm per year of credits represents the difference

between the U.S. pool average sulfur level (312 ppm) and the 150 ppm level (difference of 162

ppm), multiplied by a factor of one-half, since only winter fuel would receive the credit and by a
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-50

factor of 0.25, since RFG is roughly 25 percent of the non-California gasoline market. 

Given this expectation of significant RFG-related credits, EPA projects that a significant

excess of credits would be available. This analysis assumes that all credits which are generated

are either used within a corporation or are put up for sale on the open market. This may not

occur in all cases. However, this analysis indicates that only about half of the credits expected to

be generated are actually needed to allow refineries with current sulfur levels below either 300

ppm or 180 ppm to delay installation of desulfurization units until 2005 or 2006, respectively. It

is also possible that many more credits would be available, if many refineries use operational

techniques to reduce sulfur to levels below the 150 ppm trigger level before the time that they

install desulfurization units. On the other hand, fewer credits would be available if refineries

adopt an alternative schedule to phase-in desulfurization capacity (because of capital constraints

or site specific factors affecting individual control decisions) than the schedule posited by this

analysis. As noted above, for example, some refineries may be close enough to the 300 ppm cap

to be able to reduce their sulfur levels to meet the cap without installing new equipment. There

may also be cases where refineries have such high baseline sulfur levels that more than one

desulfurization unit would be required to produce 30 ppm sulfur gasoline on average. In these

cases a decision to phase-in these units rather than installing 30 ppm technology initially would

reduce the number of credits generated early. However, even if fewer refineries install

desulfurization equipment to generate early credits than our analysis assumed, we believe there

will be sufficient credits generated from winter RFG and from early installation of some 30 ppm

technology to fully cover the credits needed by the industry.
Chapter IV: Technological Feasibility

IV-51

Chapter IV. References

1. SAE paper 1999-01-0774, “Using Advanced Emission Control Systems to Demonstrate 

LEV II ULEV on Light-Duty Gasoline Vehicles,” Webb, et.al.

2. Baseline Submissions for the Reformulated Gasoline Program.

3. Swain, Edward J., Gravity, Sulfur Content of U.S. Crude Slate Holding Steady, Oil and 

Gas Journal, January 13, 1997. 

4. Upson, Lawrence L, Schnaith, Mark W., Low-sulfur Specifications Cause Refiners to 

Look at Hydrotreating Options, Oil and Gas Journal, December 8, 1997. 

5. Final Report, 1996 American Petroleum Institute/National Petroleum Refiners

Association Survey of Refining Operations and Product Quality, July 1997.

6. Final Report, 1996 API/NPRA Survey of Refining Operations and Product Quality.

7. Standard Specification for Spark-Ignition Fuel, D 4814-92c; American Society for

Testing Materials.

8. California Code of Regulations, Title 13, §2262.2.

9. Final Report, 1996 API/NPRA Survey of Refining Operations and Product Quality.

10. Davey, Steven W., Haley, John T., FCC Additive Technology Update, 1996 O&G J

International Catalyst Conference and Exhibition, Houston Texas, February 1996.

11. Final Report, 1996 API/NPRA Survey of Refining Operations and Product Quality.

12. Pacheco, Michael; Symposium for Diesel Desulfurization, Houston, Texas, February

1999.

13. Petroleum Refinery Process Economics, Maples, Robert E., PennWell Books, Tulsa, 

Oklahoma, 1993.

14. Podar, Syamal K., Hilbert, Timothy L., Octgain, Evaluation for the Manufacture of

Reformulated Gasoline via LP Modeling, NPRA 1995 Annual Meeting. 

15. Mobil Technology Company, FCC Gasoline Desulfurization Reaches a New

Performance Level, Sulfur 2000, A Special Edition, Hart’s Fuel Technology and

Management, Summer 1998.

16. CDTECH, FCC Gasoline Sulfur Reduction, CDTECH, Sulfur 2000, Hart’s Fuel and

Technology Management, Summer 1998.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

IV-52

17. Rock, Kerry J., Putman, Hugh, Global Gasoline Reformulation Requires New 

Technologies, Presented at Hart’s World Fuels Conference, San Francisco, March 1998.

18. Rock, Kerry L., et al, Improvements in FCC Gasoline Desulfurization via Catalytic 

Distillation, Presented at the 1998 NPRA Annual Meeting, March 1998.

19. Personal conversation with Trig Tryjankowski, Manager, Licensing, Mobil Technology

Company, January 1999.

20. Letter from Bill O’ Keefe, American Petroleum Institute, to Bruce Jordan, Office of Air 

Quality Planning and Standards, EPA, February 12, 1999.

21. Shanley, A., Benchmarking for the Next Century, Chemical Engineering, April 1996.

22. Chemical Engineers Handbook, Perry, Robert H., McGraw Hill Book Company, New 

York, 1984

23. California Code of Regulations, Title 13 §2252.

24. California Code of Regulations, Title 13 §2260 - §2272.

25. 55 FR 34138, August 21, 1990.

26. Refining Industry Profile Study; EPA contract 68-C5-0010, Work Assignment #2-15,

ICF Resources, September 30, 1998.
Chapter V: Economic Impact

t

 Even though the NLEV program ends in the Tier 2 time frame, we have not included the NLEV program

in our Tier 2 analysis, since we have analyzed and adopted NLEV previously.

V-1

Chapter V: Economic Impact

A. Impact of Tier 2 Standards on Vehicle Costs

This section presents a detailed analysis of the vehicle-related costs we estimate would be

incurred by manufacturers and consumers as a result of the Tier 2 standards. Section B. of this

Chapter presents cost estimates for fuels changes. For manufacturers, the economic impact of

the Tier 2 standards would include incremental costs for various vehicle hardware components,

as well as up-front costs for research and development (R&D), certification, and facilities

upgrades. Impacts on consumers would include increases in vehicle purchase price and changes

in vehicle operating costs. Finally, this section provides estimates of the annual nationwide

aggregate costs for Tier 2 vehicles.

1. Manufacturer Costs for Tier 2 Vehicles

a. Methodology

This section A.1. discusses EPA’s estimates of costs to manufacturers for Tier 2 vehicles,

including both hardware and developmental costs. The estimates are based on projections of

technology changes we consider most likely to be used by manufacturers to comply with the Tier

2 standards. To estimate costs, we have analyzed two sets of technologies for each vehicle class

and engine type, a baseline technology package and a Tier 2 technology package. We used as a

baseline, projected NLEV technologies for LDVs, LDT1s, and LDT2s, and Tier 1 technologies

for LDT3s and LDT4s. These are the standards that vehicles will be meeting in 2003.t We have

estimated the baseline technology packages based primarily on California Air Resources Board

technology analyses done in support of the California LEV program,1 with adjustments based on

discussions with manufacturers about trends in technology.

The following analysis projects a relatively uniform emission control strategy for various

LDV and LDT models. However, this should not suggest that a single combination of

technologies would be used by all manufacturers. Selecting technology packages requires

extensive engineering judgement and EPA does not know future technology mixes and costs

with certainty. New technological developments could significantly change the approach

manufacturers would take to meet the standards. In addition, there are several emissions control

technologies and several manufacturers of each. The Technological Feasibility portion of this

RIA details many of the available technologies. Each manufacturer will choose the mix of

technologies best suited for their vehicles. Manufacturers would have as many as eight years for

R&D for some vehicles due to the phase-in schedule. We expect a large R&D effort involving

extensive systems optimization to find the most cost effective mix of technologies for particular
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-2

vehicle lines. 

Nevertheless, we believe that the projections presented here provide a cost estimate

representative of the different approaches manufacturers may ultimately take. Clearly, there are

key technologies that manufacturers will likely use to meet the standards in most cases. We

expect Tier 2 standards would be met through refinements of current emissions control

components and systems rather than through the widespread use of new technologies. Current

LDV and LDT certification levels also suggest this approach makes sense. We have made a best

estimate of the combination of technologies that any manufacturer might use to meet the

proposed standards at an acceptable cost and these technologies form the basis of the cost

estimates. Since California, in their LEVII program, has adopted essentially the same standards

and time-line that EPA is proposing, we used California’s technology and cost analyses as a

source of information.2

 We also had several conversations with equipment and vehicle

manufacturers whose input we also used for these analyses. Most manufacturer input is

considered confidential business information and therefore is not described in detail. 

We have not specifically analyzed smaller incremental changes in technologies which

might occur due to interim standards between the baseline and the Tier 2 standards. For LDVs

and LDT1s, the interim standards are a continuation of NLEV and therefore are equivalent to the

baseline standards. For LDT2s, given the state of technology on current vehicles, we expect

only minor changes in response to the interim standards. Many engine families are already

certified at levels meeting the interim standards. In addition, broad averaging would be available

which manufacturers could use in the early years of the phase-in when significant numbers of

LDVs and LDT1s are also in the averaging program for the interim standards. 

In 2006, when LDT2s may make up the large majority of vehicles remaining in the

interim program manufacturers could use credits from model years 2004/2005 to comply with

the interim standards. If this is not an option, we expect manufacturers could make a few minor

modifications which would result in needed reductions. Most likely, the standards could be met

through calibration changes which entail changes to software. These changes would not involve

hardware or tooling changes. The R&D costs associated with these changes are already included

in the relatively large R&D costs included for the program as a whole. In addition there are

likely to be incremental improvements in the standard catalyst system for these vehicles due to

progress made by catalyst manufacturers. These incremental improvements in washcoat

technology are part of the normal progression of technology and would not likely result in an

increase in the catalyst cost due to the competitiveness of the catalyst industry.

For LDT3s and LDT4s, there is a phase in to an interim fleet average NOx standard of

0.20 g/mile with an accompanying NMHC average of 0.156 g/mile. Vehicles have their

emissions capped at 0.60 g/mile NOx and 0.23 g/mile NMHC. Most engine families currently

meet the caps. EPA expects that manufacturers could apply calibration changes and incremental

catalyst improvements, as noted above for LDT2s, where necessary to ensure compliance with

the caps. In addition, much of the R&D will have already taken place due to the California

program which includes the same standards (MDV2 standards) for pre-2004 model year LDT3s. 

 We do not expect these changes to result in increases to the cost of the program.
Chapter V: Economic Impact

V-3

For the interim fleet average NOx standard, (average standard of 0.2 g/mile NOx with a

NMHC standard of 0.156 g/mile), the approaches noted above may not be adequate in some

cases. For vehicles well above the standard, manufacturers could redesign the vehicles to meet

the interim standards. However, we believe it is more likely that manufacturers would phase

these vehicles into the interim standards later in the phase-in period and use the program

averaging flexibility to meet the interim standard. Therefore, rather than project a cost for

vehicles to meet the interim standards, we have projected sales of Tier 2 vehicles prior to 2008 to

average with and off-set those exceeding the interim standards. We believe this approach is

reasonable considering manufacturers are likely to avoid significant R&D efforts to meet a

standard that is in effect for only a few model years. Essentially, a few such vehicle models

would have to be immediately redesigned to meet Tier 2 levels. Due to timing considerations,

manufacturers are more likely to focus their resources on meeting the Tier 2 standards.

Vehicle phase-in estimates are needed to project annual aggregate costs during the phasein period. For both phase-in periods (for LDVs, LDT1s, LDT2s, and for LDT3s, LDT4s), EPA

has modeled that manufacturers will start the phase-in of Tier 2 standards with lighter vehicles

and work their way to heavier vehicles until all vehicles up through LDT4s meet the Tier 2

standard in 2009. The phase-in projections described in further detail in section A.3., below.

Costs to the manufacturer are broken into variable costs (for hardware and assembly

time) and fixed costs (for R&D, retooling, and certification). EPA projected costs separately for

LDVs, the different LDT classes, and for different engine sizes (4, 6, 8-cylinder) within each

class. Cost estimates based on the projected technology packages represent expected

incremental variable and fixed costs for vehicles in the near-term, or during the first years of

implementation.. For the long term, we have identified factors that would cause cost impacts to

decrease over time. The analysis incorporates the expectation that manufacturers and suppliers

will apply ongoing research and manufacturing innovation to making emission controls more

effective and less costly over time. Also, we project that fixed costs would be recovered over the

first five years of production, after which these costs would be recovered. These factors are

discussed in further detail below.

b. Hardware Costs for Exhaust Emissions Control

The following section briefly describes each of the technologies EPA has included in the

cost analysis and their costs incremental to the baseline use of the technology. Tables V-1

through V-5 at the end of this section provide the complete detailed projection of hardware

changes and costs for each vehicle and engine type. A breakdown of the hardware costs for the

evaporative system follow in section A.1.c. The Technological Feasibility portion of this RIA

provides further detail on the technologies included in the cost analysis, as well as others that are

less likely to be used to meet Tier 2 standards. The costs presented in this section are near-term

costs, during the first few years of production. Long-term hardware costs are discussed in a

following section.

Manufacturers are likely to use a systems approach to meeting the Tier 2 standards and
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-4

much of the effort will be in optimizing how the various components and subsystems (engine,

catalyst, fuel system, etc.) interact to achieve peak emissions performance. Some of these items

are included as part of the technology discussions below. However, there are no hardware costs

associated with these changes. The costs of optimization and calibration are part of a significant

R&D effort EPA anticipates will be necessary to meet the Tier 2 standards.

i. Catalytic Converter System

The catalytic converter system is central to meeting current standards and improvements

to the systems will be critical in meeting Tier 2 emissions standards. EPA projects that all Tier 2

LDVs and LDTs will be equipped with advanced catalysts. Catalyst manufacturers are currently

working with engine manufacturers on new catalyst systems. To determine the cost increases

due to improved catalyst systems, we first analyzed current Tier 1 and NLEV systems for the

baseline and then projected what changes may be necessary to meet Tier 2 standards.

EPA first determined an average catalyst system for the baseline vehicles. Catalyst

systems vary in size and configuration due to factors such as engine size and emissions levels,

vehicle packaging constraints, cost, and manufacturer preference. Catalyst systems typically

consist of single or dual units (main or underfloor catalysts) and may also include one or two

smaller catalysts placed close to the engine (close coupled). For the baseline, we examined the

total volume, precious metal loading, and architecture of the main, or underfloor catalysts to

derive an average baseline catalyst for the various vehicle types and engine sizes. We also noted

whether or not vehicles were also equipped with additional close coupled catalysts.

After establishing baseline catalyst systems, we then projected changes to the catalyst

system for the Tier 2 analysis. In general, manufacturers could meet the standards by using very

large catalysts with relatively high precious metal loading. Many of the test programs that have

been conducted to demonstrate the feasibility of very low standards have featured vehicles with

such catalyst systems. However, based on uniform input from catalyst manufacturers, this is not

the approach we expect manufacturers to take in meeting the Tier 2 standards. Catalyst

manufacturers anticipate that improvements to the catalyst systems design, structure, and

formulation will also play a critical role in reducing emissions. These improvements are aimed

at decreasing emissions while minimizing the increase in catalyst volume and precious metal

loading. Manufacturers are working on these catalyst systems today. 

We do expect some increase in average catalyst size (volume) and precious metal

loading. We believe that it is reasonable to expect catalyst systems to be sized such that the

underfloor catalyst volume will be equal to engine displacement and that loading will increase by

about 10 percent. Perhaps of equal importance will be the R&D efforts on the vehicle

manufacturers part to optimize engine performance and control systems so that the catalyst can

function at peak efficiency. Additional information on catalyst test programs and catalyst

changes is available in the Technical Feasibility Section of this RIA. 

For the main or underfloor catalysts, EPA projects that improvements to the catalyst
Chapter V: Economic Impact

V-5

architecture and formulation will increase catalyst costs by $2.44 to $6.59, depending on the

vehicle and engine type. These improvements include double layer washcoats and increasing the

cell density of the catalyst substrate to 600 cells per inch (cpi). We estimate that increases in the

catalyst volume and precious metal loading will account for the largest portion of the catalyst

cost increase due to the high cost of precious metals. We anticipate the change in catalyst

volume to cost between $10.00 and $55.00 per vehicle. We derived the increased volume cost

by taking the baseline cost of the catalyst per liter ($50/liter) and multiplying by the increase in

catalyst volume. Larger catalyst volume increases are projected for 6-cylinder engines in LDT

applications than for 8-cylinder engines due to relatively low baseline catalyst volumes for 6-

cylinder engines. We projected an increase in precious metal loading, in addition to the

increased volume, at a total cost of between $1.84 and $11.26 per vehicle. The details of the

underfloor catalyst cost estimates are provided in Table V-1.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-6

Sales wtd. Projected Projected Increased Increased Increased Increased Added Engine Baseline Cat. Tier 2 Cat. Volume Platinum Palladium Rhodium (b) Pt cost 

Vehicle Engine Displacement Volume Volume Cost (a) (Pt) (Pd) (Rh) (dollars) Type Type (liter) (liter) (liter) (dollars) (grams) (grams) (grams)LDV 4-cylinder 2.0 1.8 2.0 10.00 0.000 0.000 0.085 0 

6-cylinder 3.2 2.8 3.2 20.00 0.000 0.000 0.138 0 8-cylinder 4.5 4.0 4.5 25.00 0.000 0.000 0.194 0 

LDT 4-cylinder 2.3 2.3 2.3 0.00 0.000 0.000 0.097 0 

6-cylinder 3.7 2.6 3.7 55.00 0.035 0.540 0.157 0.43 8-cylinder 5.4 4.7 5.4 35.00 0.082 0.550 0.229 1.01 Precious Metal Costs

$/troy ounce $/gram

Pt 384 12.35Pd 300 9.64Rh 675 21.70(a) Catalyst cost is $50/liter. Increased catalyst volume costs are the increase in catalyst volume multiplied by $50/liter.(b) Increase in Rh of 1.2 g/cu ft

Table V-1. Main or Underfloor Catalyst Cost Breakdown
Chapter V: Economic Impact

V-7

Close coupled catalysts are typically small relative to the main catalysts, under one-half

liter in volume. Their small size is due to packaging constraints associated with their location

close to the engine and their purpose, to warm-up quickly and reduce cold-start emissions. They

also typically have relatively high precious metal loading. Due to these factors, EPA is not

projecting changes to the close coupled catalysts, only changes in their usage. For NLEV

vehicles (LDV, LDT1 and LDT2), the percentage of baseline vehicles equipped with close

coupled catalysts is high, between 60 and 100 percent, depending on the vehicle and engine type. 

We believe that the use of close coupled catalysts has likely peaked in these classes and we have

not projected increases in usage for Tier 2. For LDT3s and LDT4s, the use of close coupled

catalysts is currently low relative to the other classes. For Tier 2 LDT3s and LDT4s, we have

projected the use of close coupled catalysts to increase to be equivalent to the other vehicle

categories. The cost of dual close coupled catalysts are projected to be between $90 and $110,

for six and eight liter engines, respectively.

ii. Improved Fuel Control and Delivery

Precise fuel metering is critical to keeping the catalyst at peak operating efficiency. 

Much of the effort for improved fuel control is in calibration and system optimization. For some

vehicles, EPA has included costs for hardware changes including improved exhaust gas oxygen

sensors and air-assisted fuel injection. There are two types of improved oxygen sensors that

EPA believes will be used increasingly for Tier 2 vehicles, universal exhaust gas oxygen sensors

(UEGO) and fast light-off or planar sensors. UEGO sensors are the most expensive type of

sensor and offer the most precise fuel control. However, only some manufacturers believe the

additional control is worth their higher incremental cost of 10 dollars. We believe more

manufacturers will opt for planar sensors, which offer a key advantage of quick warm-up,

allowing for precise fuel control sooner during cold starts. Many baseline vehicles also will

likely be equipped with planar sensors. The incremental cost of planar sensors is estimated to be

four dollars per sensor. We expect that the improved sensors would be used only before the

catalyst in the exhaust system for fuel control, with conventional heated exhaust gas oxygen

sensors used post catalyst for catalyst monitoring and additional fuel control. 

Air assisted fuel injection is used to provide a better air fuel mixture to the engine, which

can be especially critical during engine warm-up. The technology can offer other advantages in

terms of engine performance which also makes it an attractive technology. For air assisted fuel

injection, the injectors must be redesigned to include a new adapter. We have projected that 50

percent of Tier 2 vehicles will be equipped with air assisted fuel injection at a cost of two

dollars for each improved injector.

As indicated above, much of the improvements in fuel control are likely to be

accomplished through system calibration. As such, they include software upgrade costs, rather

than hardware costs. EPA has included such costs in the R&D cost. These improvements may

include individual cylinder fuel control and adaptive learning. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-8

iii. Secondary Air Injection

Manufacturers sometimes use a rich air/fuel mix during cold start to improve engine

performance and driveability. Secondary injection of air into exhaust ports after cold start when

the engine is operating rich can be used to promote combustion of unburned HC and CO which

results from the rich air/fuel mix. Air injection can also be used in conjunction with spark retard

to provide additional heat to the catalyst for quicker catalyst warm-up. EPA projects increased

use of electric air injection strategies for Tier 2 vehicles equipped with 6- and 8- cylinder

engines. The air injection systems consist of an electric air pump with integrated filter and relay,

wiring, an air shut-off valve with integrated solenoid, a check valve, tubing, and brackets. We

estimate the system cost to be 50 and 65 dollars for six- and eight- cylinder engines, respectively.

 

iv. Exhaust System Improvements

Manufacturers can insulate the exhaust system so the exhaust heat does not escape, but is

instead maintained within the system to promote catalyst warm-up. Improved materials include

laminated thin-walled exhaust pipes and double walled low thermal capacity manifolds (the two

walls have a small air gap between them that acts as an insulator). EPA estimates that improved

exhaust pipe costs one dollar per foot, with total system costs of between one and six dollars,

depending on engine size. Low thermal capacity manifolds are estimated to cost 20 to 40 dollars

depending on engine size. Due to the relatively high cost of these improvements, we have

projected manufacturers would use them only on LDTs, where it may be more difficult to meet

the Tier 2 standards. In some cases, manufacturers may be able to use exhaust system

improvements in lieu of adding close-coupled catalysts. 

In addition, exhaust systems can be made leak-free which improves fuel control and

catalyst efficiency. As noted in the previous section, precise fuel control is critical to catalyst

performance and the oxygen sensor is a key element of fuel control. Air leaking into the exhaust

system can influence the oxygen sensor causing an improper fuel adjustment. Also, additional

air in the exhaust stream can lead to an oxidizing environment in the catalyst, diminishing the

catalyst’s ability to reduce NOx. Leak-free systems include corrosion-free flexible couplings,

corrosion-free steel, and improved welding of catalyst assemblies. We estimate that many

baseline vehicles and all Tier 2 vehicles will be equipped with leak-free exhaust systems at an

incremental cost of 10 to 20 dollars depending on engine size. 

v. Engine Combustion Chamber Improvements

Manufacturers may make a number of improvements to their engines as they are

redesigned, including adding a second spark plug to each cylinder, adding a swirl control valve

to improve mixing of air and fuel, or other changes needed to improve cold start combustion. 

Engine changes are not likely to be uniform throughout the industry. EPA believes that

significant engine improvements for LDVs, LDT1s and LDT2s are likely to have been made as

part of the effort to meet NLEV standards. The Tier 2 standards are not likely to drive a second
Chapter V: Economic Impact

V-9

set of major changes to these engines. Therefore, EPA has not included an engine modification

cost for these vehicles. For LDT3s and LDT4s, which would be changing from Tier 1 to Tier 2

technology, we have included a hardware cost for engine modifications of $10 and $15 for six

and eight cylinder engines, respectively. 

vi. Exhaust Gas Recirculation (EGR)

One of the most effective means of reducing engine-out NOx emissions is exhaust gas

recirculation. By recirculating spent exhaust gases into the combustion chamber, the overall airfuel mixture is diluted, lowering peak combustion temperatures and reducing NOx. Many EGR

systems in today’s vehicles utilize a control valve that requires vacuum from the intake manifold

to regulate EGR flow. Some vehicles are being equipped with electronic EGR in place of

mechanical back-pressure designs. By using electronic solenoids to open and close the EGR

valve, the flow of EGR can be more precisely controlled. EPA projects that the use of full

electronic EGR systems will increase due to Tier 2 standards. We estimate that about 50 percent

of Tier 2 LDVs and LDTs will be equipped with electronic EGR at an incremental cost of ten

dollars per vehicle. 

vii. Total Hardware Costs for Exhaust Emissions Control

Table V-3 provides a summary of the total hardware costs for each vehicle and engine

type. Tables V-3 through V-7 present detailed estimated manufacturer costs itemized for each

vehicle and engine type. The tables indicate EPA’s estimate of the percentage of use of the

technologies for both the baseline and the Tier 2 vehicles. Some of the technologies listed, such

as individual cylinder fuel control and retarded spark timing, involve calibration changes only

and have no hardware costs associated with them.

Table V-2. Total Estimated Per Vehicle Manufacturer 

Incremental Hardware Costs for the Tier 2 Standards

LDV

($)

LDT1

($)

LDT2

($)

LDT3

($)

LDT4

($)

4-cylinder 23.78 15.15 15.15 N/A N/A

6-cylinder 62.85 85.45 94.97 235.32 N/A

8-cylinder 71.63 N/A 80.98 194.45 194.45

sales weighted 42.85 39.13 89.78 198.58 194.45
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-10

4-Cylinder (53%) 6-Cylinder (39%) 

Tech. % of NLEV % Tier 2 Inc. cost Tech. % of NLEV % Tier 2 Inc. cost Tech. cost est. vehs. that that will over Tier 1 cost est. vehs. that that will over Tier 1 cost est. 

Emission Control Technology (in dollars) use tech. req. tech. (in dollars) (in dollars) use tech. req. tech. (in dollars) (in dollars) Universal Exhaust Gas Oxygen Sensor (UEGO) 10.00 0 15 1.50 20.00 0 15 3.00 20.00 Air-assisted fuel injection (a) 8.00 50 50 0.00 12.00 50 50 0.00 16.00 Individual cylinder fuel control (b) 0.00 0 10 0.00 0.00 10 10 0.00 0.00 Retarded spark timing at start-up (b) 0.00 100 100 0.00 0.00 100 100 0.00 0.00 Improved precision fuel control (c) 0.00 100 100 0.00 0.00 100 100 0.00 0.00 Faster microprocessor 3.00 0 100 3.00 3.00 0 100 3.00 3.00 Fast light-off exhaust gas oxygen sensor (planar) 4.00 100 100 0.00 8.00 100 100 0.00 8.00 Heat optimized exhaust pipe (d) 0 0 0.00 0 0 0.00 Leak-free exhaust system (e) 10.00 100 100 0.00 20.00 100 100 0.00 20.00 Engine modifications (f) 0.00 0 0 0.00 10.00 100 100 0.00 15.00 Full electronic EGR 10.00 0 50 5.00 10.00 0 50 5.00 10.00 Close-coupled catalyst 55.00 60 60 0.00 55.00 0 0 0.00 55.00 Underbody or main catalyst 80.00 70 70 0.00 80.00 100 100 0.00 80.00 Dual close-coupled catalyst 0 0 0.00 90.00 100 100 0.00 110.00 Dual underbody or main catalyst 0 0 0.00 160.00 0 0 0.00 160.00 Increased catalyst volume 10.00 0 100 10.00 20.00 0 100 20.00 25.00 Increased catalyst loading (Rh) 1.84 0 100 1.84 2.95 0 100 2.95 4.14 Improved double layer washcoat + 600 cpsi cell density 2.44 0 100 2.44 3.90 0 100 3.90 5.49 Secondary air injection (g) 50.00 0 0 0.00 50.00 0 50 25.00 65.00 Total Incremental Cost 23.78 62.85 (a) Air assisted fuel injection requires minor redesign of the idle air control valve at no additional cost and addition of an adapter to each injector at a cost of $2 each.(b) Improved precision fuel control envisioned here and retarded spark-timing at start-up constitute software changes only, at no additional hardware cost.(c) Improved precision fuel control constitute software changes only, at no additional hardware cost.(d) Length of heat optimized exhaust pipe required is estimated to be one foot for 4-cylinder engines, four feet for 6-cylinder engines, and six feet for eight-cylinder engines, at a cost of $1 p(e) Leak-free exhaust system includes corrosion free flexible coupling, plus improved welding of catalyst assemblies.(f) Types of engine modifications may be less uniform throughout the industry and may include items such as an additional spark plug per cylinder, addition of a swirl control valve or other hachieve cold combustion stability, improved fuel economy(g) Cost of air injection includes an electric air pump with integrated filter and relay, wiring, air-shut-off valve with integral solenoid, check valve, tubing and brackets.

Table V-3. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDV Compared to N
Chapter V: Economic Impact

V-11

4-Cylinder (65.9%) 6-Cylinder (34.1%)

Tech. % of NLEV % Tier 2 Inc. cost Tech. % of NLEV % Tier 2 Inc. costcost est. vehs. that that will over Tier 1 cost est. vehs. that that will over Tier 1

Emission Control Technology (in dollars) use tech. req. tech. (in dollars) (in dollars) use tech. req. tech. (in dollars)Universal Exhaust Gas Oxygen Sensor (UEGO) 10.00 0 15 1.50 20.00 0 15 3.00Air-assisted fuel injection (a) 8.00 50 50 0.00 12.00 50 50 0.00Individual cylinder fuel control (b) 0.00 10 10 0.00 0.00 10 10 0.00Retarded spark timing at start-up (b) 0.00 100 100 0.00 0.00 100 100 0.00Improved precision fuel control (c) 0.00 100 100 0.00 0.00 100 100 0.00Faster microprocessor 3.00 0 100 3.00 3.00 0 100 3.00Fast light-off exhaust gas oxygen sensor (planar) 4.00 100 100 0.00 8.00 100 100 0.00Heat optimized exhaust pipe (d) 1.00 0 100 1.00 4.00 0 100 4.00Leak-free exhaust system (e) 10.00 100 100 0.00 20.00 100 100 0.00Engine modifications (f) 0.00 0 0 0.00 10.00 100 100 0.00Full electronic EGR 10.00 0 50 5.00 10.00 0 50 5.00Close-coupled catalyst 55.00 60 60 0.00 55.00 0 0 0.00Underbody or main catalyst 80.00 70 70 0.00 80.00 100 100 0.00Dual close-coupled catalyst 0.00 0 0 0.00 90.00 100 100 0.00Dual underbody or main catalyst 0.00 0 0 0.00 160.00 0 0 0.00Increased catalyst volume 0.00 100 100 0.00 55.00 0 100 55.00Increased catalyst loading 1.84 0 100 1.84 2.95 0 100 2.95Improved double layer washcoat + 600 cpsi cell density 2.81 0 100 2.81 4.52 0 0 0.00Secondary air injection (g) 50.00 50 50 0.00 50.00 50 75 12.50Total Incremental Cost 15.15 85.45(a) Air assisted fuel injection requires minor redesign of the idle air control valve at no additional cost and addition of an adapter to each injector at a cost of $2 each.(b) Improved precision fuel control envisioned here and retarded spark-timing at start-up constitute software changes only, at no additional hardware cost.(c) Improved precision fuel control constitute software changes only, at no additional hardware cost.(d) Length of heat optimized exhaust pipe required is estimated to be one foot for 4-cylinder engines, four feet for 6-cylinder engines, and six feet for eight-cylinder engines, at a cost of $1 per foot incremental.(e) Leak-free exhaust system includes corrosion free flexible coupling, plus improved welding of catalyst assemblies.(f) Types of engine modifications may be less uniform throughout the industry and may include items such as an additional spark plug per cylinder, addition of a swirl control valve or other hardware needed toachieve cold combustion stability, improved fuel economy(g) Cost of air injection includes an electric air pump with integrated filter and relay, wiring, air-shut-off valve with integral solenoid, check valve, tubing and brackets.

Table V-4. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT1 Compared to N
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-12

4-Cylinder (2.3%) 6-Cylinder (73.7%) 

Tech. % of NLEV % Tier 2 Inc. cost Tech. % of NLEV % Tier 2 Inc. cost Tech. cost est. vehs. that that will over Tier 1 cost est. vehs. that that will over Tier 1 cost est. 

Emission Control Technology (in dollars) use tech. req. tech. (in dollars) (in dollars) use tech. req. tech. (in dollars) (in dollarsUniversal Exhaust Gas Oxygen Sensor (UEGO) 10.00 0 15 1.50 20.00 0 15 3.00 20Air-assisted fuel injection (a) 8.00 50 50 0.00 12.00 50 50 0.00 16Individual cylinder fuel control (b) 0.00 10 10 0.00 0.00 10 10 0.00 0Retarded spark timing at start-up (b) 0.00 100 100 0.00 0.00 100 100 0.00 0Improved precision fuel control (c) 0.00 100 100 0.00 0.00 100 100 0.00 0Faster microprocessor 3.00 0 100 3.00 3.00 0 100 3.00 3Fast light-off exhaust gas oxygen sensor (planar) 4.00 100 100 0.00 8.00 100 100 0.00 8Heat optimized exhaust pipe (d) 1.00 0 100 1.00 4.00 0 100 4.00 6Low thermal capacity manifold 20.00 25 50 5.00 40.00 25 50 10.00 40Leak-free exhaust system (e) 10.00 100 100 0.00 20.00 100 100 0.00 20Engine modifications (f) 0.00 0 0 0.00 10.00 100 100 0.00 15Full electronic EGR 10.00 50 50 0.00 10.00 50 50 0.00 10Close-coupled catalyst 55.00 60 60 0.00 55.00 0 0 0.00 55Underbody or main catalyst 80.00 70 70 0.00 80.00 100 100 0.00 80Dual close-coupled catalyst 0 0 0.00 90.00 100 100 0.00 110Dual underbody or main catalyst 0 0 0.00 160.00 0 0 0.00 160Increased catalyst volume 0.00 0 0 0.00 55.00 0 100 55.00 35Increased catalyst loading (Pt) 0.00 0 0 0.00 4.32 0 0 0.00 10Increased catalyst loading (Pd) 0.00 0 0 0.00 51.67 0 0 0.00 52Increased catalyst loading (Rh) 1.84 0 100 1.84 2.95 0 100 2.95 4Improved double layer washcoat + 600 cpsi cell density 2.81 0 100 2.81 4.52 0 100 4.52 6Secondary air injection (g) 50.00 0 0 0.00 50.00 50 75 12.50 65Total Incremental Cost 15.15 94.97 (a) Air assisted fuel injection requires minor redesign of the idle air control valve at no additional cost and addition of an adapter to each injector at a cost of $2 each.(b) Improved precision fuel control envisioned here and retarded spark-timing at start-up constitute software changes only, at no additional hardware cost.(c) Improved precision fuel control constitute software changes only, at no additional hardware cost.(d) Length of heat optimized exhaust pipe required is estimated to be one foot for 4-cylinder engines, four feet for 6-cylinder engines, and six feet for eight-cylinder engines, at a cost of $

(e) Leak-free exhaust system includes corrosion free flexible coupling, plus improved welding of catalyst assemblies.

(f) Types of engine modifications may be less uniform throughout the industry and may include items such as an additional spark plug per cylinder, addition of a swirl control valve or othachieve cold combustion stability, improve fuel economy(g) Cost of air injection includes an electric air pump with integrated filter and relay, wiring, air-shut-off valve with integral solenoid, check valve, tubing and brackets.

Table V-5. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT2 Compared to N
Chapter V: Economic Impact

V-13

6-Cylinder (10.1%) 8-Cylinder (89.9%)

Tech. % of Tier 1 % Tier 2 Inc. cost Tech. % of Tier 1 % Tier 2 Inc. costcost est. vehs. that that will over Tier 1 cost est. vehs. that that will over Tier 1

Emission Control Technology (in dollars) use tech. req. tech. (in dollars) (in dollars) use tech. req. tech. (in dollars)Universal Exhaust Gas Oxygen Sensor (UEGO) 20.00 0 15 3.00 20.00 0 15 3.00Air-assisted fuel injection (a) 12.00 0 50 6.00 16.00 0 50 8.00Individual cylinder fuel control (b) 0.00 0 10 0.00 0.00 0 10 0.00Retarded spark timing at start-up (b) 0.00 25 100 0.00 0.00 25 100 0.00Improved precision fuel control (c) 0.00 50 100 0.00 0.00 50 100 0.00Faster microprocessor 3.00 0 100 3.00 3.00 0 100 3.00Fast light-off exhaust gas oxygen sensor (planar) 8.00 80 100 1.60 8.00 80 100 1.60Heat optimized exhaust pipe (d) 4.00 0 100 4.00 6.00 0 100 6.00Leak-free exhaust system (e) 20.00 50 100 10.00 20.00 50 100 10.00Low thermal capacity manifold 40.00 25 75 20.00 40.00 25 100 30.00Engine modifications (f) 10.00 0 100 10.00 15.00 0 100 15.00Full electronic EGR 10.00 0 50 5.00 10.00 0 50 5.00Close-coupled catalyst 55.00 0 0 0.00 55.00 0 0 0.00Underbody or main catalyst 80.00 100 100 0.00 80.00 60 60 0.00Dual close-coupled catalyst 90.00 12 100 79.20 110.00 55 80 27.50Dual underbody or main catalyst 160.00 0 0 0.00 160.00 40 40 0.00Increased catalyst volume 55.00 0 100 55.00 35.00 0 100 35.00Increased catalyst loading (Pt) 0.43 0 100 0.43 1.01 0 100 1.01Increased catalyst loading (Pd) 5.17 0 100 5.17 5.28 0 100 5.28Increased catalyst loading (Rh) 3.40 0 100 3.40 4.97 0 100 4.97Improved double layer washcoat + 600 cpsi cell density 4.52 0 100 4.52 6.59 0 100 6.59Secondary air injection (g) 50.00 0 50 25.00 65.00 0 50 32.50Total Incremental Cost 235.32 194.45(a) Air assisted fuel injection requires minor redesign of the idle air control valve at no additional cost and addition of an adapter to each injector at a cost of $2 each.(b) Improved precision fuel control envisioned here and retarded spark-timing at start-up constitute software changes only, at no additional hardware cost.(c) Improved precision fuel control constitute software changes only, at no additional hardware cost.(d) Length of heat optimized exhaust pipe required is estimated to be one foot for 4-cylinder engines, four feet for 6-cylinder engines, and six feet for eight-cylinder engines, at a cost of $(e) Leak-free exhaust system includes corrosion free flexible coupling, plus improved welding of catalyst assemblies.(f) Types of engine modifications may be less uniform throughout the industry and may include items such as an additional spark plug per cylinder, addition of a swirl control valve or othachieve cold combustion stability, improved fuel economy(g) Cost of air injection includes an electric air pump with integrated filter and relay, wiring, air-shut-off valve with integral solenoid, check valve, tubing and brackets.

Table V-6. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT3 Compared to T
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-14

Table V-7. Estimated Incremental Manufacturer Hardware Cost for Tier 2 LDT4 Compared to T

8-Cylinder (100%)

Tech. % of Tier 1 % Tier 2 Inc. costcost est. vehs. that that will over Tier 1

Emission Control Technology (in dollars) use tech. req. tech. (in dollars)Universal Exhaust Gas Oxygen Sensor (UEGO) 20.00 0 15 3.00Air-assisted fuel injection (a) 16.00 0 50 8.00Individual cylinder fuel control (b) 0.00 0 10 0.00Retarded spark timing at start-up (b) 0.00 25 100 0.00Improved precision fuel control (c) 0.00 50 100 0.00Faster microprocessor 3.00 0 100 3.00Fast light-off exhaust gas oxygen sensor (planar) 8.00 80 100 1.60Heat optimized exhaust pipe (d) 6.00 0 100 6.00Leak-free exhaust system (e) 20.00 50 100 10.00Low thermal capacity manifold 40.00 25 100 30.00Engine modifications (f) 15.00 0 100 15.00Full electronic EGR 10.00 0 50 5.00Close-coupled catalyst 55.00 0 0 0.00Underbody or main catalyst 80.00 60 60 0.00Dual close-coupled catalyst 110.00 55 80 27.50Dual underbody or main catalyst 160.00 40 40 0.00Increased catalyst volume 35.00 0 100 35.00Increased catalyst loading (Pt) 1.01 0 100 1.01Increased catalyst loading (Pd) 5.28 0 100 5.28Increased catalyst loading (Rh) 4.97 0 100 4.97Improved double layer washcoat + 600 cpsi cell density 6.59 0 100 6.59Secondary air injection (g) 65.00 0 50 32.50Total Incremental Cost 194.45(a) Air assisted fuel injection requires minor redesign of the idle air control valve at no additional cost and addition of an adapter to each injector at a cost of $2 each.(b) Improved precision fuel control envisioned here and retarded spark-timing at start-up constitute software changes only, at no additional hardware cost.

(c) Improved precision fuel control constitute software changes only, at no additional hardware cost.(d) Length of heat optimized exhaust pipe required is estimated to be one foot for 4-cylinder engines, four feet for 6-cylinder engines, and six feet for eight-cylinder engines, at a cost of $1 (e) Leak-free exhaust system includes corrosion free flexible coupling, plus improved welding of catalyst assemblies.(f) Types of engine modifications may be less uniform throughout the industry and may include items such as an additional spark plug per cylinder, addition of a swirl control valve or other achieve cold combustion stability, improved fuel economy(g) Cost of air injection includes an electric air pump with integrated filter and relay, wiring, air-shut-off valve with integral solenoid, check valve, tubing and brackets.
Chapter V: Economic Impact

V-15

c. Hardware Costs for Evaporative Emissions Control

The standards proposed for evaporative emissions are technologically feasible now. 

Many designs have been certified by a wide variety of manufacturers that already meet these

standards. A review of the 1999 model year certification results indicates that the average

family is certified at slightly less than 1.0 grams per test (gpt) on the three day diurnal plus hot

soak test, i.e. at less than half the current 2.0 gpt standard. Many families are certified at levels

considerably below 1.0 gpt, including a few families that are certified below 0.5 gpt. 

The proposed standards will not require the development of new materials or even the

new application of existing materials. Low permeability materials and low loss connections and

seals are already used to varying degrees on current vehicles. The standards will likely ensure

their consistent use and discourage switching to cheaper materials or designs to take advantage

of the large safety margins manufacturers have under current standards (“backsliding”). 

Complex (and perhaps somewhat more expensive) approaches have been proposed which

involve pressurized fuel systems or fuel bladders. Such systems have not been implemented in

production, nor do we believe they are necessary for the standards we are proposing. We believe

manufacturers will follow more traditional paths in reducing their evaporative emissions.

There are two traditional approaches to reducing evaporative emissions. The first is to

minimize the potential for permeation and leakage by reducing the number of hoses, fittings and

connections. However, some joints and connections are necessary for vehicle assembly and

service and no known joint has zero emissions.

The second traditional approach is to use less permeable hoses and lower loss fittings

and connections. Low permeability hoses and seals as well as low loss fittings are currently

available. Fluoropolymer materials can be added as liners to hose and component materials to

yield large reductions in permeability over such conventional materials as monowall nylon. In

addition, fluoropolymer materials can greatly reduce the impact of alcohols on hydrocarbon

permeability of evaporative components, hoses and seals. Alcohols, present in about 10% of

gasoline sold in the U.S., cause swelling of conventional materials which leads to increases in

permeability and can also lead to tearing and leakage in situations where the materials are

constrained in place, such as with gaskets and O-rings. Due to the common presence of alcohols

such as ethanol in the gasoline pool and its adverse affect on materials and emissions durability,

we believe material upgrades such as those discussed above are necessary to ensure that the

benefits are captured in-use.

Steel fuel tanks and steel fuel lines have essentially zero losses due to permeation, but are

vulnerable to leakage at joints and interfaces. Manufacturers are moving toward plastic fuel

tanks for their lighter weight and greater ability to be molded to odd shapes. However, plastic

tanks are permeable and are also susceptible to seepage and higher permeability at areas where

connections and welds are made. Materials and manufacturing techniques exist to reduce these

losses.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-16

To estimate the per vehicle cost of an improved evaporative system, we looked at the

incremental cost for an average current model year vehicle with a steel fuel tank (certified at -

1.0 g) to go from a certification level of 1.0 grams per test to a level of about 0.5 grams per test

on the three day test cycle. The emission levels of 1.0 and 0.5 gpt were chosen because 1.0 

represents the current average certification level and 0.5 gpt represents a certification target that

leaves a compliance margin of about 100 percent between the certification level and the

applicable standard (0.95 gpt for our proposed LDV/LLDT standard). The reductions and costs

of the individual items are shown in Table V-8 below, and reflect the incremental cost of moving

to low permeability materials, improved designs or low loss connectors. The items in the chart

are ranked in order of decreasing cost effectiveness. Since the evaporative test procedure

measures evaporative emissions each day over a three day period and then uses the highest day,

gram per day numbers in the table are a reasonable proxy for grams per test data. 

Table V-8. Potential Evaporative Improvements and Their Costs to Manufacturers 3

(grams per day)

Emission Source Baseline

Vehicle 

(a)

Improved

Vehicle

(b)

Change

(a-b)

Cost 

($)

(d)

Cost 

Effectiveness

Ranking

(d)/(a-b)

Fuel cap seal 0.10 0.01 0.09 0.20 1

Fuel pump assembly seal 0.10 0.01 0.09 0.40 2

Fuel and vapor line 0.23 0.01 0.22 1.25 3

Fuel rail/manifold connectors 0.06 0.02 0.04 0.40 4

Canister improvements 0.12 0.04 0.08 1.00 5

Fill tube clamps 0.06 0.02 0.04 0.60 6

Fuel and vapor line connectors 0.18 0.06 0.12 2.20 7

Fill tube/fill neck connector 0.20 0.10 0.10 5.00 8

Allowance for non-fuel

emissions

0.20 0.20 0 ------ -------

Table V-8 shows that a manufacturer can choose from a range of improvements, and

attain significant reductions in evaporative emissions. By selecting the first five items from the

table, the manufacturer can achieve a reduction in evaporative emissions of about 0.5 g/day for a

total cost of about three dollars per vehicle. The cost-effectiveness of these five items taken

together is approximately $2400 per ton of VOCs removed. While these figures were based on a

passenger car, we believe it is reasonable to assume the same costs here for light duty trucks

since the same basic components are used on trucks and cars. Non fuel emissions may be higher
Chapter V: Economic Impact

V-17

for larger vehicles, but our proposed evaporative standard for HLDTs (1.2 gpt) is higher to

include a larger allowance for non-fuel losses. 

Lastly, we note that most manufacturers are moving to “returnless” injection systems,

and at least one major manufacturer’s current products are 100 percent returnless. Through more

precise fuel pumping and metering, these systems eliminate the return line in the fuel injection

system which carries unneeded fuel from the fuel injectors back to the fuel tank. Returned fuel

is a significant source of fuel tank heat and vapor generation, and therefore of evaporative

emissions. The elimination of return lines reduces the total length of hose on the vehicle and

also reduces the number of fittings and connections which can leak. We believe that most

vehicles will move to returnless injection systems either before or in conjunction with the phasein of the Tier 2 standards. 

Our analysis is conservative in that it did not include the impact of these returnless

systems. We believe that changing to a returnless injection system may provide a 0.15 g/day

evaporative emissions benefit. If the example vehicle described above were equipped with a 

returnless injection system, then, we would expect evaporative emissions of about 0.85 gpt. 

Such a vehicle would require a smaller emission reduction (0.35 gpt) to hit the certification

target of 0.5 gpt. 

Returnless vehicles have about one third less vapor and fuel line footage and

proportionately fewer connections and joints, accounting for most of the reduction attributable to

returnless systems. We would expect an emission improvement and cost about one third less

than those shown in the table above for fuel and vapor lines and fuel and vapor line connectors. 

Because the emission improvement and cost change by the same fraction, we would not expect a

change in the cost effectiveness or ranking of these items. While the 0.15 gpt is also due to small

reductions in losses from all but the last item in the table above, we believe that, in the end, the

cost effectiveness of the proposed standards will not be significantly different for vehicles with 

return or returnless systems. 

d. Assembly Costs

Another variable cost manufacturers may incur are increases in vehicle assembly costs. 

EPA has not estimated increased assembly costs for Tier 2 vehicles because the vast majority of

changes to the vehicles are likely to be improvements to existing emissions control systems. 

Therefore, we believe that assembly cost increases are likely to be negligible. Assembly costs

for components would be incurred by the component supplier and included in the component

price estimates shown above.

e. Development and Capital Costs

In addition to the hardware costs described in the previous section, vehicle manufacturers

would also incur developmental and capital costs due to the Tier 2 standards. These fixed costs
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

u

 This estimate is based on staff cost of $60 per hour and development vehicle cost of $100,000 per vehicle.

V-18

include costs for reasearch and development (R&D), tooling, and certification, which

manufacturers incur prior to the production of the vehicles. 

The Tier 2 standards would be phased-in over four model years beginning in 2004 for

LDVs, LDT1s, and LDT2s and a two year period beginning in 2008 for LDT3s and LDT4s. 

This approach would provide lead-time for R&D for the various vehicle lines to proceed

systematically. EPA estimates R&D costs of about $5 million per vehicle line (100,000

vehicles). R&D primarily includes engineering staff time and development vehicles. A large

part of the research effort will be evaluating and selecting the appropriate mix of emission

control components and optimizing those components into a system capable of meeting the Tier

2 standards. It also includes engine modifications where necessary and air/fuel ratio calibration. 

Manufacturers will take differing approaches in their research programs. We estimate that $5

million would cover about 25 engineering staff person years and about 20 development

vehicles.u

 We have estimated this large R&D effort because calibration and system optimization

is likely to be a critical part of the effort to meet Tier 2 standards. However, we believe that the

R&D costs are likely overstated because the projection ignores the carryover of knowledge from

the first vehicle lines designed to meet the standard to others phased-in later. 

Tooling costs include facilities modifications necessary to produce and assemble

components and vehicles meeting the new standards. EPA has included tooling costs due to the

Tier 2 standards of approximately $2 million per vehicle line (100,000 vehicles). We believe

that this is a reasonable estimate based on engineering judgement, after reviewing previous

estimates of tooling costs for emissions control components.4

 

EPA recently conducted a detailed cost analysis of its vehicle certification program as

part of the CAP 2000 rulemaking, which revised the certification program and is expected to

significantly reduced manufacturer certification costs.5

 For CAP 2000, EPA estimated a total

annual certification cost to the industry of between $40 and $65 million. Manufacturers incur a

large portion of these costs annually as part of certification and compliance and would incur

those costs without any change to the standards. However, EPA does allow manufacturers to

carry-over some data generated for certification when vehicles are not significantly changed

from one model year to the next. This test data is generated to demonstrate vehicle emissions

levels and emissions durability. Due to the new standards, such data would have to be generated

for the new Tier 2 vehicles, rather than carried over from previous model years. Therefore, we

believe it is appropriate to include the cost of generating new emissions test and durability data

as part of the cost analysis for Tier 2. Based on the CAP 2000 rule, EPA estimates the cost of

this testing to be about $15 million industry-wide. 

EPA estimated that the R&D costs would be incurred on average three years prior to

production and the tooling and certification costs would be incurred one year prior to production. 

These fixed costs were then increased by seven percent for each year prior to the start of

production to reflect the time value of money. We estimated total R&D and tooling costs per
Chapter V: Economic Impact

V-19

vehicle class by multiplying the costs per vehicle line (100,000 vehicles) by sales estimates for

each vehicle class divided by 100,000 vehicles. Finally, for the cost analysis, the fixed costs

were recovered over the first five years of production at a rate of seven percent.

EPA estimates the average per vehicle fixed costs to be between $19 and $22, as shown

in Table V-9. We derived the per vehicle fixed cost by dividing the total fixed cost per vehicle

class over the five year recovery period by the estimated total sales per vehicle class over the

same period. Differences in fixed costs among vehicle classes occur because we have projected

a phase-in of Tier 2 LDVs and LDTs and changes in sales volumes over time for the vehicle

classes. The aggregate fixed costs, vehicle phase-ins, and sales projections are described in

section 3., below. 

Table V-9. Per Vehicle Fixed Costs 

LDV

($)

LDT1

($)

LDT2

($)

LDT3

($)

LDT4

($)

R&D 16.10 14.23 14.08 14.34 15.48

Tooling 5.63 4.97 4.92 5.01 5.41

Certification 0.30 0.27 0.26 0.26 0.29

Total 22.03 19.47 19.26 19.61 21.18

 

f. Total Near-term and Long-term Manufacturer Costs

The previous section presented estimates of per vehicle variable and fixed costs to the

manufacturer for the first few model years of production. These near-term per vehicle costs are

shown in Table V-10. The costs in Table V-10 include the costs for the evaporative system.

Table V-10. Total Per Vehicle Manufacturer Costs - Near Term

LDV

($)

LDT1

($)

LDT2

($)

LDT3

($)

LDT4

($)

Variable 46.10 42.38 93.03 201.83 197.70

Fixed 22.03 19.47 19.26 19.61 21.18

Total 68.13 61.85 112.29 221.44 218.88

For the long-term, there are factors that EPA believes are likely to reduce the costs to

manufacturers. As noted above, we project fixed costs to be recovered by manufacturers during

the first five years of production, after which they would expire. For variable costs, research in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-20

the costs of manufacturing has consistently shown that as manufacturers gain experience in

production, they are able to apply innovations to simplify machining and assembly operations,

use lower cost materials, and reduce the number or complexity of component parts. These

effects are often described as the manufacturing learning curve.6

The learning curve is a well documented and accepted phenomenon dating back to the

1930s. The general concept is that unit costs decrease as cumulative production increases. 

Learning curves are often characterized in terms of a progress ratio, where each doubling in

cumulative production leads to a reduction in unit cost to a percentage "p" of its former value

(referred to as a "p cycle"). The organizational learning which brings about a reduction in total

cost is caused by improvements in several areas. Areas involving direct labor and material are

usually the source of the greatest savings. These include, but are not limited to, a reduction in

the number or complexity of component parts, improved component production, improved

assembly speed and processes, reduced error rates, and improved manufacturing process. These

all result in higher overall production, less scrappage of materials and products, and better

overall quality.

Companies and industry sectors learn differently. In a 1984 publication, Dutton and

Thomas reviewed the progress ratios for 108 manufactured items from 22 separate field studies

representing a variety of products and services.7 As shown in Figure V-1, of the 108 progress

ratios observed, eight were less than 70 percent, 39 were in the range of 71 to 80 percent, 54

were in the range of 81 to 90 percent, and seven were above 90 percent. The average progress

ratio for the whole data set falls between 81 and 82 percent. The lowest progress ratio of 55

percent shows the biggest improvement, representing a remarkable 45 percent reduction in costs

with every doubling of production volume. At the other extreme, except for one company that

saw increasing costs as production continued, every study showed cost savings of at least five

percent for every doubling of production volume. This data supports the commonly used p value

of 80 percent, i.e., each doubling of cumulative production reduces the former cost level by 20

percent. As each successive p cycle takes longer to complete, production proficiency generally

reaches a relatively stable plateau, beyond which increased production does not necessarily lead

to markedly decreased costs.
Chapter V: Economic Impact

V-21

55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 

Progress Ratio

05

1015

Frequency

From 22 field studies (n = 108).

Distribution of Progress Ratios

Figure V-1. Distribution of Progress Ratios
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-22

EPA applied a p value of 20 percent beginning in the third year of production in this

analysis. That is, the variable costs were reduced by 20 percent for each doubling of cumulative

production. To avoid overly optimistic projections, we included several additional constraints. 

Using one year as the base unit of production, the first doubling would occur at the start of the

third model year of production. To be conservative, we did not incorporate further cost

reductions due to the learning curve. We applied the learning curve reduction only once because

we anticipate that for the most part the Tier 2 standards would be met through improvements to

existing technologies rather than through the use of new technologies. With existing

technologies, there would be less opportunity for lowering production costs. 

In addition, we did not apply the learning curve to the catalyst precious metal costs due to

the uncertainty of future precious metal prices. Although manufacturers may be able to reduce

the use of precious metals due to the learning curve, the future price of precious metals is highly

uncertain. Any savings due to a reduction in the amount of precious metals used for a catalyst

system could be overcome by increased precious metal unit costs. Finally, we did not apply the

learning curve to the evaporative system costs. Evaporative systems have been well developed

and the anticipated system improvements are available today and are likely to be employed by

manufacturers prior to 2004 on a large number of vehicles. 

Table V-11 presents EPA’s estimates of long-term per vehicle manufacturer costs. As

noted above, we have projected cost reductions due to the learning curve to occur in the third

year of production and the fixed costs to expire for the sixth year of production. Due to the

phase-in of standards, these cost reductions are not tied to particular model years. As shown in

Table V-11, we project manufacturer costs to decrease by 21 to 40 percent for the long-term. 

The percentage decrease in costs varies largely due to the variation in projected costs for

precious metals, which are not subject to the learning curve cost reduction factor. We have

projected a larger increase in the use of precious metals for LDT3s and LDT4s than for LDVs. 

Table V-11. Long-term Total Incremental Per Vehicle Manufacturer Costs 

Production Year LDV

($)

LDT1

($)

LDT2

($)

LDT3

($)

LDT4

($)

1st and 2nd year 68.13 61.85 112.29 221.44 218.88

3rd year: learning curve applied 61.95 56.82 101.17 192.97 190.36

6th year: fixed costs expire 39.92 37.36 81.91 173.36 169.18

2. Tier 2 Vehicle Consumer Costs

Costs to consumers consists of increases in vehicle purchase price and increases in

vehicle operating costs. EPA has not estimated an increase in vehicle operating costs due to the

Tier 2 standards. Manufacturers will most likely meet the standards through improvements to
Chapter V: Economic Impact

v EPA estimated costs to the manufacturer for evaporative system improvements to be $3.25. The RPE for

the evaporative system would therefore be $4.10.

V-23

existing technologies. We do not anticipate that the improvements to technologies will affect

fuel economy or in-use maintenance. The costs of fuel quality improvements are provided in

section B, below.

For the up-front cost or purchase price increase, EPA anticipates that manufacturers

would pass along their incremental costs for Tier 2 vehicles, including a markup for overhead

and profit, to vehicle purchasers. Thus, we expect consumers would experience purchase price

increases based on the manufacturer costs discussed in section A.1. To account for manufacturer

overhead and profit, manufacturer incremental variable costs are multiplied be a Retail Price

Equivalent (RPE) factor. The RPE factor we used in this analysis, 1.26, is the same one EPA has

used in previous analyses for LDVs and LDTs. This methodology and the RPE mark-up factor

are based on contractor studies regarding hardware costs and RPEs.8,9 Table V-12 presents the

increases in vehicle costs to consumers EPA has estimated for Tier 2 vehicles. The costs shown

in Table V-12 include the costs of the evaporative system improvements, as well as the improved

exhaust emissions control system.v

 We expect decreases in manufacturing costs over time,

described in section 1.f., above, to be passed along to consumers in the form of purchase price

decreases. 

Table V-12. Incremental Per Vehicle Costs to Consumers for Tier 2 Vehicles

Production Year LDV

($)

LDT1

($)

LDT2

($)

LDT3

($)

LDT4

($)

1st and 2nd year 80.12 72.88 136.48 273.92 270.28

3rd year: learning curve applied 72.34 66.55 122.47 238.05 234.35

6th year: fixed costs expired 50.31 47.08 103.21 218.44 213.17

3. Annual Total Nationwide Costs for Tier 2 Vehicles

a. Overview of Nationwide Vehicle Costs

The above analyses developed incremental per vehicle manufacturer and consumer cost

estimates for each class of Tier 2 LDVs and LDTs. With data for the current size and

characteristics of the vehicle fleet and projections for the future, we have translated these per

vehicle costs into estimated total annual costs to the nation for the Tier 2 standards. Table V-13

presents the results of this analysis. As shown in Table V-13, EPA projected total cost starting at

$256 million in 2004 and peaking at $1,587 million in 2009 when the phase-in of the standards is

complete. Per-vehicle costs savings over time reduce projected costs to a value of $1,346

million in 2014, after which the growth in vehicle population leads to increasing costs that reach
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-24

$1,386 million in 2020. The calculated total costs represent a combined estimate of fixed costs,

as they are allocated over fleet sales during the first five years of sale, and variable costs

assessed at the point of sale. The aggregate costs include exhaust and improved evaporative

control systems. These estimates do not include costs due to improved fuel quality, which are

presented in section 2., below. The remainder of this section discusses the methodology we used

to derive the total annual cost estimates and provides total annual vehicle costs for calender years

2004 through 2020. 

Table V-13. Estimated Annual Nationwide Costs 

(thousands of dollars)

Category 2004 2009 2014 2020

LDV 246,026 342,543 285,556 294,231

LDT1 0 96,101 70,113 72,243

LDT2 0 592,396 512,604 528,175

LDT3 10,507 373,188 329,438 339,445

LDT4 0 182,341 147,904 152,397

Total 256,533 1,586,569 1,345,614 1,386,491

b. Methodology

To prepare these estimates, we projected sales for each vehicle class, the change in sales

over time, and the phase-in of Tier 2 vehicles for each class over the phase-in schedule. We

estimated current vehicle sales based on sales data submitted by vehicle manufacturers as part of

certification. These sales estimates correlated reasonably well with other available sales

information. We reduced the national sales numbers by 10 percent for LDVs and nine percent

for LDTs to account for sales in California.10 California sales were excluded from this analysis

because California emissions standards apply to those vehicles. 

To account for the current trend in sales of fewer LDVs and more LDTs, we reduced the

LDV fraction of total sales and increased the LDT fraction of total sales by 1.6 percent per year

from 1998 through 2008. After 2008, sales were stabilized at a mix of 40 percent LDVs and 60

percent LDTs. We also applied this shift in sales in its analysis of emissions reductions. These

projections are based on the current trend toward increased sales of LDTs. We are aware of an

industry study that projects the sales split leveling off much sooner at half LDVs and half

LDTs.11 Using a higher percentage of LDT sales results in higher overall cost projections

because the per vehicle costs are higher for LDTs. In this way, EPA’s cost analysis is more

conservative than if we assumed sales leveled off at one-half LDVs and one-half LDTs. Finally,

we have modeled overall vehicle sales to grow at 0.5 percent per annum on average over the
Chapter V: Economic Impact

V-25

period of the analysis.12 Table V-14 provides EPA’s estimates for vehicle sales for 1998 and

projections for select future years.

Table V-14. Estimated Annual 49-State Vehicle Sales

(thousands of vehicles)

Category 1998 2004 2008 2012 2020

LDV 7,352 6,266 5,502 5,620 5,849

LDT1 1,012 1,268 1,447 1,475 1,535

LDT2 3,374 4,228 4,824 4,917 5,117

LDT3 1,025 1,284 1,465 1,493 1,554

LDT4 471 591 674 687 715

Total 13,234 13,636 13,911 14,192 14,769

In addition to vehicle sales, EPA also projected a phase-in of Tier 2 vehicles (including

improved evaporative controls systems) for each vehicle class. Projecting the phase-in of Tier 2

vehicles is necessary to estimate aggregate costs of the standards during the phase-in period. 

Rather than assume a phase-in of 25/50/75/100 percent for each vehicle class, LDV, LDT1, and

LDT2, we projected a phase-in based on cost and difficulty considerations. We projected that

manufacturers would begin the phase-in with LDVs and end with LDT2s. We believe

manufacturers will be able to meet Tier 2 standards more easily and at a lower cost for lighter

vehicles compared to heavier vehicles. 

We have projected some sales of Tier 2 LDT3s and LDT4s prior to 2008, for reasons

described in section V.A.1.a. above. These early sales would off-set vehicles in higher bins in

the averaging program for the interim standards. To make these projections, we assessed the

current certification levels of LDT3s and LDT4s to determine how averaging could be used by

manufacturers to avoid redesigning vehicles to meet interim standards. We found that, currently,

about 25 percent of vehicles overall would fall into the highest bin (0.60 g/mile NOx), 30 percent

in the next highest bin (0.3 g/mile NOx) and the remaining 45 percent would meet the interim

standard (0.2 g/mile NOx). We conducted this analysis for each manufacturer and determined

how many vehicles meeting the Tier 2 standards would be needed to off-set vehicles in the

higher bins. In this analysis, the vehicles in the highest bin were phased-in last. This analysis

may overestimate the number of Tier 2 vehicles necessary because it does not account for the

manufacturers’ ability to make minor adjustments to vehicles close to the interim standard (i.e.,

those in the 0.3 g/mile NOx bin) which may allow those vehicles to meet the interim standard. 

Essentially, these analyses have resulted in projections of Tier 2 vehicle phase-ins which

start with the lighter vehicles within each of the two categories and progress through the heavier

vehicles until all vehicles meet the Tier 2 standards in 2009. Table V-15 presents EPA’s
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-26

projected phase-in of Tier 2 vehicles we modeled for the aggregate cost analysis over the phasein period of 2004 through 2008. Manufacturers would select the appropriate phase-in for their

vehicle fleets. These modeling projections simply allow EPA to perform the aggregate cost

analysis, reasonably accounting for the standards phase-in and the manufacturer’s ability to

average within the various programs. 

Table V-15. Projected Overall Industry Phase-in of Tier 2 Vehicles and Improved

Evaporative Emissions Controls For Purposes of the Aggregate Cost Analysis

Model Year LDV

(%)

LDT1

(%)

LDT2

(%)

LDT3*

(%)

LDT4*

(%)

2004 50 0 0 2 0

2005 100 0070

2006 100 100 30 22 0

2007 100 100 100 55 0

2008 100 100 100 100 35

2009 100 100 100 100 100

*Improved evaporative systems have been projected to phase-in 50 percent in 2008 and 100

percent in 2009 for LDT3s and LDT4s, starting with LDT3s in 2008.

This is the phase-in schedule for Tier 2 vehicles EPA used in this analysis based on the

assumption that manufacturers would perceive a fleet-wide integrated strategy as the most

efficient and least-cost approach. Others are possible, but overall costs during the phase-in years

would not be significantly different.

c. Estimates of Total Nationwide Vehicle Costs by Vehicle Class

EPA used the above sales and phase-in projections along with per vehicle variable and

fixed costs to estimate total annual vehicle costs by vehicle class. We have summed the fixed

costs for the vehicle categories and have amortized them over the first five years of production at

a seven percent discount rate. We multiplied sales by per vehicle variable costs (with the RPE

mark-up applied) to calculate total annual variable costs. As discussed above, variable costs are

reduced after the second year of production due to the learning curve factor. Tables V-16

through V-20 present total annual nationwide costs by vehicle class for years 2004 through 2020. 

Table V-21 presents these cost figures summed for all LDVs and LDTs.
Chapter V: Economic Impact

V-27

Table V-16. Annual Nationwide Costs For Tier 2 LDVs

Calendar Fixed Cost Variable Cost Total Cost

Year ($) ($) ($)

2004 64,020,172 182,006,058 246,026,230

2005 128,040,345 353,094,621 481,134,966

2006 128,040,345 319,146,974 447,187,318

2007 128,040,345 286,574,509 414,614,854

2008 128,040,345 276,809,911 404,850,256

2009 64,020,172 278,523,090 342,543,263

2010 0 279,915,706 279,915,706

2011 0 281,315,284 281,315,284

2012 0 282,721,861 282,721,861

2013 0 284,135,470 284,135,470

2014 0 285,556,147 285,556,147

2015 0 286,983,928 286,983,928

2016 0 288,418,848 288,418,848

2017 0 289,860,942 289,860,942

2018 0 291,310,247 291,310,247

2019 0 292,766,798 292,766,798

2020 0 294,230,632 294,230,632

Table V-17. Annual Nationwide Costs For Tier 2 LDT1s

Calendar Fixed Cost Variable Cost Total Cost

Year ($) ($) ($)

2004 0 0 0

2005 0 0 0

2006 27,715,184 72,431,363 100,146,547

2007 27,715,184 74,828,038 102,543,222

2008 27,715,184 68,098,756 95,813,941

2009 27,715,184 68,386,267 96,101,452

2010 27,715,184 68,728,199 96,443,383

2011 0 69,071,840 69,071,840

2012 0 69,417,199 69,417,199

2013 0 69,764,285 69,764,285

2014 0 70,113,106 70,113,106

2015 0 70,463,672 70,463,672

2016 0 70,815,990 70,815,990

2017 0 71,170,070 71,170,070

2018 0 71,525,920 71,525,920

2019 0 71,883,550 71,883,550

2020 0 72,242,968 72,242,968
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-28

Table V-18. Annual Nationwide Costs For Tier 2 LDT2s

Calendar Fixed Cost Variable Cost Total Cost

Year ($) ($) ($)

2004 0 0 0

2005 0 0 0

2006 27,725,154 159,053,529 186,778,683

2007 92,417,180 547,721,457 640,138,637

2008 92,417,180 545,161,597 637,578,777

2009 92,417,180 499,978,476 592,395,655

2010 92,417,180 502,478,368 594,895,548

2011 64,692,026 504,990,760 569,682,786

2012 0 507,515,714 507,515,714

2013 0 510,053,292 510,053,292

2014 0 512,603,559 512,603,559

2015 0 515,166,576 515,166,576

2016 0 517,742,409 517,742,409

2017 0 520,331,121 520,331,121

2018 0 522,932,777 522,932,777

2019 0 525,547,441 525,547,441

2020 0 528,175,178 528,175,178

Table V-19. Annual Nationwide Costs For Tier 2 LDT3s

Calendar Fixed Cost Variable Cost Total Cost

Year ($) ($) ($)

2004 869,782 9,636,772 10,506,553

2005 2,029,491 23,267,227 25,296,718

2006 6,378,400 74,126,448 80,504,848

2007 15,946,000 191,702,483 207,648,483

2008 28,992,728 359,149,330 388,142,058

2009 28,122,946 345,064,896 373,187,842

2010 26,963,237 322,930,549 349,893,785

2011 22,614,328 324,545,202 347,159,529

2012 13,046,727 326,167,928 339,214,655

2013 0 327,798,767 327,798,767

2014 0 329,437,761 329,437,761

2015 0 331,084,950 331,084,950

2016 0 332,740,375 332,740,375

2017 0 334,404,076 334,404,076

2018 0 336,076,097 336,076,097

2019 0 337,756,477 337,756,477

2020 0 339,445,260 339,445,260
Chapter V: Economic Impact

V-29

Table V-20. Annual Nationwide Costs For Tier 2 LDT4s

Calendar Fixed Cost Variable Cost Total Cost

Year ($) ($) ($)

2004 0 0 0

2005 0 0 0

2006 0 0 0

2007 0 0 0

2008 4,819,090 57,785,178 62,604,267

2009 13,768,828 168,572,016 182,340,843

2010 13,768,828 160,863,474 174,632,302

2011 13,768,828 145,707,212 159,476,040

2012 13,768,828 146,435,748 160,204,576

2013 8,949,738 147,167,927 156,117,665

2014 0 147,903,766 147,903,766

2015 0 148,643,285 148,643,285

2016 0 149,386,502 149,386,502

2017 0 150,133,434 150,133,434

2018 0 150,884,101 150,884,101

2019 0 151,638,522 151,638,522

2020 0 152,396,714 152,396,714

Table V-21. Annual Nationwide Costs For Tier 2 LDVs and LDTs

Calendar Fixed Cost Variable Cost Total Cost

Year ($) ($) ($)

2004 64,889,954 191,642,830 256,532,784

2005 130,069,836 376,361,848 506,431,684

2006 189,859,083 624,758,314 814,617,397

2007 264,118,709 1,100,826,487 1,364,945,196

2008 281,984,526 1,307,004,772 1,588,989,298

2009 226,044,310 1,360,524,745 1,586,569,055

2010 160,864,429 1,334,916,295 1,495,780,724

2011 101,075,181 1,325,630,297 1,426,705,478

2012 26,815,555 1,332,258,449 1,359,074,004

2013 8,949,738 1,338,919,741 1,347,869,479

2014 0 1,345,614,340 1,345,614,340

2015 0 1,352,342,411 1,352,342,411

2016 0 1,359,104,123 1,359,104,123

2017 0 1,365,899,644 1,365,899,644

2018 0 1,372,729,142 1,372,729,142

2019 0 1,379,592,788 1,379,592,788

2020 0 1,386,490,752 1,386,490,752

B. Gasoline Desulfurization Costs
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

w This methodology of modeling an average refinery, or a representation of the PADD-average, is the

only practical method (since modeling every refinery would require proprietary information and substantial

complexity) and the industry-accepted method for estimating fuel costs. This method, however, comes with the

trade-off of only approximating the cost which would be developed if we were able to average and aggregate the

results of modeling each and every refinery.

V-30

In this section, we will first lay out the methodology for our analysis of gasoline

desulfurization costs. Then we will present the estimated cost of desulfurizing gasoline. Finally,

we will discuss other relevant issues concerning the desulfurization of gasoline. 

1. Methodology

The approach to estimating gasoline desulfurization costs is different from how we

estimated costs in the Gasoline Sulfur Staff Paper. The costs presented in that report were

developed using a refinery model run by the Oak Ridge National Laboratory (ORNL). Due to

some improvement work which was being done with that refinery model, we were not able to

develop costs for this analysis using that model. For this reason, we developed our own gasoline

desulfurization model. For the Final Rule, we expect that the ORNL refinery model will be used

to develop gasoline desulfurization costs and we will consider those costs as well as other costs

from any other refinery modeling studies which may be performed by other studies. 

The analysis was performed on a regional basis. The regions used are Petroleum

Administrative Districts for Defense (PADDs). The analysis was conducted this way to take

advantage of the PADD-level refinery information which is available for each PADD. This will

help improve the understanding of how the cost for desulfurization will differ between these

regions. Figure IV-2 above depicts the various PADDs of the country. As shown in the Figure,

PADD 1 comprises the Northeast states, PADD 2 comprises the Midwest states, PADD 3

comprises the Gulf Coast states, PADD 4 comprises the Rocky Mountain states, and PADD 5

comprises the West Coast states. One issue to note is that PADD 5 normally includes California. 

However, since California already requires low sulfur gasoline as part of its California Phase II

Reformulated Gasoline program, it would be inappropriate to include California in any part of

this analysis. Thus, this analysis estimates the cost of desulfurizing gasoline in PADD 5 outside

of California, which will be indicated as PADD 5OC from this point on. 

The cost analysis for each PADD is performed for a single refinery which represents the

average refinery characteristics for that PADD. Each PADD-average refinery is created by

taking all the refining capacity and throughput in that PADD and averaging it over the number of

refineries in that PADD.w The costs for the entire PADD can be calculated by simply

multiplying the individual refinery cost by the number of refineries in that PADD. This analysis

presumes that each refinery must install a desulfurization unit which slightly overestimates the

capital cost, as some refineries already produce gasoline with less than or close to 30 ppm sulfur

and they would meet the proposed sulfur standard without adding any gasoline desulfurization

units.
Chapter V: Economic Impact

V-31

Throughout most of this analysis, we presumed that the average refinery modeled will

make their capital investments to meet a 30 ppm sulfur standard starting January 1, 2004. This

investment scenario was assumed to simplify the analysis, however, it does not capture possible

investment scenarios which could arise in response to refiners taking advantage of the proposed

Averaging, Trading and Banking (ABT) program. Participating in the ABT program, refiners

would choose a timeframe which best fits their company’s financial situation, credit generation

and banking capacity, and credit purchasing options, within the constraints of the per-gallon and

corporate average sulfur standards. The net effect is that capital investments would likely be

incurred over a six year period instead of all at once in 2003, which, if considered throughout

this analysis, would have a small, decreasing effect on the costs estimated in the analysis. At the

end of the analysis, we project the distribution of the capital costs over the years of the ABT

program. 

Each PADD was calibrated so that the volumes and sulfur levels for the various streams

which contributed to the sulfur in the whole pool balanced with the sulfur level in the gasoline

pool. The streams which contribute any significant amount of sulfur in the gasoline pool include

the FCC gasoline, straight run (nonrefined crude oil in the gasoline boiling range), alkylate, and

coker gasoline, if any was blended directly into gasoline (it may have been sent to other units

such as the reformer, the alkylate plant, and the isomerate unit, which all desulfurize their feeds

prior to processing). While alkylate sulfur levels can typically be equal to or less than five ppm,

refineries which make alkylate from coker naphtha can have high levels of sulfur in alkylate

(higher than 50 ppm). When these higher sulfur alkylate streams are averaged with the lower

sulfur streams, the level of the average alkylate sulfur level will probably be high enough that we

felt that it should be accounted for. The actual sulfur balance is described in detail further

below. 

This analysis does not directly estimate gasoline desulfurization costs for a portion of the

industry affected. California refiners currently produce some non-California, low sulfur nonreformulated gasoline which is shipped outside of the state, yet this analysis did not attempt to

estimate the cost to those refiners of desulfurizing that gasoline. Similarly, nondomestic refiners

import some gasoline to the U.S., and these costs are not estimated as well. However, after

estimating the average gasoline desulfurization cost for domestic refiners outside of California,

the aggregate desulfurization cost is calculated by multiplying the domestic cost outside of

California by a factor which accounts for the total number of gallons of gasoline sold in the U.S.

outside of California. Thus, this analysis uses the estimated cost increase of gasoline produced

by non-California U.S. refiners to represent the cost desulfurizing all gallons of gasoline

consumed in the U.S.

The first step in desulfurization was presumed to be complete use of at least some of the

existing desulfurization capacity available in the refinery. There are FCC feed hydrotreaters

already present in many refineries which apparently are not being operated at capacity. The

API/NPRA survey of 1997, which summarizes the operating characteristics and gasoline

qualities of most of the U.S. refining industry, summarized the capacity and utilization of that

capacity for FCC feed hydrotreaters for each PADD. Using that data, it was presumed that these

units could be run at 100 percent of stream day capacity minus five percent which would allow
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-32

for increased use which is expected to occur between now and when the gasoline sulfur program

is proposed to begin. Thus, before calculating the size and costs associated with a FCC gasoline

hydrotreater, the initial sulfur level in each PADD was adjusted to reflect the use of this capacity. 

The operating cost for running FCC feed hydrotreaters at capacity was based on data from

operating costs data for a FCC hydrofiner. In some PADDs there was additional hydrocracker

capacity as well. However, running these units at capacity was found to cost more per unit

sulfur removed than putting in a Mobil Oil Octgain or a CDTECH unit. Thus, these units were

presumed to not be operated at capacity. It should be noted that there are other hydrotreaters in

refineries which perhaps could provide additional hydrotreating, either before additional

hydrotreating capacity is installed, or to meet a low sulfur gasoline target. Feeds to the reformer,

isomerate and alkylate units are almost always hydrotreated, and running these units at capacity

could provide additional desulfurization with some operating cost, and perhaps some additional

capital cost for debottlenecking. However, trying to estimate the cost and incremental

desulfurization available from these units was not possible with the information we had available

to us.

In most cases, cost estimation for desulfurization down to 30 ppm is made based on

CDTECH and Mobil Oil’s desulfurization technologies, which are improved FCC gasoline

desulfurization technologies. For this analysis, we presume that half of the FCC gasoline

hydrotreaters which would be installed are CDTECH units and the other half would be Mobil Oil

Octgain units. Since past gasoline sulfur cost analyses were made based on Mobil Oil’s Octgain

125 process (2nd generation Octgain), the cost of desulfurization of PADD 3 gasoline was also

estimated with this process as well. This will allow us to compare the estimated desulfurization

cost of newer desulfurization technologies with the technology previously relied upon in these

other studies. Coker gasoline (that part of the coker stream in the gasoline boiling range which is

blended directly into gasoline), if there was any, is assumed to be treated along with the FCC

gasoline. Because maximum hydrotreating with the improved FCC gasoline desulfurization

technologies did not reduce the gasoline sulfur levels in PADDs 4 and 5 down to 30 ppm, some

straight run was presumed to be desulfurized as well. The process presumed to be used for that

desulfurization is Merox. We obtained generic capital and operating cost data for adding a

Merox unit. 

The CDTECH costs for achieving the target sulfur level are based on the combined units

of CDHydro and CDHDS. The minimum severity of these CDTECH units that would result in

treating the entire FCC gasoline stream down to 30 ppm was presumed to be used, in lieu of

more severely hydrotreating the heaviest fraction of the FCC gasoline stream. To allow us to

estimate desulfurization at different severities, CDTECH provided us cost and unit operations

data for a range in hydrotreating severities, from 50 percent to almost 98 percent, for their

process. 

Mobil Oil provided OCTGAIN 3 desulfurization cost data at one desulfurization severity. 

To estimate the desulfurization cost to reach 30 ppm, the fraction of FCC and coker gasoline to

be desulfurized at that severity was determined. The Octgain unit was then sized to process that

fraction. The sizing of the Octgain unit is consistent with how refiners are expected to use this

technology, which is treat only the heavy FCC gasoline if this achieves the sulfur target. If not,
Chapter V: Economic Impact

V-33

then the heavy and medium FCC gasoline would be hydrotreated. Finally, only if this did not

achieve the desired sulfur target, the entire FCC gasoline stream would be treated. In all cases,

only one unit is used, but the unit is sized to treat the appropriate portion of the FCC gasoline

pool until the target sulfur level is met. To facilitate this selective desulfurization strategy, a

splitter (distillation column) may be needed between the FCC main fractionation tower and the

OCTGAIN unit (however, if the entire FCC pool is being treated then a splitter may not be

needed). We presume that half the refineries already have a splitter and are using it while the

other half will have to install this splitter. Thus each PADD-average refinery has half the capital

and operating cost of a full sized splitter. In cases of meeting a less stringent gasoline sulfur

target where less than all the heavy FCC naphtha is being treated, the splitter is sized according

to the volume of the FCC heavy naphtha being treated (if 60 percent of the FCC heavy naphtha

must be treated to reach a particular sulfur reduction target, then only 60 percent of the FCC

naphtha is routed to the splitter).

As stated above, cost estimation is based on vendor supplied operating and capital costs

for CDTECH, OCTGAIN, FCC feed hydrotreating, and Merox units; while the ORNL refinery

model is referenced for splitter operating and capital costs. Shell Oil (now Equilon) engineers

analyzed the cost of installing a CDTECH unit into a generic refinery and compared their costs

to those of CDTECH. This comparison is summarized below. 

The cost of sulfur reduction was estimated for sulfur reductions down to PADD-average

levels of 150, 100, 80, 40 and 30 ppm. The national cost of desulfurization is calculated by

volume weighting the individual PADD costs. The costs are estimated for meeting the averaging

standard, which is the cost estimation methodology recommended to us by the oil industry. 

Some additional cost may be incurred for meeting the cap standard, however, estimating these

costs is more uncertain, so only the issues associated with meeting the cap standard are

discussed. Therefore, no explicit costs of a cost over and above an averaging standard are

developed.

a. Cost Inputs 

Vendors for various desulfurization technologies were contacted to obtain detailed

information on the raw material and utility needs and desulfurization capabilities for their

technologies. This information is summarized below in Table V-22: 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-34

Table V-22. Raw Material and Utility Needs and Desulfurization Capabilities for Several

Desulfurization Technologies

FCC Feed

Hydrotreating

CDTECH*

(96%

desul)

Mobil

Octgain 220†

(95% desul)

Mobil

Octgain 125

(98% desul)

Merox

(60%

desul)

Feed (Bbls/Day) - 40,000 25,000 8000 10,000

Capital Cost

($MM) ISBL

- 22.5 25 14.5 3.5

Six Tenths Rule

Exponent

- 0.65 0.65 0.65 0.6

H2 Consumption

(SCF/Bbl)

290 82 125 420 -

Electricity

(KwH/Bbl)

1.5 0.5 1.1 2.3 -

HP Steam

(Lbs/Bbl)

14 - 40 - -

Fuel Gas

(MBtu/Bbl)

56 55 12 51 -

Catalyst Cost

($/Bbl)

0.04 0.19 0.25 0.43 -

Cooling Water

(Gals/Bbl)

220 45

Octane Loss

(R+M)/2 

- 1.2 0.8 1.6 -

Yield Loss 

(vol.% gasoline)

(vol.% LPG)

(vol.% diesel)

(vol.% resid)

(6.5)

(3.4)

2.2

3.1

- 0.7 14

-

Operating Cost

($/Bbl)

0.06

* CDTECH provided data for desulfurization from 50 percent to 98 percent; only the data for 96 percent

gasoline desulfurization is summarized here.

† Data was presented separately for light cat naphtha, medium cat naphtha, and heavy cat naphtha; however,

in this table the data was volume-averaged together into one column for treating all three together. 
Chapter V: Economic Impact

x The throughput in calendar days is simply the total throughput of a unit in a year divided by the

number days in a year. The throughput in stream days is the total throughput of a unit in a year divided by the

number of days which the unit is operating. The stream day daily throughput determines the necessary capacity of

the unit since a unit must be able to handle that throughput on the days which the unit is operating.

V-35

I. Capital Cost

Capital costs are the one-time costs incurred by purchasing and installing new hardware

in refineries. A number of factors are accounted for when estimating capital costs. The cost is

calculated by first starting with the capital costs summarized in Table V-22 above. However,

those capital costs are for the throughputs indicated, and must be adjusted to reflect throughputs

different from that listed. The throughput normally listed for a new facility is the day to day

throughput used to calculate operating cost, which is normally expressed as barrels of feed per

calendar day. This throughput must be adjusted to estimate the capital cost based on stream

days.x

 A calendar day to stream day factor is used to account for the difference between the

throughput in calendar days versus the throughput in stream days. The ORNL refinery model

provides calendar day to stream day inflation factors and the factor for the FCC unit, which is

seven percent, is used here (the calendar day throughput is multiplied by 1.07 to estimate a

stream day throughput). The factor for the FCC unit is used because these improved

technologies are designed to operate with and be shutdown for maintenance on the same

schedule as the FCC unit. 

Also, a 15 percent design safety factor was applied to the capital cost. This means that

facilities are sized 15 percent larger than what planned throughput would otherwise require.13

This design factor, also sometimes called a contingency factor, is normally applied to cost

estimates to account for uncertainties in the design. An additional five percent is added to the

safety design factor, for a total of 20 percent, to account for the newness of these technologies.14

Once the stream day throughput is estimated, and the design factor is applied, if the

recalculated throughput is different from the throughputs listed in the above table, the capital

cost is estimated at this other throughput using an exponential equation termed the “six-tenths

rule.”15 The equation is as follows: (Sb/Sa)e

xCa=Cb, where Sa is the size of unit quoted by the

vendor, Sb is the size of the unit for which the cost is desired, e is the exponent, Ca is the cost of

the unit quoted by the vendor, and Cb is the desired cost for the different sized unit. The

exponential value “e” used in this equation is 0.9 for a splitter, 0.65 for OCTGAIN and

CDTECH units, and 0.6 for a merox unit. 

The capital costs are adjusted further to capture other cost factors which affect the

ultimate cost of installing capital, and these factors vary by PADD. One of these factors adjusts
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

y When vendors normally report a capital cost, that cost includes what are called onsite costs for

complete installation of the hardware, but excludes other costs integral for the functioning of the unit, and these

other costs are called offsite costs. Onsite costs normally include the capital cost for the process unit, storage

facilities, cooling water facilities, and steam facilities. Offsite costs normally include electric power distribution,

any fuel gas facilities, water supply and treatment, plant air, fire protection, flare hookup, drain system, waste

containment, plant communication, roads and walks, railroads, roads and walkways, fences and buildings. Thus

offsite costs are other capital costs which will allow the facility to run as an integral unit within the refinery.

V-36

the onsite costs upward to account for offsite costs.y According to Gary and Handwerk, the

proportion of offsite cost to onsite cost varies depending on the crude oil throughput of the

refinery. These varying factors are summarized in Table V-23.16 

Table V-23. Offsite Factors for Different Sized Refineries 

Refinery Size in Crude Oil Feed (BPSD) Offsite Costs, Percent of Inside Battery

Limit Costs

Less than 30,000 50

30,000 - 100,000 30

More than 100,000 20

Based on these offsite factors, because PADD 3 refineries average about 150,000 barrels per day,

the representative refinery used in this analysis for that PADD was assigned an offsite factor of

1.2 (or a 20 percent increase). PADD 1, PADD 2, and PADD 5OC, refineries all average about

100,000 barrels of crude oil per day, so the representative refinery used in this analysis was

assigned an offsite factor of 1.25. Finally, PADD 4 refineries average less than 30,000 barrels of

crude oil per day, so the representative refinery for that PADD was assigned an offsite cost

factor of 1.5. These factors are summarized in Table V-25 below.

Another factor which varies from PADD-to-PADD is the labor cost for installing the

capital. Gary and Handwerk provide estimates for labor costs for a number of different cities,

and these estimates are summarized in Table V-24, below.17
Chapter V: Economic Impact

V-37

Table V-24. Labor Costs in Selected Cities

Location Relative Cost

U.S. Gulf Coast 1.0

Los Angeles 1.4

Portland, Seattle 1.2

Chicago 1.3

St. Louis 1.4

Detroit 1.3

New York 1.7

Philadelphia 1.5

Alaska, North Slope 3.0

Alaska, Anchorage 2.0

 

Based on this information, each PADD was assigned a cost factor to account for the labor cost

for installing capital. PADD 1 was assigned a value of 1.5 which corresponds with the factor for

Philadelphia, where a number of PADD 1 refineries are located. PADD 2 was assigned a value

of 1.3 which corresponded with Chicago and Detroit. PADD 3 was assigned a value of 1.0,

which is accepted as the reference refinery-related labor cost for the country. PADD 4 was

assigned a value of 1.4, which corresponds to the value of St. Louis, the closest city to PADD 4,

and PADD 5 outside of California was assigned a value of 1.2, which corresponds with Portland

and Seattle. These location factors are summarized below in Table V-25. 

Table V-25. Capital Cost Factors Which Vary by PADD

PADD 1 PADD 2 PADD 3 PADD 4 PADD 5

Outside CA

Offsite

Factor

1.25 1.25 1.2 1.5 1.25

Location

Factor

1.5 1.3 1.0 1.4 1.2

The capital costs which would be incurred by refiners in order to comply with the

proposed sulfur standards must be amortized in order to combine this cost with recurring
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-38

operating costs to produce a total per gallon cost in future years. In past analyses, EPA used a

cost amortization factor of 0.173, which was based on a 10 percent return on investment (ROI), a

34 percent income tax rate, a 13 year economic and project life, and a 13 year depreciation life. 

Regarding the 10 percent ROI, in 1997 we received comments from the automobile

industry that the ROI for capital employed in the refining industry was less than 10 percent. 

They recommended use of an eight percent ROI, which we accepted and used to develop sulfur

control costs in EPA’s Staff Paper on Gasoline Sulfur Issues. The 1993 National Petroleum

Study presented the actual ROI for the refining industry during the 1980's and early 1990's. ROI

averaged close to eight percent during that timeframe. Since 1992, the refining industry has

experienced a much lower ROI, averaging roughly three percent. However, these levels are

clearly depressed and we do not believe that these low levels should be projected into the future. 

Thus, eight percent appears to be a reasonable level of ROI for assessing the impact of these

regulations on the refining industry. However, in assessing the impact of these regulations on

society, OMB Circular A-94 suggests that EPA use a seven percent discount factor in

determining the net present value of both costs and benefits. Thus, a seven percent ROI will be

used in determining the cost of reducing gasoline sulfur content for use in the cost effectiveness

and cost benefit analyses. In assessing the impact of these regulations on the refining industry,

the eight percent ROI will be used. Since the ROI of individual refiners can vary, we will also

evaluate the impact of some variation around the average of eight percent ROI and use a range of

six to 10 percent.

The 1993 National Petroleum Study also used slightly different estimates for the

economic and depreciation life of capital and for the income tax rate than those cited above. In

particular, the 1993 National Petroleum Study used an economic life of 15 years, a depreciation

life of 10 years and an income tax rate of 39 percent.18 Since the NPC study received a

substantial amount of peer review, we decided to use these financial factors from that study,

coupled with the above-mentioned estimates of ROI. The one exception is the elimination of the

income tax from the assessment of societal costs. Since income taxes are simply transfer

payments between various sectors of society, they are not included in societal costs. These

factors and the resulting capital amortization factors are summarized in Table V-26 below. 

Table V-26. Economic Cost Factors Used and the Resulting Capital Amortization Factor

Amortization

Scheme

Depreciation

Life

Economic

and Project

Life

Federal and

State Tax

Rate

Return on

Investment

(ROI)

Resulting

Capital

Amortization

Factor

Societal Cost 10 Years 15 Years 0 % 7% 0.11

Capital

Payback

10 Years 15 Years 39 % 6%

8%

10% 

0.12

0.14

0.16
Chapter V: Economic Impact

V-39

ii. Fixed Operating Costs

Operating costs which are based on the cost of capital are called fixed operating costs. 

These are fixed because the cost is normally incurred even when the unit is temporarily

shutdown. These costs are incurred each and every year after the unit is installed and operating. 

Maintenance must be performed on all operating hardware to keep it in an operable

condition, and when it is running, to keep the unit operating efficiently. Maintenance cost is

estimated to be four percent of capital cost after adjusting to include the outside battery limit

cost, and after adjusting the capital cost for the higher labor cost due to the location. This factor

is based on the maintenance factor used in the ORNL refinery model. 

Other operating costs are accounted for as well in terms of generic cost factors which

were taken from the ORNL refinery model. These factors are three percent of capital costs for

buildings, 0.2 percent for land, one percent for supplies which must be inventoried such as

catalyst, and two percent for insurance. These factors sum to 6.2 percent which is applied to the

total capital cost (which includes offsites, and the adjustment for location) to generate a

perennial fixed operating cost.

Annual labor costs are estimated using the cost equation in the ORNL refinery model.

Labor cost is very small; on the order of one ten thousandth of a cent per gallon.

iii. Variable Operating Cost

Variable operating costs are those costs incurred to run the unit on a day to day basis, and

are based completely on the unit throughput. Thus, when the unit is not operating, variable

operating costs are not being incurred. These costs are summarized in Table # V-27 below.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-40

Table V-27. Summary of Costs Taken From EIA and NPC Data Tables *

PADD 1 PADD 2 PADD 3 PADD 4 PADD 5OC

Electricity

(c/KwH)

5.9 3.9 4.2 3.4 5.4

LPG (c/Gal) 19.7 18.4 16.5 17.8 19.7

Gasoline

(c/Gal)

27.0 25.9 24.9 28.9 30

Diesel

(c/Gal)

25.2 25.7 24.7 29.6 28.6

Residual Oil

(c/Gal)

17.9 15.2 15.4 10.8 16.1

Octane Cost

(cents)

4.3 2.8 3.5 11.4 9.0

Octane

Spread

(R+M)/2

5.7 5.2 5.4 5.2 4.6

Fuel Gas

($/MMbtu)

3.75 3.75 3 4.5 3.75

Hydrogen

Cost

($/MSCF)

2.5 2.5 2.0 3.0 2.5

* c/KwH is cents per kilowatt-hour, c/Gal is cents per gallon, (R+M)/2 is octane number as

determined by Research and Motor octanes divided by two, c/Gal is cents per gallon,

$/MMbtu is dollars per million British Thermal Units (Btu), $/MSCF is dollars per

thousand standard cubic feet.

Electricity is consumed in running pumps, air coolers, and other refinery equipment

electrically powered. Electricity costs were taken from the EIA publication “Monthly Electric

Utility Sales and Revenue Report with State Distributions.” The 1997 industrial electricity costs

for individual states which comprise a PADD are averaged together to form a single individual

PADD-wide cost. 

Fuel gas is consumed in running furnaces for heating up streams including the reboilers

used in distillation. Fuel gas cost is based on an estimation factor which is three dollars per

million British thermal units (BTU) for PADD 3,19 one quarter higher than that for PADDs 1, 2

and 5OC, and half higher for PADD 4. Steam demand is converted to BTU demand on the basis
Chapter V: Economic Impact

V-41

that it is 300 pound per square inch (psi) steam, and that demand is presumed to be met with fuel

gas. Producing steam is presumed to demand 809 BTU per pound of steam required.

Cooling water is used for cooling streams, especially the vapor which comes off the top

of a distillation column and must be condensed for recycling it back into the top of the

distillation column. Cooling water is estimated to cost seven cents per 1000 gallons for PADD

3, seven and a half cents per gallon for PADDs 1, 2, and 5OC, and eight cents per gallon for

PADD 4.20

Octane loss is caused by saturation of unsaturated compounds including olefins and

aromatics which normally present in FCC gasoline. For each PADD, the cost of this loss is

estimated by using the price differentials between premium and regular grades. The price

differentials were based on the cost of gasoline grades sales to resale from the Petroleum

Marketing Annual for 1997. Octane ((R+M)/2) spread, which is the octane difference between

premium and regular grades, is from 1993 refining study by NPC.21 According to DOE, octane

spread has been increasing in recent years, so the cost for making up lost octane may be

overestimated to some degree. 

Yield loss is the loss of gasoline to lower boiling point petroleum compounds. It

sometime occurs as gasoline is processed and tends to occur with hydrotreating. The conversion

of gasoline to lower boiling point compounds incurs a cost because gasoline brings a higher

profit than the other compounds. For this analysis, yield loss is presumed to occur by gasoline

being converted to liquid petroleum gas (LPG).22 Thus, yield loss is the resale price of gasoline

minus the resale price of LPG. The costs of gasoline and LPG are from the Petroleum Supply

Annual for 1997.

Finally, hydrogen costs also vary by PADD. The cost of hydrogen supply was estimated

for PADD 3, and then increased for other PADDs that typically have higher costs. Hydrogen

cost for PADD 3 is based on an average of refiners putting in their own hydrogen plants, which

could cost as much as three dollars per thousand standard cubic foot (MSCF), and purchasing

hydrogen as a commodity from a large hydrogen plant at a little more than one dollar per

MSCF.23 Based on this range of possible cost, PADD 3 would be expected to have access to

hydrogen supplied at a cost of about two dollars per MSCF. PADD 4 is assumed to have to pay

the more conservative cost of three dollars per MSCF, and the other PADDs are assumed to

incur a cost between PADDs 3 and 4, which would be $2.5 per MSCF. This analysis does not

consider numerous other possibilities of providing hydrogen at a reduced cost by using hydrogen

recovery technology (which would recover hydrogen from plant gas), or by increasing hydrogen

production from the reformer by converting high pressure reformers to low or ultra low pressure

reformers. 

b. Determination of Blendstock Sulfur Levels

A sulfur balance is performed for each PADD average refinery to establish the volumes

and sulfur levels of blendstocks which contribute significantly to the pool sulfur level (FCC
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-42

naphtha, alkylate, straight run, and coker). The sulfur levels for these streams were volumeweighted and compared to the pool gasoline sulfur level. If the calculated pool sulfur level did

not agree with the pool sulfur level, then the FCC gasoline sulfur level or volume was adjusted,

under the presumption that the noncalculated value is more likely to be correct. This exact

process is explained in detail below in the discussion on how the calibration was carried out for

each PADD.

The volumes and sulfur levels of the various blendstocks are established based on

information from different sources. FCC gasoline volumes and sulfur levels were taken from the

1996 API/NPRA survey, or the RFG baseline data base. The RFG data base was used when the

API/NPRA data for a PADD was incomplete or internally inconsistent, as described further

below. The RFG data base was not used first because of the difficulty in gathering the data, and

because not all refiners reported their blendstock sulfur levels. Coker gasoline volumes and

sulfur levels were taken from the 1996 API/NPRA survey. Straight run sulfur levels and

volumes are from the 1989 NPRA survey.

Alkylate sulfur levels are set at 10 ppm. This value was arrived at through an analysis of

alkylate sulfur levels from the baselines submitted for the RFG program, and a review of alkylate

sulfur levels in various refining consultant refinery models. From the 1990 RFG baseline

database, alkylate sulfur levels from nine refineries were averaged together. Then, the averaged

value, which was determined to be 22 ppm, was compared to the alkylate sulfur levels used in

several refinery models. The refinery models alkylate sulfur levels averaged about 10 ppm (the

values ranged from 0 to 25 ppm). The difference between the average sulfur level seen in the

RFG data base and the average alkylate sulfur levels from the various refinery models was

reconciled by presuming that if the average alkylate sulfur level is indeed about 20 ppm, then

refiners could decrease alkylate sulfur levels by increasing the severity or better managing

existing desulfurization of the alkylate blendstock. Other blendstocks, such as isomerate,

reformate, raffinate, dimate, poly gasoline, hydrocrackate, aromatics, butane and any oxygenates

which may be blended into gasoline, are all assumed to make a negligible sulfur contribution to

the gasoline sulfur pool.

The gasoline pool sulfur levels (not calculated from blendstocks) were taken from either

the API/NPRA survey or the RFG data base and were compared to the values calculated from

the sulfur-containing blendstocks. For simplicity reasons, the API/NPRA data base was

consulted first, however, for reasons explained below, sometimes the RFG database was

preferred. 

PADD 1 - The 1996 API/NPRA survey only collected data from refiners which comprise half of

the gasoline production in PADD 1 (nine reported gasoline quality, and only five reported FCC

sulfur level); thus, it did not seem viable to use that survey data. Instead, the RFG baseline data

was used exclusively (based on data from 11 refineries). The average gasoline pool sulfur values

for each refinery were obtained from the 1995/1996 data reported by refiners to EPA. When all

the refineries’ average gasoline sulfur values were averaged together, the average ended up being

215 ppm. The FCC gasoline sulfur values for each refiner were used to estimate the average

sulfur level of FCC gasoline for the PADD, which was estimated to be about 460 ppm (although,
Chapter V: Economic Impact

V-43

this value seems low compared to the straight run sulfur level from the 1989 NPRA survey,

which was reported to be 330 ppm). The FCC sulfur level of any refinery was adjusted if the

1995/1996 gasoline sulfur level was significantly different from the level reported in the 1990

baseline submission. Based on the RFG baseline submissions, the FCC volume was calculated

to comprise 46 percent of the gasoline pool. The blendstock calculated pool sulfur level was

higher than the calculated gasoline sulfur level, so the FCC volume was adjusted downward from

46 percent to 42 percent to result in a pool sulfur level of 215 ppm. 

These figures may need to be adjusted to account for the implementation of Phase II RFG

in 2000. Phase II RFG plays an important role for PADD 1 refiners since those refiners produce

more than 60 percent of its gasoline as RFG. The average gasoline sulfur level was calculated

for RFG in 1995 and 1996 found to be about 150 ppm. Since we expect RFG to be about 150

ppm, no changes in sulfur level are expected to occur to produce Phase II RFG. The PADD 1

blendstock sulfur levels and relative volumes are summarized in Table V-28.

Table V-28. PADD 1 Blendstock Sulfur Levels and Gasoline Pool Fraction

FCC Alkylate Straight Run Coker

Sulfur (ppm) 442 10 343 3289

Percentage of

gasoline pool

42 10 4 0.44

Contribution to

pool (ppm)

185 1 14 14

PADD 2 - The API/NPRA survey data for the gasoline pool sulfur level and the FCC sulfur and

volume was used. According to the survey data, PADD 2 FCC gasoline has a sulfur level of 924

ppm and it comprises about 27 percent of the gasoline pool. However, based on that FCC sulfur

level and volume and other blendstock sulfur levels and volumes, the gasoline pool would have a

sulfur level of 260 ppm which is lower than the pool average of 338 ppm based on the

API/NPRA survey. To account for this discrepancy, the FCC contribution to the gasoline pool

was increased to 35 percent. Since PADD 2's RFG production is only 11 percent, Phase 2 RFG

is presumed to have no affect on the average sulfur level of PADD 2. The PADD 2 blendstock

sulfur levels and relative volumes are summarized in Table V-29.

 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-44

Table V-29. PADD 2 Blendstock Sulfur Levels and Gasoline Pool Fraction

FCC Alkylate Straight Run Coker

Sulfur (ppm) 924 10 397 0

Percentage of

gasoline pool

35 13 3.4 0

Contribution to

pool (ppm)

323 1 14 0

PADD 3 - According to the 1996 API/NPRA survey FCC gasoline comprises 35 percent of the

gasoline pool and the sulfur level of that blendstock is 722 ppm. When considering all the

blendstocks together, they result in a pool sulfur level of 271 ppm. However, the 1996

API/NPRA survey has PADD 3 pool sulfur levels at 305 ppm. To make the blendstock agree

with the pool sulfur level, the PADD 3 FCC gasoline volume was increased from 35 percent of

the pool to 40 percent. The PADD 3 blendstock sulfur levels and relative volumes are

summarized in Table V-30.

Table V-30. PADD 3 Blendstock Sulfur Levels and Gasoline Pool Fraction

FCC Alkylate Straight Run Coker

Sulfur (ppm) 722 10 139 3255

Percentage of

gasoline pool

40 14 2.8 0.42

Contribution to

pool (ppm)

288 1 4 14

PADD 4 - According to the 1996 API/NPRA survey, 31 percent of the gasoline pool comes from

FCC gasoline blendstock, and the sulfur level of that blendstock is 1100 ppm. When considering

the sulfur contribution from the other blendstocks, the pool average sulfur level is calculated to

be about 350 ppm. However, according to the 1996 API/NPRA survey the pool sulfur level was

about 260 ppm, and this pool sulfur level is corroborated by 1995/1996 gasoline sulfur data

reported by refiners to EPA. The PADD 4 FCC gasoline sulfur level from refiner baseline

submissions, after adjusting for changes in gasoline sulfur levels from when the baseline were

submitted in 1995/1996 (based on simple ratioing), averaged 760 ppm. This FCC sulfur level

was used and, combined with other blendstocks, resulted in a pool sulfur level of 263 ppm. The

PADD 4 blendstock sulfur levels and relative volumes are summarized in Table V-31.
Chapter V: Economic Impact

V-45

Table V-31. PADD 4 Blendstock Sulfur Levels and Gasoline Pool Fraction

FCC Alkylate Straight Run Coker

Sulfur (ppm) 762 10 122 0

Percentage of

gasoline pool

31 12 21 0

Contribution to

pool (ppm)

236 1 26 0

PADD 5 OC - Based on the 1996 API/NPRA survey data, the FCC gasoline sulfur level was 666

ppm (based on only four refineries), and the volume was 38 percent of the entire gasoline pool. 

However, when all the blendstock sulfur levels and volumes were combined together, the

calculated gasoline pool sulfur level would only average 256 ppm which is much lower than the

pool sulfur levels from the API/NPRA gasoline parameter data, which averaged 480 ppm. Based

on the RFG data base, the pool sulfur level for PADD 5 was 510 ppm, and the FCC gasoline

sulfur level for the 6 refineries was about 1200 ppm. The RFG baseline FCC sulfur level was

much more consistent with the average gasoline sulfur level and thus was used for cost

estimation. To match the blendstock sulfur levels with the RFG data base average pool sulfur

level (510 ppm), the fraction of FCC gasoline to the rest of the gasoline pool was increased from

38 percent to 42 percent. The PADD 5 outside of California blendstock sulfur levels and relative

volumes are summarized in Table V-32.

Table V-32. PADD 5 Outside of California Blendstock 

Sulfur Levels and Gasoline Pool Fraction

FCC Alkylate Straight Run Coker

Sulfur (ppm) 1197 10 41 0

Percentage of

gasoline pool

42 10 5.9 0

Contribution to

pool (ppm)

503 1 2 0

Gasoline Volume - To estimate the aggregate capital and operating cost of desulfurizing gasoline

by PADD, and for volume weighting the separate PADDs to calculate the national average cost,

the gasoline production volumes for each PADD and the production and consumption values for

the Nation as a whole are used. These values are summarized below in Table V-33.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-46

Table V-33. Projected Volume of Gasoline Produced by an Average Refinery in each

PADD, by Each PADD of Refineries and for the U.S.* in 2004 

PADD 1 PADD 2 PADD 3 PADD 4 PADD

5OC

U.S. OC

Gasoline

Produced by

Avg. Refinery

(MBbl/day)

77 66 76 19 27 -

Total Gasoline

Produced

(MMBbl/yr)

404 764 1430 107 166 2872

Gasoline

Consumed

(MMBbl/yr)

3192

* California gasoline not included. 

2. The Cost of Desulfurizing Gasoline

a. The Cost of the Averaging Standard

The refinery blendstocks sulfur levels, the vendor desulfurization technology

information, the various cost inputs, and various desulfurization assumptions were combined

together in a spreadsheet to estimate the cost of desulfurizing gasoline from the base sulfur level,

down to various gasoline sulfur levels. A parametric analysis was undertaken to understand how

the cost varies in each PADD as the sulfur standard is made more stringent. Costs are estimated

for average sulfur standards of 150 ppm, 100 ppm, 80 ppm, 40 ppm and 30 ppm. The costs for

desulfurizing gasoline to each of these levels is summarized below in Table V-34.
Chapter V: Economic Impact

V-47

Table V-34. Per-Gallon Cost of Desulfurizing Gasoline

PADD 1 PADD 2 PADD 3 PADD 4 PADD

5OC

U.S. Avg.

Average Sulfur

Level (ppm)

Societal Cost (7 percent ROI and no Income Taxes)

150 0.8 0.7 0.7 1.2 1.6 0.8

100 1.3 0.9 0.9 1.7 1.9 1.1

80 1.5 1.0 1.0 2.0 2.0 1.2

40 2.1 1.2 1.3 2.8 2.3 1.5

30 2.3 1.4 1.4 3.2 2.8 1.7

ROI Cost to Refiners of a 30 ppm Average Sulfur Standard

6% 2.4 1.5 1.4 3.3 2.8 1.7

8% 2.5 1.5 1.5 3.5 2.9 1.8

10% 2.6 1.6 1.5 3.6 3.1 1.9

As seen in the above table, our analysis shows that the per-gallon cost of desulfurizing

gasoline to 30 ppm varies from PADD to PADD. PADDs 2 and 3 would experience lower costs

than the other PADDs. Because of the smaller size of the refineries which increases the cost of

installing capital, and because of the higher expense of refining, PADD 4 is expected to be the

most expensive, and would be about twice as much to desulfurize gasoline as PADDs 2 and 3. A

national average cost is calculated by volume-weighting the various PADDs. The result is an

average national societal cost of about 1.8 cents per gallon to desulfurize gasoline down to 30

ppm. The societal cost represents capital amortized based on a seven percent rate of return on

investment (ROI), and no income taxes; and this cost was used to calculate cost-effectiveness. 

We also show that the cost would be 1.8 cents per gallon based on a typical capital recovery

scenario for the refining industry, which is based on an eight percent ROI and taxes included. 

As a sensitivity, we also show the cents per-gallon cost for six percent and 10 percent ROI. Both

the societal cost and typical refinery cost are intended to represent the average cost across an

entire PADD. Individual refiners within a PADD are expected to experience costs which are

either higher or lower than these costs. The societal costs are shown in graph form in Figures V2 - V-7 at the end of this Section. 

To help the reader better understand the cost of the program for a typical refinery, the

per-refinery costs for 150 ppm and 30 ppm are summarized in Table V-35, below. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-48

Table V-35. Estimated Average Per-Refinery Capital and Operating Cost of Desulfurizing

Gasoline to 150 ppm and 30 ppm

PADD 1 PADD 2 PADD 3 PADD 4 PADD

5OC

U.S. Avg.

150 ppm

Capital

Cost

($MM)

30 23 21 10 17 22

Operating

Cost

($MM/yr)

8 6 7 3 12 7

30 ppm

Capital

Cost

($MM)

73 40 40 23 25 43

Operating

Cost

($MM/yr)

25 13 15 9 21 15

Table V-34 shows that, on average, refiners would have to pay out $43 million in capital costs

for each refinery to lower gasoline sulfur to 30 ppm. In addition, each refinery would incur

about 15 million dollars per year in operating costs. While the smaller refiners in PADD 4 are

expected to pay out less than other refiners, their costs are higher on a per-gallon basis. To meet

a 150 ppm standard, the capital and operating costs are about half as much as having to meet a

30 ppm standard. Once again, since these figures are averages, larger refineries with high

gasoline sulfur levels will experience higher costs, while smaller refineries with lower sulfur

levels will experience lower costs.

The estimated yearly aggregate cost to the country, and to importers, of meeting 30 and

150 ppm sulfur standards is summarized in Table V-36, below.
Chapter V: Economic Impact

V-49

Table V-36. Aggregate Cost of Desulfurizing Gasoline to 150 ppm and 30 ppm

PADD 1 PADD 2 PADD 3 PADD 4 PADD

5OC

U.S.

Total

U.S.

Total w

Foreign

Cost

150 ppm

Capital

Cost

($MM)

380 640 810 140 260 2230 2450

Operating

Cost

($MM/yr)

90 160 310 40 80 680 750

30 ppm

Capital

Cost

($MM)

930 1100 1850 340 390 4650 5100

Operating

Cost

($MM/yr)

290 340 630 110 150 1520 1670

Year which Capital Dollars are Expended Amount

($MM)

2001 145

2002 727

2003 1018

2004 1358

2005 1455

Table V-35 shows that the aggregate capital cost to the U.S. refining industry for meeting

the proposed 30 ppm sulfur standard is expected to total about 4.7 billion dollars. With the

implementation of an averaging, trading and banking program, these capital investments are

expected to be spread out over several years. The bottom of Table V-35 summarizes our forecast

of the capital dollars expended during each year which the refining industry is expected to make

investments. This level of capital expenditure is less than previous capital expenditures made by
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-50

the refining industry for environmental programs. In 1996, the Energy Information

Administration studied and reported on the capital investment made by the major energy

producing companies in the U.S. during the early nineties.24 During this time, these companies

invested from one to two billion dollars per year in capital for environmental controls for their

refining operations; this cost represented about one third of the total capital expenditures made

by refiners for their refineries. Considering that these expenses were incurred by less than three

quarters of the refining industry, we believe that a program requiring the entire industry to spend

up to one and one half billion dollars of capital costs per year over several years is not

unreasonable. The aggregate operating cost to the U.S. refining industry is expected to be about

1500 million dollars per year. When considering the cost to foreign refiners, the capital and

operating costs of this program would increase to 5.1 billion dollars and 1670 million dollars per

year, respectively. 

b. Verification of the Desulfurization Cost Based on the Improved Technologies

Shell Oil engineers (who now work for Equilon) provided EPA their estimate of the cost

of a 40,000 barrel per day CDTECH unit. The Shell cost estimate showed substantially higher

costs in certain areas compared to the CDTECH estimates (based on a May 1998 CDTECH cost

estimation booklet)25. Later (September and December 1998), CDTECH provided updates on

their costs, and the most updated cost table was integrated into our cost analysis spreadsheet. 

We compared the new CDTECH costs to the Shell Oil costs and the previous CDTECH costs,

and summarized the comparison here. The sulfur reduction case which we costed out is

consistent with the past cost comparison between the early CDTECH costs and the Shell

engineers’ calculated costs, which is 90 percent FCC gasoline desulfurization. We presumed

that the comparison was done for a Gulf Coast refinery, which would be in PADD 3, thus the

cost inputs we developed for PADD 3 above were used here. The cost comparison is

summarized in Table V-37 below.
Chapter V: Economic Impact

z Costs are adjusted to add a recycle compressor which, according to the Shell engineers, would

reduce hydrogen loss by over fifty percent, add to the capital cost by approximately 10 percent (about two million

dollars), and would, according to Shell, add a small cost to downgrades (not specified). 

V-51

Table V-37. Summary of the Cost of Desulfurization by the CDTECH Process Based on 90

percent Desulfurization Severity 

Previous

CDTECH

costs

Shell Adjusted Shell

costsz

EPA (costs

revised by

CDTECH Dec.

‘98)

Capital Onsite

$/BBL

375 600 660 690

H2 Reqd. SCF/BBL 60 200 80 68

Octane Value CPG 0.6 1.0 1.0 0.7

Hydrogen Cost

($/MSCF)

3332

$/BBL FCC

Gasoline

Maint(5%&4%Cap)

($/BBL)

0.10

(5%)

0.16

(5%)

0.16

(5%)

0.09

(4%)

Catalyst ($/BBL) 0.10 0.10 0.10 0.15

Utilities ($/BBL) 0.07 0.10 0.10 0.19

H2 ($/BBL) 0.18 0.60 0.24 0.13

Octane ($/BBL) 0.25 0.42 0.42 0.27

Net Misc

Downgrades

($/BBL)

0 0.10 0.10 0

Total ($/BBL) 0.70 1.48 1.12 0.83

c/gal Gasoline Pool

(FCC fract is 0.34)

0.57 1.20 0.91 0.67

 As depicted in the above table, CDTECH’s revised capital costs are substantially higher

than the initial costs, and, after adjusting the Shell costs to include the cost for a hydrogen

compressor, the revised CDTECH and the Shell capital costs are essentially the same. The
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-52

operating costs are closer now as well. Improved agreement in the operating costs occurs

because CDTECH’s revised costs are somewhat higher in operating cost, and the adjustment in

Shell’s hydrogen consumption to account for the addition of a hydrogen compressor dramatically

reduced the hydrogen cost. There are still cost differences between the Shell costs and the costs

we develop in our analysis. Most of the differences occur because of three cost factors. 

The first cost factor which differs is the cost of hydrogen supply. Shell used three dollars

per MSCF compared to two dollars per MSCF in our analysis. In a conversation with one of the

Shell engineers, he stated that their hydrogen cost which they used was conservative. This

suggests the possibility that their cost estimating procedure may be conservative to provide a

safety factor for their cost analysis. Another cost factor which differs is the cost of maintenance. 

Shell used a five percent cost rate while we used a four percent rate. Similarly, Shell later

informed us that the five percent maintenance cost factor could be conservative and that a four

percent factor is also a reasonable factor to use. For the octane cost factor, Shell used a one cent

per gallon factor while we used a 0.7 cents/gallon cost factor. We believe our estimate is

reasonable because it is based on the actual cost of making octane in PADD 3. In our analysis,

the cost of making octane is higher in other PADDs and considering those other costs would

increase our cost somewhat making our cost closer to the cost used by Shell. Finally, Shell

added a 0.1 dollar per barrel cost for downgrades, which provides for potential yield loss from

the CDTECH unit. Shell said that they add the factor to account for all losses from the unit. We

called CDTECH to ask them whether there are any losses from their desulfurization unit, they

stated that there is none. We are presuming that there is none. If the Shell costs were calculated

using these same cost factors which we used, their operating cost would decrease to 0.78 dollars

per barrel for the FCC gasoline and 0.63 cents per gallon for the entire gasoline pool, which is

essentially identical to our costs.

 In summary, the revised CDTECH costs for their desulfurization unit brings their costs

much closer to the Shell costs. Since the Shell analysis of the CDTECH may have some

conservative cost factors involved, adjusting their analysis for these factors closes the remaining

gap between the two analyses. Shell engineers’ review of the cost of using CDTECH CDHydro

and CDHDS corroborates the revised costs provided CDTECH, which corroborates that portion

of our analysis. 

We have no third party verification of Mobil Oil’s cost factors for their third generation

Octgain process. However, Mobil has monitored its own track record for estimating the

performance of a full scale unit based on pilot plant data. They went through this process two

times since they created two different generations of the Octgain process before this third

generation was created. Based on this experience, Mobil Oil feels confident that their process

will operate in a refinery as claimed.

c. Future Cost of Desulfurization 

Like any refinery processing unit which was newly installed, the per-barrel cost will

normally decrease over time. We discussed how this change in cost would occur with several
Chapter V: Economic Impact

V-53

different refining industry consultants who cited the following reasons. 

Two of the consultants stated that the per-gallon costs could be expected to decrease

further through engineering improvements in the process. Normally, the vendor which licensed

the technology will discover engineering changes to the unit that would reduce its operating cost,

although the refinery engineering and operations staffs can also make such discoveries. 

Engineering changes would be expected to occur in the catalyst technology which would lower

operating cost such as reduced hydrogen utilization, and reduced octane and yield loss. 

Two of the consultants mentioned that a another type of cost reduction can occur

incrementally over time due to debottlenecking of the process throughput. The debottlenecking

of this unit would occur in step with the debottlenecking of other gasoline producing units, such

as the FCC unit, to help increase gasoline production to meet increased gasoline demand. Such

increases in throughput would result in decreased per-barrel fixed operating cost, such as

operating labor and maintenance costs, and insurance and other similar costs. 

One consultant stated that refinery operations personnel will learn to operate the process

more efficiently. These improvements would most likely help to reduce operating cost, such as

improved energy utilization, reduced electricity demand and decreased operating labor and

maintenance costs. However, the other two consultants seemed to think that these sort of

improvements are less likely, as refiners have learned to already squeeze the most efficiency

from their refinery units. 

Processing unit improvements can also reduce the capital cost of the improved

technologies. Capital improvements can primarily be taken advantage of when the unit is first

installed. However, units installed for 2004 will already be sunk investments if improvements to

the design of these technologies are discovered later. Thus, capital improvements would

probably not be taken advantage of until new investments are made in these desulfurization

processes.

For this analysis, we presumed that there would be reductions in costs in the ways stated

by at least two of the refinery consultants. First, there is a presumed reduction in operating cost

due to an improvement in catalyst technology. Similar to the estimate of future motor vehicle

costs, operating costs are presumed to decrease by 20 percent after two years. This improvement

is expected to occur in the catalyst cost, hydrogen cost, and decreased octane and yield losses.

This improvement in operating cost is presumed to only happen once, although the reduction

applies to additional throughput created through debottlenecking. 

A second reduction in cost occurs in fixed operating cost because the unit is

debottlenecked to keep up with increased gasoline demand. Since there are no new refineries

being built, the increase in gasoline demand is presumed to occur by the existing refiners which

currently produce gasoline for the U.S. Gasoline consumption is presumed to increase at the

same rate as VMT is presumed to increase, and this growth rate is 2.05 percent per year. Since

capital is sized larger than necessary by a 15 percent margin, the first eight years of

debottlenecking are presumed to occur with no new capital expenditures. Then, as capital must
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-54

be invested to increase throughput, the newly invested capital is presumed to cost one-third of

the originally invested capital on a per-barrel basis. The ratio of one-third presumes that

debottlenecking would cost about half of the inside battery limit capital cost. These

debottlenecking capital costs are also amortized at a seven percent rate of return over a 15 year

period. The variable operating costs for the increased barrels desulfurized are presumed to be

the same on a per-barrel basis as the original throughput. However, the fixed operating costs of

the original equipment are presumed to stay the same, thus the same fixed costs are spread over a

larger volume of gasoline produced. 

A third type of cost reduction occurs for future capital investments in desulfurization

units. This new investment is assumed to be made after 15 years, which is the assumed

economic life and project life of these units and the point at which they would have to be

replaced. At that point, the capital cost is presumed to be 20 percent lower than the cost in 2004. 

Presuming that refiners would reinvest in capital after 15 years is probably conservative since

most refineries today are still using originally installed equipment which was erected 20, 30 and

sometimes even 50 years ago.

As expected, the implementation of these cost assumptions results in a decreasing centper-gallon cost over time. The estimated future national cost of desulfurizing gasoline are

summarized below in Table V-38.
Chapter V: Economic Impact

V-55

Table V-38. Projected Future Average Per-Gallon 

National Cost of Desulfurizing Gasoline to 30 ppm 

Year Cost 

(cents per gallon)

2004 1.68

2005 1.67

2006 1.54

2007 1.52

2008 1.51

2009 1.49

2010 1.47

2011 1.45

2012 1.44

2013 1.42

2015 1.40

2020 1.38

2025 1.30

2030 1.23

d. Comparison with Previous Cost Estimates

Over the last several years, EPA and other organizations have estimated the cost of sulfur

control. In our recent technical report entitled “EPA Staff Paper on Gasoline Sulfur Issues,” we

provided a cost estimate for reducing sulfur in gasoline. That cost is summarized here in Table

V-39 along with our current costs.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-56

Table V-39. Cost of Desulfurizing Gasoline by Refiners in PADDs 1 & 3 Reported in the

“EPA Staff Paper on Gasoline Sulfur Issues,” and our Current Costs.

Base to 150 ppm Base to 100 ppm Base to 40 ppm

Previous Cost

(c/gal)*

1.1 - 1.8 1.9 - 3.0 5.1 - 8.0

Current Cost

(c/gal)**

0.7 1.1 1.6

* Based on Octgain 125 (second generation) technology, and calculated with the ORNL

refinery model with excessively high reformate sulfur levels, among other problems

which tended to overestimate costs.

** Based on improved gasoline desulfurization technologies assuming a typical refinery

capital cost recovery.

Most of the difference in cost between these two cost estimates can be explained by a couple

factors. The most important factor is the type of desulfurization hardware which we presumed

would be used by the refining industry. For our previous cost study, we worked with the

Department of Energy to develop costs using refinery model run by the Oak Ridge National

Laboratory (ORNL). That refinery model chose Mobil Oil’s Octgain 125, which is the second

generation of the Octgain process. Octgain 125 must be operated under very severe conditions

(higher temperature and pressure) to realize the octane recovery which the process is designed to

deliver. However, the more severe conditions also results in higher capital and operating costs

than that incurred by these improved gasoline desulfurization technologies. To quantify the cost

reduction of the improved technologies relative to what we were modeling with previously, we

put the inputs of the older Octgain process into our spreadsheet and developed a cost curve at the

different sulfur levels modeled. Since we only are trying to get a sense of the cost reduction for

the older Octgain process relative to the improved technologies, we only developed the cost

curve for Octgain 125 for PADD 3. A comparison of the cost of desulfurizing gasoline is

summarized below in Table V-40. 

Table V-40. A Comparison of the Per-Gallon Gasoline Desulfurization Cost of Improved

Desulfurization Technologies to that of the Earlier Mobil Octgain Process for PADD 3

150 ppm 100 ppm 80 ppm 40 ppm 30 ppm

Mobil Octgain

125

1.1 1.7 2.0 2.6 2.9

Improved

Desulfurization

Technologies

0.7 1.0 1.1 1.3 1.5
Chapter V: Economic Impact

V-57

This comparison shows that the difference between our current costs and our previous

costs for 150 and 100 ppm can mostly be explained by the difference in the technologies we used

in our modeling. To reach a low gasoline sulfur standard of 40 or 30 ppm, the improved

desulfurization technologies are nearly 50 percent less costly than the older technology. This

difference explains a part of the cost difference between these two studies, but not all the cost

difference. Probably the next most important factor is a problem which was discovered with the

refinery model which we were modeling with at the time. That model assigned reformate a

sulfur level of 35 ppm, which is normally 1 ppm or less. Achieving low sulfur levels with the

previous Octgain process caused a significant loss in octane and yield. Increasing either the

volume or octane of reformate would have been a likely source of the needed octane. However,

the refinery model did not select either of these options, due to the fact that the reformate sulfur

level was so high and could not be reduced. Thus, the refinery model had to find other more

costly ways to make up the octane losses caused by desulfurization, which likely increased cost. 

The same refinery model was later run with reformate sulfur levels reset to low levels. This run

showed that this problem with the reformate sulfur level may have increased the cost of

desulfurization by as much as 1.5 cents per gallon. Thus, an unreasonably high reformate sulfur

level explains another large portion of the difference between the two studies. 

Another possible reason for this difference in cost between the two studies is that we are

estimating costs using a simpler refinery model which focuses primarily on the sulfur content of

gasoline, instead of a more sophisticated refinery model, which attempts to optimize production

volumes and quality all at the same time. The advantage of the simpler model is that the source

of all costs is clear and can be easily evaluated. The disadvantage is that some aspects of

refinery operation, such as making up lost octane or gasoline yield, is handled in a fairly simple

fashion (e.g., by adding the current market cost of increasing octane or of producing gasoline). 

The disadvantage of the more complex linear programming refinery models is that it is very

difficult for anyone except the operator of the model to understand why the model is making

certain decisions or the cause of many of the projected costs. The example of the over-estimated

reformate sulfur level is a case in point, as this problem and its impact on costs was not at all

obvious. On the other hand, the more complex models attempt to more realistically simulate the

actions which would be required for refiners to make up lost octane or gasoline volume. This

presumes that the model reflects all of the flexibilities and constraints facing refiners in

accomplishing these goals. Again, this is difficult to determine given the complexity of both

refining and these refinery models. 

For example, some uncertainty exists concerning the cost of supplying hydrogen. Since

refinery cost data is not available for estimating hydrogen cost, we are using cost factors which

we believe are reasonable, but may slightly over or underestimate costs. A more complex

refinery model would include one or more hydrogen producing processes. However, the

fundamental operating and capital costs of these processes are usually not published and cannot

therefore be evaluated. 

Differences in capital recovery used to develop the two different sets of costs shown in

Table V-39. provide a negligible impact on the cost difference.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-58

An important point deserves to be made concerning the improvement which Mobil Oil

has made with its Octgain technology over the last several years. As seen in Table V-39, the

desulfurization cost to achieve a low sulfur gasoline with their later technology is about half as

much as with their earlier technology. This improvement over a several year period of

timeframe corroborates our assumptions above that desulfurization cost will decrease in future

years.

3. Other Effects of This Program

a. Effect of the Cap Standard

In addition to the 30 ppm averaging standard, we are proposing a 80 ppm per-gallon

standard. The per-gallon standard or cap on sulfur level provides an additional challenge to

refiners by preventing them from producing moderate and high sulfur batches of gasoline. While

the averaging standard would force refiners producing higher sulfur gasoline to produce lower

sulfur gasoline on average, which would be comprised mostly of batches of low sulfur gasoline

along with occasional batches at a moderate sulfur level, a sulfur cap would preclude refiners

from producing a single batch of gasoline with moderate sulfur levels that would exceed the cap. 

High sulfur batches of gasoline would likely be produced when the refinery is

experiencing problems with the added desulfurization unit, or problems with other units within

the refinery responsible for, or associated with, desulfurizing gasoline blendstocks. However,

changes in other refinery operations or other factors can also result in varying amounts of sulfur

in gasoline. These include changes in feedstock qualities, changes in products produced,

changes in throughput, process fluctuations, and changes in hardware processing efficiency

caused by breakdown in equipment or catalyst inactivation. 

During conversations some time ago with the economics committee of API, we discussed

how we could estimate the cost of a cap standard. The committee’s response was that the cost of

the cap standard could be estimated by estimating the average sulfur level which would result

from the cap standard. Later on, API sent us a letter which stated that the relationship between a

cap standard and the resulting average sulfur level could be estimated from the variation in

current gasoline sulfur levels presuming that the cap would represent the 90th percentile of that

variation. The cost of meeting the cap standard could be estimated by estimating the cost of

reducing gasoline sulfur to meet the average sulfur level determined by this relationship. Based

on this advice, we analyzed this relationship using gasoline batch sulfur levels provided to EPA

for the Reformulated Gasoline Program. We also compared the proposed API methodology for

estimating the relationship between the cap and averaging standards to current capped sulfur

levels. We put the results of that study in the EPA Staff Paper on Gasoline Sulfur Issues. 

The analysis showed that if a 80 ppm cap standard were established, the resulting

averaging standard would be in the range of 30 ppm to nearly 50 ppm. Because the averaging

standard is at the lower end of this range, this suggests that the cap standard would not control

the average gasoline sulfur level. Instead, the 30 ppm average standard would be the primary
Chapter V: Economic Impact

V-59

controlling standard, and if the cap standard did not exist, then while meeting the 30 ppm

averaging standard, refiners would occasionally produce gasoline which exceeded the 80 ppm

sulfur level (our analysis shows probably about five percent of the time). The addition of the 80

ppm cap would require refiners to modify their refinery operations further to not produce batches

of gasoline with sulfur levels that would exceed the cap standard. 

Since refiners are likely producing these high sulfur batches because they are not trying

to control gasoline sulfur now, stopping the production of these batches may not be a difficult

task. However, in our analysis of the relationship of the cap and averaging standards, the

refiners which have lower sulfur levels now are probably at that level because they are using

sweet crude oils, or don’t have a FCC unit which elevates the sulfur level in gasoline. Sour

crude refiners, in the day-to-day variances in their refining operations, may have a more difficult

time preventing the occurrences of high sulfur gasoline batches. Their gasoline sulfur levels is

expected to be very high if their desulfurization units were to fall into disrepair, or would vary

more widely when any of the situations summarized above which cause variance in gasoline

sulfur levels were to occur. To manage this situation in those refineries, the refinery managers

would likely have to do a better job managing the entire refinery, not just the gasoline

desulfurization unit, to deliver low sulfur gasoline. This improved operations management

would likely involve changes in the computer systems which control the refinery operations. 

There would likely have to be better management of the maintenance performed refining

processing units. Refiners would likely focus in improving the operations and maintenance of

critical units which divert sulfur into gasoline, or remove sulfur. However, after this is done, the

refinery would likely recoup at least some, or perhaps even all of the cost disbursed to make

these improvements in refinery operations from other improvements in refining operations. 

Another change which refiners could make in their refining operations is to invest in a

gasoline sulfur analyzer. Such analyzers would enable them to meet the per-gallon cap at the

lowest possible cost. Refiners normally have to send a gasoline sample out to a lab to determine

the actual sulfur level. However, the lag time between when the sample was taken and when

they receive the results provides refiners with some uncertainty on whether the gasoline it is

producing is indeed meeting the cap standard. This uncertainty could cause refiners to produce

gasoline with lower sulfur levels than necessary to ensure that the cap standard would be met. 

For this reason, refiners may choose to purchase a gasoline sulfur on-line analyzer. This

analyzer would keep the refinery manager up to speed on the exact sulfur level in their gasoline. 

This information would empower refiners with confidence that they will consistently meet the

cap standard. According to an analyzer manufacturer which makes such a device, the cost for a

gasoline sulfur analyzer would be about 50,000 dollars, and to install it would cost another 5000

dollars. Compared to the capital and operating cost of desulfurizing gasoline, the cost for this

addition would be trivial. 

If the gasoline desulfurization unit were to break down, or if a number of other problems

were to plague the refinery, the refinery would probably be producing gasoline which would

exceed the cap standard. Thus the refinery manager would have to take action preventing the

sale of off-specification gasoline. The most obvious near term solution would be to blend the

gasoline blendstocks together which it can to produce on spec gasoline. If the FCC gasoline
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-60

hydrotreater went down, the rest of the gasoline blendstocks could probably be blended together

to produce on-spec gasoline. However, a portion of the normal gasoline stream, which would be

the FCC gasoline, would have to be dealt with until the hydrotreating unit could be brought back

on line. There are several potential solutions to this problem. One would be to store the FCC

gasoline blendstock until the unit was back on line. Then the stored blendstock could be either

run through the desulfurization unit, or blended back with gasoline at a rate which would ensure

that the gasoline would still meet the cap standard. If the refinery does not already have a spare

tank in which it could store the high sulfur gasoline blendstock, then the refiner would have to

build one. Another possibility would be to sell off the blendstock to another refiner, who had the

excess desulfurization capacity to process it or blend it in with their gasoline. Since refiners

design the desulfurization units using a safety design factor, this excess capacity can be used to

process this excess feedstock.

b. Other Effects on the Refining Industry 

If a gasoline sulfur program is finalized, oil companies are expected to take a number of

steps to maximize their profitability in the period after the program is implemented. First, and

foremost refiners will try to minimize their costs by investing in the most cost-effective refinery

changes. Despite frugal choices, almost every refiner will face capital and increased operating

costs, and the refiner will try to pay off those costs. The most obvious step to recover those costs

would be to increase the price of gasoline. However, in a competitive market, the effect of an

increase in refiners’ cost on the price of gasoline depends on both the market supply and

demand. If market demand is “inelastic” (not sensitive to changes in price), then one would

expect the price of gasoline to rise by the full amount of the cost increase, and refiners would

recover all their operating cost and incrementally recover their capital costs. Since gasoline

demand is not perfectly inelastic, some reduction in demand would be expected due to the price

increase in gasoline. This would lead to a corresponding small decrease in the price of gasoline,

which would erode refiners’ ability to recover their costs. In addition, changes in supply due to

imports from abroad would change the supply curve which would also affect refiners’ cost

recovery; increased imports reduce domestic refinery cost recovery, while decreased imports

increase cost recovery. 

Overall, the U.S. refining industry is currently producing gasoline and other refined

products at full capacity.26 This situation, coupled with ever increasing demand for gasoline,

would generally produce reasonable refining margins. However, increasing imports of gasoline

over the past few years appears to be keeping prices lower, as refining margins have been

relatively low on average over the past three to four years. 

Both Canada and Europe are major exporters of gasoline and other refined products into

the U.S. market. Stringent sulfur requirements in Europe, and similar proposed requirements in

Canada, will phase-in about the same time as the proposed U.S. standards would phase in. These

required improvements in fuel quality will increase costs in these areas, as well as in the U.S.

This will support an increase in the price of gasoline in the U.S. sufficient to cover capital, as

well as operating costs. 
Chapter V: Economic Impact

V-61

A significant amount of gasoline is also imported into the U.S. from the Middle East and

South America. We do not expect gasoline sulfur standards to take effect in these gasoline

exporting countries in the near future. Thus, refiners in these countries could reblend their

gasoline to be able to export very low sulfur gasoline to the U.S., while selling higher sulfur

gasoline elsewhere. Under this scenario, their costs could be significantly less than those of

domestic refiners who essentially have to desulfurize their entire product. However, the

potential volume of low sulfur gasoline would be limited. Also, these refiners also export to

eastern Canada, which will likely have its own low sulfur specification. Thus, the ability of

these importers to flood the market with inexpensive, low sulfur gasoline appears to be limited. 

While margins may improve which would help domestic refiners recover the cost of

meeting the proposed gasoline sulfur requirements, there are still differences between refiners

which would cause the per-gallon cost for some to be higher than others. This may be due to:

having to pay a premium for capital costs due to their location, starting from a higher sulfur

baseline, or facing diseconomies of scale due to small size. In order to remain profitable, high

cost refiners would be expected to take further steps to reduce their costs. 

Refiners could adopt a whole array of changes which may help them meet the sulfur

standard, at a reduced overall cost. These changes include changing crude oil supply, optimizing

other feedstock use, cost cutting of existing operations, opting to use processing outside the

refinery, improvements in transportation and marketing of product, and changing the consumer

market.27 Refiners could choose to merge their refining operations with other refiners. Merging

of refinery downstream operations (the refining and marketing portions of the oil industry) is

already occurring across the industry as a means to reduce administrative costs and optimizing

the production and distribution of common products.28 This practice has already been occurring

because the return on investment for the refining portion of the industry has been low for some

time. 

It is possible that the projected per-gallon cost for a specific refinery to desulfurize

gasoline may be high enough relative to their ability to pay that a refiner might conclude that it is

in their best financial interest to sell the refinery. Over the last several decades, there have been

numerous refinery sales as refiners have determined that they are no longer capable of making an

acceptable level of profit, and, thus, have put the refinery up for sale.29 Many of the refineries

sold have been purchased by independents (refiners who are not vertically integrated). Because

of their flexibility and the relative availability of crude oil and other feedstocks, such as residual

oil, these independents have been able to profitably operate these refineries. If a buyer is not

found, refiners might be compelled to close the refinery, if no provisions were available to

prevent such closures. 

However, this proposed rule contains multiple provisions which are intended to prevent

refinery closures due to financial hardship. The small refiner provisions extend the time which

small refiners would have to meet the sulfur standards. Additional time would allow them to

improve their financial standing, obtain a loan or another financial source for their capital

expenditures, and employ desulfurization technology developed later on or take advantages of

improvements made with existing desulfurization technology. Similarly, refiners which do not
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-62

fall under the small refinery definition can enjoy some of these same temporal benefits through

the Averaging, Banking and Trading program (ABT). The ABT program allows a refiner to

phase-in the proposed program across its refineries to its best financial advantage, or gain even

more leeway through trades for sulfur credits. 

Based on this qualitative review of cost recovery by the refining industry and the benefits

of the proposed small refiner and ABT provisions, we do not expect refineries to close as a result

of the implementation of the proposed sulfur standards. 

c. Refinery Energy and Global Warming Impacts 

We estimated the increase in energy consumption in refineries expected to occur from

desulfurizing gasoline to 30 ppm by analyzing the specific impact on PADD 3 refineries. Also,

consistent with our cost estimation methodology, we performed the analysis presuming that only

improved gasoline desulfurization technologies would be used. For this analysis, we first

established a baseline energy consumption value for PADD 3 refineries using 1994 Energy

Information Administration data, which is the most recent energy consumption data available. 

We increased the 1994 energy consumption by 2.05 percent per year until 1997, which is the

base year of the analysis. (The value of 2.05 percent per year is the projected growth rate for

gasoline consumption). This energy consumption calculation is summarized below in Table V41.
Chapter V: Economic Impact

V-63

Table V-41. Energy Consumed by PADD 3 Refineries in 1994, Projected to 1997

Energy Type Energy Consumed BTU Value MMMBTUs

Consumed

Crude Oil 0 MBbls - 0

LPG 660 MBbls 3.64 MMBtu/Bbl 2399

Distillate 54 MBbls 5.83 MMBtu/Bbl 315

Residual Oil 998 MBbls 6.29 MMBtu/Bbl 6274

Still Gas 112,538 MBbls 6.00 MMBtu/Bbl

FOE

675,200

Petroleum Coke 38,152 MBbls 6.02 MMBtu/Bbl

FOE

229,800

Natural Gas 487,115 MM Cuft 1.03 MBtu/CuFt 501,200

Coal 0 MStTons - 0

Purchased Electricity 20,602 MMKwH 3.41 MBtu/KwH 70.3

Purchased Steam 11,970 MMLbs 0.809 MBtu/Lb 9680

Hydrogen 68,962 MMScf 0.305 MBtu/Scf 21,000

Other Products 252 MBbls 6.00 MBtu/Bbl FOE 1510

Total in 1994 1,438,000

Total in 1997

(Estimated)

1,528,500

Table V-40 shows that the energy consumed by PADD 3 in 1997 is estimated to be 1,500 trillion

BTUs. 

The increase in energy consumed by desulfurization of the FCC gasoline is calculated by

adding up the fuel gas, steam and electricity (in terms of British thermal units (BTUs)) consumed

during the desulfurization. First there is the energy consumed running both CDTECH and

Octgain processing units. Consistent with how the cost of desulfurization was estimated, each

desulfurization technology was presumed to handle half the PADDs desulfurization needs. Then

the octane and hydrogen demand had to be met. For both CDTECH and Octgain, extra reformer

capacity in PADD 3 was presumed to produce the octane and hydrogen needed for

desulfurization. The amount of additional reformer processing capacity needed was based on

hydrogen demand, which produced more octane makeup than needed. This estimation

methodology likely overestimates the energy consumed since most refiners would probably run
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-64

the reformers to make up the octane needed. They would then obtain the additional hydrogen

needed from excess hydrogen going to plant gas, and make up the refinery plant gas energy loss

due to the recovered hydrogen from cheap, unrefined petroleum streams, or by combusting

natural gas. However, we had insufficient data for estimating hydrogen recovery from plant gas. 

Alternatively, reformers could obtain hydrogen from hydrogen plants which consume less

energy per quantity of hydrogen produced than the reformer. Finally, half of the Octgain

desulfurization processes installed are presumed to need splitters, or distillation columns, to

fractionate the FCC gasoline. This additional energy demand is accounted for as well. This

presumption may overestimate costs as well for two reasons. First, to get down to 30 ppm, many

refiners would likely feed the entire feed to the Octgain unit, and not use a splitter. Second, the

splitter data upon which we based our energy demand probably boils off the entire feed, which

would not be necessary in this case since only the light ends may have to be boiled off for

sending the heavier compounds to the Octgain desulfurization unit. A summary of the estimated

CDTECH and Octgain energy and hydrogen demands in PADD 3 is summarized in Tables V-42

and V-43, respectively.

Table V-42. Estimated Yearly Energy and Hydrogen Demand of CDTECH

 Desulfurization Units in PADD 3

CDTECH Utility

Demands

Process

Demand

Yearly

Throughput

BTU Conversion

Factor

Energy and

Hydrogen

Consumed

Electricity 0.5 KwH/Bbl 240 MMBbls 3.41 MBtu/KwH 415 MMMBtu

Fuel Gas 55 MBtu/Bbl 240 MMBbls - 13,400

MMMBtu

Hydrogen 69 Scf/Bbl 240 MMBbls - 16,800 MMScf

Reformer

Electricity 2.6 KwH/Bbl 18 MMBbls 3.41 MBtu/KwH 160 MMMBtu

Fuel Gas 0.048 FOE/Bbl 18 MMBbls 6 MMBtu/Bbl 5240 MMMBtu

Steam 75 Lb/Bbl 18 MMBbls 0.809 MBtu/Lb 1100 MMMBtu

Total 20,300

MMMBtu
Chapter V: Economic Impact

aaThis estimate is based on the presumption that PADD 3 consumes 50 percent of the energy in the U.S.

outside of California. 

V-65

Table V-43. Estimated Yearly Energy and Hydrogen Demand of OCTGAIN

 Desulfurization Units in PADD 3

OCTGAIN

Utility Demands

Process

Demand

Yearly

Throughput

BTU Conversion

Factor

Energy and

Hydrogen

Consumed

Electricity 3.6 KwH/Bbl 190 MMBbls 3.41 MBtu/KwH 2950 MMBtu

Fuel Gas 17 MBtu/Bbl 190 MMBbls - 4080 MMMBtu

Steam 50 Lb/Bbl 190 MMBbls 0.809 MBtu/Lb 9710 MMMBtu

Hydrogen 125 Scf/Bbl 190 MMBbls - 23,700 MMScf

Splitter -

Electricity 2.5 KwH/Bbl 190 MMBbls 3.41 MBtu/KwH 810 MMMBtu

Fuel Gas 0.015 FOE/Bbl 190 MMBbls 6 MM Btu/Bbl 8540 MMMBtu

Steam 10 Lb/Bbl 190 MMBbls 0.809 MBtu/Lb 770 MMMBtu

Reformer

Electricity 2.6 KwH/Bbl 26 MMBbls 3.41 MBtu/KwH 230 MMMBtu

Fuel Gas 0.048 FOE/Bbl 26 MMBbls 6 MM Btu/Bbl 7400 MMMBtu

Steam 75 Lb/Bbl 26 MMBbls 0.809 MBtu/Lb 810 MMMBtu

Total 32,500

MMMBtu

As these tables show, the average increase in energy demand for the improved gasoline

desulfurization technologies, including other changes needed in the refinery to desulfurize

gasoline, is estimated to be about 53 trillion BTU’s in 1997. This increase in energy use is about

3.4 percent higher than the baseline PADD 3 energy consumption. For the U.S. outside of

California, the refining industry is estimated to consume 3000 trillion BTUs per year.aa Thus the

increase in energy demand for the U.S. refining industry, based on PADD 3 and using the 3.4

percent factor calculated above, is estimated to be about 102 trillion BTUs per year. If the

additional energy consumed by refiners producing low sulfur gasoline for importing gasoline

into the U.S. is considered, the total increase in energy consumed increases to about 122 trillion
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-66

BTU’s per year.

We next estimated the amount of global warming gas emissions that would be emitted to

meet the proposed 30 ppm gasoline sulfur standard. The basis for the estimate is an estimate of

carbon dioxide emissions emitted from the combustion of fuels, which is the source of most all

refinery energy and, thus, is presumed to be the source of most all refinery emissions of carbon

dioxide. The carbon dioxide emission factor is 65,000 grams of CO2 per million Btu of fuel

consumed, which is based on the combustion of half natural gas and half liquid petroleum gas

(LPG is presumed to emit the same quantity of carbon dioxide per volume fuel consumed as

refinery plant gas).30 For simplicity, this analysis assumes that all BTUs consumed in a refinery

are produced by these fuel sources. On this basis, in 2004, CO2 emissions from PADD 3

refineries would increase by 3.4 million tons under the proposed 30 ppm sulfur standard. Across

the entire domestic refining industry, carbon dioxide emissions in 2004 would increase by 6.9

million tons. Considering overseas refiners who export gasoline to the U.S., CO2 emissions

would increase by 7.5 million tons in 2004, or 2.1 million tons (1.9 million metric tons) of

carbon emissions. 

This increase is a one-time step increase which represents 0.03 percent of the projected

worldwide CO2 emissions inventory in 2004 which is 29.4 billion tons of CO2 per year. This

increase also represents 1.2 percent of the total projected increase in worldwide CO2 emissions

in 2004 over 2003, which would be 652 million tons. After the step increase, the CO2 emissions

increase due to gasoline desulfurization for this program is expected to increase only at or

slightly lower than the rate of increase in gasoline demand, which is about two percent. This

further increase in CO2 emissions associated with gasoline desulfurization in 2005 and beyond

would represent only 0.02 percent of the projected annual growth in worldwide CO2 emissions.
Chapter V: Economic Impact

V-67

0 40 80 120 160 200 240 280 320 360 400 440 480 520

Sulfur Concentration (ppm)

0

1

2

3

4

5

Cost (cents/gallon)

Figure V-2. Cost of Reducing Gasoline Sulfur in PADD 1

(Costs are Based on Improved Gasoline Desulfurization Technologies)

0 40 80 120 160 200 240 280 320 360 400 440 480 520

Sulfur Concentration (ppm)

0

1

2

3

4

5

Cost (cents/gallon)

Figure V-3. Cost of Reducing Gasoline Sulfur in PADD 2

(Costs are Based on Improved Gasoline Desulfurization Technologies)
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-68

0 40 80 120 160 200 240 280 320 360 400 440 480 520

Sulfur Concentration (ppm)

0

1

2

3

4

5

Cost (cents/gallon)

Improved Tech

OCTGAIN 125

Figure V-4. Cost of Reducing Gasoline Sulfur in PADD 3

(Costs are Based on Improved Gasoline Desulfurization Technologies and Octgain 125)

0 40 80 120 160 200 240 280 320 360 400 440 480 520

Sulfur Concentration (ppm)

0

1

2

3

4

5

Cost (cents/gallon)

Figure V-5. Cost of Reducing Gasoline Sulfur in PADD 4

(Costs are Based on Improved Gasoline Desulfurization Technologies)
Chapter V: Economic Impact

V-69

0 40 80 120 160 200 240 280 320 360 400 440 480 520

Sulfur Concentration (ppm)

0

1

2

3

4

5

Cost (cents/gallon)

Figure V-6. Cost of Reducing Gasoline Sulfur in PADD 5 Outside of California

(Costs are Based on Improved Gasoline Desulfurization Technologies)

0 40 80 120 160 200 240 280 320 360 400 440 480 520

Sulfur Concentration (ppm)

0

1

2

3

4

5

Cost (cents/gallon)

Figure V-7. National Cost of Reducing Gasoline Sulfur Outside of California

(Costs are Based on Improved Gasoline Desulfurization Technologies)
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

bb Calculated from the annual miles traveled per vehicle for each year of a vehicle's life, multiplied by a

distribution of vehicle survival rates by year. Annual miles travelled from "MOBILE6 Fleet Characterization Input

Data," Tracie R. Jackson, Report Number M6.FLT.007. Estimate of 11,500 miles per year includes both LDV and

LDT.

V-70

4. Per Vehicle Life-Cycle Fuel Costs

The additional cost of low sulfur gasoline is encountered by the average vehicle owner

each time the fuel tank is refilled. The impacts of the gasoline sulfur standard on the average

vehicle owner can therefore be calculated as the increased fuel production costs in cents per

gallon, multiplied by the total number of gallons used by a vehicle over a particular timeframe. 

Thus we have calculated the in-use impact of our proposed gasoline sulfur standard on a pervehicle basis for both a single year and for an entire vehicle's lifetime.

To estimate the cost of low sulfur gasoline in one year for a single vehicle, it is necessary

to convert the annual miles traveled by a single vehicle into gallons of gasoline consumed. This

conversion requires the use of an average fuel economy factor. Although the current fleetaverage fuel economy is approximately 20.7 miles per gallon31, this value is expected to change

in the future for two reasons: 

1) As the fleet turns over, those vehicles that were certified at lower fuel economy

levels drop out of the in-use fleet.

2) The light-duty vehicle fraction of the fleet is projected to drop as more and more

light-duty trucks come into the market.

We have projected that the light-duty vehicle portion of the fleet will level off to a fuel economy

of about 24.2 miles per gallon during the next decade, while the light-duty truck portion of the

fleet will level off to about 15.5 miles per gallon in the same timeframe. Using the projected

long-term distribution of 40 percent LDV and 60 percent LDT in the fleet32, we calculated the

fleet-average fuel economy to be 19.0 miles per gallon. 

In a single year, the average in-use light-duty vehicle travels approximately 11,500

milesbb. Applying the average fuel economy factor of 19.0 miles per gallon and the initial cost

for low sulfur fuel of 1.68 ¢/gal leads us to a per-vehicle estimate of $10.17. This is the

additional cost that the average vehicle owner will incur in the first year of the program due to

the use of low sulfur gasoline.

The per-vehicle cost of low sulfur gasoline can also be calculated over the lifetime of a

vehicle. However, to calculate a lifetime cost for the average in-use vehicle, it is necessary to

account for the fact that individual vehicles experience different lifetimes in terms of years that

they remain operational. This distribution of lifetimes is the vehicle survival rate distribution,

for which we used data from the National Highway Transportation Safety Administration. The

costs of low sulfur gasoline incurred over the lifetime of the average fleet vehicle can then be

calculated as the sum of the costs in individual years as shown in the equation below:
Chapter V: Economic Impact

V-71

LFC = 3 [(AVMT)i C (SURVIVE)i C (C) ÷ (FE)]

Where:

LFC = Lifetime fuel costs in $/vehicle

(AVMT)i

 = Annual vehicle miles travelled in year i of a vehicle's operational life33

(SURVIVE)i = Fraction of vehicles still operating after i years of service34

C = Cost of low sulfur gasoline in $/gal

FE = Fuel economy in miles per gallon. 24.2 for LDV, 15.5 for LDT

i = Vehicle years of operation, counting from 1 to 25

The cost of low sulfur gasoline is a function of the year of refinery production as described in

Section V.B.; the initial cost of 1.68 ¢/gal applies only in the first year of low sulfur gasoline

production. In subsequent years, refiners are able to make use of their experience in order to

lower their operating expenses. As a result of these declining fuel costs over time, we

determined that it is appropriate to calculate total lifetime costs for two separate cases: 

1) Near-term, representing a vehicle whose operational life begins at the same time

that low sulfur gasoline production begins

2) Long-term, representing a vehicle whose operational life begins six years after

low sulfur gasoline production begins

The sixth year for calculating long-term costs of low sulfur gasoline was chosen to be consistent

with the sixth year of vehicle manufacture, when the capital cost amortization period ends. 

Details of the calculation of long-term vehicle costs are given in Section V.A.

We used the above equation to calculate lifetime fuel costs separately for LDV, LDT1,

LDT2, LDT3, and LDT4. The results are shown in Table V-44.

Table V-44. Undiscounted Per-vehicle Costs of 

Low Sulfur Gasoline (In 1997 Dollars)

Near-term ($) Long-term ($)

LDV 83.36 78.15

LDT1, LDT2 178.52 167.56

LDT3, LDT4 192.13 180.28

We then weighted the per-vehicle costs for the individual vehicle categories in Table V-44 by

the fleet fractions. As a result, the total cost incurred by the average in-use vehicle over its

lifetime due to the use of low sulfur gasoline was calculated to be $142.53 on a near-term basis

and $133.73 on a long-term basis.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-72

An alternative approach to calculating lifetime per-vehicle costs of low sulfur gasoline is

to discount future year costs. This approach leads to "net present value" lifetime fuel costs, and

is a useful means for showing what the average vehicle owner would have to spend in the first

year in order to pay for all future year fuel costs. It also provides a means for comparing the

program's costs to its emission reductions in a cost-effectiveness analysis, as described in

Section VI.

Discounted lifetime fuel costs are calculated in an analogous manner to the undiscounted

values, except that each year of the summation is discounted at the average rate of 7%. The

equation given above can be modified to include this annual discount factor:

LFC = 3 [{(AVMT)i C (SURVIVE)i C (C) ÷ (FE)}/(1.07)i-1]

Once again, we calculated lifetime fuel costs separately for LDV, LDT1, LDT2, LDT3, and

LDT4. These values are shown in Table V-45.

Table V-45. Discounted Per-vehicle Costs of 

Low Sulfur Gasoline (In 1997 Dollars)

Near-term ($) Long-term ($)

LDV 60.98 56.73

LDT1, LDT2 126.95 118.19

LDT3, LDT4 135.85 126.43

Once again, we then weighted the per-vehicle costs for the individual vehicle categories in Table

V-45 by the fleet fractions. As a result, the total discounted cost incurred by the average in-use

vehicle over its lifetime due to the use of low sulfur gasoline was calculated to be $101.92 on a

near-term basis and $94.86 on a long-term basis. 

A summary of all per-vehicle fuel costs described in this section is given in Table V-46

below.
Chapter V: Economic Impact

V-73

Table V-46. Fleet Average Per-vehicle Costs

Of Low Sulfur Gasoline (In 1997 Dollars)

Cost per vehicle

($)

First year 10.17

Lifetime, undiscounted, near-term 142.53

Lifetime, undiscounted, long-term 133.73

Lifetime, discounted, near-term 101.92

Lifetime, discounted, long-term 94.86

5. Aggregate Annual Fuel Costs

Aggregate fuel costs are those costs associated with the increased cost per gallon of

gasoline due to the proposed sulfur controls, multiplied by the total number of gallons of

gasoline consumed in any given year by both highway and non-road sources. The total gallons

of gasoline consumed by highway sources were calculated using the VMT projections used

throughout the analyses within this document, along with projected fuel economy estimates

(mpg) developed by Standard & Poor’s Data Research International (DRI).35 The resultant

aggregate annual fuel costs are summarized in Table V-47. It is important to note that the capital

costs associated with the proposed sulfur controls have been amortized for this analysis. The

actual capital investment would occur up-front, prior to and during the initial years of the

program, as described previously in this chapter.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

ccThe aggregate fuel costs used in the economic impact analysis of today’s proposal include gasoline

consumed by non-road sources and exclude gasoline consumed in the State of California.

V-74

Table V-47. Increased Annualized Fuel Cost as a Result of Today’s Proposed Tier 2

Gasoline Sulfur Controls

($Million)

Calendar

Year

Including Non-Road and

Excluding Californiacc

2000 0

2004 2,255

2010 2,127

2015 2,156

2020 2,270

a. Methodology

The DRI develops projected fuel economy estimates for passenger cars (EPA’s LDVs),

light trucks under 10,000 pounds, and heavy trucks over 10,000 pounds. The VMT projections

developed by EPA are for light-duty vehicles (LDV), light-duty trucks (LDT -- under 8500

pounds), and heavy-duty gasoline (over 8500 pounds). Because of the inconsistency in

stratifying the fleet, the DRI fuel economy estimates for light trucks (under 10,000 pounds) were

used for both the EPA LDT (under 8500 pound) and for EPA’s heavy-duty gasoline trucks from

8500 to 10,000 pounds. The DRI fuel economy estimates for over 10,000 pound trucks were

then used for EPA’s over 10,000 pound heavy-duty gasoline trucks.

The stratification of EPA VMT projections between the 8500 to 10,000 trucks and the

over 10,000 trucks was done by using both DRI and EPA data. The DRI projections for the

2000 calendar year show that of all gasoline trucks, light and heavy, 2.1 percent are in the over

10,000 pound category. EPA projections show that of all gasoline trucks, light-duty and heavyduty, 9.1 percent are in the over 8500 pound category. Using these two projected population

percentages, the heavy-duty VMT projections were allocated 77 percent to the 8500 to 10,000

category, and 23 to the over 10,000 category. The same calculation was carried out and used for

each calendar year from 2000 to 2020, when the split is projected at 86 percent and 14 percent,

respectively. These results are shown in Table V-48.

The DRI fuel economy estimates also include both gasoline and diesel vehicles and

trucks. As a result, the truck fuel economy estimates may be slightly higher than a gasoline-only

estimate, as diesel vehicles and trucks tend to have higher fuel economy numbers than do

gasoline vehicles and trucks. There should be little effect on the fuel economy estimates for
Chapter V: Economic Impact

ddBased on EPA VMT estimates that California accounts for approximately 11 percent of nationwide VMT.

V-75

passenger cars, because DRI estimates that 99.7 percent of passenger cars will be gasoline fueled

in the 2000 calendar year (although 96.5 percent in the 2020 calendar year). Even for light

trucks under 10,000 pounds, where more diesels would be expected, DRI estimates a split of 96

percent gasoline in the 2000 calendar year and 92.8 percent in the 2020 calendar year. 

Therefore, the effect of diesel vehicles and trucks on the DRI under 10,000 pound fuel economy

estimates is considered negligible due to their low populations.

The effect of diesels on the over 10,000 pound heavy truck fuel economy estimates is

also considered negligible, at least where the total gasoline consumption is concerned. Although

the diesel population is relatively high in this category, where DRI estimates diesels at roughly

68 percent of the over 10,000 trucks, their effect is considered negligible because of the

insignificant amount of gasoline consumed by trucks over 10,000 pounds (less than 0.02 percent)

relative to the gasoline consumed by vehicles and trucks under 10,000 pounds.

The projected VMT values within each category (LDV, LDT, HDG<10,000, and

HDG>10,000) were then divided by the corresponding DRI projected fuel economy estimates to

derive the gasoline consumption for each category per year. These values were then added, in

each given year, to derive the total highway gasoline consumption for each year from 2004 to

2020. The results are shown in Table V-49.

b. Explanation of Results

The aggregate fuel costs used in the economic impact analysis of today’s proposal

include the non-road contribution but exclude gasoline consumed within the State of California. 

The total nationwide highway gasoline consumption was adjusted by eliminating 11 percent to

exclude the California contribution.dd The non-road contribution to the gasoline consumption

was then added in by multiplying the highway contribution by 6.4 percent, as non-road sources

are estimated to use 6.4 percent of the amount consumed by highway sources.36 The highway

gasoline consumption, including the non-road contribution and excluding the California

contribution, was then multiplied by the per gallon increase due to the proposed sulfur control

requirements to arrive at the estimated aggregate fuel cost for each individual year. The results

are shown in Table V-50.

The aggregate fuel costs used in the economic impact analysis of today’s proposal

include non-road sources because gasoline used to power these sources will incur the increased

per gallon cost, but exclude California because today’s proposal will not impact the cost of

gasoline in the State of California. The aggregate fuel costs used in the economic impact

analysis include Alaska and Hawaii as gasoline in those states will incur the increased per gallon

cost.

The aggregate fuel costs decrease during the early years due to the decreasing per gallon

cost associated with improved refining techniques and the pay off of amortized capital costs. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-76

The aggregate costs then increase in later years due both to the reinvestment in refinery

equipment (increased capital costs), which increases the per gallon cost, and because VMT is

projected to increase every year, which results in increasing fuel consumption.
Chapter V: Economic Impact

V-77

Table V-48. Stratification of Heavy-Duty Gasoline Fleet using Vehicle Count Projectio

(Counts are in Millions of Vehicles)

CY

S&P DRI 

<10k (1)

S&P 

DRI 

>10k (1)

S&P DRI 

total 

truck

S&P DRI 

%>10k

AMD <6k 

(2)

AMD 6k8500 (2) AMD <8500 AMD 8500- 14k (2) AMD >14k (2)

AMD Total 

HDG

AMD Total 

Truck

AMD 

%>8500

%HDG 

8500-10K %HDG >10k

1997/6 72.03 1.88 73.91

2000 83.74 1.76 85.50 2.1% 54.91 19.52 74.43 5.22 2.26 7.48 81.91 9.1% 77.5% 22.5%2001 87.42 1.74 89.16 2.0% 56.91 20.23 77.14 5.41 2.34 7.75 84.89 9.1% 78.6% 21.4%2002 89.94 1.73 91.67 1.9% 58.94 20.95 79.89 5.60 2.43 8.03 87.92 9.1% 79.4% 20.6%2003 92.46 1.71 94.17 1.8% 61.00 21.68 82.68 5.81 2.52 8.33 91.01 9.2% 80.2% 19.8%2004 94.98 1.69 96.68 1.8% 63.09 22.43 85.52 6.02 2.61 8.63 94.15 9.2% 80.9% 19.1%2005 99.85 1.70 101.55 1.7% 64.97 23.09 88.06 6.15 2.67 8.82 96.88 9.1% 81.6% 18.4%2006 102.37 1.68 104.05 1.6% 66.62 23.68 90.30 6.28 2.72 9.00 99.30 9.1% 82.2% 17.8%2007 104.89 1.67 106.56 1.6% 68.29 24.28 92.57 6.42 2.78 9.20 101.77 9.0% 82.7% 17.3%2008 107.41 1.65 109.06 1.5% 69.98 24.87 94.85 6.55 2.84 9.39 104.24 9.0% 83.2% 16.8%2009 109.93 1.63 111.57 1.5% 71.68 25.48 97.16 6.70 2.90 9.60 106.76 9.0% 83.7% 16.3%2010 113.32 1.68 115.00 1.5% 73.24 26.03 99.27 6.78 2.94 9.72 108.99 8.9% 83.6% 16.4%2011 114.79 1.68 116.47 1.4% 74.24 26.39 100.63 6.87 2.98 9.85 110.48 8.9% 83.8% 16.2%2012 116.27 1.68 117.94 1.4% 75.26 26.75 102.01 6.96 3.02 9.98 111.99 8.9% 84.0% 16.0%2013 117.74 1.67 119.41 1.4% 76.27 27.11 103.38 7.04 3.05 10.09 113.47 8.9% 84.2% 15.8%2014 119.21 1.67 120.89 1.4% 77.30 27.48 104.78 7.13 3.09 10.22 115.00 8.9% 84.4% 15.6%2015 122.67 1.67 124.34 1.3% 78.23 27.81 106.04 7.19 3.12 10.31 116.35 8.9% 84.8% 15.2%2016 124.14 1.67 125.81 1.3% 78.83 28.02 106.85 7.24 3.14 10.38 117.23 8.9% 85.0% 15.0%2017 125.62 1.67 127.28 1.3% 79.44 28.24 107.68 7.29 3.16 10.45 118.13 8.8% 85.2% 14.8%2018 127.09 1.66 128.75 1.3% 80.05 28.46 108.51 7.35 3.18 10.53 119.04 8.8% 85.4% 14.6%2019 128.56 1.66 130.23 1.3% 80.66 28.67 109.33 7.40 3.21 10.61 119.94 8.8% 85.6% 14.4%2020 128.39 1.66 130.05 1.3% 81.28 28.89 110.17 7.45 3.23 10.68 120.85 8.8% 85.6% 14.4%

(1) From S&P DRI World Energy Service U.S. Outlook, Table 17, April 1998; see memo fr. T.Sherwood to Docket A-97-10, 3/22/99(2) Draft MOBILE6 Fleet Characterization Input Data, OMS/AMD/Jackson, August 1998; uses count projections where 99.2% of LDTs are gasoline & 0.8% are diesel in both the 200see memo fr. T.Sherwood to Docket A-97-10, 3/22/99
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-78

Table V-49. Calculation of Gasoline Consumption

PassCar LDT<8500 HDG 8500-10k H

CY

AMD 

<8500 

VMT ex 

CA,AL,HI 

Bmiles (1)

<8500 

VMT 

nation 

Bmiles 

(2) %Car (1)

%Truck 

(1)

AMD 

PassCar 

VMT 

nation 

Bmiles (3)

S&P DRI 

PassCar 

mpg (4)

PassCar 

Gasoline 

Consump 

nation 

Bgal

AMD LDT 

VMT nation 

Bmiles (5)

LDT 

Gasoline 

VMT nation 

Bmiles (6)

S&P 

DRI 

<10k 

Truck 

mpg (4)

LDT <8500 

Gasoline 

Consump 

nation Bgal

AMD HDG 

VMT ex 

CA,AL,HI 

Bmiles (1)

HDG VMT 

nation 

Bmiles (2)

8500-10k 

HDG VMT 

nation 

Bmiles (7)

S&P 

DRI 

<10k 

Truck 

mpg (4)

8500-10k 

Gasoline 

Consump 

nation 

Bgal

>10k HDG 

VMT nation 

Bmiles (7)

1997 2000 2160 2455 54.7% 45.3% 1342 21.2 63.30 1112 1104 15.9 69.41 0.518 0.589 0.456 15.9 0.03 0.133 2001 2210 2511 53.1% 46.9% 1333 21.3 62.59 1178 1169 16.0 73.05 0.533 0.606 0.476 16.0 0.03 0.130 2002 2250 2557 51.5% 48.5% 1318 21.4 61.43 1239 1229 16.1 76.17 0.548 0.623 0.494 16.1 0.03 0.128 2003 2290 2602 49.9% 50.1% 1300 21.6 60.19 1302 1292 16.3 79.38 0.563 0.640 0.513 16.3 0.03 0.127 2004 2330 2648 48.4% 51.6% 1281 21.7 58.91 1367 1356 16.4 82.60 0.578 0.657 0.531 16.4 0.03 0.125 2005 2380 2705 46.8% 53.2% 1266 21.9 57.81 1438 1427 16.5 86.48 0.593 0.674 0.550 16.5 0.03 0.124 2006 2420 2750 45.2% 54.8% 1244 22.0 56.41 1506 1494 16.6 89.81 0.610 0.693 0.569 16.6 0.03 0.124 2007 2460 2795 43.6% 56.4% 1220 22.2 54.95 1576 1563 16.8 93.17 0.627 0.713 0.589 16.8 0.04 0.123 2008 2510 2852 42.0% 58.0% 1199 22.3 53.67 1653 1640 16.9 96.95 0.645 0.733 0.610 16.9 0.04 0.123 2009 2550 2898 40.6% 59.4% 1177 22.5 52.35 1720 1707 17.1 100.07 0.662 0.752 0.630 17.1 0.04 0.122 2010 2600 2955 39.4% 60.6% 1164 23.2 50.15 1791 1777 17.3 102.70 0.679 0.772 0.645 17.3 0.04 0.126 2011 2650 3011 38.3% 61.7% 1153 23.4 49.19 1859 1844 17.5 105.63 0.690 0.784 0.657 17.5 0.04 0.127 2012 2710 3080 37.3% 62.7% 1149 23.7 48.58 1930 1915 17.6 108.71 0.705 0.801 0.673 17.6 0.04 0.128 2013 2770 3148 36.5% 63.5% 1149 23.9 48.07 1999 1983 17.8 111.59 0.721 0.819 0.690 17.8 0.04 0.129 2014 2882 3275 35.8% 64.2% 1172 24.1 48.57 2103 2086 17.9 116.35 0.736 0.836 0.706 17.9 0.04 0.130 

2015 2888 3282 35.2% 64.8% 1155 24.6 46.93 2127 2110 18.2 115.95 0.752 0.855 0.725 18.2 0.04 0.130 2016 2940 3341 34.7% 65.3% 1158 24.8 46.64 2183 2165 18.4 117.91 0.767 0.872 0.741 18.4 0.04 0.131 2017 3000 3409 34.2% 65.8% 1167 25.1 46.57 2242 2224 18.5 120.02 0.783 0.890 0.758 18.5 0.04 0.132 2018 3060 3477 33.9% 66.1% 1178 25.3 46.59 2299 2280 18.7 121.98 0.798 0.907 0.774 18.7 0.04 0.133 2019 3130 3557 33.6% 66.4% 1195 25.5 46.82 2362 2343 18.9 124.19 0.814 0.925 0.791 18.9 0.04 0.134 2020 3190 3625 33.4% 66.6% 1211 25.5 47.47 2414 2395 19.0 126.06 0.829 0.942 0.806 19.0 0.04 0.136 

(1) OMS/AMD/Koupal; %Car & %Truck represent % of Light-duty VMT

(2) CA = 11% of nation; CA,AK,HI= 12% of nation

(3) Multiplies <8500 VMT nation by %Car(4) From S&P DRI World Energy Service U.S. Outlook, Table 17 (mpg values include diesel), April 1998; see memo fr. T.Sherwood to Docket A-97-10, 3/22/99

(5) Multiplies <8500 VMT nation by %Truck(6) Draft MOBILE6 Fleet Characterization Input Data, OMS/AMD/Jackson, August 1998; uses count projections where 99.2% of LDTs are gasoline & 0.8% are diesel in both the 2000CY & the 2020CY;see memo fr. T.Sherwood to Docket A-97-10, 3/22/99(7) Uses S&P DRI data for % of all gas trucks >10k, and AMD data for % of all gas trucks >8500, then calculates % of all >8500 gas trucks in the 8500-10k category, and % of all >8500 gas trucks in the >10k (8) Presented for comparison only. Discrepancy in later years due mainly to AMD's larger LDT VMT share (67% of LD VMT) vs S&P (~53% of <10k VMT)
Chapter V: Economic Impact

V-79

CY

EPA Total 

Hwy 

Gasoline 

Consump 

nation Bgal

Total Hwy 

Gasoline 

Consumption 

excluding CA 

Bgal (1)

Non-road 

Gasoline 

Consumption 

excluding CA 

Bgal (2)

Tier2 Cost ex 

CA & incl 

NonRoad $B 

(3)

1997

2000 132.76 118.16 7.56 0

2001 135.69 120.76 7.73 0

2002 137.65 122.51 7.84 0

2003 139.62 124.26 7.95 0

2004 141.56 125.99 8.06 2.255

2005 144.34 128.47 8.22 2.276

2006 146.27 130.18 8.33 2.136

2007 148.18 131.88 8.44 2.138

2008 150.67 134.09 8.58 2.147

2009 152.47 135.70 8.68 2.147

2010 152.91 136.09 8.71 2.127

2011 154.88 137.84 8.82 2.129

2012 157.34 140.03 8.96 2.142

2013 159.71 142.14 9.10 2.154

2014 164.98 146.83 9.40 2.204

2015 162.94 145.01 9.28 2.156

2016 164.61 146.50 9.38 2.158

2017 166.65 148.32 9.49 2.166

2018 168.62 150.07 9.60 2.172

2019 171.07 152.25 9.74 2.264

2020 173.59 154.50 9.89 2.270

(1) CA = 11% of total nation; CA,AK,HI = 12% of nation

(2) OMS/VPCD/Todd Sherwood; NonRoad fraction = 6.4%;

 see memo to Docket A-97-10, 2/19/99

(3) OMS/FED/Wyborny; Tier2 $/gal increase

Adj Cost Adj Cost

CY $/gal CY $/gal

2004 0.01682 2013 0.01424

2005 0.01665 2014 0.01411

2006 0.01542 2015 0.01397

2007 0.01523 2016 0.01385

2008 0.01505 2017 0.01372

2009 0.01487 2018 0.01360

2010 0.01469 2019 0.01398

2011 0.01452 2020 0.01381

2012 0.01438

Table V-50. Aggregate Annualized Fuel Costs per Year from 2004 to 2020
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-80

C. Combined Vehicle and Fuel Costs

Sections A. and B. of this section provide detailed cost analyses for Tier 2 vehicles and

low sulfur gasoline, respectively. The following sums the costs to consumers to provide total

incremental costs of the Tier 2 program. The per vehicle costs are provided first, followed by

the total annual nationwide costs.

1. Combined Costs Per Vehicle

Table V-51 provides a summation of our estimated incremental per vehicle costs,

including increased costs for Tier 2 vehicles and for low sulfur gasoline over the life of the

vehicles. We use the cost estimates for our cost-effectiveness analysis presented in the following

Chapter. As described in the previous sections, we expect these costs to decrease over time as

manufacturers make production improvements and recover fixed costs. Table V-51 provides

estimates of near-term costs, which represent costs in the first years of the program, and longterm costs which account for the cost decreases.

Table V-51. Total Incremental Per Vehicle Costs to Consumers 

Over the Life of a Tier 2 Vehicle

LDV

($)

LDT1

($)

LDT2

($)

LDT3

($)

LDT4

($)

Near-term Costs

Vehicle costs 80 73 136 274 270

Fuel costs* 61 127 127 136 136

Total 141 200 263 410 406

Long-term Costs

Vehicle costs 50 47 103 218 213

Fuel costs* 57 118 118 126 126

Total 107 165 221 344 339

* Discounted lifetime fuel costs in 1997 dollars

2. Combined Total Annual Nationwide Costs

Figure V-8 and Table V-52 summarize EPA’s estimates of total annual costs to the nation
Chapter V: Economic Impact

ee Excluding vehicles and fuel sold in California.

V-81

2004 2006 2008 2010 2012 2014 2016 2018 2020

Calendar Year

0

1

2

3

4

Billions of Dollars

Total

Fuels

Vehicles

Note: Capital costs have been amortized for purposes of this analysis

Total Annualized Costs of Tier 2 Vehicles and Low Sulfur Gasoline

both for Tier 2 vehicles and low sulfur gasoline.ee The capital costs have been amortized for

these analyses. The actual capital investment would occur up-front, prior to and during the

initial years of the program, as described previously in this chapter. The fuel costs shown are for

all gasoline consumed nationwide, including both on-highway and nonroad. Annual aggregate

vehicle costs change as Tier 2 vehicle sales are phased-in and projected per-vehicle costs and

annual sales change over time. The aggregate fuel costs change as projected per gallon costs and

annual fuel consumption change over time. Increases in fuel consumption over time are

generally off-set by decreases in per gallon costs. The methodology we used to derive the

aggregate costs are described in detail in the sections A.3. and B.5. of this chapter. As shown

below, total annual costs increase over the phase-in period and peak at about $3.7 billion. 

Annual costs then drop to about $3.5 billion, largely due to decreases in vehicle costs. Costs

increase gradually after 2012 due to the stabilization of vehicle costs in the long-term and

projected increases in vehicle sales and fuel consumption.

Figure V-8. Total Annualized Costs of Tier 2 Vehicles and Low Sulfur Gasoline.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-82

Table V-52. Total Annualized Costs to the Nation for 

Tier 2 Vehicles and Low Sulfur Gasoline

($million)

Calendar Year Vehicle Costs ($) Fuel Costs ($) Total ($)

2004 $257 $2,255 $2,512

2005 $506 $2,276 $2,782

2006 $815 $2,136 $2,951

2007 $1,365 $2,138 $3,503

2008 $1,589 $2,147 $3,736

2009 $1,587 $2,147 $3,734

2010 $1,496 $2,127 $3,623

2011 $1,427 $2,129 $3,556

2012 $1,359 $2,142 $3,501

2013 $1,348 $2,154 $3,502

2014 $1,346 $2,204 $3,550

2015 $1,352 $2,156 $3,508

2016 $1,359 $2,158 $3,517

2017 $1,366 $2,166 $3,532

2018 $1,373 $2,172 $3,545

2019 $1,380 $2,264 $3,644

2020 $1,387 $2,270 $3,657
Chapter V: Economic Impact

V-83

1. “Notice of Public Meeting to Consider the Status of Implementation of the Low Emission

Vehicle Program”, California Air Resources Board, Mail-out #96-28, November 21, 

1996.

2. “Proposed Amendments to California Exhaust and Evaporative Emission Standards and 

Test Procedures for Passenger Cars, Light-duty Trucks, and Medium-duty Vehicles”, 

Staff Report: Initial Statement of Reasons, State of California Air Resources Board, 

September 18, 1998.

3. Report Submitted for WA 2-9, Evaluation of the Costs and Capabilities of Vehicle 

Evaporative Emission Control Technologies. ICF Consulting Group, March 22, 1999.

4. Cost Estimations for Emission Control-Related Components/Systems and Cost 

Methodology Description,” Leroy H. Lindgren, Rath and Strong for U.S. EPA, EPA460/3-78-002, March 1978.

5. “Cost Analysis, Compliance Assurance Program for Light-duty Vehicles and Light-duty 

Trucks”, March 1999, Docket A-96-50.

6. "Learning Curves in Manufacturing," Linda Argote and Dennis Epple, Science, February 

23, 1990, Vol. 247, pp. 920-924.

7. J.M Dutton and A. Thomas, Academy of Management Review, Rev. 9, 235, 1984.

8. Cost Estimations for Emission Control-Related Components/Systems and Cost 

Methodology Description,” Leroy H. Lindgren, Rath and Strong for U.S. EPA, EPA460/3-78-002, March 1978.

9. “Update of EPA’s Motor Vehicle Emission Control Equipment Retail Price Equivalent 

(RPE) Calculation Formula,” Jack Faucett Associates for U.S. EPA, Report No. 

JACKFAU-85-322-3. September 4, 1985.

10. “Motor Vehicle Facts and Figures”, American Automobile Manufacturers, 1997.

11. “Light-duty Truck Reference Guide”, J.D. Power and Associates, July 1998.

12. “Annual Energy Outlook 1999 with Projections to 2020", Energy Information 

Administration, Office of Integrated Analysis and Forecasting, U.S., Department of 

Energy, DOE/EIA - 0383(99), p. 137, December 1999.

13. Gary, James H., Handwerk, Glenn E., Petroleum Refining: Technology and Economics, 

Marcel Dekker, New York (1994).

14. Personal conversation with A. Judzis of Equilon.

Chapter V. References
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

V-84

15. Gary, James H., Handwerk, Glenn E., (1994).

16. Gary, James H., Handwerk, Glenn E., (1994).

17. Gary, James H., Handwerk, Glenn E., (1994).

18. U.S. Petroleum Refining, Meeting Requirements for Cleaner Fuels and Refineries, 

Volume V-Refining Capability Appendix, National Petroleum Council, 1993.

19. Personal conversation with A. Judzis of Equilon.

20. Personal conversations with Bob King of Sun Company Inc, and A. Judzis of Equilon.

21. U.S. Petroleum Refining, Meeting Requirements for Cleaner Fuels and Refineries, 

Volume V-Refining Capability Appendix, National Petroleum Council, 1993.

22. Personal conversation with Bob King of Sun Company Inc.

23. Presentation by Air Products and Chemicals, Hart’s/IRI World Fuels Conference, San 

Francisco, California, March 1998.

24. Petroleum 1996: Issues and Trends, Energy Information Administration, 1996.

25. Judzis, A, E-mail message to Wyborny, Lester, entitled: Copies of two slides, 6/26/1998.

26. Venner, S. F., Downstream Mergers and Acquisitions: Is There Really a Pot of Gold at 

the End of the Rainbow?, NPRA Annual Meeting, San Francisco, CA, March 1998.

27. Stetzer, C. Martin, Price Waterhouse L.L.C., Redefining the Context of Refinery 

Pacesetter Performance, 1997 NPRA Annual Meeting, March 16 - 18, 1997.

28. Venner, S. F., 1997.

29. Refining Industry Profile Study, 1998.

30. Wang, M.Q., GREET 1.4 - Transportation Fuel-Cycle Model, Center for Transportation 

Research, Argonne National Laboratory. 

31. U.S. DOT/ FHA, Highway Statistics for 1995. Total rural and urban miles traveled 

divided by total gallons of gasoline consumed in transportation.

32. Technical memorandum from John Koupal to EPA Air Docket A-97-10, "Methodology 

for Developing Light-Duty Emission Inventory Estimates in the Tier 2 NPRM," EPA 

Report No. EPA420-R-99-005.

33. "MOBILE6 Fleet Characterization Input Data," Tracie R. Jackson, Report Number 

M6.FLT.007. 
Chapter V: Economic Impact

V-85

34. Technical memorandum from John Koupal to EPA Air Docket A-97-10, "Methodology 

for Developing Light-Duty Emission Inventory Estimates in the Tier 2 NPRM," EPA 

Report No. EPA420-R-99-005.

35. Standard & Poor’s DRI World Energy Service U.S. Outlook, Table 17, April 1998.

36. Memo from Todd Sherwood to Air Docket A-97-10, Non-Road Gasoline Consumption, 

dated February 19,1999.
Chapter VI: Cost Effectiveness

VI-1

Chapter VI: Cost-Effectiveness

This section will present the cost-effectiveness analysis we completed for the combined

Tier 2 exhaust, Tier 2 evaporative, and gasoline sulfur standards. This analysis relies in part on

cost information from Section V and emissions information from Section III to estimate the costeffectiveness of the standards in terms of dollars per ton of total NOx + NMHC emission

reductions. Finally, this Section compares the cost-effectiveness of the new provisions with the

cost-effectiveness of other NOx and NMHC control strategies from previous and potential future

EPA emission control programs.

A. Overview of the Analysis

The cost-effectiveness analysis conducted for our proposed standards focused on the

costs and emission reductions associated with a single vehicle meeting the Tier 2 emission

standards, and operating on low sulfur fuel. Both costs and emission reductions were calculated

over the life of the vehicle and then discounted at a rate of seven percent. Costs and emission

reductions were measured relative to an NLEV baseline and average sulfur levels in the absence

of sulfur controls. The calculations were performed separately for each vehicle class and the

results weighted according to the expected fleet mix. Details on our approach to costeffectiveness follow.

1. Temporal and Geographic Applicability

We have taken a per-vehicle approach to our cost-effectiveness calculations that

produces $/ton values representing any controlled vehicle, no matter where that vehicle operates. 

In effect, this means that emission reductions in both attainment and nonattainment areas are

included in our cost-effectiveness analysis. We believe that this is appropriate. Both the Tier 2

vehicle and gasoline sulfur programs are proposed to apply nationwide, so that the same

emission reductions will occur regardless of where the vehicle operates. Attainment area

emission reductions also produce health benefits. In general, the benefits of NMHC reductions

in ozone attainment areas include reductions in emissions of air toxics, reductions in the

contribution from NMHC emissions to the formation of fine particulate matter, and reductions in

damage to agricultural crops, forests, and ecosystems from ozone exposure. Emission reductions

in attainment areas help to maintain clean air as the economy grows and new pollution sources

come into existence. Also, ozone health benefits can result from reductions in attainment areas,

although the most certain health effects from ozone exposure below the NAAQS appear to be

both transient and reversible. The closure letter from the Clean Air Science Advisory

Committee (CASAC) for the recent review of the ozone NAAQS states that there is no apparent

threshold for biological responses to ozone exposure1

.

In the Regulatory Impact Analysis for a recent rulemaking for highway heavy-duty diesel

engine standards2, EPA also presented a regional ozone control cost-effectiveness analysis in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-2

which the total life-cycle cost was divided by the discounted lifetime NOx + NMHC emission

reductions adjusted for the fraction of emissions that occur in the regions expected to impact

ozone levels in ozone nonattainment areas. (Air quality modeling indicates that these regions

include all of the states that border on the Mississippi River, all of the states east of the

Mississippi River, Texas, California, and any remaining ozone nonattainment areas west of the

Mississippi River not already included.) The results of that analysis show that the regional costeffectiveness values were 13 percent higher than the nationwide cost-effectiveness values. 

Because of the small difference between the two results, EPA is presenting only nationwide costeffectiveness results for this analysis. 

Despite the fact that a per-vehicle approach to cost-effectiveness allows us to avoid the

arbitrary choice of a specific year in which to conduct the analysis, there is some value in

examining different points in time after the program is first implemented. The costs of the

program will be higher immediately after it is implemented than they will be after several years,

since both vehicle manufacturers and refiners can take advantage of decreasing capital and

operating costs over time. For the purposes of this proposed rulemaking, therefore, we will

present cost-effectiveness of our proposed program on both a near-term and long-term basis. 

More details concerning per-vehicle costs are given in Section VI.B.1.

2. Baselines

There are two broad approaches to cost-effectiveness that can be taken, each of which

requires a different baseline. These two approaches can be termed "incremental" and "average." 

Both incremental and average approaches to cost-effectiveness provide a measure of how much

more stringent than the existing standards our proposed standards can be before they cease to be

cost-effective.

An incremental approach to cost-effectiveness requires that we evaluate a number of

different potential standards, each of which is compared to the potential standards closest to it. 

Using this approach, the cost-effectiveness of our proposed standards would be calculated with

respect to another set of potential standards which is less stringent than our proposed standards. 

In this way, the $/ton values represent the last increment of control, highlighting any

nonlinearities that exist in either the costs or emission reductions.

Incremental cost-effectiveness will produce different $/ton values than an average

approach to cost-effectiveness only if the costs or emission reductions are nonlinear. In the case

of our proposed standards, both the emission reductions and the fuel costs are nearly linear,

though the vehicle costs do contain some nonlinearity.

An average approach to cost-effectiveness, on the other hand, requires that we compare

the costs and emission reductions associated with our proposed standards to those for the

previous set of standards that are being met by manufacturers. In this case, the $/ton values

represent the full range of control from the last applicable standard to our proposed standards. 
Chapter VI: Cost Effectiveness

ff Based on a consensus opinion of the multi-party Phase II RFG Implementation Team, and summarized in

a report entitled, "Phase II RFG Report on Performance Testing." Contact: Deborah Wood, Office of Mobile

Sources.

VI-3

Since today's proposed program includes both fuel standards and vehicle standards, it

was necessary for us to define a baseline for both fuels and vehicles. For fuels, there are no

previous controls applicable to sulfur (apart from an ASTM limit of 1000 ppm). As a result, we

have determined that the sulfur baseline should represent the national average sulfur level that

would exist at the time our proposed sulfur standard would go into effect. The national average

sulfur content of current conventional gasoline is approximately 330 ppm. We are not projecting

the sulfur level of conventional gasoline to change over the next ten years in the absence of

specific sulfur controls. For Phase II reformulated gasoline (RFG), the average sulfur content is

projected to be 150 ppm in the summer and 300 ppm in the winterff. Based on seasonal volume

data, we estimate that 40 vol% of the annual pool is summer gasoline, with the remainder being

winter gasoline, producing an annual Phase II RFG sulfur level of 240 ppm. Because estimating

the number of areas that will continue to be in the RFG program by the middle of the next

decade is highly speculative, we have assumed that the current volume split between RFG and

conventional gasoline will continue indefinitely. Thus we estimated that Phase II RFG will

account for 26.7 percent of the total gasoline pool. As a result, we calculated the national

average sulfur level for the next decade to be 305 ppm. This is the baseline sulfur level used in

our calculations.

For the exhaust emission standards applicable to light-duty vehicles and trucks, there are

two potentially valid baselines that could be used. The Clean Air Act (CAA) suggests that Tier 2

vehicle standards should be compared to the previous set of federal light-duty standards, termed

Tier 1 standards. However, the language does not explicitly require that the cost-effectiveness

determination use Tier 1 standards as the baseline. Since the passage of the CAA Amendments

of 1990, the National Low Emission Vehicle (NLEV) program has gone into effect. NLEV

includes light-duty standards that are more stringent that Tier 1 for LDV, LDT1, and LDT2. 

NLEV did not exist in 1990 and was not envisioned by the authors of the CAA Amendments of

1990. Had NLEV existed, either in concept or as a formal program, we believe that it could have

been identified in the CAA as the point of comparison for evaluating Tier 2 standards. In

addition, NLEV standards represent the most recent set of standards with which manufacturers

must comply. For our proposal, therefore, we have decided to make NLEV the baseline on

which the vehicle side of our cost-effectiveness calculations are based. Further, these NLEV

vehicles would be SFTP compliant since they would be sold in 2004 (the first year of our

proposed Tier 2 program).

The NLEV program did not include new standards for evaporative emissions, and so

cannot be used as the baseline for evaluating the cost-effectiveness of our proposed Tier 2

evaporative emission standards. Instead, the 2.0 gram/test standards under the enhanced

evaporative procedure, initially implemented in 1996, have been used as the baseline.

B. Costs
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-4

The costs used in our cost-effectiveness calculations are the sum of the costs of

compliance with the Tier 2 exhaust, Tier 2 evaporative, and gasoline sulfur standards on a pervehicle basis. Costs are given in 1997 dollars, and result from discounting over the lifetime of a

vehicle at a seven percent discount rate. In addition, all costs represent the fleet-weighted

average of light-duty vehicles and trucks.

1. Near and Long-Term Cost Accounting

Since the costs of complying with both the Tier 2 exhaust and gasoline sulfur standards

will vary over time, we determined that it is appropriate to consider both near-term and longterm costs in our cost-effectiveness analysis. First, the capital costs associated with the

manufacture of vehicles that meet the proposed Tier 2 standards are generally amortized over

five years. Thus in the sixth year of production, a portion of the capital costs become zero and

the total costs of production drop. Manufacturers also gain knowledge about the best way to

meet new standards as time goes on, and as a result their operating costs decrease over time. As

described in a recent rulemaking setting standards for non-road compression ignition engines, we

have determined that the cost-implications of this "learning curve" can be estimated as a 20

percent drop in operating costs in the third year of production. 

Thus near-term costs represent the highest costs of the program, as they include all

capital costs and no cost savings due to the manufacturer's learning curve. Long-term costs, on

the other hand, represent the lowest costs of the program which occur after a portion of capital

cost amortizations have ended and all learning curve cost savings have been accounted for. For

the purposes of this proposed rulemaking, therefore, we will present cost-effectiveness of our

proposed program on both a near-term and long-term basis. 

Because of our per-vehicle approach to cost-effectiveness, near-term and long-term costs

are not associated with any specific year of our proposed Tier 2 program. For instance, the costs

associated with our proposed gasoline sulfur control program will decline steadily due to rotating

capital expenditures and continuous improvements in catalyst design. Vehicle costs, however,

decline over a different schedule. Not only are the vehicle-related capital costs amortized over

five years instead of the longer, rotating schedule for gasoline sulfur, but the phase-in schedule

for the Tier 2 exhaust standards varies depending on vehicle class. Therefore, the near-term

costs actually represent a conservative view of the costs of our proposed program, since they

consider the highest vehicle and fuel costs as if they occurred at the same time for all vehicle

classes. The long-term costs, on the other hand, represent the case for some later year of the Tier

2/gasoline sulfur program in which a majority of the fleet is meeting our proposed standards. In

this case, the phase-in schedule for light-duty vehicles and trucks is no longer evident in the fleet

mix, a portion of capital cost amortizations have ended, and most learning curve cost savings

will have been taken into account. Details about the calculation of near and long-term vehicle

and fuel costs can be found in Sections V.A.1 and V.B.2.

2. Vehicle and Fuel Costs
Chapter VI: Cost Effectiveness

VI-5

The per-vehicle costs used in our cost-effectiveness calculations were derived and

presented in the preceding sections. Vehicle costs were presented in Table V-12 for the five

vehicle categories affected by our proposed standards. For the purposes of calculating costeffectiveness, we first subtracted out the costs attributable to compliance with our proposed

evaporative emission standards, then weighted the remaining costs for those five individual

vehicle categories by the expected fleet fractions to obtain fleet-average costs for our proposed

exhaust emissions standards. Also, we treated first-year production costs as the "near-term"

costs, and sixth-year production costs as the "long-term" costs. Costs associated with

compliance with our proposed evaporative emission standards were constant across all vehicle

classes at $4.10 per vehicle. For low sulfur gasoline, we used the discounted lifetime costs

presented in Table V-41. The costs used in our cost-effectiveness calculations are repeated in

Table VI-1.

Table VI-1. Fleet-average, Per-vehicle Costs Used in Cost-effectiveness

Vehicle-exhaust 

($)

Vehicle-evap 

($)

Fuel 

($)

Total costs 

($)

Near-term 124.04 4.10 101.92 230.06

Long-term 89.47 4.10 94.86 188.43

Note that the total costs in Table VI-1 were used for establishing "uncredited" cost-effectiveness

values. As described in the next section, the costs from Table VI-1 were also adjusted to

produce "credited" cost-effectiveness values.

3. Cost Crediting for PM and SO2

The object of our cost-effectiveness analysis is to compare the costs to the emission

reductions in an effort to assess the program's efficiency in helping to attain and maintain the

NAAQS. Thus we recognize that the primary purpose of our proposed standards is to reduce

emissions of hydrocarbon and oxides of nitrogen emissions from the affected vehicles. That is

why we determined that cost-effectiveness should be calculated on the basis of total NOx +

NMHC emissions. However, we also believe that reductions in other pollutants which produce

health or welfare benefits should be included in the cost-effectiveness assessment, since they

also represent a value of our proposed program.

The reduction in gasoline sulfur levels that would result from our proposed standards will

necessarily result in reductions in sulfur-containing compounds that exit the tailpipe. These

compounds are limited to sulfur dioxide (SO2) and sulfate particulate matter. To account for

reductions in emissions of these two pollutants in our cost-effectiveness calculations, we have

calculated a second set of $/ton values in which we credit some of the costs to SO2 and direct

sulfate PM, with the remaining costs being used to calculate $/ton NOx+NMHC. As a result, we
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-6

have produced both "credited" and "uncredited" $/ton NOx+NMHC values; the former takes into

account the SO2 and direct PM emission reductions associated with our proposed standards,

while the latter does not.

Cost-effectiveness values for the control of SO2 and direct PM represent conservative

estimates of the cost of measures that will need to be implemented in the future in order for all

areas to reach attainment. Such cost-effectiveness values are therefore an appropriate source for

estimating the amount of the costs to credit to these pollutants. As a result, we credited some

costs to SO2 and direct PM through the application of cost-effectiveness ($/ton) values for these

two pollutants withdrawn from other sources. 

In concept, we would consider the most expensive program needed to reach attainment a

good representation of the ultimate value of PM or SO2. However, in this rulemaking, we chose

to simplify by using more conservative approaches to establish crediting values for PM and SO2. 

The potential future programs evaluated as part of the NAAQS revisions rulemaking (discussed

in more detail in Section VI.D below) provided a reasonable source for identifying the value of

SO2 and direct PM in terms of their cost-effectiveness.

Out of the nine SO2 control programs evaluated in the NAAQS revisions rule, eight were

actually used in the modeling of ambient concentrations of PM based on their contribution to

secondary PM (sulfate) levels in PM nonattainment areas. The modeling showed that these eight

programs, along with other PM control programs as described above, permitted 70 percent of

counties not meeting the annual 8-hour PM standard to come into attainment. The

cost-effectiveness of the eight SO2 control programs ranged from $1600/ton to $111,500/ton. In

this particular rulemaking, rather than attempt to identify a more precise credit value for SO2

based on the last measures needed for attainment, we have for simplicity’s sake used the average

cost effectiveness of the eight SO2 control programs, calculated to be $4800 a ton. This average

value of $4800/ton was used in the crediting of some costs to SO2, and represents a conservative

valuation of SO2.

The NAAQS revisions rule also evaluated PM control strategies, accounting for both

PM10 and PM2.5. The average cost-effectiveness for the PM control strategies considered in the

NAAQS revisions rule ranged from $2,400/ton (for PM10) to $12,900/ton (for PM2.5). However,

a recent rulemaking setting standards for urban busses3

 determined that the cost-effectiveness of

PM control for these heavy-duty diesel engines was $10,000 - $16,000/ton. In this particular

rulemaking, rather than attempt to identify an more precise credit value for PM based on the last

measures needed for attainment, we have for simplicity’s sake used $10,000/ton as a

conservative but reasonable crediting value for PM for our proposed standards. 

The cost crediting was applied after all costs associated with compliance with our

proposed standards were calculated and summed. The per-vehicle tons reduced of both direct

PM and SO2 were multiplied by the respective cost-effectiveness values of $10,000/ton and

$4800/ton (see Sections VI.C.3 and VI.C.4 below for tons calculations). As a result, $53.73 of

the total costs were apportioned to SO2, while $3.96 was apportioned to direct PM. These

amounts are independent of whether we are considering a near-term or long-term cost-
Chapter VI: Cost Effectiveness

VI-7

effectiveness calculation, since the total tons reduced for these two compounds is the same, on a

per-vehicle basis, in any year of the program. A summary of the costs used in our costeffectiveness calculations is given below in Table VI-2. 

Table VI-2. Fleet Average Per-vehicle Costs Used in Cost-effectiveness

Near-term costs

($)

Long-term costs

($)

Total uncredited costs 230.06 188.43

SO2 credit allocation -53.73 -53.73

Direct PM credit allocation -3.96 -3.96

Total credited costs 172.37 130.74

C. Emission Reductions

In order to determine the overall cost-effectiveness of the standards we are proposing, it

was necessary to calculate the lifetime tons of each pollutant reduced on a per vehicle basis. 

This section will describe the steps involved in these calculations. In general, emission

reductions were calculated for NOx, NMHC, primary PM, and SO2 in a manner analogous to the

discounted lifetime fuel costs described in Section V.B.4. 

1. NOx and NMHC

Our proposed standards are intended primarily to reduce emissions of NOx and NMHC. 

We have determined that the cost-effectiveness of our proposed standards should be determined

for both NOx and NMHC. Several past rulemakings which produced reductions in both of these

pollutants have taken an approach to cost-effectiveness that sums the NOx and NMHC emission

reductions. This approach leads to $/ton NOx+NMHC. In addition, many standards for mobile

sources have been established in terms of NOx+NMHC caps. Thus we believe that this

approach to cost-effectiveness is appropriate for our proposed Tier 2 standards as well, because

we are proposing more stringent exhaust standards for both NOx and NMHC (separately). This

approach also allows for a direct comparison to previous programs for which NOx and NMHC

were summed in the cost-effectiveness analyses.

The discounted lifetime tonnage numbers for NOx, exhaust NMHC, and evaporative

NMHC were based on average in-use emission levels developed for EPA’s proposed MOBILE6

on-highway inventory model. These in-use emission levels were expressed in terms of average

gram/mile emissions for each year in a vehicle’s life, up to 25 years. From this basis, lifetime

tonnage estimates were developed using the following procedure: 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-8

1) Annual mileage accumulation levels proposed for MOBILE6 were applied to the

in-use emission rates for each year in a vehicle's life to generate total mass emissions

produced in each year by that vehicle.

2) The resultant mass emissions were multiplied by the probability of survival in the

appropriate year, known as the "survival" rate, from estimates for cars and trucks

published by NHTSA4.

3) A seven percent annual discount factor, compounded from the first year of the

vehicle's life, was then applied for each year to allow calculation of net present value

lifetime emissions. 

Converting to tons and summing across each year results in the total discounted lifetime

per-vehicle tons. This calculation can be described mathematically as follows:

LE = 3 [{(AVMT)i

 C (SURVIVE)i C (ER)i C (K)}/(1.07)i-1]

Where:

LE = Discounted lifetime emissions in tons/vehicle

(AVMT)i = Annual vehicle miles traveled in year i of a vehicle's operational life

(SURVIVE)i = Probability of vehicle survival after i years of service

(ER)i = Emission rate, g/mi in year i of a vehicle's operational life

K = Conversion factor, 1.102 x 10-6 tons/gram

i = Vehicle years of operation, counting from 1 to 25

For NOx and exhaust NMHC, we generated discounted lifetime tonnage values for each

vehicle class (LDV, LDT1, LDT2, LDT3, LDT4) using the above equation. This was done

separately for the baseline and control cases. The baseline case included the NLEV vehicle

program (LEV for LDV, LDT1 and LDT2; Tier 1 for LDT3 and LDT4) and the in-use fuel

program (RFG in the appropriate areas, modeled at 150 ppm sulfur for the summer; conventional

gasoline in the remaining areas, modeled at 330 ppm sulfur). The control case entailed the Tier

2 vehicle program (0.07 g NOx/mi and 0.09 g NMHC/mi for all vehicle classes) and fuel

program (30 ppm nationwide). Baseline and controlled sulfur levels also included the maximum

sulfur levels that would be seen by a vehicle over its lifetime in order to estimate the impacts of

catalyst irreversibility as described in Section VI.C.2 below. Thus the actual number of sulfur

cases was four: two for the average baseline and control sulfur levels, and two more for the

maximum baseline and control sulfur levels. For each permutation of vehicle and fuel program,

tonnage estimates were also developed for IM and non-IM areas to allow generation of a

nationwide composite tonnage estimate. The tonnage values that we calculated according to this

procedure are presented in Appendix VI-A.

Before using the tonnage values to calculate the cost-effectiveness of our proposed

program, it was necessary for us to combine the values for IM vs. no-IM areas and RFG vs.

conventional gasoline areas in an effort to represent the national scope of our proposed program. 
Chapter VI: Cost Effectiveness

VI-9

The weighting factors were based on an analysis of the fraction of the population in the 47 state

area (U.S. excluding California, Alaska, and Hawaii) which was located within or outside of IM

and RFG areas5. We also made a distinction between summer and winter RFG, since summergrade Phase II RFG having approximately 150 ppm sulfur will be used for only 40 percent of the

year, while winter-grade Phase II RFG having approximately 300 ppm sulfur will be used for the

remaining 60 percent of the year. 1998 population data was used to determine these population

fractions by state, and then nationwide weighting factors were produced from the sum of these

fractional by-state populations. The geographical results are shown in Table VI-3. 

For evaporative NMHC, we based the baseline tonnage values on gram/mile emissions

projected by MOBILE5b. To model our control case, we projected the gram/mile emissions

using the version of MOBILE5b which was modified to reflect the benefits of our proposed Tier

2 controls. We used gram/mile emission factors from 2030 to reflect a baseline fleet consisting

entirely of Enhanced Evaporative vehicles, and a control fleet consisting of essentially all Tier 2

vehicles6. The evaporative tonnage values are presented in Appendix VI-B.

Table VI-3. Weighting Factors for NOx and NMHC Lifetime Tonnage Values

RFG program area? IM program area? Fraction of population

Yes Yes 0.248

Yes No 0.019

No Yes 0.228

No No 0.505

The final step before calculating the cost-effectiveness of our proposed program was to

weight the discounted lifetime tonnage values for each vehicle class by their respective fraction

of the fleet. These fractions were developed based on our projection that LDT sales will

stabilize at 60 percent of the light-duty market by 2008. This value is based on sales data

projected by auto manufacturers for 1998 model year certification. Table VI-4 presents the final

weighting factors we used to develop fleet-average tonnage values.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

gg Tonnage values at 800 ppm and 80 ppm sulfur were used for estimating the impacts of irreversibility. 

See Section VI.C.2 for details.

VI-10

Table VI-4. Vehicle Class Sales Weighting Factors

LDV 0.4

LDT1 0.11

LDT2 0.34

LDT3 0.10

LDT4 0.05

The final discounted lifetime tonnage values in the absence of sulfur irreversibility effects for an

average fleet vehicle meeting either the standards for NLEV or our proposed Tier 2 standards are

shown in Tables VI-5 and VI-6, respectively.

Table VI-5. Fleet-average, Per-vehicle Discounted 

Lifetime Tons for the NLEV Baseline

Sulfur 

(ppm)

NOx 

(tons)

Exhaust

NMHC

(tons)

Evap

NMHC

(tons)

800gg 0.13925 0.03623 0.04192

305 0.11295 0.03285 0.04192

Table VI-6. Fleet-average, Per-vehicle Discounted 

Lifetime Tons for Proposed Tier 2 Standards

Sulfur 

(ppm)

NOx

(tons)

Exhaust

NMHC

(tons)

Evap

NMHC

(tons)

80 0.03557 0.02366 0.03887

30 0.02738 0.02247 0.03887

The values in Tables VI-5 and VI-6 were not used in the cost-effectiveness calculations directly. 

Instead, the effects of irreversibility were first calculated according to the methodology

described in Section VI.C.2 below using the tonnage values from the tables above.
Chapter VI: Cost Effectiveness

VI-11

2. Irreversibility

As described in Appendix B, we believe that vehicles meeting the SFTP and/or NLEV

standards will exhibit an increased tendency towards sulfur poisoning of their catalysts. As a

result of sulfur poisoning, catalyst efficiency is reduced and emissions increase. Since all

vehicles are currently certified on low sulfur fuel, current in-use emissions can be expected to be

higher than certification levels.

The increased emissions that result when an SFTP-compliant NLEV or Tier 2 vehicle is

run on high sulfur fuel is a function of the "sulfur sensitivity" of the catalyst. This aspect of

sulfur poisoning has been taken into account in our cost-effectiveness analysis by virtue of the

fact that the change in lifetime tons reduced is a function of our proposed gasoline sulfur

standard. The impacts of the sulfur sensitivities on emissions for pre-SFTP and post-SFTP

compliant vehicles are described in an EPA Technical Report7

.

However, one aspect of sulfur poisoning requires special treatment in our costeffectiveness analysis. In SFTP-compliant vehicles, some sulfur poisoning due to the use of high

sulfur fuel often extends well beyond the time that high sulfur fuel is actually used. When an

SFTP-compliant vehicle returns to using low sulfur gasoline after having been operated on high

sulfur fuel, a degree of poisoning remains. This effect is termed "irreversibility," and is

described in detail in Appendix B. We have estimated that the irreversibility effect for SFTPcompliant vehicles will be about 50 percent, meaning that 50 percent of the emission reductions

that would otherwise occur when changing from high to low sulfur fuel are lost due to permanent

sulfur poisoning of the catalyst. That is to say, 50 percent of the sensitivity effect is permanent

or “irreversible” regardless of the fuel sulfur level.

Since our cost-effectiveness analysis makes use of emissions summed over the life of a

vehicle, we must account for the fact that there may have been hundreds of refuelings in that

time frame with repeated switches between low and high sulfur fuel. Since the higher sulfur

fuels will be widely available, we expect vehicles to be exposed to such fuels early in their lives. 

As a result, the irreversibility effect will be present for most of these vehicles' lifetimes. 

Irreversibility effects on lifetime emissions can then be calculated as the difference between

lifetime emissions at high sulfur fuel and lifetime emissions at the average fuel sulfur level. 

While it is possible that the irreversibility effect can be reduced or eliminated under

certain driving conditions, such as high temperature/high load driving, we believe that this is

unlikely for SFTP-compliant vehicles. The data regarding catalyst cleanup conditions for future

vehicles is quite limited. Lacking data to support the recovery of full catalyst functionality, our

analysis treats irreversibility as a permanent effect.

Under our proposed gasoline sulfur program, the average sulfur level will be 30 ppm and

the maximum allowable level will be 80 ppm. Per-vehicle lifetime emissions at these two sulfur

levels were used to determine the effect of irreversibility on Tier 2 vehicles. The Tier 2 lifetime

tonnage values for NOx and exhaust NMHC at 30 ppm, which included the effects of
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-12

irreversibility and which was actually used in our cost-effectiveness analysis, was calculated

from the following equation:

ILE30 = (IE) C (LE80 - LE30) + LE30

Where:

ILE30 = Irreversibility-impacted, discounted lifetime emissions of Tier 2 vehicles at 

30 ppm sulfur in tons/vehicle, for each vehicle class

IE = Irreversibility impact, 0.50

LE80 = Discounted lifetime emissions of Tier 2 vehicles at 80 ppm sulfur in

tons/vehicle, for each vehicle class

LE30 = Discounted lifetime emissions of Tier 2 vehicles at 30 ppm sulfur in

tons/vehicle, for each vehicle class

For the NLEV vehicles forming our baseline, the average sulfur level was established as

305 ppm as described in Section VI.A.3 above. Apart from an ASTM maximum allowable value

of 1000 ppm, there is no regulated in-use maximum value for gasoline sulfur. However, after the

year 2000, we project that more than 95 percent of gasoline will contain sulfur levels below 800

ppm. We have therefore chosen 800 as the maximum sulfur level on which NLEV vehicles will

be operated. It could be argued that 1000 ppm is a more appropriate value to represent the

maximum (or even higher, as a few in-use batches of gasoline exceed the ASTM limit). We

believe that a maximum of 800 ppm is more representative of the maximum sulfur level that the

average NLEV vehicle will be operated on, since very few vehicles will ever see sulfur levels as

high as 1000 ppm.

Per-vehicle lifetime emissions at 305 ppm and 800 ppm were used to determine the effect

of irreversibility on vehicles meeting NLEV standards. Unlike for Tier 2 vehicles, however,

NLEV standards only apply to LDV, LDT1, and LDT2, while LDT3 and LDT4 meet Tier 1

standards as well as the SFTP. As discussed in Appendix B, we believe that irreversibility

applies to any SFTP-compliant vehicle, including Tier 1 vehicles produced after the year 2000. 

Thus the calculations followed the same procedure as that used for Tier 2 vehicles:

ILE305 = (IE) C (LE800 - LE305) + LE305

Where:

ILE305 = Irreversibility-impacted, discounted lifetime emissions of SFTP-complaint

NLEV vehicles at 305 ppm sulfur in tons/vehicle, for each vehicle class

IE = Irreversibility impact, 0.50

LE800 = Discounted lifetime emissions of NLEV vehicles at 800 ppm sulfur in 

tons/vehicle, for each vehicle class

LE305 = Discounted lifetime emissions of NLEV vehicles at 305 ppm sulfur in 

tons/vehicle, for each vehicle class
Chapter VI: Cost Effectiveness

VI-13

After assessing the impact of irreversibility on both Tier 2 and NLEV vehicles, we were

able to develop a final set of discounted lifetime tonnage values that were actually used in our

cost-effectiveness analysis. These values are given in Table VI-7.

Table VI-7. Fleet-average, Per-vehicle Discounted 

Lifetime Tons Used in Cost-effectiveness Analysis

NOx (tons) Exhaust NMHC

(tons)

Evap NMHC

(tons)

Total NOx +

NMHC (tons)

Baseline: NLEV

at 305 ppm

0.12610 0.03454 0.04192 0.20256

Proposal: Tier 2

at 30 ppm

0.03148 0.02307 0.04020 0.09475

3. Primary Particulate Matter

Vehicles meeting our proposed standards will produce reductions in both primary and

secondary particulate matter. As described in Section VI.B.3 above, we are accounting for

reductions in primary (sulfate) PM in our cost-effectiveness analysis. Although secondary PM

reductions are not being accounted for in our cost-effectiveness analysis, they have been

included in our analysis of the health and welfare benefits of our proposed program, as described

in Section VII.

Primary PM emission reductions result from the removal of sulfur in gasoline, which

produces a commensurate reduction in the amount of sulfate PM emitted from the tailpipe. To

calculate the reduction, we have assumed that sulfate PM accounts for 1 percent of all sulfur

exiting the tailpipe on a molar basis. Primary sulfate PM exists almost entirely as sulfuric acid,

and is generally hydrated. We have assumed seven hydrations, consistent with the approach

taken in the development of EPA's NON-ROAD emissions model.

Discounted lifetime tons of primary PM reduced as a result of our proposed gasoline

sulfur standard are calculated according to the following equation:

LE = 3 [{(AVMT)i

 C (SURVIVE)i ÷ (FE) C (D) C (SUL) C (F) C (MC) C (K)}/(1.07)i-1]

Where:

LE = Discounted lifetime emissions of primary PM in tons/vehicle

(AVMT)i

 = Annual vehicle miles traveled in year i of a vehicle's operational life

(SURVIVE)i = Fraction of vehicles still operating after i years of service

FE = Fuel economy by vehicle class (see Section VI.B.4)
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-14

D = Density of gasoline, 6.17 lb/gal

SUL = Change in gasoline sulfur concentration, 2.75x10-4 lb sulfur/lb fuel (275 ppm) 

F = Fraction of total sulfur which exits the tailpipe as primary PM, 0.01

MC = Molar conversion factor, 7 lb sulfuric acid per lb sulfur

K = Conversion factor, 5.0 x 10-4 tons/lb

i = Vehicle years of operation, counting from 1 to 25

After applying the above equation separately for each vehicle class and weighting the

resulting tonnage values according to the factors presented in Table VI-4, we determined that the

fleet-average, per-vehicle discounted lifetime tons of primary PM reduced is 0.000396. This is

the value that was used to determine the PM-based credit that was applied to the total costs as

described in Section VI.B.3 and summarized in Table VI-2.

4. Sulfur Dioxide

The sulfur contained in gasoline exists the tailpipe as either sulfuric acid, a component of

primary particulate matter, or as sulfur dioxide (SO2). As described in Section VI.C.2 above, we

have assumed that sulfate PM, as hydrated sulfuric acid, accounts for 1 percent of all sulfur

exiting the tailpipe on a molar basis. Thus the remaining 99 percent of sulfur exiting the tailpipe

is in the form of SO2. 

Discounted lifetime tons of SO2 reduced as a result of our proposed gasoline sulfur

standard are calculated according to the following equation:

LE = 3 [{(AVMT)i C (SURVIVE)i ÷ (FE) C (D) C (SUL) C (F) C (MC) C (K)}/(1.07)i-1]

Where:

LE = Discounted lifetime emissions of SO2 in tons/vehicle

(AVMT)i

 = Annual vehicle miles traveled in year i of a vehicle's operational life

(SURVIVE)i = Fraction of vehicles still operating after i years of service

FE = Fuel economy by vehicle class (see Section VI.B.4)

D = Density of gasoline, 6.17 lb/gal

SUL = Change in gasoline sulfur concentration, 2.75x10-4 lb sulfur/lb fuel (275 ppm)

F = Fraction of total sulfur which exits the tailpipe as SO2, 0.99

MC = Molar conversion factor, 2 lb SO2 per lb sulfur

K = Conversion factor, 5.0 x 10-4 tons/lb

i = Vehicle years of operation, counting from 1 to 25

After applying the above equation separately for each vehicle class and weighting the

resulting tonnage values according to the factors presented in Table VI-4, we determined that the

fleet-average, per-vehicle discounted lifetime tons of SO2 reduced is 0.01119. This is the value

that was used to determine the SO2-based credit that was applied to the total costs as described in

Section VI.B.3 and summarized in Table VI-2.
Chapter VI: Cost Effectiveness

VI-15

D. Results

We calculated the cost-effectiveness of our proposed standards for Tier 2 exhaust, Tier 2

evaporative, and gasoline sulfur as the total per-vehicle, discounted lifetime costs divided by the

total per-vehicle, discounted lifetime tons reduced. Costs are given in Table VI-2. The tons

reduced are calculated from the values in Table VI-7 as the difference between our NLEV

baseline at our baseline sulfur level of 305 ppm, and our proposed Tier 2 standards at our

proposed sulfur standard of 30 ppm. The results are given in Table VI-8.

Table VI-8. Cost-effectiveness of the Proposed Standards

Credited

costs ($)

Uncredited

costs ($)

Tons

NOx+NMHC

Credited

$/ton

Uncredited

$/ton

Near term 172.37 230.06 0.10781 1599 2134

Long term 130.74 188.43 0.10781 1213 1748

We also evaluated the cost effectiveness of a number of alternative control options using

the methodology described in this Section. The options evaluated were:

- The proposed Tier 2 emission standards with no reduction in gasoline sulfur levels;

- The proposed Tier 2 emission standards with the sulfur controls proposed by API and 

NPRA, which include average sulfur standards of 150 ppm in the NOx Control Region 

(nominally the eastern two-thirds of the U.S.) and 300 ppm elsewhere (i.e., the West) 

starting in 2004;

- The proposed Tier 2 emission standards with average sulfur standard of 30 ppm in 

API/NPRA NOx Control Region and 150 ppm in the West starting in 2004;

- The proposed Tier 2 emission standards with an 80 ppm nationwide sulfur standard 

starting in 2004; 

- The proposed 30 ppm nationwide sulfur standard with California Phase 2 LEV emission 

standards (excluding the ZEV mandate); because these standards change from year to 

year, we chose to evaluate the 2010 model year standards;

All of these alternative control options are evaluated relative to the same baseline which was

used to evaluate the cost effectiveness of the proposed Tier 2 and sulfur standards. The results

are shown in Table VI-9 below.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-16

Table VI-9. Alternative program options evaluated by EPA

Credited

costs ($)

Uncredited

costs ($)

Tons

NOx+NMHC

Credited

$/ton

Uncredited

$/ton

Tier 2 vehicle standards with 80 ppm nationwide

Near term 155.37 202.58 0.09921 1566 2042

Long term 115.63 162.84 0.09921 1166 1641

Tier 2 vehicle standards with no change in sulfur

Near term 128.14 128.14 0.07319 1751 1751

Long term 93.57 93.57 0.07319 1278 1278

Tier 2 vehicle standards with 150 ppm in API region, 300 ppm in non-API region

Near term 136.80 161.81 0.08719 1569 1856

Long term 99.89 124.90 0.08719 1146 1433

Tier 2 vehicle standards with 30 ppm in API region, 150 ppm in non-API region

Near term 165.20 216.57 0.10263 1610 2110

Long term 124.51 175.88 0.10263 1213 1714

California LEV-II NMOG emission standards with 30 ppm nationwide

Near term 205.02 262.70 0.11168 1836 2352

Long term 158.75 216.43 0.11168 1421 1938

As can be seen, the cost effectiveness of the five alternatives are all quite similar to that

of the proposed program. The long-term credited cost per ton of the alternatives are all within

$50 per ton of that for the proposed program, with the exception of the California LEV-II

NMOG standards. The long-term credited cost effectiveness of this program is roughly $150 per

ton higher than that of the proposed program. For reasons cited elsewhere in this Draft RIA and

in the preamble to the proposed rule, EPA chose not to propose any of these alternative control

programs in lieu of the proposed standards.
Chapter VI: Cost Effectiveness

gg Cost-effectiveness of Tier 1 standards was originally calculated separately for NOx and NMHC. A

combined cost-effectiveness was recalculated for our proposal. See internal memorandum from David Korotney to

Docket A-97-10, "Calculation of Tier 1 vehicle cost-effectiveness in terms of $/ton NOx+NMHC," document

number II-B-03.

VI-17

Because the primary purpose of cost-effectiveness is to compare our proposed program to

alternative programs, we made a comparison between the values in Table VI-8 and the costeffectiveness of other programs. Table VI-10 summarizes the cost effectiveness of several

recent EPA actions for controlled emissions from mobile sources.

Table VI-10. Cost-effectiveness of Previously Implemented 

Mobile Source Programs (Costs Adjusted to 1997 Dollars)

Program

$/ton

NOx+NMHC

2004 Highway HD Diesel stds

Non-road Diesel engine stds

Tier 1 vehicle controls

NLEV

Marine SI engines 

On-board diagnostics

300

410-650

1,980-2,690gg

1,859

1,128-1,778

2,228

By comparing the values from Table VI-8 to those in Table VI-10, we can see that the

cost effectiveness of the Tier 2/gasoline sulfur standards falls within the range of these other

programs. Engine-based standards (the 2004 highway heavy-duty diesel standards, the non-road

diesel engine standards and the marine spark-ignited engine standards) have generally been less

costly than our proposed Tier 2/gasoline sulfur standards. Vehicle standards, most similar to

today’s proposal, have comparable or higher values than our proposed Tier 2/gasoline sulfur

program. 

The primary advantage of making comparisons to previously implemented programs is

that their cost-effectiveness values were based on a rigorous analysis and are generally accepted

as representative of the efficiency with which those programs reduce emissions. Unfortunately,

previously implemented programs can be poor comparisons because they may not be

representative of the cost-effectiveness of potential future programs. For instance, it is tempting

to look at the engine standards and conclude that more reductions at a similar low cost

effectiveness should still be available. This is especially true for the two largest categories

(highway and non-road diesel engines) where new standards have been adopted that were highly

cost effective. However, cost effectiveness was not a limiting consideration in either case. 

Rather, the level of the standards selected was based on technical feasibility in the time

available. 

We do not believe that significant further control is available from highway or non-road
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-18

diesel engines through more stringent standards at the cost effectiveness levels shown in Table

VI-10. Based on current knowledge, the next generation of controls for these diesel engines

would require advanced after-treatment devices, still in the research and development phase. 

Such controls have not yet been employed and when they become available will be more costly

and will have difficulty functioning without changes to diesel fuel. 

On the vehicle side, the last two sets of standards were Tier 1 and NLEV, which had cost

effectiveness comparable to or higher than our proposed Tier 2/gasoline sulfur standards. 

Compared to engines, these levels reflect the advanced (and more expensive) state of vehicle

control technology, where standards have been in effect for a much longer period than for

engines. Based on these results, Tier 2/gasoline sulfur appears to be a logical and consistent next

step in vehicle control.

The most complete source of information on the cost-effectiveness of potential future

programs is the rulemaking which revised the PM and ozone National Ambient Air Quality

Standards (NAAQS). The Regulatory Impact Analysis (RIA) associated with that rulemaking

contained a listing of potential future emission control programs and their cost-effectiveness8

. 

The listing categorizes control programs by mobile, point, and area source strategies for a total

of 236 potential future programs. Although the majority of the programs in this list would most

likely be implemented on a local or regional basis, they still provide the most complete

information available on alternative programs and their associated cost-effectiveness. 

Of the 236 potential future programs in the NAAQS RIA, 112 produced NOx reductions

with an average cost-effectiveness of $13,000/ton, while 55 programs produced NMHC

reductions with an average cost-effectiveness of $5,000/ton. These values confirm that future

controls will be more expensive than past controls. In fact, for the purposes of evaluating the

capability of potential future controls for bringing all areas into attainment, an upper limit of

$10,000/ton was established. As a result of the analyses conducted in the context of the NAAQS

revisions rulemaking, it was determined that some areas would be willing to pay up to

$10,000/ton for local control measures in order to achieve attainment.

We recognize that the cost effectiveness calculated for our proposed program is not

strictly comparable to the $10,000/ton limit established in the NAAQS analyses since the

technologies identified there can be targeted at the specific nonattainment areas of concern,

while the proposed Tier 2/gasoline sulfur program would apply nationwide. However, we are

not using cost effectiveness to portray Tier 2 as a control strategy to select as an alternative to

local controls because of its lower cost effectiveness. Rather, the program we are proposing

today is likely one of several programs, both national and local in nature, that will be necessary

for attainment and maintenance of the NAAQS.

In summary, given the array of controls that will have to be implemented to make

progress toward attaining and maintaining the NAAQS, we believe that the weight of the

evidence from alternative means of providing substantial NOx + NMHC emission reductions

indicates that our Tier 2/gasoline sulfur proposal is cost-effective. This is true from the

perspective of other mobile source control programs or from the perspective of other stationary
Chapter VI: Cost Effectiveness

VI-19

source technologies that might be considered.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-20

APPENDIX VI-A : Discounted Lifetime Tonnage Values for Exhaust

Emissions

StandardVeh clasIM case Sulfur Fuel NOx tons NMHC tons

NLEV LDT1 IM 30 Conventional 0.04614 0.01839

NLEV LDT1 IM 80 Conventional 0.06296 0.01989

NLEV LDT1 IM 330 Conventional 0.10032 0.02252

NLEV LDT1 IM 800 Conventional 0.13343 0.02424

NLEV LDT1 IM 30 RFG 0.04494 0.01565

NLEV LDT1 IM 80 RFG 0.06132 0.01694

NLEV LDT1 IM 150 RFG 0.07523 0.01787

NLEV LDT1 IM 300 RFG 0.09463 0.01901

NLEV LDT1 IM 800 RFG 0.12953 0.02061

NLEV LDT1 No IM 30 Conventional 0.06646 0.03540

NLEV LDT1 No IM 80 Conventional 0.08716 0.03669

NLEV LDT1 No IM 330 Conventional 0.13312 0.03906

NLEV LDT1 No IM 800 Conventional 0.18824 0.04059

NLEV LDT1 No IM 30 RFG 0.06478 0.03000

NLEV LDT1 No IM 80 RFG 0.08495 0.03110

NLEV LDT1 No IM 150 RFG 0.10209 0.03192

NLEV LDT1 No IM 300 RFG 0.12597 0.03297

NLEV LDT1 No IM 800 RFG 0.16619 0.03424

NLEV LDT2 IM 30 Conventional 0.07705 0.02205

NLEV LDT2 IM 80 Conventional 0.08783 0.02329

NLEV LDT2 IM 330 Conventional 0.10639 0.02535

NLEV LDT2 IM 800 Conventional 0.11983 0.02668

NLEV LDT2 IM 30 RFG 0.07503 0.01878

NLEV LDT2 IM 80 RFG 0.08552 0.01984

NLEV LDT2 IM 150 RFG 0.09307 0.02059

NLEV LDT2 IM 300 RFG 0.10225 0.02147

NLEV LDT2 IM 800 RFG 0.11660 0.02271

NLEV LDT2 No IM 30 Conventional 0.09894 0.03943

NLEV LDT2 No IM 80 Conventional 0.11092 0.04051

NLEV LDT2 No IM 330 Conventional 0.13155 0.04241

NLEV LDT2 No IM 800 Conventional 0.14896 0.04306

NLEV LDT2 No IM 30 RFG 0.09642 0.03344

NLEV LDT2 No IM 80 RFG 0.10809 0.03436

NLEV LDT2 No IM 150 RFG 0.11650 0.03502

NLEV LDT2 No IM 300 RFG 0.12671 0.03586

NLEV LDT2 No IM 800 RFG 0.14218 0.03688

NLEV LDT3 IM 30 Conventional 0.15696 0.05429

NLEV LDT3 IM 80 Conventional 0.15929 0.05585

NLEV LDT3 IM 330 Conventional 0.17147 0.06451

NLEV LDT3 IM 800 Conventional 0.18512 0.07818

NLEV LDT3 IM 30 RFG 0.15282 0.04632

NLEV LDT3 IM 80 RFG 0.15508 0.04765

NLEV LDT3 IM 150 RFG 0.15830 0.04960

NLEV LDT3 IM 300 RFG 0.16546 0.05410

NLEV LDT3 IM 800 RFG 0.17755 0.06646

NLEV LDT3 No IM 30 Conventional 0.18307 0.07525

NLEV LDT3 No IM 80 Conventional 0.18545 0.07659

NLEV LDT3 No IM 330 Conventional 0.19794 0.08400

NLEV LDT3 No IM 800 Conventional 0.22195 0.09850

NLEV LDT3 No IM 30 RFG 0.17836 0.06396

NLEV LDT3 No IM 80 RFG 0.18068 0.06510

NLEV LDT3 No IM 150 RFG 0.18399 0.06677
Chapter VI: Cost Effectiveness

VI-21

NLEV LDT3 No IM 300 RFG 0.19134 0.07062

NLEV LDT3 No IM 800 RFG 0.20478 0.08046

NLEV LDT4 IM 30 Conventional 0.23321 0.06443

NLEV LDT4 IM 80 Conventional 0.23669 0.06632

NLEV LDT4 IM 330 Conventional 0.25494 0.07682

NLEV LDT4 IM 800 Conventional 0.28329 0.09441

NLEV LDT4 IM 30 RFG 0.22703 0.05498

NLEV LDT4 IM 80 RFG 0.23042 0.05659

NLEV LDT4 IM 150 RFG 0.23525 0.05895

NLEV LDT4 IM 300 RFG 0.24598 0.06442

NLEV LDT4 IM 800 RFG 0.27546 0.08026

NLEV LDT4 No IM 30 Conventional 0.26188 0.08646

NLEV LDT4 No IM 80 Conventional 0.26534 0.08807

NLEV LDT4 No IM 330 Conventional 0.28349 0.09702

NLEV LDT4 No IM 800 Conventional 0.30934 0.11431

NLEV LDT4 No IM 30 RFG 0.25512 0.07351

NLEV LDT4 No IM 80 RFG 0.25849 0.07489

NLEV LDT4 No IM 150 RFG 0.26330 0.07690

NLEV LDT4 No IM 300 RFG 0.27397 0.08155

NLEV LDT4 No IM 800 RFG 0.30272 0.09452

NLEV LDV IM 30 Conventional 0.03043 0.01124

NLEV LDV IM 80 Conventional 0.04183 0.01224

NLEV LDV IM 330 Conventional 0.06714 0.01400

NLEV LDV IM 800 Conventional 0.08982 0.01517

NLEV LDV IM 30 RFG 0.02963 0.00957

NLEV LDV IM 80 RFG 0.04073 0.01043

NLEV LDV IM 150 RFG 0.05016 0.01106

NLEV LDV IM 300 RFG 0.06330 0.01182

NLEV LDV IM 800 RFG 0.08723 0.01291

NLEV LDV No IM 30 Conventional 0.03939 0.01892

NLEV LDV No IM 80 Conventional 0.05250 0.01983

NLEV LDV No IM 330 Conventional 0.08161 0.02146

NLEV LDV No IM 800 Conventional 0.11664 0.02264

NLEV LDV No IM 30 RFG 0.03839 0.01605

NLEV LDV No IM 80 RFG 0.05116 0.01683

NLEV LDV No IM 150 RFG 0.06201 0.01740

NLEV LDV No IM 300 RFG 0.07713 0.01812

NLEV LDV No IM 800 RFG 0.10329 0.01903

Tier 2 LDT1 IM 30 Conventional 0.02183 0.01839

Tier 2 LDT1 IM 80 Conventional 0.02903 0.01989

Tier 2 LDT1 IM 330 Conventional 0.04500 0.02252

Tier 2 LDT1 IM 800 Conventional 0.05863 0.02470

Tier 2 LDT1 IM 30 RFG 0.02128 0.01565

Tier 2 LDT1 IM 80 RFG 0.02828 0.01694

Tier 2 LDT1 IM 150 RFG 0.03424 0.01787

Tier 2 LDT1 IM 300 RFG 0.04253 0.01901

Tier 2 LDT1 IM 800 RFG 0.05683 0.02055

Tier 2 LDT1 No IM 30 Conventional 0.04163 0.03540

Tier 2 LDT1 No IM 80 Conventional 0.05338 0.03669

Tier 2 LDT1 No IM 330 Conventional 0.07948 0.03906

Tier 2 LDT1 No IM 800 Conventional 0.11031 0.04041

Tier 2 LDT1 No IM 30 RFG 0.04060 0.03000

Tier 2 LDT1 No IM 80 RFG 0.05206 0.03110

Tier 2 LDT1 No IM 150 RFG 0.06180 0.03192

Tier 2 LDT1 No IM 300 RFG 0.07537 0.03297

Tier 2 LDT1 No IM 800 RFG 0.09735 0.03416

Tier 2 LDT2 IM 30 Conventional 0.02033 0.01832

Tier 2 LDT2 IM 80 Conventional 0.02685 0.01982

Tier 2 LDT2 IM 330 Conventional 0.04133 0.02242

Tier 2 LDT2 IM 800 Conventional 0.05357 0.02459
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-22

Tier 2 LDT2 IM 30 RFG 0.01982 0.01559

Tier 2 LDT2 IM 80 RFG 0.02617 0.01687

Tier 2 LDT2 IM 150 RFG 0.03157 0.01780

Tier 2 LDT2 IM 300 RFG 0.03909 0.01893

Tier 2 LDT2 IM 800 RFG 0.05191 0.02045

Tier 2 LDT2 No IM 30 Conventional 0.04101 0.03535

Tier 2 LDT2 No IM 80 Conventional 0.05236 0.03663

Tier 2 LDT2 No IM 330 Conventional 0.07756 0.03898

Tier 2 LDT2 No IM 800 Conventional 0.10723 0.04033

Tier 2 LDT2 No IM 30 RFG 0.04000 0.02996

Tier 2 LDT2 No IM 80 RFG 0.05106 0.03105

Tier 2 LDT2 No IM 150 RFG 0.06047 0.03187

Tier 2 LDT2 No IM 300 RFG 0.07357 0.03291

Tier 2 LDT2 No IM 800 RFG 0.09464 0.03413

Tier 2 LDT3 IM 30 Conventional 0.02730 0.02130

Tier 2 LDT3 IM 80 Conventional 0.03626 0.02302

Tier 2 LDT3 IM 330 Conventional 0.05614 0.02602

Tier 2 LDT3 IM 800 Conventional 0.07307 0.02848

Tier 2 LDT3 IM 30 RFG 0.02661 0.01813

Tier 2 LDT3 IM 80 RFG 0.03533 0.01960

Tier 2 LDT3 IM 150 RFG 0.04274 0.02066

Tier 2 LDT3 IM 300 RFG 0.05307 0.02197

Tier 2 LDT3 IM 800 RFG 0.07083 0.02369

Tier 2 LDT3 No IM 30 Conventional 0.05087 0.04114

Tier 2 LDT3 No IM 80 Conventional 0.06519 0.04260

Tier 2 LDT3 No IM 330 Conventional 0.09700 0.04528

Tier 2 LDT3 No IM 800 Conventional 0.13467 0.04681

Tier 2 LDT3 No IM 30 RFG 0.04961 0.03486

Tier 2 LDT3 No IM 80 RFG 0.06358 0.03611

Tier 2 LDT3 No IM 150 RFG 0.07544 0.03703

Tier 2 LDT3 No IM 300 RFG 0.09198 0.03822

Tier 2 LDT3 No IM 800 RFG 0.11874 0.03979

Tier 2 LDT4 IM 30 Conventional 0.02970 0.02152

Tier 2 LDT4 IM 80 Conventional 0.03954 0.02326

Tier 2 LDT4 IM 330 Conventional 0.06139 0.02631

Tier 2 LDT4 IM 800 Conventional 0.08008 0.02883

Tier 2 LDT4 IM 30 RFG 0.02894 0.01831

Tier 2 LDT4 IM 80 RFG 0.03853 0.01981

Tier 2 LDT4 IM 150 RFG 0.04667 0.02089

Tier 2 LDT4 IM 300 RFG 0.05802 0.02221

Tier 2 LDT4 IM 800 RFG 0.07763 0.02398

Tier 2 LDT4 No IM 30 Conventional 0.05402 0.04138

Tier 2 LDT4 No IM 80 Conventional 0.06935 0.04286

Tier 2 LDT4 No IM 330 Conventional 0.10338 0.04559

Tier 2 LDT4 No IM 800 Conventional 0.14375 0.04714

Tier 2 LDT4 No IM 30 RFG 0.05268 0.03506

Tier 2 LDT4 No IM 80 RFG 0.06763 0.03633

Tier 2 LDT4 No IM 150 RFG 0.08032 0.03728

Tier 2 LDT4 No IM 300 RFG 0.09802 0.03848

Tier 2 LDT4 No IM 800 RFG 0.12673 0.04006

Tier 2 LDV IM 30 Conventional 0.01364 0.01124

Tier 2 LDV IM 80 Conventional 0.01831 0.01224

Tier 2 LDV IM 330 Conventional 0.02868 0.01400

Tier 2 LDV IM 800 Conventional 0.03766 0.01556

Tier 2 LDV IM 30 RFG 0.01328 0.00957

Tier 2 LDV IM 80 RFG 0.01783 0.01043

Tier 2 LDV IM 150 RFG 0.02170 0.01106

Tier 2 LDV IM 300 RFG 0.02709 0.01182

Tier 2 LDV IM 800 RFG 0.03653 0.01293

Tier 2 LDV No IM 30 Conventional 0.02237 0.01892
Chapter VI: Cost Effectiveness

VI-23

Tier 2 LDV No IM 80 Conventional 0.02905 0.01983

Tier 2 LDV No IM 330 Conventional 0.04389 0.02146

Tier 2 LDV No IM 800 Conventional 0.06155 0.02244

Tier 2 LDV No IM 30 RFG 0.02181 0.01605

Tier 2 LDV No IM 80 RFG 0.02832 0.01683

Tier 2 LDV No IM 150 RFG 0.03386 0.01740

Tier 2 LDV No IM 300 RFG 0.04157 0.01812

Tier 2 LDV No IM 800 RFG 0.05435 0.01930
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VI-24

APPENDIX VI-B : Discounted Lifetime Tonnage Values for

Evaporative Emissions

Standard Veh class IM case Fuel NMHC tons

2.0 gpt enhanced LDT1 IM Conventional 0.02835

2.0 gpt enhanced LDT1 IM RFG 0.01793

2.0 gpt enhanced LDT1 No IM Conventional 0.06791

2.0 gpt enhanced LDT1 No IM RFG 0.03537

2.0 gpt enhanced LDT2 IM Conventional 0.02835

2.0 gpt enhanced LDT2 IM RFG 0.01793

2.0 gpt enhanced LDT2 No IM Conventional 0.06791

2.0 gpt enhanced LDT2 No IM RFG 0.03537

2.0 gpt enhanced LDT3 IM Conventional 0.03216

2.0 gpt enhanced LDT3 IM RFG 0.01972

2.0 gpt enhanced LDT3 No IM Conventional 0.08730

2.0 gpt enhanced LDT3 No IM RFG 0.04301

2.0 gpt enhanced LDT4 IM Conventional 0.03216

2.0 gpt enhanced LDT4 IM RFG 0.01972

2.0 gpt enhanced LDT4 No IM Conventional 0.08730

2.0 gpt enhanced LDT4 No IM RFG 0.04301

2.0 gpt enhanced LDV IM Conventional 0.02184

2.0 gpt enhanced LDV IM RFG 0.01208

2.0 gpt enhanced LDV No IM Conventional 0.04722

2.0 gpt enhanced LDV No IM RFG 0.02268

Tier 2 LDT1 IM Conventional 0.02612

Tier 2 LDT1 IM RFG 0.01622

Tier 2 LDT1 No IM Conventional 0.06595

Tier 2 LDT1 No IM RFG 0.03389

Tier 2 LDT2 IM Conventional 0.02612

Tier 2 LDT2 IM RFG 0.01622

Tier 2 LDT2 No IM Conventional 0.06595

Tier 2 LDT2 No IM RFG 0.03389

Tier 2 LDT3 IM Conventional 0.02994

Tier 2 LDT3 IM RFG 0.01797

Tier 2 LDT3 No IM Conventional 0.08551

Tier 2 LDT3 No IM RFG 0.04168

Tier 2 LDT4 IM Conventional 0.02994

Tier 2 LDT4 IM RFG 0.01797

Tier 2 LDT4 No IM Conventional 0.08551

Tier 2 LDT4 No IM RFG 0.04168

Tier 2 LDV IM Conventional 0.02028

Tier 2 LDV IM RFG 0.01101

Tier 2 LDV No IM Conventional 0.04567

Tier 2 LDV No IM RFG 0.02158
Chapter VI: Cost Effectiveness

VI-25

1. U.S. EPA; Review of NAAQS for Ozone, Assessment of Scientific and Technical 

Information, Office of Air Quality Planning and Standards Staff Paper; document 

number: EPA-452\R-96-007

2. "Final Regulatory Impact Analysis: Control of Emissions of Air Pollution from Highway 

Heavy-Duty Engines." September 16, 1997. Alan Stout, U.S. EPA, OAR/OMS/EPCD. 

3. "Control of Air Pollution from New Motor Vehicles and New Motor Vehicle Engines; 

Particulate Emission Regulations for 1993 Model Year Buses, Particulate Emission 

Regulations for 1994 and Later Model Year Urban Buses, Test Procedures for Urban 

Buses, and Oxides of Nitrogen Emission Regulations for 1998 and Later Model Year 

Heavy-Duty Engines." March 24,1993. 58 FR 15781.

4. “Updated Vehicle Survivability and Travel Mileage Schedules”, November 1995, U.S. 

Department of Transportation / National Highway Traffic Safety Administration 

(NHTSA). Tables 10-13. EPA Air Docket A-97-10.

5. See memorandum from David J. Korotney to EPA Air Docket A-97-10, "Nationwide and

regional population fractions," document No. II-B-07.

6. “Development of Light-Duty Emission Inventory Estimates in the Notice of Proposed 

Rulemaking for Tier 2 and Sulfur Standards”, Koupal. EPA Report No. EPA420-R-99-

005.

7. "Development of Light-Duty Emission Inventory Estimates in the Notice of Proposed 

Rulemaking for Tier 2 and Sulfur Standards," Koupal. EPA Air Docket A-97-10.

8. Regulatory Impact Analysis for final rule revising the NAAQS for PM and ozone. 

Appendix B, "Summary of control measures in the PM, regional haze, and ozone partial 

attainment analyses." Contact: Scott Mathias, U.S. EPA, OAR/OAQPS.

Chapter VI. References
Chapter VII: Benefit-Cost Analysis

hh The “Section 812 studies” refers to (1) USEPA, Report to Congress: The Benefits and Costs of the

Clean Air Act, 1970 to 1990, October 1997 (also known as the “Section 812 Retrospective); and (2) the first in the

ongoing series of prospective studies estimating the total costs and benefits of the Clean Air Act, expected to be

published later in 1999.

ii

“Regulatory Impact Analysis for the NOx SIP Call, FIP, and Section 126 Petitions” September 1998, EPA452/R-98-003

VII-1

Chapter VII: Benefit-Cost Analysis

While relative cost-effectiveness is the principal economic policy criterion established for

potential Tier 2 standards in the Clean Air Act, further insight regarding the merits of the

proposed standards can be provided by benefit-cost analysis (BCA). In its traditional

application, BCA estimates the economic “efficiency” of proposed standards by defining and

quantifying the various expected consequences and representing those consequences in terms of

dollars. Expressing the effects of the potential standards in dollar terms provides a means for

comparing the expected benefits of our proposed standards to the expected costs.

The basic question we sought to answer in the BCA was: “What are the net yearly

economic benefits to society of the reduction in mobile source emissions likely to be achieved by

today’s proposed standards?” In designing an analysis to answer this question, we adopted an

analytical structure and sequence similar to that used in the so-called “Section 812 studies”hh to

estimate the total benefits and costs of the entire Clean Air Act. Moreover, we used many of the

same data sets, models, and assumptions actually used in the Section 812 studies and/or the

recent Regulatory Impact Analyses (RIAs) for the PM and Ozone NAAQS, and the NOx SIP

Call.ii By adopting the major design elements, data sets, models, and assumptions developed for

recent RIAs, we have largely relied on methods which have already received review by other

Federal Agencies, and the public. Furthermore, the data sets adopted from the Section 812

studies have received extensive review by the independent Science Advisory Board and the

public. 

The BCA that we performed for our proposed standards can be thought of as having four

parts, each of which will be discussed separately in the Sections that follow. These four steps

are:

1. Calculation of the impact that our proposed standards will have on the nationwide

inventories for NOx, NMHC, SO2, and PM.

2. Air quality modeling to determine the changes in ambient concentrations of

various pollutants that will result from our proposed standards.

3. A benefits analysis to determine the changes in human health and welfare, both in

terms of number of incidences and monetary value, that result from the changes in

ambient concentrations of various pollutants.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

jj

 For the purposes of air quality modeling, 'nationwide' is taken to mean the contiguous 48-states. Also,

the proposed Tier 2/gasoline sulfur standards are assumed to have no effect on vehicle emissions in California,

though air quality in California may be affected through meteorological boundary conditions.

kkPreparation of the baseline inventory is described in some detail by Woolfolk et al. (1998). E.H. Pechan

(1999) provide emissions data reflecting the incorporation of the Tier 2 rule. 

VII-2

4. Calculation of the costs of our proposed standards for purposes of comparison to

the monetized benefits.

Our BCA does contain a number of limitations common to all BCAs. Critical limitations

on the availability, validity, or reliability of data; limitations in the scope and capabilities of

environmental and economic effect models; and controversies and uncertainties surrounding key

underlying scientific and economic literature all contribute to an inability to estimate the

economic effects of environmental policy changes in exact and unambiguous terms. Under these

circumstances, we consider it most appropriate to view BCA as a tool to inform, but not dictate,

regulatory decisions such as the ones reflected in today’s proposal. The limitations of the

assessment of benefits will be discussed in each of the following Sections as appropriate.

Despite these important uncertainties, we believe the preliminary BCA is indicative of

the range of benefits and costs associated with the standards proposed today. This is because the

analysis focuses on estimating the economic effects of the changes in air quality conditions

expected to result from today’s proposed rules, rather than focusing on developing a precise

prediction of the absolute levels of air quality likely to prevail at some particular time in the

future. An analysis focusing on the changes in air quality can give useful insights into the likely

economic effects of emissions reductions of the magnitude expected to result from today's

proposed rule.

A. Emissions

In order to determine the air quality impact of our proposed standards, we first calculated

the reductions in vehicle emissions that are expected to occur as a result of those standards, and

then determined the impact of those emission reductions on the nationwidejj inventories for NOx,

NMHC, SO2, and PM. This Section describes how these inventory impacts were determined.

Our analysis used the Section 812 post-CAAA scenario for 2010 as the baseline emission

estimates. This baseline inventory was also used to produce the control inventory through the

application of the estimated changes in emissions associated with our proposed Tier 2 rule.kk 

We also updated the fugitive dust PM10 and PM2.5 emissions for the Section 812 inventory using

the National Pollutant Inventory in order to reflect significant changes to the base year

methodologies for fugitive dust categories. These changes reduced the estimates of primary PM

emissions. Fugitive dust PM10 and PM2.5 emitters whose 1990 emissions estimates were revised

include agricultural tilling, paved and unpaved roads, prescribed burning, construction activity,
Chapter VII: Benefit-Cost Analysis

VII-3

and wind erosion.

The Tier 2/gasoline sulfur program we are proposing has various emission-related

components which begin at various times and in some cases phase in over time. This means that

during the early years of the program there will not be a consistent match between costs and

benefits. This is due to the fact that the full vehicle cost is incurred at the time of vehicle

purchase, while the fuel cost along with the emission reductions and benefits occur throughout

the lifetime of the vehicle. In order to more appropriately match the costs and emission

reductions of our proposed program, therefore, our BCA assumes some future year when the

fleet is fully turned over. For today’s proposal this stability does not occur until well into the

future. However, for the purpose of the benefit calculations, we have no available baseline data

set beyond the year 2010, since the Section 812 inventory was developed only for this year. We

have therefore made adjustments to allow the use of 2010 as a surrogate for a future year in

which the fleet consists entirely of Tier 2 vehicles.

For emissions, we calculated reductions by treating 2010 as if the fleet had already turned

over. We did this by applying the control case emission reductions from a fully turned over fleet

(for the year 2040) to the fleet mileages for this year. Clearly, this approach does not, nor is it

intended to, predict actual expected emission reductions for 2010. This is not its purpose. It is

intended to portray the characteristics of the vehicle fleet after it is fully turned over, within the

constraint that 2010 was the latest year for which we could perform the analysis. 

The resulting analysis represents a snapshot of benefits and costs in a future year in

which the light-duty fleet consists entirely of Tier 2 vehicles. As such, it depicts the maximum

emission reductions (and resultant benefits) and among the lowest costs that would be achieved

in any one year by the program on a “per mile” basis. (Note, however, that net benefits would

continue to grow over time beyond those resulting from this analysis, but only because of growth

in vehicle miles traveled.) Thus, based on the long-term costs for a fully turned over fleet, the

resulting benefit-cost ratio will be close to its maximum point (for those benefits which we have

been able to value).

At the time that we undertook the development of the benefit estimates for this rule, we

did not have quantitative estimates of the VOC emission reductions that would result from the

evaporative emission standards in the proposal. Therefore, the benefit estimates do not include

the value of the evaporative emission standard. Consistent with this, the program cost estimates

also exclude the evaporative emission control cost. Since the evaporative emission reductions

and costs are both relatively small compared to the rest of the program, they are not expected to

significantly affect the overall cost-benefit ratio. 

For the purposes of assessing benefits, we estimated that the proposed Tier 2/gasoline

sulfur standards would reduce NMHC emissions by 214,443 tons and NOx emissions 1,789,318

tons for a hypothetical fully turned-over fleet of light-duty gasoline vehicles and trucks 

(Korotney, 1998). These reductions would occur in all States except California, which already

meets this standard. Measured from the Section 812 2010 post-CAA scenario emission

estimates for highway vehicles, these reductions translate into a 6.1 percent and 48.9 percent
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-4

annual reduction in VOC and NOx emissions, respectively, for these States and vehicle

categories. These percent reductions were used to estimate the 47-State VOC and NOx emission

reductions from light-duty vehicles and trucks in every county. Reductions (based on percent

VOC) were also used to estimate the soluble organic aerosol (SOA) emissions. 

A reduction to the SO2 inventory was also made to account for expected gasoline sulfur

reduction. SO2 reductions are based on reducing the gasoline sulfur content from 330 parts per

million (ppm) to 30 ppm. There are some uncertainties introduced by the SO2 emission

estimation methods. For one, the baseline emission estimates do not account for the lower sulfur

levels in Federal or California reformulated gasoline. Thus, the baseline emission estimates

likely overestimate gasoline vehicle emitted SO2 nationwide by about 10 percent (in comparison

to the combined conventional + reformulated gasoline baseline sulfur of 305 ppm, as described

in Section VI.A.2), and in California by a factor of 10 (in comparison to their average sulfur

limit of 30 ppm). These differences are expected to have only a modest impact on SO2 benefits

attributed to the Tier 2 rule, however, because no motor vehicle SO2 benefit was estimated for

California, and 47 State benefits are only slightly overstated in Federal reformulated gasoline

areas.

Table VII-1 summarizes the emissions inventories in the 47 contiguous states for both the

baseline and control scenarios. 
Chapter VII: Benefit-Cost Analysis

VII-5

Table VII-1. Emission Estimates by Vehicle Type and Reductions Associated with Adoption of th

Continental U.S. minus California -- Section 812 2010 CAA Highway Vehicle EmissionsVehicle type VOC NOx CO SO2 PM10 PM2.5 Light duty gas vehicle 2,197,781 2,296,033 22,746,343 153,912 65,117 37,491 Light duty gas truck 1 743,149 750,514 7,681,457 55,797 20,062 12,010 Light duty gas truck 2 574,236 609,133 5,947,424 28,430 10,072 6,095 Heavy duty gas vehicle 136,919 272,760 1,526,289 12,416 5,840 3,837 Motorcycle 40,697 14,467 221,551 396 453 227 Light duty diesel vehiclea 7 24 22 0 0 0 

Light duty diesel trucks 365 870 819 58 65 50 Heavy duty diesel vehicle 139,013 1,297,002 2,123,937 107,054 78,764 65,856 2010 baseline emissions 3,832,166 5,240,802 40,247,842 358,062 180,372 125,566 Reductions due to Tier 2 rule 214,443 1,789,318 0 228,137 0 0 47-state emission estimates under Tier 2 rule 3,617,723 3,451,484 40,247,842 129,925 180,372 125,566 California emissionsLight duty gas vehicle 65,841 106,110 965,593 24,105 10,198 5,872 Light duty gas truck 1 17,450 33,335 304,932 8,177 2,936 1,752 Light duty gas truck 2 8,756 22,425 154,846 4,167 1,474 892 Heavy duty gas vehicle 5,250 23,561 112,979 1,635 769 507 Motorcycle 3,647 2,030 24,311 60 68 37 Light duty diesel vehicle 2 7 11 0 0 0 Light duty diesel trucks 39 146 198 13 14 11 Heavy duty diesel vehicle 12,740 145,980 84,364 13,013 9,599 8,030 California emissions for baseline and under Tier2

113,725 333,595 1,647,234 51,170 25,059 17,101 

48-state emission estimates for control scenario 3,731,448 3,785,079 41,895,076 181,095 205,431 142,667 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-6

aFuture year emissions of SO2, PM10, PM2.5, SOA, and NH3 from light-duty diesel vehicles are projected to be zero due to low projected vehi

levels.
Chapter VII: Benefit-Cost Analysis

llDouglas and Iwamiya (1999) provide further information on the UAM-V modeling used in this analysis.

VII-7

B. Air Quality Impacts

EPA has used a regional-scale version of the Urban Airshed Model (UAM-V) to estimate

ozone air quality. Our analysis uses a Source-Receptor Matrix (S-R Matrix) based on the

Climatological Regional Dispersion Model (CRDM) is used to estimate nitrogen deposition, PM

air quality, and visibility degradation.

Section VII.B.1 covers the estimation of ozone air quality using UAM-V. Section

VII.B.2 covers the estimation of particulate matter air quality, and Section VII.B.3 discusses the

estimation of nitrogen deposition. Finally, Section VII.B.4 covers the estimation of visibility

degradation.

1. Ozone Air Quality Estimates

EPA used the emissions inputs with a regional-scale version of UAM-V to estimate

ozone air quality. Because it accounts for spatial and temporal variations as well as differences

in the reactivity of emissions, the UAM-V is useful for evaluating the air-quality effects of the

Tier 2 rule.ll

Our analysis applies the modeling system for a base-year of 1990 and for two future-year

scenarios: a 2010 baseline and a control scenario. As discussed later, we used the two separate

years because ambient air quality observations from 1990 are used to calibrate the model. The

UAM-V modeling system requires a variety of input files that contain information pertaining to

the modeling domain and simulation period. These include gridded, day-specific emissions

estimates and meteorological fields, initial and boundary conditions, and land-use information.

The model divides the U.S. into two regions: East and West. The model then segments

the area in each region into grids, each of which has several layers of air conditions that are

considered in the analysis. Using this data, the UAM-V model generates predictions of hourly

ozone concentrations for every grid. We then used the results of this process to develop 2010

ozone profiles at monitor sites by applying derived adjustment factors to the actual 1990 ozone

data at each monitor site. For areas (grids) without ozone monitoring data, we interpolated

ozone values using data from monitors surrounding the area. After completing this process, we

calculated daily and seasonal ozone metrics as inputs for the health and agriculture benefits

analysis. The Sections below provide a more detailed discussion of each of the steps in this

evaluation and a summary of the results.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-8

a. Modeling Domain 

For the eastern U.S., the domain is the same as the eastern U.S. domain used in EPA's

(1998b) recent analysis, “Regulatory Impact Analysis for the NOx SIP Call, FIP, and Section 126

Petitions.” The domain encompasses most of the eastern U.S. and consists of two grids, as

illustrated in Figure VII-1. The shaded area of Figure VII-1 uses a relatively fine grid of 12 km,

which consists of seven vertical layers. The unshaded area of Figure VII-1 has less resolution, as

it uses a 36 km grid, which consists of five vertical layers. The top of the modeling domain is

4000 meters above ground level, for both the shaded and unshaded regions.

Figure VII-1. UAM-V Modeling Domain for Eastern U.S.

The modeling domain used to obtain results for the western U.S. comprises the

contiguous 48 states. Note that although the domain includes the entire contiguous 48 states,

results using this domain configuration were only used to estimate the effects of the Tier 2 rule

in the West (defined as the region not shown in Figure VII-1). The domain extends from 126

degrees west longitude to 66 degrees west longitude, and from 24 degrees north latitude to 52

degrees north latitude. The analysis used a grid cell size of 2/3 longitude by 1⁄2 latitude

(approximately 56 by 56 km) resulting in a 90 by 56 grid (5,040 cells) for each vertical layer,

with eight vertical layers in all.
Chapter VII: Benefit-Cost Analysis

mm The five-month ozone season for this analysis is defined as May to September for health benefits. For

agricultural benefits for some crops, the relevant growing season extends into April and into October and November.

In this analysis, no changes in ozone concentrations are assumed to occur outside the five-month ozone season. 

However, the ozone metric used to estimate certain crop yield benefits requires that the baseline level of ozone

concentrations be estimated for months outside the five-month ozone season.

VII-9

b. Simulation Periods

A simulation period is generally characterized by high ozone concentrations in one or

more portions of the U.S.; exceedances of the 1-hour National Ambient Air Quality Standard for

ozone were recorded at monitors during these periods. This study used three multi-day

simulation periods to prepare the future-year ozone profiles. For the eastern U.S. ozone analysis, 

we modeled two simulation periods: 20-30 July 1993 and 7-18 July 1995. For the western U.S.

the simulation period was 1-10 July 1990.

c. UAM-V Model Output

Standard output from the UAM-V modeling system includes: (1) hourly, surface-layer

ozone concentrations (provided as hourly averages) for each grid cell; and (2) instantaneous

ozone values for all grid cells and layers for each hour of the simulation. This study extracted

hourly, surface-layer ozone concentrations for each grid-cell from the file containing hourly

average ozone values. We then used this information to calculate a set of adjustment factors for

forecasting 2010 ozone concentrations, as described in the following Section.

d. Converting Episode Estimates to Full-Season Profiles

The UAM-V runs generate surface layer hourly average ozone concentration estimates

for the limited modeled episodes which are used in conjunction with actual 1990 concentrations

to generate ozone concentrations for the entire ozone season.mm We mapped individual monitors

onto the gridded UAM-V output, and used the modeled concentrations of the corresponding grid

cells to calculate an adjustment factor.

We multiplied hourly ozone concentrations for 1990 by the adjustment factors to estimate

2010 ozone concentrations. Using the calculated adjustment factors and the observed monitor

concentrations, we created a data set containing modified observed hourly ozone concentrations

for each of the two scenarios. The Technical Support Document for this analysis details the

steps involved.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

nnThe Technical Support Document (Abt Associates, 1999) has a map of the location of ozone monitors in

the U.S. The map shows that some areas of the country do not have many ozone monitors in close proximity to each

other.

ooInterpolation between monitors is conducted using the same method as used by Abt Associates (1998) for

the NOx SIP call analysis; previously termed the "convex polygon" method, it is more accurately described as

Voronoi Neighbor Averaging (VNA) spatial interpolation, which will be used throughout this document.

VII-10

Figure VII-2. VNA Spatial Interpolation

e. Extrapolating from Monitored to Unmonitored Locations

To model whole U.S., we needed ozone data for every location. Since actual ozone data

is only available from limited monitor sites, we needed a method to extrapolate to unmonitored

locations, in order to estimate the effects of several ozone-related health and welfare effects.nn

Given available ozone monitoring data, we obtained ozone measures (e.g., daily average) for

each location in the contiguous 48 states in two steps: (1) we converted hourly data to an ozone

measure of interest, such as the daily average, and (2) we used monitor-specific ozone measures

to extrapolate ozone measures to a grid of eight km by eight km population grid-cells. The

conversion from hourly data to ozone measures of interest is straightforward. The estimation of

ozone measures at each grid-cell uses a Voronoi Neighbor Averaging (VNA) spatial

interpolation procedure.oo 

The VNA procedure interpolates air

quality estimates from the monitors to the

center of each population grid-cell. The VNA

procedure is a generalization of planar

interpolation. Rather than limit the selection of

monitors to, say, three, VNA identifies the set

of monitors that best “surrounds” the center of

each grid-cell. The result of VNA is illustrated

in Figure VII-2. VNA determines the set of

monitors that best surround the grid-cell by

identifying which monitor is closest

(considering both angular direction and

horizontal distance) in each direction from the

grid-cell center. Each selected monitor will

likely be the closest monitor for multiple

directions. The set of monitors found using this

approach forms a polygon around the grid-cell

center. 

The analysis of ozone impacts on agriculture adjusts the VNA approach slightly. 

Because calculating the benefits for this welfare category is best accomplished by using air

quality data at the county level, we used the VNA approach to estimate ozone measures for the
Chapter VII: Benefit-Cost Analysis

VII-11

center of each county, rather than the eight km by eight km population grid-cell level. To

provide estimates for all counties, the analysis includes monitors that are up to 400 km from a

county centroid. (Using a shorter distance would result in some county centroids not receiving

an estimate.)

f. Ozone Air Quality Results

A summary of the ozone air quality profiles used to assess the benefits of the proposed

standards is presented in Table VII-2. The change in seasonal ozone values across the U.S.

ranges from an increase of 0.0016 ppm to -0.0028 ppm from the base case to the control, with a

spatial average of -0.0008 ppm. The population-weighted average change is somewhat lower,

-0.0004 ppm, which reflects that urban regions have smaller reductions in ozone than less

populated rural regions. The air quality technical support document for this Regulatory Impact

Assessment (RIA) (Abt Associates, 1999) contains maps showing the base case ozone

concentrations and ozone concentration changes for the control scenario. These maps only

convey information about the five-month ozone season used for the health benefits analysis. The

change in the ozone index used in the agriculture analysis (termed “SUM06" and defined in

Table VII-2) ranges from -0.0132 to 0.0087 ppm, with a spatial average of -0.0025 ppm and a

population weighted average of -0.0026 ppm.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-12

Table VII-2. Summary of UAM-V Derived Hourly Ozone Air Quality

Statistic 2010 Base Casea Changea Percent Change

Seasonal Average

Minimum (ppm) b 0.0168 - 0.0028 -16.7%

Maximum (ppm) b 0.0611 0.0016 2.6%

Spatial Average (ppm) 0.0305 - 0.0008 -2.6%

Population-Weighted Average (person-ppm) c 0.0302 - 0.0004 -1.3%

Seasonal SUM06d

Minimum (ppm) b 0.0000 - 0.0132 0.0%

Maximum (ppm) b 0.1052 0.0087 8.3%

Spatial Average (ppm) 0.0122 - 0.0025 -20.5%

Population-Weighted Average (person-ppm) c 0.0193 - 0.0026 -13.5%

a

 All values are calculated at the county centroid, using VNA spatial interpolation and allowing all monitors with a

maximum distance of 400 km. The change is defined as the control case value minus the base case value.

b

 The base case minimum (maximum) is the value for the county with the lowest (highest) seasonal average, where the

season is defined as May through September and all hours are included in the calculation. The change relative to the

base case picks the minimum (maximum) from the set of changes in all counties.

c

 Calculated by summing the product of the projected 2010 county population and the estimated 2010 county centroid

seasonal (or SUM06) ozone concentration, and then dividing by the total population.

d

 SUM06 is defined as the cumulative sum of hourly ozone concentrations over 0.06 ppm that occur from 8am to 8pm

in the months of May through September.

2. PM Air Quality Estimates

 Changes in concentrations of PM have an important effect on people's health and welfare. 

Our analysis uses the S-R Matrix model to evaluate the air quality effects of the Tier 2 rule. The

S-R Matrix reflects the relationship between annual average PM concentration values at a single

receptor in each county (a hypothetical monitor sited at the county population centroid) and the

contribution by PM species to this concentration from each emission source (E.H. Pechan,

1996). The modeled receptors include all U.S. county centroids plus receptors in ten Canadian

provinces and 29 Mexican cities/states. The methodology used in this RIA for estimating PM air

quality concentrations using the S-R Matrix is similar to the method used in the July 1997 PM

and Ozone NAAQS RIA (U.S. EPA, 1997e). Below is a detailed discussion of the steps taken to

run the S-R Matrix and to derive the resulting changes in PM air quality.
Chapter VII: Benefit-Cost Analysis

pp Ratio of molecular weights: Sulfate/SO2= 1.50; nitrate/nitrogen dioxide = 1.35; ammonium/ammonia =

1.06.

VII-13

a. Climatological Regional Dispersion Model

The CRDM uses assumptions similar to the Industrial Source Complex Short Term

model (ISCST3), an EPA-recommended short range Gaussian dispersion model. CRDM

incorporates terms for wet and dry deposition and chemical conversion of SO2 and NOx to PM,

and uses climatological summaries (annual average mixing heights and joint frequency

distributions of wind speed and direction) from 100 upper air meteorological sites throughout

North America. The analysis used meteorological data for 1990 coupled with emissions data

from version 2.0 of the 1990 National Particulate Inventory to develop the S-R Matrix.

b. Development of the S-R Matrix

To develop the S-R Matrix, we modeled a nationwide total of 5,944 sources (i.e.,

industrial point, utility, area, nonroad, and motor vehicle) of primary and precursor emissions

with CRDM. In addition, we modeled secondary organic aerosols formed from anthropogenic

and biogenic VOC emissions, as well as natural sources of PM10 and PM2.5 (i.e., wind erosion

and wild fires). We modeled emissions of SO2, NOx, and ammonia in order to calculate

ammonium sulfate and ammonium nitrate concentrations, the primary particulate forms of

sulfate and nitrate. The CRDM produced a matrix of transfer coefficients for each of these

primary and precursor emissions. These coefficients can be applied to the emissions of any unit

(area source or individual point source) to calculate a particular source's contribution to a county

receptor's total annual average PM10 or PM2.5 concentration. Each individual unit in the

inventory is associated with one of the modeled source types (i.e., area, point sources with

effective stack height of 0 to 250 m, 250 m to 500 m, and individual point sources with effective

stack height above 500 m) for each county.

The relative concentrations in the atmosphere of ammonium sulfate and ammonium

nitrate depend on complex chemical reactions. In the presence of sulfate and nitric acid (the gas

phase oxidation product of NOx), ammonia reacts preferentially with sulfate to form particulate

ammonium sulfate rather than react with nitric acid to form particulate ammonium nitrate. We

adjusted the S-R Matrix transfer coefficients to reflect concentrations of secondarily-formed

particulates (Latimer, 1996). First, we multiplied the transfer coefficients for SO2, NOx, and

ammonia by the ratios of the molecular weights of sulfate/SO2, nitrate/nitrogen dioxide and

ammonium/ammonia to obtain concentrations of sulfate, nitrate and ammonium.pp Ammonium

nitrate forms under conditions of excess ammonium and low temperatures. For each county

receptor, the sulfate-nitrate-ammonium equilibrium is estimated based on the following

simplifying assumptions:
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

qq To calculate total particle mass of ammonium sulfate and ammonium nitrate, the anion concentrations of

sulfate and nitrate are multiplied by 1.375 and 1.290 respectively.

rr Natural and man-made fugitive dust emissions account for 86 percent of PM10 emissions and 59 percent

of PM2.5 emissions in the most recent 1990 estimates in the National Emission Trends Inventory.

ss See U.S. EPA (1997b, page 6-5) for a map delineating modeling regions. Using 0.25 multiplicative

factor, fugitive dust as percentage of PM2.5 mass for: Central U.S. = 17.2 percent; Eastern U.S.= 10.4 percent;

Western U.S.= 10.6 percent. By comparison, without using a multiplicative factor, fugitive dust as a percentage of

PM2.5 mass for: Central U.S. = 44.6 percent; Eastern U.S. = 30.9 percent; Western U.S. = 31.5 percent.

VII-14

1. All sulfate is neutralized by ammonium;

2. Ammonium nitrate forms only when there is excess ammonium;

3. Because ammonium nitrate forms only under relatively low temperatures, annual 

average particle nitrate concentrations are divided by four assuming that 

sufficiently low temperatures are present only one-quarter of the year.

 

Finally, we calculated the total particle mass of ammonium sulfate and ammonium nitrate.qq

c. Fugitive Dust Adjustment Factor

The 1990 CRDM predictions for fugitive dust are not consistent with measured ambient

data. The CRDM-predicted average fugitive dust contribution to total PM2.5 mass is 31 percent

in the East and 32 percent in the West (as cited in: U.S. EPA, 1998b, p. 3-15). Monitoring data

from the IMPROVE network show that minerals (i.e., crustal material) comprise approximately

five percent of PM2.5 mass in the East and approximately 15 percent of PM2.5 mass in the West

(U.S. EPA, 1996b). These disparate results suggest a systematic overestimate in the fugitive

dust contribution to total PM. This overestimate is further complicated by the recognition that

the 1990 National Particulate Inventory (NPI) significantly overestimates fugitive dust

emissions. The most recent National Emissions Trends inventory indicates that the NPI

overestimates fugitive dust PM10 and PM2.5 emissions by 40 percent and 73 percent respectivelyrr

(U.S. EPA, 1997d).

To address this bias, we applied a multiplicative factor of 0.25 nationally to fugitive dust

emissions as a reasonable first-order attempt to reconcile differences between modeled

predictions of PM2.5 and actual ambient data. This is the same adjustment that was used in the

NOx SIP call analysis (U.S. EPA, 1998b). This adjustment results in a fugitive dust contribution

to modeled ambient PM2.5 concentrations of 10 percent to 17 percent.ss Even after this

adjustment the fugitive dust fraction of total eastern PM2.5 mass is 10.4 percent, which is still

greater than the five percent indicated by IMPROVE monitors. However, given that the

adjustment factor appears to bring the modeled fugitive dust contribution to PM2.5 mass more

within the range of values reported from monitoring data, we adjusted the fugitive dust
Chapter VII: Benefit-Cost Analysis

tt The normalization procedure was conducted for county-level modeled PM10 and PM2.5 estimates falling

into one of four air quality data tiers. The tiering scheme reflects increasing relaxation of data completeness criteria

and therefore increasing uncertainty for the annual design value (U.S. EPA, 1997c). Nationwide, Tier 1 monitored

counties cover the 504 counties with at least 50 percent data completeness and therefore have the highest level of

certainty associated with the annual design value. Tier 2 monitored counties cover 100 additional counties with at

least one data point (i.e., one 24-hour value) for each of the three years during the period 1993 -1995. Tier 3

monitored counties cover 107 additional counties with missing monitoring data for one or two of the three years

1993 - 1995. In total, Tiers 1, 2 and 3 cover 711 counties currently monitored for PM10 in the 48 contiguous states.

In 1997 the PM10 monitoring network consisted of approximately 1600 individual monitors with a coverage of

approximately 711 counties in the 48 contiguous states. Tier 4 covers the remaining 2369 non-monitored counties.

uu See Appendix J - Reference Method for PM10 , Final Rule for National Ambient Air Quality Standards

for Particulate Matter (Federal Register, Vol. 62, No. 138, p. 41, July 18, 1997).

VII-15

contribution to total PM that is estimated by the S-R Matrix by this factor. This factor still may

result in an overprediction of the fugitive dust contribution.

d. Normalizing S-R Matrix Results to Measured Data

In an attempt to further ensure comparability between S-R Matrix results and measured

annual average PM values, the analysis calibrated the S-R results using factors developed for the

PM and Ozone NAAQS RIA (U.S. EPA, 1997e). For the NAAQS RIA, a “calibration factor”

was developed for each monitored county.tt This analysis calibrated all S-R Matrix predictions

regardless of overprediction or underprediction relative to monitored values. We applied this

factor equally across all particle species contributing to the annual average PM value at a countylevel receptor.

The calibration procedure employed 1993 - 1995 PM10 ambient monitoring data from the

AIRS database following the assumptions of data completeness discussed above. The PM10 data

represent the annual average of design value monitors averaged over three years (U.S. EPA,

1997f). We eliminated the standardization for temperature and pressure from this concentration

data based upon proposed revisions to the reference method for PM10.

uu

Because there is little PM2.5 monitoring data available, we developed a general linear

model to predict PM2.5 concentrations directly from the 1993 - 1995 PM10 values (U.S. EPA,

1996a). The analysis used a SASTM general linear model (i.e., GLM) procedure to predict PM2.5

values as a function of season, region, and measured PM10 value. We then used these derived

PM2.5 data to calibrate model predictions of annual average PM2.5.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-16

e. Development of Annual Median PM2.5 Concentrations

The CRDM procedure does not directly produce estimates of daily 24-hour average PM

concentrations or annual median PM concentrations. Some health benefits have concentrationresponse (C-R) functions that rely on estimates of either the daily 24-hour average or annual

median concentrations. Using historical data, EPA therefore developed 24-hour average

estimates corresponding to the 99th percentile value for PM10 and the 98th percentile value for

PM2.5 reflecting forms of PM10 and PM2.5 daily standards.

Peak-to-mean ratios (i.e., ratio of the 24-hour average value to annual average value) are

established from actual PM10 monitor data for 1993 to 1995. For PM10, the peak value is defined

exactly the way it is for the new PM10 NAAQS, i.e., the value corresponding to the 99th

percentile value of the distribution of actual daily 24-hour average PM10 values. For PM2.5, the

peak value is also defined exactly the way it is for the new PM2.5 NAAQS, i.e., the value

corresponding to the 98th percentile value of the distribution of estimated daily 24-hour average

PM2.5 values. In this analysis, we assumed that these historical peak-to-mean ratios hold for the

2010 model year, and applied them to the annual average PM estimates generated by the S-R

Matrix.

Starting with the annual mean and peak values developed from the S-R Matrix, we used

maximum likelihood to estimate the parameters of a distribution that are most consistent with the

S-R Matrix results. Using the parameters of the distribution, we then estimated the annual

median concentration and other representative concentrations in the distribution (e.g., 5th

percentile).

f. PM Air Quality Results

Table VII-3 provides a summary of the predicted ambient PM10 and PM2.5 concentrations

used in this study. The concentration changes are generally very small. The technical support

document for this RIA (Abt Associates, 1999) contains maps showing the base case PM

concentrations and PM concentration changes generated.
Chapter VII: Benefit-Cost Analysis

VII-17

Table VII-3. Summary of S-R Matrix Derived PM Air Quality

Statistic 2010 Base Case Changea Percent Change

PM10

Minimum Annual Mean PM10 (μg/m3) b 5.96 -0.64 -10.7%

Maximum Annual Mean PM10 (μg/m3

) b 63.18 0.00 0.0%

Average Annual Mean PM10 (μg/m3) 22.46 -0.14 -0.6%

Population-Weighted Average Annual Mean PM10 (personμg/m3

) c 28.31 -0.20 -0.7%

PM2.5

Minimum Annual Mean PM2.5 (μg/m3) b 0.86 -0.64 -74.4%

Maximum Annual Mean PM2.5 (μg/m3

) b 28.02 0.00 0.0%

Average Annual Mean PM2.5 (μg/m3

) 10.75 -0.14 -1.3%

Population-Weighted Average Annual Mean PM2.5 (personμg/m3

) c 13.00 -0.20 -1.5%

a

 The change is defined as the control case value minus the base case value.

b

 The base case minimum (maximum) is the value for the county with the lowest (highest) annual average. The change

relative to the base case picks the minimum (maximum) from the set of changes in all counties.

c

 Calculated by summing the product of the projected 2010 county population and the estimated 2010 county PM

concentration, and then dividing by the total population in the 48 contiguous states.

3. Nitrogen Deposition Estimates

The analysis used RADM to generate nitrogen deposition estimates. The RADM was

developed over a ten year period, 1984 - 1993, under the auspices of the National Acid

Precipitation Assessment Program (NAPAP), to address policy and technical issues associated

with acidic deposition. The model provides a scientific basis for predicting changes in

deposition and air quality resulting from changes in precursor emissions and to predict the levels

of acidic deposition in certain sensitive receptor regions. To do so requires that RADM be a

multipollutant model that predicts the oxidizing capacity of the atmosphere, including the

prediction of ozone, and chemical transformations involving oxides of sulfur and nitrogen.

NAPAP has extensively documented the development, application, and evaluation of the

RADM (Chang et al., 1987; Chang et al., 1990; Dennis et al., 1990). Several recent studies of

acidic deposition have used RADM, including EPA’s 1995 Acid Deposition Standard Feasibility

Study Report to Congress (U.S. EPA, 1995), EPA’s 1997 Deposition of Air Pollutants to the

Great Waters Report to Congress (U.S. EPA, 1997a), work estimating the nitrogen deposition
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-18

airshed of the Chesapeake Bay watershed (Dennis, 1997), and in the NOx SIP call (U.S. EPA,

1998a)

RADM estimates deposition in units of kilograms per hectare (kg/ha). The model

estimates wet deposition in the form of SO4

2-, NO3-

, NH3, H+. It estimates dry deposition in the

form of SO2, SO4 as aerosol, O3, HNO3, NO2, H2O2. The model then maps the deposition

estimates to specific East Coast and Gulf Coast estuaries and their watersheds, which are subject

to eutrophication problems. Land-deposited nitrogen in each watershed is multiplied by a factor

of 10 percent to obtain the nitrogen load delivered via export (pass-through) to the corresponding

estuary.

Table VII-4 provides a summary of the change in nitrogen deposition estimates for

selected estuaries as a result of the Tier 2 rule1

. The results represent a 10.8 percent reduction in

the average annual deposition across these estuaries.

Table VII-4. Summary of 2010 Nitrogen Deposition in Selected Estuaries

(million kg/year)

Estuary 2010 Base Case Changea Percent Change

Albemarle/Pamlico Sound 11.87 -1.27 -10.7%

Cape Cod Bay 3.96 -0.42 -10.6%

Chesapeake Bay 18.05 -1.91 -10.6%

Delaware Bay 3.37 -0.34 -10.1%

Delaware Inland Bays 0.44 -0.04 -9.1%

Gardiners Bay 1.24 -0.13 -10.5%

Hudson River/Raritan Bay 3.95 -0.45 -11.4%

Long Island Sound 5.78 -0.66 -11.4%

Massachusetts Bay 1.33 -0.14 -10.5%

Narragansett Bay 1.17 -0.12 -10.3%

Sarasota Bay 0.37 -0.04 -10.8%

Tampa Bay 2.27 -0.28 -12.3%

All Selected Estuaries 53.8 -5.8 -10.8%

a

 Change is defined here as the emissions level after implementing the Tier 2 rule minus the base case emissions.
Chapter VII: Benefit-Cost Analysis

VII-19

4. Visibility Degradation Estimates Using the S-R Matrix

Visibility degradation is often directly proportional to decreases in light transmittance in

the atmosphere. Scattering and absorption by both gases and particles decrease light

transmittance. To quantify changes in visibility, our analysis used a light-extinction coefficient,

based on the work of Sisler (1996), which shows the total fraction of light that is decreased per

unit distance.

The light extinction coefficient accounts for the scattering and absorption of light by both

particles and gases, and a number of factors are included in its estimation. Because fine particles

are much more efficient at light scattering than coarse particles, the analysis specifies several

fine particle species, whereas coarse particles are kept as one category. Fine particles with

significant light-extinction efficiencies include sulfates, nitrates, organic carbon, elemental

carbon (soot), and soil (Sisler, 1996).

Once we determined the light-extinction coefficient, we calculated a unitless visibility

index, called a “deciview,” which we used in the valuation of visibility. The deciview metric

provides a linear scale for perceived visual changes over the entire range of conditions, from

clear to hazy. Under many scenic conditions, the average person can generally perceive a

change of one deciview.

The analysis generated visibility degradation estimates in “recreational” (e.g., federally

designated Class I areas such as national parks and recreation areas) and “residential” (non-Class

I areas) areas at the county level using the results of the S-R Matrix. The visibility benefits

analysis (see Section VII.C) distinguishes between general regional visibility degradation and

visibility degradation in certain Federally-designated Class I areas (i.e., national parks, forests,

recreation areas, wilderness areas, etc.). Therefore we separated visibility degradation estimates

into “residential” and “recreational” categories depending upon the geographic area covered by

the estimate, and summed from the county-level to one of six regions (defined in part by the

underlying study) and the nation.

Table VII-5 provides a summary of the visibility degradation estimates in terms of

deciviews. The valuation methodology for recreational visibility requires separate treatment of

visibility changes in the different regions in the U.S. Table VII-5 provides residential and

recreational visibility degradation estimates for each region. All predicted visibility changes are

small (less than one deciview), with the largest changes occurring in the Southeast and

Northeast. The air quality technical support document for this RIA (Abt Associates, 1999)

contains maps showing the base case visibility degradation and visibility degradation changes.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-20

Table VII-5. Summary of 2010 Visibility Degradation Estimates

(deciviews)

Visibility Degradation 2010 Base Case Changea Percent Change

Southeast

Annual Average--Residential 23.44 -0.19 -0.8%

Annual Average--Recreationalb 21.65 -0.23 -1.1%

Southwest

Annual Average--Residential 17.89 -0.08 -0.4%

Annual Average--Recreationalb 18.69 -0.08 -0.4%

California & Nevada

Annual Average--Residential 19.29 -0.04 -0.2%

Annual Average--Recreationalb 19.93 -0.06 -0.3%

Northeast

Annual Average--Residential 21.80 -0.17 -0.8%

Annual Average--Recreationalb 17.66 -0.06 -0.3%

North Central

Annual Average--Residential 18.55 -0.11 -0.6%

Annual Average--Recreationalb 19.13 -0.08 -0.4%

Northwest

Annual Average--Residential 20.70 -0.21 -1.0%

Annual Average--Recreationalb 21.65 -0.15 -0.7%

National

Annual Average--Residential 21.77 -0.16 -0.7%

Annual Average--Recreationalb 19.51 -0.09 -0.5%

a

 The change is defined as the control case deciview level minus the base case deciview level.

b

 Recreational visibility averages are from the 41 Class I areas used in the benefits analysis. See Table VII-14 for 

 list of Class I areas.

C. Benefits Assessment

The changes in ozone, PM, nitrogen oxides, and visibility levels described in Section

VII.B will result in changes in the health and welfare impacts associated with elevated ambient

concentrations of these pollutants. This Section describes the methods for estimating the
Chapter VII: Benefit-Cost Analysis

VII-21

physical magnitude and monetary value of these impacts.

Section VII.C.1 provides an overview of the benefits methodology. Section VII.C.2

discusses issues in estimating health effects. Section VII.C.3 discusses methods and provides

estimated values for avoided incidences and monetary benefits for ozone- and PM-related health

effects. Section VII.C.4 discusses methods and provides estimated values for air pollutionrelated welfare effects. Section VII.C.5 discusses the aggregation of health and welfare benefits,

and presents an estimate of total benefits. Section VII.C.6 presents sensitivity analyses, and

Section VII.C.7 discusses potential benefit categories that are not quantified due to data and/or

methodological limitations, and provides a list of analytical uncertainties, limitations, and biases.

1. Overview of Benefits Estimation

Most of the specific methods and information used in this benefit analysis are similar to

those used in the §812 Retrospective of the Benefits and Costs of the Clean Air Act and

forthcoming §812 Prospective EPA Reports to Congress, which were reviewed by EPA’s

Science Advisory Board (U.S. EPA, 1997g), as well as the approach used by EPA in support of

revising the ozone and PM NAAQS (U.S. EPA, 1997e; U.S. EPA, 1997h) and the Regional

NOx SIP call (U.S. EPA, 1998b). Prior to describing the details of the approach for the benefits

analysis, it is useful to provide an overview of the approach. The overview is intended to help

the reader better identify the role of each issue described later in this Section.

The general term “benefits” refers to any and all outcomes of the regulation that

contribute to an enhanced level of social welfare. The value of “benefits” refers to the dollar

value associated with all the expected positive impacts of the regulation; that is, all regulatory

outcomes that lead to higher social welfare. If the benefits are associated with market goods and

services, the monetary value of the benefits is approximated by the sum of the predicted changes

in “consumer (and producer) surplus.” If the benefits are non-market benefits (such as the risk

reductions associated with environmental quality improvements), however, other methods of

measuring benefits must be used as discussed in the text. The total value of such a good is the

sum of the dollar amounts that all those who benefit are willing to pay.

In addition to benefits, regulatory actions may also lead to unintended nonmarket costs,

that some might term “disbenefits.” An example of a disbenefit of reduced ozone concentrations

is that there will be less protection from UV radiation. In order to quantify the impact of a

regulatory action, both the benefits and disbenefits should be included. However, like many

benefits, disbenefits are difficult to quantify. EPA's approach is to present as complete a set of

quantified estimates of benefits and disbenefits as possible, given the state of science at the time

of the analysis.

This conceptual economic foundation raises several relevant issues and potential
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-22

limitations for the benefits analysis of the regulation. First, the standard economic approach to

estimating environmental benefits is anthropocentric– all benefits values arise from how

environmental changes are perceived and valued by people. Thus, all near-term as well as

temporally distant future physical outcomes associated with reduced pollutant loadings need to

be predicted and then translated into the framework of present-day human activities and

concerns. Second, as noted below, it is not possible to quantify or to value all of the benefits

resulting from environmental quality improvements.

Conducting a benefits analysis for anticipated changes in air emissions is a challenging

exercise, as it requires a series to steps to be specified and understood. Figure VII-3 illustrates

these steps, which include: (1) institutional relationships and policy-making; (2) the technical

feasibility of pollution abatement; (3) the physical-chemical properties of air pollutants and their

consequent linkages to biological or ecological responses in the environment, and (4) human

responses and values associated with these changes.
Chapter VII: Benefit-Cost Analysis

vvThe exception to this is the estimation of nitrogen deposition benefits, which uses an avoided cost

approach.

VII-23

Tier 2 Rule

9

Evaluate Changes in Vehicles and Fuels

9

Estimate Reductions in

Pollutant Emissions

9

Model Changes in Ambient Air Quality

b `

Estimate Changes in Plant Damage,

Crop Yields, and Other Welfare

Effects

Estimate Changes in Adverse Human

Health Symptoms and Risk

9 9

Estimate Changes in Supply and

Value of Crops, Changes in

Visibility Levels, and Other Welfare

Effects

Estimate Value of Averted Adverse

Human Health Symptoms and Risk

Figure VII-3. Example Benefits Analysis Method

Our analysis mainly uses a “damage function” approach to estimate the adverse physical

effects from air pollution that will be avoided in the United States due to implementation of the

emission reductions required by the Tier 2 rule.vv This approach examines individual physical

effects, such as, say, hospital admissions, that may be affected by reductions in specific

pollutants. The total value for a given physical effect is simply the product of the number of

incidences avoided and the value per incidence avoided. The damage function approach

assumes that the benefits from individual effects are additive and independent, i.e., benefits for

one effect do not depend on benefits for a separate effect. Alternative approaches include

market-based measures include: hedonic prices, which measure the total value of a reduction in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

wwRecent analyses have been presented in 1990 dollars, such as the NOx SIP call (U.S. EPA, 1998b) and

the §812 Retrospective of the Benefits and Costs of the Clean Air Act (U.S. EPA, 1997g). The method of adjusting

from 1990 dollars to 1997 dollars depends on the basis of the benefits estimates. Benefits estimates based on costof-illness are adjusted by using the consumer price indexes (CPI-Us) for medical care, while benefits estimates based

directly on estimates of WTP have been adjusted using the CPI-U for “all items.”

VII-24

air pollution using a single metric, such as the price of a house, or contingent valuation, which

asks individuals for their total willingness to pay (WTP) for a reduction in air pollution. If the

single metric approach successfully captures the full WTP for a reduction in air pollution, then

the damage function approach should yield an estimate that is less than or equal to the estimate

from the single metric approach. All monetized estimates of benefits presented are in 1997

dollars.ww

Some of the estimates of the economic value of avoided health and welfare effects are

derived from contingent valuation (CV) studies. Concerns about the reliability of value

estimates that come from CV studies have dominated debates about the methodology, since

research has shown that bias can be introduced easily into these studies, especially if they are not

carefully done. Accurately measuring willingness to pay for avoided health and welfare losses

depends on the reliability and validity of the data collected. There are several issues to consider

when evaluating study quality, including but not limited to 1) whether the sample estimates of

WTP are representative of the population WTP, 2) whether the good to be valued is

comprehended and accepted by the respondent, 3) whether the WTP elicitation format is

designed to minimize strategic responses, 4) whether WTP is sensitive to respondent familiarity

with the good, to the size of the change in the good, and to income, 5) whether the estimates of

WTP are broadly consistent with other estimates of WTP for similar goods, and (6) the extent to

which responses are consistent with established economic principles. This benefits analysis does

not attempt to list the individual strengths and weaknesses of each CV study used. However, in

some instances, such as for valuation of chronic bronchitis and residential visibility, when the

CV study reliability is questionable, we adopt alternative estimates as conservative measures of

benefits, which are presented in the low-end estimate of the range of monetized benefits. In

other instances, for example the study used to value changes in visibility at Class I areas, we

recognize potential weaknesses, but do not alter the estimates presented in the study.

In this analysis, the valuation of avoided incidences of health effects and avoided

degradation of welfare effects relies on benefits transfer. The benefits transfer approach takes

values or value functions generated by previous research and transfers them from the study to the

policy of interest. For example, we obtained the value of reduced mortality from a distribution

of values of statistical life based on 26 wage-risk and contingent valuation studies. None of the

values for the health and welfare categories valued in this benefit analysis were generated

specifically in the context of the Tier 2 rule. The validity of this approach relies on the

correlation between attributes of the policy and the studies from which the values were obtained. 

Where possible, we selected studies that valued effects matching those in the policy analysis. 

When studies were not available that exactly matched the studied effect and the policy effect, we

selected studies that matched as closely as possible, and note the differences (and where known,
Chapter VII: Benefit-Cost Analysis

VII-25

potential drawbacks to their application) in the text.

The first step in a benefits analysis using this approach is the identification of the types or

categories of benefits associated with the anticipated changes in ambient air quality conditions. 

The second step is the identification of relevant studies examining the relationships between air

quality and these benefit categories and studies estimating the value of avoiding damages. The

most prominent avoided damages are those related to human health risk reductions, effects on

crops and plant life, visibility, and materials damage.

It is difficult to identify all the types of benefits that might result from environmental

regulation and to value those benefits that are identified, due to the non-market nature of many

benefits categories. Since many pollution effects (e.g., adverse health or ecological effects)

traditionally have not been traded as market commodities, economists and analysts cannot look

to changes in market prices and quantities to estimate the value of these effects. This lack of

observable markets may lead to the omission of significant benefits categories from an

environmental benefits analysis. It is not possible to quantify the magnitude of this

underestimation. The more important of these omitted effect categories are shown in Table

VII-6.

Table VII-6. Unquantified Benefit Categories*

Unquantified Benefit Categories Associated with

Ozone and Nitrogen Oxides

Unquantified Benefit Categories 

Associated with PM

Health

Categories

Airway responsiveness.

Pulmonary inflammation.

Increased susceptibility to respiratory infection.

Acute inflammation and respiratory cell damage.

Chronic respiratory damage/premature aging of

lungs.

Ultraviolet-B radiation (cost).

Changes in pulmonary function.

Morphological changes.

Altered host defense mechanisms.

Cancer.

Other chronic respiratory disease.

Welfare

Categories

Ecosystem and vegetation effects in Class I areas

(e.g., national parks).

Damage to urban ornamentals (e.g.,grass, flowers,

shrubs, and trees in urban areas).

Fruit and vegetable crops.

Reduced yields of tree seedlings, commercial and

non-commercial forests.

Damage to ecosystems.

Materials damage (other than consumer cleaning

cost savings).

Nitrates in drinking water.

Brown clouds.

Materials damage (other than consumer cleaning

cost savings ).

Damage to ecosystems (e.g., acid sulfate

deposition).

Nitrates in drinking water.

Brown clouds.

* Note that there are other pollutants that are reduced in conjunction with the Tier 2 rule that are not considered in this

analysis, such as carbon (a pollutant associated with global climate change).
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-26

Within each effect category, there may be several possible estimates of health and

welfare effects. Each of these possibilities represents a health or welfare “endpoint.” The basic

structure of the analysis is to create a set of benefit estimates reflecting key assumptions

concerning environmental conditions and the responsiveness of human health and the

environment to changes in air quality. Total benefits are presented as the sum of nonoverlapping endpoints, to avoid double-counting benefits.

We made subjective judgements in our analysis because of a lack of information. To

reflect the range of uncertainty regarding key assumptions– such as the appropriate PM

threshold– this analysis uses two suites of assumptions. This RIA has adopted the approach of

presenting a range of monetized benefits that reflects these uncertainties by selecting alternative

values for each of several key assumptions. Taken together, these alternative sets of assumptions

define a “high end” and a “low end” estimate for the benefits that have been monetized in this

analysis. 

Table VII-7 lists the specific health and welfare effects that are included in at least one of

the assumptions sets, indicating the specific effect categories that are included in the plausible

range of benefits. This table also includes the estimates of mean WTP, or “unit values” used to

monetize the benefits for each effect. Table VII-8 highlights the key differences between the

assumption sets.
Chapter VII: Benefit-Cost Analysis

VII-27

Table VII-7. Quantified and Monetized Primary Health and Welfare Effects

Effect Pollutant

Value per incident ($1997)

LOW HIGH

Health Effects in the Benefits Analysis

Mortality, long-term exposure - over age 30 PM2.5 $2,730,000 $5,894,400

Mortality, short-term exposure Ozone $0 $5,894,400

Chronic bronchitis - all ages PM10 $74,500 $319,280

Hospital admissions - all respiratory, all ages Ozone & 

PM2.5

$9,672 (Ozone)

$9,142 (PM)

$9,672 (Ozone)

$9,142 (PM)

Hospital admissions - congestive heart failure PM10 $11,931 $11,931

Hospital admissions - ischemic heart disease PM10 $14,854 $14,854

Any of 19 acute respiratory symptoms -adult Ozone $22 $22

Acute bronchitis - children PM2.5 $55 $55

Lower respiratory symptoms (LRS) - children PM10 $15 $15

Upper respiratory symptoms (URS) - children PM10 $23 $23

Work loss days (WLD) - adult PM2.5 $102 $102

Minor restricted activity days (MRAD) - adult PM2.5 $47 $47

Welfare Effects in the Benefits Analysis

Agriculture - select commodity crops Ozone n/a n/a

Household soiling (annual value) PM10

$3.09/household/

:g/m3 change in PM10

$3.09/household/:g/

m3

 change in PM10

Nitrogen deposition: (annual value) NOx

 Albemarle-Pamilico

Sound $90/kg of nitrogen $90/kg of nitrogen

 Chesapeake Bay $59/kg of nitrogen $59/kg of nitrogen

 Tampa Bay $238/kg of nitrogen $238/kg of nitrogen

 Average nine estuaries $129/kg of nitrogen $129/kg of nitrogen

Decreased worker productivity Ozone $1/worker/10%

change in ozone

$1/worker/10%

change in ozone

Visibility - residential PM and gases not valued $17/household

 per deciview

In-region recreational visibility: (annual value) PM and gases

 California $6.43/household

/deciview

$12.89/household

/deciview

 Southwest $8.41/household $16.82/household
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Effect Pollutant

Value per incident ($1997)

LOW HIGH

VII-28

 Southeast $3.99/household

/deciview

$7.98/household

/deciview

Out-of-region recreational visibility: California $4.48/household

/deciview

$8.96/household

/deciview

 Southwest $6.76/household

/deciview

$13.51/household

/deciview

 Southeast $2.46/household

/deciview

$4.91/household

/deciview

Table VII-8. Key Differences Between Low and High Assumption Sets

Assumption Low High

Threshold for PM effect 15 :g/m3 background

PM Mortality value of statistical life

year lost

value of statistical life

Ozone-related short-term exposure mortality excluded included

Agriculture low crop sensitivity to

ozone

high crop sensitivity to

ozone

Visibility no residential visibility

valuation

recreational and

residential visibility

valued

Infant mortality excluded included

2. Issues in Estimating Changes in Health Effects

This benefits analysis relies on concentration-response (C-R) functions estimated in

published epidemiological studies relating adverse health to ambient air quality. The specific CR functions used are included in Table VII-9. While a broad range of adverse health effects have

been associated with exposure to elevated ozone and PM levels (as noted for example in Table

VII-6), in this quantified benefit analysis only a subset of health effects are included. Health

effects are excluded from the current analysis for three reasons: (1) the possibility of double

counting (such as hospital admissions for specific respiratory diseases); (2) uncertainties in

applying effect relationships based on clinical studies (where human subjects are exposed to

various levels of air pollution in a carefully controlled and monitored laboratory situation) to the

affected population; or (3) a lack of an established C-R relationship.

When a single published study is selected as the basis of the C-R relationship between a
Chapter VII: Benefit-Cost Analysis

VII-29

pollutant and a given health effect, or “endpoint,” applying the C-R function is straightforward. 

This is the case for most of the endpoints selected for inclusion in the benefits analysis. A single

C-R function may be chosen over other potential functions because the underlying

epidemiological study used superior methods, data or techniques, or because the C-R function is

more generalized and comprehensive. For example, the study that estimated the effects of PM

on hospital admissions for all ages and all respiratory diseases is selected over studies limited to

the over age 65 population or specific categories of respiratory diseases. 

An exception to the “single study” selection in the benefits analysis is mortality

associated with exposure to ozone. Estimates of premature mortality associated with short-term

exposure to PM2.5 and PM10, are also based on multiple estimates of the relationship between PM

and mortality, but are presented as a sensitivity analysis. When several estimated C-R

relationships between a pollutant and a given health endpoint have been selected, they are

combined or pooled to derive a single estimate of the relationship. A separate technical support

document provides details of the procedures used to combine multiple C-R functions (Abt

Associates, 1999).

Whether the C-R relationship between a pollutant and a given health endpoint is

estimated by a single function from a single study or by a pooled function of C-R functions from

several studies, we apply that same C-R relationship everywhere in the benefits analysis. 

Although the C-R relationship may in fact vary somewhat from one location to another (for

example, due to differences in population susceptibilities or differences in the composition of

PM), location-specific C-R functions are generally not available. While a single function

applied everywhere may result in overestimates of incidence changes in some locations and

underestimates of incidence changes in other locations, these location-specific biases will to

some extent cancel each other out when the total incidence change is calculated. It is not

possible to know the extent or direction of the bias in the total incidence change based on

application of a single C-R function everywhere.

The remainder of this Section discusses two key issues involving the use of C-R

functions to estimate the benefits of the Tier 2 rule: baseline incidences and health effect

thresholds, i.e. levels of pollution below which changes in air quality have no impacts on health.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-30

Table VII-9. PM and Ozone Health Concentration-Response Function Summary Data

Endpoint Pollutant Concentration-Response Function Averaging Time Po

Source

Functional

Forma Studied Applied

MortalityMortality (long-term exposure) -PM2.5

PM2.5 Pope et al. (1995) log-linear annual median annual medianc a

Mortality (short-term exposure) Ozone Kinney et al., (1995) log-linear daily 1-hour max daily 1-hour max

Ozone Ito and Thurston (1996) log-linear 1-day average 1-day average Ozone Moolgavkar et al. (1995) log-linear 1-day average 1-day average Ozone Samet et al. (1997) log-linear 1-day average 1-day average 

Hospital AdmissionsAll respiratory illnesses PM2.5/ PM10 Thurston et al. (1994) linear 1-day average 1-day average 

Congestive heart failure PM10 Schwartz & Morris

(1995)

log-linear 2-day average 1-day average a

Ischemic heart disease PM10 Schwartz & Morris

(1995)

log-linear 1-day average 1-day average a

All respiratory illnesses Ozone Thurston et al. (1992) linear daily 1-hour max daily 1-hour max 
Chapter VII: Benefit-Cost Analysis

Endpoint Pollutant Concentration-Response Function Averaging Time Po

Source

Functional

Forma Studied Applied

VII-31

Respiratory Symptoms/Illnesses not requiring hospitalizationDevelopment of chronicbronchitis

PM10 Schwartz (1993) logistic annual mean annual mean 

Acute bronchitis PM2.5 Dockery et al.(1989) logistic annual mean annual meand ag

Upper respiratory symptoms(URS)

PM10 Pope et al. (1991) log-linear 1-day average 1-day average as

ag

Lower respiratory symptoms(LRS)

PM10 Schwartz et al. (1994) logistic 1-day average 1-day average a

Any of 19 acute respiratorysymptoms

Ozone Krupnick et al. (1990) logistic daily 1-hour max daily 1-hour max ag

Minor restricted activity days(MRAD)

PM2.5 Ostro and Rothschild

(1989)

log-linear 2-week average 1-day average ag

Work loss days (WLD) PM2.5 Ostro (1987) log-linear 2-week average 1-day average ag

Decreased worker productivity Ozone Crocker & Horst (1981)

and EPA (1994)

percent

change

1-day average 1-day average l

a The log-linear is the most common concentration-response relationship; in this case, the relationship between a change in pollutant level, )

incidence of the health effect, )y, is: )y = population* incidence rate*[exp(B*)PM)-1].

b The population examined in the study and to which this analysis applies the reported concentration-response (C-R) relationship. In genera

analyzed the C-R relationship for a specific age group (e.g., ages 65+) in a specific geographical area. This analysis applies the reported pol

individuals in the age group nationwide.

c A single pollutant coefficient reported for several studies indicates a pooled analysis; see text for discussion of pooling C-R relationships a
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-32

a. Baseline Incidences

The epidemiological studies of the association between pollution levels and adverse

health effects generally provide a direct estimate of the relationship of air quality changes to the

relative risk of a health effect, rather than an estimate of the absolute number of avoided cases. 

For example, a typical result might be that a ten :g/m3 decrease in daily PM2.5 levels might

decrease hospital admissions by three percent. The baseline incidence of the health effect is

necessary to convert this relative change into a number of cases. 

Because most PM and ozone studies that estimate C-R functions for mortality considered

only non-accidental mortality, we adjusted county-specific baseline mortality rates used in the

estimation of PM- and ozone-related mortality to provide a better estimate of county-specific

non-accidental mortality. We multiplied each county-specific mortality rate by the ratio of

national non-accidental mortality to national total mortality (0.93). We estimated countyspecific baseline mortality incidences among individuals aged 30 and over– necessary for PM2.5-

related long-term exposure mortality, estimated by Pope et al. (1995)– by applying national agespecific death rates to county-specific age distributions, and adjusting the resulting estimated

age-specific incidences so that the estimated total incidences (including all ages) equals the

actual county-specific total incidences.

County-level incidence rates are not available for other endpoints. The analysis used

national incidence whenever possible, because these data are most applicable to a national

assessment of benefits. However, for some studies, the only available incidence information

come from the studies themselves; in these cases, incidence in the study population is assumed to

represent typical incidence at the national level.

b. Thresholds 

A very important issue in applied modeling of changes in PM is whether to apply the C-R

functions to all predicted changes in ambient concentrations, even small changes occurring at

levels approaching “anthropogenic background”. Different assumptions about whether to model

thresholds, and if so, at what level, can have a major effect on the resulting benefits estimates.

We use two thresholds– a different threshold for the low, primary, and high sets of assumptions–

which are set respectively at: 1) 15 :g/m3

 for all effects except those that have a lowest observed

level higher than 15 :g/m3

; and 2) the background level of the pollutant (i.e., the pollutant level

that would occur after removing all anthropogenic emissions). 

3. PM- and Ozone-related Health Effects

This Section discusses the methods used to estimate the change in the incidence of PMand ozone-related health effects due to the Tier 2 rule and the methods used to value this change. 
Chapter VII: Benefit-Cost Analysis

VII-33

a. Premature Mortality

Both ozone and particulate matter have been associated with increased risk of premature

mortality, which is a very important health endpoint in this economic analysis due to the high

monetary value associated with risks to life. There are two types of exposure to elevated levels

of air pollution that may result in premature mortality. Acute (short-term) exposure (e.g.,

exposure on a given day) to peak pollutant concentrations may result in excess mortality on the

same day or within a few days of the elevated exposure. Chronic (long-term) exposure (e.g.,

exposure over a period of a year or more) to levels of pollution that are generally higher may

result in mortality in excess of what it would be if pollution levels were generally lower. The

excess mortality that occurs will not necessarily be associated with any particular episode of

elevated air pollution levels. Both types of effects are biologically plausible, and there is an

increasing body of consistent corroborating evidence from animal toxicity studies indicating that

both types of effects exist.

There are, similarly, two basic types of epidemiological studies of the relationship

between mortality and exposure to pollutants. Long-term studies (e.g., Pope et al., 1995)

estimate the association between long-term (chronic) exposure to air pollution and the survival

of members of a large study population over an extended period of time. Such studies examine

the health endpoint of concern in relation to the general long-term level of the pollutant of

concern– for example, relating annual mortality to some measure of annual pollutant level. 

Daily peak concentrations would impact the results only insofar as they affect the measure of

long-term (e.g., annual) pollutant concentration. In contrast, short-term studies relate daily

levels of the pollutant to daily mortality. By their basic design, daily studies can detect acute

effects but cannot detect the effects of long-term exposures. A chronic exposure study design (a

prospective cohort study, such as the Pope study) is best able to identify the long-term exposure

effects, and may detect some of the short-term exposure effects as well. Because a long-term

exposure study may detect some of the same short-term exposure effects detected by short-term

studies, including both types of study in a benefit analysis would likely result in some degree of

double counting of benefits. 

Another major advantage of the long-term study design concerns the issue of the degree

of prematurity of mortality associated with air pollution. It is possible that the short-term studies

are detecting an association between air pollution and mortality that is primarily occurring

among terminally ill people. Critics of the use of short-term studies for policy analysis purposes

correctly point out that an added risk factor that results in a terminally ill person dying a few

days or weeks earlier than they otherwise would have (known as “short-term harvesting”) is

potentially included in the measured air pollutant mortality “signal” detected in such a study. 

As the short-term study design does not examine individual people (it examines daily mortality

rates in large populations, typically a large city population), it is impossible to know anything

about the overall health status of the specific population that is detected as dying early. While
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-34

some of the detected excess deaths may have resulted in a substantial loss of life (measuring loss

of life in terms of lost years of remaining life), others may have lost a relatively short amount of

lifespan.

While the long-term study design is preferred, these types of studies are expensive to

conduct and consequently there are relatively few well designed long-term studies. For PM,

there has only been one high quality study accepted by the Science Advisory Board, and for

ozone, no acceptable long-term studies have been published. For this reason, our analysis used

short-term ozone mortality studies as the basis for determining ozone-related mortality benefits. 

The next two Sections provide details on the measurement of changes in incidences of premature

mortality associated with changes in PM and ozone arising from implementation of the Tier 2

rule.

Estimating PM-related Premature Mortality

The benefits analysis estimated PM-related mortality using the PM2.5 relationship from

Pope et al. (1995). This decision reflects the Science Advisory Board’s explicit recommendation

for modeling the mortality effects of PM in both the completed §812 Retrospective Report to

Congress and the ongoing §812 Prospective Study. The Pope et al. study estimates the

association between long-term (chronic) exposure to PM2.5 and the survival of members of a

large study population. This relationship is selected for use in the benefits analysis instead of

short-term (daily pollution) studies for a number of reasons. 

We selected the Pope et al. (1995) long-term study as providing the best available

estimate of the relationship between PM and mortality. It is used alone– rather than considering

the total effect to be the sum of estimated short-term and long-term effects– because summing

creates the possibility of double-counting a portion of PM-related mortality. We selected the

Pope et al. study in preference to other available long-term studies because it uses better

statistical methods, has a much larger sample size, the longest exposure interval, and more

locations (51 cities) in the United States, than other studies. It is unlikely that the Pope et al.

study contains any significant amount of short-term harvesting. First, the health status of each

individual tracked in the study is known at the beginning of the study period. Persons with

known pre-existing serious illnesses were excluded from the study population. Second, the

statistical model used in the Pope study examines the question of survivability throughout the

study period (ten years). Deaths that are premature by only a few days or weeks within the

ten-year study period (for example, the deaths of terminally ill patients, triggered by a short

duration PM episode) are likely to have little impact on the calculation of the average probability

of surviving the entire ten year interval. In relation to the “Six-cities” study by Dockery et al.

(1993), the Pope et al. study found a smaller increase in excess mortality for a given PM air

quality change.

Estimating Ozone-related Premature Mortality
Chapter VII: Benefit-Cost Analysis

xxThe U.S. study-only approach has been implemented previously in the NOx SIP call RIA (U.S. EPA,

1998b).

VII-35

The literature on the possible relationship between exposure to ambient ozone and

premature mortality has been evolving rapidly. Of the 28 time-series epidemiology studies

identified in the literature that report results on a possible association between daily ozone

concentrations and daily mortality (see (see: U.S. EPA, 1997e, Appendix J), 21 were published

or presented since 1995. In particular, a series of studies published in 1995 through 1997 (after

closure on the ozone Criteria Document) from multiple cities in western Europe has significantly

increased the body of studies finding a positive association. Fifteen of the 28 studies report a

statistically significant relationship between ozone and mortality, with the more recent studies

tending to find statistical significance more often than the earlier studies. The ozone-mortality

datasets have also tended to become larger in more recent studies as longer series of air quality

monitoring data have become available over time. This suggests that it may take many years of

data before the ozone effect can be separated from the daily weather and seasonal patterns with

which it tends to be correlated. 

In 1997, as a part of the ozone NAAQS promulgation RIA, EPA staff reviewed this

recent literature. They identified nine studies that met a defined set of selection criteria, and

conducted a meta-analysis of the results of the nine studies (U.S. EPA, 1997e). Our analysis

implements the same basic approach to quantifying ozone mortality as the NAAQS, with the

exception that a subset of four of the nine studies is used, representing only U.S. based

analyses.xx In a post-NAAQS RIA review of the methodology for assessing ozone mortality

effects, it was determined that the relationships between ambient ozone and mortality in the nonU.S. study locations included in the original NAAQS-related analysis may not be representative

of the range of ozone-mortality C-R relationships in the United States. To reduce the potential

for applying inappropriate C-R functions of the ozone mortality benefits from the Tier 2 rule, the

analysis only included U.S. studies, based on the assumption that demographic and

environmental conditions on average would be more similar between the study and policy sites. 

However, the full body of peer-reviewed ozone mortality studies should be considered when

evaluating the weight of evidence regarding the presence of an association between ambient

ozone concentrations and premature mortality.

Because of differences in the averaging times used in the underlying studies (some use

daily average ozone levels, while others use 1-hour daily maximum values), it is not possible to

conduct a meaningful analysis directly on the coefficients of the C-R functions. Instead, the

analysis translated each C-R function into a set of predicted mortality incidence changes that

would be estimated by that C-R function, given the set of air quality changes. We then

combined these studies to estimate the impact of ozone on mortality incidence. The technical

support document for this analysis provides additional details of this approach (Abt Associates,

1999)

Infant Mortality
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-36

Woodruff et al. (1997) found a significant association between annual PM10 levels and

post-neonatal mortality (deaths of infants aged 28 - 51 weeks). This estimate should not overlap

with the Pope et al. (1995) estimate because the Pope et al. function is based on a population

over the age of 30. The SAB recently advised the §812 Prospective project, however, to not

include this in the §812 primary analysis at this time, primarily because the study is of a new

endpoint and the results have not been replicated in other studies in the U.S. Consequently, our

analysis includes infant mortality in the high set of assumptions.

Valuing Premature Mortality

To value the benefit of reducing premature mortality, we employ two approaches to the

calculated change in incidence. One approach, the “value of statistical lives lost” (VSL)

approach, uses information from several value-of-life studies to determine a reasonable benefit

of preventing mortality. The mean value of avoiding one statistical death is estimated to be $5.9

million in 1997 dollars (or $4.8 million in 1990 dollars as has been used in previous EPA

analyses). This represents an intermediate value from a variety of estimates that appear in the

economics literature, and is a value that EPA has frequently used in RIAs for other rules. This

estimate is the mean of a distribution fitted to the estimates from 26 value-of-life studies

identified in the §812 study as “applicable to policy analysis.” The approach and set of selected

studies mirrors that of Viscusi (1992) (with the addition of two studies), and uses the same

criteria used by Viscusi in his review of value-of-life studies. The $5.9 million estimate is

consistent with Viscusi’s conclusion (updated to 1997$) that “most of the reasonable estimates

of the value of life are clustered in the $3.7 to $8.6 million range.” Five of the 26 studies are

contingent valuation (CV) studies, which directly solicit WTP information from subjects; the rest

are wage-risk studies, which base WTP estimates on estimates of the additional compensation

demanded in the labor market for riskier jobs. The 26 studies used to form the distribution of the

value of a statistical life are listed in Table VII-10.

The second approach for valuing premature mortality is the value of statistical life-years

lost” (VSLY) approach, which incorporates assumptions to account for the age-distribution of

the affected population. Moore and Viscusi (1998) suggest one approach for determining the

value of a statistical life-year lost. They assume that the willingness to pay to save a statistical

life is the value of a single year of life times the expected number of years of life remaining for

an individual. They suggest that a typical respondent in a mortal risk study may have a life

expectancy of an additional 35 years. Using a mean estimate of $4.8 million (1990 dollars), their

approach would yield an estimate of $137,000 per life-year lost or saved. If an individual

discounts future additional years using a standard discounting procedure. Using a 35 year life

expectancy, a $4.8 million value of a statistical life, and a 5 percent discount rate, the implied

value of each life-year lost is $293,000. A higher discount rate would produce a greater value

per life-year, and a lower discount rate would produce a lower value per life-year. The Moore

and Viscusi procedure is identical to this approach, but uses a zero discount rate. In addition to

the VSLY, the expected number of life-years saved is necessary to determine the appropriate

value for an avoided incidence of premature mortality. Based on adjustments to reflect age-
Chapter VII: Benefit-Cost Analysis

VII-37

specific relative premature mortality is determined to be 9.8 years. Using 9.8 years, the value of

an avoided incidence of PM-related premature mortality is then $2.2 million (1990$). Thus, for

the low-end estimate of premature mortality in this analysis we apply the value of $2.7 million in

1997 dollars per life-year saved, and the high-end estimate applies $5.9 million per life to the full

estimate of incidence.

Table VII-10. Summary of Mortality Valuation Estimatesa

Study Type of Estimate

Valuation per Statistical Life

(millions of 1990 $)

Kneisner and Leeth (1991) (US) Labor Market 0.7

Smith and Gilbert (1984) Labor Market 0.9

Dillingham (1985) Labor Market 1.1

Butler (1983) Labor Market 1.4

Miller and Guria (1991) Contingent Valuation 1.5

Moore and Viscusi (1988) Labor Market 3.1

Viscusi et al. (1991) Contingent Valuation 3.3

Gegax et al. (1985) Contingent Valuation 4.1

Marin and Psacharopoulos (1982) Labor Market 3.4

Kneisner and Leeth (1991) (Australia) Labor Market 4.1

Gerking et al. (1988) Contingent Valuation 4.2

Cousineau et al. (1988) Labor Market 4.4

Jones-Lee (1989) Contingent Valuation 4.7

Dillingham (1985) Labor Market 4.8

Viscusi (1978; 1979) Labor Market 5.0

R.S. Smith (1976) Labor Market 5.6

V.K. Smith (1983) Labor Market 5.8

Olson (1981) Labor Market 6.4

Viscusi (1981) Labor Market 8.0

R.S. Smith (1974) Labor Market 8.8

Moore and Viscusi (1988) Labor Market 9.0

Kneisner and Leeth (1991) (Japan) Labor Market 9.3

Herzog and Schlottman (1987) Labor Market 11.2

Leigh and Folson (1984) Labor Market 11.9

Leigh (1987) Labor Market 12.8

Garen (1988) Labor Market 16.6

a

 Based on Viscusi (1992). The values in Viscusi have been updated to 1997 $, as detailed in (Abt Associates, 1999).
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-38

b. Chronic Bronchitis

There are a limited number of studies that have estimated the impact of air pollution on

chronic bronchitis. An important hindrance is the lack of long-term health data and the

associated air pollution levels. Schwartz (1993) and Abbey et al.(1993; 1995) provide the

evidence that long-term PM exposure gives rise to the development of chronic bronchitis in the

U.S. Following the NOx SIP call analysis (U.S. EPA, 1998b), our analysis uses the Schwartz

study to develop a C-R function linking PM to chronic bronchitis.

It should be noted that Schwartz used data on the prevalence of chronic bronchitis, not its

incidence. To use Schwartz’s study and still estimate the change in incidence, there are at least

two possible approaches. The first is to simply assume that it is appropriate to use the baseline

incidence of chronic bronchitis in a C-R function with the estimated coefficient from Schwartz’s

study, to directly estimate the change in incidence. The second is to estimate the percentage

change in the prevalence rate for chronic bronchitis using the estimated coefficient from

Schwartz’s study in a C-R function, and then to assume that this percentage change applies to a

baseline incidence rate obtained from another source. (That is, if the prevalence declines by 25

percent with a drop in PM, then baseline incidence drops by 25 percent with the same drop in

PM.) Following work in the retrospective analysis of the Clean Air Act (U.S. EPA 1997a, pg.

D-24), our analysis uses the former approach, and estimates the change in incidence using an

annual incidence rate of 0.6 percent.

Valuing Chronic Bronchitis

PM-related chronic bronchitis is the only measured morbidity endpoint that may be

expected to last from the initial onset of the illness throughout the rest of the individual’s life. 

WTP to avoid chronic bronchitis would therefore be expected to incorporate the present

discounted value of a potentially long stream of costs (e.g., medical expenditures and lost

earnings) and pain and suffering associated with the illness. Two studies, Viscusi et al. (1991)

and Krupnick and Cropper (1992), provide estimates of WTP to avoid a case of chronic

bronchitis.

The Viscusi et al. and the Krupnick and Cropper studies were experimental studies

intended to examine new methodologies for eliciting values for morbidity endpoints. Although

these studies were not specifically designed for policy analysis, we believe the studies provide

reasonable estimates of the WTP for chronic bronchitis. As with other contingent valuation

studies, the reliability of the WTP estimates depends on the methods used to obtain the WTP

values. Some specific attributes of the studies may raise some questions regarding their

reliability. An alternative approach that can be use is the cost of illness (COI) approach, which

considers only the expenditures on the illness as a valuation method. This approach, however,

underestimates the true value of a change in incidence because it does not consider other

components of the valuation such as the amount an individual would be willing to pay to avoid

the illness even if they did not have medical expenses to consider. As such, it can serve as a
Chapter VII: Benefit-Cost Analysis

yyAs previously mentioned, the Schwartz (1993) study defines a case of chronic bronchitis for the purpose

of estimating a concentration-response function. This function only examines the relationship of chronic bronchitis

and PM without differentiating between severity of cases. Therefore, an adjustment for severity is necessary to

value the benefits of reduced incidences.

VII-39

lower bound of the value for chronic bronchitis. Therefore, this analysis values chronic

bronchitis by using the COI approach in the low-end estimate and the WTP approach for the

high-end estimate.

The COI approach for valuing chronic bronchitis uses average annual lost earnings and

average annual medical expenditures reported in Krupnick and Cropper (1990). Using a 5

percent discount rate and assuming that (1) lost earnings continue to age 65, (2) medical

expenditures are incurred until death, and (3) life expectancy is unchanged by chronic bronchitis,

the present discounted value of the stream of medical expenditures and lost earnings associated

with an average case of chronic bronchitis is estimated to be about $94,500 for a 30 year old,

$about $71,200 for a 40 year old, about $73,000 for a 50 year old, and about $50,300 for a 60

year old. The midpoint of the COI estimates across the range of ages is $72,400 per case, which

is used to value the low-end estimate of benefits for reduce incidence of chronic bronchitis.

For the WTP approach, we use two studies. The study by Viscusi et al. uses a sample

that is larger and more representative of the general population than the study by Krupnick and

Cropper (which selects people who have a relative with the disease). Thus, the valuation for the

high-end estimate is based on the distribution of WTP responses from Viscusi et al. (1991). The

WTP to avoid a case of pollution-related chronic bronchitis is derived by starting with the WTP

to avoid a severe case of chronic bronchitis, as described by Viscusi et al. (1991)yy, and adjusting

it downward to reflect (1) the decrease in severity of a case of pollution-related CB relative to

the severe case described in the Viscusi et al. study, and (2) the elasticity of WTP with respect to

severity reported in the Krupnick and Cropper (Krupnick et al., 1992) study. The technical

support document describes the adjustment procedure in more detail (Abt Associates, 1999). 

The mean value of the adjusted distribution is $319,280. This is the WTP for chronic bronchitis

we used in our benefits analysis.

As expected, the WTP estimate is greater than the full COI estimate in part because it

reflects the willingness to pay to avoid the pain and suffering associated with the illness. Thus,

the COI approach has a known downward bias because it does not include a measure of an

individual’s willingness to pay some amount to avoid the illness even if no medical expenses and

no loss of earnings occurred. The WTP estimate of $319,280 is from 3.4 times the COI estimate

for 30 year olds to 6.3 times the estimate for 60 year olds. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-40

c. Hospital Admissions

Both ozone and particulate matter have been associated with increased risk of premature

mortality. Each is discussed below.

Estimating Ozone-related Hospital Admissions

Our analysis estimates ozone-related hospital admissions for “all respiratory diseases,”

using a C-R function based on the work of Thurston et al. (1992). Thurston et al. examined

hospital admissions for all ages in the population. Because of the comprehensiveness of the

Thurston et al. study, it is selected over other available studies that are restricted to limited age

ranges (e.g., the population aged 65 years and older), and/or specific diagnoses (e.g., hospital

admissions for pneumonia). The age- and disease-specific effect categories are subsets of the

all-age, all-respiratory disease hospital admission category. Therefore, the benefits of avoided

hospital admissions for respiratory illnesses for all ages should be larger than the benefits for

more restricted categories. However, that is not true for the estimated benefits, based on the

available studies. The estimated relationship produces fewer benefits than either of the two

available alternatives: all respiratory disease admissions for the population over 65; or the sum of

pneumonia and chronic obstructive pulmonary disease (COPD) admissions for the population

over 65. Clearly adding the results for these study types would involve a serious amount of

double counting. Therefore, selecting the Thurston et al. study may underestimate the total

benefits of hospital admissions.

Estimating PM-related Hospital Admissions

The benefits analysis includes three PM-related hospital admissions, due to all

respiratory illnesses (Thurston et al., 1994), congestive heart failure (Schwartz and Morris,

1995), and ischemic heart disease (Schwartz and Morris, 1995). As with ozone-induced hospital

admissions, the benefits analysis relies on a study of all respiratory hospital admissions for all

age groups, rather than studies examining the population over 65.

Valuing Hospital Admissions

An individual’s WTP to avoid a hospital admission will include, at a minimum, the

amount of money they pay for medical expenses (i.e., what they pay towards the hospital charge

and the associated physician charge) and the loss in earnings. In addition, however, an

individual is likely to be willing to pay some amount to avoid the pain and suffering associated

with the illness itself. That is, even if they incurred no medical expenses and no loss in earnings,

most individuals would still be willing to pay something to avoid the illness.

Because medical expenditures are to a significant extent shared by society, via medical

insurance, Medicare, etc., the medical expenditures actually incurred by the individual are likely

to be less than the total medical cost to society. The total value to society of an individual’s
Chapter VII: Benefit-Cost Analysis

VII-41

avoidance of hospital admission, then, might be thought of as having two components: (1) the

cost of illness (COI) to society, including the total medical costs plus the value of the lost

productivity, as well as (2) the individual’s WTP to avoid the illness itself.

In the absence of estimates of social WTP to avoid hospital admissions for specific

illnesses (components 1 plus 2 above), estimates of total COI (component 1) are typically used

as conservative (lower bound) estimates. Because these estimates do not include the value of

avoiding the illness itself (component 2), they are biased downward. Some analyses adjust COI

estimates upward by multiplying by an estimate of the ratio of WTP to COI, to better

approximate total WTP. Other analyses have avoided making this adjustment because of the

possibility of over adjusting -- that is, possibly replacing a known downward bias with an

upward bias. The previous RIAs for PM and ozone, as well as the revised RIA for ozone and

PM NAAQS, did adjust the COI estimate upward. The COI values used in this benefits analysis

will not be adjusted to better reflect the total WTP. This is consistent with the guidance offered

by the §812 Science Advisory Board (SAB) committee. 

The COI estimates used in our analysis consist of three components: estimated physician

charges (based on the average length of a hospital stay for the illness), the estimated opportunity

cost of time spent in the hospital, and estimated hospital charges. 

Our analysis assumes that physician charges associated with hospital care for asthma and

chronic obstructive pulmonary disease (COPD) (two endpoints not estimated for this analysis)

provide reasonably good estimates of average physician charges associated with hospital stays

for the illness categories considered here. Abt Associates (1992) estimated that physician

charges for the first day of hospital care for asthma (in 1988) or COPD (in 1989) averaged $135

(in 1997 $); physician charges for subsequent days of hospital care averaged $50. Estimated

physician charges for a hospital stay of n days for any of the illness categories discussed below,

then, would be $135 + $50(n-1).

The opportunity cost of a day spent in the hospital is estimated, for people in the

workforce, as the value of the lost daily wage. This is estimated at $102. The study on PM and

work loss days from which this value is derived (Ostro, 1987), however, considers only

individuals 18 to 65 years old, while two of the hospital admission studies used in this analysis

(“all respiratory, all ages”, Thurston et al., 1994; and Thurston et al., 1992), considers all ages

for both ozone and PM. It should be noted that, because the value of a PM-related work loss day

(WLD) is elsewhere added into the total benefits analysis as a separate health endpoint,

including it as a component of the WTP to avoid a PM-related hospital admission associated

would be double counting. Additionally, because there is a not a separate work loss function for

ozone, the lost productivity is included in the cost of an ozone hospital admission, but not for

PM. 

To derive estimates of the opportunity cost of a day spent in the hospital for respiratory

illness based on Thurston et al. (1994) or Thurston et al. (1992), which considered individuals of
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

zzThis is approximately the same as the ratio of employed to total population in the United States. In 1994,

for example, this ratio was (123 million)/(260 million), or 47 percent. 

VII-42

all ages, we assumed that half of the PM- or ozone-related hospital admissions are among

individuals who are not employed, including the young and the elderly.zz We therefore estimated

the expected opportunity cost of a day spent in the hospital for an individual randomly selected

from among those admitted to the hospital for PM- or ozone-related respiratory illnesses to be

(0.5)($102) +(0.5)($51) = $76.50. However, because the value of work loss days for those in the

labor force is a separate component of the total benefit for PM, only the second component of

opportunity cost enters the PM-related “all respiratory” hospital admissions benefit, which is,

then, (0.5)($51) = $25.50.

To estimate the opportunity cost of a day spent in the hospital for an individual aged 65

or older (necessary for the ischemic heart disease and congestive heart failure hospital admission

functions for individuals 65 years and over), we assumed that such an individual is not in the

workforce. Although the value of a WLD may be an inappropriate way to estimate the

opportunity cost of a day spent in the hospital for someone who is not employed (including the

young and the elderly), this opportunity cost is positive and should not be ignored. As a rough

approximation, we assumed that, for the young, the elderly, and any other unemployed

individuals, the opportunity cost of a day spent in the hospital is one-half what it is for

individuals in the workforce, or $51. 

Finally, for all hospital admissions included in this analysis, we based estimates of

hospital charges on discharge statistics provided by Elixhauser et al. (1993). The resulting Cost

of Illness values for hospital admissions are shown in Table VII-11.
Chapter VII: Benefit-Cost Analysis

VII-43

Table VII-11. Derivation of Cost of Illness (COI) and Total WTP Estimates for Hospital Admissions End

Hospital Admissions For: Hospital

Charge

(1)

Physician

Charge

(2)

Opportunity Cost

Total Cost of 

(1) + (

(Standard 

Opportunity

Cost per day

Avg Length of

Stay (days)

Total Opportunity Cost 

 (3)

Ischemic Heart Disease, age $

65 (ICD codes 410-414) $13,996 $438 $50.96 7 $357 $14,791 Congestive Heart Failure, age$ 65 (ICD code 428)

$10,854 $539 $50.96 9 $459 $11,852 

PM-Related “all respiratoryillnesses,” all ages (ICD codes466, 480-482, 485, 490-493)

$8,414 $488 $25.48 8 $204 $9,106 

Ozone-Related “all respiratoryillnesses,” all ages (ICD codes466, 480-486, 490-493)

$8,607 $438 $76.44 7 $535 $9,580 

a Note: Two different escalation factors were used in the adjustment to 1997$. Hospital and physician charges both used escalation factors b

CPI-U for medical care. The opportunity cost adjustment used an escalation factor base upon the CPI-U for “all items.” The standard devia

Cost of Illness column is based upon a weighted average of each of the three COI components.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-44

d. Acute Bronchitis

Dockery et al. (1989) examined the relationship between PM and other pollutants on the

reported rates of chronic cough, bronchitis and chest illness, in a study of 5,422 children aged ten

to twelve. Bronchitis and chronic cough were both found to be significantly related to PM

concentrations.

Estimating WTP to avoid a case of acute bronchitis is difficult for several reasons. First,

WTP to avoid acute bronchitis itself has not been estimated. Estimation of WTP to avoid this

health endpoint therefore must be based on estimates of WTP to avoid symptoms that occur with

this illness. Second, a case of acute bronchitis may last more than one day, whereas it is a day of

avoided symptoms that is typically valued. Finally, the C-R function used in the benefit analysis

for acute bronchitis was estimated for children, whereas WTP estimates for those symptoms

associated with acute bronchitis were obtained from adults.

With these caveats in mind, we estimate WTP to avoid a case of acute bronchitis as the

midpoint between a low estimate and a high estimate. The low estimate ($16.32) is the sum of

the midrange values recommended by IEc (1994) for two symptoms believed to be associated

with acute bronchitis: coughing ($7.72) and chest tightness ($8.60). The high estimate was taken

to be twice the value of a minor respiratory restricted activity day ($47.12), or $94.24. The

midpoint between the low and high estimates is $55.26. 

e. PM-related Upper Respiratory Symptoms

The benefits analysis used the C-R function for PM-related Upper Respiratory Symptoms

(URS) from Pope et al. (1991). Pope et al. describe URS as consisting of one or more of the

following symptoms: runny or stuffy nose; wet cough; and burning, aching, or red eyes. The

children in the Pope et al. study were asked to record respiratory symptoms in a daily diary, and

the daily occurrences of URS and LRS, as defined above, were related to daily PM10

concentrations. Estimates of WTP to avoid a day of symptoms are therefore appropriate

measures of benefit. 

Willingness to pay to avoid a day of URS is based on symptom-specific WTPs to avoid

those symptoms identified by Pope et al. as part of the URS complex of symptoms. Three

contingent valuation (CV) studies have estimated WTP to avoid various morbidity symptoms

that are either within the URS symptom complex defined by Pope et al. (1991) or are similar to

those symptoms identified by Pope et al. In each CV study, participants were asked their WTP

to avoid a day of each of several symptoms. The three individual symptoms that were identified

as most closely matching those listed by Pope et al. for URS are cough, head/sinus congestion,

and eye irritation. A day of URS could consist of any one of seven possible “symptom

complexes” consisting of at least one of these symptoms. It is assumed that each of the seven
Chapter VII: Benefit-Cost Analysis

VII-45

types of URS is equally likely. The mean WTP to avoid a day of URS is therefore the average of

the mean WTPs to avoid each type of URS, or $22.96. This is the point estimate for the dollar

value for PM-related URS used in the benefit analysis. Finally, it is worth emphasizing that

what is being valued here is URS as defined by Pope et al. While other definitions of URS are

certainly possible, we used this definition of URS in the benefits analysis because it is the

incidence of this specific definition of URS that has been related to PM exposure by Pope et

al.(1991).

f. PM-related Lower Respiratory Symptoms

Schwartz et al. (1994) estimated the relationship between Lower Respiratory Symptoms

(LRS) and PM-10 concentrations. The method for deriving a point estimate of mean WTP to

avoid a day of LRS is the same as for URS. Schwartz et al. define LRS as at least two of the

following symptoms: cough, chest pain, phlegm, and wheeze. The symptoms for which WTP

estimates are available that reasonably match those listed by Schwartz et al. for LRS are cough

(C), chest tightness (CT), coughing up phlegm (CP), and wheeze (W). A day of LRS, as defined

by Schwartz et al., could consist of any one of the 11 combinations of at least two of these four

symptoms.

We assumed that each of the eleven types of LRS is equally likely. The mean WTP to

avoid a day of LRS as defined by Schwartz et al. (1994) is therefore the average of the mean

WTPs to avoid each type of LRS, or $14.51. This is the point estimate used in the benefit

analysis for the dollar value for LRS as defined by Schwartz et al. The WTP estimates are based

on studies which considered the value of a day of avoided symptoms, whereas the Schwartz et al.

study used as its measure a case of LRS. Because a case of LRS usually lasts at least one day,

and often more, WTP to avoid a day of LRS should be a conservative estimate of WTP to avoid

a case of LRS.

Finally, as with URS, it is worth emphasizing that what is being valued here is LRS as

defined by Schwartz et al. (1994). While other definitions of LRS are certainly possible, this

definition of LRS is used in this benefit analysis because it is the incidence of this specific

definition of LRS that has been related to PM exposure by Schwartz et al.

The point estimates derived for mean WTP to avoid a day of URS and a case of LRS are

based on the assumption that WTPs are additive. For example, if WTP to avoid a day of cough

is $8.60, and WTP to avoid a day of shortness of breath is $6.14, then WTP to avoid a day of

both cough and shortness of breath is $14.74. If there are no synergistic effects among

symptoms, then it is likely that the marginal utility of avoiding symptoms decreases with the

number of symptoms being avoided. If this is the case, adding WTPs would tend to overestimate

WTP for avoidance of multiple symptoms. However, there may be synergistic effects– that is,

the discomfort from two or more simultaneous symptoms may exceed the sum of the discomforts

associated with each of the individual symptoms. If this is the case, adding WTPs would tend to
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-46

underestimate WTP for avoidance of multiple symptoms. It is also possible that people may

experience additional symptoms for which WTPs are not available, again leading to an

underestimate of the correct WTP. However, for small numbers of symptoms, the assumption of

additivity of WTPs is unlikely to result in substantive bias.

There are three sources of uncertainty in the valuation of both URS and LRS: (1) an

occurrence of URS or of LRS may be comprised of one or more of a variety of symptoms (i.e.,

URS and LRS are each potentially a “complex of symptoms”), so that what is being valued may

vary from one occurrence to another; (2) for a given symptom, there is uncertainty about the

mean WTP to avoid the symptom; and (3) the WTP to avoid an occurrence of multiple

symptoms may be greater or less than the sum of the WTPs to avoid the individual symptoms. 

g. Ozone-related Any of 19 Respiratory Symptoms

 The presence of “any of 19 acute respiratory symptoms” is a somewhat subjective health

effect used by Krupnick et al. (1990). Moreover, not all 19 symptoms are listed in the Krupnick

et al. study. It is therefore not clear exactly what symptoms were included in the study. Even if

all 19 symptoms were known, it is unlikely that WTP estimates could be obtained for all of the

symptoms. Finally, even if all 19 symptoms were known and WTP estimates could be obtained

for all 19 symptoms, the assumption of additivity of WTPs becomes tenuous with such a large

number of symptoms. The likelihood that all 19 symptoms would occur simultaneously,

moreover, is very small. 

Acute respiratory symptoms must be either upper respiratory symptoms or lower

respiratory symptoms. In the absence of further knowledge about which of the two types of

symptoms is more likely to occur among the “any of 19 acute respiratory symptoms,” we

assumed that they occur with equal probability. Because this health endpoint may also consist of

combinations of symptoms, it was also assumed that there is some (smaller) probability that

upper and lower respiratory symptoms occur together. 

To value avoidance of a day of “the presence of any of 19 acute respiratory symptoms”

we therefore assumed that this health endpoint consists either of URS, or LRS, or both. We also

assumed that it is as likely to be URS as LRS and that it is half as likely to be both together. 

That is, it was assumed that “the presence of any of 19 acute respiratory symptoms” is a day of

URS with 40 percent probability, a day of LRS with 40 percent probability, and a day of both

URS and LRS with 20 percent probability. Using the point estimates of WTP to avoid a day of

URS and LRS derived above, the point estimate of WTP to avoid a day of “the presence of any

of 19 acute respiratory symptoms” is:

(0.40)($22.96) + (0.40)($14.51) + (0.20)($22.96 + $14.51) = $22.48

Because this health endpoint is only vaguely defined, and because of the lack of information on
Chapter VII: Benefit-Cost Analysis

VII-47

the relative frequencies of the different combinations of acute respiratory symptoms that might

qualify as “any of 19 acute respiratory symptoms,” the unit dollar value derived for this health

endpoint must be considered only a rough approximation.

h. Work Loss Days

Ostro (1987) estimated the impact of PM on the incidence of work-loss days (WLD) in a

national sample of the adult working population, ages 18 to 65, living in metropolitan areas. 

Separate coefficients were developed for each year in the analysis (1976-1981); we then

combined these coefficients for use in this analysis.

Willingness to pay to avoid the loss of one day of work was estimated by dividing the

median weekly wage for 1990 (U.S. Bureau of the Census, 1992) by five (to get the median daily

wage). This values the loss of a day of work at the median wage for the day lost. Valuing the

loss of a day’s work at the wages lost is consistent with economic theory, which assumes that an

individual is paid exactly the value of his labor.

The use of the median rather than the mean, however, requires some comment. If all

individuals in society were equally likely to be affected by air pollution to the extent that they

lose a day of work because of it, then the appropriate measure of the value of a work loss day

would be the mean daily wage. It is highly likely, however, that the loss of work days due to

pollution exposure does not occur with equal probability among all individuals, but instead is

more likely to occur among lower income individuals than among high income individuals. It is

probable, for example, that individuals who are vulnerable enough to the negative effects of air

pollution to lose a day of work as a result of exposure tend to be those with generally poorer

health care. Individuals with poorer health care have, on average, lower incomes. To estimate

the average lost wages of individuals who lose a day of work because of exposure to PM

pollution, then, would require a weighted average of all daily wages, with higher weights on the

low end of the wage scale and lower weights on the high end of the wage scale. Because the

appropriate weights are not known, however, the median wage was used rather than the mean

wage. The median is more likely to approximate the correct value than the mean because means

are highly susceptible to the influence of large values in the tail of a distribution (in this case, the

small percentage of very large incomes in the United States), whereas the median is not

susceptible to these large values. The median daily wage in 1990 was $101.92 (adjusted to 1997

$). This is the value that was used to represent work loss days (WLD).

i. Minor Restricted Activity Days

Ostro and Rothschild (1989) estimated the impact of PM2.5 on the incidence of minor

restricted activity days (MRAD) in a national sample of the adult working population, ages 18 to

65, living in metropolitan areas. We developed separate coefficients for each year in the analysis
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-48

(1976-1981), which were then combined for use in this analysis.

No studies are reported to have estimated WTP to avoid a minor restricted activity day

(MRAD). However, IEc (1993) has derived an estimate of WTP to avoid a minor respiratory

restricted activity day (MRRAD), using WTP estimates from Tolley et al. (1986) for avoiding a

three-symptom combination of coughing, throat congestion, and sinusitis. This estimate of WTP

to avoid a MRRAD, so defined, is $47.12. Although Ostro and Rothschild (1989) estimated the

relationship between PM2.5 and MRADs, rather than MRRADs (a component of MRADs), it is

likely that most of the MRADs associated with exposure to PM2.5 are in fact MRRADs. For the

purpose of valuing this health endpoint, then, we assumed that MRADs associated with PM

exposure may be more specifically defined as MRRADs, and therefore used the estimate of

mean WTP to avoid a MRRAD.

Any estimate of mean WTP to avoid a MRRAD (or any other type of restricted activity

day other than WLD) will be somewhat arbitrary because the endpoint itself is not precisely

defined. Many different combinations of symptoms could presumably result in some minor or

less minor restriction in activity. Krupnick and Kopp (1988) argued that mild symptoms will not

be sufficient to result in a MRRAD, so that WTP to avoid a MRRAD should exceed WTP to

avoid any single mild symptom. A single severe symptom or a combination of symptoms could,

however, be sufficient to restrict activity. Therefore WTP to avoid a MRRAD should, these

authors argue, not necessarily exceed WTP to avoid a single severe symptom or a combination

of symptoms. The “severity” of a symptom, however, is similarly not precisely defined;

moreover, one level of severity of a symptom could induce restriction of activity for one

individual while not doing so for another. The same is true for any particular combination of

symptoms.

Given that there is inherently a substantial degree of arbitrariness in any point estimate of

WTP to avoid a MRRAD (or other kinds of restricted activity days), the reasonable bounds on

such an estimate must be considered. By definition, a MRRAD does not result in loss of work. 

WTP to avoid a MRRAD should therefore be less than WTP to avoid a WLD. At the other

extreme, WTP to avoid a MRRAD should exceed WTP to avoid a single mild symptom. The

highest IEc midrange estimate of WTP to avoid a single symptom is $19.30, for eye irritation. 

The point estimate of WTP to avoid a WLD in the benefit analysis is $101.92. If all the single

symptoms evaluated by the studies are not severe, then the estimate of WTP to avoid a MRRAD

should be somewhere between $19.30 and $101.92. Because the IEc estimate of $47.12 falls

within this range (and acknowledging the degree of arbitrariness associated with any estimate

within this range), we used the IEc estimate as the point estimate of mean WTP to avoid a

MRRAD.

j. Worker Productivity

The benefits analysis based the valuation used to monetize benefits associated with
Chapter VII: Benefit-Cost Analysis

VII-49

increased worker productivity resulting from improved ozone air quality on information reported

in Crocker and Horst (1981) and summarized in EPA (1994). Crocker and Horst (1981)

examined the impacts of ozone exposure on the productivity of outdoor citrus workers. The

study measured productivity impacts as the change in income associated with a change in ozone

exposure, given as the elasticity of income with respect to ozone concentration (-0.1427). The

reported elasticity translates a ten percent reduction in ozone to a 1.4 percent increase in income. 

Given the average daily income for outdoor workers engaged in strenuous activity reported by

the 1990 U.S. Census, $89.64 per day (adjusted to 1997 $), a ten percent reduction in ozone

yields approximately $1 in increased daily wages.

4. Ozone- and PM-Related Welfare Effects

In addition to the effects on human health described above, emission reductions

attributed to the Tier 2 rule will also produce welfare (i.e., non-health) benefits. Welfare effects

cover a potentially broad range of adverse effects, including adverse impacts on plants, animals,

structural materials, visibility, and ecosystem functions. Like health effects, in order to be

included in a quantified monetary benefits analysis, all of the analytical links between changes in

emissions and the monetary value of the effects must be available. While the required analytical

components are available for certain welfare endpoints, our analysis omits many other likely or

possible welfare categories. The availability of information on each analytical step limits the

total coverage of the welfare effects. All of the welfare benefits that are quantified and included

in the benefits analysis were included in the NOx SIP call. Table VII-12 lists the welfare

categories that are included in the benefits analysis; the technical support document for this RIA

provides further detail on these endpoints (Abt Associates, 1999). Each of these categories will

be discussed separately below.

Table VII-12. Quantified Welfare Effects Included in the Benefits Analysis

Welfare Effect Pollutant Study

Agriculture - commodity crops Ozone Taylor (1993)

Nitrogen deposition in estuarine and

coastal waters NOx EPA (1998a)

Visibility-recreational PM and gases Chestnut et al. (1997)

Visibility-residential PM and gases McClelland et al. (1991)

Household soiling PM ESEERCO (1994)
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-50

a. Commodity Agricultural Crops

The economic value associated with varying levels of yield loss for ozone-sensitive

commodity crops is analyzed using the AGSIM© agricultural benefits model (Taylor et al.,
Chapter VII: Benefit-Cost Analysis

aaa Agricultural benefits differ from other health and welfare endpoints in the length of the assumed ozone

season. For agriculture, the ozone season is assumed to extend from April to September. This assumption is made

to ensure proper calculation of the ozone statistic used in the exposure-response functions. The only crop affected

by changes in ozone during April is winter wheat.

bbb The total value for these crops in 1997 was $57 billion. 

VII-51

1993). AGSIM© is an econometric-simulation model that is based on a large set of statistically

estimated demand and supply equations for agricultural commodities produced in the United

States. The model is capable of analyzing the effects of changes in policies (in this case, the

implementation of the Tier 2 rule) that affect commodity crop yields or production costs. The

technical support document for this RIA provides further details on AGSIM© (Abt Associates,

1999).

The measure of benefits calculated by the model is the net change in consumers' and

producers' surplus from baseline ozone concentrations to the ozone concentrations resulting from

attainment of particular standards. Using the baseline and post-control equilibria, the model

calculates the change in net consumers' and producers' surplus on a crop-by-crop basisaaa. Dollar

values are aggregated across crops for each standard. The total dollar value represents a measure

of the change in social welfare associated with the Tier 2 rule. Although the model calculates

benefits under three alternative welfare measures (perfect competition, price supports, and

modified agricultural policy), results presented here are based on the "perfect competition"

measure to reflect recent changes in agricultural subsidy programs. Under the recently revised

1996 Farm Bill , most eligible farmers have enrolled in the program to phase out government

crop price supports for the AGSIM©-relevant crops: wheat, corn, sorghum, and cotton.

For the purpose of our analysis, the model analyzed the six most economically significant

crops: corn, cotton, peanuts, sorghum, soybean, and winter wheat.bbb The model employs

biological exposure-response information derived from controlled experiments conducted by the

National Crop Loss Assessment Network (NCLAN) (1996).

b. Nitrogen Deposition

Excess nutrient loads, especially that of nitrogen, cause a variety of adverse

consequences to the health of estuarine and coastal waters. These effects include toxic and/or

noxious algal blooms such as brown and red tides, low (hypoxic) or zero (anoxic) concentrations

of dissolved oxygen in bottom waters, the loss of submerged aquatic vegetation due to the lightfiltering effect of thick algal mats, and fundamental shifts in phytoplankton community structure. 

Direct C-R functions relating deposited nitrogen and reductions in estuarine benefits are not

available. The preferred willingness-to-pay based measure of benefits depends on the

availability of these C-R functions and on estimates of the value of environmental responses. 

Because neither appropriate C-R functions nor sufficient information to estimate the marginal
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

ccc Avoided cost is only a proxy for benefits, and should be viewed as inferior to willingness-to-pay based

measures. Current research is underway to develop other approaches for valuing estuarine benefits, including

contingent valuation and hedonic property studies. However, this research is still sparse, and does not contain

sufficient information on the marginal willingness-to-pay for changes in concentrations of nitrogen (or changes in

water quality or water resources as a result of changes in nitrogen concentrations).

ddd The case study estuaries are Albemarle-Pamlico Sounds, Chesapeake Bay, and Tampa Bay.

eee The ten East Coast estuaries are Albemarle-Pamlico Sounds, Cape Cod Bay, Chesapeake Bay, Delaware

Bay, Delaware Inland Bays, Gardiners Bay, Hudson River/Raritan Bay, Long Island Sound, Massachusetts Bays,

and Narragansett Bays. The Gulf Coast estuaries are Sarasota Bay and Tampa Bay.

VII-52

value of changes in water quality exist at present, this analysis used an avoided cost approach

instead of willingness-to-pay to generate estuary-related benefits. The use of the avoided cost

approach to establish the value of a reduction in nitrogen deposition is problematic, because

there is not a direct link between implementation of the air pollution regulation and the

abandonment of a separate costly regulatory program by some other agency, (i.e. a state

environmental agency). However, there are currently no readily available alternatives to this

approach.ccc

The avoided costs to surrounding communities of reduced nitrogen loadings were

calculated for three case study estuaries.ddd These costs are used to estimate the avoided costs for

ten East Coast estuaries, and two Gulf Coast case study estuaries for which reduced nitrogen

loadings were modeled.eee The avoided cost estimates for the ten East Coast case study estuaries,

which represent approximately half of the estuarine watershed area in square miles along the

East Coast, are then used to extrapolate avoided costs to all East Coast estuaries. The three case

study estuaries are chosen because they have agreed upon nitrogen reduction goals and the

necessary nitrogen control cost data. The remaining estuaries in this analysis are chosen based

on their potential representativeness and our ability to estimate the direct and indirect nitrogen

load from atmospheric deposition.

Our analysis values atmospheric nitrogen reductions on the basis of avoided costs

associated with agreed upon controls of nonpoint water pollution sources. We estimated benefits

using a weighted-average, locally-based cost for nitrogen removal from water pollution (U.S.

EPA, 1998a). Valuation reflects water pollution control cost avoidance based on the weighted

average cost/pound of current non-point source water pollution controls for nitrogen in the three

case study estuaries. Taking the weighted cost/pound of these available controls assumes States

will combine low cost and high cost controls, which could inflate avoided cost estimates.

Reductions in nitrogen deposition from the Tier 2 rule should impact estuaries all along

the eastern seaboard and the Gulf Coast. Nitrogen reduction programs are currently targeting

many of the estuaries in these areas due to current impairment of estuarine water quality by

excess nutrients. Some of the largest of these estuaries, including the Chesapeake Bay, have

established goals for nitrogen reduction and target dates by which these goals should be
Chapter VII: Benefit-Cost Analysis

fffThe figures in the original work have been updated to 1997 $ using an all-good CPI index.

ggg The value for Tampa Bay is not a true weighted cost per pound, but a midpoint of a range of $71.89 to

$144.47 developed by Apogee Research for the control possibilities (mostly urban BMPs) in the Tampa Bay estuary.

hhh There are 43 East Coast estuaries of which ten were in the sample, and 31 Gulf of Mexico estuaries of

which two are in the sample.

VII-53

achieved. Using the best and most easily implemented existing technologies, many of the

estuaries will not be able to achieve the stated goals by the target dates. Meeting these additional

reductions will require development of new technologies, implementation of costly existing

technologies (such as stormwater controls), or use of technologies with significant

implementation difficulties, such as agricultural best management practices (BMPs). Reductions

in nitrogen deposition from the atmosphere will directly reduce the need for these additional

costly controls. Thus, while the Tier 2 rule does not totally eliminate the need for nutrient

management programs already in place, it may substitute for some of the incremental costs and

programs (such as an agricultural BMP program) necessary to meet the nutrient reduction goals

for each estuary.

The fixed capital costs for non-point controls in the case study estuaries ranged from

$0.75 to $55.59 per pound for agricultural and other rural best management practices and from

$42.98 to $175.16 per pound for urban nonpoint source controls (stormwater controls, reservoir

management, onsite disposal system changes, onsite BMPs).fff Using these as a base, we

calculated the total fixed capital cost per pound (weighted on the basis of fractional relationship

of nitrogen load controlled for the estuary goal) for each of the case-study estuaries and applied

in the valuation of their avoided nitrogen load controlled. The weighted capital costs per pound

for the case-study estuaries are $40.95 for Albemarle-Pamlico Sounds, $26.79 for Chesapeake

Bay, and $108.36 for Tampa Bayggg. For the purposes of our analysis, EPA assumes that

estuaries that have not yet established nutrient reduction goals will utilize the same types of

nutrient management programs as projected for the case study estuaries. For the other nine

estuaries, an average capital cost per pound of nitrogen (from the three case-estuaries) of

$58.70/lb is calculated and applied; it is unclear whether this cost understates or overstates the

costs associated with reductions in these other estuaries. The other nine estuaries generally

represent smaller, more urban estuaries (like Tampa Bay), which typically have fewer technical

and financial options available to control nitrogen loadings from nonpoint sources. This may

result in higher control costs more similar to the Tampa Bay case. On the other hand, these

estuaries may have opportunities to achieve additional point source controls at a lower costs. 

Also, increased public awareness of nutrification issues and technological innovation may, in the

future, result in States finding lower cost solutions to nitrogen removal.

The benefits analysis assumed that the ten included East Coast estuaries are highly or

moderately nutrient sensitive, and they represent approximately 45.46 percent of all estuarine

watershed area along the East Coast.hhh Because NOAA data indicate that approximately 92.6

percent of the watershed and surface area of East Coast estuaries are highly or moderately
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-54

nutrient sensitive, it is reasonable to expect that East Coast estuaries not included in this analysis

would also benefit from reduced deposition of atmospheric nitrogen. Therefore, we scaled-up

total benefits from the ten representative East Coast estuaries to include the remainder of the

nutrient sensitive estuaries along the East Coast on the basis of estuary watershed plus water

surface area. Since the ten estuaries are assumed to be nutrient sensitive and account for 48

percent of total eastern estuarine area, we scaled-up estimates by multiplying the estimate for the

ten East Coast estuaries by 2.037 (equal to 92.6 percent divided by 45.46 percent). We then

added this figure to the benefits estimated for the two Gulf Coast estuaries for a total benefits

estimate for nitrogen deposition.

We then annualized all capital cost estimates based on a seven percent discount rate and a

typical implementation horizon for control strategies. Based on information from the three case

study estuaries, this typically ranges from five to ten years. EPA has used the midpoint of 7.5

years for annualization, which yields an annualization factor of 0.1759. Non-capital installation

costs and annual operating and maintenance costs are not included in these annual cost estimates. 

Depending upon the control strategy, these costs can be significant. Reports on the

Albemarle-Pamlico Sounds indicate, for instance, that planning costs associated with control

measures comprises approximately 15 percent of capital costs. Information received from the

Association of National Estuary Programs indicates that operating and maintenance costs are

about 30 percent of capital costs, and that permitting, monitoring, and inspections costs are about

one to two percent of capital costs. For these reasons, the annual cost estimates may be

understated.

c. Household Soiling Damage

Welfare benefits also accrue from avoided air pollution damage, both aesthetic and

structural, to architectural materials and to culturally important articles. At this time, data

limitations preclude the ability to quantify benefits for all materials whose deterioration may be

promoted and accelerated by air pollution exposure. However, our analysis addresses one small

effect in this category, the soiling of households by particulate matter.

Assumptions regarding the air quality indicator are necessary to evaluate the C-R

function. PM10 and PM2.5 are both components of TSP. However, it is not clear which

components of TSP cause household soiling damage. The Criteria Document cites some

evidence that smaller particles may be primarily responsible, in which case these estimates are

conservative.

Several studies have provided estimates of the cost to households of PM soiling. The

study that is cited by ESEERCO (1994) as one of the most sophisticated and is relied upon by

EPA in its 1988 Regulatory Impact Analysis for SO2 is Manuel et al. (1982). Using a household

production function approach and household expenditure data from the 1972-73 Bureau of Labor

Statistics Consumer Expenditure Survey for over twenty cities in the United States, Manuel et al.
Chapter VII: Benefit-Cost Analysis

VII-55

estimate the annual cost of cleaning per :g/m3 PM per household as $1.55 ($0.59 per person

times 2.63 persons per household). This estimate is low compared with others (e.g., estimates

provided by Cummings et al. (1981) and Watson and Jaksch (1982) are about eight times and

five times greater, respectively). The ESEERCO report notes, however, that the Manuel et al.

estimate is probably downward biased because it does not include the time cost of do-ityourselfers. Estimating that these costs may comprise at least half the cost of PM-related

cleaning costs, they double the Manuel et al. estimate to obtain a point estimate of $3.09

(reported by ESEERCO in 1992 dollars as $2.70).

d. Visibility

Visibility effects reported earlier in this chapter are described in terms of changes in

deciview, a unitless measure useful for comparing the effects of air quality on visibility. This

measure is used in the WTP function for visibility and is directly related to two other common

visibility measures: visual range (measured in km) and light extinction (measured in km-1). 

Modeled changes in visibility are measured in terms of changes in light extinction, which are

then transformed into deciviews. A change of one deciview represents a change of

approximately 10 percent in the light extinction budget, “which is a small but perceptible scenic

change under many circumstances.” (Sisler, 1996) A change of less than 10 percent in the light

extinction budget represents a measurable improvement in visibility, but may not be perceptible

to the eye in many cases. All of the average regional changes in visibility are substantially less

than one deciview (i.e. less than 10 percent of the light extinction budget), and thus less than

perceptible. However, this does not mean that these changes are not real or significant. Our

assumption is then that individuals can place values on changes in visibility that may not be

perceptible. This is quite plausible if individuals are aware that many regulations lead to small

improvements in visibility which when considered together amount to perceptible changes in

visibility.

The analysis derives the residential visibility valuation estimate from the results of an

visibility study (McClelland et al., 1991). We derive a household WTP value by dividing the

value reported in McClelland et al. by the corresponding hypothesized change in deciview,

yielding an estimate of $17 per unit change in deciview. Due to the somewhat dated methods

used in the McClelland study and inconsistencies of the study with current best practices for

conducting contingent valuation studies, the reliability of the results of the McClelland is

uncertain. EPA recognizes these uncertainties, but believes a non-zero value exists for

residential visibility improvements. Without alternative studies to verify the reliability of the

WTP estimate from McClelland, the low-end estimate in this analysis does not value residential

visibility while the high-end estimate uses the $17 per unit change in deciview obtained from the

study. This value is applied to all households – including any households living in or around

national parks– in any area estimated to experience a change in visibility.

A separate valuation component is needed for valuing improvements in visibility in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-56

national parks and other areas (collectively known as “Class I areas”). Chestnut (1997)

developed a method for estimating the value to the U.S. public of visibility improvements in

Class I visibility areas. The approach was based on the results of a 1990 Cooperative Agreement

project jointly funded by the EPA and the National Park Service, “Preservation Values For

Visibility Protection at the National Parks.” Based on that contingent valuation study of

visibility improvements, Chestnut calculates a household WTP for visibility improvements in

Class I-area National Parks, capturing both use and non-use recreational values, and accounts for

geographic variations in the willingness to pay. The PM and ozone NAAQS RIA (U.S. EPA,

1997b) analysis used this method. Similar to the McClelland study, the reliability of the results

of the Chestnut study are uncertain because of inconsistency with certain elements of best

practices for conducting contingent valuation. Contingent valuation is a rapidly developing field

and new methodologies for study design are continually evolving. As such, studies developed

during the late 1980's and early 1990's may differ in some elements of study design from more

recent studies. EPA recognizes that there are some important aspects of the Chestnut study that

are still useful for providing valuations associated with recreational visibility improvements. In

the author’s judgement, the WTP value derived in the Chestnut study “may be indicative of an

accuracy no better than ± 50 percent (Chestnut and Rowe, 1990).” Due to these uncertainties,

the low-end estimate presents a conservative estimate of WTP for recreational visibility

improvements that reflects the lower-bound of the variation (-50 percent).

More specifically, the Preservation Values study examined the demand for visibility in

Class I-area National Parks in three broad regions of the country, California, Southwest, and

Southeast. Because the Tier 2 rule has an impact on ambient pollution in all states – even in

California, due to drift from neighboring states – all three regions are relevant to the visibility

analysis. For a given region, the Preservation Values study asked respondents in Arizona,

California, Missouri, New York and Virginia for their willingness to pay to protect visibility at

National Parks in that region. Table VII-13 lists the parks included in the study in the study

regions, as well as the parks in other regions specifically mentioned in the Preservation Values

study. These other parks are used in estimating the visibility benefits in the “transfer regions”,

as described below.
Chapter VII: Benefit-Cost Analysis

iiiThere are a number of Class I areas in each region that are not National Parks (e.g., Florida’s Okefenokee

Wilderness Area), and are thus not included in the estimated value for visibility. We do not attempt to estimate

WTP for these other areas, and simply note that they are omitted.

VII-57

Table VII-13. Class I Areas Included in Visibility Study By Region

Visibility Region National Parks

California & Nevada Yosemite, Sequoia/Kings Canyon, Redwoods, Pinnacles, Lava Beds, Death Valley, Lassen

Volcanic, Joshua Tree, Point Reyes

Southwest Grand Canyon, Mesa Verde, Arches, Bandelier, Capitol Reef, Carlsbad Caverns, Bryce

Canyon, Chiricahua, Zion, Saguaro, Canyonlands, Petrified Forest, Rocky Mountain

Southeast Shenandoah, Great Smoky Mountains, Mammoth Cave, Everglades

Transfer Region National Parks

Northwest 

(transfer from

California & Nevada)

Crater Lake, Mount Rainier, North Cascades, Olympic

North Central Yellowstone/Grand Tetons, Badlands, Craters of the Moon, Glacier, Theodore Roosevelt,

Wind Cave

Northeast Acadia, Big Bend, Guadalupe Mountains, Isle Royale, Voyageurs

Note: The “indicator” park (where identified) is shown in bold for each regions. In each case the indicator park is a

well-known park in that region. Source: Chestnut (1997).

Photos from each region’s “indicator park” were provided as part of the survey

instrument. After a number of preparatory questions, respondents reached the WTP section of

the survey. Respondents were first instructed that their answer to the WTP question applied only

to the region in their survey, and that they did not have to worry about other regions of the

country. After furnishing their WTP, respondents were asked what portion of their stated total

value was for visibility at the indicator park alone. To avoid including benefits outside of the

region, the reported answers were appropriately adjusted. All of these safeguards make it less

likely that there will be overlap between urban (i.e., “residential”) and National Park (i.e., 

“recreational”) visibility benefits.iii

When estimating the benefits attributable to visibility improvement at specific Class I

recreational parks, adjustments can be made to account for the location of parks, whether the

people valuing the park live “in-region” or “out-of-region,” and whether or not the park is an

“indicator park.” These issues are discussed below.

First, because the regional distribution of national parks throughout the U.S. is so varied,

the estimated WTP coefficient per change in deciview changes in value depending upon the

location of the Class I area. Based on the National Parks Visibility Valuation Study (Chestnut
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-58

and Rowe, 1990), Chestnut (1997, p. 10) estimated coefficients for the three study visibility

regions: California, Southwest, and Southeast. To account for national parks in the rest of the

contiguous U.S., however, the same coefficients are transferred to value visibility changes in

parks located in adjacent regions, termed here as “transfer regions.” Table VII-14 displays the

“in-region” and “out-of-region” coefficients used in each of the different visibility regions.

Table VII-14. Estimated Coefficients Used in the Valuation of 

WTP for Improved Visibility

Study Visibility Regions and Transfer

Visibility Regions*

Estimated $ for Out-of-Region

Households

Estimated $ for In-Region

Households

California & Northwest $8.96 $12.89

Southwest & Centralwest $13.51 $16.82

Southeast & Northeast $4.91 $7.98

* Transfer regions are groups of states adjacent to the study region from which WTP values are assigned.

The in-region coefficient estimates the WTP of residents within a given visibility region

for visibility improvements at all parks located within that same region. The out-of-region

coefficient estimates the WTP of residents living outside a given visibility region for visibility

improvements at all parks located within that region. The results of the survey suggest that inregion residents are likely to value visibility improvements at their parks more than out-of-region

residents. This is consistent with expectations, as in-region households are more likely to visit,

know about, and care for these parks.

Because the WTP coefficients are for visibility improvements at more than one park

within a given visibility region, the WTP values must be apportioned between parks within a

given visibility region. Our analysis assumes that WTP for visibility is related to a park's

number of visitors. This is clearly a very crude approximation, since the WTP that we are

attempting to estimate includes both use and non-use values, and a visitation rate is a better

measure of use value and is not clearly linked to non-use values. On the other hand, short of

conducting a survey for individual parks, it is difficult to estimate the relative importance of

visibility at each park, and using a visitation rate to weight seems more appropriate than taking a

simple average or using some other weighting metric, such as the size of the park.

For each study visibility region, we sum 1997 visitor-days at each Class I park. We then

divide this total visitation figure into a WTP coefficient (in- or out-of-region, as appropriate) to

create a WTP per visitor-days for the entire study region. Multiplying this new value by each

park’s own number of 1997 visitor-days yields an apportioned per-park WTP coefficient for each

park present in the study visibility region. Thus, we apply a visibility valuation function from a
Chapter VII: Benefit-Cost Analysis

VII-59

study region to an extrapolated, transfer region.

For aggregate benefits, the low-end estimate does not value residential visibility and uses

the lower-bound estimate for recreational visibility for each region. In the high set of valuation

assumptions, total visibility benefits consist of residential visibility benefits, as well as in- and

out-of-region recreational visibility benefits (using the WTP estimates reported by Chestnut

without adjustments to reflect the upper-bound of variation). 

e. Ozone- and PM-related Welfare Effect Benefits Estimation

Table VII-15 presents estimates of the monetary benefits arising from each of the welfare

endpoints associated with the air quality changes attributed to the Tier 2 rule.

Table VII-15. Welfare Endpoint Monetary Benefits

Monetary Benefits (millions 1997$)

Endpoint Pollutant Low High 

Agricultural crop damage Ozone -1 301

Nitrogen deposition NOx 200 200

Household soiling damage PM 60.1 60.1

Visibility

 Out-of-region recreational PM and gases 266.33 266.33

 In-region recreational PM and gases 64.10 64.10

 Residential PM and gases not valued 371.02

5. Total Aggregated Benefits

In our analysis, we aggregated dollar benefits associated with each of the effects

examined, such as hospital admissions, into a total benefits estimate assuming that none of the

included health and welfare effects overlap. The point estimate of the total benefits associated

with the health and welfare effects in each set (low and high) is just the sum of the separate

effects estimates. The estimate of total benefits may be thought of as the end result of a

sequential process in which, at each step, the estimate of benefits from an additional source is

added. Each time an estimate of dollar benefits from a new source (e.g., a new health effect) is

added to the previous estimate of total dollar benefits, the estimated total dollar benefits

increases. The uncertainty surrounding the estimate of total dollar benefits, however, also
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-60

increases. 

A significant portion of the uncertainty in the benefit estimate derives from uncertainty

about the true value of the coefficient in the C-R functions and the true dollar value of the

effects. The analysis relies on estimates of these parameters, but the true values being estimated

are unknown. This type of uncertainty can often be probabilistically quantified. For example,

the uncertainty about pollutant coefficients is typically quantified by reported standard errors of

the estimates of the coefficients in the C-R functions estimated by epidemiological studies. The

Technical Support Document for this analysis quantifies the uncertainty associated with each

health and welfare endpoint. Another important source of uncertainty derives from the discrete

set of assumptions used to select endpoints and concentration-response functions and to

determine inputs to the concentration-response functions. This type of uncertainty can be

quantified through the use of sensitivity analyses, but is not easily conveyed in probabilistic

terms. 

6. Sensitivity Analyses

A portion of the uncertainty associated with benefits analysis involves discrete choices

between assumptions. We can not easily assign non-arbitrary probabilities to the alternative

assumptions, and instead we use a reasonable range of assumptions. Our analysis uses two sets

of assumptions that incorporate the following key assumptions:

(1) the choice of the PM threshold (15 :g/m3

,or background);

(2) the value placed on reduced mortality associated with PM (the value of a statistical life, or

the value of statistical life adjusted to reflect age-distributions of the affected population);

(3) the value placed on reduced incidence of chronic bronchitis;

(4) whether PM is associated with infant mortality;

(5) whether ozone is associated with the mortality of someone at any age;

(6) whether plantings of commodity crop cultivars are sensitive or insensitive to ozone; and

(7) the value placed on visibility benefits (both residential and recreational visibility).

Table VII-16 presents the estimates for the impacts and the associated economic value for

each set of assumptions. The results shown in the table demonstrate that selected alternative

assumptions drastically changes the total benefits that can be assumed for this rule. Actual

benefits are likely to be between the Low and High estimates provided. 
Chapter VII: Benefit-Cost Analysis

VII-61

Table VII-16. Avoided Incidence and Monetized Benefits Associated with the 

 Tier 2 Rule for a Range of Assumption Sets

Avoided Incidence 

(cases/year)

Monetary Benefits 

(millions 1997$)

Endpoint Lowa Highc Low High

PM

Mortality (long-term exp. - ages 30+) 832 2,416 2,275 14,256

Mortality (long-term exp. - infants) – 10 – 56

Chronic bronchitis 3,885 3,914 281 1,354

Hosp. Admissions - all respiratory (all ages) 504 836 4.6 7.6

Hosp. Admissions - congestive heart failure 127 138 1.5 1.7

Hosp. Admissions - ischemic heart disease 146 159 2.2 2.4

Acute bronchitis 984 4,072 0.1 0.2

Lower respiratory symptoms (LRS) 19,782 37,437 0.3 0.5

Upper respiratory symptoms (URS) 3,093 3,387 0.1 0.1

Work loss days (WLD) 233,000 415,000 23.8 42.3

Minor restricted activity days (MRAD) 1,856,000 3,370,000 87.7 159.3

Household soiling damage – – 60.1 60.1

Ozone

Mortality (short-term; four U.S. studies) – 388 – 2,312

Hospital admissions - all respiratory (all ages) 549 736 5.3 7.1

Any of 19 acute symptoms 54,101 71,545 1.3 1.7

Decreased worker productivity – – 43.0 60.4

Agricultural crop damage – – -1 301

Visibility – – 330 701

Nitrogen Deposition – – 200 200

Total (PM + ozone + visibility + N deposition) – – 3,315 19,525

a

 The low assumption set assumes effects from PM do not occur below concentrations of 15 :g/m3, that all mortality and chronic bronchitis

effects occur within the same year of the PM reduction (see section 7.a for a discussion of this uncertainty), utilizes the value of statistical life

year lost approach, ozone-related mortality and PM-related infant mortality are not included in the benefits estimate, chronic bronchitis valued

with the cost of illness approach, plantings of commodity crop cultivars are assumed to be insensitive to ozone, and does not value residential

visibility benefits.

c The high assumption set assumes a PM threshold of background, utilizes the value of a statistical life approach, both ozone-related mortality

and PM-related mortality are included in the estimation of benefits, chronic bronchitis valued with a willingness-to-pay approach, plantings of

commodity crop cultivars are assumed to be sensitive to ozone, and full accounting for recreational and residential visibility benefits.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-62

7. Limitations of the Analysis

Given incomplete information, this national benefits analysis yields approximate results

because of the uncertainty associated with any estimate. Potentially important sources of

uncertainty exist and many of these are summarized in Table VII-17. These uncertainties can

cause the total benefits estimate to be understated or overstated. Where possible, we state the

direction of the bias presented by the uncertainty. However, in most cases the effect of the

uncertainty on total benefits is unknown (i.e., it could increase or decrease benefits depending on

specific conditions). The remainder of this Section provides a discussion of four broad areas of

uncertainty.
Chapter VII: Benefit-Cost Analysis

VII-63

Table VII-17. Sources of Uncertainty in the Benefit Analysis

1. Uncertainties Associated With Concentration-Response Functions

-The value of the ozone- or PM-coefficient in each C-R function.

-Application of a single C-R function to pollutant changes and populations in all locations.

-Similarity of future year C-R relationships to current C-R relationships. 

-Correct functional form of each C-R relationship. (e.g., It is uncertain whether there are thresholds and, if so, what

they are.)

-Extrapolation of C-R relationships beyond the range of ozone or PM concentrations observed in the study. 

2. Uncertainties Associated With Ozone and PM Concentrations 

-Estimating future-year baseline and hourly ozone and daily PM concentrations.

-Estimating the change in ozone and PM resulting from the control policy.

3. Uncertainties Associated with PM Mortality Risk

-No scientific basis supporting a plausible biological mechanism.

-Potential causal agents within the complex mixture of PM responsible for the reported adverse health effects have not

been identified.

-While there were a great number of studies associated with PM10, there were a limited number of studies that directly

measured PM2.5.

-The extent to which adverse health effects are associated with low level exposures that occur many times in the year

versus peak exposures.

-Estimated health effects levels associated with PM2.5 exposure were small.

-Possible confounding in the epidemiological studies of PM2.5, effects with other factors (e.g., other air pollutants,

weather, indoor/outdoor air, etc.).

-The extent to which effects reported in the long-term studies are associated with historically higher levels of PM rather

than the levels occurring during the period of study.

-Reliability of the limited ambient PM2.5 monitoring data in reflecting actual PM2.5 exposures.

4. Uncertainties Associated With Possible Lagged Effects

-What portion of the PM-related long-term exposure mortality effects associated with changes in annual PM levels

would occur in a single year, and what portion might occur in subsequent years. Ignoring lags may lead to an

overestimate of benefits. 

5. Uncertainties Associated With Baseline Incidence Rates

-Some baseline incidence rates are not location-specific (e.g., those taken from studies) and may therefore not

accurately represent the actual location-specific rates.

-Current baseline incidence rates may not well approximate what baseline incidence rates will be in the year 2007.

-Projected population and demographics -- used to derive incidences – may not well approximate future-year

population and demographics.

6. Uncertainties Associated With Economic Valuation

-Unit dollar values associated with health and welfare endpoints are only estimates of mean WTP and therefore have

uncertainty surrounding them. 

-Mean WTP (in constant dollars) for each type of risk reduction may differ from current estimates due to differences in

income or other factors.

7. Uncertainties Associated With Aggregation of Monetized Benefits

-Health and welfare benefits estimates are limited to the available C-R functions. Thus, unquantified benefit categories
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-64

will cause total benefits to be under

a. PM Mortality Risk and Health Effects

Table VII-20 summarizes a number of the uncertainties associated with estimating

mortality risk associated with particulate matter (PM). Most of these uncertainties can serve to

increase or decrease the estimated benefits relative to a hypothetical “true” prediction. Some

uncertainties may inflate estimates, while others - such as exclusion of effects categories - can

result in understatement. The fundamental concentration-response relationships used to estimate

benefits are derived from epidemiological studies of community health. Based on these studies

and other available information, the EPA Criteria Document concluded that the observed

associations between particulate matter and mortality and other serious health effects were

“likely causal.” The Criteria Document also noted that, as yet, the scientific information did not

provide a basis for determining what biological mechanisms might account for such effects. To

the extent that some chance remains that no causal mechanisms are found for some PM

components or for the PM mix taken as a whole, the benefit estimates derived from the

epidemiological studies would be overstated. 

Similarly, the evaluation of the epidemiological evidence included an extensive

assessment of a number of potential pollutant and weather confounders or effects modifiers. The

Criteria Document concluded that these factors could not fully account for the observed

PM/effects associations, but it is possible that some portion of the quantitative relationships are

affected by the presence of other pollutants. While multiple pollutant effects may be additive, it

is also possible that the PM related effects association may be overstated for some studies, which

might inflate the benefits estimates derived from such studies. 

In addition, following the recommendation of the Advisory Council on Clean Air

Compliance analyses (an SAB advisory committee established to review methodology for the

812 study), the PM mortality benefit estimates have been derived from a single study that likely

encompasses both short-and long-term mortality effects (Pope et al. 1995). Similarly, the

Agency has used a single study (Schwartz 1993) in its estimates of the benefits of reduced cases

of chronic bronchitis. The approach used in both cases assumes that the benefits of the PM

reductions will occur within a year of the reductions. Because some fraction of the estimated

mortality or chronic bronchitis effects may well be associated with multi-year exposures, the

benefits of a given reduction in concentrations in one year will not all be realized in that year. To

date, however, the available studies have not developed any estimates of the relative proportion

of near term as compared to the potential “lagged” consequences of PM reductions (HEES,

1999).

Some analysts believe, however, that this analysis should provide an estimate that reflects

the potential effect of considering such lagged effects in presenting the range of estimated

benefits. For example, if one were to assume that realization of the full health benefits from
Chapter VII: Benefit-Cost Analysis

jjjThis approach assumes that 25 percent of the reductions in health effects reduction are realized in year 1,

25 percent in year 2, 16.67 percent in year 3, 16.67 in year 4 and 16.67 in year 5. This is an illustrative example

only and does not represent any known lag structure for these health effects.

VII-65

reductions in particulate matter resulting from this rule might take up to 5 years, the estimated

monetized benefits for reductions in premature mortality and chronic bronchitis would be

reduced by $204 million at the low end of the range of total benefits (see Table VII-18 below).

Table VII-18. PM Health Effects and Benefits (No Lag and Lag of up to Five Years)

Health Effects Benefits (No Lag)

(millions 1997$)

Benefits (Lag of up to 5 years)jjj

(millions 1997$)

Chronic Bronchitis $281 $259

Mortality $2,278 $2,096

Total $2,559 $2,355

As discussed above, SAB has concluded that selection of a value for such a lag at this

time would be arbitrary and inclusion of pollutant-related time lags in mortality is premature

(HEES, 1999). For this reason, we have not incorporated lags into this analysis. The Agency is

committed to working with the SAB and others during the development of the final rule to look

at how to address this issue in the benefits range for both the Tier 2 final rule and RIA and in

future regulatory analyses.

b. Unquantifiable Benefits

In considering the monetized benefits estimates, the reader should be aware that many

limitations for conducting these analyses are mentioned throughout this RIA. One significant

limitation of both the health and welfare benefits analyses is the inability to quantify many PM

and ozone-induced adverse effects listed in Table VII-6. In general, if it were possible to include

the unquantified benefits categories in the total monetized benefits, the benefits estimates

presented in this RIA would increase. Specific examples of unquantified benefits explored in

more detail below include other human health effects, urban ornamental plants, aesthetic injury

to forests, nitrogen in drinking water, and brown clouds.

The benefits of reductions in a number of ozone- and PM-induced health effects have not

been quantified due to the paucity of C-R and/or economic valuation data. These effects include:

reduced pulmonary function, morphological changes, altered host defense mechanisms, cancer,

other chronic respiratory diseases, infant mortality, airway responsiveness, increased

susceptibility to respiratory infection, pulmonary inflammation, acute inflammation and
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-66

respiratory cell damage, and premature aging of the lungs.

In addition to the above non-monetized health benefits, there are a number of nonmonetized welfare benefits including: reduced adverse effects on vegetation, forests, and other

natural ecosystems. The CAA and other statutes, through requirements to protect natural and

ecological systems, indicate that these are scarce and highly valued resources. Lack of

comprehensive information, insufficient valuation tools, and significant uncertainties therefore

result in understated welfare benefits estimates in this RIA. However, a number of expert

biologists, ecologists, and economists (Costanza et al., 1997) argue that the benefits of protecting

natural resources are enormous and increasing as ecosystems become more stressed and scarce in

the future. Additionally, agricultural, forest and ecological scientists (Heck and Cowling, 1997)

believe that vegetation appears to be more sensitive to ozone than are humans and consequently, 

that damage is occurring to vegetation and natural resources at concentrations below the ozone

NAAQS. Experts also believe that the effect of ozone on plants is both cumulative and longterm. The specific non-monetized benefits from reductions in ambient ozone concentrations

would accrue from: decreased foliar injury; averted growth reduction of trees in natural forests;

maintained integrity of forest ecosystems (including habitat for native animal species); and the

aesthetics and utility of urban ornamentals (e.g., grass, flowers, shrubs and trees). Other welfare

categories for which there is incomplete information to estimate the economic value of reduced

adverse effects include: materials damage; and reduced sulfate deposition to aquatic and

terrestrial ecosystems.

Other Human Health Effects

Human exposure to PM and ozone is known to cause health effects such as: impaired

airway responsiveness, increased susceptibility to respiratory infection, acute inflammation and

respiratory cell damage, premature aging of the lungs and chronic respiratory damage. An

improvement in ambient PM and ozone air quality is expected to reduce the number of

incidences within each effect category that the U.S. population would experience. Although

these health effects are known to be PM or ozone-induced, C-R data is not available for

quantifying the benefits associated with reducing these effects. The inability to quantify these

effects leads to an underestimation of the monetized benefits presented in this analysis.

Urban Ornamentals

Urban ornamentals represent an additional vegetation category likely to experience some

degree of effects associated with exposure to ambient ozone levels and likely to impact large

economic sectors. In the absence of adequate exposure-response functions and economic

damage functions for the potential range of effects relevant to these types of vegetation, no direct

quantitative economic benefits analysis has been conducted. It is estimated that more than $20

billion (1990 dollars) are spent annually on landscaping using ornamentals (Abt Associates,

1995), both by private property owners/tenants and by governmental units responsible for public

areas, making this a potentially important welfare effects category. However, information and
Chapter VII: Benefit-Cost Analysis

VII-67

valuation methods are not available to allow for plausible estimates of the percentage of these

expenditures that may be related to impacts associated with ozone exposure.

Commercial Forests

Any attempt to estimate economic benefits for commercial forests associated with

reductions in ozone arising from implementation of the Tier 2 rule is constrained by a lack of

exposure-response functions for the commercially important mature trees. Although exposureresponse functions have been developed for seedlings for a number of important tree species,

these seedling functions cannot be extrapolated to mature trees based on current knowledge. 

Recognizing this limitation, a study (de Steiger et al., 1990; Pye et al., 1988) involving expert

judgment about the effect of ozone levels on percent growth change has been used to develop

estimates of ozone-related economic losses for commercial forest products. Our analysis,

however, did not quantify benefits from improved production within commercial forests.

Aesthetic Injury to Forests

Ozone is a regionally dispersed air pollutant that has been shown conclusively to cause

discernible injury to forest trees (Fox and Mickler, 1996). One of the welfare benefits expected

to accrue as a result of reductions in ambient ozone concentrations in the United States is the

economic value the public receives from reduced aesthetic injury to forests. There is sufficient

scientific information available that ambient ozone levels cause visible injury to foliage and

impair the growth of some sensitive plant species (U.S. EPA, 1996c, p. 5-521). However,

present analytic tools and resources preclude EPA from quantifying the benefits of improved

forest aesthetics.

Nitrates in Drinking Water

Nitrates in drinking water are currently regulated by a maximum contaminant level

(MCL) of 10 mg/L on the basis of the risk to infants of methemoglobinemia, a condition which

adversely affects the blood’s oxygen carrying capacity. In an analysis of pre-1991 data, Raucher

et al.(1993) found that approximately 2 million people were consuming public drinking water

supplies which exceed the MCL. Supplementing these findings, the National Research Council

concluded that 42 percent of the public drinking water users in the U.S. (approximately 105

million people) are either not exposed to nitrates or are exposed to concentrations below 1.3

mg/L (National Research Council 1995). 

In a recent epidemiological study by the National Cancer Institute, a statistically

significant relationship between nitrates in drinking water and incidence of non-Hodgkin’s

lymphoma were reported (Ward et al., 1996). Though it is generally acknowledged that

traditional water pollution sources such as agricultural runoff are mostly responsible for

violations of the MCL, other more diffuse sources of nitrate to drinking water supplies, such as

that from atmospheric deposition, may also become an important health concern should the
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-68

cancer link to nitrates be found valid upon further study. 

Other Unquantified Benefits Categories

There are other welfare benefits categories for which there is incomplete information to

permit a quantitative assessment for this analysis. For some endpoints, gaps exist in the

scientific literature or key analytical components and thus do not support an estimation of

incidence. In other cases, there is insufficient economic information to allow estimation of the

economic value of adverse effects. Potentially significant, but unquantified welfare benefits

categories include: existence and user values related to the protection of Class I areas (e.g.,

Shenendoah National Park), damage to tree seedlings of more than 10 sensitive species (e.g.,

black cherry, aspen, ponderosa pine), non-commercial forests, ecosystems, materials damage, and

reduced sulfate deposition to aquatic and terrestrial ecosystems. Although scientific and

economic data are not available to allow quantification of the effect of ozone in these categories,

the expectation is that, if quantified, each of these categories would lead to an increase in the

monetized benefits presented in this RIA.

c. Potential Disbenefits

In this discussion of unquantified benefits, a discussion of potential disbenefits must also

be mentioned. Several of these disbenefit categories are related to nitrogen deposition, while one

category is related to the issue of ultraviolet light. Because EPA is not able to quantify these

disbenefit categories, total benefits will be overstated.

Passive Fertilization

Several disbenefit categories are related to nitrogen deposition. Nutrients deposited on

crops from atmospheric sources are often referred to as passive fertilization. Nitrogen is a

fundamental nutrient for primary production in both managed and un-managed ecosystems. 

Most productive agricultural systems require external sources of nitrogen in order to satisfy

nutrient requirements. Nitrogen uptake by crops varies, but typical requirements for wheat and

corn are approximately 150 kg/ha/yr and 300 kg/ha/yr, respectively (NAPAP, 1990). These rates

compare to estimated rates of passive nitrogen fertilization in the range of 0 to 5.5 kg/ha/yr

(NAPAP, 1991). So, for these crops, deposited nitrogen could account for as much as two to

four percent of nitrogen needs. Holding all other factors constant, farmers’ use of purchased

fertilizers or manure may increase as deposited nitrogen is reduced. EPA has not estimated the

potential value of this possible increase in the use of purchased fertilizers, but it is likely that the

overall value is very small relative to the value of other health and welfare endpoints presented in

this analysis. First, reductions in NOx emissions affect only a fraction of total nitrogen

deposition. Approximately 70 to 80 percent of nitrogen deposition is in the form of nitrates (and

thus can be traced to NOx emissions) while most of the remainder is due to ammonia emissions

(Dennis, 1997). The annual average change in nitrogen deposition attributable to the Tier 2 rule
Chapter VII: Benefit-Cost Analysis

VII-69

is about 11 percent of baseline levels, suggesting a relatively small potential change in passive

fertilization. Second, some sources of nitrogen, such as animal manure, are available at no cost

or at a much lower cost than purchased nitrogen. In addition, in certain areas nitrogen is

currently applied at rates which exceed crop uptake rates, usually due to an overabundance of

available nutrients from animal waste. Small reductions in passive fertilization in these areas is

not likely to have any consequence to fertilizer application. The combination of these factors

suggests that the cost associated with compensating for reductions in passive fertilization is

relatively minor.

Information on the effects of changes in passive nitrogen deposition on forests and other

terrestrial ecosystems is very limited. The multiplicity of factors affecting forests, including other

potential stressors such as ozone, and limiting factors such as moisture and other nutrients,

confound assessments of marginal changes in any one stressor or nutrient in forest ecosystems. 

However, reductions in deposition of nitrogen could have negative effects on forest and

vegetation growth in ecosystems where nitrogen is a limiting factor (U.S. EPA, 1993).

On the other hand, there is evidence that forest ecosystems in some areas of the United

States are nitrogen saturated (U.S. EPA, 1993). Once saturation is reached, adverse effects of

additional nitrogen begin to occur such as soil acidification which can lead to leaching of

nutrients needed for plant growth and mobilization of harmful elements such as aluminum. 

Increased soil acidification is also linked to higher amounts of acidic runoff to streams and lakes

and leaching of harmful elements into aquatic ecosystems. 

Ultraviolet Light

A reduction of tropospheric ozone is likely to increase the penetration of ultraviolet light,

specifically UV-b, to ground level. UV-b is an issue of concern because depletion of the

stratospheric ozone layer (i.e., ozone in the upper atmosphere) due to chlorofluorocarbons and

other ozone-depleting chemicals is associated with increased skin cancer and cataract rates.

Currently, EPA is not able to adequately quantify these effects for the purpose of valuing benefits

for this policy.

Other EPA programs exist to address the risks posed by changes in UV-b associated with

changes in total column ozone. As presented in the Stratospheric Ozone RIA (U.S. EPA, 1992),

stratospheric ozone levels are expected to significantly improve over the next century as the

major ozone depleting substances are phased out globally. This expected improvement in

stratospheric ozone levels is estimated to reduce the number of non-melanoma skin cancers by

millions of cases in the U.S. by 2075.

d. Projected Income Growth

Our analysis does not attempt to adjust benefits estimates to reflect expected growth in
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-70

real income. Economic theory argues, however, that WTP for most goods (such as

environmental protection) will increase if real incomes increase. The degree to which WTP may

increase for the specific health and welfare benefits provided by the Tier 2 rule cannot be

estimated due to insufficient income elasticity information.

D. Cost

Since the benefits assessment has been performed on the basis of a fully turned over fleet

of tier 2 vehicles, consistent costs were developed by using the same basis. Costs to be compared

to the monetized value of the benefits were therefore developed for a fleet the size of the year

2010 fleet. For this purpose we used the long term cost once the capital costs have been

recovered and the manufacturing learning curve reductions have been realized, since this most

closely represents the makeup of a fully turned-over fleet.

This analysis also made adjustments in the costs to account for the fact that there is a time

difference between when some of the costs are expended and when the benefits are realized. The

vehicle costs are expended when the vehicle is sold, while the fuel related costs and the benefits

are distributed over the life of the vehicle. 

We resolved this difference by using costs distributed over time such that there is a

constant cost per ton of emissions reduction and such that the net present value of these

distributed costs corresponds to the net present value of the actual costs. A constant ratio of cost

to emission reduction over the life of the vehicle would also reflect itself in the ratio of the net

present value of the costs and net present value of the emission reductions. This, of course, is

how EPA determined the cost effectiveness estimates for the proposed rule. Thus, the simplest

way to develop this distributed cost number is simply to multiply the cost effectiveness ratio

(dollars per ton) times the emission reduction estimates for the benefits assessment.

The resulting adjusted costs are somewhat greater than the actual annual cost of the

program, reflecting the time value adjustment. Thus, both because of the assumption of a fully

turned over fleet and because of the time value adjustment, the costs presented in this section do

not represent actual annual costs of the Tier 2/gasoline sulfur program for 2010. Rather, they

represent an approximation of the steady-state cost per ton that would likely prevail in 2015 and

beyond. The benefit cost ratio for the earlier years of the program would be expected to be lower

than that based on these costs, since the fleet-adjusted costs are larger in the early years of the

program while the benefits are smaller. 

Since the long term costs are not representative of the per vehicle costs in the early phases

of the program, we also estimated an adjusted cost based on the near term cost effectiveness

value. Using the near term cost effectiveness value of $2134/per ton, the adjusted cost would be

$4.3 billion. While no actual in-use fleet could consist entirely of vehicles experiencing this near

term cost, this value does present an upper bound on the cost figure. 
Chapter VII: Benefit-Cost Analysis

VII-71

 The resulting adjusted cost values are given in Table VII-19.

Table VII - 19. Adjusted Cost for Comparison to Benefits

Cost Basis Cost per ton ratio Tons of NOx + NMHC Adjusted Cost 

(billions of dollars)

Long term 1748 2,003,761 3.5
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-72

Chapter VII References

Abbey, D.E., F. Petersen, P.K. Mills and W.L. Beeson, 1993. “Long-Term Ambient

Concentrations of Total Suspended Particulates, Ozone, and Sulfur Dioxide and Respiratory

Symptoms in a Nonsmoking Population.” Archives of Environmental Health, 48(1): 33-46.

Abbey, D.E., B.E. Ostro, F. Petersen and R.J. Burchette, 1995. “Chronic Respiratory Symptoms

Associated with Estimated Long-Term Ambient Concentrations of Fine Particulates Less Than

2.5 Microns in Aerodynamic Diameter (PM2.5) and Other Air Pollutants.” Journal of Exposure

Analysis and Environmental Epidemiology, 5(2): 137-159.

Abt Associates Inc., 1992. The Medical Costs of five Illnesses Related to Exposure to

Pollutants. Prepared for U.S. EPA, Office of Pollution Prevention and Toxics. Washington,

DC. See EPA Air Docket A-96-56, Document No. VI-B-09-(n).

Abt Associates Inc., 1995. Urban Ornamental Plants: Sensitivity to Ozone and Potential

Economic Losses. Prepared for the U.S. Environmental Protection Agency, Office of Air Quality

Planning and Standards. Research Triangle Park, NC. July.

Abt Associates Inc., 1998. Air Quality Estimation for the NOx SIP Call RIA. Prepared for U.S.

EPA, Office of Air Quality Planning and Standards, under contract no. 68-D-98-001. Research

Triangle Park, NC. September. See EPA Air Docket A-96-56, Document No. VI-B-09-(gggg)

Abt Associates Inc., 1999. Tier 2 Proposed Rule: Air Quality Estimation, Selected Health and

Welfare Benefits Methods, and Benefit Analysis Results. Prepared for U.S. EPA, Office of Air

Quality Planning and Standards. Research Triangle Park, NC. February.

Butler, R.J., 1983. "Wage and Injury Rate Responses to Shifting Levels of Workers'

Compensation." In: Safety and the Work Force. Worrall, J.D., Ed. Cornell University, ILR

Press, Ithaca, NY. 

Chang, J.S., R.A. Brost, I.S.A. Isaksen, S. Madronich, P. Middleton, W.R. Stockwell and C.J.

Walcek, 1987. "A Three-Dimensional Eulerian Acid Deposition Model: Physical Concepts and

Formulation." Journal of Geophysical Research, 92, 14,681-14,700.

Chang, J.S., P.B. Middleton, W.R. Stockwell, C.J. Walcek, J.E. Pleim, H.H. Lansford, F.S.

Binkowski, S. Madronich, N.L. Seaman and D.R. Stauffer, 1990. "The Regional Acid

Deposition Model and Engineering Model. NAPAP SOS/T Report 4." In: Acidic Deposition:

State of Science and Technology, Volume 1. National Acid Precipitation Assessment Program,

Washington DC. December.

Chestnut, L.G., 1997. "Draft Memorandum: Methodology for Estimating Values for Changes in

Visibility at National Parks." April 15. See EPA Air Docket A-96-56, Document No. VI-B-09-(ooo).
Chapter VII: Benefit-Cost Analysis

VII-73

Chestnut, L.G. and R.D. Rowe, 1990. Preservation Values for Visibility Protection at the

National Parks: Draft Final Report. Prepared for U.S. Environmental Protection Agency, Office

of Air Quality Planning and Standards, Economic Analysis Branch. Research Triangle, NC. 

February, 16.

Costanza, R., R. d'Arge, R. de Groot, S. Farber, M. Grasso, B. Hannon, K. Limburg, S. Naeem,

R.V. O'Neill, J. Paruelo, R.G. Raskin, P. Sutton and M. van den Belt, 1997. "The Value of the

World's Ecosystem Services and Natural Capital." Nature, 387, 253-259.

Cousineau, J., R. Lacroix and A. Girard, 1988. Occupational Hazard and Wage Compensating

Differentials. University of Montreal Working Paper. 

Crocker, T.D. and R.L. Horst, Jr, 1981. "Hours of Work, Labor Productivity, and

Environmental Conditions: A Case Study." The Review of Economics and Statistics, 63, 361-368.

Cummings, R., H. Burness and R. Norton, 1981. Methods Development for Environmental

Control Benefits Assessment, Volume V. Measuring Household Soiling Damages from

Suspended Air Particulates, A Methodological Inquiry. Prepared for U.S. Environmental

Protection Agency. Washington, DC. 

de Steiger, J.E., J.M. Pye and C.S. Love, 1990. " Air Pollution Damage to U.S. Forests." 

Journal of Forestry, 88(8), 17-22.

Dennis, R. 1997. Personal communication. NOAA Atmospheric Research Lab, Research

Triangle Park, NC. 

Dennis, R.L., 1997. "Using the Regional Acid Deposition Model to Determine the Nitrogen

Deposition Airshed of the Chesapeake Bay Watershed." In: Atmospheric Deposition to the Great

Lakes and Coastal Waters. Baker, J.E., Ed. Society of Environmental Toxicology and

Chemistry, Pensacola, FL. pp. 393-413. See EPA Air Docket A-96-56, Document No. VI-B09-(ccc).

Dennis, R.L., W.R. Barchet, T.L. Clark and S.K. Seilkop, 1990. "Evaluation of Regional Acid

Deposition Models (Part I). NAPAP SOS/T Report 5." In: Acidic Deposition: State of Science

and Technology, Volume 1. National Acid Precipitation Assessment Program, Washington, DC. 

September.

Dillingham, A., 1985. "The Influence of Risk Variable Definition on Value of Life Estimates." 

Economic Inquiry, 24, 277-294.

Dockery, D.W., C.A. Pope, X.P. Xu, J.D. Spengler, J.H. Ware, M.E. Fay, B.G. Ferris and F.E.

Speizer, 1993. "An Association Between Air Pollution and Mortality in 6 United-States Cities." 

New England Journal of Medicine, 329(24), 1753-1759.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-74

Dockery, D.W., F.E. Speizer, D.O. Stram, J.H. Ware, J.D. Spengler and B.G. Ferris, Jr., 1989. 

"Effects of Inhalable Particles on Respiratory Health of Children." American Review of

Respiratory Disease, 139, 587-594.

Douglas, S.G. and R.K. Iwamiya, 1999. Estimating the Effects of the Tier 2 Motor-Vehicle

Standards on Air Quality: Ozone. Prepared for Abt Associates Inc. Prepared by Systems

Applications International, Inc. SYSAPP-99-98/50. January.

E.H. Pechan & Associates, I., 1996. Regional Particulate Control Strategies Phase II. 

Prepared for the U.S. Environmental Protection Agency, Office of Policy, Planning, and

Evaluation. Washington, DC. September.

E.H. Pechan, 1999. Emissions and Air Quality Impacts of Proposed Motor Vehicle Tier 2 and

Fuel Sulfur Standards. Prepared by The Pechan-Avanti Group under EPA Contract No. 68-D9-

8052. Prepared for U.S. EPA, Office of Air Quality Planning and Standards, Innovative

Strategies and Economics Group. Research Triangle Park, NC. January.

Empire State Electric Energy Research Corporation (ESEERCO), 1994. New York State

Environmental Externalities Cost Study. Report 2: Methodology. Prepared by RCG/Hagler,

Bailly, Inc. November.

Fox, S. and R.A. Mickler, Eds. 1996. Impact of Air Pollutants on Southern Pine Forests. 

Ecological Studies. Vol. 118. Springer-Verlag, New York.

Garen, J., 1988. "Compensating Wage Differentials and the Endogeneity of Job Riskiness." The

Review of Economics and Statistics, 70(1), 9-16.

Gegax, D., S. Gerking and W. Shulze, 1985. Perceived Risk and the Marginal Value of Safety. 

Working paper prepared for the U. S. Environmental Protection Agency. 

Gerking, S., M. DeHaan and W. Schulze, 1988. "The Marginal Value of Job Safety: A

Contingent Valuation Study." Journal of Risk and Uncertainty, 1, 185-199.

Heck, W.W. and E.B. Cowling, 1997. "The Need for a Long Term Cumulative Secondary

Ozone Standard--An Ecological Perspective." EM, January, 23-33.

Herzog, H.W., Jr., and A.M. Schlottmann, 1987. Valuing Risk in the Workplace: Market Price,

Willingness to Pay, and the Optimal Provision of Safety. University of Tennessee Working

Paper. 

Industrial Economics Incorporated (IEc), 1993. Memorandum to Jim DeMocker, U.S.

Environmental Protection Agency, Office of Air and Radiation, Office of Policy Analysis and

Review. September 30. See EPA Air Docket A-96-56, Document No. VI-B-09-(lll).
Chapter VII: Benefit-Cost Analysis

VII-75

Industrial Economics Incorporated (IEc), 1994. Memorandum to Jim DeMocker, U.S.

Environmental Protection Agency, Office of Air and Radiation, Office of Policy Analysis and

Review. March 31. See EPA Air Docket A-96-56, Document No. VI-B-09-(nnn).

Ito, K. and G.D. Thurston, 1996. "Daily Pm(10)/Mortality Associations - an Investigation of

At-Risk Subpopulations." Journal of Exposure Analysis and Environmental Epidemiology, 6(1),

79-95.

Jones-Lee, M.W. 1989. The Economics of Safety and Physical Risk. Basil Blackwell, Oxford.

Kinney, P.L., K. Ito and G.D. Thurston, 1995. "A Sensitivity Analysis of Mortality Pm-10

Associations in Los Angeles." Inhalation Toxicology, 7(1), 59-69.

Kniesner, T.J. and J.D. Leeth, 1991. "Compensating Wage Differentials for Fatal Injury Risk in

Australia, Japan, and the United States." Journal of Risk and Uncertainty, 4(1), 75-90.

Korotney, D. 1998. "Tons reduced values for 812 inventory adjustment." Email communication,

U.S. Environmental Protection Agency, Office of Mobile Sources, Ann Arbor, MI. November 9.

Krupnick, A.J. and M.L. Cropper, 1992. "The Effect of Information On Health Risk

Valuations." Journal of Risk and Uncertainty, 5(1), 29-48.

Krupnick, A.J., W. Harrington and B. Ostro, 1990. "Ambient Ozone and Acute Health Effects -

Evidence From Daily Data." Journal of Environmental Economics and Management, 18(1), 1-18.

Krupnick, A.J. and R.J. Kopp, 1988. The Health and Agricultural Benefits of Reductions in

Ambient Ozone in the United States. Resources for the Future. Washington, DC. Discussion

Paper QE88-10. August.

Latimer and Associates, 1996. Particulate Matter Source - Receptor Relationships Between All

Point and Area Sources in the United States and PSD Class/Area Receptors. Prepared for Bruce

Polkowsky, Office of Air Quality Planning and Standards, U.S. EPA. Research Triangle Park,

NC. September.

Lee, E.H. and W.E. Hogsett, 1996. Methodology for Calculating Inputs for Ozone Secondary

Standard Benefits Analysis: Part II. Prepared for U.S. EPA, Office of Air Quality Planning and

Standards. March. See EPA Air Docket A-96-56, Document No. VI-B-09-(f).

Leigh, J.P., 1987. "Gender, Firm Size, Industry and Estimates of the Value-of-Life." Journal of

Health Economics, 6, 255-273.

Leigh, J.P. and R.N. Folsom, 1984. "Estimates of the Value of Accident Avoidance at the Job

Depend on Concavity of the Equalizing Differences Curve." The Quarterly Review of
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-76

Economics and Business, 24(1), 56-66.

Manuel, E.H., R.L. Horst, K.M. Brennan, W.N. Lanen, M.C. Duff and J.K. Tapiero, 1982. 

Benefits Analysis of Alternative Secondary National Ambient Air Quality Standards for Sulfur

Dioxide and Total Suspended Particulates, Volumes I-IV. Prepared for U.S. Environmental

Protection Agency, Office of Air Quality Planning and Standards. Research Triangle Park. 

Marin, A. and G. Psacharopoulos, 1982. "The Reward for Risk in the Labor Market: Evidence

from the United Kingdom and a Reconciliation with Other Studies." Journal of Political

Economy, 90(4), 827-853.

McClelland, G., W. Schulze, D. Waldman, J. Irwin, D. Schenk, T. Stewart, L. Deck and M.

Thayer, 1991. Valuing Eastern Visibility: A Field Test of the Contingent Valuation Method. 

Prepared for U.S. Environmental Protection Agency, Office of Policy, Planning and Evaluation. 

June. See EPA Air Docket A-96-56, Document No. VI-B-09-(ppp).

Miller, T. and J. Guria, 1991. The Value of Statistical Life in New Zealand. Report to the New

Zealand Ministry of Transport, Land Transport Division. 

Moolgavkar, S.H., E.G. Luebeck, T.A. Hall and E.L. Anderson, 1995. "Air Pollution and Daily

Mortality in Philadelphia." Epidemiology, 6(5), 476-484.

Moore, M.J. and W.K. Viscusi, 1988. "Doubling the Estimated Value of Life: Results Using

New Occupational Fatality Data." Journal of Policy Analysis and Management, 7(3), 476-490.

NAPAP, 1990. Acidic Deposition: State of Science and Technology, Report 18: Response of

Vegetation to Atmospheric Deposition and Air Pollution. National Acid Precipitation

Assessment Program, Office of Director. Washington, DC. NTIS document No. PB92-

100544INZ (order at 1-800-553-6847).

NAPAP, 1991. National Acid Precipitation Assessment Program: 1990 Integrated Assessment

Report. National Acid Precipitation Assessment Program, Office of Director. Washington, DC. 

NTIS document No. PB92-100346INZ (order at 1-800-553-6847).

National Research Council. Subcommittee on Nitrate and Nitrite in Drinking Water. 1995. 

Nitrate and Nitrite in Drinking Water. National Academy Press, Washington, DC. NTIS

document No. PB95-267092INZ (order at 1-800-553-6847).

Olson, C.A., 1981. "An Analysis of Wage Differentials Received by Workers on Dangerous

Jobs." Journal of Human Resources, 16, 167-185.

Ostro, B.D., 1987. "Air Pollution and Morbidity Revisited: A Specification Test." Journal of

Environmental Economics and Management, 14, 87-98.
Chapter VII: Benefit-Cost Analysis

VII-77

Ostro, B.D. and S. Rothschild, 1989. "Air Pollution and Acute Respiratory Morbidity - an

Observational Study of Multiple Pollutants." Environmental Research, 50(2), 238-247.

Pope, C.A., D.W. Dockery, J.D. Spengler and M.E. Raizenne, 1991. "Respiratory Health and

Pm10 Pollution - a Daily Time Series Analysis." American Review of Respiratory Disease, 

144(3), 668-674.

Pope, C.A., M.J. Thun, M.M. Namboodiri, D.W. Dockery, J.S. Evans, F.E. Speizer and C.W.

Heath, 1995. "Particulate Air Pollution As a Predictor of Mortality in a Prospective Study of Us

Adults." American Journal of Respiratory and Critical Care Medicine, 151(3), 669-674.

Pye, J.M., J.E. de Steiguer and C. Love, 1988. Expert Opinion Survey on the Impact of Air

Pollutants on Forests of the USA. Proceedings of Air Pollution and Forest Decline, Interlaken,

Switzerland. . October. See EPA Air Docket A-96-56, Document No. VI-B-09-(e).

Raucher, R.S., J.A. Drago, E. Trabka, A. Dixon, A. Patterson, C. Lang, L. Bird and S. Ragland, 

1993. An Evaluation of the Federal Drinking Water Regulatory Program Under the Safe

Drinking Water Act as Amended in 1986. Appendix A: Contaminant-Specific Summaries. 

Prepared for the American Water Works Association. 

Samet, J.M., 1997. Particulate Air Pollution and Daily Mortality: Analysis of the Effects of

Weather and Multiple Air Pollutants. The Phase IB Report of the Particle Epidemiology

Evaluation Project. Health Effects Institute. March. Available through

http://www.healtheffects.org/pubform.htm

Schwartz, J., 1993. "Particulate Air Pollution and Chronic Respiratory Disease." 

Environmental Research, 62, 7-13.

Schwartz, J. and R. Morris, 1995. “Air Pollution and Hospital Admissions For Cardiovascular

Disease in Detroit, Michigan.” American Journal of Epidemiology, 142(1): 23-35.

Schwartz, J., D.W. Dockery and L.M. Neas, 1996. "Is Daily Mortality Associated Specifically

With Fine Particles." Journal of the Air & Waste Management Association, 46(10), 927-939.

Schwartz, J., D.W. Dockery, L.M. Neas, D. Wypij, J.H. Ware, J.D. Spengler, P. Koutrakis, F.E.

Speizer and B.G. Ferris, 1994. "Acute Effects of Summer Air Pollution On Respiratory

Symptom Reporting in Children." American Journal of Respiratory and Critical Care Medicine, 

150(5), 1234-1242.

Schwartz, J. and R. Morris, 1995. "Air Pollution and Hospital Admissions For Cardiovascular

Disease in Detroit, Michigan." American Journal of Epidemiology, 142(1), 23-35.

Sisler, J.F., 1996. Spatial and Seasonal Patterns and Long Term Variability of the Composition
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-78

of the Haze in the United States: An Analysis of Data from the IMPROVE Network. Colorado

State University, Cooperative Institute for Research in the Atmosphere. Fort Collins, CO. July. 

See EPA Air Docket A-96-56, Document No. VI-B-09-(ee).

Smith, R.S., 1974. "The Feasibility of an 'Injury Tax' Approach to Occupational Safety." Law

and Contemporary Problems, 38(4), 730-744.

Smith, R.S., 1976. The Occupational Safety and Health Act: Its Goals and Achievements. 

American Enterprise Institute. Washington, DC. 

Smith, V.K., 1983. "The Role of Site and Job Characteristics in Hedonic Wage Models." 

Journal of Urban Economics, 13, 296-321.

Smith, V.K. and C. Gilbert, 1984. "The Implicit Risks to Life: A Comparative Analysis." 

Economics Letters, 16, 393-399.

Taylor, C.R., K.H. Reichelderfer and S.R. Johnson. 1993. Agricultural Sector Models for the

United States: Descriptions and Selected Policy Applications. Iowa State University Press,

Ames, IA.

Thurston, G.D., K. Ito, C.G. Hayes, D.V. Bates and M. Lippmann, 1994. "Respiratory Hospital

Admissions and Summertime Haze Air Pollution in Toronto, Ontario - Consideration of the Role

of Acid Aerosols." Environmental Research, 65(2), 271-290.

Thurston, G.D., K. Ito, P.L. Kinney and M. Lippmann, 1992. "A Multi-Year Study of Air

Pollution and Respiratory Hospital Admissions in 3 New-York State Metropolitan Areas -

Results For 1988 and 1989 Summers." Journal of Exposure Analysis and Environmental

Epidemiology, 2(4), 429-450.

Tolley, G.S. and et al., 1986. Valuation of Reductions in Human Health Symptoms and Risks. 

Prepared for U.S. Environmental Protection Agency. January. See EPA Air Docket A-96-56,

Document No. VI-B-09-(mmm).

U.S. Bureau of the Census. 1992. Statistical Abstract of the United States: 1992. 112 ed.

Washington, DC.

U.S. EPA, 1992. Regulatory Impact Analysis: Protection of Stratospheric Ozone. Volume II,

Part I, Appendix F. U.S. EPA, Stratospheric Protection Program. Washington, DC. 

U.S. EPA, 1993. Air Quality Criteria for Oxides of Nitrogen. Volume II. U.S. EPA, Office of

Research and Development. Washington, DC. EPA-/600/8-91/049bF. August. NTIS

document No. PB92-176379INZ (order at 1-800-553-6847).
Chapter VII: Benefit-Cost Analysis

VII-79

U.S. EPA, 1994. Documentation for Oz-One Computer Model (Version 2.0). Prepared by

Mathtech, Inc., under Contract No. 68D30030, WA 1-29. Prepared for U.S. EPA, Office of Air

Quality Planning and Standards. Research Triangle Park, NC. August.

U.S. EPA, 1995. Acid Deposition Standard Feasibility Study Report to Congress. U.S. EPA,

Office of Air and Radiation, Acid Rain Division. Washington, DC. EPA 430-R-95-001a. May.

See EPA Air Docket A-96-56, Document No. VI-B-09-(ll).

U.S. EPA, 1996a. Proposed Methodology for Predicting PM2.5 from PM10 Values to Assess

the Impact of Alternative Forms and Levels of the PM NAAQS. Prepared by Terence FitzSimons, David Mintz and Miki Wayland (U.S. Environmental Protection Agency, Office of Air

Quality Planning and Standard, Air Quality Trends Analysis Group). June 26. See EPA Air

Docket A-96-56, Document No. VI-B-09-(u).

U.S. EPA, 1996b. Review of National Ambient Air Quality Standards for Ozone: Assessment of

Scientific and Technical Information. OAQPS Staff Paper. U.S. EPA, Office of Air Quality

Planning and Standards. Research Triangle Park, NC. EPA-452\R-96-007. June. NTIS

document No. PB92-190446INZ (order at 1-800-553-6847).

U.S. EPA, 1996c. Air Quality Criteria for Ozone and Related Photochemical Oxidants. U.S.

EPA, Office of Research and Development. Washington, DC. EPA-/600/P-93/004cF. July. 

NTIS document No. PC E99/MF E99, PB94-173119INZ (order at 1-800-553-6847).

U.S. EPA, 1996d. Regulatory Impact Analysis for Proposed Particulate Matter National

Ambient Air Quality Standard. Prepared by: Innovative Strategies and Economics Group, Office

of Air Quality Planning and Standards. Research Triangle Park, NC. December. Available at

http://www.epa.gov/ttn/oarpg/t1ria.html

U.S. EPA, 1997a. Deposition of Air Pollutants to the Great Waters: Second Report to

Congress. U.S. EPA, Office of Air Quality Planning and Standards. Research Triangle Park,

NC. EPA-453/R-97-011. June. See EPA Air Docket A-96-56, Document No. VI-B-09-(ff).

U.S. EPA, 1997b. The Effects of SOx and NOx Emission Reductions on Sulfate and Nitrate

Particulate Concentrations. Thomas Braverman, Air Quality Modeling Group, Office of Air

Quality Planning and Standards. Research Triangle Park, NC. May. See EPA Air Docket A96-56, Document No. VI-B-09-(cc).

U.S. EPA, 1997c. "Methodology Used to Create PM10 and PM2.5 Air Quality Databases for

RIA Work." Memorandum from David Mintz, Air Quality Trends Analysis Group, Office of Air

Quality Planning and Standards to Allyson Siwik Innovative Strategies and Economics Group,

Office of Air Quality Planning and Standards. July 15. See EPA Air Docket A-96-56,

Document No. VI-B-09-(kk).
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VII-80

U.S. EPA, 1997d. National Air Pollutant Emission Trends Procedures Document 1990-1996,

Section 4:0: National Criteria Pollutant Estimates, 1985-1996. Draft Document. Office of Air

Quality Planning and Standards. Research Triangle Park, NC. June. See EPA Air Docket A96-56, Document No. VI-B-09-(hhh).

U.S. EPA, 1997e. Regulatory Impact Analyses for the Particulate Matter and Ozone National

Ambient Air Quality Standards and Proposed Regional Haze Rule. U.S. EPA, Office of Air

Quality Planning and Standards. Research Triangle Park, NC. July. See EPA Air Docket A-96-

56, Document No. VI-B-09-(r).

U.S. EPA, 1997f. "Response to Comments Made by AISI on EPA Methodology for Predicting

PM2.5 from PM10." Memorandum to the docket from Terence Fitz-Simons (Office of Air

Quality Planning and Standards, Air Quality Trends Analysis Group). February 6. See EPA Air

Docket A-96-56, Document No. VI-B-09-(w).

U.S. EPA, 1997g. The Benefits and Costs of the Clean Air Act: 1970 to 1990. U.S. EPA, Office

of Air and Radiation, Office of Policy, Planning and Evaluation. Washington, DC. October. 

Available at http://www.epa.gov/airprogm/oar/sect812/copy.html

U.S. EPA, 1997h. Technical Support Document for the Regulatory Impact Analyses for the

Particulate Matter and Ozone National Ambient Air Quality Standards and Proposed Regional

Haze Rule. U.S. EPA, Office of Air Quality Planning and Standards. Research Triangle Park,

NC. July 17.

U.S. EPA, 1998a. The Regional NOx SIP Call & Reduced Atmospheric Deposition of Nitrogen: 

Benefits to Selected Estuaries. September 22.

U.S. EPA, 1998b. Regulatory Impact Analysis for the NOx SIP Call, FIP, and Section 126

Petitions. U.S. EPA, Office of Air and Radiation. Washington, DC. EPA-452/R-98-003. 

December. See EPA Air Docket A-96-56, VI-B-09.

Viscusi, W.K., 1978. "Labor Market Valuations of Life and Limb: Empirical Estimates and

Policy Implications." Public Policy, 26(3), 359-386.

Viscusi, W.K. 1979. Employment Hazards: An Investigation of Market Performance. Harvard

University Press, Cambridge.

Viscusi, W.K., 1981. "Occupational Safety and Health Regulation: Its Impact and Policy

Alternatives." In: Research in Public Policy Analysis and Management. Crecine, J., Ed. JAI

Press, Greenwich, CT. pp. 281-299. 

Viscusi, W.K. 1992. Fatal Tradeoffs: Public and Private Responsibilities for Risk. Oxford

University Press, New York.
Chapter VII: Benefit-Cost Analysis

VII-81

Viscusi, W.K., W.A. Magat and J. Huber, 1991. "Pricing Environmental Health Risks - Survey

Assessments of Risk - Risk and Risk - Dollar Trade-Offs For Chronic Bronchitis." Journal of

Environmental Economics and Management, 21(1), 32-51.

Ward, M.H., S.D. Mark, K.P. Cantor, D.D. Weisenburger, A. Correa-Villasenor and S.H. Zahm, 

1996. "Drinking Water Nitrate and the Risk of Non-Hodgkin's Lymphoma." Epidemiology, 

7(September), 465-471.

Watson, W. and J. Jaksch, 1982. "Air Pollution: Household Soiling and Consumer Welfare

Losses." Journal of Environmental Economics and Management, 9, 248-262.

Woodruff, T.J., J. Grillo and K.C. Schoendorf, 1997. "The relationship between selected causes

of postneonatal infant mortality and particulate air pollution in the United States." 

Environmental Health Perspectives, 105(6), 608-612.

Woolfolk, M.E., R.K. Iwamiya, C. Van Landingham, T.C. Myers, G.E. Mansell, H.H. Tunggal

and S.G. Douglas, 1998. A Prospective Analysis of Air Quality in the U.S.: Air Quality

Modeling. Systems Applications International, Inc. San Rafael, California. SYSAPP-97/69. 
Chapter VIII: Regulatory Flexibility Analysis

VIII-1

Chapter VIII: Regulatory Flexibility

This chapter presents our Initial Regulatory Flexibility Analysis (IRFA) which evaluates

the impacts of the proposed Tier 2 and gasoline sulfur standards on small businesses. This

analysis has the following objectives: 1) to specify an appropriate definition for “small business”

for entities subject to the final rule, 2) to characterize small businesses in the petroleum refining

and motor vehicle manufacturing industries (described in more detail below in Table VIII-1), 3)

to assess the impact of the proposed standards on these businesses, and 4) to evaluate the relief

provided by regulatory alternatives.

A. Requirements of the Regulatory Flexibility Act

When proposing and promulgating rules subject to notice and comment under the Clean

Air Act, we are generally required under the Regulatory Flexibility Act (RFA) to conduct a

regulatory flexibility analysis unless we certify that the requirements of a regulation will not

cause a significant impact on a substantial number of small entities. The key elements of the

IRFA include: 

• the number of affected small entities;

• the projected reporting, record keeping, and other compliance requirements of the

proposed rule, including the classes of small entities that would be affected and

the type of professional skills necessary for preparation of the report or record;

• other federal rules that may duplicate, overlap, or conflict with the proposed rule;

and,

• any significant alternatives to the proposed rule that accomplish the stated

objectives of applicable statutes and which minimize significant economic

impacts of the proposed rule on small entities.

The Regulatory Flexibility was amended by the Small Business Regulatory Enforcement

Fairness Act of 1996 (SBREFA), to ensure that concerns regarding small entities are adequately

considered during the development of new regulations that affect them. 

In developing the NPRM, we concluded that the proposed Tier 2 and gasoline sulfur

standards would likely have a significant impact on a substantial number of small entities. To

comply with the requirements of the RFA, we were required to quantify these economic impacts. 

The methodology used to calculate the per-refinery costs for desulfurizing gasoline is located

above in Chapter 5.B.; the cost for an average small refiner to comply with the 30 ppm standard

is described below in section C.

Based on the results of our economic analyses, we convened a Small Business Advocacy

Review Panel (the Panel), as required by SBREFA. The purpose of the Panel was to collect the

advice and recommendations of small entity representatives (SERs) that would be affected by the
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VIII-2

proposed Tier 2 and gasoline sulfur standards. The report of the Panel has been placed in the

rulemaking record.1

B. Description of Affected Entities

A Tier 2 program establishing stringent vehicle emission standards and requiring

reductions in gasoline sulfur content would primarily affect manufacturers of LDVs, LDTs,

HDGVs, and oil refiners that produce gasoline. Most companies in these industries do not meet

the small business definitions provided in the U.S. Small Business Administration (SBA)

regulations (13 CFR Part 121). However, we have identified several companies within these

industries that are small businesses as defined by SBA. These businesses may be subject to the

Tier 2 vehicle and gasoline sulfur standards and could be significantly impacted by the new

standards. Table VIII-1, below, describes the affected industries, including the small business

size standards SBA has established for each type of economic activity under the Standard

Industrial Classification (SIC) and North American Industrial Classification systems.
Chapter VIII: Regulatory Flexibility Analysis

VIII-3

Table VIII-1. Industries Containing Small Businesses 

Potentially Affected by Today’s Proposed Rule

Industry NAICS1

 Codes SIC2 Codes Defined by SBA as a 

Small Business If:3

Petroleum Refiners 324110 2911 < 1500 employees

Petroleum Marketers and

Distributors

422710

422720

5171

5172 < 100 employees

Independent Commercial 

Importers of Vehicles and

Vehicle Components

811112

811198

541514

7533

7549

8742

< $5 million annual sales

Alternative Fuel Vehicle

Converters

336311

541690

3592

8931 < 500 employees

336312 3714 < 750 employees

422720 5172 < 100 employees

454312

811198

541514

5984

7549

8742

< $5 million annual sales

Motor Vehicle Manufacturers

336111

336112

336120

3711 < 1000 employees

1) North American Industry Classification System

2) Standard Industrial Classification system

3) According to SBA’s regulations (13 CFR 121), businesses with no more than the listed number of employees or

dollars in annual receipts are considered “small entities” for purposes of a regulatory flexibility analysis.

1. Small Refiners

Of the approximately 160 petroleum refineries that currently produce gasoline in the U.S.,

about 15 meet SBA’s definition of a small business. SBA’s SIC code for petroleum refining is

2911. According to this code, a petroleum refining company must have fewer than 1500

employees to qualify as a SBA small business. In the event that we propose gasoline sulfur

control, some small refiners could have greater difficulty than larger refiners in complying with

the standard(s), due to such factors as limited operational flexibility, lack of access to alternate

crude oil feedstocks, limited availability of new sulfur reduction equipment, or difficulty in

raising capital to finance projects.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VIII-4

2. Small Petroleum Marketers

While refiners would be the primary affected parties in a gasoline sulfur control program,

some marketers of gasoline, many of which are small by SBA definitions, may be directly subject

to the rule and could be adversely impacted by it. This impact appears to be limited to new or

expanded requirements for reporting the sulfur content of gasoline samples. 

SBA defines small businesses in this category (SIC codes 5171 and 5172) as those with

fewer than 100 employees. There are several hundred small gasoline marketers participating at

various points in the national gasoline distribution system.

3. Small Certifiers of Covered Vehicles 

In addition to the major vehicle manufacturers, three distinct categories of businesses

relating to LDV, LDTs, and HDGVs exist that would be covered by Tier 2 emission standards. 

Some companies in each of these categories are small businesses according to SBA regulations. 

Small Independent Commercial Importers

Independent Commercial Importers are companies that hold a Certificate (or Certificates)

of Conformity which permits them to alter imported vehicles to meet U.S. emission standards. 

As with alternative fuel vehicle converters described below, these businesses could face greater

technical challenges if emission standards are tightened. We have identified five businesses in

this category that are currently active and that appear to be small entities under SBA regulations. 

Alternative Fuel Vehicle Converters

Under certain circumstances, our current policy permits the conversion of gasoline or

diesel vehicles to operate on an alternative fuel without applying for and receiving the EPA

Certificate of Conformity (also known as the “certification” process) that is required of

conventional manufacturers. However, certification can provide certain benefits to a converter,

and a few businesses have completed certification or have expressed interest in certifying

alternative fueled vehicle models. Beginning in model year 2000, converters must seek a

certificate for all of their vehicle models, although there will be some aspects of the certification

process that will be simplified for small volume manufacturers (SVMs), including these

converters. To the extent that companies are involved in this business when Tier 2 emission

standards become effective, they would be subject to such standards and could face greater

technical challenges in achieving the new standards with the vehicles they convert. 

Small Volume Vehicle Manufacturers

We permit vehicle manufacturers selling 10,000 or fewer vehicles per year to be
Chapter VIII: Regulatory Flexibility Analysis

VIII-5

designated as SVMs. This status allows vehicle models to be certified under a slightly simpler

certification process. More stringent Tier 2 standards could be relatively more difficult for small

manufacturers to achieve than larger manufacturers to the extent that research and development

resources are more limited. Less than five current SVMs meet the SBA guidelines for vehicle

manufacturers of 1000 or fewer employees.

C. Projected Costs of the Proposed Gasoline Sulfur Standards

The costs for an average-size small refinery (19,000 bbls gasoline/day) to produce

gasoline with a sulfur level of 30 ppm are described below in Table VIII-2. A more detailed

discussion of our refinery cost analysis, in general, can be found above in Chapter 5.

Table VIII-2. Costs for a 19,000 bbls gasoline/day 

Refinery to Produce 30 ppm Gasoline

Location Per-Gallon Cost

(cents/gallon)

Operating Cost

($million/year)

Capital Cost

($million/year)

PADD III 2.9 8 16

PADD IV 3.4 9 22

Costs for a small refinery located in PADD II to produce 30 ppm gasoline would fall

between the costs for a refinery in PADD III and a refinery in PADD IV.

In comparison, the average annual sales of small refiners in the U.S. were approximately

$385 million for 1997 based on data obtained from Dun & Bradstreet.

D. The Types and Number of Small Entities to Which the Proposed Rule Would

Apply

The types and number of small entities to which the proposed rule would apply are

described in Table VIII-3, below.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VIII-6

Table VIII-3. Types and Number of Small Entities to 

Which the Proposed Tier 2/Gasoline Sulfur Rule Would Apply

Type of Small Entity Number of Companies

Affected by Today’s Rule

Small Refiners Approximately 17

Small Gasoline Marketers Several Hundred

Small Certifiers of

Covered Vehicles

Approximately 15

Using our 1990 refinery baseline data, established for the purposes of the RFG and

anti-dumping programs, we have estimated that small refiners produce approximately 3.5 percent

of all gasoline in the U.S. Furthermore, of the 17 refineries that we have identified as meeting

SBA’s definition of small business, nine already have gasoline sulfur levels less than 90 ppm. 

Therefore, approximately eight small refineries (out of 160 refineries in the U.S.) will need to

significantly reduce their gasoline sulfur levels to comply with the proposed gasoline sulfur

standards.

We are also aware that there are several hundred gasoline distributors/marketers in the

U.S. The proposed rule may include a new requirement for them to add sulfur content to the set

of gasoline quality parameters they currently report or record. However, this requirement should

not be burdensome since sulfur content is generally measured along with other parameters and

the results would simply need to be recorded and reported.

E. Projected Reporting, Recordkeeping, and Other Compliance Requirements

of the Proposed Rule

We are proposing to require that refiners and importers keep and make available to us

certain records which demonstrate compliance with the sulfur program requirements. These

records include information about each batch of gasoline produced or imported, including batch

volume, sulfur test results and calculations used to determine compliance. We believe that the

proposed recordkeeping requirements for refiners and importers are necessary to allow

independent auditors and our inspectors to determine if the gasoline produced or imported, in

fact, met the applicable sulfur standards when it left the refinery or import facility. A similar

record retention requirement is included in the RFG and anti-dumping regulations.

Because the information required to be reported under today’s rule in many cases is not

included in the RFG and anti-dumping compliance reports, and because we believe it would be

difficult to adapt the present RFG and anti-dumping reports to include the information required
Chapter VIII: Regulatory Flexibility Analysis

VIII-7

under today’s proposed rule, we are proposing to require refiners and importers to submit a

separate annual sulfur compliance report along with the refiner’s or importer’s RFG and/or antidumping compliance reports. The sulfur report form would be relatively short and would require

only the minimum information necessary to demonstrate compliance with the applicable sulfur

standards. Parties would be required to include the refiner and refinery facility registration

numbers or importer registration number issued under the RFG regulations, the total volume of

gasoline (RFG and conventional gasoline) produced at the refinery (or refineries, if aggregated

prior to 2006) or imported by the importer during the averaging period, and the annual average

sulfur content of the gasoline produced or imported. Small refiners who have EPA-approved

individual baselines also be required to include the sulfur standards applicable to the refinery.

F. Other Relevant Federal Rules Which May Duplicate, Overlap, or Conflict

with the Proposed Rule

The Tier 2 emission standards and gasoline sulfur control regulations that we are

proposing are similar in many respects to existing regulations; in some cases, these regulations

are replacing earlier requirements with more stringent requirements for refiners and vehicle

manufacturers. However, the Panel is not aware of any area where the new regulations would

duplicate, overlap, or conflict with the existing federal, state, or local regulations. 

G. Regulatory Alternatives

The Panel considered a wide range of options and regulatory alternatives for providing

small businesses with flexibility in complying with potential Tier 2 vehicle emission and

gasoline sulfur standards. As a part of the process, the Panel requested and received comment on

several early ideas for compliance flexibility that were suggested by the SERs and Panel

members. Taking into consideration the comments received on these ideas as well as additional

business and technical information gathered about the affected small entities, the Panel

recommended that we solicit comment on several of them. As described below, the Panel

recommended some of these concepts individually and, in the case of small refiners,

recommended a comprehensive option that incorporates several ideas. The Panel took

considerable time in addressing the concerns of the small refiners, who indicated their belief that

their businesses may have to close if relief is not considered for their industry. Taken together,

the Panel believed that these options would provide meaningful relief to small businesses in each

of the industry sectors potentially affected by a Tier 2/gasoline sulfur control program while

protecting the environmental goals of the program. 

1. Small Refiners

The Panel recommended that small refiners be provided a four- to six-year period during
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VIII-8

which less stringent gasoline sulfur requirements would apply. Each refinery’s gasoline sulfur

limit would be based on its individual average sulfur level as reported in its most recent batch

report (submitted under the reformulated gasoline program, e.g., for 1997) available at the time

of the proposed rule. This four- to six-year period of relief would begin at the time that final

standards become effective for the refining industry as a whole. Following this period of relief,

small refiners would be required to meet the industry-wide standard, although temporary

hardship relief would be available on a case-by-case basis. The Panel believed that the additional

time that this approach would provide would 1) allow larger refiners to demonstrate new sulfurreduction technologies, 2) permit the costs of advanced technology units to drop as the volume of

their sales increases, 3) free-up industry engineering and construction resources, and 4) provide

additional time for small refiners to raise capital for infrastructure changes. 

Although during the Panel process we had not yet decided on an approach for a proposed

sulfur control program, several small refiner options were discussed which made assumptions

about the program that might be in place. Among the program designs that we were considering

during the Panel process, the “worst case” scenario for small refiners was a national, year-round

sulfur requirement of 30 ppm on average with an 80 ppm per-gallon cap beginning in 2004. The

following discussion of the specific small refiner relief provisions assumed the existence of the

“worst case” scenario and a scenario where the gasoline sulfur standards would be higher than 30

and 80 ppm. The Panel emphasized that we had not yet made decisions regarding the level and

scope of sulfur controls that we were intending to propose.

a. Interim Sulfur Standards

In the Panel’s recommended approach, small refiners covered by this special provision

would be assigned interim sulfur standards based on their individual refinery gasoline sulfur

levels today, according to Table VIII-4 below.
Chapter VIII: Regulatory Flexibility Analysis

VIII-9

Table VIII-4. Federal Gasoline Sulfur Program with Sulfur 

Standards of 30 ppm on Average and an 80 ppm Per-Gallon Cap

 Average Refinery Sulfur Level (ppm) Interim Sulfur Standards (average/cap, ppm) * 

0 to 30 30/80

31 to 80 80 (Cap only)

81 to 200 Average: Maintain current average level

Cap: Factor of 2.0 above the average

201 and above Average: One-half current average level, 200 ppm

minimum and 300 ppm maximum

Cap: Factor of 1.5 above average level

* Note that if the federal program were to include a phase-in of sulfur standards, and if a refiner’s current average

sulfur level was below the phase-in level, the phase-in level would become the refiner’s compliance level for the

period of the phase-in.

More generally, if standards higher than 30/80 ppm were promulgated, the recommended

interim standards for small refiners would be at the levels described in Table VIII-5, below.

Table VIII-5. Federal Gasoline Sulfur Program with Sulfur 

Standards Above 30 ppm on Average and an 80 ppm Per-Gallon Cap

 Average Refinery Sulfur Level (ppm) Interim Sulfur Standards (average/cap, ppm)* 

0-200 Average: Maintain federal standard or current

average level

Cap: Factor of 2 times the average

201-400 Average: 200 ppm or federal standard

Cap: Factor of 1.5 times the average

401-600 Average: One-half of current average level

Cap: Factor of 1.5 times the average

601 and above 300/450

* Note that if the federal program were to include a phase-in of sulfur standards, and if a refiner’s current average

sulfur level was below the phase-in level, the phase-in level would become the refiner’s compliance level for the

period of the phase-in.

i. Duration of Interim Standards

In addition to recommending that we propose a duration of four to six years during which

the interim standards would apply, beginning from the effective date of the sulfur standard, the
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VIII-10

Panel also recommends that we specifically request comment on an alternative duration of 10

years.

b. Hardship Relief

i. Small Refiners

The Panel believed that it would be impossible to predict what the nature of the refining

industry would be in the latter part of the next decade, when small refiners will need to comply

with the final gasoline sulfur standard(s). Given this uncertainty, the Panel recommended that

we propose provisions for small refiners that would allow us on a case-by-case basis to extend

some form of relief from the standards for an additional period of time in cases of severe

hardship. The Panel recommended that we design such a proposed hardship relief provision to

include, at a minimum, the following characteristics:

• Criteria for granting of hardship relief that are sufficiently specific to help assure

fairness among recipients of such relief while allowing a degree of flexibility for

EPA to address special problems that may face individual refiners. Such criteria

should be designed to require a demonstration that the refiner faces extreme

economic consequences absent the relief and has exhausted other channels that

could limit the consequences. EPA should consider including in proposed

hardship relief provisions criteria such as, demonstrated inability on the part of the

small refiner to develop sufficient capital, the temporary unavailability of new

lower-cost sulfur removal technology, or the temporary unavailability of

engineering or construction resources necessary for the design and installation of

the new equipment.

• A provision for a small refiner to propose an appropriate time period for this

additional relief. The Panel believes that the refiner should be expected to

carefully document the need for a specific period of additional relief. The Panel

also believes that such a period should be a minimum of two years so that the

refiner can demonstrate a degree of stability into the future when seeking capital

or credit. 

The Panel was hopeful that the time provided by the interim standards for small refiners

(perhaps added to any time provided by a phase-in of the industry-wide program) would allow

for industry technology prove-out and cost reductions and for individual refiner planning such

that hardship relief would be seldom or never needed. The Panel was also satisfied that current

OMS management is committed to providing hardship relief if and when the need is

demonstrated and we encourage future OMS management to be similarly open to small refiners

facing dire economic impacts due to gasoline sulfur reduction standards.
Chapter VIII: Regulatory Flexibility Analysis

VIII-11

Finally while the Panel recommended a refinery-based compliance option for small

refiners, as discussed above, OMB noted that the Panel received comments from small refiners

and small gasoline distributors supporting a geographically-limited sulfur program proposed by

API and NPRA. In light of these comments, OMB recommended that we evaluate the

API/NPRA proposal. 

ii. Small Marketers of Gasoline

The Panel believed that adding gasoline sulfur to the fuel parameters already being

sampled and tested by gasoline marketers will likely result in little, if any, additional burden. 

The gasoline marketer SERs that commented to the Panel did not address this issue. The Panel

did not recommend any special provisions for gasoline marketers. (These parties raised concerns

about indirect effects of a sulfur control program on marketers, especially if some refiners go out

of business and reduce the number of gasoline suppliers. However, the focus of the RFA and

SBREFA is on direct effects of a potential rule on small entities, which in this case do not appear

to be problematic.)

2. Small Certifiers of Covered Vehicles

The Panel recommended that EPA solicit comment on several ideas suggested by small

companies that certify LDVs, LDTs, and HDGVs, as discussed further below. However, several

other concerns that these businesses raised to the Panel do not appear to be affected by potential

new Tier 2 emission standards but rather involve existing regulations. While the Panel did not

believe that these “non-Tier 2" issues would be appropriately addressed in a Tier 2 rulemaking,

the Panel encouraged EPA to meet with small certifiers designated as ICIs to discuss those

issues. 

The Panel recommended that EPA solicit comment on the following potential regulatory

options:

1) For small certifiers that convert imported vehicles to U.S. standards or that convert

vehicles to operate on alternative fuels, provide a delay in required compliance of two

years after Tier 2 standards apply to the model (engine family) involved.

2) If the Tier 2 program involves a phase-in of standards, allow small certifiers to comply at

the end of such a phase-in.

3) If the Tier 2 program does not involve a phase-in of standards, delay compliance for small

certifiers until 2007 (or three years after the program begins industry-wide).

4) Establish a credit program as a part of the Tier 2 program, and provide incentives for

large manufacturers to make credits available to small certifiers. In addition, develop a
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

VIII-12

program to provide credits to small certifiers for taking older vehicles off the road

(scrappage).

5) Design a case-by-case hardship relief provision that would delay required compliance for

small certifiers that demonstrate that they would face a severe economic impact from

meeting the Tier 2 standards.
Chapter VIII: Regulatory Flexibility Analysis

VIII-13

1. Report of the Small Business Advocacy Panel on Tier 2 Light-Duty Vehicle and LightDuty Truck Emission Standards, Heavy-Duty Gasoline Engine Standards, and Gasoline 

Sulfur Standards, October 1998.

Chapter VIII. References
Appendix A: 47-State and Four-Cities Analyses

A-1

Appendix A: 47-State and Four-Cities Analyses

Double-click on the icon below to open Appendix A:

Acrobat Document
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

A-2
Appendix B: Irreversibility of Sulfur's Emission Impact

B-1

Appendix B: Evidence Supporting the Irreversibility of

Sulfur's Emission Impact

 Fuel sulfur impacts vehicle emissions in two basic ways. One is an immediate impact,

which occurs within a few miles of driving. The other is a more lasting impact, ranging from 20

or more miles to potentially permanent. This lasting effect of sulfur on emissions is termed

irreversibility, referring to the fact that the emission impact of high sulfur fuel does not reverse

when low sulfur fuel is used. 

The immediate impact of sulfur on emissions is summarized in an EPA technical report.1

There, it was shown that operation on typical conventional gasoline containing 330 ppm sulfur

increases exhaust VOC and NOx emissions from LEV and Tier 2 vehicles (on average) by 40

percent and 150 percent, respectively, relative to their emissions with certification fuel containing

roughly 30 ppm sulfur. All of the data supporting these impacts were generated with very short

exposures to high sulfur gasoline, essentially a few miles of preconditioning and a few miles of

actual emission testing. When the vehicles were tested using low sulfur fuel after being operated

on high sulfur fuel, special preconditioning was performed to ensure that any residual effect of

the high sulfur fuel was removed. This preconditioning would not normally occur through

normal vehicle operation, so the emission impacts described in Section III only strictly apply to

situations where the vehicle operated on fuel with a single sulfur level over its entire life. 

In this section, we are concerned with the impact of sulfur under more realistic

conditions. In particular, we are interested in vehicles’ emission response following exposure to

low sulfur fuel after exposure to high sulfur fuel. We are also concerned with the potential that

long term exposure to high sulfur fuel may increase emissions to a greater degree than the short

term exposures simulated in most emission testing. 

This section is divided into five parts. The first section describes the sensitivity of

vehicle exhaust emissions to gasoline sulfur content. The second discusses the theory of how

sulfur affects catalytic activity and the conditions conducive for its removal (sulfur

reversibility/irreversibility). The third describes the vehicle testing programs which have

attempted to measure the reversibility of the sulfur impact. This part also compares the relative

impact of long term sulfur exposure versus short term exposure. The fourth presents criteria for

evaluating the wide range of sulfur reversibility data which are available. Finally, the fifth

describes EPA’s projections of the degree of sulfur reversibility for various vehicle types (e.g.,

Tier 1 vehicle, LEVs, and Tier 2 vehicles). 

A. Exhaust Emission Sensitivity to Sulfur Content

The sulfur in gasoline increases exhaust emissions of HC, CO, and NOx by decreasing

the efficiency of the three-way catalyst used in current and advanced emission control systems. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-2

For the purpose of this document, we will refer to this phenomenon as “sulfur sensitivity.” Sulfur

sensitivity has been demonstrated through numerous laboratory and vehicle fleet studies. These

studies have demonstrated that significant reductions in HC, CO, and in particular, NOx

emissions can be realized by reducing fuel sulfur levels. Sulfur sensitivity for Tier 0 and Tier 1

vehicles is marginal, with NOx emissions decreasing between 11 percent to 16 percent when

sulfur is reduced from 330 ppm to 40 ppm. Sulfur sensitivity for LEV and ULEV vehicles,

however, is much more significant. When sulfur is increased from 40 ppm to 330 ppm, we

project that emissions increase by the following percentages:

Vehicle Type NMHC NOx

LEV and ULEV LDV 40% 134%

LEV and ULEV LDT 24% 42%

These percentages apply to “normal emitting” vehicles, which generally are those in-use vehicles

with emissions at or below twice their applicable emission standards. Higher emitting vehicles

are projected to be less sensitive to sulfur, because the catalyst is not operating at peak efficiency

in-use and should therefore be less affected on a percentage basis by higher sulfur levels.

We anticipate that Tier 2 vehicles will be at least as sensitive to sulfur as LEV and ULEV

LDVs and possibly even more so, due to the greater stringency of the proposed Tier 2 emission

standards, especially for NOx. At present, however, we have only projected that Tier 2 vehicles

will be just as sensitive as LEV and ULEV LDVs and not more so. 

More detailed discussions of sulfur sensitivity can be found in the “EPA Staff Paper on

Gasoline Sulfur Issues,”2

 published May 1, 1998, and the EPA report which developed sulfur

sensitivity estimates for a range of vehicle classes for incorporation in the draft version of EPA’s

fleet-wide emissions model, MOBILE6. This report is titled “Fuel Sulfur Effects on Exhaust

Emissions”3

 and is dated January 5, 1999. 

Sulfur sensitivity has been shown to be variable and to depend upon both catalyst

formulation and vehicle operating conditions, which are discussed in detail in both reports. 

Another variable, which was not discussed in either report, is the effect of real world vehicle

aging with sulfur. Sulfur sensitivity is temperature dependent. Sulfur adheres to the catalyst

surface more thoroughly at lower catalyst temperatures (approximately 450°C to 500°C) than

higher temperatures. Several vehicle manufacturers have suggested that the sulfur sensitivity

results from the numerous fleet studies actually underestimate the sensitivity of sulfur on exhaust

emissions, because the test cycles (FTP or LA4 cycles) used to saturate the catalyst with sulfur

result in catalyst temperatures that are too high. Specifically, the argument is that most vehicles

achieve catalyst temperatures over the FTP that exceed 450°C, thus not allowing complete

adsorption of sulfur to the catalyst surface, whereas real-world vehicle operation in metropolitan

non-attainment areas quite frequently result in catalyst temperatures at or below 450°C.
Appendix B: Irreversibility of Sulfur's Emission Impact

B-3

We have a sulfur test program currently underway to assess the validity of this concern. 

Although testing is still ongoing, very preliminary results from a single vehicle seems to support

the fact that emissions are even more sensitive to sulfur when the catalyst is saturated with sulfur

via on-road operation. We plan to have the results of this test program available prior to the

development of technical analyses for the final rule. If the remainder of the testing supports the

early results and manufacturer’s contentions, real world levels of sulfur sensitivity would be even

greater than the levels discussed above, further supporting the need for sulfur reduction in

gasoline.

A second concern about the current estimates of sulfur sensitivity is that all of the

vehicles in the test programs used to develop to above projections of sulfur sensitivities were

only exposed to high sulfur fuel for a few miles of driving prior to emission testing. In addition

to adsorbing onto the surface of the catalyst, sulfur can also penetrate into the precious metal

layer, especially into palladium, and into the oxygen storage material. This penetration may not

have fully occurred during the very few miles of operation prior to emission testing on high

sulfur fuel. In an API sulfur reversibility test program discussed further below in this appendix,

vehicles’ sulfur sensitivity were measured after both short-term exposure to high sulfur fuel and

after 1,000-2,000 miles of driving with high sulfur fuel. For the five vehicles tested, NMHC

emission sensitivity was the same with both short-term and longer-term exposure to high sulfur

fuel. However, NOx emission sensitivity was 25-50% higher after longer-term exposure to high

sulfur fuel when compared to short-term exposure. Thus, the above sulfur sensitivities could

significantly underestimate the impact of sulfur on NOx emissions for LEVs, ULEVs and Tier 2

vehicles. We plan to investigate this issue further in the future.

B. Theory Supporting the Reversibility and Irreversibility of Sulfur’s Emission 

Impact

Sulfur impacts emissions from modern vehicles primarily by reducing the efficiency of

the three-way catalyst. Molecules of sulfur (either in the form of sulfur dioxide or hydrogen

sulfide) adsorb on the catalyst surface and basically take up space so that molecules of HC, CO

and NOx cannot adsorb and react to form water, nitrogen, oxygen and carbon dioxide. With

palladium catalysts, it appears that sulfur also penetrates into the metal itself, forming a reservoir

of sulfur within the catalyst. Sulfur dioxide also penetrates into the oxygen storage medium of

the catalyst and reduces the ability of the catalyst to manage the level of oxygen on the catalyst

surface. This oxygen management function is a key component of the 98 percent plus

efficiencies of today’s three-way catalysts, particularly for controlling NOx emissions. 

EPA summarized the basic chemical and thermodynamic mechanisms involved in

sulfur’s two types of interference in it staff paper on gasoline sulfur in May of 1998.4

 This paper

also summarized the conditions required to remove sulfur from the catalyst once the vehicle had

been exposed to high sulfur fuel. The results of a number of studies showed that generally high

temperatures (in excess of 700o F) are required to remove sulfur from both the surface of the

catalyst and from the washcoat matrix. In addition to high temperature, a rich exhaust (absence
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-4

of oxygen coupled with presence of HC and CO, or a low air-fuel ratio) or an alternating

sequence of rich and lean (presence of more oxygen in the exhaust than is needed to oxidize the

HC and CO present, or a high air fuel ratio) exhaust was often needed to fully regenerate the

catalyst. Larger degrees of lean and rich exhaust appear to be much more conducive to sulfur

removal than small changes in air fuel ratio. When these rich or alternating rich-lean conditions

were not present, even higher temperatures were required to remove the sulfur from the catalyst,

when such removal was successful. However, when the combination of temperature and

variation in the air-fuel ratio is sufficient, the sulfur accumulated from operation on high sulfur

fuel appears to be essentially eliminated and the emission impact of the high sulfur fuel is fully

reversed. 

If sulfur reversibility was the only criteria involved in catalyst design, auto manufacturers

could place their catalysts right up against the engine and design the onboard computer to vary

the air fuel ratio from rich to lean sufficiently to regenerate the catalyst after any temporary

exposure to high sulfur fuel. Engine exhaust temperatures are generally high enough at the

exhaust manifold during typical driving to facilitate sulfur removal. The onboard computer is

certainly capable of varying the air-fuel ratio significantly. However, other critical catalyst design

criteria prevent such the use of such simple measures. First, excessive temperatures can

thermally damage the catalyst and reduce its efficiency. Second, simultaneously high conversion

efficiencies of HC, CO and NOx require very tight air fuel ratio control (minimal swings to either

rich or lean conditions). 

Regarding catalyst temperature, auto manufacturers must balance a number of conflicting

criteria. One important criterion for catalyst design is that it light-off quickly. Most of the HC

and CO emissions from LEV vehicles, and significant amounts of NOx emissions, occur prior to

catalyst light-off. Achieving this has affected the type and amount of materials used in the

catalyst and resulted in moving the catalyst closer to the engine. Many manufacturers have

switched to catalysts containing palladium, which generally can withstand higher temperatures

than platinum and rhodium catalysts. At the same time, catalyst manufacturers have improved

the design of their platinum and rhodium catalysts so that they can withstand higher

temperatures, as well. Moving the catalyst closer to the engine also increases catalyst

temperature during warmed-up operation, other factors being equal. Despite improvements in

the thermal durability of catalysts, sufficiently high temperatures can still cause a significant loss

of catalyst efficiency. 

Engine load also affects exhaust and catalyst temperature. The engine load for a given

vehicle is a function of vehicle speed, rate of acceleration, vehicle weight and road grade, with

higher levels of all of these factors leading to higher engine loads and catalyst temperatures. 

Vehicles which carry the most widely varying loads and which are driven the most aggressively

will generally experience the most variation in their catalyst temperature. Manufacturers must

design their catalysts to both light-off quickly and stay warm under light loads while not

sustaining thermal damage under heavy loads. Light trucks and sporty vehicles probably present

the most difficult challenges in this regard. For example, light trucks are most often driven with

one person and minimal cargo. However, they also are used to carry numerous passengers or
Appendix B: Irreversibility of Sulfur's Emission Impact

B-5

carry or pull heavy cargo up steep hills. The catalyst must be designed to withstand the higher

temperatures of these heavier loads. 

One additional factor affecting catalyst temperature is the upcoming implementation of

EPA and California SFTP standards. The SFTP standards address emissions generated while the

vehicle is driving aggressively (high speeds and high rates of acceleration) and while the air

conditioning is turned on, both of which generate higher engine loads than exist during EPA’s

FTP test cycle. Manufacturers have historically designed their engines to run rich under high

loads. The excess fuel decreases exhaust and catalyst temperature relative to an engine running

at stoichiometry (just the right amount of air to burn the fuel). The SFTP standards will require

that manufacturers reduce much of this high-load enrichment in order to reduce HC and CO

emissions during these high loads. Therefore, all other factors being equal, exhaust and catalyst

temperatures under extreme conditions will increase after implementation of the SFTP standards,

which begin their phase-in in the 2001 model year. Thus, the SFTP standards incrementally

increase the difficulty of quickly lighting-off the catalyst while still protecting it from thermal

damage during extreme driving conditions. While these extreme conditions must be considered

in the catalyst design process, their frequency in-use is not sufficient to rely upon for sulfur

removal. For example, some vehicle owners own and tow trailers up steep hills, while others do

not. Therefore, while the SFTP standards may increase temperatures under some conditions,

they will not necessarily increase sulfur removal capability for the general vehicle population. 

Requiring manufacturers to increase the temperature of their catalysts under light loads to

improve sulfur reversibility would therefore increase temperatures under heavy loads even

further. EPA has not assessed the feasibility of manufacturers increasing warmed-up catalyst

temperatures beyond that required by the current standards, as well as the proposed Tier 2

standards, without additional degradation in catalyst efficiency. However, based on the JohnsonMatthey data presented in the next section, even very high temperatures of 900o

 F are not

necessarily sufficient to fully reverse the sulfur impact if extensive use of high sulfur fuel has

occurred. Regular operation at such temperatures places the catalyst at risk of thermal damage

from even occasional excursions above this level, which can regularly occur from the types of

high load operation described above, as well as occasional spark plug misfire. Since the vast

majority of the HC, CO and NOx emission control occurring under both the current standards

and the proposed Tier 2 standards relies on the proper operation of the catalyst over the life of the

vehicle, increasing catalyst temperatures to enhance sulfur reversibility risks essentially all of the

benefits of EPA’s exhaust emission control program (both current and proposed),. Therefore, it

would be imprudent to require vehicle manufacturers to design catalysts that operate at

temperatures high enough to improve the reversibility of sulfur effects and also meet the

proposed Tier 2 standards in-use. 

Moving to the variation in air-fuel ratio, manufacturers have significantly enhanced their

engines’ and computers’ abilities over the past few years specifically to avoid large swings in

rich and lean operations. This ability to maintain tight control of the air-fuel ratio has increased

catalyst efficiency significantly in the process. Designing the vehicle to have alternating richlean operation may improve the reversibility of sulfur effects, but would reduce catalyst
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-6

efficiency and potentially prevent the achievement of both current and proposed Tier 2 exhaust

emissions standards. As was the case with increasing catalyst temperature, it would be counterproductive to reverse this progress in overall emission control just to enhance the sulfur

reversibility of catalyst systems. 

Thus, the two changes in emission control design, hotter catalyst temperatures and

variable air-fuel ratios both run counter to other design criteria aimed at achieving stringent

emission standards in-use. Therefore, EPA believes that sulfur reversibility should be evaluated

with the catalyst temperatures and air-fuel ratio control of today’s cleanest vehicles, considering

the impact of the future SFTP standards. The next section will do this by evaluating the available

sulfur reversibility data on such vehicles.

C. Results of Sulfur Reversibility Test Programs

EPA has received data from three test programs which evaluate the reversibility of

sulfur’s impact on vehicle emissions. These three programs are summarized in the following

three sections. A fourth section summarizes other test data received, as well as describing some

EPA testing which is underway.

1. Coordinating Research Council (CRC) Sulfur Reversibility Program

The CRC sulfur reversibility program evaluated six 1997 LEV LDV models that were

part of their original sulfur sensitivity program. The following table lists the six vehicles used in

the program.

Table B-1. CRC Test Vehicles

Vehicle Number of Cylinders Engine Displacement

Ford Taurus 6 3.0L

Ford Escort 4 2.0L

Honda Civic 4 1.6L

Toyota Camry 4 2.2L

Nissan Sentra 4 1.6L

Suzuki Metro 4 1.3L

All six vehicles were equipped with 100K mile bench aged catalysts and oxygen sensors. 
Appendix B: Irreversibility of Sulfur's Emission Impact

B-7

Testing was performed in two phases - I and II. Phase I consisted of three FTP tests (with a

single LA4 cycle run in between) with an initial baseline fuel containing 30 ppm sulfur. Three

additional FTP tests (again with the single LA4 preconditioning) were run using fuel containing

600 ppm sulfur. In order to evaluate the reversibility of the effects of the higher 600 ppm sulfur

from the catalyst surface of the six vehicles, all of the vehicles ran eight FTP tests using an LA4

test just prior to each FTP as a sulfur “purge” cycle. The LA4 cycle was chosen as a purge cycle

because of its general representativeness of city driving. Reversibility was defined as the ratio of

1) the difference between the average of emissions with high sulfur fuel and the average of

emissions from the subsequent eight tests using low sulfur fuel to 2) the difference between the

average of the high sulfur results with the average of the initial baseline low sulfur results. Total

mileage accumulation during purge testing was roughly 250 miles. In other words, after 250

miles of operation, emission performance stabilized and no further purging of sulfur from the

catalyst surface occurred.

Phase II consisted of three FTP tests with fuel containing 600 ppm sulfur followed by two

FTP tests with 30 ppm sulfur fuel with an LA4 purge cycle prior to each FTP. Six FTP tests

were then performed with a US06 cycle prior to each FTP as a sulfur purge cycle. The US06

cycle was chosen as a purge cycle to simulate aggressive high speed and load operation that

would encourage higher catalyst temperatures and rich A/F operation. Reversibility was

determined in the same manner as in phase I (same initial 30 ppm sulfur baseline). Total mileage

accumulation turned out to be roughly 200 miles.

The following table lists the results of the CRC sulfur reversibility test program.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

kkk API has completed a third-party review of the results of their test program (as well as the CRC test

program). See “Reversibility of Gasoline Sulfur Effects on Low Emissions Vehicles,” T.J. Truex and L.S. Caretto

for API, April 7, 1999.

B-8

Table B-2. Sulfur Reversibility: CRC Test Program (%)

NMHC NOx

Purge Cycle Purge Cycle

Vehicle

Manufac

Models LA4 US06 LA4 US06

Ford Taurus 69.0 83.0 70.0 95.0

Ford Escort 137.0 122.0 95.0 100.0

Honda Civic 94.0 99.0 96.0 97.0

Nissan Sentra 99.0 111.0 85.0 88.0

Toyota Camry 112.0 98.0 50.0 102.0

Suzuki Metro 170.0 165.0 86.0 87.0

Fleet

Estimate

97.0 108.0 84.0 95.0

The fleet estimate used for the CRC data was determined by averaging the baseline low

sulfur results, the high sulfur results and the final low sulfur results for all vehicles and

determining reversibility as discussed above. These results indicate that on average, NMHC

emissions are very reversible, regardless of purge cycle used (LA4 or US06). The Ford Taurus,

however, showed only a moderate level of reversibility for NMHC, especially with the LA4

purge cycle (69 percent). The results for NOx indicate that with the LA4 purge cycle, the

average level of reversibility is 84 percent with the Toyota Camry having reversibility as low as

50 percent. When using the US06 purge cycle, NOx emissions were far more reversible with an

average reversibility of 95 percent. The Nissan Sentra and Suzuki Metro showed almost the

exact same level of reversibility with both purge cycles.

2. American Petroleum Institute Sulfur Reversibility Program

The API programkkk evaluated a total of seven vehicles, four were 1998 LEV LDVs, one

was a 1998 ULEV LDV, and the other two were Tier 1 vehicles (LDV and LDT1). All of the

vehicles had been driven for 6,000-10,000 miles, except for the S10 pickup, which had 50,000
Appendix B: Irreversibility of Sulfur's Emission Impact

B-9

miles on it. API replaced the catalysts of all of the vehicles. Reversibility of the sulfur effect

was measured for all of these vehicles with their new catalysts thermally aged to the equivalent

of 4,000 miles (i.e., low mileage catalysts) and after only a very short exposure to high sulfur

fuel. Four of these vehicles were also tested with 1,000 miles of road aging on high sulfur fuel

(540 ppm) prior to reversibility testing. 

The sulfur reversibility of two vehicles was also tested after short term exposure to high

sulfur fuel with their catalysts thermally aged to represent 100,000 miles of driving. (However,

the oxygen sensors were not aged.) Finally, one vehicle was tested after 2,000 miles of driving

using high sulfur fuel with its catalysts thermally aged to represent 100,000 miles of driving. 

All of the vehicles were tested in a sequence similar to the one used by CRC. The

program started with testing using low sulfur fuel (40 ppm). This was followed by testing with a

high sulfur fuel (540 ppm). Then, the fuel was switched back to the low sulfur fuel and the

vehicle operated over either an LA4 or US06 cycle, which was used as a sulfur purge cycle. 

Following this purge cycle, emissions were again measured with the FTP. 

One major difference between the API and CRC programs was that API generally only

performed two tests at each sulfur level, including the purge cycle phase. Thus, statistically

speaking, the API program is weaker than the CRC program. Examination of individual

emission test results shows significant variability occurred. 

Table B-3 lists the vehicle tested in the API program.

Table B-3. API Test Vehicles

Vehicle Number of Cylinders Engine Displacement

1998 Ford Taurus (LEV) 6 3.0L

1998 Honda Accord (ULEV) 6 2.3L

1998 Toyota Avalon (LEV) 6 3.0L

1998 Nissan Altima (LEV) 4 2.4L

1998 Ford Grand Marquis (LEV) 8 4.6L

1998 Ford Town Car (Tier1) 8 4.6L

1997 Chevrolet S-10 (Tier1) 6 4.3L

 API screened specific vehicles for this test program by performing emission testing over both

the FTP and the US06 cycle. API believed that these vehicles were nearly in compliance with

future SFTP standards and therefore representative of 2000 and later emission control
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-10

technology. This will be discussed further below.

Table B-4 shows the sulfur reversibility emission results for all of the vehicles when

tested with low mileage (4,000 mile) catalysts. 

Table B-4. Sulfur Reversibility: API Test Program 

Low Mileage Catalysts, Short-Term Exposure to High Sulfur Fuel (%)

NMHC NOx

Purge Cycle Purge Cycle

Vehicle

Manufac

Models LA4 US06 LA4 US06

Ford 98 Taurus 100.0 n/a * 96.2 n/a

Honda 98 Accord (ULEV) 23.1 100.0 78.3 97.8

Toyota 98 Avalon 71.4 42.9 52.1 106.3

Nissan 98 Altima 800 n/a* 125.0 n/a

Ford 98 Gr. Mar 103.2 80.6 84.5 71.8

Ford 98 Town Car (Tier1) 46.3 60.0 95.0 104.4

Chevrolet 97 S-10 (Tier1) 66.7 154.2 70.3 117.4

Fleet Estimate 67.9 45.9 83.3 92.3

* Vehicle not tested with US06 purge cycle.

The most obvious difference between the reversibilities measured by API and those found

by CRC is that API’s average NMHC reversibility rate when using the LA4 as a purge cycle is 68

percent, while CRC’s average NMHC reversibility rate shows nearly ful reversible at 97 percent. 

The measured NOx reversibilities (with the LA4 purge cycle) were almost identical in the two

programs, 83 percent for API compared to 84 percent for CRC. 

API found much higher reversibility using the US06 cycle as a purge cycle for NOx (92.3

percent). However, the opposite was true for NMHC (45.9 percent). This 45.9 percent

reversibility is considerably lower than that found in the CRC program, where NMHC emissions

were essentially fully reversible after purging with the US06 cycle. 

Another difference between the API and CRC test results is the great deal of disparity

between the reversibilities measured for individual vehicles in the API program. Some vehicles

were highly reversible while others were not. The CRC results appear to be more consistent
Appendix B: Irreversibility of Sulfur's Emission Impact

B-11

from vehicle-to-vehicle. This could be a result of the fact that CRC performed eight purge/FTP

combinations with low sulfur fuel after exposure to high sulfur fuel, compared to API, which

only performed two purge/FTP combinations. The CRC data showed that emissions after the

switch back to low sulfur fuel fluctuated up and down before reaching a more consistent level

during the eight tests. It is also possible that API simply experienced greater test-to-test

variability, or that the vehicles in the API program simply differed more in their inherent

reversibility.

Table B-5 shows measured reversibility for vehicles with low mileage catalysts that were

operated on high sulfur fuel (540 ppm) for 1,000 miles on the road. Four vehicles were evaluated

in this manner. The Taurus was tested with the LA4 purge cycle, but not the US06, while the

Accord, Avalon, and Grand Marquis all were tested with the US06 purge cycle but not the LA4. 

As with the low mileage catalyst data, there is a significant amount of disparity between vehicles,

especially for NMHC reversibility with the US06 cycle. Reversibility of NOx emissions with the

US06 cycle, however, are consistent and indicate that the sulfur effect is almost fully reversible

with the US06 cycle. The Taurus with only short term exposure to high sulfur fuel was 100

percent reversible with the LA4 purge cycle for NMHC, but only 67.9 percent reversible with the

LA4 cycle after road aging. Reversibility of NOX emissions from the Taurus was nearly

complete for both short term and longer term exposure to high sulfur fuel. 

Table B-5. Sulfur Reversibility: API Test Program 

Low Mileage Catalysts, 1,000 Mile Exposure to High Sulfur Fuel (%)

1,000 Mile Exposure Short-Term Exposure

NMHC NOx NMHC NOx

Purge Cycle Purge Cycle Purge Cycle Purge cycle

Models LA4 US06 LA4 US06 LA4 US06 LA4 US06

98 Taurus 67.5 102.5 97.6 169.0 100.0 n/a * 96.2 n/a

98 Accord (ULEV) n/a 100.0 n/a 94.5 23.1 100.0 78.3 97.8

98 Avalon n/a 75.0 n/a 101.4 71.4 42.9 52.1 106.3

98 Grand Marquis n/a 45.5 n/a 101.9 103.2 80.6 84.5 71.8

Fleet Estimate 67.5 88.0 97.6 106.5 94.0 69.0 77.7 88.4

Table B-7 shows measured reversibility for vehicles with catalysts bench aged to

represent 100,000 mile of driving. Only two vehicles were tested with this configuration - the

Taurus and the Altima. Due to problems with the fuel tank on the original Altima used in the

program, a second Altima was procured and tested with a 100K catalyst system. Reversibility of
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-12

the Altima’s emissions was measured after both short-term exposure to high sulfur fuel, as well

as after 2,000 miles of highway driving with high sulfur fuel. This was the only vehicle in the

API program that had both a 100,000 mile catalyst and extended road aging with high sulfur

fuel. It was also the only vehicle with 2,000 miles of driving with high sulfur fuel instead of

1,000 like the other four vehicles with more extended use with high sulfur fuel. 

Table B-6. Sulfur Reversibility: API with 100K Aged Catalysts Test Program (%)

NMHC NOx

Purge Cycle Purge Cycle

Models LA4 US06 LA4 US06

Short-term Exposure to High Sulfur Fuel

98 Taurus 207.0 107.0 88.7 85.4

98 Altima 84.9 102.7 78.9 89.2

Fleet estimate 120.0 104.0 87.3 87.3

2,000 Mile Exposure to High Sulfur Fuel 

98 Altima n/a 115.1 n/a 93.9

The Taurus showed very similar levels of NMHC emission reversibility (after the LA4

purge cycle) with both low mileage and high mileage catalysts (essentially fully reversible in

both cases). NOx emission reversibility dropped from 96.2 percent with the low mileage catalyst

to 88.7 percent with the 100,000 mile catalyst. NOx emission reversibility did not improve after

purging with US06 cycles. 

The first Altima tested, which had a 4000 mile catalyst, was fully reversibility for both

NMHC and NOx emissions with the LA4 purge cycle. The second Altima, which had a 100,000

mile catalyst showed less reversibility, only 84.9 percent for NMHC emissions and 78.9 percent

for NOx emissions. Both NMHC and NOx emission reversibility improved with purging with

the US06 cycle, though NOx emissions were still not fully reversible. 

The second Altima showed similar NMHC and NOx reversibility with both short-term

and long-term exposure to high sulfur fuel with the US06 purge cycle. The second Altima was

not tested with the LA4 purge cycle. 

While the focus of the API test program was reversibility, the fact both short and longer

term exposures to high sulfur fuel were evaluated also allows the comparison of sulfur sensitivity

under these two conditions. Table B-7 presents the FTP emissions on both low and high sulfur
Appendix B: Irreversibility of Sulfur's Emission Impact

B-13

fuel, the latter after both very short term exposure to high sulfur levels and 1,000-2,000 miles of

driving on high sulfur fuel. All five vehicles so tested showed greater NOx emission increases

after exposure to high sulfur fuel for 1,000-2,000 miles than occurred after short term exposure.

NMHC emissions, on the other hand, showed essentially the same sensitivity to sulfur after either

short or longer term exposure. The increased NOx emission sensitivity with extended mileage is

a concern, as the sulfur sensitivity being projected for current and future vehicles was derived

from testing which included only short term exposure to high sulfur fuel. The API data indicates

that the effect of sulfur on NOx emissions may be 30-50 percent greater than is currently being

projected. EPA plans to investigate this further in the future.

Table B-7. Sulfur Sensitivity: API Test Program 

Low Mileage Catalysts, Short-Term Exposure to High Sulfur Fuel (g/mi)

NMHC NOx

FTP Test

Sulfur Level

30 ppm 540 ppm 540 ppm 30 ppm 540 ppm 540 ppm

Sulfur

Exposure

--- Short-term 1,000 Mile ---- Short-term 1,000 Mile

Vehicle Low Mileage Catalysts

Taurus 0.033 0.051 0.073 0.075 0.101 0.117

Accord 0.029 0.036 0.041 0.100 0.164 0.245

Avalon 0.040 0.058 0.060 0.068 0.130 0.143

Gr. Marq. 0.044 0.075 0.055 0.040 0.143 0.152

Average 0.037 0.055 0.057 0.071 0.135 0.164

100,000 Mile Catalysts

Altima 0.041 0.059 0.057 0.061 0.112 0.132

3. Johnson Matthey Sulfur Reversibility Program

Johnson Matthey (JM), a catalyst manufacturer, conducted a test program to evaluate if

long term exposure to high sulfur fuel damaged catalysts, whether the damage was reversible

when the system was run on low sulfur fuel, and to determine whether exposure of catalysts to

higher temperatures with low sulfur fuel reversed the damage. Four catalyst designs: Palladium

(Pd), Pd/Rhodium (Rh), Platinum (Pt)/Rh, and Pt/Pd/Rh, were bench aged for 45 hours

approximately equal to 50K miles. There were two sets of catalysts. Set A was aged using 87

ppm sulfur, while set B was aged using 735 ppm. Set A was always used as the baseline test. 
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-14

Set B was used to measure high sulfur results (735 ppm) and the consequent low sulfur results. 

A single vehicle was used for all of the testing - a 1990 Tier 0 Mitsubishi Galant. Each catalyst

was installed on the vehicle and then evaluated. Each catalyst was located in a front underbody

position. Sulfur purging with the US06 cycle was not evaluated, only the LA4 purge cycle.

After evaluating reversibility performance of each catalyst to exposure of low sulfur fuel,

JM attempted to demonstrate the effect prolonged exposure to high catalyst temperatures would

have on sulfur reversibility, since most of the scientific literature has suggested that exposing the

catalyst system to temperatures over 700/ C should facilitate reversibility. Each catalyst was run

over a steady-state sulfur recovery cycle which involved an A/F ratio (AFR) oscillation of

stoichiometry +/- 0.5 AFR @ 0.10 Hz (5 seconds rich/5 seconds lean) and a catalyst bed

temperature of 700/ C. This procedure was followed by a cycle at 800/ C and then a final cycle

at 900/ C. What JM found was that according to their results, sulfur is highly irreversible even

when the catalyst is exposed for five straight hours to temperatures of 700/ C, 800/ C, and 900/

C. 

Table B-8 lists the results of JM’s sulfur reversibility program. The fleet estimate is also

a simple arithmetic average of the data. It should be noted that all of the catalysts had very poor

reversibility when only switching back to low sulfur fuel. As the catalysts were then exposed to

increasing temperature, the results became mixed - some catalysts improving, while others

deteriorated. For NMHC, the Pt/Rh catalyst appears to be the only catalyst that showed more

reversibility in response to increased temperatures. Curiously, most of the catalysts seemed to

respond best to the 700/ C and 800/ C temperatures and poorly to the highest temperature (900/

C). For NOx, the results were even poorer. For example, the Pd/Rh catalyst never experienced a

NOx sulfur reversibility rate above 18 percent. In fact, most of the time it had negative

reversibility rates, meaning once the catalyst was re-exposed to low sulfur fuel after having been

operated on high sulfur fuel, the low sulfur emission results were higher than the high sulfur

results.
Appendix B: Irreversibility of Sulfur's Emission Impact

B-15

Table B-8. Sulfur Reversibility: Johnson Matthey Test Program (LA4 Purge Cycle) (%)

Catalyst

NMHC NOx

Sulfur Purging Temperature

None 700/ C 800/ C 900/ C None 700/ C 800/ C 900/ C

Pd 50.0 50.0 66.0 17.0 44.0 75.0 88.0 69.0

Pd/Rh 30.0 30.0 20.0 10.0 -5.0 18.0 -50.0 -33.0

Pt/Rh 50.0 92.0 92.0 83.0 32.0 32.0 32.0 32.0

Pt/Pd/Rh 38.0 85.0 46.0 54.0 47.0 65.0 -35.0 47.0

Fleet

Estimate

42.0 64.3 56.0 41.0 29.5 47.5 8.8 28.8

4. Other Testing

Honda has suggested that in order for complete sulfur adsorption onto the catalyst

surface, catalyst temperatures must be below 500/ C. Honda believes that the cycles that have

been used in the various sulfur test programs to adhere the sulfur to the catalyst surface have

been inadequate. They believe catalyst temperatures over the FTP or LA4 test have generally

been exceeding 500/ C at some point or another during the cycle. They proposed a conditioning

cycle that consisted of an extended 35 mph cruise making sure the catalyst temperature does not

exceed 450/ C - 500/ C. Full sulfur adsorption is determined by monitoring feedgas SO2 and

exhaust SO2 until they are the same. Honda found that when using their conditioning cycle,

NMHC emissions were 20 percent more irreversible than when using the FTP or LA4 for sulfur

conditioning. NOx emissions were 19 percent more irreversible.

As a result of Honda’s information, the 1K road aging results from the API program, and

the apparent effect of sulfur aging on the JM results, we have undertaken our own EPA sulfur

reversibility evaluation program. The primary focus of our program is to determine the effect

road aging has on sulfur adsorption to the catalyst and the subsequent removal or reversal of the

sulfur. At this time, testing is still underway and we are just about to start the road aging. 

Although this data will not be available for the NPRM, it will be completed in time for the final

rule.

D. Criteria for Evaluating Sulfur Reversibility Data

Projecting the degree of sulfur irreversibility for various vehicles types under

representative in-use conditions is difficult due to inadequacies in essentially all of the available

data. As mentioned in the previous section, the sulfur reversibility testing would ideally have
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-16

used vehicles designed to meet a range of FTP and SFTP standards, thermally aged catalyst

systems prior to testing, exposed these systems to high sulfur fuel for a few thousand miles of

typical driving, and used representative driving cycles to purge sulfur between emission tests. 

While many of the vehicles tested had thermally aged catalyst systems, none were

designed to meet SFTP standards. API tested the vehicles in their test program over the US06

cycle to assess the degree to which they might already be in compliance with future SFTP

standards. The results showed that two out of the eight (including the second Altima) vehicles

were below the 0.14 g/mi US06 NMHC+NOx standard for LEVs and ULEVs, while half of the

vehicles were below the 8.0 g/mi US06 CO standard. However, only one vehicle met the

NMHC+NOx standard with any significant margin of safety. Thus, this screening data does not

support the contention that these vehicles were essentially in compliance with the SFTP

standards. Also, API did not measure emissions over the SC03 cycle, which simulates emissions

with the air conditioning system turned on and which is also a part of the SFTP requirement. 

Thus, there is no evidence that these vehicles were designed to meet non-US06 related SFTP

requirements. 

In addition to US06 emission data, API also measured each vehicle’s air-fuel ratio on a

second-by- second basis over both the FTP and US06 cycles. The standard deviation of the airfuel ratio over the FTP averaged 0.35, while that over the US06 cycle averaged 1.03. Thus,

variability in air-fuel mixture control was nearly three time as great over the US06 cycle as over

the FTP. Tight air-fuel mixture control is essential to maintaining low engine-out emissions and

high catalyst over the entire emission test and during in-use driving. The first step a

manufacturer will take in order to comply with the SFTP requirements will be to modify the

engine calibration to achieve the best level of air-fuel mixture control possible. The fact that

these vehicles showed much greater variability over the US06 cycle indicates that manufacturers

had not yet begun the process of making these vehicles SFTP-compliant. Previous studies have

shown that wide swings in air-fuel ratio reduce the impact of sulfur on catalyst efficiency and

emissions relative to minor swings in air-fuel ratio. Thus, this criterion appears to be of critical

importance in projecting the reversibility of SFTP-compliant LEVs and Tier 2 vehicles.

Moving to exposure to high sulfur fuel, while a few vehicles were operated on high sulfur

fuel for a thousand miles or more, only two vehicles had catalysts which were thermally aged to

more than a few thousand miles. Also, the driving cycles used to purge sulfur after switching

from high to low sulfur fuel were not any of the driving cycles developed to be fully

“representative” of recent driving patterns. The result of these shortcomings is that considerable

technical judgment has to be used to project the degree of sulfur irreversibility which would

occur for both current and future vehicles. 

EPA established a number of criteria for evaluating the available data in order to project

likely levels of in-use sulfur reversibility. The first criterion is to focus exclusively on testing of

vehicles with thermally aged catalysts. We believe that this is essential, because catalysts prior to

thermal aging contain far more surface area and oxygen storage capacity than is needed to meet

low emission levels. It is possible for sulfur to deactivate a considerable portion of the surface
Appendix B: Irreversibility of Sulfur's Emission Impact

lll All but one of the segments were taken from EPA’s REP05 cycle, which represents the aggressive

portion of in-use driving. The remaining segment was taken from ARB’s HL07 cycle, which was intended to

represent aggressive in-use driving in California.

B-17

area and oxygen storage with minor impacts on overall catalyst performance. This would not be

representative of the impact of sulfur on real-world emissions over most of the vehicle’s life. 

The second criterion is to give priority to testing where the catalyst has been exposed to

high sulfur for a considerable period of time. Long term exposure would be the predominant

mode of exposure under a regional sulfur program such as that proposed by API. With the high

sulfur region being potentially quite large geographically, most vehicles entering it are likely to

be there awhile. Simply crossing the region that would have 300 ppm average sulfur levels under

the regional program proposed by API represents roughly 1000 or more miles. 

Under any sulfur control program, sulfur levels will vary from batch to batch of gasoline

produced by refineries. For example, under the proposal, sulfur could easily vary from less than

10 ppm to 80 ppm in-use after 2008. Under this scenario, exposure to high sulfur fuel could be

one tankful at a time, or could continue for several tankfuls, depending on the production

patterns at refineries and the purchasing patterns of individuals. Still, even one tankful of fuel

typically lasts 300 miles or more. This is far more than the 10-20 miles of exposure to high

sulfur fuel which occurred in most of the testing summarized in the previous section. 

Development of the subsequent criteria are more complex, because the issues of SFTP

compliance and representative driving cycles are not as easily addressed. None of the vehicles

tested were certified to either the Tier 1 or LEV SFTP emission standards. While some of the

vehicles may have SFTP emissions close to or even below the applicable SFTP standards, it is

still likely that manufacturers would change their engine calibrations to enhance compliance with

these emission standards in-use. This is confirmed by the API measurements of air-fuel ratio

over the FTP and US06 cycles. Thus, none of the test vehicles can be assured of having SFTPcompliant engine calibrations. 

Likewise, only the LA4 and US06 driving cycles were used in the test programs

performed to date. The LA4 cycle was derived from driving patterns in Los Angeles in the early

1970's. However, due to physical limitations in the dynamometers in use at the time, all

accelerations greater than 3.3 mph per second were reduced to this level. This, plus the fact that

driving has become more aggressive over the past 25 years makes the LA4 cycle less aggressive

on average than today’s typical driving. However, the LA4 cycle does include driving as fast as

58 mph, so it is also not representative of light, city driving. 

The US06 cycle is made up of real-world driving segments.lll However, the concentration

of aggressive driving is much higher than occurs in the real world. Therefore, the length of time

that the catalyst is exposed to both high temperatures and rich conditions is much higher than

would occur in the real world. This could easily remove more sulfur than would be removed in-
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-18

use even during aggressive driving.

As mentioned in Section B, meeting the SFTP standards will requiring the tightening of

air-fuel mixture control and reduce the amount of rich operation in-use during aggressive

driving. Both of these changes directionally reduce sulfur removal. This primarily affects the sulfur

reversibility testing after preconditioning with the US06 cycle. In particular, it casts considerable

doubt in the applicability of measured reversibilities using the US06 purge cycle to SFTPcompliant vehicles. Therefore, the measured levels of sulfur reversibility after operation on

US06 cycles will not be used to project the in-use levels of sulfur reversibility for SFTPcompliant vehicles.

For pre-SFTP vehicles, the US06 cycle still likely over-estimates the amount of sulfur

reversibility which would occur in-use, due to its unrepresentative concentration of high

temperatures and rich operation. Thus, the measured levels of sulfur reversibility after operation

on both LA4 and US06 cycles will be used to project the in-use levels of sulfur reversibility for

pre-SFTP vehicles.

In summary, the projections developed in the following section will:

1. Only use data from vehicles with aged catalyst systems,

2. Emphasize data from vehicles whose catalysts experienced substantial use with high 

sulfur fuel,

3. For projections regarding SFTP-compliant vehicles, only use data where the sulfur was 

purged using the LA4 cycle, and 

4. For projections regarding pre-SFTP vehicles, use data where the sulfur was purged using 

either the LA4 or US06 cycle.

E. Projected Levels of Sulfur Irreversibility In-Use

Applying the first criterion developed in Section D. results in the retention of the CRC

and JM data (Tables B-2 and B-8), as that testing was performed on vehicles with thermally aged

catalysts. It also allows the use of the API data contained in Table B-6. However, the remaining

API data apply to vehicles with low mileage catalysts, which are not sufficiently representative of

in-use operation. Therefore, EPA’s current conclusions about reversibility of sulfur effects do

not rely on the API data except that in Table B-6.

Of these data, only the JM data and the second Altima tested by API also involved

extensive use of high sulfur fuel prior to the measurement of reversibility. JM simulated the use

of high sulfur fuel through oven aging, so it may not be fully representative as actual vehicle

driving on the road. However, oven aging to simulate on-road thermal degradation is well

established, so the same for sulfur aging should be equally acceptable. 

API actually drove the second Altima on the road for 2,000 miles with high sulfur fuel. 
Appendix B: Irreversibility of Sulfur's Emission Impact

B-19

However, the type of driving actually performed is not known, raising some uncertainty about its

representativeness. More importantly, API only measured reversibility with this vehicle after

operating the vehicle with low sulfur fuel over the US06 cycle. This took advantage of the

vehicle’s widely varying air-fuel ratio over this test cycle and likely purged more sulfur off of the

catalyst than would occur with an SFTP-compliant vehicle. JM, on the other hand, simulated the

type of air-fuel ratio control which would be indicative of an SFTP-compliant vehicle with it

oven aging and purging. Thus, overall, the JM data should receive the greatest weight in this

analysis. Table B-9 summarizes the results of these three test programs.

Table B-9. Sulfur Reversibility: Summary of Relevant Test Programs (%)

NMHC NOx

Purge Cycle Purge Cycle

Models LA4 US06 LA4 US06

CRC (6 vehicles) 97% Complete 84% 95%

JM (4 catalysts) 4-64% 41-64% 30-48% 9-48%

API (2-3 vehicles) Compete Complete 87% 89%

The JM results are shown as a range, as it is difficult at this time to average the results at

the various sulfur purging temperatures. However, the JM data were placed into the two purge

cycle categories by assuming that the test results with no oven-based sulfur purging and the

purging at 700/ C were similar to LA4 driving, while the results with oven purging at 700-900/ C

were similar to US06 driving. Another relevant factor is that the results of the API testing are the

most erratic, primarily due to the relatively small number of replicate tests. 

As can be seen, there is considerable variation in the measured levels of sulfur

reversibility in the above test data. In particular, the JM data show much less reversibility and

should be given the most weight because it was the only test program thus far to include catalysts

aged both thermally and with high sulfur fuel. Therefore, the overall projection of reversibility

primarily hinges on the relative weight given to the JM data. In any event, there will be

considerable uncertainty in any summary projection developed from these results, because of the

limitations in the test methods described above. 

For pre-SFTP vehicles, we decided to utilize reversibility measurements using both the

LA4 and US06 driving cycles. Since the CRC and API vehicles are pre-SFTP vehicles, these

two test programs were given considerable weight along with those of JM. For these vehicles,

we project that NMHC emissions are fully reversible, while NOx emissions are only 85 percent

reversible. For SFTP-compliant vehicles, we decided above to utilize reversibility measurements

using only the LA4 driving cycle. We also gave additional weight to the JM data, as the vehicles
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

B-20

tested in the CRC and API programs were not SFTP-compliant. While the JM test vehicle was

also not SFTP-compliant, the purging of the sulfur from the catalyst was conducted in a way that

was more consistent with that of an SFTP-compliant vehicle. Given this, we project that both

NMHC and NOx emissions from SFTP-compliant vehicles, will be 50 percent reversible. Based

on the average results of the three test programs, we could have projected a higher reversibility

for NMHC emissions and a lower reversibility for NOx emissions. However, examining the

results for the individual vehicles and catalysts and given the fact that none of the vehicles tested

were SFTP-compliant, we decided to project a single level of reversibility for both pollutants.
Appendix B: Irreversibility of Sulfur's Emission Impact

B-21

1. “Development of Light-Duty Emission Inventory Estimates in the Notice of Proposed 

Rulemaking for Tier 2 and Sulfur Standards,” U.S. EPA, February 1999.

2. “EPA Staff Paper on Gasoline Sulfur Issues,” U.S. EPA, May 1998, EPA420-R-98-005.

3. EPA Report Number M6.FUL.001

4. “EPA Staff Paper on Gasoline Sulfur Issues,” U.S. EPA, May 1998, EPA420-R-98-005.

Appendix B. References
Appendix C: One-hour and Eight-hour County Design Values

C-1

Appendix C: One-Hour and Eight-Hour County Design Values

The tables contained in this appendix are as follows:

Table C-1. Areas formally designated as nonattainment areas for ozone under the 1-hour

NAAQS, outside California, as of August 10, 1998.

Table C-2. Metropolitan areas and rural counties with 1995-1997 measured design values

exceeding the 1-hour standard.

Table C-3. Metropolitan areas and rural counties with 1995-1997 measured design values

exceeding the 8-hour standard.

Table C-4. Metropolitan areas and rural counties with 1995-1997 measured design values

within 15% of the 8-hour standard.

Table C-5. Metropolitan areas and rural counties with design values projected to exceed the

1-hour standard in 2007 with ROTR controls but without Tier 2/Sulfur controls.

Table C-6. Metropolitan areas and rural counties with design values projected to exceed the

8-hour standard in 2007 with ROTR controls but without Tier 2/Sulfur controls.

Table C-7. Metropolitan areas and rural counties with design values projected to be less than

the 8-hour standard but within 15% or it in 2007 with ROTR controls but without

Tier 2/Sulfur controls.

Table C-8. Metropolitan areas and rural counties with design values projected to exceed the

8-hour standard in 2007 with ROTR and Tier 2/Sulfur controls.

Table C-9. Metropolitan areas and rural counties with design values projected to exceed the

8-hour standard in 2010 with ROTR controls but without Tier 2/Sulfur controls.

Table C-10. Metropolitan areas and rural counties with design values projected to exceed the

8-hour standard in 2010 with ROTR controls and Tier 2/Sulfur controls.

Table C-11. One-hour county design values (ppb) and population.

Table C-12. Eight-hour county design values (ppb) and population.

Table C-13. Metropolitan areas and rural counties with design values that exceeded the 1-hour

standard prior to ROTR controls, and were projected to meet but remain within

15% of the 1-hour standard after ROTR controls.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

C-2

Table C-1. Areas formally designated as nonattainment areas for ozone under the

1-hour NAAQS, outside California, as of August 10, 1998.1

1990 Located

Popu- in a

lation CMSA

Areas Listed Alphabetically Classification (1000) or MSA?

Atlanta, GA Serious 2,654 msa

Baltimore, MD Severe-15 2,348 msa

Baton Rouge, LA Serious 559 msa

Beaumont-Port Arthur, TX Moderate 361 msa

Birmingham, AL Marginal 751 msa

Boston-Lawrence-Worcester (E. MA), MA-NH Serious 5,505 cmsa

Chicago-Gary-Lake County, IL-IN Severe-17 7,886 cmsa

Cincinnati-Hamilton, OH-KY Moderate 1,705 cmsa

Dallas-Fort Worth, TX Serious 3,560 cmsa

Door Co, WI Marginal 26 neither

El Paso, TX Serious 592 msa

Greater Connecticut Serious 2,470 cmsa

Houston-Galveston-Brazoria, TX Severe-17 3,731 cmsa

Kent & Queen Anne's Co.s, MD Marginal 52 part

Lancaster, PA Marginal 423 msa

Louisville, KY-IN Moderate 834 msa

Manitowoc Co, WI Moderate 80 neither

Milwaukee-Racine, WI Severe-17 1,735 cmsa

Muskegon, MI Moderate 159 msa

New York-N. New Jersey-Long Island, NY-NJ-C Severe-17 17,651 cmsa

Philadelphia-Wilmington-Trenton, PA-NJ-DE-M Severe-15 6,010 cmsa

Phoenix, AZ Serious 2,092 msa

Pittsburgh-Beaver Valley, PA Moderate 2,468 cmsa

Portland, ME Moderate 441 msa

Portsmouth-Dover-Rochester, NH Serious 183 msa

Providence (All RI), RI Serious 1,003 cmsa

Springfield (Western MA), MA Serious 812 msa

St Louis, MO-IL Moderate 2,390 msa

Sunland Park, NM (New Area 1995) Marginal 8 msa

Washington, DC-MD-VA Serious 3,924 msa
Appendix C: One-hour and Eight-hour County Design Values

C-3

Table C-2. Metropolitan areas and rural counties with 1995-1997 measured design values

exceeding the 1-hour standard.

Name of metropolitan area or rural county Design

Value (ppb)

1990 Population

Manitowoc WI 126 80,421

Door WI 127 25,690

Jefferson TN 125 33,016

Mason MI 125 25,537

Kent MD 129 17,842

Sagadahoc ME 125 33,535

Iberville LA 139 31,049

La Porte IN 146 107,066

Atlanta, GA MSA 145 2,959,500

Barnstable-Yarmouth, MA MSA 131 134,954

Baton Rouge, LA MSA 131 528,261

Beaumont-Port Arthur, TX MSA 139 361,218

Birmingham, AL MSA 132 839,942

Boston-Worcester-Lawrence, MA-NH-ME-CT CMSA 138 5,455,403

Chicago-Gary-Kenosha, IL-IN-WI CMSA 129 8,239,820

Cincinnati-Hamilton, OH-KY-IN CMSA 125 1,817,569

Dallas-Fort Worth, TX CMSA 139 4,037,282

Grand Rapids-Muskegon-Holland, MI MSA 137 937,891

Hartford, CT MSA 144 1,157,585

Houma, LA MSA 127 182,842

Houston-Galveston-Brazoria, TX CMSA 189 3,731,029

Kansas City, MO-KS MSA 128 1,582,874

Lancaster, PA MSA 125 422,822

Longview-Marshall, TX MSA 139 193,801

Louisville, KY-IN MSA 125 949,012

Memphis, TN-AR-MS MSA 131 1,007,306

Milwaukee-Racine, WI CMSA 127 1,607,183

New York-Northern New Jersey-Long Island, NY-NJ-CT-PA CMSA 157 19,549,649

Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA 152 5,893,019

Pittsburgh, PA MSA 133 2,394,811

Providence-Fall River-Warwick, RI-MA MSA 133 1,134,350

St. Louis, MO-IL MSA 131 2,492,348

Springfield, MA MSA 132 587,884

Washington-Baltimore, DC-MD-VA-WV CMSA 145 6,726,395
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

C-4

Table C-3. Metropolitan areas and rural counties with 1995-1997 measured design values

exceeding the 8-hour standard.

Name of metropolitan area or rural county Design

Value (ppb)

1990 Population

Manitowoc WI 95 80,421

Kewaunee WI 93 18,878

Door WI 92 25,690

Madison VA 86 11,949

Jefferson TN 96 33,016

Chester SC 87 32,170

Franklin PA 86 121,082

Preble OH 86 40,113

Logan OH 86 42,310

Knox OH 91 47,473

Clinton OH 97 35,415

Northampton NC 86 20,798

Haywood NC 85 46,942

Granville NC 94 38,345

Caswell NC 89 20,693

Jefferson NY 88 110,943

Essex NY 86 37,152

Ste. Genevieve MO 87 16,037

Mason MI 98 25,537

Cass MI 94 49,477

Benzie MI 88 12,200

Kent MD 96 17,842

Sagadahoc ME 95 33,535

Knox ME 87 36,310

Iberville LA 96 31,049

Livingston KY 86 9,062

Hancock KY 89 7,864

La Porte IN 104 107,066

Sussex DE 93 113,229

Clay AL 86 13,252

Allentown-Bethlehem-Easton, PA MSA 95 595,081

Altoona, PA MSA 90 130,542

Atlanta, GA MSA 110 2,959,500

Augusta-Aiken, GA-SC MSA 87 415,220

Barnstable-Yarmouth, MA MSA 100 134,954

Baton Rouge, LA MSA 95 528,261

Beaumont-Port Arthur, TX MSA 93 361,218

Benton Harbor, MI MSA 98 161,378

Biloxi-Gulfport-Pascagoula, MS MSA 86 312,368
Appendix C: One-hour and Eight-hour County Design Values

Table C-3. Metropolitan areas and rural counties with 1995-1997 measured design values

exceeding the 8-hour standard.

Name of metropolitan area or rural county Design

Value (ppb)

1990 Population

C-5

Birmingham, AL MSA 95 839,942

Boston-Worcester-Lawrence, MA-NH-ME-CT CMSA 97 5,455,403

Buffalo-Niagara Falls, NY MSA 85 1,189,340

Canton-Massillon, OH MSA 88 394,106

Charlotte-Gastonia-Rock Hill, NC-SC MSA 97 1,162,140

Chattanooga, TN-GA MSA 90 424,347

Chicago-Gary-Kenosha, IL-IN-WI CMSA 96 8,239,820

Cincinnati-Hamilton, OH-KY-IN CMSA 99 1,817,569

Cleveland-Akron, OH CMSA 99 2,859,644

Columbus, OH MSA 92 1,345,450

Dallas-Fort Worth, TX CMSA 104 4,037,282

Dayton-Springfield, OH MSA 93 951,270

Detroit-Ann Arbor-Flint, MI CMSA 92 5,187,171

Dover, DE MSA 94 110,993

Elkhart-Goshen, IN MSA 90 156,198

Erie, PA MSA 87 275,572

Evansville-Henderson, IN-KY MSA 93 278,990

Fayetteville, NC MSA 87 274,713

Fort Wayne, IN MSA 90 456,281

Grand Rapids-Muskegon-Holland, MI MSA 99 937,891

Greensboro--Winston-Salem--High Point, NC MSA 89 1,050,304

Greenville, NC MSA 88 108,480

Greenville-Spartanburg-Anderson, SC MSA 88 830,539

Harrisburg-Lebanon-Carlisle, PA MSA 88 587,986

Hartford, CT MSA 101 1,157,585

Houma, LA MSA 85 182,842

Houston-Galveston-Brazoria, TX CMSA 117 3,731,029

Huntington-Ashland, WV-KY-OH MSA 88 312,529

Indianapolis, IN MSA 97 1,380,491

Jamestown, NY MSA 85 141,895

Janesville-Beloit, WI MSA 85 139,510

Johnson City-Kingsport-Bristol, TN-VA MSA 88 436,047

Johnstown, PA MSA 88 241,280

Kalamazoo-Battle Creek, MI MSA 87 429,453

Kansas City, MO-KS MSA 94 1,582,874

Knoxville, TN MSA 95 585,960

Lake Charles, LA MSA 85 168,134

Lancaster, PA MSA 96 422,822

Lexington, KY MSA 85 405,936

Lima, OH MSA 89 154,340
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-3. Metropolitan areas and rural counties with 1995-1997 measured design values

exceeding the 8-hour standard.

Name of metropolitan area or rural county Design

Value (ppb)

1990 Population

C-6

Longview-Marshall, TX MSA 91 193,801

Louisville, KY-IN MSA 92 949,012

Memphis, TN-AR-MS MSA 95 1,007,306

Milwaukee-Racine, WI CMSA 98 1,607,183

Nashville, TN MSA 99 985,026

New York-Northern New Jersey-Long Island, NY-NJ-CT-PA CMSA 108 19,549,649

Norfolk-Virginia Beach-Newport News, VA-NC MSA 87 1,444,710

Owensboro, KY MSA 87 87,189

Parkersburg-Marietta, WV-OH MSA 89 149,169

Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA 110 5,893,019

Pittsburgh, PA MSA 105 2,394,811

Portland, ME MSA 94 221,095

Providence-Fall River-Warwick, RI-MA MSA 96 1,134,350

Raleigh-Durham-Chapel Hill, NC MSA 89 858,485

Reading, PA MSA 92 336,523

Richmond-Petersburg, VA MSA 90 865,640

St. Louis, MO-IL MSA 100 2,492,348

San Antonio, TX MSA 87 1,324,749

Scranton--Wilkes-Barre--Hazleton, PA MSA 90 638,524

Sharon, PA MSA 92 121,003

Sheboygan, WI MSA 92 103,877

South Bend, IN MSA 91 247,052

Springfield, MA MSA 97 587,884

Steubenville-Weirton, OH-WV MSA 85 142,523

Terre Haute, IN MSA 88 147,585

Toledo, OH MSA 89 614,128

Tulsa, OK MSA 88 708,954

Tyler, TX MSA 89 151,309

Washington-Baltimore, DC-MD-VA-WV CMSA 107 6,726,395

Wheeling, WV-OH MSA 86 159,301

York, PA MSA 87 339,574

Youngstown-Warren, OH MSA 93 600,895
Appendix C: One-hour and Eight-hour County Design Values

C-7

Table C-4. Metropolitan areas and rural counties with 1995-1997 measured design values

within 15% of the 8-hour standard.

Name Design Value

(ppb) Pop’n.

Simpson KY 83 15,145

Yancey NC 84 15,419

Wythe VA 78 25,466

Pike KY 74 72,583

Rockingham NC 84 86,064

McLean KY 83 9,628

Person NC 84 30,180

Putnam TN 80 51,373

Monroe MO 84 9,104

Walworth WI 83 75,000

Sharkey MS 80 7,066

Macoupin IL 83 47,679

Ulster NY 82 165,304

St Mary LA 81 58,086

Hardin KY 81 89,240

Henry VA 82 56,942

Union SC 81 30,337

Humphreys TN 77 15,795

Graves KY 74 33,550

Lee MS 75 65,581

Pointe Coupee LA 83 22,540

Haywood TN 82 19,437

Lawrence PA 84 96,246

Frederick VA 84 45,723

Huron MI 82 34,951

Edmonson KY 82 10,357

Jefferson WI 80 67,783

Effingham IL 81 31,704

Grant LA 75 17,526

Hamilton NY 75 5,279

Fond Du Lac WI 79 90,083

Caroline VA 84 19,217

Darlington SC 78 61,851

Camden NC 83 5,904

Dodge WI 78 76,559

Greenbrier WV 83 34,693

Columbia WI 81 45,088

Bell KY 76 31,506

Barnwell SC 81 20,293
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-4. Metropolitan areas and rural counties with 1995-1997 measured design values

within 15% of the 8-hour standard.

Name Design Value

(ppb) Pop’n.

C-8

Hancock ME 83 46,948

Coos NH 77 34,828

Cheshire NH 74 70,121

Bennington VT 79 35,845

Adams MS 77 35,356

Albany-Schenectady-Troy, NY MSA 81 861,623

Appleton-Oshkosh-Neenah, WI MSA 81 315,121

Asheville, NC MSA 75 191,772

Austin-San Marcos, TX MSA 81 846,227

Bangor, ME MSA 73 91,629

Champaign-Urbana, IL MSA 81 173,025

Charleston-North Charleston, SC MSA 76 506,877

Charleston, WV MSA 81 250,454

Clarksville-Hopkinsville, TN-KY MSA 80 169,439

Columbia, SC MSA 83 453,932

Columbus, GA-AL MSA 83 260,862

Corpus Christi, TX MSA 83 349,894

Davenport-Moline-Rock Island, IA-IL MSA 78 350,855

Decatur, AL MSA 81 131,556

Decatur, IL MSA 83 117,206

Elmira, NY MSA 73 95,195

Green Bay, WI MSA 82 194,594

Hickory-Morganton-Lenoir, NC MSA 79 292,405

Huntsville, AL MSA 84 293,047

Jackson, MS MSA 77 395,396

Jacksonville, FL MSA 81 906,727

Lafayette, LA MSA 84 345,053

Lakeland-Winter Haven, FL MSA 74 405,382

Lansing-East Lansing, MI MSA 83 432,684

Little Rock-North Little Rock, AR MSA 81 513,026

Madison, WI MSA 79 367,085

Minneapolis-St. Paul, MN-WI MSA 81 2,538,776

Mobile, AL MSA 79 476,923

Monroe, LA MSA 77 142,191

Montgomery, AL MSA 77 292,517

New Orleans, LA MSA 84 1,285,262

Oklahoma City, OK MSA 83 958,839

Orlando, FL MSA 78 1,224,844

Pensacola, FL MSA 84 344,406

Peoria-Pekin, IL MSA 80 339,172
Appendix C: One-hour and Eight-hour County Design Values

Table C-4. Metropolitan areas and rural counties with 1995-1997 measured design values

within 15% of the 8-hour standard.

Name Design Value

(ppb) Pop’n.

C-9

Pittsfield, MA MSA 77 88,695

Roanoke, VA MSA 78 224,592

Rochester, NY MSA 83 1,062,470

Rockford, IL MSA 79 329,676

Rocky Mount, NC MSA 84 133,369

Sarasota-Bradenton, FL MSA 76 489,483

Savannah, GA MSA 72 257,899

Shreveport-Bossier City, LA MSA 82 376,330

Springfield, IL MSA 76 189,550

Springfield, MO MSA 78 264,346

Syracuse, NY MSA 79 742,237

Tampa-St. Petersburg-Clearwater, FL MSA 82 2,067,959

Utica-Rome, NY MSA 72 316,645

Victoria, TX MSA 78 74,361

Wichita, KS MSA 74 485,270

Williamsport, PA MSA 73 118,710

Wilmington, NC MSA 79 171,269

sum 26,226,237

MA count 52

MA sum 24,306,857

Cnty count 44

Cnty sum 1,919,380
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

C-10

Table C-5. Metropolitan areas and rural counties with design values projected to exceed the 1-

hour standard in 2007 with ROTR controls but without Tier 2/Sulfur controls.

Name Design Value

(ppb) Pop’n.

Iberville LA 132 31,049

La Porte IN 131 107,066

Beaumont-Port Arthur, TX MSA 129 361,218

Hartford, CT MSA 125 1,157,585

Houston-Galveston-Brazoria, TX CMSA 175 3,731,029

Longview-Marshall, TX MSA 129 193,801

Memphis, TN-AR-MS MSA 125 1,007,306

New York-Northern New Jersey-Long Island, NY-NJ-CT-PA

CMSA

136 19,549,649

Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA 126 5,893,019

Washington-Baltimore, DC-MD-VA-WV CMSA 126 6,726,395

sum 38,758,117

MA count 8

MA sum 38,620,002

Cnty count 2

Cnty sum 138,115
Appendix C: One-hour and Eight-hour County Design Values

C-11

Table C-6. Metropolitan areas and rural counties with design values projected to exceed the 8-

hour standard in 2007 with ROTR controls but without Tier 2/Sulfur controls.

Name Design Value

(ppb) Pop’n.

Manitowoc WI 85 80,421

Mason MI 88 25,537

Iberville LA 91 31,049

La Porte IN 93 107,066

Atlanta, GA MSA 95 2,959,500

Barnstable-Yarmouth, MA MSA 89 134,954

Baton Rouge, LA MSA 88 528,261

Beaumont-Port Arthur, TX MSA 86 361,218

Benton Harbor, MI MSA 86 161,378

Biloxi-Gulfport-Pascagoula, MS MSA 88 312,368

Boston-Worcester-Lawrence, MA-NH-ME-CT CMSA 86 5,455,403

Charlotte-Gastonia-Rock Hill, NC-SC MSA 94 1,162,140

Chicago-Gary-Kenosha, IL-IN-WI CMSA 90 8,239,820

Cincinnati-Hamilton, OH-KY-IN CMSA 87 1,817,569

Cleveland-Akron, OH CMSA 86 2,859,644

Dallas-Fort Worth, TX CMSA 94 4,037,282

Grand Rapids-Muskegon-Holland, MI MSA 89 937,891

Hartford, CT MSA 88 1,157,585

Houston-Galveston-Brazoria, TX CMSA 109 3,731,029

Kansas City, MO-KS MSA 90 1,582,874

Knoxville, TN MSA 85 585,960

Memphis, TN-AR-MS MSA 90 1,007,306

Milwaukee-Racine, WI CMSA 94 1,607,183

Nashville, TN MSA 88 985,026

New York-Northern New Jersey-Long Island, NY-NJ-CT-PA CMSA 97 19,549,649

Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA 94 5,893,019

Pittsburgh, PA MSA 95 2,394,811

St. Louis, MO-IL MSA 90 2,492,348

San Antonio, TX MSA 85 1,324,749

Springfield, MA MSA 87 587,884

Tulsa, OK MSA 87 708,954

Washington-Baltimore, DC-MD-VA-WV CMSA 93 6,726,395

sum 79,546,273

MA count 28

MA sum 79,302,200

Cnty count 4

Cnty sum 244,073
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

C-12

Table C-7. Metropolitan areas and rural counties with design values projected to be less than

the 8-hour standard but within 15% or it in 2007 with ROTR controls but without Tier 2/Sulfur

controls.

Name Design Value

(ppb) Pop’n.

Kewaunee WI 84 18878

Door WI 83 25690

Jefferson TN 80 33016

Chester SC 78 32170

Logan OH 73 42310

Knox OH 77 47473

Clinton OH 80 35415

Haywood NC 75 46942

Granville NC 83 38345

Caswell NC 74 20693

Jefferson NY 79 110943

Essex NY 78 37152

Ste. Genevieve MO 77 16037

Cass MI 83 49477

Benzie MI 79 12200

Kent MD 82 17842

Sagadahoc ME 82 33535

Knox ME 76 36310

Livingston KY 72 9062

Sussex DE 81 113229

Clay AL 72 13252

Simpson KY 72 15145

Rockingham NC 73 86064

Monroe MO 78 9104

Walworth WI 77 75000

Sharkey MS 74 7066

Ulster NY 72 165304

St Mary LA 76 58086

Union SC 73 30337

Pointe Coupee LA 77 22540

Lawrence PA 74 96246

Huron MI 73 34951

Jefferson WI 73 67783

Fond Du Lac WI 73 90083

Camden NC 74 5904

Dodge WI 72 76559

Columbia WI 76 45088

Hancock ME 72 46948

Adams MS 74 35356
Appendix C: One-hour and Eight-hour County Design Values

Table C-7. Metropolitan areas and rural counties with design values projected to be less than

the 8-hour standard but within 15% or it in 2007 with ROTR controls but without Tier 2/Sulfur

controls.

Name Design Value

(ppb) Pop’n.

C-13

Albany-Schenectady-Troy, NY MSA 72 861623

Allentown-Bethlehem-Easton, PA MSA 80 595081

Altoona, PA MSA 75 130542

Appleton-Oshkosh-Neenah, WI MSA 76 315121

Augusta-Aiken, GA-SC MSA 77 415220

Austin-San Marcos, TX MSA 77 846227

Birmingham, AL MSA 83 839942

Buffalo-Niagara Falls, NY MSA 77 1189340

Canton-Massillon, OH MSA 76 394106

Chattanooga, TN-GA MSA 82 424347

Columbia, SC MSA 74 453932

Columbus, GA-AL MSA 75 260862

Columbus, OH MSA 78 1345450

Corpus Christi, TX MSA 81 349894

Davenport-Moline-Rock Island, IA-IL MSA 74 350855

Dayton-Springfield, OH MSA 79 951270

Detroit-Ann Arbor-Flint, MI CMSA 84 5187171

Dover, DE MSA 79 110993

Elkhart-Goshen, IN MSA 79 156198

Erie, PA MSA 75 275572

Evansville-Henderson, IN-KY MSA 80 278990

Fayetteville, NC MSA 79 274713

Fort Wayne, IN MSA 81 456281

Green Bay, WI MSA 75 194594

Greensboro--Winston-Salem--High Point, NC MSA 80 1050304

Greenville, NC MSA 77 108480

Greenville-Spartanburg-Anderson, SC MSA 79 830539

Harrisburg-Lebanon-Carlisle, PA MSA 75 587986

Houma, LA MSA 81 182842

Huntsville, AL MSA 73 293047

Indianapolis, IN MSA 84 1380491

Jacksonville, FL MSA 79 906727

Jamestown, NY MSA 74 141895

Janesville-Beloit, WI MSA 78 139510

Johnson City-Kingsport-Bristol, TN-VA MSA 77 436047

Johnstown, PA MSA 74 241280

Kalamazoo-Battle Creek, MI MSA 75 429453

Lafayette, LA MSA 79 345053

Lake Charles, LA MSA 77 168134
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-7. Metropolitan areas and rural counties with design values projected to be less than

the 8-hour standard but within 15% or it in 2007 with ROTR controls but without Tier 2/Sulfur

controls.

Name Design Value

(ppb) Pop’n.

C-14

Lakeland-Winter Haven, FL MSA 72 405382

Lancaster, PA MSA 83 422822

Lansing-East Lansing, MI MSA 74 432684

Lexington, KY MSA 75 405936

Lima, OH MSA 75 154340

Little Rock-North Little Rock, AR MSA 79 513026

Longview-Marshall, TX MSA 84 193801

Louisville, KY-IN MSA 77 949012

Madison, WI MSA 74 367085

Minneapolis-St. Paul, MN-WI MSA 79 2538776

Mobile, AL MSA 75 476923

Monroe, LA MSA 73 142191

New Orleans, LA MSA 80 1285262

Norfolk-Virginia Beach-Newport News, VA-NC MSA 78 1444710

Oklahoma City, OK MSA 83 958839

Orlando, FL MSA 78 1224844

Owensboro, KY MSA 73 87189

Pensacola, FL MSA 82 344406

Portland, ME MSA 83 221095

Providence-Fall River-Warwick, RI-MA MSA 82 1134350

Raleigh-Durham-Chapel Hill, NC MSA 82 858485

Reading, PA MSA 78 336523

Richmond-Petersburg, VA MSA 77 865640

Rochester, NY MSA 75 1062470

Rocky Mount, NC MSA 76 133369

Sarasota-Bradenton, FL MSA 76 489483

Scranton--Wilkes-Barre--Hazleton, PA MSA 75 638524

Sharon, PA MSA 81 121003

Sheboygan, WI MSA 83 103877

Shreveport-Bossier City, LA MSA 77 376330

South Bend, IN MSA 80 247052

Steubenville-Weirton, OH-WV MSA 73 142523

Tampa-St. Petersburg-Clearwater, FL MSA 83 2067959

Terre Haute, IN MSA 72 147585

Toledo, OH MSA 80 614128

Tyler, TX MSA 82 151309

Victoria, TX MSA 75 74361

Wichita, KS MSA 72 485270

Wilmington, NC MSA 72 171269
Appendix C: One-hour and Eight-hour County Design Values

Table C-7. Metropolitan areas and rural counties with design values projected to be less than

the 8-hour standard but within 15% or it in 2007 with ROTR controls but without Tier 2/Sulfur

controls.

Name Design Value

(ppb) Pop’n.

C-15

York, PA MSA 74 339574

Youngstown-Warren, OH MSA 81 600895

sum 49,387,949

MA count 80

MA sum 47,630,414

Cnty count 39

Cnty sum 1,757,535
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

C-16

Table C-8. Metropolitan areas and rural counties with design values projected to exceed the 8-

hour standard in 2007 with ROTR and Tier 2/Sulfur controls.

Name Design Value

(ppb) Pop’n.

Mason MI 87 25,537

Iberville LA 90 31,049

La Porte IN 92 107,066

Atlanta, GA MSA 91 2,959,500

Barnstable-Yarmouth, MA MSA 87 134,954

Baton Rouge, LA MSA 86 528,261

Beaumont-Port Arthur, TX MSA 85 361,218

Benton Harbor, MI MSA 85 161,378

Biloxi-Gulfport-Pascagoula, MS MSA 87 312,368

Charlotte-Gastonia-Rock Hill, NC-SC MSA 90 1,162,140

Chicago-Gary-Kenosha, IL-IN-WI CMSA 90 8,239,820

Cincinnati-Hamilton, OH-KY-IN CMSA 88 1,817,569

Cleveland-Akron, OH CMSA 85 2,859,644

Dallas-Fort Worth, TX CMSA 92 4,037,282

Grand Rapids-Muskegon-Holland, MI MSA 87 937,891

Hartford, CT MSA 86 1,157,585

Houston-Galveston-Brazoria, TX CMSA 109 3,731,029

Kansas City, MO-KS MSA 88 1,582,874

Memphis, TN-AR-MS MSA 88 1,007,306

Milwaukee-Racine, WI CMSA 93 1,607,183

Nashville, TN MSA 86 985,026

New York-Northern New Jersey-Long Island, NY-NJ-CT-PA CMSA 97 19,549,649

Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA 94 5,893,019

Pittsburgh, PA MSA 94 2,394,811

St. Louis, MO-IL MSA 87 2,492,348

Springfield, MA MSA 85 587,884

Tulsa, OK MSA 86 708,954

Washington-Baltimore, DC-MD-VA-WV CMSA 91 6,726,395

sum 72,099,740

MA count 25

MA sum 71,936,088

Cnty count 3

Cnty sum 163,652
Appendix C: One-hour and Eight-hour County Design Values

C-17

Table C-9. Metropolitan areas and rural counties with design values projected to exceed the 8-

hour standard in 2010 with ROTR controls but without Tier 2/Sulfur controls.

Name Design Value

(ppb) Pop’n.

Mason MI 87 25,537

Iberville LA 90 31,049

La Porte IN 92 107,066

Atlanta, GA MSA 94 2,959,500

Barnstable-Yarmouth, MA MSA 88 134,954

Baton Rouge, LA MSA 87 528,261

Beaumont-Port Arthur, TX MSA 85 361,218

Benton Harbor, MI MSA 85 161,378

Biloxi-Gulfport-Pascagoula, MS MSA 87 312,368

Boston-Worcester-Lawrence, MA-NH-ME-CT CMSA 85 5,455,403

Charlotte-Gastonia-Rock Hill, NC-SC MSA 93 1,162,140

Chicago-Gary-Kenosha, IL-IN-WI CMSA 90 8,239,820

Cincinnati-Hamilton, OH-KY-IN CMSA 87 1,817,569

Cleveland-Akron, OH CMSA 85 2,859,644

Dallas-Fort Worth, TX CMSA 93 4,037,282

Grand Rapids-Muskegon-Holland, MI MSA 88 937,891

Hartford, CT MSA 87 1,157,585

Houston-Galveston-Brazoria, TX CMSA 109 3,731,029

Kansas City, MO-KS MSA 89 1,582,874

Memphis, TN-AR-MS MSA 89 1,007,306

Milwaukee-Racine, WI CMSA 93 1,607,183

Nashville, TN MSA 87 985,026

New York-Northern New Jersey-Long Island, NY-NJ-CT-PA CMSA 97 19,549,649

Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA 94 5,893,019

Pittsburgh, PA MSA 94 2,394,811

St. Louis, MO-IL MSA 89 2,492,348

Springfield, MA MSA 86 587,884

Tulsa, OK MSA 86 708,954

Washington-Baltimore, DC-MD-VA-WV CMSA 92 6,726,395

sum 77,555,143

MA count 26

MA sum 77,391,491

Cnty count 3

Cnty sum 163,652
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

C-18

Table C-10. Metropolitan areas and rural counties with design values projected to exceed the 8-

hour standard in 2010 with ROTR controls and Tier 2/Sulfur controls.

Name Design Value

(ppb) Pop’n.

Mason MI 86 25,537

Iberville LA 89 31,049

La Porte IN 91 107,066

Atlanta, GA MSA 89 2,959,500

Barnstable-Yarmouth, MA MSA 85 134,954

Biloxi-Gulfport-Pascagoula, MS MSA 86 312,368

Charlotte-Gastonia-Rock Hill, NC-SC MSA 87 1,162,140

Chicago-Gary-Kenosha, IL-IN-WI CMSA 91 8,239,820

Cincinnati-Hamilton, OH-KY-IN CMSA 88 1,817,569

Dallas-Fort Worth, TX CMSA 90 4,037,282

Grand Rapids-Muskegon-Holland, MI MSA 86 937,891

Houston-Galveston-Brazoria, TX CMSA 110 3,731,029

Kansas City, MO-KS MSA 86 1,582,874

Memphis, TN-AR-MS MSA 86 1,007,306

Milwaukee-Racine, WI CMSA 92 1,607,183

New York-Northern New Jersey-Long Island, NY-NJ-CT-PA CMSA 98 19,549,649

Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA 93 5,893,019

Pittsburgh, PA MSA 93 2,394,811

St. Louis, MO-IL MSA 85 2,492,348

Tulsa, OK MSA 85 708,954

Washington-Baltimore, DC-MD-VA-WV CMSA 90 6,726,395

sum 65,458,744

MA count 18

MA sum 65,295,092

Cnty count 3

Cnty sum 163,652

Table C-11. One-hour county design values (ppb) and population

All 1-hour county design values are listed in this table. The design value headings in the

table are defined as follows:

dv1—measured 1-hour design value 1995-1997.

bg1—projected design value in 2007 after ROTR.

nt110—interpolated design value in 2010 without Tier 2/Sulfur controls.

t107—projected design values in 2007 after ROTR and Tier 2/Sulfur (OMS4).

t110—interpolated design values in 2010 after ROTR and Tier 2/Sulfur.

t120—projected design values in 2020 after ROTR and Tier 2/Sulfur (OMS3).

u107—interpolated design values in 2007 after ROTR and Tier 2/Sulfur.
Appendix C: One-hour and Eight-hour County Design Values

C-19

u110—interpolated design values in 2010 after ROTR and Tier 2/Sulfur.

u120—interpolated design values in 2020 after ROTR and Tier 2/Sulfur.

The “u” values correspond to today’s proposal. The “t” values correspond to OMS3 and

OMS4. For discussing the effects of today’s proposal on design values, we projected design

values using the rollback method for three modeling runs: 2007 post ROTR, OMS3, and OMS4. 

All other design values have been linearly interpolated based on NOX. See the main text for

further details.

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

AL Clay 110 90 89 87 85 82 87 85 82 75,000

AL Colbert 83 69 68 67 66 64 67 66 64 25,617

AL Elmore 102 86 85 83 81 78 83 81 78 46,975

AL Geneva 84 77 76 75 73 71 75 73 71 34,773

AL Jefferson 132 117 116 114 112 108 114 112 108 31,679

AL Lawrence 98 86 85 83 81 79 83 81 79 80,421

AL Madison 102 87 86 84 82 79 84 82 79 18,878

AL Mobile 111 105 104 103 101 98 103 101 98 67,783

AL Montgomery 92 84 83 81 79 75 81 79 75 90,083

AL Morgan 114 101 100 98 96 93 98 96 93 4,590

AL Shelby 127 111 109 106 103 98 106 103 98 25,690

AL Sumter 83 76 75 73 72 70 73 72 70 76,559

AR Crittenden 122 111 110 108 106 103 108 106 103 45,088

AR Montgomery 79 74 73 72 71 69 72 71 69 34,693

AR Newton 83 78 77 76 74 72 76 74 72 25,466

AR Pulaski 108 106 105 102 100 97 102 100 97 11,949

CT Fairfield 138 124 123 123 122 121 123 122 121 56,942

CT Hartford 138 122 121 121 119 117 121 119 117 45,723

CT Litchfield 120 104 103 102 100 97 102 100 97 19,217

CT Middlesex 135 116 115 113 111 109 113 111 109 35,845

CT New Haven 157 136 135 133 131 129 133 131 129 51,373

CT New London 144 125 124 122 120 117 122 120 117 35,303

CT Tolland 127 111 110 108 106 104 108 106 104 33,016

DC District of Columbia 125 107 106 106 106 106 106 106 106 15,795

DE Kent 124 104 103 101 99 95 101 99 95 19,437

DE New Castle 139 116 115 113 111 107 113 111 107 50,480

DE Sussex 123 107 106 104 102 98 104 102 98 25,741

FL Alachua 101 97 96 93 91 86 93 91 86 34,854
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-20

FL Brevard 86 84 83 82 80 77 82 80 77 40,339

FL Broward 103 103 103 103 103 103 103 103 103 73,712

FL Duval 116 114 113 110 108 103 110 108 103 36,815

FL Escambia 113 111 110 109 107 105 109 107 105 30,337

FL Hillsborough 112 113 112 111 109 106 111 109 106 57,494

FL Lee 88 87 86 85 84 82 85 84 82 61,851

FL Leon 96 90 89 86 83 78 86 83 78 32,170

FL Manatee 96 97 96 95 93 90 95 93 90 20,293

FL Orange 106 107 106 103 100 94 103 100 94 23,862

FL Osceola 96 95 94 92 90 86 92 90 86 96,246

FL Palm Beach 89 83 82 80 78 75 80 78 75 121,082

FL Pasco 92 89 88 86 84 81 86 84 81 36,490

FL Pinellas 93 91 90 89 87 84 89 87 84 10,333

FL Polk 99 96 95 93 91 88 93 91 88 31,969

FL Sarasota 99 99 98 96 94 92 96 94 92 40,113

FL Seminole 95 92 91 89 87 82 89 87 82 42,310

FL St Johns 91 88 87 85 83 79 85 83 79 47,473

FL St Lucie 82 80 79 78 76 73 78 76 73 35,415

FL Volusia 89 87 86 83 81 77 83 81 77 15,419

GA Bibb 122 107 105 102 99 92 102 99 92 11,268

GA Chatham 85 78 77 76 74 72 76 74 72 86,064

GA DeKalb 136 117 115 111 107 100 111 108 100 30,180

GA Douglas 140 122 120 116 112 105 116 113 105 20,798

GA Fannin 92 81 80 78 76 72 78 76 72 25,078

GA Fulton 143 124 122 119 116 109 119 116 109 46,942

GA Glynn 89 84 83 82 80 78 82 80 78 38,345

GA Gwinnett 121 103 101 97 94 87 97 94 87 39,995

GA Muscogee 108 98 96 93 90 84 93 90 84 20,693

GA Paulding 112 97 95 92 89 83 92 89 83 5,904

GA Richmond 118 105 104 101 98 93 101 98 93 165,304

GA Rockdale 145 123 121 117 114 107 117 114 107 110,943

GA Spalding 126 109 107 103 100 93 103 100 93 5,279

IA Harrison 79 77 76 76 75 74 76 75 74 37,152

IA Linn 75 71 70 70 69 68 70 69 68 38,592

IA Palo Alto 70 68 67 67 66 65 67 66 65 74,929

IA Polk 86 82 81 80 79 77 80 79 77 34,828
Appendix C: One-hour and Eight-hour County Design Values

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-21

IA Scott 95 90 89 88 87 86 88 87 86 70,121

IA Story 87 83 82 81 80 78 81 80 78 35,410

IA Van Buren 82 76 75 74 73 71 74 73 71 49,216

IA Warren 74 70 69 69 68 66 69 68 66 16,037

IL Adams 89 80 79 78 77 75 78 77 75 9,104

IL Champaign 94 77 76 75 74 72 75 74 72 47,880

IL Cook 127 124 124 125 125 127 124 125 126 7,066

IL Du Page 103 95 94 94 93 92 94 93 92 65,581

IL Effingham 97 79 78 77 76 74 77 76 74 75,555

IL Hamilton 89 70 69 69 68 66 69 68 66 8,377

IL Jersey 112 98 97 94 92 87 94 92 87 9,071

IL Kane 116 102 101 101 99 97 101 99 97 35,356

IL Lake 116 108 107 107 106 104 107 106 104 10,415

IL Macon 100 83 82 80 78 76 80 78 76 19,776

IL Macoupin 102 85 84 82 80 77 82 80 77 37,308

IL Madison 128 108 107 105 103 98 105 103 98 25,537

IL McHenry 108 97 96 96 94 92 96 94 92 34,951

IL Peoria 95 82 81 80 79 77 80 79 77 49,477

IL Randolph 94 82 81 80 79 77 80 79 77 12,200

IL Rock Island 83 76 75 75 74 73 75 74 73 17,842

IL Sangamon 98 83 82 80 78 76 80 78 76 35,308

IL St Clair 108 97 96 95 93 90 95 93 90 49,767

IL Will 108 92 91 90 89 87 90 89 87 33,535

IL Winnebago 93 83 82 82 81 80 82 81 80 18,653

IN Allen 106 95 94 93 92 90 93 92 90 52,602

IN Clark 125 104 103 102 101 99 102 101 99 36,310

IN De Kalb 82 73 72 71 70 69 71 70 69 115,904

IN Elkhart 113 100 99 98 97 95 98 97 95 46,948

IN Floyd 125 111 111 111 110 110 111 110 110 58,086

IN Hamilton 116 102 101 100 99 98 100 99 98 22,540

IN Hancock 120 105 104 104 103 102 104 103 102 31,049

IN Johnson 102 84 83 83 82 80 83 82 80 17,526

IN Kosciusko 100 87 86 85 84 82 85 84 82 30,083

IN La Porte 146 131 130 129 127 125 129 127 125 10,361

IN Lake 117 105 104 104 102 100 104 102 100 15,145

IN Lawrence 100 75 74 73 72 71 73 72 71 49,489
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-22

IN Madison 112 98 97 96 94 92 96 94 92 72,583

IN Marion 115 99 98 98 97 95 98 97 95 30,283

IN Morgan 103 83 82 82 81 79 82 81 79 9,628

IN Porter 124 109 108 107 105 103 107 105 103 62,879

IN Posey 99 83 82 81 80 79 81 80 79 9,062

IN St Joseph 114 100 99 98 97 96 98 97 96 13,998

IN Tippecanoe 104 85 84 84 83 81 84 83 81 89,240

IN Vanderburgh 114 97 96 95 94 92 95 94 92 7,864

IN Vigo 107 88 87 86 85 83 86 85 83 33,550

IN Warrick 115 92 91 91 89 87 91 89 87 10,357

KS Miami 114 112 111 110 109 107 110 109 107 31,506

KS Pawnee 80 80 80 80 80 80 80 80 80 7,555

KS Sedgwick 96 93 92 92 91 89 92 91 89 7,676

KS Wyandotte 113 110 109 109 108 107 109 108 107 74,252

KY Bell 92 74 73 72 70 68 72 70 68 10,669

KY Boone 108 90 89 89 88 86 89 88 86 14,730

KY Boyd 122 98 97 96 94 92 96 94 92 42,836

KY Bullitt 116 94 93 92 90 88 92 90 88 107,066

KY Campbell 115 99 98 97 95 93 97 95 93 65,294

KY Christian 101 80 79 78 77 75 78 77 75 34,583

KY Daviess 108 89 88 88 87 85 88 87 85 47,679

KY Edmonson 118 96 95 94 92 90 94 92 90 8,499

KY Fayette 101 90 89 89 88 87 89 88 87 31,704

KY Graves 92 73 72 72 71 69 72 71 69 66,090

KY Greenup 114 90 89 89 87 85 89 87 85 62,496

KY Hancock 114 82 81 80 79 77 80 79 77 15,992

KY Hardin 113 86 85 84 82 80 84 82 80 113,229

KY Henderson 108 85 84 84 83 81 84 83 81 7,666

KY Jefferson 120 100 100 100 99 99 100 99 99 7,841

KY Jessamine 98 81 80 79 78 76 79 78 76 16,174

KY Kenton 114 97 96 95 94 92 95 94 92 23,647

KY Lawrence 95 72 71 70 69 67 70 69 67 13,252

KY Livingston 108 91 90 89 88 86 89 88 86 292,594

KY McCracken 100 81 80 79 78 76 79 78 76 181,276

KY McLean 103 83 82 82 81 79 82 81 79 149,285

KY Oldham 112 97 96 95 94 92 95 94 92 247,105
Appendix C: One-hour and Eight-hour County Design Values

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-23

KY Perry 90 77 76 74 73 71 74 73 71 291,130

KY Pike 98 83 82 80 78 76 80 78 76 130,542

KY Pulaski 94 76 75 74 73 71 74 73 71 140,510

KY Scott 101 89 88 86 84 82 86 84 82 140,320

KY Simpson 101 87 86 84 82 80 84 82 80 174,821

KY Trigg 101 85 84 83 81 79 83 81 79 54,091

LA Ascension 121 113 112 111 109 107 111 109 107 648,951

LA Beauregard 117 106 105 105 104 103 105 104 103 71,120

LA Bossier 98 92 91 90 89 87 90 89 87 545,837

LA Caddo 101 95 94 93 91 89 93 91 89 54,457

LA Calcasieu 116 104 103 103 102 100 103 102 100 352,910

LA East Baton Rouge 131 122 121 118 116 112 118 116 112 41,611

LA Grant 91 84 83 83 82 80 83 82 80 189,719

LA Iberville 139 132 131 130 129 127 130 129 127 120,940

LA Jefferson 107 103 102 102 101 100 102 101 100 18,375

LA Lafayette 109 102 101 100 99 97 100 99 97 576,407

LA Lafourche 127 122 121 120 119 118 120 119 118 146,601

LA Livingston 127 118 117 115 113 110 115 113 110 186,605

LA Orleans 96 89 88 88 87 85 88 87 85 380,105

LA Ouachita 95 90 89 88 87 86 88 87 86 70,526

LA Pointe Coupee 111 103 102 101 99 97 101 99 97 58,214

LA St Bernard 98 91 90 90 89 88 90 89 88 19,419

LA St Charles 115 110 109 108 107 107 108 107 107 239,397

LA St James 119 112 111 110 109 107 110 109 107 80,509

LA St John The Baptist 114 107 106 106 105 103 106 105 103 161,378

LA St Mary 104 98 97 97 96 94 97 96 94 115,243

LA West Baton Rouge 114 106 105 103 101 97 103 101 97 31,760

MA Barnstable 131 118 117 115 113 110 115 113 110 651,525

MA Berkshire 99 85 84 83 81 79 83 81 79 99,358

MA Bristol 138 119 118 116 114 110 116 114 110 506,325

MA Essex 113 100 99 98 96 93 98 96 93 245,845

MA Hampden 126 115 114 114 112 110 114 112 110 164,587

MA Hampshire 132 118 117 115 113 110 115 113 110 456,310

MA Middlesex 109 95 94 93 91 89 93 91 89 670,080

MA Plymouth 102 89 88 87 85 83 87 85 83 336,073

MA Suffolk 95 86 86 86 85 84 86 85 84 1,398,468
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-24

MA Worcester 108 93 92 90 88 85 90 88 85 709,705

MD Anne Arundel 142 123 122 120 118 114 120 118 114 435,276

MD Baltimore 130 112 111 109 107 103 109 107 103 104,233

MD Baltimore City 137 122 121 120 118 116 120 118 116 120,005

MD Calvert 105 85 84 82 80 78 82 80 78 663,906

MD Carroll 115 94 93 91 89 87 91 89 87 260,120

MD Cecil 152 126 125 123 121 116 123 121 116 220,756

MD Charles 118 98 97 95 93 91 95 93 91 968,532

MD Harford 145 126 125 122 120 116 122 120 116 131,761

MD Kent 129 110 109 107 105 102 107 105 102 367,585

MD Montgomery 118 98 97 96 94 91 96 94 91 168,767

MD Prince George's 132 113 112 110 108 105 110 108 105 173,025

ME Cumberland 121 107 106 105 103 100 105 103 100 295,039

ME Hancock 115 100 99 97 95 91 97 95 91 128,776

ME Kennebec 98 87 86 85 83 80 85 83 80 207,619

ME Knox 119 104 103 101 99 96 101 99 96 511,433

ME Oxford 79 71 70 69 67 64 69 67 64 110,605

ME Penobscot 95 84 83 82 80 78 82 80 78 131,497

ME Piscataquis 80 72 71 70 68 65 70 68 65 50,319

ME Sagadahoc 125 109 108 107 105 101 107 105 101 285,536

ME Somerset 92 83 82 80 78 75 80 78 75 128,181

ME Washington 107 93 92 90 88 85 90 88 85 5,105,067

ME York 126 113 112 110 108 106 110 108 106 128,932

MI Allegan 137 120 119 118 117 115 118 117 115 475,594

MI Benzie 108 97 96 95 93 91 95 93 91 317,471

MI Berrien 119 103 102 101 100 98 101 100 98 516,418

MI Cass 115 102 101 100 98 96 100 98 96 183,241

MI Clinton 88 77 76 75 74 73 75 74 73 357,313

MI Genesee 99 89 88 88 87 86 88 87 86 781,666

MI Huron 110 98 97 96 95 93 96 95 93 291,479

MI Ingham 97 87 86 85 84 83 85 84 83 113,909

MI Kalamazoo 106 92 91 90 88 86 90 88 86 866,228

MI Kent 124 111 110 109 107 105 109 107 105 150,187

MI Lenawee 104 94 93 93 91 89 93 91 89 83,866

MI Macomb 124 111 111 111 111 111 111 111 111 142,031

MI Mason 125 113 112 112 110 108 112 110 108 57,589
Appendix C: One-hour and Eight-hour County Design Values

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-25

MI Mecosta 124 108 107 105 103 101 105 103 101 68,941

MI Muskegon 136 121 120 120 118 116 120 118 116 215,499

MI Oakland 117 105 104 104 103 103 104 103 103 142,585

MI Ottawa 113 101 100 100 99 98 100 99 98 514,990

MI Roscommon 99 87 86 86 85 83 86 85 83 81,129

MI St Clair 119 108 107 106 104 102 106 104 102 122,354

MI Washtenaw 104 94 93 92 90 88 92 90 88 1,412,140

MI Wayne 114 104 103 103 102 101 103 102 101 99,821

MN Anoka 106 103 103 103 102 101 103 102 101 271,126

MN Dakota 91 88 88 88 87 87 88 87 87 285,720

MN Lake 74 74 74 74 74 74 74 74 74 179,278

MN St Louis 80 80 80 80 80 80 80 80 80 128,300

MN Washington 103 100 99 99 98 96 99 98 96 37,068

MO Clay 128 122 121 120 118 115 120 118 115 961,437

MO Greene 101 90 89 87 85 81 87 85 81 66,929

MO Jackson 88 85 84 83 82 80 83 82 80 291,145

MO Jefferson 125 113 112 110 108 106 110 108 106 273,525

MO Monroe 96 89 88 87 85 83 87 85 83 1,852,810

MO Platte 116 112 111 110 109 107 110 109 107 1,170,103

MO St Louis 119 106 105 103 100 95 103 100 95 264,036

MO St Louis City 108 99 98 97 96 94 97 96 94 85,167

MO St. Charles 131 117 116 113 111 107 113 111 107 150,979

MO Ste Genevieve 108 96 95 94 92 90 94 92 90 148,723

MS Adams 97 94 93 92 91 89 92 91 89 147,548

MS Choctaw 81 73 72 71 70 68 71 70 68 573,809

MS DeSoto 131 125 124 124 123 121 124 123 121 136,731

MS Franklin 94 91 90 89 88 86 89 88 86 93,182

MS Hancock 105 100 99 98 97 95 98 97 95 370,712

MS Hinds 97 89 88 87 85 83 87 85 83 100,043

MS Jackson 109 113 112 111 110 109 111 110 109 31,513

MS Lauderdale 92 83 82 81 79 76 81 79 76 117,206

MS Lee 96 88 87 85 83 81 85 83 81 327,140

MS Madison 89 82 81 80 79 78 80 79 78 36,033

MS Sharkey 95 89 88 88 87 85 88 87 85 717,400

MS Warren 97 91 90 90 89 87 90 89 87 145,607

NC Alexander 94 85 84 81 79 74 81 79 74 1,083,592
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-26

NC Buncombe 86 78 77 75 73 69 75 73 69 2,111,687

NC Caldwell 97 87 86 83 81 76 83 81 76 91,476

NC Camden 93 82 81 80 78 75 80 78 75 282,937

NC Caswell 111 93 92 90 88 83 90 88 83 430,459

NC Chatham 103 84 83 80 78 74 80 78 74 110,993

NC Cumberland 106 96 95 92 89 84 92 89 84 198,213

NC Davie 105 92 91 88 86 81 88 86 81 156,198

NC Duplin 89 80 79 77 75 72 77 75 72 95,195

NC Durham 103 91 89 86 83 78 86 83 78 275,572

NC Edgecombe 102 91 90 87 85 80 87 85 80 44,920

NC Forsyth 115 105 104 101 98 93 101 98 93 165,058

NC Franklin 110 93 91 88 85 80 88 85 80 43,044

NC Granville 116 102 100 97 94 87 97 94 87 25,968

NC Guilford 109 98 96 93 90 85 93 90 85 102,874

NC Haywood 107 96 95 92 90 85 92 90 85 274,566

NC Johnston 107 91 90 87 85 80 87 85 80 51,666

NC Lincoln 105 93 92 89 87 82 89 87 82 335,113

NC Martin 90 78 77 75 73 70 75 73 70 150,171

NC Mecklenburg 123 121 119 116 113 106 116 113 106 300,836

NC New Hanover 102 93 92 91 89 85 91 89 85 35,324

NC Northampton 100 83 82 80 78 74 80 78 74 181,596

NC Person 100 82 81 79 77 73 79 77 73 90,509

NC Pitt 104 90 89 87 85 80 87 85 80 158,983

NC Rockingham 113 100 99 96 93 88 96 93 88 500,631

NC Rowan 122 107 106 103 100 94 103 100 94 187,768

NC Swain 78 66 65 64 62 60 64 62 60 194,594

NC Wake 118 110 108 105 101 94 105 102 94 265,878

NC Yancey 108 92 91 89 87 84 89 87 84 347,420

ND Cass 75 75 75 75 75 75 75 75 75 27,859

NE Douglas 88 86 85 85 84 82 85 84 82 107,924

NE Lancaster 69 67 66 66 65 65 66 65 65 226,800

NH Belknap 89 80 79 79 77 75 79 77 75 145,196

NH Carroll 88 79 78 76 75 73 76 75 73 93,894

NH Cheshire 91 80 79 78 76 73 78 76 73 44,506

NH Coos 101 91 90 88 86 83 88 86 83 237,813

NH Grafton 77 69 68 67 66 64 67 66 64 41,172
Appendix C: One-hour and Eight-hour County Design Values

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-27

NH Hillsborough 111 98 97 95 93 91 95 93 91 254,957

NH Merrimack 98 88 87 87 86 84 87 86 84 851,783

NH Rockingham 130 117 116 114 112 110 114 112 110 143,196

NH Strafford 101 91 90 89 87 85 89 87 85 128,699

NH Sullivan 90 81 80 79 77 75 79 77 75 174,092

NJ Atlantic 124 106 105 103 101 98 103 101 98 70,709

NJ Bergen 122 108 107 106 105 103 106 105 103 27,544

NJ Camden 137 119 118 116 114 111 116 114 111 85,860

NJ Cumberland 115 96 95 93 91 87 93 91 87 2,818,199

NJ Essex 114 98 97 97 96 94 97 96 94 217,399

NJ Gloucester 128 112 111 109 107 104 109 107 104 191,707

NJ Hudson 120 113 112 112 111 111 112 111 111 51,150

NJ Hunterdon 119 102 101 100 98 95 100 98 95 96,827

NJ Mercer 131 113 112 110 108 106 110 108 106 36,742

NJ Middlesex 139 121 120 119 117 114 119 117 114 61,834

NJ Monmouth 138 121 120 118 116 113 118 116 113 238,912

NJ Morris 124 105 104 103 101 98 103 101 98 45,527

NJ Ocean 149 125 124 122 120 115 122 120 115 108,936

NJ Union 109 94 93 92 91 89 92 91 89 797,159

NY Albany 105 94 93 91 89 87 91 89 87 130,669

NY Bronx 123 121 121 121 121 121 121 121 121 55,920

NY Chautauqua 104 90 89 88 86 84 88 86 84 88,109

NY Chemung 88 78 77 76 75 73 76 75 73 254,441

NY Dutchess 113 97 96 94 92 89 94 92 89 53,794

NY Erie 91 79 78 78 77 75 78 77 75 77,982

NY Essex 101 91 90 88 86 84 88 86 84 672,971

NY Hamilton 97 86 85 84 82 79 84 82 79 83,829

NY Herkimer 88 78 77 76 74 72 76 74 72 141,895

NY Jefferson 110 99 98 97 95 92 97 95 92 139,510

NY Kings 124 110 109 108 106 104 108 106 104 143,596

NY Madison 89 79 78 77 75 73 77 75 73 163,029

NY Monroe 102 93 92 91 90 88 91 90 88 223,411

NY New York 121 114 113 113 112 112 113 112 112 153,411

NY Niagara 102 93 92 92 91 90 92 91 90 57,867

NY Oneida 95 85 84 83 81 79 83 81 79 23,466

NY Onondaga 102 90 89 89 87 85 89 87 85 161,993
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-28

NY Orange 115 99 98 97 95 93 97 95 93 633,232

NY Putnam 122 105 104 102 100 97 102 100 97 85,969

NY Queens 125 119 119 120 120 121 119 120 120 335,749

NY Richmond 137 121 120 119 117 114 119 117 114 31,255

NY Saratoga 101 91 90 88 87 85 88 87 85 51,043

NY Schenectady 94 84 83 82 80 78 82 80 78 68,250

NY Suffolk 138 120 119 118 116 112 118 116 112 164,762

NY Ulster 97 84 83 81 79 77 81 79 77 130,598

NY Wayne 102 91 90 89 88 86 89 88 86 168,134

NY Westchester 121 104 103 102 100 98 102 100 98 405,382

OH Allen 106 89 88 88 87 85 88 87 85 422,822

OH Ashtabula 105 89 88 87 86 84 87 86 84 281,912

OH Butler 125 104 103 102 100 98 102 100 98 57,883

OH Clark 118 99 98 97 96 94 97 96 94 133,239

OH Clermont 116 99 98 98 97 95 98 97 95 111,486

OH Clinton 121 100 99 98 96 94 98 96 94 225,366

OH Cuyahoga 108 94 93 92 90 88 92 90 88 23,867

OH Delaware 99 85 84 84 83 81 84 83 81 30,508

OH Franklin 107 88 87 86 85 83 86 85 83 109,755

OH Geauga 112 100 99 99 97 95 99 97 95 213,641

OH Greene 111 93 92 91 90 88 91 90 88 349,660

OH Hamilton 119 112 112 112 112 113 111 112 112 104,948

OH Jefferson 111 93 92 91 89 87 91 89 87 87,777

OH Knox 113 96 95 94 93 91 94 93 91 64,404

OH Lake 119 103 102 101 99 97 101 99 97 664,937

OH Lawrence 113 87 86 86 84 82 86 84 82 47,567

OH Licking 115 97 96 95 93 91 95 93 91 33,263

OH Logan 100 84 83 82 80 78 82 80 78 149,967

OH Lorain 101 91 90 89 88 86 89 88 86 367,085

OH Lucas 111 100 99 98 97 95 98 97 95 383,545

OH Madison 112 93 92 91 89 87 91 89 87 398,978

OH Mahoning 109 95 94 93 91 88 93 91 88 67,910

OH Medina 110 97 96 95 93 91 95 93 91 826,330

OH Miami 110 93 92 91 90 88 91 90 88 49,939

OH Montgomery 112 94 93 93 92 90 93 92 90 1,255,488

OH Portage 114 101 100 98 96 94 98 96 94 72,831
Appendix C: One-hour and Eight-hour County Design Values

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-29

OH Preble 110 88 87 86 85 83 86 85 83 959,275

OH Stark 107 93 92 91 90 88 91 90 88 175,034

OH Summit 113 99 98 97 95 93 97 95 93 304,715

OH Trumbull 109 95 94 92 90 87 92 90 87 95,328

OH Union 75 63 62 62 61 59 62 61 59 243,641

OH Warren 124 104 103 102 100 97 102 100 97 145,896

OH Washington 110 84 83 82 80 78 82 80 78 275,227

OH Wood 94 82 81 80 79 78 80 79 78 50,251

OK Cleveland 102 101 100 98 96 94 98 96 94 378,643

OK Comanche 92 86 85 84 83 81 84 83 81 142,191

OK Latimer 100 95 94 93 92 90 93 92 90 49,210

OK Mc Clain 95 91 90 89 87 85 89 87 85 209,085

OK Oklahoma 110 110 109 108 106 104 108 106 104 103,281

OK Okmulgee 94 92 91 90 89 87 90 89 87 35,061

OK Tulsa 121 121 120 120 119 117 120 119 117 510,784

PA Allegheny 133 121 120 120 118 116 120 118 116 81,021

PA Beaver 105 93 92 91 90 89 91 90 89 67,675

PA Berks 118 101 100 98 96 93 98 96 93 118,570

PA Blair 114 95 94 92 90 88 92 90 88 20,879

PA Bucks 137 115 114 112 110 106 112 110 106 42,437

PA Cambria 102 86 85 84 82 80 84 82 80 39,996

PA Dauphin 113 97 96 93 91 86 93 91 86 448,306

PA Delaware 126 110 109 107 105 101 107 105 101 66,631

PA Erie 105 89 88 87 85 83 87 85 83 496,938

PA Franklin 114 92 91 90 89 87 90 89 87 804,219

PA Lackawanna 110 96 95 94 92 89 94 92 89 433,203

PA Lancaster 125 109 108 106 104 100 106 104 100 671,780

PA Lawrence 101 90 89 87 85 82 87 85 82 827,645

PA Lehigh 114 96 95 93 91 88 93 91 88 553,124

PA Luzerne 110 90 89 88 86 84 88 86 84 1,321,864

PA Lycoming 91 75 74 74 73 71 74 73 71 378,977

PA Mercer 111 98 97 95 93 90 95 93 90 325,824

PA Montgomery 122 104 103 101 99 96 101 99 96 1,951,598

PA Northampton 116 98 97 96 94 91 96 94 91 421,353

PA Perry 103 86 85 84 82 79 84 82 79 2,300,664

PA Philadelphia 130 120 119 119 118 117 119 118 117 1,203,789
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-30

PA Washington 117 90 89 88 86 84 88 86 84 825,380

PA Westmoreland 125 107 106 104 102 99 104 102 99 83,941

PA York 109 93 92 91 89 86 91 89 86 1,487,536

RI Kent 133 114 113 110 108 105 110 108 105 874,866

RI Providence 117 100 99 97 95 92 97 95 92 553,099

SC Abbeville 93 82 81 79 77 73 79 77 73 107,776

SC Aiken 104 92 91 89 87 82 89 87 82 307,647

SC Anderson 114 103 101 98 95 90 98 95 90 778,206

SC Barnwell 99 85 84 83 81 77 83 81 77 259,462

SC Berkeley 94 84 83 82 80 77 82 80 77 493,819

SC Charleston 102 94 93 91 89 87 91 89 87 133,793

SC Cherokee 106 93 92 89 86 81 89 86 81 52,141

SC Chester 107 97 96 93 91 86 93 91 86 599,611

SC Darlington 94 82 81 79 77 73 79 77 73 174,253

SC Edgefield 93 81 80 78 76 71 78 76 71 22,795

SC Oconee 92 83 82 79 76 71 79 76 71 416,444

SC Pickens 107 98 96 93 90 85 93 90 85 677,491

SC Richland 107 96 95 92 89 83 92 89 83 107,728

SC Spartanburg 117 106 105 102 99 92 102 99 92 287,529

SC Union 98 89 88 85 83 79 85 83 79 87,189

SC Williamsburg 85 74 73 72 70 68 72 70 68 86,915

SC York 114 103 102 99 96 91 99 96 91 62,254

TN Anderson 110 93 92 90 88 85 90 88 85 262,798

TN Blount 124 110 109 106 104 100 106 104 100 182,827

TN Bradley 106 92 91 88 86 81 88 86 81 71,347

TN Coffee 105 87 86 85 83 80 85 83 80 441,946

TN Davidson 110 102 101 101 100 99 101 100 99 502,824

TN Dickson 120 101 100 99 97 94 99 97 94 541,174

TN Dyer 112 100 99 97 95 92 97 95 92 1,585,577

TN Giles 104 93 92 91 89 85 91 89 85 230,082

TN Hamblen 96 80 79 77 75 73 77 75 73 547,651

TN Hamilton 113 104 103 101 98 93 101 98 93 224,327

TN Haywood 97 84 83 82 80 78 82 80 78 678,111

TN Humphreys 102 86 85 84 82 80 84 82 80 138,053

TN Jefferson 125 105 104 101 99 95 101 99 95 1,336,449

TN Knox 120 110 109 107 105 102 107 105 102 370,321
Appendix C: One-hour and Eight-hour County Design Values

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-31

TN Lawrence 93 81 80 78 76 74 78 76 74 204,584

TN Loudon 112 94 93 91 89 85 91 89 85 186,093

TN Madison 64 55 54 53 52 50 53 52 50 139,352

TN Putnam 99 83 82 80 78 76 80 78 76 243,135

TN Rutherford 95 81 80 78 76 74 78 76 74 161,135

TN Sevier 111 96 95 93 91 87 93 91 87 596,270

TN Shelby 128 121 120 118 116 112 118 116 112 423,380

TN Sullivan 111 99 98 97 95 93 97 95 93 36,414

TN Sumner 124 108 107 105 103 100 105 103 100 81,306

TN Williamson 110 99 98 96 94 91 96 94 91 38,759

TN Wilson 108 97 96 94 92 88 94 92 88 181,835

TX Bexar 121 118 117 116 114 111 116 114 111 336,523

TX Brazoria 148 139 138 137 136 134 137 136 134 63,306

TX Cameron 81 81 81 81 81 81 81 81 81 6,282

TX Collin 132 120 119 118 116 112 118 116 112 217,881

TX Dallas 134 123 122 121 119 116 121 119 116 209,274

TX Denton 139 124 123 121 119 114 121 119 114 79,332

TX Ellis 118 112 111 110 108 106 110 108 106 713,968

TX Galveston 182 171 170 169 168 166 169 168 166 89,123

TX Gregg 139 129 128 127 125 122 127 125 122 252,913

TX Harris 189 175 175 176 176 177 175 176 176 56,558

TX Hidalgo 78 77 77 77 77 77 77 77 77 212,907

TX Jefferson 139 129 128 127 126 124 127 126 124 249,238

TX Nueces 115 112 111 111 111 111 111 111 111 171,380

TX Orange 121 112 111 111 110 108 111 110 108 993,529

TX Smith 109 101 100 98 96 94 98 96 94 20,539

TX Tarrant 133 120 119 117 115 112 117 115 112 262,852

TX Travis 112 106 105 102 100 97 102 100 97 396,685

TX Victoria 95 91 90 90 89 89 90 89 89 1,185,394

TX Webb 90 90 90 90 90 90 90 90 90 277,776

VA Alexandria City 124 108 108 108 107 106 108 107 106 211,707

VA Arlington 123 107 107 107 106 105 107 106 105 216,935

VA Caroline 109 92 91 88 86 81 88 86 81 219,039

VA Charles City 119 102 101 99 97 94 99 97 94 328,149

VA Chesterfield 114 97 96 94 92 88 94 92 88 121,003

VA Fairfax 124 107 106 104 102 100 104 102 100 103,877
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-32

VA Fauquier 97 75 74 73 71 69 73 71 69 248,253

VA Frederick 102 80 79 78 76 74 78 76 74 86,088

VA Hampton City 109 98 97 96 94 90 96 94 90 247,052

VA Hanover 124 107 105 102 99 93 102 99 93 178,386

VA Henrico 115 101 99 96 94 89 96 94 89 207,949

VA Henry 101 82 81 79 77 74 79 77 74 146,568

VA Madison 99 81 80 79 77 75 79 77 75 80,298

VA Prince William 110 91 90 88 86 83 88 86 83 35,233

VA Roanoke 94 81 80 78 76 72 78 76 72 468,973

VA Stafford 110 91 90 88 86 82 88 86 82 69,120

VA Suffolk City 108 91 90 88 86 83 88 86 83 192,493

VA Wythe 94 72 71 70 68 66 70 68 66 834,054

VT Bennington 99 89 88 87 85 81 87 85 81 851,659

VT Chittenden 85 77 76 75 74 72 75 74 72 281,131

WI Brown 108 99 98 97 95 93 97 95 93 106,107

WI Columbia 104 97 96 95 93 91 95 93 91 462,361

WI Dane 97 90 89 89 88 86 89 88 86 113,269

WI Dodge 93 85 84 83 82 80 83 82 80 503,341

WI Door 127 113 112 111 109 106 111 109 106 151,309

WI Florence 80 74 73 73 72 70 73 72 70 250,836

WI Fond Du Lac 96 88 87 87 86 84 87 86 84 65,797

WI Jefferson 94 86 85 84 83 81 84 83 81 74,361

WI Kenosha 129 117 116 114 112 110 114 112 110 182,132

WI Kewaunee 121 109 108 106 104 102 106 104 102 427,239

WI Manitowoc 126 113 112 110 108 106 110 108 106 736,014

WI Marathon 84 79 78 77 76 75 77 76 75 729,268

WI Milwaukee 126 118 117 116 114 112 116 114 112 692,134

WI Oneida 78 74 73 72 71 70 72 71 70 606,900

WI Outagamie 98 92 91 90 89 87 90 89 87 818,584

WI Ozaukee 127 118 117 117 116 114 117 116 114 111,183

WI Polk 85 82 81 80 79 78 80 79 78 170,936

WI Racine 119 108 107 106 104 102 106 104 102 101,154

WI Rock 103 95 94 93 92 90 93 92 90 757,027

WI Sauk 90 85 84 83 82 80 83 82 80 123,372

WI Sheboygan 123 109 108 107 105 103 107 105 103 215,686

WI St Croix 88 85 84 84 83 81 84 83 81 61,236
Appendix C: One-hour and Eight-hour County Design Values

Table C-11. One-hour county design values (ppb) and population

State County dv1 bg1 nt110 t107 t110 t120 u107 u110 u120 Pop’n.

C-33

WI Vernon 85 81 80 80 79 78 80 79 78 51,372

WI Walworth 100 92 91 90 89 87 90 89 87 48,741

WI Washington 106 95 94 93 91 89 93 91 89 115,400

WI Waukesha 109 99 98 97 95 93 97 95 93 863,518

WI Winnebago 98 91 90 89 88 86 89 88 86 50,871

WV Cabell 122 98 97 95 93 91 95 93 91 403,662

WV Greenbrier 99 73 72 71 70 68 71 70 68 118,710

WV Hancock 106 92 91 90 89 87 90 89 87 120,284

WV Kanawha 110 91 90 88 86 82 88 86 82 339,574

WV Ohio 107 85 84 83 81 79 83 81 79 264,806

WV Wood 116 89 88 87 85 83 87 85 83 227,813

Table C-12. Eight-hour county design values (ppb) and population

All 8-hour county design values are listed in this table. The design value headings in the

this table are defined as follows:

dv8—measured 8-hour design value 1995-1997.

bg8—projected design value in 2007 after ROTR.

nt810—interpolated design value in 2010 without Tier 2/Sulfur controls.

t807—projected design values in 2007 after ROTR and Tier 2/Sulfur (OMS4).

t810—interpolated design values in 2010 after ROTR and Tier 2/Sulfur.

t820—projected design values in 2020 after ROTR and Tier 2/Sulfur (OMS3).

u807—interpolated design values in 2007 after ROTR and Tier 2/Sulfur.

u810—interpolated design values in 2010 after ROTR and Tier 2/Sulfur.

u820—interpolated design values in 2020 after ROTR and Tier 2/Sulfur.

The “u” values correspond to today’s proposal. The “t” values correspond to OMS3 and

OMS4. For discussing the effects of today’s proposal on design values, we projected county

design values using the rollback method for three modeling runs: 2007 post ROTR, OMS3, and

OMS4. All other design values have been linearly interpolated based on NOX. See the main text

for further details.

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

AL Clay 86 72 71 70 68 66 70 68 66 13,252

AL Elmore 77 65 64 63 61 59 63 61 59 49,210

AL Geneva 69 63 62 61 60 58 61 60 58 23,647

AL Jefferson 92 82 81 80 78 74 80 78 74 651,525
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-34

AL Lawrence 81 70 69 68 67 65 68 67 65 31,513

AL Madison 84 73 72 71 69 66 71 69 66 238,912

AL Mobile 79 75 74 73 72 70 73 72 70 378,643

AL Montgomery 70 63 62 61 59 57 61 59 57 209,085

AL Shelby 95 83 82 80 78 74 80 78 74 99,358

AL Sumter 66 60 59 58 57 55 58 57 55 16,174

AR Crittenden 95 87 86 85 83 81 85 83 81 49,939

AR Montgomery 67 63 62 61 60 58 61 60 58 7,841

AR Newton 71 66 65 64 63 61 64 63 61 7,666

AR Pulaski 81 79 78 77 75 72 77 75 72 349,660

CT Fairfield 104 94 93 93 92 91 93 92 91 827,645

CT Hartford 89 78 77 76 75 73 76 75 73 851,783

CT Litchfield 94 81 80 79 77 75 79 77 75 174,092

CT Middlesex 98 84 83 82 80 78 82 80 78 143,196

CT New Haven 107 93 92 91 89 87 91 89 87 804,219

CT New London 101 88 87 86 84 82 86 84 82 254,957

CT Tolland 91 79 78 77 76 74 77 76 74 128,699

DC District of Columbia 94 80 79 79 79 79 79 79 79 606,900

DE Kent 94 79 78 77 75 72 77 75 72 110,993

DE New Castle 99 83 82 81 79 76 81 79 76 441,946

DE Sussex 93 81 80 79 77 74 79 77 74 113,229

FL Brevard 71 69 68 68 66 64 68 66 64 398,978

FL Broward 69 69 69 69 69 69 69 69 69 1,255,488

FL Duval 81 79 78 77 75 72 77 75 72 672,971

FL Escambia 84 82 81 81 79 77 81 79 77 262,798

FL Hillsborough 82 83 82 81 80 78 81 80 78 834,054

FL Lee 71 70 69 69 68 66 69 68 66 335,113

FL Leon 66 61 60 59 57 53 59 57 53 192,493

FL Manatee 75 76 75 74 72 70 74 72 70 211,707

FL Orange 78 78 77 76 74 70 76 74 70 677,491

FL Osceola 72 71 70 69 67 64 69 67 64 107,728

FL Palm Beach 67 63 62 61 59 57 61 59 57 863,518

FL Pasco 75 73 72 71 69 66 71 69 66 281,131

FL Pinellas 73 72 71 70 69 67 70 69 67 851,659

FL Polk 74 72 71 70 68 66 70 68 66 405,382

FL Sarasota 76 76 75 74 72 70 74 72 70 277,776

FL Seminole 72 70 69 67 65 62 67 65 62 287,529

FL St Johns 72 69 68 67 65 62 67 65 62 83,829

FL St Lucie 64 62 61 61 59 57 61 59 57 150,171

FL Volusia 69 67 66 64 62 59 64 62 59 370,712

GA Chatham 72 66 65 64 63 61 64 63 61 216,935

GA DeKalb 100 86 85 82 79 74 82 79 74 545,837
Appendix C: One-hour and Eight-hour County Design Values

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-35

GA Fannin 76 66 65 63 61 58 63 61 58 15,992

GA Fulton 110 95 94 91 89 84 91 89 84 648,951

GA Glynn 75 70 69 68 67 65 68 67 65 62,496

GA Gwinnett 91 78 77 74 71 66 74 71 66 352,910

GA Muscogee 83 75 74 71 69 64 71 69 64 179,278

GA Paulding 89 77 76 73 71 67 73 71 67 41,611

GA Richmond 87 77 76 74 72 68 74 72 68 189,719

GA Rockdale 106 90 89 86 83 78 86 83 78 54,091

IA Linn 62 59 58 58 57 56 58 57 56 168,767

IA Polk 66 62 61 61 60 59 61 60 59 327,140

IA Scott 78 74 73 73 72 71 73 72 71 150,979

IA Van Buren 68 63 62 61 60 59 61 60 59 7,676

IL Adams 74 67 66 65 64 62 65 64 62 66,090

IL Champaign 81 68 67 67 66 64 67 66 64 173,025

IL Cook 91 90 90 91 91 93 90 91 92 5,105,067

IL Du Page 75 70 70 70 69 69 70 69 69 781,666

IL Effingham 81 67 66 66 65 63 66 65 63 31,704

IL Jersey 84 72 71 70 68 64 70 68 64 20,539

IL Kane 85 75 74 74 73 72 74 73 72 317,471

IL Lake 86 81 81 81 80 79 81 80 79 516,418

IL Macon 83 69 68 67 66 64 67 66 64 117,206

IL Macoupin 83 69 68 67 65 63 67 65 63 47,679

IL Madison 93 79 78 76 74 71 76 74 71 249,238

IL McHenry 85 77 76 76 75 73 76 75 73 183,241

IL Peoria 80 71 70 69 68 66 69 68 66 182,827

IL Randolph 78 69 68 67 66 64 67 66 64 34,583

IL Rock Island 70 65 64 64 63 62 64 63 62 148,723

IL Sangamon 76 65 64 63 61 59 63 61 59 178,386

IL St Clair 78 70 69 69 68 66 69 68 66 262,852

IL Will 79 68 67 67 66 65 67 66 65 357,313

IL Winnebago 79 71 70 70 69 68 70 69 68 252,913

IN Allen 90 81 80 79 78 76 79 78 76 300,836

IN Clark 92 76 75 74 73 72 74 73 72 87,777

IN Elkhart 90 79 78 78 77 76 78 77 76 156,198

IN Floyd 90 77 77 77 76 76 77 76 76 64,404

IN Hamilton 97 84 83 83 82 82 83 82 82 108,936

IN Hancock 95 83 82 82 81 80 82 81 80 45,527

IN La Porte 104 93 92 92 91 89 92 91 89 107,066

IN Lake 95 86 85 85 84 83 85 84 83 475,594

IN Madison 91 79 78 78 76 74 78 76 74 130,669

IN Marion 95 82 81 80 79 78 80 79 78 797,159

IN Porter 96 85 84 84 83 81 84 83 81 128,932
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-36

IN St. Joseph 91 80 79 79 78 77 79 78 77 247,052

IN Vanderburgh 93 80 79 78 77 76 78 77 76 165,058

IN Vigo 88 72 71 70 69 68 70 69 68 106,107

IN Warrick 93 77 76 75 74 72 75 74 72 44,920

KS Miami 74 72 71 71 70 69 71 70 69 23,466

KS Pawnee 71 71 71 71 71 71 71 71 71 7,555

KS Sedgwick 74 72 71 71 70 69 71 70 69 403,662

KS Wyandotte 85 83 82 82 81 81 82 81 81 161,993

KY Bell 76 62 61 60 59 57 60 59 57 31,506

KY Boone 82 68 67 67 66 65 67 66 65 57,589

KY Boyd 85 69 68 67 66 65 67 66 65 51,150

KY Bullitt 85 70 69 68 67 66 68 67 66 47,567

KY Campbell 90 79 78 77 76 74 77 76 74 83,866

KY Christian 80 66 65 65 64 62 65 64 62 68,941

KY Daviess 87 73 72 72 71 70 72 71 70 87,189

KY Edmonson 82 68 67 67 66 64 67 66 64 10,357

KY Fayette 85 75 74 74 73 73 74 73 73 225,366

KY Graves 74 60 59 59 58 56 59 58 56 33,550

KY Greenup 80 64 63 63 62 60 63 62 60 36,742

KY Hancock 89 67 66 66 65 63 66 65 63 7,864

KY Hardin 81 62 61 61 60 58 61 60 58 89,240

KY Henderson 86 69 68 68 67 65 68 67 65 43,044

KY Jefferson 91 75 75 75 74 74 75 74 74 664,937

KY Jessamine 80 66 65 64 63 61 64 63 61 30,508

KY Kenton 90 78 77 77 76 74 77 76 74 142,031

KY Lawrence 70 53 52 52 51 50 52 51 50 13,998

KY Livingston 86 72 71 71 70 69 71 70 69 9,062

KY McCracken 80 65 64 64 63 61 64 63 61 62,879

KY McLean 83 69 68 67 66 65 67 66 65 9,628

KY Oldham 87 74 73 73 72 70 73 72 70 33,263

KY Perry 69 58 57 57 56 54 57 56 54 30,283

KY Pike 74 62 61 60 58 56 60 58 56 72,583

KY Pulaski 76 61 60 60 59 58 60 59 58 49,489

KY Scott 78 68 67 66 65 63 66 65 63 23,867

KY Simpson 83 72 71 70 69 67 70 69 67 15,145

LA Ascension 87 81 80 80 79 77 80 79 77 58,214

LA Beauregard 75 69 68 68 67 66 68 67 66 30,083

LA Bossier 79 74 73 73 72 70 73 72 70 86,088

LA Caddo 82 77 76 75 74 72 75 74 72 248,253

LA Calcasieu 85 77 76 76 75 75 76 75 75 168,134

LA East Baton Rouge 95 88 87 86 84 81 86 84 81 380,105

LA Grant 75 69 68 68 67 66 68 67 66 17,526
Appendix C: One-hour and Eight-hour County Design Values

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-37

LA Iberville 96 91 90 90 89 88 90 89 88 31,049

LA Jefferson 83 80 79 79 78 78 79 78 78 448,306

LA Lafayette 84 79 78 77 76 74 77 76 74 164,762

LA Lafourche 85 81 81 81 80 79 81 80 79 85,860

LA Livingston 88 82 81 80 78 76 80 78 76 70,526

LA Orleans 71 66 65 65 64 63 65 64 63 496,938

LA Ouachita 77 73 72 72 71 70 72 71 70 142,191

LA Pointe Coupee 83 77 76 76 74 72 76 74 72 22,540

LA St Bernard 80 75 74 74 73 72 74 73 72 66,631

LA St Charles 81 77 76 76 75 75 76 75 75 42,437

LA St James 84 79 78 77 76 75 77 76 75 20,879

LA St John The Baptist 82 77 76 76 75 74 76 75 74 39,996

LA St Mary 81 76 75 75 74 73 75 74 73 58,086

LA West Baton Rouge 86 80 79 78 76 73 78 76 73 19,419

MA Barnstable 100 89 88 87 85 83 87 85 83 186,605

MA Berkshire 77 67 66 65 64 62 65 64 62 139,352

MA Bristol 97 84 83 82 80 78 82 80 78 506,325

MA Essex 89 79 78 77 75 73 77 75 73 670,080

MA Hampden 89 81 80 80 79 78 80 79 78 456,310

MA Hampshire 97 87 86 85 84 82 85 84 82 146,568

MA Middlesex 87 76 75 75 73 71 75 73 71 1,398,468

MA Plymouth 71 62 61 61 60 58 61 60 58 435,276

MA Suffolk 76 70 70 70 70 70 70 70 70 663,906

MA Worcester 87 75 74 73 71 69 73 71 69 709,705

MD Anne Arundel 107 93 92 90 88 86 90 88 86 427,239

MD Baltimore 96 82 81 79 77 75 79 77 75 692,134

MD Baltimore City 103 93 92 91 90 89 91 90 89 736,014

MD Calvert 85 69 68 67 65 63 67 65 63 51,372

MD Carroll 93 76 75 74 73 71 74 73 71 123,372

MD Cecil 110 92 91 90 88 85 90 88 85 71,347

MD Charles 93 77 76 75 73 71 75 73 71 101,154

MD Harford 107 93 92 91 89 86 91 89 86 182,132

MD Kent 96 82 81 80 78 76 80 78 76 17,842

MD Montgomery 93 78 77 76 74 72 76 74 72 757,027

MD Prince George's 100 86 85 84 82 80 84 82 80 729,268

ME Cumberland 94 83 82 80 78 76 80 78 76 243,135

ME Hancock 83 72 71 70 69 67 70 69 67 46,948

ME Kennebec 75 67 66 66 64 62 66 64 62 115,904

ME Knox 87 76 75 74 72 70 74 72 70 36,310

ME Oxford 59 53 52 52 50 48 52 50 48 52,602

ME Penobscot 73 65 64 64 62 60 64 62 60 146,601

ME Piscataquis 64 58 57 56 55 53 56 55 53 18,653
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-38

ME Sagadahoc 95 82 81 80 78 76 80 78 76 33,535

ME Somerset 69 62 61 61 59 57 61 59 57 49,767

ME York 96 85 84 83 81 79 83 81 79 164,587

MI Allegan 98 86 85 85 84 83 85 84 83 90,509

MI Benzie 88 79 78 78 77 75 78 77 75 12,200

MI Berrien 98 86 85 85 84 82 85 84 82 161,378

MI Cass 94 83 82 81 80 78 81 80 78 49,477

MI Clinton 74 64 63 63 62 61 63 62 61 57,883

MI Genesee 84 75 75 75 74 73 75 74 73 430,459

MI Huron 82 73 72 72 71 69 72 71 69 34,951

MI Ingham 83 74 73 73 72 71 73 72 71 281,912

MI Kalamazoo 87 75 74 74 73 71 74 73 71 223,411

MI Kent 88 79 78 77 76 75 77 76 75 500,631

MI Lenawee 83 75 74 74 73 71 74 73 71 91,476

MI Macomb 91 82 82 82 81 81 82 81 81 717,400

MI Mason 98 88 87 87 86 84 87 86 84 25,537

MI Muskegon 99 89 88 87 86 84 87 86 84 158,983

MI Oakland 78 71 70 70 69 68 70 69 68 1,083,592

MI Ottawa 84 75 74 73 72 71 73 72 71 187,768

MI St. Clair 92 84 83 82 81 80 82 81 80 145,607

MI Washtenaw 83 74 73 72 71 70 72 71 70 282,937

MI Wayne 88 80 79 79 79 79 79 79 79 2,111,687

MN Anoka 81 79 79 79 78 78 79 78 78 243,641

MN Dakota 68 66 66 66 65 65 66 65 65 275,227

MN Lake 63 63 63 63 63 63 63 63 63 10,415

MN St Louis 66 66 66 66 66 66 66 66 66 198,213

MN Washington 74 72 71 71 70 69 71 70 69 145,896

MO Clay 94 90 89 88 86 84 88 86 84 153,411

MO Greene 78 70 69 68 66 63 68 66 63 207,949

MO Jackson 73 70 69 69 68 66 69 68 66 633,232

MO Jefferson 90 83 82 79 78 76 79 78 76 171,380

MO Monroe 84 78 77 76 74 72 76 74 72 9,104

MO Platte 86 81 81 82 81 79 82 81 79 57,867

MO St Louis City 83 76 75 75 74 73 75 74 73 396,685

MO St. Charles 100 90 89 87 85 82 87 85 82 212,907

MO St. Louis 88 78 77 75 74 72 75 74 72 993,529

MO Ste. Genevieve 87 77 76 75 73 70 75 73 70 16,037

MS Adams 77 74 73 73 72 70 73 72 70 35,356

MS Choctaw 55 49 48 48 47 46 48 47 46 9,071

MS DeSoto 88 84 83 83 82 81 83 82 81 67,910

MS Hancock 80 76 75 74 73 72 74 73 72 31,760

MS Hinds 76 70 69 68 67 65 68 67 65 254,441
Appendix C: One-hour and Eight-hour County Design Values

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-39

MS Jackson 86 88 87 87 86 85 87 86 85 115,243

MS Lauderdale 72 65 64 63 62 60 63 62 60 75,555

MS Lee 75 68 67 66 65 63 66 65 63 65,581

MS Madison 77 71 70 69 68 67 69 68 67 53,794

MS Sharkey 80 74 73 73 72 71 73 72 71 7,066

MS Warren 76 71 70 70 69 68 70 69 68 47,880

NC a Alexander 79 71 70 68 66 62 68 66 62 27,544

NC Buncombe 75 67 66 65 63 59 65 63 59 174,821

NC Caldwell 79 71 70 68 66 63 68 66 63 70,709

NC Camden 83 74 73 72 70 68 72 70 68 5,904

NC Caswell 89 74 73 71 69 66 71 69 66 20,693

NC Chatham 85 71 70 68 66 63 68 66 63 38,759

NC Cumberland 87 79 78 76 74 69 76 74 69 274,566

NC Davie 88 78 77 75 73 69 75 73 69 27,859

NC Duplin 72 65 64 62 60 58 62 60 58 39,995

NC Durham 83 74 73 71 69 64 71 69 64 181,835

NC Edgecombe 84 76 75 72 70 66 72 70 66 56,558

NC Forsyth 89 80 79 77 75 71 77 75 71 265,878

NC Franklin 86 73 72 69 67 63 69 67 63 36,414

NC Granville 94 83 82 79 76 71 79 76 71 38,345

NC Guilford 85 76 75 73 71 66 73 71 66 347,420

NC Haywood 85 75 74 72 70 67 72 70 67 46,942

NC Johnston 87 76 75 73 71 67 73 71 67 81,306

NC Lincoln 86 77 76 73 71 67 73 71 67 50,319

NC Martin 75 65 64 63 61 58 63 61 58 25,078

NC Mecklenburg 97 94 93 90 87 82 90 87 82 511,433

NC New Hanover 79 72 71 70 68 66 70 68 66 120,284

NC Northampton 86 71 70 69 67 64 69 67 64 20,798

NC Person 84 68 67 65 63 60 65 63 60 30,180

NC Pitt 88 77 76 74 72 68 74 72 68 107,924

NC Rockingham 84 73 72 70 68 65 70 68 65 86,064

NC Rowan 93 82 81 79 77 73 79 77 73 110,605

NC Swain 66 57 56 55 53 51 55 53 51 11,268

NC Wake 89 82 81 78 75 70 78 75 70 423,380

NC Yancey 84 71 70 69 67 65 69 67 65 15,419

ND Cass 67 67 67 67 67 67 67 67 67 102,874

NE Douglas 67 65 64 64 63 63 64 63 63 416,444

NE Lancaster 56 54 54 54 53 53 54 53 53 213,641

NH Belknap 64 57 56 56 55 53 56 55 53 49,216

NH Carroll 62 55 54 53 52 51 53 52 51 35,410

NH Cheshire 74 66 65 64 63 61 64 63 61 70,121

NH Coos 77 70 69 67 65 63 67 65 63 34,828
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-40

NH Grafton 57 51 50 50 49 47 50 49 47 74,929

NH Hillsborough 87 77 76 75 74 72 75 74 72 336,073

NH Merrimack 71 63 62 62 61 60 62 61 60 120,005

NH Rockingham 95 86 85 84 82 80 84 82 80 245,845

NH Strafford 78 71 70 69 68 66 69 68 66 104,233

NH Sullivan 71 64 63 62 61 59 62 61 59 38,592

NJ Atlantic 100 87 86 85 83 81 85 83 81 224,327

NJ Bergen 94 84 83 82 81 80 82 81 80 825,380

NJ Camden 106 92 91 90 88 85 90 88 85 502,824

NJ Cumberland 93 78 77 76 74 71 76 74 71 138,053

NJ Essex 92 79 78 78 77 76 78 77 76 778,206

NJ Gloucester 105 92 91 90 88 86 90 88 86 230,082

NJ Hudson 98 94 94 95 94 94 95 94 94 553,099

NJ Hunterdon 98 83 82 81 79 76 81 79 76 107,776

NJ Mercer 101 88 87 86 84 82 86 84 82 325,824

NJ Middlesex 103 89 88 87 86 84 87 86 84 671,780

NJ Monmouth 100 87 86 85 83 81 85 83 81 553,124

NJ Morris 100 84 83 82 80 78 82 80 78 421,353

NJ Ocean 108 92 91 89 87 84 89 87 84 433,203

NJ Union 83 71 70 69 68 66 69 68 66 493,819

NY Albany 81 72 71 71 70 68 71 70 68 292,594

NY Bronx 95 97 97 98 98 99 97 98 98 1,203,789

NY Chautauqua 85 74 73 72 71 69 72 71 69 141,895

NY Chemung 73 65 64 63 62 60 63 62 60 95,195

NY Dutchess 90 78 77 76 74 72 76 74 72 259,462

NY Erie 76 66 65 65 64 63 65 64 63 968,532

NY Essex 86 78 77 76 74 72 76 74 72 37,152

NY Hamilton 75 67 66 65 64 62 65 64 62 5,279

NY Herkimer 70 62 61 61 60 58 61 60 58 65,797

NY Jefferson 88 79 78 77 75 73 77 75 73 110,943

NY Kings 88 79 78 77 76 74 77 76 74 2,300,664

NY Madison 77 69 68 67 66 64 67 66 64 69,120

NY Monroe 81 74 73 73 72 70 73 72 70 713,968

NY Niagara 85 77 76 76 75 74 76 75 74 220,756

NY Oneida 72 64 63 63 62 60 63 62 60 250,836

NY Onondaga 79 70 69 69 68 66 69 68 66 468,973

NY Orange 91 79 78 77 76 74 77 76 74 307,647

NY Putnam 90 78 77 76 74 72 76 74 72 83,941

NY Queens 91 90 90 90 90 92 89 90 91 1,951,598

NY Richmond 103 92 91 90 88 86 90 88 86 378,977

NY Saratoga 76 68 67 67 66 64 67 66 64 181,276

NY Schenectady 74 66 65 65 64 62 65 64 62 149,285
Appendix C: One-hour and Eight-hour County Design Values

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-41

NY Suffolk 102 89 88 86 84 82 86 84 82 1,321,864

NY Ulster 82 72 71 70 68 66 70 68 66 165,304

NY Wayne 83 75 74 73 72 71 73 72 71 89,123

NY Westchester 94 82 81 80 79 77 80 79 77 874,866

OH Allen 89 75 74 74 73 72 74 73 72 109,755

OH Ashtabula 85 74 73 73 72 70 73 72 70 99,821

OH Butler 93 77 76 76 75 74 76 75 74 291,479

OH Clark 93 79 78 77 76 74 77 76 74 147,548

OH Clermont 89 76 75 75 74 72 75 74 72 150,187

OH Clinton 97 80 79 78 77 75 78 77 75 35,415

OH Cuyahoga 88 77 76 75 74 73 75 74 73 1,412,140

OH Franklin 87 73 72 71 70 69 71 70 69 961,437

OH Hamilton 95 87 87 88 88 88 88 88 88 866,228

OH Jefferson 84 71 70 69 68 66 69 68 66 80,298

OH Knox 91 77 76 76 75 73 76 75 73 47,473

OH Lake 99 86 85 85 84 82 85 84 82 215,499

OH Lawrence 82 65 64 64 63 61 64 63 61 61,834

OH Licking 92 78 77 77 76 74 77 76 74 128,300

OH Logan 86 73 72 71 70 68 71 70 68 42,310

OH Lorain 87 78 77 76 75 74 76 75 74 271,126

OH Lucas 89 80 79 79 78 76 79 78 76 462,361

OH Madison 91 76 75 74 73 71 74 73 71 37,068

OH Mahoning 90 78 77 77 75 73 77 75 73 264,806

OH Medina 89 78 77 77 76 74 77 76 74 122,354

OH Miami 88 75 74 73 72 71 73 72 71 93,182

OH Montgomery 91 76 75 75 74 73 75 74 73 573,809

OH Portage 88 77 76 76 74 72 76 74 72 142,585

OH Preble 86 70 69 68 67 65 68 67 65 40,113

OH Stark 88 76 75 75 74 73 75 74 73 367,585

OH Summit 91 80 79 79 78 76 79 78 76 514,990

OH Trumbull 93 81 80 79 77 75 79 77 75 227,813

OH Warren 99 83 82 81 79 77 81 79 77 113,909

OH Washington 89 69 68 67 66 64 67 66 64 62,254

OK Cleveland 79 78 77 76 74 72 76 74 72 174,253

OK Comanche 60 57 56 56 55 54 56 55 54 111,486

OK Mc Clain 77 74 73 72 71 69 72 71 69 22,795

OK Oklahoma 83 83 82 81 80 78 81 80 78 599,611

OK Tulsa 88 87 86 86 85 84 86 85 84 503,341

PA Allegheny 105 95 94 94 93 91 94 93 91 1,336,449

PA Beaver 87 76 75 75 74 72 75 74 72 186,093

PA Berks 92 78 77 76 74 71 76 74 71 336,523

PA Blair 90 75 74 73 72 70 73 72 70 130,542
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-42

PA Bucks 102 86 85 83 81 79 83 81 79 541,174

PA Cambria 88 74 73 72 71 69 72 71 69 163,029

PA Dauphin 88 75 74 72 70 67 72 70 67 237,813

PA Delaware 100 87 86 85 83 81 85 83 81 547,651

PA Erie 87 75 74 73 72 70 73 72 70 275,572

PA Franklin 86 71 70 69 68 66 69 68 66 121,082

PA Lackawanna 86 75 74 73 72 70 73 72 70 219,039

PA Lancaster 96 83 82 81 79 76 81 79 76 422,822

PA Lawrence 84 74 73 72 70 68 72 70 68 96,246

PA Lehigh 95 80 79 78 76 73 78 76 73 291,130

PA Luzerne 90 74 73 72 71 69 72 71 69 328,149

PA Lycoming 73 61 60 60 59 57 60 59 57 118,710

PA Mercer 92 81 80 78 76 74 78 76 74 121,003

PA Montgomery 97 83 82 81 79 76 81 79 76 678,111

PA Northampton 90 76 75 74 72 70 74 72 70 247,105

PA Perry 84 70 69 68 66 64 68 66 64 41,172

PA Philadelphia 102 94 94 94 93 92 94 93 92 1,585,577

PA Washington 95 74 73 73 71 69 73 71 69 204,584

PA Westmoreland 88 76 75 74 73 71 74 73 71 370,321

PA York 87 74 73 72 70 68 72 70 68 339,574

RI Kent 96 82 81 79 77 75 79 77 75 161,135

RI Providence 87 74 73 72 71 69 72 71 69 596,270

SC a Abbeville 77 70 69 67 65 62 67 65 62 23,862

SC Aiken 81 73 72 70 68 64 70 68 64 120,940

SC Anderson 88 79 78 76 74 70 76 74 70 145,196

SC Barnwell 81 71 70 68 66 64 68 66 64 20,293

SC Berkeley 71 63 62 61 60 58 61 60 58 128,776

SC Charleston 76 70 69 68 67 65 68 67 65 295,039

SC Cherokee 84 74 73 71 69 65 71 69 65 44,506

SC Chester 87 78 77 75 73 70 75 73 70 32,170

SC Darlington 78 68 67 66 64 61 66 64 61 61,851

SC Edgefield 76 66 65 63 61 58 63 61 58 18,375

SC Oconee 76 68 67 65 63 59 65 63 59 57,494

SC Pickens 83 76 75 72 70 66 72 70 66 93,894

SC Richland 83 74 73 71 69 64 71 69 64 285,720

SC Spartanburg 86 79 78 75 73 68 75 73 68 226,800

SC Union 81 73 72 70 68 65 70 68 65 30,337

SC Williamsburg 70 61 60 59 58 56 59 58 56 36,815

SC York 82 75 74 72 70 66 72 70 66 131,497

TN Anderson 87 75 74 72 70 68 72 70 68 68,250

TN Blount 95 83 82 81 79 76 81 79 76 85,969

TN Davidson 88 82 81 81 80 79 81 80 79 510,784
Appendix C: One-hour and Eight-hour County Design Values

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-43

TN Hamilton 90 82 81 79 77 73 79 77 73 285,536

TN Haywood 82 71 70 69 68 66 69 68 66 19,437

TN Humphreys 77 65 64 64 63 61 64 63 61 15,795

TN Jefferson 96 80 79 78 76 73 78 76 73 33,016

TN Knox 95 85 84 83 81 78 83 81 78 335,749

TN Putnam 80 67 66 65 64 62 65 64 62 51,373

TN Rutherford 79 67 66 65 63 61 65 63 61 118,570

TN Sevier 93 81 80 78 76 73 78 76 73 51,043

TN Shelby 95 90 89 88 86 84 88 86 84 826,330

TN Sullivan 88 77 76 76 75 73 76 75 73 143,596

TN Sumner 99 88 87 86 84 81 86 84 81 103,281

TN Williamson 88 80 79 78 76 74 78 76 74 81,021

TN Wilson 90 80 79 78 76 73 78 76 73 67,675

TX Bexar 87 85 84 84 83 82 84 83 82 1,185,394

TX Brazoria 92 87 86 86 85 84 86 85 84 191,707

TX Cameron 66 66 66 66 66 66 66 66 66 260,120

TX Collin 101 93 92 91 89 87 91 89 87 264,036

TX Dallas 95 89 88 88 87 85 88 87 85 1,852,810

TX Denton 104 94 93 92 90 87 92 90 87 273,525

TX Ellis 82 78 77 76 75 73 76 75 73 85,167

TX Galveston 105 99 98 98 97 97 98 97 97 217,399

TX Gregg 91 84 83 83 81 79 83 81 79 104,948

TX Harris 117 109 109 110 110 111 109 110 110 2,818,199

TX Hidalgo 56 55 55 55 55 55 55 55 55 383,545

TX Jefferson 93 86 85 85 84 82 85 84 82 239,397

TX Nueces 83 81 81 81 81 81 81 81 81 291,145

TX Orange 86 80 79 79 78 77 79 78 77 80,509

TX Smith 89 82 81 80 79 77 80 79 77 151,309

TX Tarrant 97 89 88 87 86 84 87 86 84 1,170,103

TX Travis 81 77 76 75 74 72 75 74 72 576,407

TX Victoria 78 75 74 74 73 73 74 73 73 74,361

TX Webb 60 60 60 60 60 60 60 60 60 133,239

VA Alexandria City 87 76 75 75 75 75 75 75 75 111,183

VA Arlington 91 79 79 79 78 78 79 78 78 170,936

VA Caroline 84 70 69 67 65 62 67 65 62 19,217

VA Charles City 90 77 76 75 73 70 75 73 70 6,282

VA Chesterfield 87 74 73 71 69 67 71 69 67 209,274

VA Fairfax 92 79 78 78 76 74 78 76 74 818,584

VA Fauquier 81 64 63 62 61 59 62 61 59 48,741

VA Frederick 84 67 66 65 63 61 65 63 61 45,723

VA Hampton City 87 78 77 76 74 72 76 74 72 133,793

VA Hanover 90 77 76 74 72 68 74 72 68 63,306
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-44

VA Henrico 90 77 76 74 72 69 74 72 69 217,881

VA Henry 82 67 66 64 62 60 64 62 60 56,942

VA Madison 86 71 70 69 67 65 69 67 65 11,949

VA Prince William 88 73 72 71 69 67 71 69 67 215,686

VA Roanoke 78 66 65 64 62 59 64 62 59 79,332

VA Stafford 86 69 68 67 65 63 67 65 63 61,236

VA Suffolk City 82 70 69 68 66 63 68 66 63 52,141

VA Wythe 78 61 60 59 58 56 59 58 56 25,466

VT Bennington 79 71 70 69 67 65 69 67 65 35,845

VT Chittenden 69 63 62 61 60 59 61 60 59 131,761

WI Brown 82 75 74 74 73 71 74 73 71 194,594

WI Columbia 81 76 75 74 73 71 74 73 71 45,088

WI Dane 79 74 73 73 72 70 73 72 70 367,085

WI Dodge 78 72 71 71 70 68 71 70 68 76,559

WI Door 92 83 82 81 80 78 81 80 78 25,690

WI Florence 64 60 59 59 58 57 59 58 57 4,590

WI Fond Du Lac 79 73 72 72 71 70 72 71 70 90,083

WI Jefferson 80 73 72 72 71 69 72 71 69 67,783

WI Kenosha 96 88 87 86 85 83 86 85 83 128,181

WI Kewaunee 93 84 83 82 81 79 82 81 79 18,878

WI Manitowoc 95 85 84 83 82 80 83 82 80 80,421

WI Marathon 71 67 66 66 65 63 66 65 63 115,400

WI Milwaukee 94 89 88 87 86 84 87 86 84 959,275

WI Oneida 64 61 60 59 58 57 59 58 57 31,679

WI Outagamie 80 75 74 74 73 71 74 73 71 140,510

WI Ozaukee 98 94 93 93 92 90 93 92 90 72,831

WI Polk 69 66 65 65 64 63 65 64 63 34,773

WI Racine 92 85 84 84 82 80 84 82 80 175,034

WI Rock 85 78 77 77 76 75 77 76 75 139,510

WI Sauk 74 70 69 68 67 66 68 67 66 46,975

WI Sheboygan 92 83 82 81 80 79 81 80 79 103,877

WI St Croix 67 65 64 64 63 62 64 63 62 50,251

WI Vernon 69 66 65 65 64 63 65 64 63 25,617

WI Walworth 83 77 76 76 75 73 76 75 73 75,000

WI Washington 80 74 73 73 72 70 73 72 70 95,328

WI Waukesha 81 75 74 73 72 70 73 72 70 304,715

WI Winnebago 81 76 75 74 73 71 74 73 71 140,320

WV Cabell 88 71 70 69 68 66 69 68 66 96,827

WV Greenbrier 83 61 60 59 58 57 59 58 57 34,693

WV Hancock 85 73 72 72 71 69 72 71 69 35,233

WV Kanawha 81 68 67 65 63 61 65 63 61 207,619

WV Ohio 86 68 67 67 66 64 67 66 64 50,871
Appendix C: One-hour and Eight-hour County Design Values

Table C-12. Eight-hour county design values (ppb) and population

State County dv8 bg8 nt810 t807 t810 t820 u807 u810 u820 cntypop

C-45

WV Wood 89 70 69 68 67 65 68 67 65 86,915

Table C-13. Metropolitan areas and rural counties with design values that exceeded the 1-hour

standard prior to ROTR controls, and were projected to meet but remain within 15% of the 1-

hour standard after ROTR controls.

Name Design Value

(ppb) Pop’n.

Manitowoc WI 113 80,421

Door WI 113 25,690

Mason MI 113 25,537

Kent MD 110 17,842

Sagadahoc ME 109 33,535

Atlanta, GA MSA 124 2,959,500

Barnstable-Yarmouth, MA MSA 118 134,954

Baton Rouge, LA MSA 122 528,261

Birmingham, AL MSA 117 839,942

Boston-Worcester-Lawrence, MA-NH-ME-CT CMSA 119 5,455,403

Chicago-Gary-Kenosha, IL-IN-WI CMSA 124 8,239,820

Dallas-Fort Worth, TX CMSA 124 4,037,282

Grand Rapids-Muskegon-Holland, MI MSA 121 937,891

Houma, LA MSA 122 182,842

Kansas City, MO-KS MSA 122 1,582,874

Lancaster, PA MSA 109 422,822

Louisville, KY-IN MSA 111 949,012

Milwaukee-Racine, WI CMSA 118 1,607,183

Pittsburgh, PA MSA 121 2,394,811

Providence-Fall River-Warwick, RI-MA MSA 114 1,134,350

St. Louis, MO-IL MSA 117 2,492,348

Springfield, MA MSA 118 587,884

sum 34,670,204

MA count 17

MA sum 34,487,179

Cnty count 5

Cnty sum 183,025
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

C-46

1. U.S. EPA. Green Book Web Site: http://www.epa.gov/oar/oaqps/greenbook/oytc.html.

Appendix C. References
Appendix D: Legal Authority for Gasoline Sulfur Control

mmmBecause sulfur is directly or indirectly controlled by EPA requirements, and will be controlled directly

under today’s proposal, states are preempted from initiating sulfur control programs unless they are identical to the

federal requirements. See the discussion in Section V.B on this subject.

D-1

Appendix D: EPA’s Legal Authority for Proposing 

Gasoline Sulfur Controls

We are proposing gasoline sulfur controls pursuant to our authority under Section

211(c)(1) of the Clean Air Act. This section gives us the authority to “control or prohibit the

manufacture, introduction into commerce, offering for sale, or sale” of any fuel or fuel additive

(A) whose emission products, in the judgment of the Administrator, cause or contribute to air

pollution "which may be reasonably anticipated to endanger the public health or welfare” or (B)

whose emission products “will impair to a significant degree the performance of any emission

control device or system which is in general use, or which the Administrator finds has been

developed to a point where in a reasonable time it would be in general use” were the fuel control

or prohibition adopted. The following sections describe current our regulatory requirements that

affect gasoline sulfur content, and explain our bases for proposing to control gasoline sulfur

under Section 211(c)(1).

A. EPA’s Current Regulatory Requirements for Gasoline

We currently have regulatory requirements for conventional and reformulated gasoline

(RFG), adopted under Sections 211(c) and 211(k) of the Act. RFG is required to be sold in

certain ozone nonattainment areas. Gasoline sold in the rest of the country is subject to the

conventional gasoline requirements. See 40 CFR part 80.

Both the RFG and conventional gasoline (CG) requirements include a NOx performance

standard that requires refiners to achieve a certain level of NOx control compared to1990

baseline levels. As a practical matter, compliance with this performance standard results in

limiting sulfur levels in RFG. The NOx reductions required by the Phase 2 RFG requirements,

effective on January 1, 2000, are expected to result in RFG sulfur levels of about 150 ppm. In

addition, EPA’s regulations require compliance with the RFG and CG standards (including the

NOx performance standard) to be calculated using the Complex Model beginning in 1998. This

model contains range limits for RFG for a number of fuel parameters that affect NOx

performance, including a range of zero to 500 ppm for sulfur. Therefore, the requirement to use

the Complex Model effectively limits sulfur levels in RFG to no more than 500 ppm. The sulfur

Complex Model range limit for RFG is the only direct regulation of sulfur content under Section

211(c)(1). However, the NOx performance standards for RFG and CG have an indirect effect on

sulfur content.mmm

All gasoline is subject to Section 211(f) of the Act, which prohibits fuel or fuel additive
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

nnnStandard Specification for Automotive Spark-Ignition Engine Fuel

D-2

manufactures from introducing into commerce, or increasing the concentration in use of, any fuel

or fuel additive for general use in light duty motor vehicles which is not “substantially similar” to

the fuel used in the certification of model year 1975 or later vehicles or engines. We have

interpreted "substantially similar" for unleaded gasoline to include any gasoline meeting the 1988

ASTM specifications for unleaded gasoline (ASTM D 4814-88nnn), which limits the sulfur

content of unleaded gasoline to 0.1 weight percent (1000 ppm) sulfur.

B. How the Proposed Gasoline Sulfur Control Program Meets the CAA Section

211(c) Criteria

Under Section 211(c)(1), EPA may adopt a fuel control if at least one of the following

two criteria is met: 1) the emission products of the fuel cause or contribute to air pollution which

may reasonably be anticipated to endanger public health or welfare, or 2) the emission products

of the fuel will significantly impair emissions control systems in general use or which would be

in general use were the fuel control to be adopted. We are proposing to control sulfur levels in

gasoline based on both of these criteria. Under the first criterion, we believe that emissions

products of sulfur in gasoline used in Tier 1 and LEV technology vehicles contribute to ozone

pollution, air toxics, and PM. Under the second criterion, we believe that gasoline sulfur in fuel

that will be used in Tier 2 technology vehicles will significantly impair the emissions control

systems expected to be used in such vehicles. The following sections summarize our analysis of

each criterion.

1. Health and Welfare Concerns of Air Pollution Caused by Sulfur in Gasoline

We believe that the emission products of gasoline sulfur contribute to air pollution that

can reasonably be anticipated to endanger public health and welfare. The combustion products

of the sulfur-containing compounds in gasoline (SO2 and other sulfur oxides) contribute to air

pollution that has adverse impacts on public health and welfare. The greatest impact of gasoline

sulfur on pollution is the increase in emissions of hydrocarbons (including hazardous air

pollutants such as benzene and 1,3-butadiene), NOx, particulate matter, and compounds such as

nitrates and sulfates that become particulates in the atmosphere. As explained below and in the

RIA, these increased emissions result primarily from the adverse impact of high sulfur levels on

the automotive catalysts used in the vehicles which have recently entered the fleet or will be used

to comply with the proposed Tier 2 standards. The health and welfare implications of the

emissions of these compounds are discussed in greater detail in Section III of the Preamble.

Section 211(c)(2)(A) requires that, prior to adopting a fuel control based on a finding that

the fuel’s emission products contribute to air pollution that can reasonably be anticipated to

endanger public health or welfare, EPA consider “all relevant medical and scientific evidence
Appendix D: Legal Authority for Gasoline Sulfur Control

D-3

available, including consideration of other technologically or economically feasible means of

achieving emission standards under [section 202 of the Act].” EPA’s analysis of the medical and

scientific evidence relating to the emissions impact of sulfur in gasoline is described in more

detail in the RIA. 

2. Impact of Gasoline Sulfur Emission Products on Emission Control Systems 

EPA believes that sulfur in gasoline can significantly impair the emissions control

technology of vehicles designed to meet the proposed Tier 2 emissions standards. We know that

gasoline sulfur has a negative impact on vehicle emission controls. This is not a new

development. Vehicles depend on the catalytic converter to oxidize or reduce emissions of HC,

CO, and NOx. Sulfur and sulfur compounds attach or “adsorb” to the precious metals which are

required to convert these emissions. Sulfur also blocks sites on the catalyst designed to store

oxygen which are necessary to optimize NOx emissions conversions. While the amount of sulfur

contamination can vary depending on the metals used in the catalyst and other aspects of the

design and operation of the vehicle, some level of sulfur contamination will occur in any catalyst.

For older vehicles designed to meet Tier 0 and Tier 1 emission standards, this sulfur

contamination increases emissions of NMHC and NOx by almost 17 percent when one of these

vehicles is operated on gasoline containing 330 ppm sulfur (approximately the current national

average sulfur level) compared to operation on gasoline with 30 ppm sulfur (which is close to

California’s current average sulfur level, and is the average sulfur level proposed in this notice). 

Thus, Tier 0 and Tier 1 vehicles have higher emissions when they are exposed to sulfur levels

substantially higher than the proposed sulfur standard. This increase is generally not enough to

cause a vehicle to exceed the full useful life emission standards in practice, because car

manufacturers design the vehicles with a margin of safety to compensate for deterioration in

emissions performance over the life of the vehicle. However, it does lead to greater in-use

emissions than achieved with the proposed control on gasoline sulfur content.

The sulfur impact on the catalysts used in later model vehicles is clearly significant. High

sulfur levels have been shown to significantly impair the emissions control systems of cleaner,

later technology vehicles. The California LEV standards and Federal NLEV standards, as well as

California's new LEV-II standards and our proposed Tier 2 standards, require catalysts to be

extremely efficient to adequately reduce emissions over the full useful life of the vehicle. Recent

test programs conducted by the automotive and oil industries show that LEV and ULEV vehicles

can experience, on average, a 40 percent increase in NMHC and 134 percent increase in NOx

emissions when operated on 330 ppm sulfur fuel compared to 30 ppm sulfur fuel. This level of

emissions increase is significant enough that it would undermine the technical and economic

feasibility of the Tier 2 standards proposed today. 

This level of impact on emission control system efficiency would mean actual in-use

emissions reductions from the proposed tier 2 standards would be undercut to such a degree that

the resulting limited in-use emissions reductions would not warrant the expense imposed by the
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

D-4

Tier 2 standards, and would not achieve the in-use emissions reductions from these motor

vehicles needed to address the air quality problems described elsewhere in this notice. In

addition, the concerns about irreversibility of the damage to the catalyst mean it would not be

feasible to design an emission control system that would offset this level of impact on the

efficiency of the control system in order to comply over the useful life of the vehicles. Average

sulfur levels in the U.S. are currently high enough to significantly impair the emissions control

systems in new technology vehicles, and to potentially cause these vehicles to fail emission

standards required for vehicles up through 100,000 miles (or more) of operation.

Based on this information, we have concluded that the sensitivity of automotive catalysts

to sulfur has increased to such a degree in vehicle technology currently available, and expected to

be used to meet the proposed Tier 2 standards, that sulfur levels in gasoline must be reduced to

enable these catalysts to operate properly. Not only will harmful emissions from vehicles on the

road today be reduced through lowering gasoline sulfur levels, but the emissions control systems

expected to be used to attain the proposed Tier 2 standards will be significantly impaired if sulfur

levels are not substantially reduced from current levels. A lesser reduction in gasoline sulfur

levels nationwide would likely require us to reduce the stringency of the proposed Tier 2

standards. The same kind of analysis for Tier 0 and Tier 1 vehicles could arguably support a

determination that gasoline sulfur levels significantly impair the emissions control systems of

these vehicles. This is because the effect of sulfur in reducing catalyst efficiency and thereby

increasing emissions exists for all vehicles at issue here (Tier 0 through tier 2), presenting more a

question of difference in degree than in the nature of the effects. 

Sulfur in gasoline can also significantly impair the onboard diagnostic (OBD) systems in

current and future vehicles. EPA regulations require all vehicles to be equipped with OBD

systems that monitor catalyst performance and other emissions-related performance, and warns

the vehicle owner if the emissions control system is not functioning properly. In a 1997 staff

paper, EPA concluded that sulfur in gasoline can directly impact OBD systems by affecting the

OBD system’s oxygen sensors.1

 It is possible that high sulfur levels may impair the OBD system

in such a way that it does not recognize an improperly functioning catalyst, and fails to warn the

owner. In addition, it is not clear that the conditions which may reverse some of sulfur’s effect

on the catalyst will also reverse this impact on the OBD system’s oxygen sensors. The impact of

sulfur on OBD systems in cleaner technology vehicles may be even more significant, since the

OBD malfunction thresholds are expressed as multiples of the applicable hydrocarbon standard. 

Therefore, the impact of sulfur on OBD systems in vehicles meeting more stringent hydrocarbon

standards would be more significant in relative terms.

3. Sulfur Levels that Tier 2 Vehicles Can Tolerate

We believe that Tier 2 vehicles that operate on gasoline will have to use fuel with sulfur

levels no greater than 80 ppm to avoid significant impairment of their emissions control systems. 

Furthermore, on average, these vehicles will not be able to be exposed to sulfur levels

substantially greater than 30 ppm to achieve the desired emission performance and avoid
Appendix D: Legal Authority for Gasoline Sulfur Control

D-5

significantly impairing the emissions control system. These conclusions are based on data

collected on vehicles currently sold in California or being developed for sale in California and

the Northeast (the latter under the NLEV program).

The test data from industry test programs and individual automotive and catalyst

manufacturers show that even very low levels of sulfur have some impact on catalyst

performance. The data also show that the greatest increase in emissions comes as the sulfur level

is increased from the lowest levels. At higher sulfur levels, the catalyst is approaching the point

of being saturated with sulfur, and its performance is already impaired, such that an additional

increase in sulfur content has a smaller impact on emissions. This trend applies generally for all

of the regulated pollutants (NMHC, CO, NOx). However, for most vehicles, the impact is

greatest for NOx.

While the overall trends demonstrate that high sulfur levels significantly impair the

emissions control system of newer technology vehicles, the data also shows that some vehicles

are much less sensitive to sulfur than others. The reasons for these vehicle-to-vehicle variations

are not fully understood. We have identified a number of factors involved in the vehicle design

and operation which appear to contribute to the variation. To summarize briefly, sulfur

sensitivity is impacted not only by the catalyst formulation (the types and amounts of precious

metals used in the catalyst) but also by the following factors:

the materials used to provide oxygen storage capacity in the catalyst, as well as the general design

of the catalyst,

- the location of the catalyst relative to the engine, which impacts the temperatures inside the

catalyst,

the mix of air and fuel entering the engine over the course of operation, which is varied by the

engine’s computer in response to the driving situation and affects the mix of gases entering the

catalyst from the engine, and

the speeds the car is driven at and the load the vehicle is carrying, which also impact the

temperatures experienced by the catalyst.

All of these factors contribute not only to the degree to which sulfur will poison a catalyst, but

also whether and how easily the sulfur will be removed during a vehicle’s normal operation. 

This cycle of sulfur collection (adsorption) and removal (desorption) in the catalyst is what

ultimately affects sulfur’s net impact on emissions and the emissions control system, both short

and long term. Since these factors vary for every vehicle, the sulfur impact varies for every

vehicle to some degree. There is no single factor that guarantees that a vehicle will be very

sensitive or very insensitive to sulfur. None of the data that we have reviewed indicates a vehicle

design which is completely insensitive to sulfur, or even capable of tolerating average sulfur

levels above 30 ppm without a significant impairment of its emissions control system.
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

D-6

Based on the data and information obtained from catalyst manufacturers, we have also

concluded that there are no viable emission control alternatives that could achieve the same level

of emission standards without reducing commercial gasoline sulfur levels, as explained in the

next section.

4. Sulfur Sensitivity of Other Catalysts

Section 211(c)(2)(B) requires that, prior to adopting a fuel control based on a significant

impairment to vehicle emissions control systems, EPA consider available scientific and

economic data, including a cost benefit analysis comparing emissions control devices or systems

which are or will be in general use that require the proposed fuel control with such devices or

systems which are or will be in general use that do not require the proposed fuel control. As

described below, we conclude that the emissions control systems expected to be used to meet the

proposed Tier 2 standards would be significantly impaired by operation on high sulfur gasoline. 

Our analysis of the available scientific and economic data can be found in the Preamble,

including an analysis of the environmental benefits of the proposed control, an analysis of the

costs and the technological feasibility of controlling sulfur to the proposed levels, and a costbenefit analysis of the proposed sulfur control and Tier 2 vehicle emissions standards. Under

Section 211(c)(2)(B), EPA is also required to compare the costs and benefits of achieving vehicle

emissions standards through emissions control systems that are not sulfur-sensitive, if any such

systems are or are will be in general use. 

We have determined that there are not (and will not be in the foreseeable future) emission

control devices available for gasoline-powered vehicles that can meet the proposed Tier 2

emission standards and would not be significantly impaired by gasoline with high sulfur levels. 

All catalysts are sensitive to sulfur to some degree. As explained in Section IV.A of the

Preamble, we cannot identify one or more factors that definitively determine sulfur sensitivity,

because sulfur sensitivity seems to be due to a combination of many factors that vary by vehicle. 

Hence, it is not possible to identify alternative designs that can tolerate existing (or even

intermediate) sulfur levels and that can reasonably be expected to be applied to all cars and light

trucks meeting Tier 2 standards. 

 As described in Section IV.A. of the Preamble, EPA anticipates that all the gasoline

vehicle technologies expected to be used to meet the proposed Tier 2 standards will require the

use of low sulfur gasoline. If we do not control gasoline sulfur to the proposed levels, we will

not be able to set Tier 2 standards as stringent as those we are proposing today. Moreover,

vehicles already on the road would continue to emit at higher levels than they would if operated

on low sulfur fuel. Consequently, EPA concludes that the benefits that would be achieved

through implementation of the proposed vehicle and sulfur control programs cannot be achieved

through the use of emission control technology that is not sulfur-sensitive. 

This also means that if EPA were to adopt vehicle emissions control standards without

controlling gasoline sulfur content, the standards would be significantly less stringent than those
Appendix D: Legal Authority for Gasoline Sulfur Control

D-7

proposed today based on what would be technologically feasible with current sulfur levels. The

cost of the vehicle emissions control technology would likely be similar to the costs of meeting

the proposed Tier 2 standards, because the same technologies would be used. However, the

emissions benefits of those technologies would be significantly less than what would be achieved

by the program proposed today, because the emissions control technology for gasoline vehicles

currently in use, and expected to be used in the future, would be significantly impaired by high

sulfur fuel.

5. Effect of Gasoline Sulfur Control on the Use of Other Fuels or Fuel Additives

Section 211(c)(2)(C) requires that, prior to prohibiting a fuel or fuel additive, EPA

establish that such prohibition will not cause the use of another fuel or fuel additive “which will

produce emissions which endanger the public health or welfare to the same or greater degree”

than the prohibited fuel or additive. This finding is required by the Act only prior to prohibiting

a fuel or additive, not prior to controlling a fuel or additive. Since EPA is not proposing to

prohibit sulfur in gasoline, but rather to control the levels of sulfur in gasoline, this finding is not

required prior to regulation. However, EPA does not believe that the proposed sulfur control will

result in the use of any other fuel or additive that will produce emissions that will endanger

public health or welfare to the same or greater degree as the emissions produced by gasoline with

uncontrolled sulfur levels.

We believe that gasoline formulated to meet the proposed low sulfur standards will have

a net benefit to public health due to reduced emissions of harmful compounds. The composition

of the emissions from combustion of low sulfur gasolines will be different than the composition

of the emissions from the high sulfur gasolines they replace. Furthermore, other changes to the

composition of the gasoline are likely to accompany the reduction in sulfur content. While some

of these changes may involve increases in the content of certain compounds that tend to lead to

more harmful emission products, we believe that the improved catalyst performance enabled by

the low sulfur fuel will more than offset any slight increase in harmful emissions that would

otherwise result (if sulfur levels remained constant but the other properties were increased).

It is difficult to quantify this impact because it depends on the specific approaches that

each refiner takes to reduce their gasolines’ sulfur levels, as well as the composition of the

gasoline overall. However, some general trends can be identified, and based on these trends we

have drawn the conclusion that low sulfur gasoline will pose no new, increased risk to human

health relative to the higher sulfur gasoline it replaces.

Some refiners already make gasolines that meet the proposed standards. Others will

make modest changes in the way in which they blend refinery streams to produce low sulfur

gasoline. But most refiners will have to install some desulfurization technology and/or otherwise

substantially change their operation. If a refiner chooses a traditional route to desulfurize

gasoline, he will likely select a desulfurization technology which has the undesirable side effect

of reducing the octane content of the gasoline streams. To make up that octane, the refiner has
Tier 2/Sulfur Draft Regulatory Impact Analysis - April 1999

D-8

several options. All of these options, whether increasing the aromatics or olefins content of the

gasoline through other processing changes, or through the addition of oxygenates such as ethanol

or MTBE, could lead to increased emissions of air toxics (benzene, 1,3-butadiene, aldehydes) if

the emissions performance of the vehicle catalyst remained constant. However, since low sulfur

gasoline will enable very low emitting catalysts and will improve the performance of existing

catalysts, the catalyst will be able to convert these toxic emissions into less harmful compounds. 

Because of the diversity among refineries, it is impossible to estimate with any certainty how

many refiners may choose this route.

If a refiner chooses one of the improved technologies for sulfur removal, the technologies

on which much of our economic analysis for this proposal is based (as discussed in Sections IV.C

and IV.D of the Preamble), there will be less of a need to increase high octane compounds in the

gasoline. These improved technologies are designed to reduce the octane loss that occurs with

the traditional technologies. Because the need to increase high octane components is reduced if

these technologies are used, the net benefit of low sulfur gasoline is even greater, because there

are even fewer toxic compounds for the catalyst to have to convert. (No catalyst yet developed is

able to convert 100 percent of the pollutants that come from the engine.)
Appendix D: Legal Authority for Gasoline Sulfur Control

D-9

1. EPA Staff Paper on Gasoline Sulfur Issues (EPA420-R-98-004), May 1998.

Appendix D. References