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# OAR Box 1834 Prepped byKeeiaRichards



### Document

Number: 

# 49 ) IV-H-0 3 Docket Number: 

# A-90-0 7

Printed 11/10/20082:14:35PM Sheet 49of 61P. 2 

## #-70-07 43T-H-03 

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Draf t Regulator ySuppor t Documen t

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# flp isipjji j

ui " MA Y2 6& M EP AAI R DOC KE l 

## Regulator yFlexibilit yAnalysi s
Fuel s an d Fue l Additive s Registratio n

Regulation s



# DRAF T

Apri l 7 , 199 4 U.S . Environmenta l Protectio n Agenc y Offic e o f Ai r an d Radiatio n Offic e o f Mobil e Source sP. 3 \ Tabl eo f Content s Page . Introductio n1 Chapte r 1 : Progra mDescriptio n I . Statutor yBackgroun d II . Descriptio no

f th eProgra m A . Scop eo

f Healt hEffect s Evaluatio n B . Scop eo

f WelfareProvision s C . Scop eo

f Emissio nContro lSyste mTestin g III . Provision s t oPreven t Undu eBurden s A . Cost/Burde nSharin gProvision s B . Smal lBusines s Provision s C. Provision s t oEliminat eDuplicatio no f Effort D . Othe r

Specia lProvision s Chapte r 2 : Industr yOverview I . Introductio n II . Analysi s o

f Currentl yRegistere dF/FAProducer s A . Dat aCollectio n B . Characterizatio no

f Registere dProducer s Chapte r 3 : Progra mRequirement s an dAssociate dCost s I . Introductio n II . Descriptio no

f Change s i nProgra mRequirement s III . Tie r

1 Requirement s an dCost s A . Literatur eSearc h B . Characterizatio no

f Emission s C. Tota lTie r

1 Cost s IV. Tie r

2Requirement s an dCost s A . Emissio nGeneratio nfor BiologicalTestin g B . Biologica lTes t

Cost s C. Tota lBiologica lTes t Cost s D. Tota lTie r

2Cost s V . Tie r 3 Requirements , an dPotentia lCost s VI. Administrative/Reportin gRequirement s an dCost s VII. Summar y VIII. Cos t

Estimate s fo r

Futur eAlternativ eF/FARegistration s Chapte r 4 : Estimate dCos t

Impact s I . Introductio n II . Analytica lAssumption s an dApproac h III . Methodolog yan dResult s A . Produce r

Cos t Impact s B . Industr yCos t

Impact s :P. 4

IV. Limitation s o

f th eAnalysi s V . Conclusion s Chapte r 5 : Regulator yFlexibilit yAnalysi s I . Introductio n II . Requirement s o

f th eRegulator yFlexibilit yAct III . Methodolog y A . Dat aSource s B . Adjustment s t oth eDat a C . Definitio no

f Smal lManufacture r IV. Characterizatio no

f Smal l&Larg eManufacturer s .. . A . Characteristic s o

f Additiv eManufacturer s B . Characteristic s o

f Fue lManufacturer s C . Genera lConclusion s V . Estimatio no

f Impact s o nSmal lManufacturer s A . Comparin gth eRati oo f Complianc eCos t

t oSale s B . Analysi s o

f Chang ei nRO

A C. Examinatio no

f Manufacturer s Potentiall yPushe dint oClosure . VI. Assessin gth eEffectivenes s o f Smal lBusines s Provision s VII. Mitigatin gCircumstance s tha t Reduc eAdvers eImpact s VIII. Limitation s o

f th eAnalysi s IX. Conclusion s Chapte r 6 : Perspective : Summar yan dSocieta lBenefit s Appendi xA

: Summar yo

f Biologica lTes t

Cost sp. a.

Figur e 1-1 : Figur e 1-2 : Figur e 1-3 : Tabl e 1-1 : Exhibi t 2-1 : Exhibi t 2-2 : Tabl e 3-1 : Tabl e 3-2 : Tabl e 3-3 : Tabl e 3-4 : Tabl e 3-5 : Tabl e 4-1 : Tabl e 4-2 : Tabl e 4- 3 Tabl e 4-4 : Tabl e 4-5 : Tabl e 4-6 : Exhibi t 5-1 : Exhibi t 5-2 : Lis t o f Exhibits . Figures , andTable s

Groupin gFramewor k Fue l Manufacture r Annua l Sale s Distribution Fue l Additiv e Manufacture r Annua l Sale s Distribution; F/FA Groupin gSystem Profile s o f Registere dFue l Manufacturers. . Profile s o f Registere dAdditiv e Manufacturer s Emissio nCharacterization/Measuremen t Requirement s Estimate dEmissio nCharacterization / Measuremen t Cost s Tie r 1 Cost s Tie r 2 Cost s Estimate dAlternativ e Fue l Registration s & Cost s Estimate dGroup s Pe r Fuel/Fue l Additiv e Categor y Assume dCombustio nEmissio nTes t Requirement s Pe r Categor y Assume dEvaporativ e Emissio nTes t Requirement s Pe r Categor y Estimate dComplianc e Cost s Pe r Grou p Estimate dComplianc e Cost s fo r Smal l Atypica l Manufacturer s Summary

o f Complianc e Cost s SBA Definition s o f Smal l by SI C Cod e fo r F/FA Manufacturer s Profile s o f Additiv e Manufacturer s F/FA Program

Definitio n Eagf iP. 6

Exhibi t 5-3 : Exhibi t 5-4 : Exhibi t 5-5 : Exhibi t 5-6 : Exhibi t 5-7 : Exhibi t 5-8 : Exhibi t 5-9 : Figur e 5-1 : Figur e 5-2 : Figur e 5-3 : Figur e 5-4 : Profile s o f Additiv e Manufacturer s

SBA Definition s Profile s o f Fue l Manufacturer s F/FA Program

Definitio n Profile s o f Fue l Manufacturer s SBA Definitio n Summary o f Complianc e Cost s pe r Manufacture r Compariso no f Smal l andLarg e Company Complianc e Cos t t o Sale s Ratio s Estimate dImpact s onROA Summary o f Profil e o f Manufacturer s Potentiall y

Pushe dint o Closur e Diagram

o f 8 Profile s Numbe r o f Additiv e Companie s Classifie db y EP A andSBA

Definition s a s Smal l Numbe r o f Fue l Companie s Classifie db y EP A andSBA

Definition s a s Smal l Measur e o f Financia l Healt handDistress.. .P. 7 

# DRAF T

Introductio

n Thi s RegulatorySuppor t Documen t (RSD ) present s th e Environmenta l Protectio n Agency' s (EPA ) fina l estimate s o f cost s an d impact s o f th e Fuel s an d Fue l Additive s (F/FA ) Registratio n Regulation s o n th e affecte d industries . Th e basi c approac huse d i n th e draf t suppor t document 1 prepare d fo r th e Notic e o f Propose d Rulemaking (NPRM ) (5 7 F R13168 , Apri l 15 , 1992 ) i s maintaine d throughou t thi s fina l document . Majo r change s i nprogram requirement s and assumption s o n whic hth e analysi s i s base d ar e identifie d throughou t th e document . Simila r t o th e analysi s prepare d fo r th e NPRM , thi s fina l rul e analysi s focuse s mainl yo n producer s o f gasolin e an d diese l fuel s an

d thei r additive s sinc e producer s o f alternativ e F/FAs ar e no t ye t require d t o registe r thei r product s wit hEPA . However , EP Aexpect s t o designat e thes e F/FA s fo r registratio n an d ha s include d provision s fo r alternativ e fuel s i n thi s fina l rul e unde r th e assumptio ntha t theywil l b e designated . Consequently , thi s analysi s include s a discussio no f th e expecte d impac t o f thi s rul e o n producer s o f alternativ e fuels .

EP Acontracte d wit hDun& Bradstree t (D&B ) Informatio n Services , IC F Incorporated , an d Southwes t Researc hInstitut e fo r assistanc e i n obtaining informatio nt o updat e th e draf t RSD . T o ^.S . Environmenta l Protectio nAgency , Offic e o f Mobil e Sources , "Draf t RegulatorySuppor t Document , Fuel s an d Fue l Additive s Registratio n Regulations, " September , 1991 , Docke t A 90-07 .P. 8

updat e manufacturer/produc t informatio ncontaine d o nth e Fuel s an d Fue l Additive s Registratio n (FFAR ) database , EPArequeste d tha t D& B collec t curren t financia l informatio no nth e registere d companie s an d identif yregistere d companie s n o longe r i n operation . Alette r explaining financia l informatio n sough t an d collectio nmethodolog y i s availabl e i n th e publi c docket 2
. Result s o f th e dat a collectio n ar e discusse d i n Chapte r 2 .
Two contract s wer e establishe d wit hIC F Incorporated . On e contract 3 wa s establishe d fo r th e purpos e o f creating a flexibl e produc t grouping facilit yfromwhic hcos t estimate s woul d b e determine d (explained furthe r i n Chapte r 4 ) . Th e othe r suc h contract 4 involve d dat a analysi s t o suppor t EPA' s assessmen t o f impact s o f th e F/F

Aregistratio n regulation s o n smal l businesses , th e result s o f whic har e presente d i nChapte r 5 . Finally , EP Aestablishe d a contrac t wit hSouthwes t Researc h

2 Lette r t o Sher i Dunatchik , EPA , fromKathry nE . Brigham , Governmen t Suppor t Manager , Dun & Bradstree t Informatio n Services , Jun e 30 , 1993 .

3 "Groupin g an

d Reporting Databas e fo r Fuel s an d Fue l Additives, " prepare d fo r EP Ab yIC F Incorporate d unde r EPA contrac t 68-C1-0059 , September , 1993 .

4 "Smal l Busines s Impac t Analysi s o f th e Fue l an d Fue l Additiv e Registratio n Program, " prepare d fo r EP Ab yICF Incorporate d unde r EP AContrac t 68-C1-0059 , January , 1994 , availabl e i n Docke t A-90-07 .P. 9

Institute 3 t o identif ycommercia l price s associate d wit hcertai n aspect s o f th e Tie r 1 testing requirement s o f thi s rule , th e result s o f whic har e discusse d i nChapte r 3 . Following thi s introduction , th e firs t chapte r provide s th e statutoryhistoryo f thi s rulemaking along wit ha brie f descriptio n o f th e requirement s o f th e program . Th e scop e o f healt han d welfar e effect s evaluatio n an d emissio ncontro l system testing ar e discussed , followe d b ya discussio no f specia l provision s o f th e program . Chapte r 2 present s a characterizatio n o f manufacturer s currentl yregistering fue l an d additiv e product s wit hEPA . Th e chapte r characterize s registere d manufacturer s i n term s o f sale s an d ne t income , a s wel l a s numbe r an d typ e o f product s they produce . Chapte r 3 discusse s fue l and fue l additiv e testing requirement s an

d relate d costs . Th e chapte r provide s a brie f discussio n o f th e majo r change s i n program requirement s an

d assumption s fromthos e use d i nth e draf t impac t analysis . Following thi s discussion , estimate d cost s ar e presente d fo r eac h activit yrequire d unde r eac htie r o f evaluatio nan d testing . The estimate d cost s fo r emissio ngeneration , emissio n speciation ,

5 "Moto r Vehicl e Fue l an d Fue l Additiv e Emission s Generatio n an d Speciatio n Costs, " June , 1993 , prepare d b ySouthwes t Researc h Institut e unde r EP AContrac t No . 68-C2-0144 .P.1 0

biologica l testing , an d complianc e wit hreporting requirement s ar e provided . Th e chapte r als o include s a discussio n o f projecte d cost s relate d t o futur e registration s o f alternativ e F/F Aproducts .

Chapte r 4 present s th e projecte d cos t impact s o f th e program o n th e fuel/fue l additiv e industry . Cos t impact s ar e discusse d fo r fue l manufacturers , fue l additiv e manufacturers , an d th e industr

y a s a whole . Th e analytica l judgement s an d assumption s o n whic hth e analysi s i s base d an d th e methodologyfo r determining th e cos t impact s o f complianc e ar e presented . Chapte r 5 present s ananalysi s o f th e financia l impact s o f th e F/F ARegistratio n Regulation s o n smal l businesse s an d compare s thes e t o th e impact s o n larg e manufacturers . I t explain s th e F/F A program' s smal l busines s definitio n an d assesse s th e effectivenes s o f specia l provision s include d i n th e fina l rul e fo r certai nsmal l companies . Finally , Chapte r 6 provide s a summaryan d discussio no f th e informatio n presented . Th e sensitivit yo f projecte d cost s t o assumption s use d i n th e analysi s i s include d a s wel l a s a brie f discussio n o f th e expecte d relationshi p betwee nth e program ' s cost s and benefits .

# DRAF T
Chapte r 1 Progra m Descriptio

n p.1 1

I . statutor

y Backgroun

d Sectio n 211(a ) o f 197 0 Clea nAi r Ac t (CAA ) direct s th e Administrato r o f th e EP At o registe r moto r vehicl e fuel s an d fue l additive s prio r t o thei r sal e o r introductio nint o commerce . Th e basi c registratio n informatio nrequire d b yeac hfue l an

d fue l additiv e manufacture r i s specifie d unde r sectio n211(b)(1) , and include s suc hitem s a s commercia l identifying information , rang e o f concentration , purpos e in-use , and chemica l composition . Unde r sectio n 211(b)(2) , EP Ai s als o give n authorit yt o requir e manufacturer s t o conduc t test s t o determin e th e potentia l healt h effect s o f thei r fuel s an d fue l additive s an d t o requir e othe r informatio n t o identif yth e emission s produce d b ysuc hfuel s an

d fue l additives , thei r effect(s ) on th e publi c healt han d welfare , an d thei r impac t o n vehicula r emissio ncontro l performance . Althoughth e genera l registratio n regulation s o f section s 211(a ) and (b)(1 ) wer e implemente d i n 1975 , EP Adi d no t exercis e it s authorit yt o requir e health , welfare , an d emissio ncontro l systemeffect s testing unde r sectio n211(b)(2) . However , i nth e CA AAmendment s o f 197 7 (P L 95-95 , Augus t 7 , 1977) , Congres s adde dsectio n 211(e ) t o th e statut e whic hmad e implementatio no f sectio n

211(b)(2 ) mandatoryan d establishe d time limit s fo r complianc e b y fue l an d fue l additiv e producers . I naddition , Sectio n211(e)(3 ) allowe d th e Administrato r t o exemp t o r mak e specia l allowance s fo r smal l businesses , t o provid e fo r cos t and/o r burde nsharing , an d t o mak e othe r specifi c exemption s whe nadditiona l testing woul d b e duplicativ e o f adequat e existing testing .

II . Descriptiono f the Progra m Th e purpos e o f th e ne wregistratio n requirement s i s t o provid e EP Awit hinformatio n t o evaluat e th e potentia l advers e health , welfare , an

d emissio n effect s o f F/F Aemission s an

d t o hel p determin e whethe r regulatoryactio ni s neede d unde r sectio n211(c ) . Th e ne wrequirement s supplemen t existing registratio nrequirement s and appl yt o al l F/F Adesignate d fo r registration . A t th e presen t time , gasolin e an d diese l F/FA s produce d an d commerciall y distribute d fo r us e i n highwaymoto r vehicle s ar e designate d fo r registration . Bot hdomesti c an d foreignproduct s ar e include d i n th e designation . EP Aanticipate s tha t methano l (M10 0 an d M85) , ethano l (E10 0 an

d E85) , natura l ga s (bothcompresse d natura l ga s (CNG ) an d liquifie d natura l ga s (LNG) ) , an d liquifie d petroleu mga s (LPG ) alternativ e fuel s an d additive s wil l soo nb e designated . Fuel s intende d fo r us e exclusivel yi n off-road vehicle s ar e no t currentl ydesignated .P.1 3

A . Scope o f HealthEffect s Evaluatio n Th e potentia l scop e o f th e healt heffect s testing programi s vast , an

d EP Aha s take n step s consisten t wit hth e Ac t t o limi t th e focu s o f th e requirement s s o a s no t t o lev yanunnecessaryburde n on th e regulate d industry , whil e stil l requiring th e leve l o f informatio n neede d t o achiev e th e overal l goal s o f th e program . Th e 211(b ) programdoe s no t mandat e comprehensiv e healt heffect s assessment s a s routin e requirement s fo r registration . Instead , a systemo f evaluatio n tier s ha s bee n developed , enabling EPAt o determin e whethe r mor e definitiv e testing i s neede d fo r specifie d fuel s o r additive s base d upo ntoxicit yan d exposur e dat a obtaine d fromavailabl e literatur e and/o r from a batteryo f screening tests . Th e tiere d approac hpermit s F/F Amanufacturer s t o mak e ful l us e o f tes t result s an d othe r informatio nwhic hmayalread yb e availabl e abou t thei r products . Unde r Tie r 1 , F/F Amanufacturer s ar e require d t o performa literatur e searc ho nth e healt han d welfar e effect s o f F/FAs , characteriz e th e emissions , an d provid e productio n volume an d marke t distributio ndata 6
. Tie r 2 consist s o f a 90-da

yanima l exposur e stud yt o scree nfo r genera l systemi c an d orga n toxicity , an d als o encompasse s specifi c test s fo r carcinogenicity , mutagenicity , teratogenicity , neurotoxicity , an d reproductiv e effects . Actua l Tie r 2 testing requirement s wil l depend o n th e exten t t o whic hth e dat a searc hactivitie s i n Tie r 1

s Th e modeling analyse s propose d i nth e NPR Mhav e bee n eliminate d fromTie r 1 requirements . Whe n needed , theywil l b e prescribe d unde r Tie r 3 .P.1 4

provid e documentatio n o f adequat e existing test s comparabl e t o thos e include d i n Tie r 2 . Fuel s an d additive s wil l b e subjec t t o Tie r 3 testing requirement s onl yi f determine d t o b e neede d o n a case-by-cas e basi s b yEPA . Th e endpoint s t o b e addresse d an d th e studie s conducte d i n Tie r 3 wil l b e determine d individuall yfo r eac hcase , generall yfocusing o narea s o f concer n whic har e identifie d i n th e earlie r tiers . Th e evaluatio ntier s ar e furthe r explaine d i n Chapte r 3 o f thi s document . Consisten t wit hth e overal l emphasi s o f th e CA Ao n advers e ai r pollutio n effects , th e healt htesting requirement s ar e concerne d wit hth e effect s o f inhalatio nexposur e t o th e evaporativ e an d combustio n product s o f fuel s an d additives . Theyd o no t specificall yaddres s th e possibl e advers e effect s o f exposur e t o fuel s an

d additive s i n th e liqui d state , no r a t thi s time d o they includ e th e effect s o f exposur e t o th e atmospheri c transformatio n product s o f fue l an d additiv e emissions . Restricting th e focu s o f th e rulemaking t o exposur e o f combustio nan d evaporativ e emission s o f fuel s an

d additive s represent s a majo r reductio n i n th e potentia l scop e o f th e healt heffect s evaluatio nprogram . Furthe r significan t reduction s i nprogramcost s an d overal l impac t on th e fue l and additiv e industrywil l als o occu r a s a resul t o f grouping mechanism s fo r testing F/F Aproducts , provision s fo r exempting relabele d product s fro mtesting requirements , an d specia l provision s fo r smal l businesses .P.1 5

B . Scope o f Welfar e Provision s Sectio n 211(b ) (2 ) (B ) state s tha t th e Administrato r mayrequir e manufacturer s t o furnis h"reasonabl e an d necessary " informatio n fo r determining "the exten t t o whic h(fue l an d fue l additive ) emission s affec t th e publi c healt ho r welfare" . Th e term"welfar e effects " refer s generall yt o th e impac t whic hai r pollutio nproduce d b y moto r vehicl e fuel s an d additive s mayhav e o nth e environment , including no t onl yeffect s o n aquati c ecosystem s an d anima l health , bu t als o effect s whic hmaydetrac t fromhuma nwell-being . Th e welfar e effect s requirement s wil l b e me t i nassociatio n wit hth e requirement s i n th e firs t evaluatio n tier . I n Tie r 1 , responsibl e producer s ar e require d t o conduc t exhaus t an d evaporativ e emissio n chemica l speciatio nprocedure s t o identif yth e specifi c compound s i n th e emissio nproduct s generate d b yfuel s an

d additives . Thes e procedure s wil l yiel d an inventoryo f potentiall y hazardou s ai r pollutant s whic hmayhav e significan t impact s o nth e genera l environmen t an d publi c welfar e a s wel l a s o nth e publi c health . Thes e wil l als o b e usefu l i nassessing Tie r 2 results . Tie r 1 als o include s a literatur e searc hfo r existing health

relate d informatio n whic hwil l b e expande d t o includ e requirement s fo r collectio n o f publishe d o r in-hous e dat a regarding th e welfar e effect s o f th e emissio nproducts . Finally , Tie r 1 require s manufacturer s t o provid e informatio nonth e productio n an d distributio n pattern s o f F/FAs whic hwil l b e use d b yEPAt o evaluat e th e potentia l exposure s resulting from thei r use . Thus ,P.1 6

excep t perhap s fo r a mino r increas e i n th e scop e o f th e literatur e searc hactivitie s o f Tie r 1 , n o incrementa l cost s ar e expecte d wit h respec t t o welfar e effect s assessments .
C . Scop e o f Emission s Contro l SystemTesting Existing regulation s unde r sectio n211(f ) cal l fo r emissio n contro l testing o f fuel s an d additive s onl ywhe n thei r compositio n depart s significantl yfrom th e genera l rang e o f fue l formulation s whic hwoul d ordinaril yb e anticipate d b ymanufacturer s o f moto r vehicl e engine s an d emissio n contro l devices . Unde r th e existing fuel/additiv e registratio n program , fue l an d additiv e formulation s whic har e no t "substantiall ysimilar " ("su bsim" ) t o designate d certificatio n fuel s (as define d i n5 6 F R5352 , February19 , 1991 ) canno t b e introduce d int o commerc e unles s a waive r i s issue d b y EPA . T o obtai n suc ha waiver , th e produce r o f th e fue l o r additive mus t sho wtha t th e "dissimilar " produc t doe s no t adversel yaffec t th e abilit yo f a moto r vehicle' s emissio ncontro l system t o achieve complianc e wit hemissio n standard s during th e usefu l lif e o f th e vehicle . Th e curren t waive r programha s prove nt o b e bot hpractica l an d effectiv e a s applie d t o gasolin e fuel s and additives , an d EPA' s plan s t o extend th e applicabilit yo f thi s programt o othe r fue l an d additiv e categorie s wil l serve t o fulfil l th e aim s o f th e emissio n contro l testing provision s o f sectio n211(b) . Therefore , the emissio n contro l systemtesting provision s o f 211(b ) wil l b e 1 0P.1 7

integrate d wit hexisting an d planne d program s promulgate d unde r sectio n 211(f) . I n othe r words , ne wfuel s an d additive s whic hd o no t mee t th e "su

bsim " criteri a wil l b e subjec t t o th e regula r sectio n 211(f ) waive r applicatio n proces s prio r t o registration , a s unde r th e existing registratio nprogram . Th e onl yne wexpressio n o f EPA' s authorit yunde r sectio n 211(b ) i n regar d t o emissio n contro l testing requirement s pertain s t o fuel s and additive s whic hwer e registere d i n th e pas t unde r th e statute' s "grandfathering " provision . Rathe r tha n requiring al l "grandfathered " products 7 t o routinel yg o throughth e waive r process , emissio n contro l systemtesting fo r "grandfathered " product s wil l b e require d onl yo n a case-by-cas e basi s whe n evidenc e become s availabl e tha t suc hproduct s mayhav e advers e effect s o n emissio n contro l performance . Thus , thi s rulemaking provide s a mechanis mb ywhic hEP Aca n choos e t o requir e specifi c "grandfathered " product s t o underg o sectio n211(f ) waive r applicatio n procedure s i f s o petitione d b youtsid e parties , o r i f othe r informatio n availabl e t o th e Agenc yindicate s tha t suc h revie wi s appropriate . Consequently , thi s analysi s include s n o cost s directl yrelate d t o emissio n contro l systemtesting .

'Product s registere d prio r t o th e implementatio no f th e waive r applicatio n programand/o r promulgatio no f applicabl e "substantiall ysimilar " criteri a an d whic hexcee d thos e "su bsim " criteria . 1 1III . Provision s t o Prevent Undu e Burden s

Th e fina l rul e provide s a numbe r o f specia l provision s t o avoi d duplicatio n o f effort , t o alleviat e th e financia l impac t on smal l businesses , an d t o eas e th e burde n o n th e regulate d industry i n general . Th e discussio nbelo wfocuse s on cost/burde n sharing provision s an

d provision s establishe d fo r relabele d product s an d smal l businesses . Othe r specia l provision s o f th e programar e briefl ydescribe d below , bu t ar e no t include d i nth e analysi s eithe r becaus e theyhav e n o direc t impac t o r thei r impact s woul d b e minimal . Thes e additiona l specia l provision s woul d onl yfurthe r decreas e th e financia l burde n o n th e regulate d industry .
A . Cost/BurdenSharing Provision s Sectio n 21 1 (e ) (3 ) allow s th e Agenc yt o provid e fo r cos t and/o r burde n sharing among producer s o f an yfue l o r fue l additiv e whic h i s manufacture d o r processe d b ytw o o r mor e person s s o tha t requirement s can b e me t withou t duplicatio no f effort . Unde r on e scenario , a manufacture r mayalread yhav e incurre d al l necessary cost s o f registration , an d anothe r manufacture r migh t wis ht o rel y o n th e result s o f thi s existing testing fo r purpose s o f registering a simila r product . Anothe r cas e involve s tw o o r mor e producer s o f simila r product s wh o nee d t o undertak e th e same testing requirement s prio r t o registration . Fo r purpose s o f enacting thes e provisions , EP Aha s develope d a voluntarygrouping scheme whic h permit s manufacturer s o f simila r F/FA s t o poo l thei r resource s an d 1 2P.1 9

effort s i n satisfying th e registratio nrequirements . Manufacturer s taking advantag e o f th e grouping provision s wil l b e abl e t o shar e thei r planning efforts , researc hcapabilities , an d financia l resource s i n satisfying th e information-gathering an d testing requirement s o f th e F/F Aregistratio nprogram . Require d testing i s t o b e don e o n th e selecte d representativ e fo r th e respectiv e grou p an d result s submitte d jointl yfo r al l member s o f th e group , wit h applicabl e cos t t o b e share d b yth e respectiv e manufacturers . Th e basi c conceptua l framewor k fo r th e grouping systemi s illustrate d i n Figur e 1-1 . Eac hfue l o r additiv e i s firs t sorte d int o on e o f si xbroa d "fue l families" . Eac hfue l famil yconsist s o f F/F Aproduct s whic hshar e basi c characteristic s i n regar d t o thei r chemical/physica l propertie s an d engine/vehicl e applicability . A s previousl ymentioned , thi s analysi s focuse s mainl yo n product s belonging t o th e gasolin e an d diese l fue l families , bu t include s a brie f discussio no f futur e registration s o f product s belongin g t o th e alternativ e fue l families . Th e fue l familie s ar e the nsubdivide d int o th e following thre e F/F Acategories : "baseline, " "non-baseline, " an d "atypical. " Th e baselin e categorie s generall yconsis t o f fuel s and associate d fue l additive s whic hcontai n n o element s othe r tha ncarbon , hydrogen , oxygen , nitrogen , an d sulfu r an

d conformt o certai nquantitativ e limit s fo r particula r elements , compounds , and/o r characteristic s (e.g. , oxyge n les s tha n 1. 5 weigh t percen t i n gasolin e an d les s 1 3tha n 1. 0 weigh t percen t i n diesel) . Non-baselin e F/FA s contai nn o

element s othe r tha n thos e allowe d i nth e baselin e category , bu t theyexcee d th e maximu m amount s allowe d fo r certai n restricte d characteristics . Th e atypica l categorie s consis t primaril yo f F/FA s tha t contai n element s othe r tha nthos e allowe d i n th e baselin e category . Fo r fue l additives , th e categorydeterminatio n i s base d o n th e characteristic s o f th e mixtur e whic hresult s whe n th e additiv e i s mixe d i n th e appropriat e bas e fue l a t th e maximu m concentratio n recommende d b yth e additiv e manufacturer . I f th e fue l o r fuel/additiv e mixtur e contain s bot hnon-baselin e (e.g. , exceed s allowabl e oxyge n content ) an d atypica l characteristic s (e.g. , contain s a metal) , th e formulatio n i s characterize d a s atypical . Thus , atypica l characteristic s tak e precedenc e ove r non baselin e characteristics . Finally , fromthes e categories , product s ar e furthe r subdivide d int o "fuel/additiv e groups " whic hrepresen t th e fina l leve l o f produc t classificatio nwithi nth e grouping system . The group s consis t o f F/FA s sorte d togethe r o n th e basi s o f th e assumptio n tha t thei r emissio nproduct s wil l b e simila r o na qualitativ e basis . Arepresentativ e fromeac hgrou p wil l b e selecte d fo r testing wit hth e result s an d associate d cost s share d b yth e participating manufacturers . Tabl e 1- 1 show s a summaryo f th e F/F Agrouping system . The colum n heading s represen t th e fue l familie s an d th e categorie s 1 4P.2 1

defin e th e rows . Withi n eac hfue l family' s categorie s ar e th e fuel/additiv e groups . The grouping systemi s a keyfacto r i n determining manufacture r cost s fo r thi s program . Assumption s regarding manufacture r participatio n i ngroup s an d th e amoun t o f testing expecte d t o b e require d fo r product s i n eac ho f th e group s i s discusse d i n Chapte r 4 .
B . Smal l Busines s Provision s Th e CA Agive s EP Adiscretionaryauthorit yt o provid e progra m exemptions , deferrals , o r modification s fo r smal l businesses , an d t o defin e "smal l business " fo r th e regulations . Using curren t annua l sale s data , EP Aexamine d th e distributio n o f currentl y registere d companie s acros s variou s sale s range s an d identifie d a sale s leve l whic hwil l defin e th e businesse s whic hwil l b e considere d "small " fo r thi s program . Figure s 1- 2 an d 1- 3 showth e sale s distribution s o f registere d fue l manufacturer s an d additive manufacturers , respectively . Acompariso no f thes e figure s indicate s tha t th e distributio n o f sale s i s simila r fo r bot h industries . Eac hindustryappear s t o b e mad e u p o f man

ysmal l companie s an

d relativel yfewlarge r companies . Th e figure s show tha t abou t a fift ho f registere d fue l manufacturer s an d a thir d o f registere d additiv e manufacturer s hav e sale s abov e $10 0 million . Fo r bot hindustries , mos t companie s wit hsale s unde r $10 0 millio n actuall yhav e sale s unde r $5 0 million . Thus , withi neac ho f the industries , companie s tend t o cluste r above $10 0 millio nan d belo w $5 0 millio n i n sales . Furthermore , companie s belo w$5 0 millio n i n 1 5P.2 2

sale s als o tend t o b e belo w$1 0 million , especiall ywithi nth e additiv e industry .
Base d o n thi s analysi s o f F/F Amanufacture r sale s data , EPA identifie d $5 0 millio n a s a reasonabl e sale s leve l fo r differentiating betwee n smal l an d larg e companie s withi neac h industry . A s a result , th e fina l rul e define s a smal l busines s fo r thi s programa s an ymoto r vehicl e fue l o r fue l additiv e manufacture r wit htota l annua l sale s o f les s tha n $5 0 million. 8 Th e smal l busines s relate d provision s establishe d fo r thi s rul e ar e define d below . Specia l provision s fo r smal l F/F Acompanie s wer e develope d base d o n assumption s regarding th e degre e t o whic hmanufacturer s wil l hav e th e opportunit yt o grou p wit hothe r manufacturer s t o shar e costs , an

d th e degre e t o whic hinformatio n on simila r product s ca n b e expecte d t o b e submitte d b ylarge r companies . A revie wo f th e registratio n databas e show s tha t nearl yevery registere d F/F

Amanufacture r produce s a t leas t on e baselin e o r non baselin e product . Hence , eve n i f generou s specia l provision s ar e provide d fo r smal l manufacturer s o f thes e products , EP Ai s assure d tha t tes t dat a o n suc hproduct s wil l stil l b e submitte d b yother , 8 Fo r thi s purpose , "manufacturer " i s define d a s a paren t compan yowning mor e tha n 5 0 percen t o f a company' s asset s o r shares . "Tota l Annua l Sales " i s define d a s th e averag e o f th e manufacturer' s tota l sale s revenu e i neac ho f th e previou s thre e years . Sinc e manufacture r sale s dat a wa s no t availabl e fo r th e previou s thre e years , 199 3 sale s dat a wa s use d fo r determining impact s i n thi s analysis . 1 6large r companie s whic hd o no t qualif yfo r th e specia l provisions .

Therefore , i n regar d t o registratio n o f product s i n th e baselin e an d non-baselin e categories , th e fina l rul e require s smal l businesse s (i.e. , companie s wit hannua l sale s les s tha n $5 0 million ) t o submi t onl yth e basi c registratio ndat a fo r thei r baselin e and/o r non-baselin e products . Suc hcompanie s ar e no t require d t o mee t th e Tie r 1 an d Tie r 2 requirement s i norde r t o registe r thei r baselin e an d non-baselin e F/FAs . Sinc e th e large r companie s wil l stil l b e submitting th e dat a fo r thes e products , thi s provisio n shoul d no t caus e EP At o b e withou t th e dat a neede d t o evaluat e thes e products . However , th e product s o f suc hsmal l companie s wil l b e treate d th e same a s thos e o f th e large r companie s i n th e same grou

p shoul d Tie r 3 o r 211(c ) action s b e taken . Thi s i s no t a vali d assumptio n i n th e cas e o f atypica l products , however . Analysi s o f curren t registration s show s tha t ther e ar e fewe r atypica l product s tha nbaselin e products , an d fewe r larg e companie s tha t produc e atypica l products . O f th e tota l numbe r o f registere d fue l additiv e manufacturers , les s tha n3 0 percen t produc e a t leas t on e atypica l product , an d th e majorit yo f thes e manufacturer s (about 6 0 percent ) hav e unde r $5 0 millio ni n sales . Eve n fewe r fue l manufacturer s produc e atypica l products , wit honl y1 3 percen t producing a t leas t on e atypica l product . I n contras t t o manufacturer s o f atypica l additives , th e majorit yo f manufacturer s o f atypica l fuel s (about 7 0 percent ) hav e sale s above $10 0 million . 1 7Therefore , i f th e same smal l busines s provision s describe d

abov e i n relatio n t o baseline/non-baselin e F/FAs wer e als o applie d t o atypica l F/FAs , the nn o dat a woul d b e submitte d fo r man y atypica l F/FAs . I f thi s wer e th e case , EPAwoul d b e unabl e t o discharg e it s responsibilit yt o evaluat e th e healt heffect s o f al l fuel s an

d additives . Nevertheless , EP Arealize s tha t th e testing programwil l b e particularl yburdensome fo r verysmal l manufacturer s o f atypica l products . I n part , thi s i s du e t o th e adde d complianc e requirement s fo r atypica l product s (e.g. , mor e rigorou s mileag e accumulatio n requirement s prio r t o emissio n generatio nan d extr a emissio n characterizatio n requirement s fo r determining th e emissio n specie s containing th e a typica l element(s) ) . Aneve n greate r impac t result s fromth e fac t tha t grouping opportunitie s fo r thes e manufacturer s ar e mor e limited . No t onl yd o atypica l product s tend t o b e unique , bu t also , th e smalles t manufacturer s rarel yar e member s o f th e dominan t trad e association s whic har e mos t likel yt o tak e th e lead i n organizing an d administering F/F Agrou p functions . Thus , th e highes t programcost s ar e expecte d t o fal l onth e manufacturer s wit hth e lowes t financia l resource s an d th e fewes t opportunitie s t o shar e th e costs .
Fo r thes e reasons , specia l smal l busines s provision s applicabl e t o atypica l product s hav e bee n include d i n the fina l rule . However , thes e provision s appl yt o fewe r manufacturer s an d 1 8P.2 5

ar e les s libera l tha n thos e establishe d fo r baselin e an d non baselin e products . Specifically , fo r manufacturer s o f atypica l product s wit hles s tha n $1 0 millio ni nannua l sale s (rathe r than th e $5 0 millio n sale s leve l applicabl e t o manufacturer s o f baseline/non-baselin e products) , th e minima l requirement s o f th e programinclud e onl ybasi c registratio nan d Tie r 1 data . Thes e requirement s fal l betwee nthos e applicabl e t o smal l manufacturer s o f baseline/non-baselin e product s (basi c registratio ndat a only ) an d th e genera l requirement s o f th e programfo r large r manufacturer s (basi c registration , Tie r 1 , an d Tie r 2) . Still , an assessmen t o f th e effectivenes s o f smal l busines s provision s performe d b ya contractor , ICF , sho wtha t th e smal l busines s provisio n fo r manufacturer s o f atypica l product s reduce s th e financia l burde n o f th e program significantly . I ntotal , th e smal l busines s provision s fo r manufacturer s o f thes e product s lessene d th e cos t burde n t o industryb yove r $2 0 millio n dollars . Thus , althoughth e smal l busines s provision s fo r atypica l manufacturer s ar e no t a s libera l a s thos e provide d fo r manufacturer s o f baselin e and non-baselin e products , th e provision s reduc e th e financia l burde n o f th e program significantl ywhil e stil l assuring tha t EP Awil l b e supplie d wit hemissio n characterizatio n an d literatur e searc hdat a upo nwhic ht o bas e it s initia l evaluatio n o f eac hatypica l F/F A(o r group ) . A t th e Agency' s discretion , healt heffec t concern s arising fro mth e 1 9J

initia l revie wo f thi s dat a maystil l b e require d t o b e followe d u p b ysuitabl e testing unde r th e provision s o f Tie r 3 . Sinc e smal l busines s exemption s ar e base d on bot hth e manufacturer' s annua l sale s an d th e produc t category , i t i s possibl e fo r a manufacture r t o hav e some product s excuse d fro m programrequirement s bu t no t others . Fo r example , anadditiv e manufacture r having bot hbaselin e an d atypica l product s an d annua l sale s o f $3 0 millio n wil l b e excuse d fromTie r 1 an d Tie r 2 requirement s fo r th e baselin e additives , bu t wil l no t b e excuse d fromprogramrequirement s fo r th e atypica l products . Thes e specia l provision s allo wth e Agenc yt o eas e th e testing burde n o n a significan t numbe r o f relativel ysmal l manufacturers , whil e stil l obtaining th e leve l o f informatio n necessaryt o achiev e th e overal l goal s o f th e program . Approximatel y6 4 percen t o f fue l additiv e manufacturer s an d 7 4 percen t o f fue l manufacturer s wil l qualif yfo r smal l busines s provision s fo r thei r baseline/non

baselin e products . Furthermore , abou t 4 5 percen t o f additiv e manufacturer s an

d 1 1 percen t o f fue l manufacturer s wil l qualif yfo r smal l busines s specia l provision s fo r thei r atypica l products . Th e result s o f th e smal l busines s impac t analysi s suppor t th e smal l busines s definition s use d i nthi s registratio nprogram , an d ar e discusse d i n greate r detai l i n Chapte r 5 .

2 0P.2 7

C . Provision s t o Eliminat e Duplicatio no f Effor t Unde r CA

Asectio n 211(e)(3)(c) , th e Administrato r mayexemp t an yfue l o r additiv e fromth e regulation s "upon a finding tha t an y additiona l testing o f suc hfue l o r fue l additiv e woul d b e duplicativ e o f adequat e existing testing. " EP Awil l exercis e it s authorit yunde r thi s provisio nb yexempting fuel s an d additive s registere d a s relabele d product s fromth e evaluatio nan d testing requirement s o f thi s program . Arelabele d produc t i s a repackage d versio n o f a produc t whic hi s als o registere d b yth e origina l manufacturer . Testing o f relabele d product s woul d clearl y duplicat e th e effort s o f th e origina l manufacturer . Consequently , onl ybasi c registratio n informatio nwil l b e require d fo r relabele d products .
EP Ai s als o providing a specia l provisio n fo r manufacturer s o f non-baselin e an

d atypica l product s t o avoi d duplicativ e efforts . Sinc e requiring manufacturer s o f non-baselin e an d atypica l F/FAs t o submi t literatur e dat a o n al l emissio n product s wil l duplicat e th e effort s o f informatio n submitte d fo r th e bas e fue l t o whic hi t i s compared , EP Ai s allowing manufacturer s o f non-baselin e an d atypica l F/FA s t o submi t Tie r 1 literatur e dat a onl yfo r th e emissio n specie s whic har e differen t fromth e emissio n product s o f th e respectiv e bas e fuel .
D . Othe r Specia l Provision s I n additio n t o th e provision s discusse d above , EP Ai s als o 2 1providing i n thi s fina l rul e specia l provision s fo r experimenta l

F/FA s an

d aerosol s products . Fo r experimenta l F/FAs , EP Ai s relying on existing regulation s unde r 4 0 CF R79.4(a)(3 ) an d 79.4(b)(2 ) whic hexempt s fuel s an d fue l additive s use d fo r research , developmen t o r testing . Base d o n thes e provisions , an y designate d F/F

Asol d t o automobile , engine , o r componen t manufacturer s fo r research , developmen t o r tes t purposes , o r sol d t o automobil e manufacturer s fo r factoryfill , an d no t i n an

ycas e offere d fo r commercia l sal e t o th e public , i s exempte d fro mth e registratio n requirements . Thi s provisio ndoe s no t affec t th e result s o f th e analysi s sinc e thes e product s ar e no t currentl y require d t o registe r wit hEPA .
I n regar d t o aeroso l products , th e fina l rul e contain s a specia l provisio n unde r whic hmanufacturer s o f aftermarke t additive s tha t ar e sol d t o b e applie d i n aeroso l for m(e.g. , starte r fluids , carbureto r cleaners ) ar e require d t o provid e onl y existing informatio n o n thei r product s (o r components) , a discussio n o f th e potentia l exposures , and basi c registratio ndata . Thus , aeroso l product s ar e exemp t fromTie r 1 emissio n characterizatio n requirement s an d Tie r 2 . Testing o f aerosol s may b e performe d unde r Tie r 3 a t EPA' s discretion . EPA' s registratio n databas e doe s no t indicat e whic hcurrentl yregistere d aftermarke t additive s ar e aerosols . A s a result , cos t reduction s fo r product s qualifying fo r thes e provision s ar e no t considere d i nthi s analysis . 2 2Figure 1-1 : Groupin g Framewor k
FiMlFamttM Conventional : Artemaftv* : Ganln *

DtoM l Methano l Ethano l Mathan a (CNQ . LUG ) Propan e (LPG )

FueVAddrttve Categories :

- Baselin e

- Non-baselin e -Atypica l 

# I

FueVAddtfv e Group s 

# I

Grou p Representative(s )Tabl e1-1 : F/F AGroupin g Syste m

F/F A Category Baseline

Non-baeeline

Atypica l Conventiona l Gasoline (A ) Ona grou

p raprasanta

db y gasolin a baaa fue l

Ona grou

pfo r aach gasoline-oxygenat e blan do r aac h gasoline me t hanol/co solvent bland ; on a grou pfo xaach syntheti c crude derivedfua l Ona grou

pfo r aach atypica l element / characteristic , o r uniqua combinatio

n o f atypica l elamanta / charactariatic * Fua l Familie s Diaaa l (B ) Ona grou

p rapraaantadby diaaa l baa a fua l

Ona grou

pfo r aachoxygen contributing coapoun do r claaa o f compounds ; ona grou pfor aac h aynthati c crude derivedfua l Ona grou

pfor aachatypica l element / charactariatic . o r uniqua combinationo f atypica l elements / characteristic s Mathano l (C ) Tw o groupa : 1 ) K10 0 grou

p (induda a methanol-gasoline formulations with at laaa t 9« % methanol ) rapraaanta

db y M10 0 baaa fua l 2 ) M S (induda a •athanol-gaaolina foramlation

a wit h 50-95 % methanol ) rapraaanta

db y MS 5 baaa fua l On a grou pfor aachindividua l non-methanol , non-gaaolin

a component an

dona grou pfo r aac h uniqua combinatio

no f aac hcomponent s Ona grou

pfor aachatypica l alaaant / charactariatic . o r uniqua combinatio

no f atypica l alaaanta / characteristic s Alternative rua l Familie s Ethano l (D ) Ona grou

p (include s athanol-gaaolina foramlation

a wit h a t laaa t 50 % ethanol ) representedb

y E8 5 bas e fua l

On e grou

pfor eachIndividua l non-ethanol , non gasoline component an

don e grou pfor each unique combinationo f suchcomponent s On e grou

pfor eachatypica l alaaant / charactariatic . o r unique combinationo f atypica l elements / characteristic s Methane (CHS , IMG ) (E ) One grou

p (include s both CH Gan dLUG) , representedb

y CH Gbas e fue l

One grou

pt o includ e methan e formulation s exceedin

gthe specifiedlimi t for non-methane hydrocarbon s
One grou

pfor eac hatypica l element / charactariatic . or unique combinatio

no f atypica l elements / character istic a Propan e (LPG ) (F ) On e grou

p represente db

y LP S baa a fue l

On e groupt o include propan e formulation s exceedingth e specifie dlimi t for butan e and highe r hydrocarbon s On e groupfor aachatypica l alaaant / charactariatic . o r uniqu e combinationo f atypica l elements / characteriatic a

C OFigur e 1-2. 1 

## Fue l Manufacture rAnnua l Sale s Distributio n Manufacturer s o fLeade d Products Exclude d P.3 1

Figur e 1-2. 2 0 5 1 0 1 5 2025303540455055606570758085909 5 10 0 Cumulative Percen to f63 8 Companie s 30 0

<1 0 10-4 9 50-9 9 Annua l Sale s ( $ Millions ) •>10 0 Figure 1 -2. 3

OT c o 

# i

OT 

## <s 7 3 3 C 1Z U 10 0 80 60 40 20 0 JFuel Mfrs . Earnin g < $100 M Pe rYea i 

### •

- i $50 MiaiO N / "

•II I •*«—-P " ' 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 —

1 0 2030405060708 0

Cumulative Percen to f52 5 Comoanie s < $10 0 M M 90 10 0

### Fue l Additiv e Manufacture rAnnua l Sale s Distributio n Manufacturer

s o fLeaded Product

s &Relabelers Excluded Flaur e 1-3. 1

Figur e 1 -3. 2 1 0 2 0 3

0 4

0 5

0 6

0 7

0 Cumulativ

e Percen to

f45 6 Companies 8 0 9

0 10

0

Figur e 1-3. 3 <1 0 10-4 9 50-9 9 Annua l Sales ($Miltions) ->10 0

10 0 

## t • 8 3 3 5 «> 

# 1 OT 1 3 3 C S 8 0 6 0 4 0 2 0 -

- • Fue l Additiv

e Mfrs . Earnin g < $100 M P«r Year | / $6 0 Millio n j j / / / >

1 0 2030405060708 0

Cumulativ

e Percen to

f31 4 Companies < $10 0 M M 9 0 10

0

# DRAF T
Chapte r 2
Industr y Overvie

w

I . Introductio

n Thi s chapte r provide s a characterizatio n o f currentl y registere d fue l an d fue l additiv e manufacturers . Financia l informatio n an

d informatio nregarding th e numbe r an d type s o f product s registere d ar e presented . Fo r purpose s o f registratio n wit hEPA , a fue l manufacture r i s define d a s an yperso nwho , fo r sal e o r introductio n int o commerce , produce s o r manufacture s a fue l o r cause s o r direct s th e alteratio n o f th e chemica l compositio nof , o r th e mixtur e o f chemica l compound s in , a bul k fue l b yadding t o i t a n additive. 9 B ythi s definition , thos e entitie s require d t o registe r fuel s includ e no t onl yrefiner s o f crud e oil , bu t als o operator s wh o formulat e thei r ow n fuel s b

yadding differen t combination s o f additives , an d thos e wh o mi xfuels . EPAi s als o expecting t o includ e importer s o f fuel s i nth e definitio no f fue l manufacturer .

Afue l additiv e manufacture r i s define d a s an yperso n wh o produce s o r manufacture s anadditiv e fo r us e a s a nadditiv e and/o r

9 4 0 CF RPar t 79 . 2 3sell s an additiv e unde r hi s ow n name. 1 0 Include d i n thi s definitio n ar e companie s whic hmanufactur e additive s fro mnon-additiv e constituent s a s wel l a s thos e whic hproduc e additive s b ymixing tw o o r mor e othe r registere d additive s an d thos e whic hrepackag e existing additive s fo r sal e unde r a differen t labe l (i.e. , relabelers) . Fue l additiv e product s can b e subdivide d b ypurpose in-us e a s bul k additive s and/o r aftermarke t additives . Bul k additive s ar e product s whic har e adde d t o fue l befor e th e fue l i s commerciall yavailabl e fo r introductio nint o th e fue l tank o f a moto r vehicle , whethe r adde d a t th e refinerya s par t o f th e origina l blending strea m o r afte r th e fue l i s transporte d from th e refinery . Aftermarke t additive s ar e product s whic har e adde d b y th e end-use r directl yt o fue l i n a moto r vehicl e o r engin e t o modif yth e performanc e o r othe r characteristic s o f th e fuel , th e engine , o r it s emissions . EP Aals o expect s t o includ e importer s o f fue l additive s i n th e fue l additiv e manufacture r definition .

II . Analysi s o f Currentl y RegisteredFuel/Fue l Additiv e Producer s

A s discusse d i n th e firs t chapter , EP Ai s require d t o registe r moto r vehicl e fuel s an d fue l additive s prio r t o thei r sal e o r introductio n int o commerce . Commercia l identifying information , rang e o f concentration , purpose-in-use , an d chemica l compositio n ar e example s o f informatio nrequire d fo r eac hproduc t registration .

10 Ibid . 2 4P.3 5

Th e registratio n information , maintaine d b yEPAo na registratio n database , i s th e primarysourc e o f dat a use d i n thi s impac t analysis .

A s o f Decembe r 1992 , th e registratio ndatabas e containe d informatio n o n a tota l o f 2,05 3 uniqu e producer s an d 6,46 9 leade d gasoline , unleade d gasolin e an d diese l fue l an

d fue l additive products . O f thes e manufacturers , approximatel y78 5 (nearly4 0 percent ) wer e fue l producers , 1,24 0 (over 6 0 percent ) wer e additiv e producers , and 2 8 produce d bot hfuel s an d additives . Approximatel y 3 0 percen t o f th e 2,09 9 fue l product s registere d wer e leade d gasolin e products , 6 0 percen t wer e unleade d gasolin e products , an d 1 0 percen t wer e diese l fue l products . O f th e 4,37 0 registere d fue l additiv e products , 4 2 percen t wer e bul k additive s an d 5 8 percen t wer e aftermarket . Nearl yone-fourt ho f al l registere d additive s wer e relabele d products . Th e databas e contain s informatio no n product s registere d sinc e th e registratio n programbega n i n1975 . Sinc e manufacturer s ar e no t currentl yrequire d t o notif yth e Agenc ywhe nproductio no f a registere d produc t ha s ceased , o r whe na compan yha s bee nsol d o r gon e ou t o f business , th e databas e maycontai nobsolet e information . Thus , t o mor e accuratel ydetermin e cost s an d impact s o f thi s program , EP Aattempte d t o updat e th e databas e b y identifying manufacturer s n o longe r i n busines s an d t o collec t curren t financia l informatio nfo r thos e manufacturer s stil l 2 5producing registere d products , a s describe d below . However , ther e

wa s n o wayfo r EP At o confirmwhethe r al l o f th e F/FA s registere d b ya "functioning " manufacture r ar e stil l (o r hav e eve r been ) i n production .
A . Dat a Collectio n Using th e Dun & Bradstree t (D&B ) databas e service s availabl e t o EP Athroughth e Nationa l Compute r Center 11 , informatio no n annua l sales , numbe r o f employees , and th e primaryStandar d Industria l Classificatio n (SIC ) cod e wa s collecte d o n approximatel y6 3 percen t o f registere d F/F

Amanufacturers . Whe n th e registere d F/F Acompan

y wa s a subsidiaryo r divisio n o f a large r company , th e sales/employee/SI C cod e dat a wa s collecte d fo r th e parent 1 2 company . Fo r th e remaining companies , EP Acontracte d wit hDun & Bradstree t Informatio n Service s t o collec t sales/employee/SI C cod e information , throughus e o f thei r mor e comprehensiv e database , an d t o identif ycompanie s whic hha d relocated , ha d bee n sol d o r renamed , o r whic hwer e n o longe r i nbusiness . Companie s no t

" Acomputerize d inventoryo f facilitie s regulate d b yth e U.S . EPA , calle d FINDS , i s maintaine d b yEPA' s Offic e o f Informatio n Resource s Management . I t operate s o n a mainframe compute r whic hreside s a t EPA' s Nationa l Compute r Cente r i n Researc hTriangl e Park , Nort hCarolina . ThroughFINDS , user s can acces s a Dun & Bradstree t databas e whic hcontain s informatio non U.S . busines s establishments . ""Parent " i s define d a s a busines s entit ywit hcontrolling interes t i n anothe r compan ythroughownershi p o f a majorit y(more tha n 5 0 percent ) o f it s voting stock . Whe n th e F/F Acompan

ywa s a subsidiaryo r division , informatio nwa s collecte d fo r th e "closest " paren t listed , no t th e uppermos t headquarter s o r ultimat e paren t company . 2 6P.3 7

identifie d o n D&B' s comprehensiv e databas e wer e investigate d vi a phone , an

d i n some cases , physica l researc h(i.e. , a D& B analys t drov e t o th e busines s site) . Companie s stil l no t foun d afte r thi s effor t wer e considere d t o b e ou t o f busines s fo r purpose s o f thi s analysis . Financia l dat a wa s no t sough t fo r companie s producing onl y leade d gasolin e product s sinc e leade d gasolin e fo r highwayvehicle s wil l b e illega l a s o f January1 , 1996 . Consequently , theyar e exclude d from

th e remainde r o f thi s analysis . I naddition , becaus e onl ybasi c registratio n informatio nwil l b e require d fo r relabele d products , financia l informatio nwa s no t collecte d fo r relabeler s sinc e thei r impact s woul d b e minimal . However , cost s t o companie s registering relabele d product s ar e include d i nth e overal l cos t projection s discusse d i n Chapte r 4 .
A s a resul t o f th e dat a search , 24 9 registere d F/F Acompanie s (1 2 percen t o f tota l registere d companies ) wer e determine d t o b e ou t o f business . Excluding thes e companies , relabelers , thos e producin g onl yleade d products , and afte r combining companie s liste d mor e tha n onc e o n th e databas e (se e sectio nII I o f Chapte r 5 fo r discussion) , curren t annua l sale s dat a wa s collecte d fo r 9 5 percen t o f th e registere d companies . Fo r th e remaining five percent , unde r th e assumptio ntha t companie s fo r whic hsale s dat a wa s no t availabl e wer e likel yt o b e small , EP Aassigne d a sale s leve l o f $4 9 millio n t o manufacturer s wit hgreate r tha n5 0 2 7employees , an d $ 9 millio nt o manufacturer s wit hles s tha n5 0 employees . I f employe e informatio nwa s no t available , a sale s o f $4 9 millio n wa s assigne d t o th e company .

B . Characterizatio no f RegisteredProducer s I n total , th e numbe r o f uniqu e "functioning " registere d manufacturer s o n whic hthi s analysi s i s base d i s 1,076 . Thi s include s 43 8 additiv e manufacturers , 61 8 fue l manufacturers , an d 2 0 manufacturer s tha t produc e bot hfue l and additiv e products . Th e tota l numbe r o f additiv e product s manufacture d b yth e 45 8 additiv e companie s i s 2,778 . Th e averag e numbe r o f additiv e product s registere d pe r additiv e manufacture r i s approximatel y6 , wit hth e maximu mnumbe r o f product s manufacture d b ya singl e additiv e compan ybein g 179 . Nearl yhal f o f th e additiv e manufacturer s (4 5 percent ) produc e onl yon e product . O f th e 2,77 8 registere d additives , approximatel y1 0 percen t ar e atypical . Th e tota l numbe r o f fue l product s manufacture d b yth e 63 8 fue l companie s i s 1,420 , roughl yone-hal f th e numbe r o f product s manufacture d b

yadditiv e companies . Th e averag e numbe r o f fue l product s pe r manufacture r i s approximatel y2 , wit hth e maximu m numbe r registere d b ya singl e fue l compan ybein g 16 . Abou t 4 0 percen t o f fue l manufacturer s produc e onl yon e product , an d approximatel y1 5 percen t o f tota l registere d fue l product s ar e atypical .

2 8P.3 9

Analysi s o f th e update d databas e show s tha t abou t 9 0 percen t o f additiv e manufacturer s an d 9 8 percen t o f fue l manufacturer s produc e a t leas t on e baselin e o r non-baselin e product . Registratio n o f atypica l product s i s muc hlower , especiall yb yfue l manufacturers , wit honl y2 7 percen t o f tota l additiv e manufacturer s an d 1 3 percen t o f tota l fue l manufacturer s producing a t leas t on e atypica l product .
A s discusse d briefl yi n Chapte r 1 an d show ni n Figur e 1- 2 fo r fue l manufacturer s an d Figur e 1- 3 fo r additiv e manufacturers , th e distributio n o f annua l sale s acros s registere d manufacturer s show s tha t eac hindustryconsist s o f a smal l numbe r o f larg e manufacturer s an

d a larg e numbe r o f smalle r companies . A s show ni n Figur e 1-2 , abou t 8 2 percen t o f tota l fue l manufacturer s hav e sale s unde r $10 0 million , 7 3 percen t hav e sale s unde r $5 0 million , an d nearl y4 0 percen t hav e sale s belo w$1 0 million . Thus , o f th e fue l companie s unde r $10 0 millio ni nsales , nearl yal l hav e sale s unde r $5 0 million , an

d hal f fal l belo w$1 0 millio n i n sales . Onl yabou t 1 8 percen t o f fue l manufacturer s hav e sale s $10 0 millio n an d above .

I n regar d t o fue l additiv e manufacturers , approximatel y6 8 percen t hav e sale s belo w$10 0 million , 6 4 percen t belo w$5 0 million , and 4 5 percen t belo w$1 0 million . Thus , registere d fue l additiv e manufacturer s tend t o b e small , wit hove r 6 5 percen t o f thos e unde r $10 0 millio ni n sale s als o belo w$1 0 million . Onl y abou t a thir d o f tota l fue l additiv e companie s hav e sale s abov e 2 9P.4 0

$10 0 million . Using th e sale s dat a collecte d fo r eac hmanufacture r an d th e regressio n equation s develope d fo r th e smal l busines s impac t analysi s fo r th e NPRM 13 , IC F provide d estimate s o f ne t income , asset , an

d retur n o n asse t (ROA ) informatio nfo r eac ho f th e registere d companies . Fromthis , IC F develope d profile s o f smal l an d larg e companies , a s show ni nExhibi t 2- 1 fo r fue l manufacturer s an d Exhibi t 2- 2 fo r additiv e manufacturers . Approximatel y7 3 percen t o f fue l companie s an d 6 4 percen t o f additiv e companie s ar e considere d smal l fo r thi s program(i.e. , hav e sale s <$5 0 million) . Acompariso n o f th e media n smal l fue l and fue l additiv e manufacture r indicate s tha t smal l fue l manufacturer s generall yhav e mor e employee s an

d highe r sale s an

d ne t income tha nsmal l additiv e manufacturers , bu t tha t ROAtend s t o b e smalle r fo r smal l fue l companies . However , whe ncomparing th e media n larg e fue l an d additiv e manufacturer , th e dat a suggest s tha t larg e additive manufacturer s generall yhav e mor e employee s an d highe r sales , ne t income , an

d ROAtha n larg e fue l companies . Th e likel yexplanatio n fo r thi s finding i s tha t severa l verylarg e companies , including majo r automobil e manufacturer s an d chemica l companie s ar e registere d a s fue l additiv e manufacturers .

I n sum , a compariso n o f currentl yregistere d fue l an d additive

13 Se e IC F Analysi s availabl e i nAi r Docke t A-90-07 , item numbe r III-A-03 . 3 0P.4 1

companie s suggest s tha t larg e additiv e manufacturer s (thos e wit h sale s $5 0 millio n an d above ) generall ytend t o b e large r i nterm s o f sale s an

d numbe r o f employee s tha nlarg e fue l manufacturers . However , smal l additiv e manufacturer s ar e generall ysmalle r tha n smal l fue l companies . On e reaso n fo r thi s mayb e th e divers e natur e o f th e companie s registering products , particularl y additives . Tha t is , theymak e mor e product s tha nfue l additives . Th e dat a als o suggest s a bimoda l distributio ni nth e siz e o f th e companie s i n eac hindustry(i.e. , a smal l numbe r o f larg e companie s an d a larg e numbe r o f smal l ones) . Complianc e cos t impact s o n smal l an

d larg e fue l an

d additiv e manufacturer s i s discusse d i n Chapte r 5 .

3 1P.4 2

Exhibi t2- 1 Profile s of

Registere dFue lManufacturer s

Small * Larg e TOTA L Numbe r 46 5 173 63 8 Percent

73 % 27 % 100 %

ImaJarat a Sala a Aaiat * Na t!•««* • • O A

Bmalaraa * S*M « Aaaa U N* t Ia**O M RO A Mlslma m

0 S49.00 0 J l 3.1« 4 $29 2 2Jt %

0 J50.000.00 0 $15,643,91 3 $633,62 1 4.19 * Laira rQaartil *

1 $3,000,00 0 $882,30 3 $28,54 4 3J3 *

21 5 $15,917,70 2 $27,204,04 0 $1,191,32 1 4-40 * Mafla a

Smal l >•• ! Ma n

2 2 $9,000,00 0 $2,711,66 4 $97,03 7 3.57 * Lara * r*a l Mai l

44 3 $261,12100 0 $87,279,65 8 $406956 0 4.19 % Upaa rOsarW a factara n 5 1

$22,000,00 0 $6,712,32 1 $263,63 9 3.90 * •factara n 3,02 5 $1,775,820,00 0 $621,866,62 2 $36,751,77 2 SJU% Manam a

29,43 7 $49,665,53 4 $13,537,04 1 $630,73 7 3.19 *

67.30 0 S62J59.000.00 0 S6t.309.097.9 M $4^69.80X31 1

7.86 * Ararat *

154 $14,707,89 4 $4,335,22 4 $178,33 4 3.54 %

4.31 5 $2,653,133,84 8 $1,688,061,36 3 $116,891,83 2 5.16 * •Companies wit

hsales les s tha

n$50million .P.4 3

Exhibi t2- 2 Profile s of

Registere dAdditiv eManufacturer s

Small * Larg e TOTA L Numbe r 295 16 3 458 Percent

64% 36% 100 %

Bmaioyaa a Sala a Aaaa U Na tIncaa M RO A

Bmalaraa a Salaa Aaaat a Na tlacam a RO A 0 $30,00 0 $12,06 3 $49 2 4.08 %

1 0 $30,000,00 0 $13.43 6 J 8 3 $1,377,37 9 5.42 * 3

$900,00 0 $296,68 8 $13,62 8 4.39 *

72 2 $176,414,36 6 $102,843. 1 J 3 $3,863,45 6 3.70 * M*4la a Smal l A4altrr a M

1 6 $4,282,99 5 $1,671,04 2 $81,82 6 4.90 * Lart a A44ttlr < M

3 j a $97X793,13 3 S681,»2X8t 4 $41,710,68 6 6.12 * Uaaa rQaarUl a aaafaataiai a 5 2 $1X116.18 3 $5,288,94 9 $270,26 4 5.11 * aaafaatarar * 14.33 3 $3,405,500,00 0 SX733.103.45 1 $173,985*7 5 6.44 * Maxtaaa m

1.11 0 $49,000,00 0 $24,873,32 0 $1345,97 0 5.41 *

33X70 0 $115,068,000,00 0 S135.063J93.62 0 $10,047,009,08 1

7.44 * A'rrat *

3 1 $9,688,73 8 $4,476,367 $23409 0 4.86 *

14,76 4 $4,974,456,42 0 $4,903,814,56 1 $344,33X61 1 6.12 * •Companie s wit

hsale s les s tha

n$5 0million .

# DRAFT Chapte r3 Progra m Requirement s an

dAssociatedCoat a

I . Introductio

n
Th e regulation s implementing Clea n Ai r Ac t (CAA ) sectio n 211(b)(2 ) requir e producer s o f moto r vehicl e fuel s an d fue l additive s t o submi t informatio nregarding th e compositio n o f th e emission s produce d b ysuc hF/FA s an

d th e effect s o f th e emission s o n th e publi c healt han d welfare . A s previousl ymentioned , EPA believe s th e genera l regulatorymechanism s alread yimplemente d unde r sectio n 21 1 (f ) ar e adequat e t o satisf yth e emissio n contro l systemprovision s o f sectio n 211(b) . Furthermore , a s indicate d i n Chapte r 1 o f thi s document , welfar e effect s ar e t o b e addresse d i n conjunctio n wit hTie r 1 healt heffect s requirements , an d possibl y Tie r 3 . Therefore , th e cost s presente d i nthi s analysi s ar e associate d primaril ywit hhealt heffect s evaluation , including informatio n collection , emissio ncharacterization , biologica l testing , and reporting requirements . Th e purpos e o f thi s chapte r i s t o projec t cost s associate d wit hmeetin g programrequirement s an d submitting th e informatio n necessaryfo r registration . Becaus e gasolin e an d diese l fuel s an

d thei r additive s ar e th e onl yproduct s require d t o b e registere d 3 2wit hEP Aa t th e time thi s analysi s wa s conducted , specifi c

componen t cos t estimate s ar e provide d onl yfo r testing o f thes e fuel/additiv e families . However , futur e designatio no f methanol , ethanol , natura l gas , an d liquifie d petroleu mga s fuel s an

d thei r additive s i s expected . Thus , producer s o f thes e F/FAs , i nadditio n t o gasolin e an

d diesel , ar e expecte d t o b e subjec t t o th e registratio n requirement s o f today' s rule . Potentia l cost s associated.wit hfutur e registration s o f alternativ e F/F Aproduct s ar e discusse d a t th e end o f thi s chapter .

A s previousl ymentioned , EP Acontracte d wit hSwR I t o hel p identif ycommercia l price s associate d wit hspecifie d aspect s o f th e generatio n an d collectio n o f combustio nan d evaporativ e emissions , th e chemica l characterizatio n(speciation ) o f suc h emissions , an

d th e controlle d dilutio nan d direc t deliveryo f suc h emission s t o anima l exposur e chamber s fo r healt heffect s testing . T o obtai n thi s data , SwR I contacte d and provide d a surveyt o eigh t laboratorie s capabl e o f performin g a t leas t some o f thes e tasks . Eac ho f th e laboratorie s responde d t o a t leas t some o f th e survey categories . Base d o n it s ow nexperienc e a s a commercia l testing laboratory , SwR I the n evaluate d th e response s an d develope d a "typical " commercia l pric e whic hmigh t b e charge d fo r eac ho f th e tasks . Thes e pric e estimate s ar e th e basi s fo r muc ho f th e cos t dat a presente d i n thi s chapter . Othe r cos t estimate s wer e obtaine d fromvariou s sources , including resource s withi n EPA . Fo r example , biologica l testing cost s wer e base d o ndat a receive d fro mth e 3 3Offic e o f Pesticide s an d Toxi c Substances 14
. Th e dat a presente d i n thi s chapte r reflec t th e cost s fo r an individua l produce r t o mee t th e requirements , an d d o no t reflec t potentia l saving s resulting fro mcost-sharing arrangement s o r from volume discount s provide d b ylaboratories . Whe ncos t projection s ar e presente d i n thi s chapter , a rang e o f estimate d cost s i s provide d i n some instances . Thi s reflect s th e fac t tha t certai n programrequirement s ar e mor e stringen t an d costl yfo r product s i n th e "atypical " categorie s tha n fo r th e "non-atypical " (baseline an d non-baseline ) products . I n suc hinstances , differen t cost s ar e presente d fo r "atypical " and "non-atypical " products . Majo r change s i n th e fina l programrequirement s compare d t o thos e originall ypropose d ar e outline d below , followe d b ya discussio n o f requirement s an d cost s associate d wit heac h evaluatio n tier , and , finally , cost s associate d wit hadministrativ e an d reporting requirements . Aggregat e cost s t o industryar e discusse d i n Chapte r 4 .

II . Descriptiono f Change s inProgra m Requirement s
Th e fina l rul e maintain s th e three-tie r testing structur e fo r
14 U.S . Environmenta l Protectio n Agency , Offic e o f Pesticide s an d Toxi c Substances , "Cos t Estimate s fo r TSCATes t Guidelines, " Memorandu

mfromDa n Axelra d t o Sher i Dunatchik , June , 1991 . 3 4evaluating th e healt heffect s o f fuel s an d additives , wit hsome variation s i n specifi c program requirements . Tie r 1 o f th e proposa l include d a modeling analysi s fo r atmospheri c reactivity , environmenta l fate/partitioning , an d exposur e a s par t o f th e welfar e effect s evaluation . Du e t o th e limite d applicabilit yo f availabl e modeling method s fo r thi s program , EPAi s no t requiring routin e modeling analysi s i nth e fina l rule . Instead , modeling effort s wil l b e require d onl yo n a case-by-cas e basis , a s neede d unde r Tie r 3 . Tie r 1 requirements , however , d o includ e submitta l o f productio n volume an d distributio ndata . F/F Amanufacturer s ar e als o require d unde r Tie r 1 t o determin e th e emission s resulting fromth e us e o f th e fue l o r additiv e containe d i n th e fuel . I n doing so , th e emission s ar e t o b e generated , collected , sampled , an d subjecte d t o test s fo r determining th e identit yan d concentratio n o f individua l emissio n products . Befor e emission s can b e generate d fo r characterization , manufacturer s wil l b e require d t o accumulat e a certai nnumbe r o f mile s o n th e vehicle . Th e minimu mmileag e accumulatio nrequire d prio r t o emission s testing ha s bee nreduce d fromth e propose d 25,00 0 mile s (o

r comparabl e hours ) t o 4,00 0 mile s fo r light-dut y vehicle/truc k testing o r 12 5 hour s fo r heavy-dut yengin e testing . I n th e cas e o f F/FA s wit hatypica l elements , onc e eac hatypica l element(s ) o f interes t i s detecte d i na t leas t on e emissio n fraction , an additiona l 10,00 0 mile s i s require d prio r t o generatio n o f emission s fo r purpose s o f emissio ncharacterizatio n 3 5

# 1

an d biologica l testing .

I n additio n t o characterizing catalyze d exhaus t emission s generate d vi a th e Federa l Tes t Procedur e (FTP ) a s proposed , th e fina l rul e als o include s characterizatio n o f non-catalyze d exhaus t emissions . Furthermore , fo r th e fina l rule , evaporativ e emissio n characterizatio n i s t o b e conducte d o n emission s generate d froman evaporativ e emissio n generato r (EEG) , rathe r tha nth e propose d metho d o f using a seale d housing fo r evaporativ e determinatio n (SHED ) t o generat e emissions . I n general , thes e change s describe d above , along wit hothe r change s i n programassumption s an d cost s (explaine d i n th e nex t section) , resul t i ntota l Tie r 1 cost s bein g highe r tha n estimate d i n th e proposal .

I n th e NPRM , EP Apropose d short-termtest s unde r Tie r 2 fo r th e evaluatio n o f si xhealt heffect s endpoints : carcinogenicity , mutagenicity , teratogenicity , reproductiv e toxicity , neurotoxicity , an d pulmonarytoxicity . Th e Tie r 2 testing requirement s hav e bee n modifie d i n th e fina l rul e t o enhanc e th e efficienc yan d feasibilit yo f th e program . Aserie s o f individua l test s ar e replace d wit ha comprehensiv e 90-da ysubchroni c inhalatio nprotoco l tha t examine s genera l systemi c an d organtoxicit y(includin g pulmonarytoxicity) , a s wel l a s specifi c assessment s relate d t o carcinogenic , mutagenic , teratogenic , reproductive , an d neurotoxi c effects . Thes e modification s wil l increas e th e qualit yan d breadt h o f th e tes t data , whil e slightl ydecreasing th e actua l testing 3 6cost . However , result s o f th e surveyconducte d b ySwR I sugges t tha t bot hlight

- an d heavy-dut yemissio ngeneratio ncost s fo r biologica l testing purpose s wer e underestimate d i nth e proposal . This , i n combinatio n wit hchange s i nothe r assumption s regarding Tie r 2 testing , explaine d i n detai l below , resul t i na sligh t increas e i n tota l Tie r 2 cost s estimate d fo r bot hlight-dut y gasolin e and heavy-dut ydiese l testing . Cost s associate d wit h individua l testing requirement s o f eac htie r ar e discusse d below .

III . Tier 1 Requirement s an dCoat a
Th e scop e o f Tie r 1 encompasses : 1 ) a literatur e searc ho f availabl e informatio n o n th e compositio nan d effect s o f F/F

A emission s o n publi c healt han d welfare , 2 ) a chemica l analysi s t o characteriz e th e emission s o f fuel s o r fuel/additiv e mixtures , an d 3 ) a discussio n o n potentia l exposure s using informatio non productio n volume and distributio npattern s o f th e particula r fuel(s ) o r fuel/additiv e mixture(s) . Eac ho f thes e requirement s ar e explaine d below .

* • Literatur e Search Acomprehensiv e literatur e surveywil l b e required , using bot h publi c an

d in-hous e (industr yan d manufacturer ) source s t o gathe r al l availabl e informatio nabou t th e chemica l compositio nan d potentia l advers e effect s o f whol e combustio nemission s an d 3 7P.5 0

relevan t emissio n fractions , a s wel l a s th e individua l emissio n product s identifie d b yemissio n speciatio nprocedures . The informatio n i s t o b e compile d fro m peer-reviewe d scientifi c journal s an

d othe r literatur e a s wel l a s interna l industrystudies , government-sponsore d reports , proceeding s o f scientifi c meetings , an d othe r documente d sources . Asearc ho f appropriat e commerciall y availabl e toxicologi c an d environmenta l database s mus t b e conducte d t o locat e informatio n frompublishe d sources . Th e searc hmus t cove r a t leas t fiftee n year s prio r t o th e dat e o f submission , an d mus t b e curren t a s o f si xmonth s prio r t o beginning o f testing . Th e informatio n t o b e submitte d t o EP Aa s a resul t o f th e dat a searc hinclude s a summaryo f th e genera l findings , a printe d cop y o f th e output s fromth e databas e searches , complet e documentatio n o f unpublishe d in-hous e o r othe r privatel yconducte d studies , an d table s summarizing al l cite d studies .

I n EPA' s judgement , companie s wil l likel ymee t thes e dat a researc hrequirement s throughth e service s o f a contractor . EPA estimate s tha t a typica l contracto r wil l charg e anhourl yrat e o f $6 5 fo r thi s service , and databas e service s ar e estimate d t o cos t approximatel y$2 0 pe r hour . Fo r baselin e products , EP Aestimate s contracto r and databas e servic e hour s t o b e approximatel y30 0 an d 7 5 hours , respectively . . Fo r non-baselin e an d atypica l products , EP Ai s allowing manufacturer s t o submi t Tie r 1 literatur e dat a onl y fo r th e emissio n specie s whic har e differen t fro mth e emissio n product s o f th e respectiv e bas e fuel . Consequently , EP Aestimate s 3 8P.5 1

th e dat a researc hrequirement s fo r thes e product s t o abou t one thir d o f th e researc htime require d fo r baselin e product s (i.e. , 10 0 contracto r hour s an d 2 5 hour s o f databas e use) . I nsum , EPA estimate s th e cos t fo r conducting th e literatur e searc hportio n o f Tie r 1 t o b e $21,00 0 fo r baselin e product s an d $7,00 0 fo r non baselin e an

d atypica l products .
B . Characterizatio no f Kmiaaion

a CA Asectio n 211(b ) require s F/F Aproducer s "t o determin e th e emission s resulting from th e us e o f th e fue l o r additiv e containe d i n suc hfuel. " T o satisf yth e requirement s o f thi s provision , exhaus t emission s wil l nee d t o b e generated , collected , sampled , an d subjecte d t o test s fo r determining th e identit yan d concentratio n o f individua l emissio nproducts . Whe n applicable , evaporativ e emission s wil l als o b e generated , collected , an d subjecte d t o mos t o f th e same method s o f chemica l analysis . Th e emissio n characterizatio nrequirement s canb e mitigate d b y comparabl e dat a obtaine d throughth e literatur e searc hdescribe d above . 1 . Emissio n Generatio n Thi s sectio n present s th e method s and cost s fo r generating an d sampling th e emission s t o b e use d i nchemica l speciatio n procedures . Becaus e man yo f th e same method s wil l b e neede d fo r generating emission s t o b e use d fo r biologica l testing i n Tier s 2 an d 3 , a discussio n o f thes e overlapping requirement s i s als o 3 9include d i n thi s section .

a . Vehicl e Requirement s Th e vehicle s use d t o generat e emission s fo r purpose s o f emissio n characterizatio nan d biologica l testing mus t b e ne w vehicle s o f th e mode l yea r i nwhic htesting begins . Vehicl e class , emissio n contro l equipment , an d vehicl e sale s volume ar e th e parameter s t o b e considere d i n determining th e vehicl e o r engin e t o b e use d fo r emissio n generation . Fo r eac hfue l famil y(i.e. , gasoline , diesel) , th e vehicl e clas s t o b e use d fo r emissio n generatio n wil l b e tha t whic hconsume s th e highes t yearl yamoun t o f fue l i n tha t fue l family . Sinc e diese l F/FA s ar e currentl yuse d predominantl yi n HDEs , and gasolin e F/FA s ar e predominantl yuse d i n light-dut yvehicle s (LDVs) , EP Aassume s i nthi s analysi s tha t HDE s wil l b e use d fo r testing diese l product s an d LDV s wil l b e use d fo r testing gasolin e products . Further , EP Aassume s us e o f a heav y heavy-dut ydiese l engin e (HDDE ) (a n engin e use d i n a vehicl e greate r tha n 33,00 0 lbs . gros s vehicl e weigh t rating (GVWR) ) becaus e thi s subclas s reflect s th e mos t gallon s o f diese l fue l consume d among vehicle s operating o ndiese l fuel . Th e specifi c vehicle/engin e mode l t o b e selecte d fo r testing i s t o b e an yon e o f th e fiv e mos t commo n fue l systeman d emissio ncontro l system configurations .

Ne wvehicle s (o

r engines ) use d i n emissio ngeneratio n fo r th e testing o f baselin e and non-baselin e F/FA s ar e require d t o underg o 4 0P.5 3

a break-i n perio d wher e th e vehicl e (o r engine ) i s ru

n exclusivel y o n th e fue l o r fuel/additiv e mixtur e t o b e tested . Fo r vehicle s on a chassi s dynamometer , th e mileag e accumulatio n neede d prio r t o emission s testing i s a minimu mo f 4,00 0 miles . Fo r engine s on a n engin e dynamomete r th e minimu mbreak-i n requiremen t i s 12 5 hour s o f operatio n fo r heavy-dut yengine s an d 8 0 hour s fo r light-dut y vehicl e engines . Th e manufacturer s wil l b e responsibl e fo r appropriatel ymaintaining th e vehicle/engin e whil e subjec t t o thes e requirements . Mileag e can b e accumulate d b yan yappropriat e means .
I n th e cas e o f F/FA s wit hatypica l elements , afte r completio n o f th e 4,00 0 miles , th e F/F Amanufacture r i s require d t o identif y an d measur e th e atypica l element(s ) i nth e exhaust , i f possible . Th e atypica l element(s ) o f interes t ar e t o b e measure d i n eac ho f th e emissio n fraction s (i.e. , vapor , semi-volatile , an d particulate ) a t interval s t o b e decide d b yth e manufacturer . The manufacture r i s require d t o continu e mileag e accumulatio nunti l eithe r 1 ) 5 0 percen t o r mor e o f th e inpu t mas s o f eac hatypica l can b e measure d i n th e emissions , o r 2 ) mileag e equivalen t t o 4 0 percen t o f th e vehicle' s usefu l lif e i s reached . Testing ma y commenc e afte r eithe r o f thes e condition s ha s bee nmet . Cos t estimate s provide d fo r producer s o f non-atypica l produc t formulation s (i.e. , baselin e an d non-baseline ) reflec t the assumptio n tha t emissio n generatio n fo r purpose s o f emissio n characterizatio n and biologica l testing wil l begi nwhe nth e vehicl e 4 1P.5 4

ha s accumulate d th e minimu m miles/hour s require d (4,00 0 mile s fo r an LD V o r 12 5 hour s fo r anHDE ) . Fo r producer s o f atypica l formulations , range s an d poin t estimate s ar e provided . Th e lowen d cos t estimat e assume s testing begin s whe nth e minimu mmileag e accumulatio n requiremen t o f 4,00 0 mile s (o r equivalen t hours ) i s reached . Th e highend reflect s th e cos t a manufacture r woul d incur i f mileag e equivalen t t o 4 0 percen t o f th e vehicle' s usefu l lif e woul d nee d t o b e accumulated . Whe ndetermining poin t estimate s t o b e use d i n th e cos t analysi s fo r atypicals , EP Aassume d tha t a t leas t 5 0 percen t o f th e inpu t mas s o f eac hatypica l elemen t woul d b e abl e t o b e measure d i n th e emission s afte r th e accumulatio n o f mileag e equivalen t t o 7 5 percen t o f th e maximu mrequirement . I n othe r words , poin t estimate s use d i n thi s cos t analysi s fo r testing o f atypica l product s reflec t th e assumptio n tha t testing wil l begi n whe n mileag e ha s reache d 3 0 percen t o f th e vehicle' s usefu l lif e (i.e. , 30,00 0 mile s fo r LDV s an d 87,00 0 mile s fo r heav yHDVs) . Vehicl e Acguisitio n Cost s EP Aestimate s producer s o f gasolin e fuel s an d additive s wil l spend approximatel y$15,00 0 t o purchas e th e appropriat e light-dut y vehicl e fo r testing purposes . I n th e cas e o f diese l fuel/additiv e products , EP Aassume s tha t producer s wil l purchas e a heavy-dut y diese l engin e (HDDE ) fo r testing purposes , rathe r tha npurchasing a HDV , accumulating miles , an d the n removing th e engin e fro mth e vehicl e fo r testing . Dealer s i nth e South-Centra l Texa s are a wer e contacte d t o obtai n pric e estimate s fo r new , highway-certifie d 4 2P.5 5

heav yHDDEs . Base d on five pric e estimates , th e averag e pric e o f a new , heav

yHDD E i s $18,600 . AlthoughEP Ai s routinel yrequiring onl yon e vehicl e o r engin e fo r th e testin g o f F/FAs , EP Aforesee s tha t a t leas t on e backu p vehicle/engine , identica l i nmode l an d emissio n contro l equipment , mayb e neede d i n orde r t o replac e vehicle s /engine s tha t wea r ou t o r malfunctio n during th e cours e o f testing . EP Arecommend s tha t backup vehicles/engine s accumulat e mileag e along wit hth e primary tes t vehicle/engine , s o a s t o minimiz e testing interruption s i nth e even t tha t th e backu p vehicle/engin e i s needed . Fo r thi s analysis , EP Aassume s manufacturer s wil l retai non e backu p vehicl e fo r testing . Consequently , gasolin e F/F Aproducer s wil l spen d $30,00 0 o n vehicl e purchase s fo r testing , whil e engin e acquisitio ncost s fo r diese l F/F

Aproducer s ar e estimate d t o tota l $37,000 . Mileag e Accumulatio nCost s A s indicate d above , EP Aenvision s emissio ncharacterizatio nt o b e conducte d a t 4,00 0 mile s fo r non-atypica l (baseline an d non baseline ) formulations , an d whe n3 0 percen t o f th e vehicle' s usefu l lif e i s reache d fo r atypica l formulations . I nadditio nt o maintenanc e an

d fue l expenses , th e require d mileag e accumulatio n wil l hav e an adde d expens e fo r th e tim e and/o r personne l involve d i n th e mileag e accumulatio nactivity . Severa l o f th e laboratorie s contacte d b

ySwR I indicate d theywer e familia r wit hoperating vehicle s o n a se t driving rout e wit ha hire d drive r t o accumulat e 4 3miles . On th e basi s o f th e responses , $0.80/mil e i s determine d t o

b e a cos t likel yt o b e charge d fo r thi s task . Maintenanc e an d fue l cost s ar e included . Using thi s rate , EP Aestimate s mileag e accumulatio n cost s fo r gasolin e an d othe r F/FAs teste d o n light

dut yvehicle s t o b e $3,20 0 fo r non-atypica l an d $24,00 0 fo r atypica l formulations . Doubling thi s cos t t o accoun t fo r backu p vehicl e mileag e accumulation , tota l LD V mileag e accumulatio n cost s ar e estimate d t o b e $6,40 0 fo r testing non-atypica l gasolin e F/FAs , an d $48,00 0 fo r testing atypica l gasolin e F/FAs . Thi s cos t coul d reac ha s muc ha s $64,00 0 fo r atypica l product s i f testing i s conducte d whe n bot hvehicle s hav e reache d 4 0 percen t o f th e vehicle s usefu l life , o r coul d b e a s lo wa s abou t $6,40 0 i f th e minimu mmileag e o f 4,00 0 mile s prove d t o b e adequate 15
.
Fo r diese l an

d othe r F/FAs whic har e use d i n HDVs , EPA envision s "miles " wil l b e accumulate d o n a heavy-dut yengin e vi a a dynamomete r a t a testin g facility , wit hn o particula r load o r cycle s bein g applie d t o th e engine . Informatio n receive d fro m testing facilitie s familia r wit hthi s procedur e indicate s tha t approximatel y$2.2 0 pe r mile , including fue l an d maintenanc e costs , migh t b e charge d fo r thi s task . Using a rat e o f 5 0 miles/hou r t o

15 I t shoul d b e note d tha t manufacturer s ar e permitte d t o accumulat e mile s b

yan yappropriat e means , including us e o f a chassi s o r engin e dynamomete r a s oppose d t o us e o f a tes t trac k assume d fo r thi s analysis . I f mile s ar e accumulate d vi a a chassi s dynamometer , tota l mileag e accumulatio ncost s woul d b e approximatel y3 3 percen t highe r tha n estimate d fo r thi s analysis , whil e engin e dynamomete r cost s woul d b e abou t 4 6 percen t highe r (assumin

g 2 vehicles/engines) . 4 4conver t hour s t o miles , EPAestimate s th e cos t t o accumulat e th e

equivalen t o f 12 5 hour s on a HD E woul d b e approximatel y$13,750 . Thus , tota l HD E mileag e accumulatio ncosts , including on e backu p vehicle , i s estimate d a t $27,50 0 fo r non-atypica l produc t testing . Th e cos t fo r atypica l produc t mileag e accumulatio ni s estimate d a t $191,400 , ranging from nearl y$8,80 0 fo r 4,00 0 mile s o f mileag e accumulatio n t o a maximu mcos t o f ove r $255,00 0 fo r accumulating mile s equivalen t t o 4 0 percen t o f th e engine' s usefu l life . HD E acquisitio n and mileag e accumulatio ncost s ar e estimate d t o tota l ove r $200,00 0 fo r testing o f atypica l diese l products , assuming tha t characterizatio n wil l no t b e conducte d unti l mileag e ha s reache d 3 0 percen t o f th e vehicle s usefu l life . Shoul d thi s leve l o f mileag e accumulatio n b e necessary , manufacturer s o f thes e product s ar e likel yt o find i t mor e economicall yfeasibl e t o repea t a portio n o f th e testing , shoul d i t b e necessary , rathe r tha n retai n a backup tes t engine . Thus , thi s analysi s assume s tha t manufacturer s o f atypica l diese l product s wil l choos e no t t o purchas e a backup engine .
Tota l Vehicl e Reguiremen t Cost s I n sum , fo r testing gasolin e fuel s an d additive s using an LDV , EP Aestimate s cost s associate d wit hvehicl e acquisitio nan d mileag e accumulatio n (for a primarytes t vehicl e an d on e backu

p vehicle ) t o b e $36,40 0 fo r non-atypica l produc t formulations , assuming emissio n speciation/biologica l testing begin s a t 4,00 0 miles . Fo r atypica l produc t formulations , assuming emissio nspeciatio nand biologica l 4 5testing occu r a t 30,00 0 miles , th e vehicle-relate d cost s ar e

estimate d t o b e $78,000 . Reflecte d i nthes e cost s i s th e conservativ e assumptio n tha t th e vehicle s ar e retained , shoul d furthe r testing b e necessary(e.g. , prescribe d unde r Tie r 3 ) . Fue l cost s an

d maintenanc e cost s ar e include d i n th e cost s presente d above . Th e chang e i n mileag e accumulatio nrequirement s an d assumption s regarding vehicl e purchases , i n combinatio nwit h update d cos t data , resul t i ntota l estimate d light-dut ygasolin e vehicl e acquisition/mileag e accumulatio n cost s bein g highe r tha n wer e estimate d a t th e time o f th e NPRM . Wit hregar d t o diese l an d othe r F/FA s requiring th e us e o f HDEs , cost s associate d wit hacquiring an d operating a heav

yheavy

dut yengin e ar e estimate d t o tota l abou t $64,70 0 for . non-atypica l formulation s an

d $210,00 0 fo r testing atypica l formulation s (non

atypica l pric e include s acquisitio nan d mileag e accumulatio nfo r on e backup engine) . Thes e cost s reflec t th e assumptio n tha t emissio n characterizatio n an d biologica l testing begi na t th e equivalen t o f 4,00 0 mile s fo r non-atypica l products , an d a t 87,00 0 mile s fo r atypica l products . Fue l and maintenanc e cost s ar e reflecte d i n th e cost s a s well . Thes e HD E acquisition/mileag e accumulatio n cost s ar e highe r tha nestimate d fo r th e proposal . b . Combustio n Emissio n Generatio n Procedure s fo r generating emission s fo r emissio n characterizatio n ar e dependen t upo n th e emissio nproduc t categorie s 4 6o f interest . Bot hcatalyze d an d non-catalyze d exhaus t emission s generate d using th e FT P ar e t o b e speciate d fo r light-dut ygasolin e vehicl e testing , an d onl ynon-catalyze d exhaus t emission s ar e t o b e speciate d fo r heavy-dut ydiese l engin e testing . Vapor-phase , semi

volatile , an

d particulat e emission s ar e require d t o b e characterized . Cost s ar e base d o nth e assumptio n tha t th e F/F A manufacturer s wil l see k laboratoryservice s fo r thes e purposes , rathe r tha n conducting test s in-hous e o r erecting facilitie s capabl e o f conducting suc htests . Estimate s receive d fromtesting laboratorie s indicat e tha t generating emission s vi a anFT P whic hha s bee n modifie d t o allo w collectio n o f al l thre e phase s o f emission s fo r subsequen t measuremen t o f th e emissio n product s o f interes t woul d cos t approximatel y$1,10 0 fo r a light-dut yvehicl e an d $2,40 0 fo r a heavy-dut yengine . Base d o ncomment s receive d fromtesting facilities , a n additiona l $5,00 0 engin e set-u p fe e i s expecte d t o b e charge d fo r heavy-dut yengin e testing .

c . Evaporativ e Emission Generation Dependin g o n specifi c RVP criteria , some fuel s and additive s wil l b e require d t o underg o emissio n characterizatio nan d biologica l testing fo r evaporativ e emissions . Th e evaporativ e emissio n characterizatio n requirement s involv e speciatio no f emission s generate d from anevaporativ e emissio ngenerato r (EEG ) rathe r tha n a vehicle . 4 7

# 1

Th e EE Gi s a fue l tank o r vesse l t o whic hhea t and/o r vacuu m i s applie d t o caus e a portio n o f th e fue l t o evaporat e a t a desire d rate . EP Aestimate s th e cos t o f generating/collecting evaporativ e emission s vi a thi s procedur e t o b e approximatel y$20 0 pe r hour . Althoughmanufacturer s wil l hav e flexibilit yi nth e designo f th e EEG , EP Aestimate s a cos t o f $4,00 0 fo r th e hardwar e an d labo r expecte d t o b e associate d wit hit s development . Evaporativ e emissio n generatio n i s no t applicabl e t o diese l fuel s an d thei r additives . 2 . Emissio n Characterizatio n I n general , th e emissio n characterizatio n requirement s o f Tie r 1 focu s o n th e detectio n an d measuremen t o f selecte d chemica l classe s and compounds . Th e require d analyse s include : 1 ) th e measuremen t o f basi c emissions 1 6 (i.e. , tota l hydrocarbons , carbo n monoxide , nitroge n oxides , and particulate s fromcombustio n emissions ; tota l hydrocarbon s fromevaporativ e emissions) , 2 ) th e speciatio n o f volatil e hydrocarbo n compounds , aldehydes , ketones , alcohols , ethers , polycycli c aromati c hydrocarbon s (PAHs ) an d nitrate d polycycli c aromati c hydrocarbon s (NPAHs) , an d 4 ) th e speciatio n o f atypica l emissio n products , whe natypica l element s ar e know

n t o b e presen t i n th e rawfue l o r additiv e formulation . 16 EPApropose d t o requir e th e characterizatio no f "regulate d emissions " fo r fuel/vehicl e type s fo r whic hcertificatio n procedure s existe d a t th e time o f th e publicatio n o f th e NPR M (i.e. , gasoline , diesel , an d methanol) . Th e term "basi c emissions " i s bein g use d instead o f "regulate d emissions " becaus e certificatio n requirement s hav e no t ye t bee ndevelope d fo r al l F/FA s include d i n thi s rule . 4 8P.6 1

Speciatio n requirement s ar e summarize d i nTabl e 3-1 , an d associate d cost s ar e provide d i n Tabl e 3-2 . Th e cost s identifie d ar e cost s pe r sampl e o f emission s collected 17 , an d ar e th e same fo r bot h gasolin e and diese l F/F Aproducts .

I n sum , basi c emission s ar e t o b e measure d fo r bot hvapo r an d particulat e phas e combustio n emission s a t a cos t o f $30 0 pe r sample . Measuremen t o f tota l hydrocarbon s i s require d fo r evaporativ e emission s (whenapplicabl e t o th e F/FA ) a t a per-sampl e cos t o f $225 . Th e cos t o f hydrocarbo n speciatio n fo r vapo r phas e combustio n emission s and evaporativ e emission s i s estimate d a t $33 3 pe r sample . Speciatio n o f aldehyde s an d ketone s i s require d onl y fo r th e vapo r phas e o f combustio nemissions , an d i s estimate d t o cos t abou t $20 0 pe r sample . Alcoho l an d ethe r speciation , require d fo r bot hvapo r phas e combustio n emission s an d evaporativ e emission s wheneve r th e fue l o r fuel/additiv e formulatio n unde r evaluatio n contain s alcohol s o r ethers , i s estimate d a t $16 7 pe r sample . PA H an d NPAH speciation , require d fo r bot hth e semi-volatil e an d particulat e phas e o f combustio n emissions , i s estimate d a t $80 0 pe r sampl e fo r LD

V gasolin e testing an d $120 0 pe r sampl e fo r HD E diese l testing. 1 8 Thes e cost s ar e base d o n th e result s o f th e survey conducte d b

ySwR I wher e laboratorie s wer e aske d t o identif y

17 Thre e bag s o f vapo r phas e emission s ar e t o b e collected . Characterizatio n i s t o b e performe d o na sampl e o f eac hba g o f emission s collected . "Fo r heavy-duty , particulat e phas e combustio nemission s ar e collecte d fo r bot hth e hot

- an d cold-star t segment s o f th e FTP . 4 9commercia l price s charge d fo r performing th e characterizatio n

requirement s describe d abov e using curren t characterizatio n procedures . I n general , thes e cost s ar e considerabl yles s tha n estimate d i n th e NPRM .
T o determin e speciatio ncost s fo r atypica l elements , EPA reviewe d th e atypica l product s containe d i nth e registratio n databas e according t o th e variabilit yi n th e numbe r o f atypica l element s the ycontain , wha t phas e o r phase s th e element s woul d appea r in , th e numbe r o f end emissio n specie s whic hcontai n suc h elements , and othe r factors . Base d o n thi s analysis , EP Abelieve s tha t tw o i s a representativ e numbe r o f atypica l element s containe d i n atypica l products . EP Aestimate s a cos t o f $30 0 fo r activitie s relate d t o detectio n o f th e atypica l element , and $40 0 fo r measurin g th e emissio n product s containing th e atypica l element s (per element , pe r phase) . A s state d previously , EP Aenvision s emissio n characterizatio n t o b e conducte d whe n3 0 percen t o f th e vehicle' s usefu l lif e i s reache d fo r atypica l formulations . Befor e thi s poin t i s reached , EP Aenvision s tha t detectio n procedure s wil l b e conducte d fiv e time s fo r light-dut yvehicl e testing and seve n time s fo r heavy-dut yengin e testing . Base d o n al l o f thes e factors , EP Aestimate s cost s relate d t o identificatio nan d measuremen t o f atypica l element s t o b e $3,90 0 fo r light-dut y vehicl e testing an d $5,30 0 fo r heavy-dut yengin e testing .
C . Tota l Tie r 1 Cost a 5 0Tabl e 3- 3 provide s tota l estimate d cost s o f Tie r 1

requirements . A s show n i nth e table , cost s ar e provide d fo r producer s o f bot hgasolin e an d diese l products , and fo r baseline , non-baselin e an

d atypica l produc t formulations . Fo r presentatio n purposes , emissio n generation/speciatio n cost s hav e bee ncombined . Thi s analysi s assume s th e following : 1 ) onl yon e combustio nan d on e evaporativ e emissio n generatio n wil l b e neede d fo r emissio n characterization , wit hth e exceptio no f emissio n product s containing atypica l element s 2 ) speciatio no f alcohols/ether s wil l onl yb e necessaryfo r non-baselin e products , 3 ) onl yon e sampl e o f emission s wil l b e collecte d an d characterize d fo r evaporativ e emission s generate d vi a th e EE Gmethod , 4 ) acquisitio nan d mileag e accumulatio n fo r on e backu p vehicle , wit hth e exceptio no f heavy

dut ydiese l atypica l testing (se e III. B o f thi s chapter) . A$5 0 fe e fo r measurin g a fuel' s RVP leve l i s reflecte d i n th e cost s fo r testing gasolin e products . Th e cost s als o reflec t th e requiremen t tha t emissio n generation/speciatio n procedure s b e conducte d thre e times . Fo r atypica l F/FAs , testing i s assume d t o begi nwhe n3 0 percen t o f th e vehicle' s usefu l lif e ha s bee nreached . Underlying thes e cost s ar e th e assumption s tha t littl e o r n o previou s dat a exist s t o offse t speciatio nrequirement s an d tha t ther e ar e n o saving s fromcost-sharing provisions . Unde r thes e assumptions , producer s o f gasolin e fuel s o r fue l additive s woul d likel yincu r Tie r 1 cost s o f $106,30 0 fo r baselin e

5 1products , $95,80 0 fo r non-baselin e products 19 , an d $150,60 0 fo r atypica l products . Cost s t o a produce r o f baseline , non-baseline , an d atypica l diese l produc t formulation s ar e estimate d a t $119,400 , $106,400 , and $262,400 , respectively . Thi s include s cost s for : 1 ) conducting a literatur e searc hfo r informatio no nth e compositio n an d effect s o f F/F

Aemission s o npubli c healt h& welfare , 2 ) purchasing on e primarytes t vehicle/engin e an d on e backu

p vehicle/engin e (excep t fo r testing diese l atypica l produc t formulations ) an

d accumulating th e appropriat e mile s fo r testing , an d 3 ) performing th e appropriat e emissio ncharacterizatio n requirements . Al l Tie r 1 cos t total s estimate d i n thi s analysi s ar e highe r tha n thos e estimate d i nth e proposal , wit hth e exceptio n o f diese l atypica l produc t testing .
IV . Tie r 2 Requirement * an dCost a
Th e second tie r o f healt heffect s evaluatio nconsist s o f a subchroni c inhalatio n toxicit ytest , wit hth e additio n o f ancillary studie s t o scree n fo r severa l specifi c healt heffec t endpoint s (carcinogenicity , mutagenicity , teratogenicity , reproductiv e toxicit yand neurotoxicity ) withi n a singl e 90-da yexposur e schedule . Thes e test s wil l b e require d fo r al l fuel s an d additive s t o th e exten t tha t th e result s o f th e dat a searc hactivitie s i n Tie r 1 d o no t includ e comparabl e existing informatio nfro m

"Tota l non-baselin e produc t cost s ar e les s tha nbaseline

produc t cost s du e t o lowe r literatur e searc hcosts . 5 2P.6 5

adequatel yperforme d an d properl ydocumente d previou s studies .
I n general , laboratoryanimal s ar e t o b e expose d b yinhalatio n t o dilute d whol e exhaus t an d (whe n applicable ) evaporativ e emissions . Th e tes t guideline s generall ycal l fo r a minimu mo f thirtee n week s exposure , si xhour s pe r day , five day s pe r week . Th e tes t guideline s an d relate d emissio n generatio nprocedure s ar e discusse d below , along wit hestimate d cost s o f performing eac htes t o n an individua l basis .

A . Kmiaaio

nGeneratio

nfor Biologica l Teatin g 1 . Combustio n Emissio nGeneratio n Emission s ar e t o b e generate d o na continua l basi s throughou t th e require d hour s o f anima l exposur e fo r eac hexposur e day , wit h emission s dilute d an d route d directl yfrom th e vehicl e o r engin e t o th e biologica l testing chamber . Fo r testing o f gasolin e fuels/additives , EP Aconservativel yassume s a chassi s dynamomete r wil l b e use d t o generat e emission s ove r consecutiv e transien t driving cycle s fo r healt heffect s testing , a t a cos t o f approximatel y$71,500. 2 ° Testing o f diese l fuel s an d additive s usin g an engin e dynamomete r fo r emissio ngeneratio ni s estimate d t o cos t $58,500 . Thes e cost s ar e base d o nestimate s receive d fro m testin g laboratorie s whic hsugges t $1,10 0 pe r da yfo r chassi s dynamomete r testing an d $90 0 pe r da

yfo r engin e dynamomete r testing

"Us e o f an engin e dynamomete r fo r testing gasolin e F/FAs i s permitte d bu t no t required . 5 3migh t b e charge d fo r generation , dilution , an d deliveryo f th e emission s t o th e anima l cages . Fue l an d maintenanc e cost s ar e included .
On e require d test , th e Ame s Revers e Mutatio n Assay , i s anin

vitr o tes t requiring exposur e o f bacteria l culture s t o th e extracte d particulat e matte r an d th e semi-volatil e fractio no f combustio n emissions . EP Aassume s tha t a strea mo f emission s delivere d t o th e anima l exposur e chamber s wil l b e diverte d an d collecte d fo r th e Ame s assay . Acos t o f $50 0 fo r gasolin e product s an d $80 0 fo r diese l product s i s estimate d fo r th e processing o f th e P Man d semi-volatil e fraction s o f th e samples . 2 . Evaporativ e Emissio n Generatio n Fo r healt heffect s testing , manufacturer s ar e require d t o generat e emission s using th e same evaporativ e emissio ngenerato r (EEG ) an

d operating condition s specifie d abov e unde r Evaporativ e Emissio n Generation , sectio nIII . Evaporativ e emission s wil l b e dilute d an

d route d t o th e anima l chamber s i n a manne r simila r t o th e metho d use d fo r combustio nemission s healt heffect s testing . Estimate s receive d fromlaboratorie s fo r generation , dilution , an d deliveryo f evaporativ e emission s generate d froman EE Gchambe r range d from$15 0 t o $1,05 0 pe r day . Although , i nEPA' s judgement , th e cos t seem s t o b e high , evaluatio no f th e estimate s indicate s tha t $90 0 pe r da

ymaylikel yb e charged . Using thi s price , th e tota l cos t o f generating evaporativ e emission s fo r si xhour s pe r 5 4da

yfo r 6 5 day s using th e procedur e describe d above i s estimate d a t $58,500 . Brie f description s o f biologica l tes t guideline s fo r th e evaluatio n o f eac hhealt heffec t endpoin t ar e provide d below , along wit hthei r associate d cost . Th e cos t estimate s ar e base d on standar d testing cost s receive d fromth e Offic e o f Pesticide s an d Toxi c Substance s (se e footnot e numbe r 14) , adjuste d t o accoun t fo r modification s t o th e standar d protocol s t o b e consisten t wit hth e scop e o f th e healt heffect s testing program , an d update d t o accoun t fo r inflatio n i n th e labo r rate s sinc e th e time o f th e proposal . Appendi xAprovide s componen t cos t dat a fo r eac ho f th e biologica l test s describe d below . Thes e cost s ar e incrementa l t o th e associate d emissio n generatio ncost s describe d above .

B . Biologica l Tea t Coat a 1 . Subchroni c Inhalatio nStud y Th e 90-da

ysubchroni c inhalatio nstud ywil l serv e a s a basi c framewor k fo r th e Tie r 2 testing program . Th e tes t wil l provid e valuabl e screening informatio no n genera l systemi c an d organ toxicity . Basi c requirement s o f th e stud yinclud e ophthalmologica l examination , bloo d chemistryanalysis , broa d orga n examination , an d histopathology . Hematologyan d clinica l biochemistryanalysi s i s als o included . Specifi c tes t requirement s o f th e stud yar e describe d i n th e regulatorytex t o f thi s fina l rule . Thi s 90-da y subchroni c inhalatio n toxicit ytes t i s estimate d t o cos t 5 5approximatel y$177,000 .

2 . Carcinogenicit yan d Mutagenicit yScreen s Thre e assay s ar e include d i n Tie r 2 fo r carcinogenicit yan d mutagenicit yscreening . Th e Ame s assa yi s conducte d separatel y fromth e othe r tw o screening test s becaus e exposur e o f live animal s t o exhaus t emission s i s no t required . T o accommodat e th e tw o in vivo assay s (micronucleu s (MN ) an d siste r chromati c exchang e (SCE)) , withi n th e overal l Tie r 2 testing framework , a satellit e grou p o f animal s woul d b e expose d concurrentl ywit hth e mai n anima l populatio n o f th e 90-da ysubchroni c inhalatio nstudy . Thus , th e incrementa l cost s fo r thes e studie s ar e limite d t o th e additiona l anima l acquisitio n an d maintenanc e cost s an d th e cost s specifi c t o eac hassay . N o incrementa l cost s fo r th e anima l exposure s woul d b e incurred .
Ame s Revers e Mutatio n Assay . Th e Ame s assa yi s a n in vitro tes t whic hmake s us e o f fiv e mutan t strain s o f th e bacteriu mSalmonella typhimurium. Th e bacteri a wil l b e expose d t o extracte d fuel/additiv e combustio nemissio nfractions , an d th e numbe r o f revers e mutation s wil l b e analyzed . Th e cos t o f conducting anAme s assayfo r thi s programi s estimate d a t $4,700 . An Ame s battery wil l b e conducte d o n bot hparticulat e and semi-volatile-phas e sample s o f combustio n emissions , therefor e doubling thi s cos t t o $9,400 .

5 6P.6 9

Micronucleu s Assay . Micronucle i ar e sub-cellula r structure s containing chromosome s an d chromosome fragment s no t incorporate d int o th e mai n nucleu s during cel l division . Whil e micronucle i d o for munde r natura l conditions , exposur e t o potentiall ymutageni c o r carcinogeni c agent s can caus e an increas e i n micronucleate d cells . I n thi s assay , live rodent s wil l b e expose d b yinhalatio nt o th e fuel/additiv e emissions , an d thei r periphera l bloo d cell s wil l subsequentl yb e examine d an d compare d t o thos e o f untreate d animals . A s a supplementarytes t t o th e subchroni c inhalatio n study , th e incrementa l cos t fo r thi s assa yi s estimate d a t $2,900 . Th e cos t fo r a 3 0 da ystand-alon e tes t i s estimate d a t $38,000 . Siste r Chromati c Exchang e (SCE) . I nthi s assay , bloo d lymphocyte s an d lung cell s fromanimal s whic hhav e undergon e inhalatio n exposur e t o vehicl e emission s wil l b e examine d microscopicall y afte r bein g labele d and staine d t o permi t visualizatio no f DN A replicatio n errors . Thi s assa yi s estimate d t o cos t $43,00 0 a s a stand-alon e test , o r abou t $7,20 0 whe ncoordinate d wit hth e 90-da y subchroni c inhalatio n study . 3 . Fertilit yScree n fo r Reproductiv e an d Teratologi c Effect s Th e purpos e o f thi s screening tes t i s t o obtai ninformatio n abou t th e potentia l reproductiv e an d teratogeni c (developmental ) effect s cause d b

yinhalatio no f F/F Aemissions . The fertilit y scree n involve s th e mating o f expose d mal e an d femal e animal s t o F/F Aemission s t o examin e th e effect s o nconception , followe d b ya 5 7teratologystudy , involving inhalatio nexposur e o f th e female s t o

F/F Aemission s during pregnancy . Thi s assessmen t coul d cos t ove r $90,00 0 i f conducte d individually , o r abou t $38,00 0 whe nth e exposure s ar e conducte d i nconjunctio nwit hth e subchroni c inhalatio n study . 4 . Neurotoxicit yScree n Th e fina l rul e doe s no t includ e th e Functiona l Observationa l Neurotoxicit yBattery(FONB ) propose d i nth e NPRM . Instead,an expande d neurohistopathologyexaminatio ni s include d withi nth e 90

- da ysubchroni c inhalatio n study . I naddition , a biochemica l assa y whic hmeasure s th e leve l o f glia l fibrillaryacidi c protei n (GFAP ) i s required . Performanc e o f th e GFAP assa yan d neurohistopathology examinatio n coul d cos t nearl y$200,00 0 whe n conducte d separately , o r $3,60 0 an

d $42,000 , respectively , whe ncoordinate d wit hth e subchroni c inhalatio n study . C . Tota l Biologica l Tea t Coat s Th e cos t o f conducting eac ho f th e screening test s individuall ywa s provide d above , along wit hth e incrementa l cos t o f conducting th e screening test s i nconjunctio n wit hth e subchroni c inhalatio n study . Th e cos t o f conducting eac htes t individuall y doe s no t conside r an ysaving s whic hcoul d b e achieve d fro m conducting an

yo f th e test s i nconjunctio n wit hon e another . The Tie r 2 testing programi s designe d s o tha t variou s tes t requirements , suc ha s anima l subjects , exposur e scenarios , an d 5 8P.7 1

genera l technica l principles , ar e simila r among th e tests . Thi s permit s th e healt heffect s examinatio n t o b e conducte d unde r a L singl e comprehensiv e tes t protocol . Th e designo f th e Tie r 2 testing programmake s bes t us e o f animals , laboratorycapacity , an d financia l resources . I f testing i s planne d an d conducte d i n thi s fashion , EP Aestimate s tha t th e tota l cos t fo r conducting al l o f th e require d biologica l test s o n combustio nemission s woul d b e slightl yabov e $280,00 0 (excludin g emissio ngeneratio ncosts) . Likewise , conducting al l biologica l test s o n evaporativ e emission s i s estimate d t o cos t abou t $270,700 . Th e differenc e i s th e Ame s assay , whic hi s require d onl yfo r combustio nemissions . Thes e cost s represen t tota l cost s o f conducting al l biologica l test s wit h n o cost-sharing arrangements . 3 D . Tota l Tier 2 Coat a Tabl e 3- 4 show s th e cost s associate d wit hmeeting th e requirement s o f Tie r 2 . Th e emissio ngeneratio ncost s assume emission s wil l b e generate d 6 hours/day , 5 days/wee k fo r 1 3 weeks , and tha t on e emissio n generatio n (combustion o r evaporative ) wil l produc e sufficien t emission s t o conduc t al l biologica l tests . Th e cost s assume tha t al l biologica l test s excep t th e Ame s assa ywil l b e performe d o n bot hcombustio nan d evaporativ e emission s fo r th e evaluatio n o f gasolin e fuel s an d additives , an

d o n combustio nonl y whe n testin g diese l fuel s an d additives . Thi s analysi s indicate s th e highes t cos t an individua l produce r woul d likel yincur fo r fulfilling al l Tie r 2 requirement s woul d b e approximatel y$681,300 . 5 9Thi s cos t represent s th e potentia l cos t t o producer s o f a gasolin e

fue l product . Th e highes t potentia l Tie r 2 cos t t o a diese l fue l produce r woul d b e abou t $339,400 . Tota l tie r 2 cost s ar e slightl y highe r tha n initiall yestimate d fo r th e proposal . Eve n thoughth e require d exposur e duratio ni s longe r tha n proposed , th e biologica l testing i s programi s designe d fo r mor e efficien t us e o f animal s and laboratorycapacity , resulting i ntie r 2 tes t cost s being simila r t o thos e proposed .

V . Tie r 3 Requirement a an dPotentia l Coet a
Al l cost s associate d wit hTie r 1 and Tie r 2 requirement s ar e assume d t o b e incurre d i nth e firs t 3 year s afte r th e rul e i s promulgated , and Tie r 3 cost s ar e assume d t o b e incurre d ove r th e following 3 years . However , yearl ycost s mayactuall yb e les s i f producer s financ e th e cost s ove r a longe r perio d o f time . Fuel s an

d fue l additive s wil l b e subjec t t o additiona l testing unde r th e Tie r 3 provision s o f th e registratio n programonl yi f determine d t o b e neede d o n a case-by-cas e basi s b yEPA . Th e endpoint s t o b e addresse d an d th e natur e o f th e studie s t o b e performe d wil l depend o nth e cas e a t hand . Chronic/lifetime studies , exposur e studies , an d additiona l emissio ncharacterizatio n o r modelin g analysi s ar e example s o f furthe r testing/analysi s tha t coul d b e required . An ytesting t o b e performe d o naeroso l 6 0P.7 3

additive s woul d als o occu r a t th e Tie r 3 level . Becaus e suc ha wid e rang e o f testing/analysi s mayb e require d unde r Tie r 3 depending o n th e area s o f concern , i t i s difficul t t o predic t th e associate d costs . However , using anima l inhalatio nexposure s o f chroni c tw o yea r duratio n a s an exampl e o f testing whic hmigh t b e required , Tie r 3 cost s coul d reac habou t 3 millio ndollars , o r on e millio n dollar s pe r year , assuming th e cos t o f 2 year s o f biologica l testing woul d b e incurre d ove r 3 years . Thes e Tie r 3 cost s ar e no t include d i n th e overal l cos t projection s presente d i n Chapte r 4 .

VT . Adminiatrative/Reportin gReguiremen f an

dCoat a Th e material s t o b e submitte d t o EP Aar e divide d int o thre e majo r categories : basi c registratio ndata , a summaryreport , an d appendices . Productio n volume dat a an d informatio n currentl y require d fo r F/FAregistratio n ar e require d t o b e submitte d fo r basi c registration , an d shoul d b e submitte d o n EP Aform s whic har e i n effec t a t th e time o f th e submittal . Th e summaryrepor t require s a tex t summaryo f th e evaluatio nprocedures , results , an d conclusion s pertaining t o requirement s o f Tier s 1 an d 2 . Detaile d informatio n i n suppor t o f th e genera l discussion s containe d i n th e summaryrepor t ar e t o b e submitte d a s appendice s t o th e report . Producer s wh o mus t conduc t additiona l testing unde r Tie r 3 wil l b e require d t o submi t a fina l repor t whe nth e designate d Tie r 3 6 1

# 1

testing i s complete .

EP Aestimate s approximatel y$10 0 wil l b e spen t b yeac h produce r fo r submitta l o f basi c registratio n dat a o neac hproduct . I n addition , eac hmanufacture r i s expecte d t o incu r approximatel y $30 0 fo r activitie s associate d wit hreviewing th e regulation s an d planning fo r grou

p participation , i f applicable . EP Aestimate s approximatel y$9,40 0 fo r administratio ncost s relate d t o submissio n o f Tie r 1 data , $4,60 0 fo r submissio n o f Tie r 2 data , an d nearl y $12,30 0 fo r cost s associate d wit hgrou p administration . Thus , a tota l o f ove r $26,00 0 i s expecte d t o b e incurre d b yeac hgrou

p o f manufacturer s wit hsimila r product s fo r activitie s relate d t o grou p administration , collectio n o f existing data , oversigh t o f testing (i f required) , and submissio n o f Tie r 1 and Tie r 2 data . Averaging thi s cos t ove r th e thre e yea r perio d manufacturer s ar e allowe d fo r submissio n o f dat a afte r promulgatio no f th e fina l rul e yield s a cos t o f abou t $8,50 0 pe r year , pe r grou p fo r thes e activities . Thi s cos t woul d likel yb e les s fo r a manufacture r wh o i s alon e i n a grou p o r wh o wishe s t o conduc t testing individuall ysinc e grou p administratio n cost s woul d no t apply .

VII . Summar

y

Fo r an individua l produce r o f a gasolin e F/FA , th e cos t fo r fulfilling al l requirement s o f Tier s 1 an d 2 an d reporting th e 6 2result s t o EP Ai s estimate d t o b e abou t $800,00 0 fo r baselin e

products , abou t $792,00 0 fo r non-baselin e produc t formulations , an d abou t $846,00 0 i f th e produc t formulatio ni s atypical . Comparabl e cost s fo r diese l fuel/additiv e producer s ar e estimate d a t approximatel y$473,00 0 an d $460,00 0 fo r producer s o f baselin e an d non-baselin e produc t formulation s respectively , an d abou t $616,00 0 fo r producer s o f atypica l produc t formulations . T o er r onth e conservativ e side , thes e cost s ar e inclusive . Tha t is , theyassume tha t ther e i s no t adequat e existing data , an d tha t th e produce r mus t therefor e conduc t al l o f th e Tie r 1 an d Tie r 2 test s d e novo . Theyals o assume tha t th e produce r doe s no t qualif yfo r an yspecia l provision s (e.g. , fo r smal l businesses) . I naddition , th e estimate s assume tha t th e produce r take s o nindividua l financia l responsibilit yfo r al l tes t costs , eithe r becaus e h e elect s no t t o engag e i n grouping an d cos t sharing provision s o r becaus e h e i s no t abl e t o d o s o (i.e. , sol e produce r i n th e group) . Th e lowes t cos t likel yt o b e incurre d b ya produce r no t qualifying fo r specia l provision s and no t participating i na grou p woul d b e th e cos t o f conducting a literatur e searc h(th e result s o f whic hprovid e documentatio n o f adequat e existing test s comparabl e t o thos e include d i n Tie r 2 ) an d registering th e produc t wit hEPA . Thi s cos t i s estimate d t o b e abou t $21,00 0 fo r a produce r o f a baselin e product , an

d $7,00 0 fo r a produce r o f a non-baselin e product . Producer s o f atypica l product s woul d nee d t o characteriz e the emission s befor e a literatur e searc hcoul d b e conducted .

6 3P.7 6

A s previousl ydiscussed , "small " F/F Amanufacturer s o f baselin e an

d non-baselin e produc t formulations , an d manufacturer s o f relabele d products , ar e onl yrequire d t o submi t basi c registratio n data . Th e per-produc t cos t t o suc hproducer s i s estimate d t o tota l onl yabou t $400 . "Small " manufacturer s o f atypica l product s hav e th e adde d cos t o f Tie r 1 testing . Cost s t o thi s typ e o f produce r coul d rang e fromabou t $13,50 0 t o abou t $114,00 0 fo r a gasolin e produc t an d up t o abou t $272,00 0 fo r a diese l product , depending on th e degre e t o whic hadequat e Tie r 1 dat a alread

yexists . Al l o f thes e cost s ar e one-time obligation s associate d wit hmeeting th e basi c registratio nand/o r generi c testing requirement s o f th e programfo r on e product . Tie r 3 cost s ar e no t included . Cost s incurre d o na per-manufacture r basi s (takin g int o accoun t suc hfactor s a s specia l provisions , multipl e product s pe r manufacturer , an d cost-sharing opportunities ) an d aggregat e cost s t o th e industryar e discusse d i nth e nex t chapter .

VIII.Coa t Estimate s for Futur e Alternativ e F/F A Regiatration

a
Th e discussio n thu s fa r ha s focuse d o n cost s associate d wit h registratio n and testing requirement s fo r gasolin e an d diese l fue l an d fue l additiv e products . A s mentione d previously , a proposa l t o designat e methanol , ethanol , liquifie d petroleu m gas , an

d natura l ga s F/FAproduct s fo r registratio n i s expecte d i nth e nea r future . 6 4

# 1

EP Aha s thu s define d familie s an d include d provision s fo r thes e alternativ e fue l product s i n thi s fina l rul e unde r th e assumptio n tha t the ywil l b e designated . Th e projecte d cos t impac t o f thi s rul e o n producer s o f thes e alternativ e fue l product s i s discusse d below .

A s show n i n Tabl e 1- 1 fo r th e F/F Agrouping system , withi nth e baselin e category , tw o group s ar e establishe d fo r th e methano l fue l famil y(M10 0 grou

p an d M8 5 group , represente d b ythei r respectiv e bas e fuel) , on e grou p fo r th e ethano l fue l famil y(represente d b y E8 5 bas e fuel) , on e grou p fo r th e methan e fue l famil y(represente d b yCN Gbas e fuel) , and on e grou p fo r th e propan e fue l famil y (represente d b

yLP Gbas e fuel) . Cos t estimate s fo r th e registratio n an

d testing o f thes e products , show ni nTabl e 3-5 , ar e base d o n uni t pric e estimate s associate d wit hregistration/testing o f gasolin e an

d diese l baselin e products . Althoughsome require d dat a mayb e availabl e fo r some o f th e alternativ e fue l families , thi s analysi s conservativel yassume s tha t al l Tie r 1 an d Tie r 2 testing wil l b e require d fo r eac htesting representativ e o f eac h alternativ e F/F

Aproduc t group . Othe r assumption s underlying th e analysi s are : 1 ) al l registere d product s ar e baselin e products , 2 ) testin g fo r th e M10 0 an d LP Ggroup s wil l b e conducte d using a heavy-dut yengine , an d al l remaining group s wil l mak e us e o f light

dut yvehicle s fo r testing ; 3 ) evaporativ e testing wil l b e require d fo r th e methano l an d ethano l fue l familie s only ; an d 4 ) a

n Ame s tes t wil l no t b e require d t o b e conducte d o nth e testing 6 5P.7 8

representativ e o f th e methan e (CN Gan d LNG ) an

d propan e (LPG ) groups .

Base d o n thes e assumptions , cost s associate d wit htesting a singl e representativ e fromeac halternativ e fue l famil ybaselin e grou p ar e estimate d t o b e a s follows : $735,00 0 fo r testing eac ho f th e E8 5 and M8 5 representatives , $721,00 0 fo r th e M10 0 group , $389,00 0 fo r th e methan e (CNG ) group , an d $408,00 0 fo r th e propan e (LPG ) group . Thi s sum s t o a tota l cos t o f abou t 3 millio ndollar s fo r testing o f a singl e representativ e fromeac hgrou p i nth e baselin e categoryo f eac ho f th e alternativ e fue l families . Afte r discussion s wit hrepresentative s fromsevera l majo r alternativ e fue l trad e associations , EP Aestimate s approximatel y40 0 baselin e alternativ e F/F

Aproduct s wil l b e registere d withi nth e firs t yea r afte r theyar e designate d fo r registration . O f thes e 40 0 produc t registrations , EP Aestimate s tha t th e ethano l fue l famil ywil l accoun t fo r abou t 5 percent , th e M10 0 an d M8 5 produc t registration s wil l b e abou t 1 5 percen t an d 2 0 percent , respectively , abou t hal f o f th e alternativ e F/F Aproduc t registration s wil l b e i nth e methan e fue l family , an d th e remaining 1 0 percen t wil l b e i n th e propan e fue l family . Using thes e produc t percentages , EPA estimate s pe r produc t cost s t o rang e fromjus t belo w$2,00 0 (for product s i n th e methan e fue l family ) t o abou t $37,00 0 (for product s i n th e ethano l fue l family) . On average , alternativ e F/F A producer s mayincu r cost s o f $7,50 0 pe r produc t ($3,000,000/40 0 products ) i n th e firs t yea r t o registe r thei r alternativ e F/F A 6 6P.7 9

product s wit hEPA , assuming al l Tie r 1 an d Tie r 2 testing i s required . Thes e judgement s regarding futur e registration s o f alternativ e F/F

Aproduct s ar e no t intende d t o b e prediction s o f introductio n o f thes e product s int o th e market . Rather , theyar e estimate s use d fo r th e sol e purpos e o f estimating possibl e cos t impact s o f thi s rul e o nalternativ e F/F Aproducers . Futur e registration s o f thes e product s mayb e highe r o r lowe r tha nassume d i n thi s analysis , and th e estimate d per-produc t cost s woul d b e lowe r o r highe r a s a result . Th e overal l cos t projection s presente d elsewher e i n thi s documen t ar e base d o n curren t produc t registration s an

d d o no t includ e cos t projection s relate d t o thes e potentia l futur e alternativ e F/F Aproduc t registrations .

6 7Tabl e 3-1 : Emissio nCharacterization/Measuremen t Requirement s

Emissio n Typ e

Combustio n Emissions : Vapo r Phas e Semi volatil e Phas e Particulat e Phas e Evapora t iv e Emissions: * Evaporativ e Emissio n Generator ' Basi c Emissions * Speciate dEmission s

Hydrocarbon s Ketone s an d Aldehyde s Alcohol s an d Ethers " Polycycli c

Aromati c Hydrocarbon s (PAHs) ° Nitrate d

Polycycli c Aromati c Hydrocarbon s (NPAHs) c Atypicals d

X

X X X X X
X X

X X

X 

### x

X * X X 

### x

Basi c emission s = tota l hydrocarbons , carbo nmonoxide , oxide s o f nitrogen , an dparticulate s (se e Sectio n VII.B.2. a below ) bRequire di f alcohol s o r ether s exis t i nth e uncombuste dfue l o r fue l additiv e formulation . ° No t require dfo r methan e (CNG , LNG ) o r propan e (LPG) . d Manufacturer s o f atypica l product s mus t examin e al l emissio nfraction s fo r th e measuremen t an d identificatio no f potentia l atypica l species . "Onl y applicabl e t o F/FA s require dt o measur e evaporativ e emissions . Evaporativ e emission s ar e t o b e generate dusin ga nevaporativ e emissio ngenerato r a s describe di nSectio n VI . C . 'Th e onl y

basi c emissio nrequire dt o b e measure dfo r evaporativ e emission s i s tota l hydrocarbons .

0 0' Tabl e 3-2 : Estimate d Emissio nCharacterization/Measuremen t Costs *

Emissio n Typ e

Combus t ion Emissions : Vapo r Phas e Semi volatil e Phas e Particulat e Phas e Evaporativ e Emissions: * Evaporativ e Emissio n Generator ' Basi c

Emissions * Speciate dEmission s

Hydrocarbon s Ketone s and Aldehyde s Alcohol s

and Ethers 0 Polycycli c

Aromati c Hydrocarbon s (PAHs) c Nitrate d

Polycycli c Aroma t i c Hydrocarbon s (NPAHs) ° $30 0
$30 0 $33 3 $20 0 $16 7 $80 0 $80 0 $80 0

$80 0 $225 h $33 3 $16 7 Atypicals d

$40 0 $40 0 $40 0 $40 0

Basi c emission s = tota l hydrocarbons , carbo nmonoxide , oxide s o f nitrogen , andparticulate s (see Sectio n VII.B.2. a below ) bRequire di f alcohol s o r ether s exis t i nth e uncombuste dfue l o r fue l additiv e formulation . c No t require dfor methan e (CNG , LNG ) o r propane (LPG) . dManufacturer s o f atypica l product s mus t examin e al l emissio nfraction s fo r th e measuremen t and identificatio no f potentia l atypica l species . * Onl y applicabl e t o F/FA s require dt o measur e evaporativ e emissions . ' Evaporativ e emission s ar e t o be generate dusin ganevaporativ e emissio ngenerato r a s describe di nSectio n VI.C . 'Th e onl y

basi c emissio nrequire dt o b e measure dfo r evaporativ e emission s i s tota l hydrocarbons . *Pe r Sampl eTabl e 3-3 : Tie r 1 Cost s

Literatur e Searc h Acquisition * Mileag e Accumulation * Combust.Gen./Charact : * * RV P Measuremen t Engin e set-u p fe e Evaporativ e Gen. /Charac t TOTAL : Gasolin e Fue l Famil y Baselin e $21,00 0 30,00 0 6,40 0 42,60 0 5 0 N/ A 6,27 5 $106,32 5 Non-Baselin e $7,00 0 30,00 0 6,40 0 45,60 0 5 0 N/ A 6,77 5 $95,82 5 Atypica l $7,00 0 30,00 0 48,00 0 58,50 0 5 0 N/ A 7,07 5 $150,62 5 Diese l Fue l Famil y

Baselin e $21,00 0 37,20 0 27,50 0 28,70 0

5,00 0 N/ A $119,40 0 Non-Baselin e $7,00 0 37,20 0 27,50 0 29,70 0

5,00 0 N/ A $106,40 0 Atypica l $7,00 0 18,60 0 191,40 0 40,40 0

5,00 0 N/ A $262,40 0 1 ' •Pric e include s one primar y an don e backu pvehicle/engin e (excep t fo r diese l atypical) . **Prlc e include s characterizatio no f bot hcatalyze d6 non-catalyze dexhaus t emission s fo r light-duty , an d characterizatio no f non-catalyze dexhaus t emission s fo r heavy-duty .Tabl e 3- 4 Tie r 2 Cost s

Combustio n Emissio n Generatio n Ame s Samplin g Evaporativ e Emissio n Generatio n Biologica l Tests : 90-da ySubchroni c Inhalatio nStudy Ame s Revers e Mutatio nAssay Micronucleu s Assa y Siste r Chromati dExchang e Fertilit y

Scree n Neurotoxicit y

Scree n TOTAL : Gasolin e Fue l Famil y Baseline/Non-Baseline/Atypica l

$71,50 0 50 0 58,50 0 177,00 0 9,400 * 2,90 0 7,20 0 38,00 0 45,60 0 $681,300* * Diese l Fue l Famil y 'Baseline/Non-Baseline/Atypica l

$58,50 0 80 0 N/ A 177,00 0 9,40 0 2,90 0 7,20 0 38,00 0 45,60 0 $339,40 0 *Pric e include s th e cos t o f conductin gthe assa y o nbot hparticulat e an dsemi-volatile-phas e combustio n emissions . **Pric e include s al l biologica l test s conducte dtwic e (onc e o ncombustio nemission s an donc e o nevaporativ e emissions) , excep t fo r th e Ame s assa y (no t require dfo r evap . testing) .Tabl e3-5 : Estimate dAlternativ eFue lRegistration s & Cost s

Baselin e Group s Tes t Representativ e Grou pCos t Est . Produc t Registration s Cost/Produc t (Rounded ) Methano l 2 M8 5 $735,00 0 8 0 $9,00 0 M10 0

$721,00 0 6 0 $12,00 0 Fue l Familie s

Ethano l 1 E8 5 $735,00 0 2 0 $37,00 0 Methan e

1 CN G $389,00 0 20 0 $2,00 0 Propan e

1
LP G $408,00 0 4 0 $10,00 0 Tota l

5

$ 3 Millio n 40 0 $7,50 0

# DRAF T Chapte r4
EstimatedCos t Impact s

I . Introductio

n Unde r Executiv e Orde r 1286 6 [5 8 Federa l Registe r 51,73 5 (Octobe r 4 , 1993)] , EP Amus t determin e whethe r a regulatio ni s "significant " an

d therefor e subjec t t o revie wb yth e Offic e o f Managemen t an

d Budge t (OMB ) an

d th e requirement s o f th e Executiv e Order . Th e orde r define s "significan t regulatoryaction " a s on e tha t i s likel yt o resul t i n a rul e tha t may : (1 ) hav e an annua l effec t o nth e econom yo f $10 0 millio n o r mor e o r adversel yaffec t i na materia l wayth e economy , secto r o f th e economy , productivity , competition , jobs , th e environment , publi c healt ho r safety , o r State , local , o r triba l government s o r communities , (2 ) creat e a seriou s inconsistenc yo r otherwis e interfer e wit h a n actio n take n o r planne d b yanothe r agency , (3 ) materiall yalte r th e budgetaryimpac t o f entitlements , grants , use r fees , o r loan programs , o r th e right s an d obligation s o f recipient s thereof ; o r 6 8(4 ) rais e nove l lega l o r polic yissue s arising ou t o f lega l

mandates , th e President' s priorities , o r th e principle s se t fort hi n th e Executiv e Order. " Thi s analysi s indicate s tha t th e rul e i s no t expecte d t o hav e an annua l effec t o n th e econom yo f $10 0 millio no r more , no r woul d i t hav e an

ysignifican t advers e effect s o n th e economy , productivity , competition , jobs , th e environment , publi c healt ho r safety , o r government s o r communities . Consequently , thi s rul e i s no t considere d significan t unde r th e term s o f th e firs t criterion , and , sinc e th e othe r thre e criteri a ar e no t applicable , thi s rul e i s no t considere d t o b e a "significan t regulatoryaction " unde r th e term s o f th e Executiv e Order . Nevertheless , becaus e thi s rul e ha s bee n o n EPA' s regulatoryagend a fo r ove r 2 0 years , th e Agenc yha s decide d t o trea t thi s actio n a s significan t an d prepar e a RegulatorySuppor t Documen t (RSD ) t o asses s it s economi c impact s o n th e affecte d industries .
Base d o n th e uni t cos t estimate s presente d i n th e previou s chapter , thi s chapte r project s th e overal l cos t impact s o f th e F/F A registratio n programo n th e F/F Aindustry . Cos t impact s ar e discusse d fo r fue l manufacturers , additiv e manufacturers , an d th e industrya s a whole . Th e following section s discus s th e analytica l assumption s and approache s o nwhic hthi s cos t analysi s i s based , th e methodologyfo r determining produce r an d industryimpacts , th e limitation s o f th e analysis , an d conclusions . 6 9II . Analytica l Aaaumption s an dApproach Althoughth e cost-sharing (grouping ) provisio no f thi s rul e i s voluntary , EP Aassume s fo r thi s analysi s tha t manufacturer s wil l choos e t o participat e i ngrouping wit hmanufacturer s o f simila r product s t o th e exten t possible . So , fo r th e purpos e o f determining programcosts , eac hcurrently-registere d produc t wa s assigne d t o an appropriat e categoryan d group , base d o nth e compositiona l informatio n containe d i n th e registratio n databas e fo r eac hF/FA . Th e result s o f thes e assignment s ar e show ni n Tabl e 4-1 . Exclude d fromth e tabl e ar e manufacturer s who , throughsmal l busines s provisions , ar e exempte d fromtesting requirement s fo r thei r baselin e an

d non-baselin e products . Fo r eac hcategory , th e tabl e identifie s th e numbe r o f registere d fuel s an d fue l additive s i n th e category , th e numbe r o f group s the ysor t into , an d th e numbe r o f producer s wit ha t leas t on e registere d produc t i nth e category .

T o determin e th e cost s applicabl e t o th e group s i neac h category , assumption s ha d t o b e mad e wit hregar d t o th e applicabilit yo f variou s programrequirement s t o eac hcategoryan d th e likelihoo d tha t some o f thes e requirement s coul d b e satisfie d b yrelying o n adequat e existing tes t data . Thes e assumption s ar e outline d belo wfo r eac hproduc t categoryan d ar e summarize d i n Tabl e 4- 2 fo r testing o f combustio n emission s an d Tabl e 4- 3 fo r testing o f evaporativ e emissions . Whil e some oxygenat e gasolin e 7 0P.8 8

mixture s mayhav e adequat e informatio navailabl e fo r bot hcatalyze d an d non-catalyze d exhaus t emissions , EPAconservativel yassume s fo r thi s analysi s tha t dat a fo r non-catalyze d exhaus t emission s i s no t available . I n regar d t o Tie r 2 , EPAassume s test s wil l b e necessaryfo r bot hcombustio nan d evaporativ e emissions . Gasolin e Baselin e Category EP Aha s designate d on e grou p fo r thi s category , whic hi s estimate d t o contai n approximatel y1,58 6 fuel/additiv e product s registere d b

y30 7 larg e producer s (sale s i $5 0 million) . Base d on result s o f th e Auto/Oi l Ai r Qualit yImprovemen t Researc hProgram (Auto/Oi l Program) , fo r thi s category , EP Aanticipate s sufficien t dat a t o b e availabl e fo r characterizatio no f bot hcatalyze d an d non-catalyze d exhaus t emission s generate d using th e FTP , excep t fo r PA H an d NPAH analysis . EP Aestimate s al l require d test s wil l b e neede d fo r characterizatio no f evaporativ e emissions . Furthermore , EP Aassume s al l Tie r 2 test s wil l b e neede d fo r combustio nan d evaporativ e emission s fo r thi s category . Gasolin e Non-Baselin e Category Thi s categoryo f fuel/additiv e product s i s estimate d t o contai n 47 6 product s produce d b y12 0 larg e manufacturer s (sale s z. $5 0 million) , whic har e subdivide d int o nin e groups . EP Aassume s al l Tie r 1 characterizatio ntest s wil l b e neede d fo r non-catalyze d combustio n emission s an d evaporativ e emissions . However , du e t o studie s don e b

yth e Auto/Oi l Program a s wel l a s othe r on-going 7 1P.8 9

industryefforts , EP Abelieve s i t i s reasonabl e t o assume tha t onl y PAH speciatio n and measuremen t o f tota l NPAH wil l b e neede d fo r catalyze d combustio n emissions . Whil e some oxygenat e gasolin e mixture s mayhav e adequat e informatio n availabl e fo r bot hcatalyze d an d non-catalyze d exhaus t emissions , EP Aconservativel yassume s fo r thi s analysi s tha t dat a fo r non-catalyze d exhaus t emission s i s no t available . I n regar d t o Tie r 2 , EP Aassume s al l biologica l test s wil l b e necessaryfo r bot hcombustio n and evaporativ e emissions . Gasolin e Atypica l Category EP Aestimate s thi s categorywil l b e mad e up o f 5 6 fuel/additiv e group s consisting o f 29 3 product s manufacture d b y14 6 producers . I n th e fina l rule , EP Ai s requiring onl yvolatil e fuel/additiv e mixture s t o underg o testing o f evaporativ e emissions. 2 1 Base d o n th e chemical/physica l characteristic s o f product s i n thi s category , an d th e likelihoo d tha t anadditiv e wil l b e th e testin g representativ e fo r mos t o f th e group s i n thi s category , EP Aanticipate s tha t non e o f th e group s wil l b e require d t o tes t evaporativ e emissions . Fo r combustio n emissions , however , EP Aassume s al l Tie r 1 an d Tie r 2 testing wil l b e needed . Diese l Baselin e Category "Fuel s wit ha Rei d Vapo r Pressur e (RVP ) o f 2. 0 pound s pe r squar e inc h(psi ) ar e subjec t t o th e Tie r 1 an d Tie r 2 testing requirements , whil e thos e wit hRV P les s tha n 2. 0 ar e excused . Wit hrespec t t o additives , Tie r 1 an d Tie r 2 evaporativ e emissio n testin g i s require d whe n th e RV P o f th e fuel/fue l additiv e mixtur e i s increase d b y0. 4 ps i o r more .

7 2P.9 0

Thi s categorycontain s onl yon e group , whic hinclude s an estimate d 8 7 larg e manufacturer s (sale s 2 $5 0 million ) representing 49 6 products . Aconsiderabl e amoun t o f informatio n exist s on baselin e diese l products . Fo r thes e products , EP Ai s considering existing applicabl e speciatio n studie s conducte d unde r th e Ai r Pollutio n Researc hAdvisoryCounci l (APRAC ) program t o b e adequat e data , i n lie u o f ne wtesting . However , th e APRAC program doe s no t includ e dat a concerning speciatio no f hydrocarbons , whic hi s require d fo r manufacturer s o f diese l F/FA s unde r thi s program . Consequently , EP Aassume s tha t th e onl yemissio n characterizatio n test s require d fo r thi s grou p ar e hydrocarbo nspeciatio no f non catalyze d combustio n emissions . Becaus e th e literatur e contain s existing tes t dat a o n man yo f th e require d healt heffect s endpoints , EP Afurthe r project s tha t withi n Tie r 2 , onl yth e screen s fo r neurotoxi c an d teratologi c endpoint s o n combustio n emission s wil l nee d t o b e conducted . Evaporativ e emissio n assessment s ar e no t applicabl e t o product s i n th e diese l categories . Diese l Non-Baselin e Category Amon g currentl yregistere d diese l products , th e non-baselin e categoryha s tw o groups , containing on e larg e manufacture r (sale s * $5 0 million ) wit hon e produc t i n eac hgroup . Unlik e product s i n th e diese l baselin e category , littl e informatio ni s expecte d t o exis t fo r thes e uniqu e produc t formulations . Consequently , al l testin g o f combustio n emissions , bot hchemica l an d biological , i s 7 3P.9 1

assume d t o b e neede d fo r product s identifie d wit hthi s group . Diese l Atypica l Category EP Aestimate s 4 1 group s withi n thi s category , representing a tota l o f 11 2 manufacturer s an d 21 3 products . Becaus e o f th e uniqu e natur e o f thes e products , EPAassume s adequat e dat a i s unavailabl e fo r fulfilling chemica l an d biologica l testing requirement s o f thi s category . Thus , fo r purpose s o f thi s analysis , EP Aassume s al l Tie r 1 and 2 test s o n combustio nemission s wil l b e conducted . Th e assumption s outline d abov e ar e th e basi s fo r determining impact s t o manufacturer s no t qualifying fo r an yspecia l provision s o f th e rul e fo r a give n product . Fo r manufacturer s qualifying fo r smal l busines s specia l provision s fo r some product s bu t no t others , th e assumption s abov e appl yonl yt o th e product s fo r whic hd o no t qualif ythemfo r specia l smal l busines s provisions . Assumption s regarding tes t requirement s fo r manufacturer s qualifying fo r specia l smal l busines s provision s fo r suc hproduct s ar e discusse d i n th e nex t section . Th e methodologyuse d t o projec t th e complianc e cost s fo r individua l companie s along wit hth e overal l cos t impact s o n fue l manufacturers , additiv e manufacturers , an d th e combine d industryi s als o discussed .

III . Methodolog

y an dResult s

7 4A . Produce r Coa t Impact s

Befor e initiating activitie s directe d specificall yt o completing th e Tie r requirement s discusse d above , eac hmanufacture r wil l nee d t o become familia r wit hth e regulation s an d wil l als o nee d t o submi t basi c registratio n dat a (o r reaffirm

existing registratio n data ) fo r eac hproduct . Fo r thes e start-u p activities , EP Aassigne d t o eac hmanufacture r a one-time fixe d cos t o f $30 0 plu s $10 0 pe r product .
Next , t o determin e th e testing cost s applicabl e t o manufacturer s no t qualifying fo r an yspecia l smal l busines s provisions , cost s wer e calculate d base d o nth e genera l testing assumption s describe d abov e fo r eac hcategory , using th e uni t cos t estimate s provide d i n Chapte r 3 . Thes e total s wer e assigne d t o eac hgrou

p i n th e categoryan d wer e the n divide d equall yamong th e product s assigne d t o eac hsuc hgroup . Finally , th e per-produc t cost s wer e assigne d bac k t o th e responsibl e manufacturers . The estimate d complianc e cost s applicabl e t o eac hgrou p i neac hproduc t categoryar e summarize d i nTabl e 4-4 . Base d o n th e uni t cos t dat a presente d i n Chapte r 3 an d th e testing assumption s outline d above , th e tabl e show s tha t group s i nth e gasolin e baselin e produc t categoryar e likel yt o hav e th e highes t grou p cos t (estimated a t nearl y$800,000) , an d diese l baselin e group s ar e expecte d t o incur th e lowes t grou

p cos t (estimated a t nearl y$445,000) . Consisten t wit hth e smal l busines s provision s describe d i n 7 5Chapte r 1 , manufacturer s wit hannua l sale s les s tha n $5 0 millio n

wer e omitte d from

thi s cos t allocatio nproces s fo r thei r baselin e an d non-baselin e products . Suc hmanufacturer s wer e assigne d n o Tie r 1 o r Tie r 2 cost s fo r thei r products . Th e atypica l product s o f manufacturer s wit hannua l sale s les s tha n $1 0 millio nwer e als o omitte d fromth e genera l cos t allocatio n proces s describe d above ; however , thes e manufacturer s wer e assigne d cost s applicabl e t o thei r atypica l products . A s previousl ydescribed , thes e manufacturer s qualif yfo r th e specia l smal l busines s provisio n whic hexcuse s themfromTie r 2 testing requirement s fo r thei r atypica l products , bu t ar e stil l responsibl e fo r Tie r 1 . Becaus e thes e verysmal l manufacturer s ar e expecte d t o fin d i t difficul t t o participat e i n th e grouping and cos t sharing provision s o f th e rule , thi s analysi s assigne d eac hsuc hmanufacture r th e ful l cos t fo r completing Tie r 1 fo r eac ho f hi s atypica l products . However , i f an individua l manufacture r ha d mor e tha n on e atypica l produc t applicabl e t o a particula r group , th e Tie r 1 cos t fo r thos e product s wa s assigne d t o th e manufacture r onl yonce . Thi s analysi s als o assume s tha t thes e manufacturer s wil l no t purchas e backu p vehicles/engine s sinc e theyar e excuse d fromTie r 2 . Tabl e 4- 5 present s estimate d complianc e cost s t o manufacturer s qualifying fo r specia l provision s fo r thei r atypica l products . I n sum , approximatel y$114,00 0 wil l b e spen t b ya manufacture r (with sale s les s tha n $1 0 million ) o f anatypica l produc t i n th e gasolin e fue l family , whil e manufacturer s (withsale s les s tha n$1 0 million ) 7 6P.9 4

o f atypica l diese l product s ar e projecte d t o incu r cost s o f approximatel y$272,00 0 fo r testing thei r products . Manufacturer s qualifying fo r specia l provision s fo r thei r baseline/non-baselin e product s (no t show n i n th e table ) wil l incur cost s o f $10 0 fo r registratio n o f thei r product , an d a one-time pe r manufacture r cos t o f $30 0 fo r becoming familia r wit hth e regulations . Tabl e 4- 6 provide s a compariso n o f complianc e cost s betwee n fue l and additiv e manufacturers . Fo r th e 63 8 fue l manufacturer s examine d i n thi s analysis , complianc e cost s rang e from abou t $40 0 t o $1. 7 million , wit ha media n complianc e cos t o f $500 . O f th e 45 8 fue l additiv e manufacturers , cost s rang e froman d $40 0 t o $3. 7 million , wit ha media ncomplianc e cos t o f abou t $900 . Approximatel y7 8 percen t o f al l F/F Amanufacturer s ar e estimate d t o incu r cost s belo w$10,000 , an d nearl y6 5 percen t belo w$1,000 . Furthermore , on e percen t o f th e fue l an d additiv e manufacturer s examine d i n thi s analysi s wil l assume cost s i n exces s o f on e millio n dollars . Complianc e cost s fo r fue l an d fue l additive producer s combine d rang e from$40 0 t o abou t $ 4 million , wit ha media n cos t o f abou t $500 . Amor e detaile d analysi s o f th e financia l impact s t o smal l fue l an d fue l additiv e manufacturer s i s provide d i n th e nex t chapter . Thi s analysi s ha s focuse d oncos t impact s t o producer s o f non leaded , non-relabele d products . A s discusse d i n th e dat a collectio n sectio n o f Chapte r 2 , financia l dat a wa s no t sough t fo r 7 7companie s producing onl yleade d gasolin e product s sinc e thes e

product s wil l b e illega l a s o f January1 , 1996 , an d fo r companie s registering onl yrelabele d product s sinc e onl ybasi c registratio n dat a wil l b e require d fo r thes e products . However , sinc e th e basi c registratio n requirement s appl yt o relabelers , theywil l hav e applicabl e t o themcost s o f $30 0 ( a one-time pe r manufacture r cost ) fo r activitie s associate d wit hreviewing th e regulations , an d $10 0 fo r submitta l o f basi c registratio n dat a fo r eac hproduct . Thes e cost s appl yt o 32 7 relabeler s an d 63 8 products . Accordingly , a tota l cos t o f $161,900 , applicabl e t o relabelers , i s include d i n th e tota l cost s t o th e industry , discusse d below .
B . Industr

y Coa t Impact s Summing th e cost s acros s al l manufacturer s yield s a tota l cos t impac t t o th e fuel/fue l additiv e industryo f approximatel y6 6 millio n dollars . Averagin g th e industrycost s ove r thre e year s bring s th e annua l cost s t o approximatel y$2 2 million , wel l unde r th e $10 0 millio n limi t tha t contribute s t o defining a "significan t regulatoryaction" . Th e thre e yea r averag e i s relevan t becaus e manufacturer s wil l b e allowe d thre e year s fo r complianc e fo r thei r fuels/additive s registere d befor e promulgatio no f th e fina l rule . Annua l cost s mayi n fac t b e les s i f th e complianc e cost s ar e finance d ove r mor e tha n thre e years .

IV . Limitation s o f the Analysi s 7 8I n determining cost s t o eac hgroup , judgement s wer e mad e

concerning th e availabilit yo f existing dat a whic hcoul d mitigat e th e program' s testing requirements . I t i s possibl e tha t mor e o r les s adequat e existing tes t dat a mayb e availabl e tha nwa s assume d i n thi s analysi s fo r al l categories , an d th e estimate d cost s woul d b e lowe r o r highe r a s a result . Whe n per-produc t cost s wer e calculate d fo r manufacturer s no t qualifying fo r specia l provisions , EP Aassume d tha t complianc e cost s woul d b e divide d equall yamong th e numbe r o f products . However , manufacturer s hav e th e opportunit yt o apportio n cost s i n an ymanner . Fo r example , cost s coul d b e divide d among th e member s o f th e grou

p rathe r tha n among th e numbe r o f products . I f cost s ar e divide d differentl ytha n wa s assume d fo r thi s analysis , change s woul d b e reflecte d i n cost s t o eac hmanufacturer , bu t industry cost s woul d remai n unchanged . Additionally , fo r purpose s o f thi s analysis , EP Aassume d tha t manufacturer s qualifying fo r specia l smal l busines s provision s fo r thei r atypica l product s (i.e. , thos e wit hsale s les s tha n $1 0 million ) woul d no t hav e th e resource s t o grou p wit hothe r manufacturer s t o shar e costs . I f thes e manufacturer s ar e capabl e o f grouping an d canshar e cost s wit h othe r manufacturers , th e cost s i nthi s analysi s ar e overestimate d bot hfo r th e individua l manufacturer s involve d an d fo r th e industr

y a s a whole .

7 9Th e per-produc t cost s als o depend o n th e numbe r o f product s

expecte d t o b e containe d i n eac hgroup . However , th e numbe r o f product s assigne d t o th e group s fo r thi s analysi s mayb e subjec t t o erro r fo r a variet yo f reasons . First , producer s ar e no t require d t o notif yEP Ai f manufacturing o f a produc t ha s cease d permanently , an d thu s EPA' s registratio n databas e maycontai n F/FAs whic hn o longe r exist . Fo r thi s reason , i t i s possibl e tha t th e numbe r o f product s i n an

ygrou p i s overestimated , thu s underestimating th e per-produc t costs . Second , th e analysi s i s base d o nproduct s registere d wit hEP Aprio r t o Decembe r 1992 . Sinc e tha t time , additiona l fuel/fue l additiv e product s hav e bee n registere d wit h EPA . I n thi s instance , th e numbe r o f product s actuall ybelonging t o a grou

p mayb e underestimated , thu s overestimating th e per produc t cost s fo r tha t group . Third , grouping assignment s fo r thi s analysi s wer e base d o n existing registratio n dat a submitte d b y manufacturer s concerning th e chemica l compositio no f thei r fuel s and additives . T o th e exten t tha t thi s informatio n mayb e inaccurat e o r out-of-date , EPA' s assumption s a s t o appropriat e grou p assignment s mayb e erroneous . Thus , th e actua l numbe r o f product s pe r grou

p and eve nth e numbe r o f group s pe r categoryma y b e somewha t differen t fromthos e assume d here . Finally , participatio n i n th e grouping systemi s voluntary , an d manufacturer s maychoos e t o defin e thei r ow nsubgroup s o r eve n wor k independentl yrathe r tha nshar e cost s among al l potentia l manufacturer s i n th e group . A s a result , th e numbe r o f participatin g manufacturers , an d thei r respectiv e products , mayb e 8 0les s fo r an ygroup . I f so , th e numbe r o f product s b ywhic hth e cost s wer e divide d mayb e overestimated , thu s underestimating manufacture r an

d industrycosts .

V . Conclusion s
Th e effect s o f th e regulatio no nfue l an d fue l additiv e producer s appea r t o b e relativel ysmall . I n mos t cases , th e complianc e cost s wil l b e les s tha n$10,00 0 pe r manufacturer , an d onl yon e percen t o f producer s ar e expecte d t o incu r cost s i nexces s o f on e millio n dollars . Th e result s o f thi s analysi s indicat e th e fuel/fue l additiv e registratio n regulatio n wil l lead t o tota l cost s o f abou t $6 6 million . Wit hindustrycomplianc e cost s average d ove r thre e years , th e annua l cos t impac t t o th e industryi s estimate d a t $2 2 million . EP Aha s n o reaso n t o believ e th e economy , productivity , competition , employment , environment , publi c healt ho r safety , o r government s o r communitie s wil l b e adversel yaffecte d a s a resul t o f thi s regulation . Th e RegulatoryFlexibilit yAnalysi s (RFA ) i n Chapte r 5 , lend s suppor t t o expectatio no f onl yminima l economi c impact s fromth e cost s impose d b ythi s regulation . Th e RFA , whil e primaril yconcerne d wit hcost s impose d onsmalle r entities , als o provide s insigh t a s t o overal l economi c impact s onth e industr ya s a whole . Th e impac t t o mos t companie s i s expecte d t o b e relativel y 8 1P.9 9

smal l s o a s no t t o caus e significan t advers e effects . I n conclusion , th e fue l an d fue l additiv e registratio nregulatio n wil l no t hav e significan t advers e effect s o n th e industry , no r wil l i t resul t i n an economi c impac t o f $10 0 millio no r mor e annually .

3, 4



### 8 2P. 1

Tabl e 4-1 : Estimate d Group s Pe r Fuel/Fue l Additiv e Categor y

F/F ACategor y Baseline 1

Non-Baseline 1 ' 2

Atypical 3 Fue l Famil y Gasolin e 1 Grou p 30 7 Manufacturer s 1,5 8 6 Product s 9 Group s 12 0 Manufacturer s 4 7 6 Product s
5 6 Group s 1 4 6 Manufacturer s 29 3 Product s Diese l 1 Grou p 8 7 Manufacturer s 49 6 Product s 2 Group s 1 Manufacture r 2 Product s
4 1 Group s 11 2 Manufacturer s 21 3 Product s 'Exclude s dac a fo r manufacturer s who , unde r smal l busines s provision s o f thi s ruie , ar e exempte d fro mtes t requirement s fo r thei r baselin e an d non-baselin e product s (i.e. , exclude s manufacturer s < $5 0 millio n i n sales) . ^Non-baselin e product s ca n fal l int o mor e tha n on e grou p dependin g upo n th e numbe r o f oxyge n compound s the ycontain . Thus , the yar e counte d multipl e time s i n th e tabl e dependin g upo n th e numbe r o f group s the yfal l into . 'Includesdat a fo r manufacturer s wh o ar e exempte d fro ma portio n o f th e test : requirement s fo r thes e product s unde r th e smal l busines s provision s o f thi s rui e (i.e. , include s manufacturer s < $1 0 millio n i n sales) .( Tabl e 4-2 : Assume d Combustio n Emissio n Tes t Requirement s Pe r Categor y
Family / Categor y Tie r 1 Requirement s

Lit . Searc h Charact .

o f Catalyze d Emission s Charact .

o f Non Catalyze d Emission s Tie r 2 Requirement s

90-da y Inhalatio n Study Ame s

Assa y Micronucl .

Assa y SC E

Gasolin e Categor y Baselin e No n Baselin e Atypica l X

X

X X 1

X 1

X X x

X

X X

X

X X

X

X X

X

X X

X

X

Diese l Categor y Baselin e No n Baselin e Atypica l X

X

X N/ A

N/ A

N/ A X*

X

X X

X

X X

X X

X X

X Onl y PAHspeciatio nan a measuremen t o f tota l NPAHassume dt o b e necessary . Onl y Hydrocarbo nspeciatio nassume dt o b e necessary . Fertilit y Scree n

X

X

X

X

X

X Neurotox .

Scree n

X

X

X

X

X

XTabl e 4-3 : Assume d Evaporativ e Emissio n Tes t Requirement s Pe r Categor y

Family / Categor y Tie r 1

Requirement s Lit . Searc h Charact .

o f Evap . Emission s Tie r 2 Requirement s 90-da y Inhalatio n Stud y Ame s

Assa y Micronucl .

Assa y SC E Fertilit y Scree n Neurotox .

Scree n Gasolin e Categor y Baselin e No n Baselin e Atypica l X

X

X X

X X

X X

X X

X X

X X

X X

X

Diese l Categor y Baselin e No n Baselin e Atypica l N/ A

N/ A N/ A N/ A

N/ A N/ A N/ A

N/ A N/ A N/ A

N/ A N/ A N/ A

N/ A N/ A N/ A

N/ A N/ A N/ A

N/ A N/ A N/ A

N/ A N/ A

C OTabl e4—4 : Estimate dComplianc eCost s Pe r Group *

Tie r 1 : Literatur e Searc h Acquisitio n Mileag e Accumulatio n Combustio nGen./Charac t Evaporativ e Gen./Charac t Tie r 2 : Combustio nGeneratio n Ame s Samplin g Evaporativ e Generatio n Biologica l Testin g Administrativ e Cost s

TOTA L (Rounded) : Gasolin e Fue l Famil y Baselin e
$21,00 0 30,00 0 6,40 0 25,85 0 6,27 5

71,50 0 50 0 58,50 0 550,800* * 26,33 5 $797,00 0 Non-Baselin e

$7,00 0 30,00 0 6,40 0 35,75 0 6,77 5

71,50 0 50 0 58,50 0 550,800* * 26,33 5 $794,00 0 Atypica l

$7,00 0 30,00 0 48,00 0 58,55 0 0

71,50 0 50 0 0 280,10 0 26,33 5 $522,00 0 Diese l Fue l Famil y

Baselin e
$21,00 0 37,20 0 27,50 0 13,00 0 N/ A

58,50 0 0 N/ A 260,60 0 26,33 5 $444,00 0 Non-Baselin e

$7,00 0 37,20 0 27,50 0 34,70 0 N/ A

58,50 0 80 0 N/ A 280,10 0 26,33 5 $472,00 0 Atypica l

$7,00 0 18,60 0 191,40 0 45,40 0 N/ A

58,50 0 80 0 N/ A 280,10 0 26,33 5 $628,00 0 *Cost s i nthi s tabl ear eapplicabl et omanufacturer s no tqualifyin gfo rspecia lprovisions . **Conducte donbot hcombustio nan devaporativ eemissions .P. 5

Tabl e 4-5 : EstimatedComplianc e Cost s fo r Small * Atypica l Manufacturer s

Tier 1 : Literatur e Search Acquisition Mileage Accumulatio n Combustio

nGen./Char . Evaporativ

e Gen./Char . Tier 2 Administrativ

e Cost s TOTA L (Rounded) : Gasolin e Fue l Family $7,00 0 15,00 0 24,00 0 58,55 0 0 Exempt 9,45 0 $114,00 0 Diese l

Fue l Family $7,00 0 18,60 0 191,40 0 45,40 0 N/ A Exempt 9,45 0 $272,00 0 *Thos e manufacturer s wit hsale s unde r $1 0 million .Tabl e 4-6 : Summar y o f Complianc e Costs *

Numbe r o f Companie s Rang e o f Complianc e Costs :

Minimu m Media n Maximu m Percentag e Les s tha n$1,00 0 Percentag e Greate r tha n$10,00 0 Percentag e Greate r tha n$ 1 Millio n Fue l Manufacturer s 45 8 $40 0 $50 0 $1,673,00 0 73 % 16 % < 1 % Additiv e

Man ufacturer s 63 8 $40 0 $91 5 $3,717,00 0 53 % 31 % 2 % Tota l

Manufacturer s 1,076* * $40 0 $50 0 $3,717,00 0 65 % 2 2 % 1 % *Relabelers , an dcompanie s registerin gonl y leade dproducts , ar e excluded . **Th e tota l numbe r o f uniqu e companie s include di nthi s analysi s i s 1,076 . Thi s include s 43 8 additiv e manufacturers , 61 8 fue l manufacturers , an d2 0 manufacturer s tha t produc e bot hfuel s an dadditives .P. 7



# DRAF T
Chapte r 5 Regulator

y Flexibility

Analysi s

I . Introductio

n Thi s chapte r present s th e result s o f a regulatoryflexibilit y analysi s o f th e testing requirement s o f th e F/F Aregistratio n regulations . Th e result s ar e base d o na smal l busines s impac t analysi s conducte d b yIC F Incorporate d unde r contrac t wit hEPA 22
. Th e analysi s ha d fou r mai nobjectives : 1 ) t o compar e th e F/F A program' s smal l busines s definitio n t o th e Smal l Busines s Administration' s (SBA ) definition s o f smal l fo r th e affecte d industries , 2 ) t o determin e i f th e registratio nprogram woul d impac t smal l businesse s significantl ymor e tha nlarg e businesses , 3 ) t o estimat e th e magnitud e o f smal l busines s impact s b y assessing i f complianc e cost s woul d b e likel yt o pus hsmal l businesse s int o financia l distres s o r eve nclosure , an d 4 ) t o quantif yth e exten t t o whic hth e smal l busines s provision s reduc e th e program' s burde n fo r manufacturer s o f atypica l products . An importan t poin t t o bea r i nmind i s tha t th e analysi s assume s n o passthrougho f cost s i n pric e increase s an d thu s canb e characterize d a s depicting "wors t case " impacts . Sinc e th e time o f th e IC F analysis , some underlying assumption s use d t o projec t "Se e footnot e 4 . 8 3P. 8

manufacture r cos t dat a wer e revised . Th e discussio nan d impac t estimate s presente d i n thi s chapte r reflec t th e revise d cos t estimate s (whichar e presente d i nthi s document) . Fo r thi s reason , th e actua l dat a presente d i n thi s chapte r doe s no t correspond directl ywit hth e result s o f th e IC F analysis . EP Ause d ICF' s methodologydiscusse d below , along wit hrevise d cos t estimate s t o determin e smal l busines s impact s fo r thi s regulation .

II . Requirement s o f the Regulator y Flexibility

Ac t

EP Ai s require d unde r th e RegulatoryFlexibilit yAc t (RFA ) t o determin e whethe r th e requirement s o f th e regulatio nwil l caus e a significan t impac t o n a substantia l numbe r o f smal l entities . EPA ha s establishe d guideline s setting standard s t o b e use d i n evaluating impact s o n smal l businesses . Th e guideline s specif y tha t siz e definition s se t b yth e SB

Ashoul d b e use d a s th e initia l determinatio n o f a "smal l entity, " bu t tha t EP Amayus e an alternativ e definitio n i f i t bette r capture s th e poin t a t whic h entitie s ar e adversel yaffecte d becaus e o f thei r size . Th e EPA guideline s als o provid e guidanc e o nsetting th e standard s t o b e use d fo r evaluating impact s o n smal l businesses . Fou r criteri a ar e establishe d fo r determining whethe r impact s wil l b e significant :

1 ) Annua l complianc e cost s increas e tota l cost s o f productio n fo r smal l businesse s b ymor e tha nfiv e percent . 8 4P. 9

2 ) Complianc e cost s a s a percentag e o f sale s fo r smal l businesse s ar e a t leas t te n percen t highe r tha n complianc e cost s a s a percentag e o f sale s fo r larg e businesses .
3 ) Capita l cost s o f complianc e represen t a significan t portio n o f capita l availabl e t o smal l businesses .
4 ) Th e requirement s o f th e regulatio n ar e likel yt o resul t i n closure s o f smal l businesses . Accordin g t o th e guidelines , ther e i s a significan t impac t o n smal l entitie s wheneve r anyo f th e abov e criteri a ar e met . Th e firs t criterio n wa s no t applie d i n thi s analysi s becaus e productio n cost s o f th e F/F Aproduct s ar e unknown . Impact s o f th e regulatio n o n smal l businesse s wer e determine d base d o n th e remainin g criteria . Th e methodolog yuse d t o conduc t th e smal l busines s impac t analysi s i s presente d below , followe d b ya discussio n o f th e result s o f th e analysis . Assumption s an d limitation s o f th e analysi s ar e discussed .

III . Methodolog y

A . Dat a Source s EP Aprovide d IC F wit hth e majorit yo f th e dat a neede d t o conduc t th e impac t analysis . Provide d fo r eac hmanufacture r wa s 8 5P.1 0

manufacture r I D an d produc t informatio n containe d o n th e F/F A registratio n database , SI C code , numbe r o f employees , 199 3 annua l sale s data , and manufacture r complianc e cos t dat a estimate d b yEPA . Using regressio n equation s develope d fo r th e smal l busines s impac t analysi s conducte d a t th e time o f th e proposal 23 , IC F the n projecte d ne t income and asse t informatio n fo r eac hregistere d compan ybase d o n th e 199 3 sale s data . Thi s additiona l informatio n wa s necessary fo r determining complianc e cos t impact s using retur no nasset s (ROA ) (ne t income/assets ) a s an indicato r o f th e financia l healt h o f a company . Th e regressio n equations , whic hrelate d ne t income t o sale s an

d asset s t o sale s (se e th e IC F report) , wer e determine d t o stil l b e vali d fo r thi s analysi s sinc e th e industryha s no t change d dramaticall yfromth e time o f th e firs t analysis. 3 4

B . Adjustment s t o the Dat a Arevie wo f th e F/F Aregistratio ndatabas e reveale d tha t a numbe r o f companie s ar e liste d mor e tha n onc e fo r varying reasons : theymanufactur e bot hfuel s an d additives , theyhav e multipl e fue l o r additiv e identificatio n numbers , o r theyhav e affiliates/subsidiarie s fo r whic hsimila r financia l dat a wa s provided . T o enabl e th e program' s impact s t o b e appropriatel y estimated , suc hrelate d companie s wer e considere d t o b e singl e entities , and th e program' s impact s wer e estimate d base d on th e su m "Se e footnot e 13 . 24 IC F verifie d thi s b ycomparing financia l statistic s fo r relevan t SI C code s i n th e 199 0 an d 199 2 Annua l Statemen t Studie s b yRober t Morri s Associates . 8 6P.1 1 \

o f thei r respectiv e complianc e costs .
A s a resul t o f merging certai n manufacturers ' dat a i nthi s manner , th e tota l numbe r o f uniqu e companie s o n whic hthi s smal l busines s impac t analysi s i s base d i s 1,076 . Thi s include s 43 8 additiv e manufacturers , 61 8 fue l manufacturers , an d 2 0 manufacturer s tha t produc e bot hadditive s an d fuels . Producer s o f bot hfue l and additiv e product s ar e include d i n bot hth e fue l manufacture r analysi s an d th e additiv e manufacture r analysis . C . Definitiono f Smal l Manufacture r Th e fina l rul e define s a smal l busines s fo r thi s programa s an ymoto r vehicl e fue l o r fue l additiv e manufacture r wit htota l annua l sale s o f les s tha n $5 0 millio n (se e Chapte r 1 fo r furthe r discussio n o n th e smal l busines s definitio n fo r thi s program) . The IC F analysi s compare d companie s classifie d a s smal l unde r th e F/F A programdefinitio n t o thos e classifie d a s smal l b yth e SBA . Th e nex t sectio n provide s a characterizatio no f smal l and larg e fue l and additiv e manufacturers , according t o eac ho f th e following definitions :
1 ) F/FAprogramsmal l busines s definition , i nwhic ha smal l busines s i s define d a s an yfue l o r additiv e manufacture r wit h tota l annua l sale s les s tha n$5 0 million . 2 ) SBA' s definitions , whic har e base d o nsale s o r numbe r o f 8 7employees , b ySI C code . Th e SB Adefinition s ar e presente d i n Exhibi t 5-1 . SB

Aregulation s specif ytha t fo r al l industrie s fo r whic hn o SI C cod e informatio ni s specificall ylisted , th e siz e standar d t o b e use d i s $3. 5 millio ni n sales . Thi s standar d wa s use d fo r approximatel y2 4 companies . P.1 2 

# I

IV . Characterisationo f Smal l an dLarge Manufacturer s

EP A Deflnlttoi i SB A Definitio n Atfwtl W

•MMlfMlUfW S 

# S 

# s L L S 

# s Pw

M 

# L L EP

A Definitio n SB A Definitio n Figure 5-1: Diagram of 8profiles Eigh t financia l profile s o f affecte d companie s wer e develope d t o facilitat e compariso n o f smal l an

d larg e companie s withi n eac ho f th e industrie s (se e Figur e 5-1 ) . Thes e profile s provid e summarydat a fo r characteristic s suc h a s numbe r o f employees , sales , assets , ne t income and returno n asset s fo r fue l and additiv e manufacturer s using bot hth e F/F A programsmal l busines s definitio nan d th e SB

Adefinitions . T o clearl yillustrat e th e difference s betwee nsmal l an d larg e manufacturers , statistic s o n th e minimum , maximum , average , an d quartil e value s ar e presente d fo r eac hdat a characteristic . Th e minimu man d maximu

m value s provid e a rang e o f th e dispersio no f value s i n eac hset . Th e averag e provide s a simpl e (non-weighted ) averag e value . Quartile s ar e a usefu l measur e o f distributio no f 8 8dat a set s tha t ar e highl yskewed , o r thos e i nwhic hothe r measure s

(e.g. , average ) woul d b e warpe d b yextreme values . Th e profiles , provide d i n Exhibit s 5- 2 through5-5 , wer e discusse d i n Chapte r 2 i n regar d t o th e F/F Asmal l busines s definition , an d ar e show

n agai n her e fo r compariso n purposes . Asummar yo f th e profile s i s provide d belo wfo r eac hindustry . P.1 3 

# 1

A . Characteristic s o f Additiv e Manufacturer s Bot hth e F/F

Aprograman

d SB Adefinition s classif yapproximatel y6 5 percen t o f th e 45 8 additiv e manufacturer s a s small . Th e F/F A programdefinitio n classifie s 29 5 companie s a s smal l whil e th e SB Adefinitio n classifie s 30 0 companie s a s small . Whil e th e tw o definition s resul t i n nearl yth e same numbe r o f companie s bein g classifie d a s small , th e definition s d o Figure 5-2: Number of additive companies no t encompas s th e same companie s (i.e. , F/F Aclassified

byEPA and SBA definitions as small. smal l additiv e manufacturer s ar e no t jus t a subse t o f SBAsmal l additiv e manufacturer s —se e Figur e 5-2) . Thi s result s i n sligh t difference s i n th e impac t o n smal l companie s depending upo n th e definitio n used . Acompariso n o f th e F/F Aan d SB Aprofile s o f smal l additiv e manufacturer s reveal s tha t th e F/F Aprogramdefinitio ndoe s a bette r jobo f grouping companie s wit hsimila r sale s an d employmen t characteristics . Thi s i s becaus e th e F/FAprogramsmal l busines s 

### 8 9P.1 4

definitio n i s base d o n sale s wherea s SB Adefinition s ar e primaril y base d o n numbe r o f employees , regardles s o f sales . A s a result , SB Adefinition s ar e ap t t o classif yrelativel ylarg e companie s a s small . Fo r example , a compan ywit h$2 0 billio ni n sale s an d 1,50 0 employee s i s considere d *small " b yth e SB

Adefinition . Thi s leve l o f sales , however , i s muc hhighe r tha nth e sale s o f some o f th e companie s classifie d a s larg e unde r eithe r definition .
Fo r bot hth e F/F

APrograman

d SB Asmal l busines s definitions , th e profile s sho wtha t larg e additiv e companie s ar e considerabl y large r tha n smal l additiv e companies . Unde r bot hdefinitions , th e media n smal l additiv e compan yha s fewe r tha n 2 0 employees , unde r $ 5 millio n i n sales , an d an ROAo f nearl y5 percent . I ncomparison , th e media n larg e additiv e manufacture r ha s abou t 3,60 0 employees , nearl y$10 0 millio n i n sales , an d a nROAgreate r tha n6 percent . Media n sales , assets , and ne t income ar e approximatel y200 , 400 , and 50 0 time s highe r fo r larg e tha nfo r smal l companies , respectively . Thus , t o hav e th e registratio nregulatio nimpac t smal l an

d larg e additiv e companie s similarly , smal l compan y complianc e cost s mus t b e o n th e orde r o f 20 0 t o 40 0 time s les s tha n larg e compan

ycosts . I n addition , larg e additiv e manufacturer s tend t o hav e highe r ROA s tha nsmal l additiv e manufacturers . B y eithe r definitio n o f small , th e media nsmal l compan yROAi s 4. 9 percen t whil e th e media n larg e compan yROAi s 6 percent . Thus , smal l additiv e companie s tend t o b e financiall yles s robus t than larg e additiv e companie s and , therefore , wil l hav e relativel yles s 9 0capita l availabl e t o themt o sustai n financia l shock s

B . Characteristic s o f Fue l Manufacturer s Ther e ar e 63 8 fue l manufacturer s include d i n thi s analysis . A s show n i n Exhibit s 5- 4 an d 5-5 , th e F/F

Aprograman

d SB Adefinition s resul t i n verydifferen t number s o f fue l manufacturer s bein g classifie d a s small . Th e F/F Aprogramdefinitio n classifie s 46 5 fue l manufacturer s (o

r 7 3 percent ) a s small , whil e SB Adefinition s classif yonl y38 1 (o r 6 0 percent ) a s smal l (se e Figur e 5-3) . Figure 5-3: Number of fuel companies classified by EPA and SBA definitions as small.. Simila r t o th e result s found fo r additiv e manufacturers , th e F/F Aprogramdefinitio nmor e tightl ygroup s fue l manufacturer s wit hsimila r financia l characteristic s tha n d o SB A definitions . Fo r example , fue l manufacturer s classifie d b yth e SB

A a s smal l ha d sale s ranging from$49,00 0 t o $5. 5 billion , whil e F/F A smal l compan

ysale s rang e from$49,00 0 t o approximatel y$5 0 million . Media n sale s fo r companie s classifie d b yth e SB

Aa s larg e ar e $4 9 million , $ 1 millio n lesstha nth e minimu m F/F Alarg e compan ysales . Th e profile s showtha t larg e fue l companie s ar e considerabl y large r tha n smal l fue l companies . Th e profil e o f th e media nsmal l 9 1P.1 6

fue l manufacture r i s simila r unde r bot hdefinitions : nearl y2 0 employees , $ 9 millio n i n sales , an d ROAo f nearl y3. 6 percent . I n comparison , statistic s on larg e fue l manufacturer s diffe r considerabl yunde r th e tw o definitions . Using th e F/F Aprogra

m smal l busines s definition , th e media nfue l manufacture r classifie d a s larg e ha s nearl y45 0 employees , $26 9 millio n i nsales , an d ROA o f 4. 9 percent . Th e media nlarg e fue l manufacture r unde r th e SB A definitio n ha s abou t 20 0 employees , $4 9 millio n i nsales , an d 4. 2 percen t ROA . Th e magnitud e o f differenc e i nsiz e betwee n smal l an d larg e fue l companie s i s muc hsmalle r i n compariso nt o th e differenc e i n siz e betwee n smal l and larg e additiv e companies . Specifically , media n sales , assets , an d ne t income o f larg e fue l manufacturer s ar e onl y30-4 0 time s highe r tha n fo r smal l fue l manufacturer s unde r th e F/F Aprogramdefinition , an d onl y5- 6 time s highe r unde r th e SB Adefinition . Thus , impact s woul d b e simila r t o smal l and larg e fue l companie s unde r th e SB Adefinition , bu t t o hav e th e registratio n regulation s impact s smal l an d larg e fue l companie s similarl yunde r th e F/F Adefinition , smal l compan y complianc e cost s mus t b e 30-4 0 time s les s tha nlarg e compan ycosts .
Acompariso n o f ROA' s show s tha t smal l fue l companie s hav e simila r ROAprofile s unde r bot hdefinitions . According t o eithe r definition , th e media n ROAfo r smal l fue l manufacturer s i s 3. 6 percent , an

d th e 75t hpercentil e ROAi s 4 percent . F/F Alarg e companies , however , hav e somewha t highe r ROA s tha nSB Alarg e companies . Thi s migh t reflec t that , fo r companie s i n thi s 9 2analysis , ROAtend s t o increas e wit hsize , an d F/F Alarg e companie s tend t o hav e highe r sale s tha nSB Alarg e companies . Finally , unde r th e F/F Aprogramdefinition , th e fue l manufacture r profile s sugges t that , base d o n ROA , smal l fue l companie s tend t o b e les s health y financiall ytha n larg e fue l companies . C . Genera l Conclusion s I n sum , a revie wo f th e profile s show s tha t larg e additiv e manufacturer s tend t o b e bigge r i nterm s o f sale s an d numbe r o f employee s tha n larg e fue l manufacturers , wherea s smal l additiv e manufacturer s tend t o b e smalle r tha nsmal l fue l manufacturers . I n general , additiv e manufacturer s tend t o hav e highe r ROA s tha nfue l manufacturers , suggesting tha t theymayb e mor e capabl e o f withstanding th e impact s o f complianc e costs . Th e IC F stud

ysupport s th e adoptio n o f th e F/F Aprogram' s definition s o f smal l fo r thi s program . I n compariso nt o th e SBA , th e F/F

Aprogramdefinitio nclassifie s a large r numbe r o f manufacturer s a s small , an d mor e closel ygroup s companie s wit h simila r financia l characteristics . Adoptio no f SBA' s smal l busines s definition s woul d resul t i nfewe r numbe r o f companie s qualifying fo r specia l smal l busines s provision s and , consequently , large r cost s pe r firm . Consequently , th e remainde r o f thi s analysi s focuse s o n impact s t o smal l companie s using th e F/F Asmal l busines s definition .

9 3P.1 8

V . Estimatio no f Tmp-rrh

- o n Smal l Manufacturer s

I n accordanc e wit hEP Aguidance , th e followin g thre e method s wer e use d t o determin e i f smal l businesse s ar e disproportionatel y impacte d b yth e F/F ARegistratio n Program :

1 ) Th e rati o o f complianc e cos t t o sale s wa s compare d fo r smal l an d larg e companie s t o determin e i f th e rati o wa s a t leas t te n percen t highe r fo r smal l companies . 2 ) Th e impac t o f complianc e cost s o n a company' s RO Awa s calculate d t o se e i f complianc e cost s represen t a significan t portio n o f capita l availabl e t o smal l businesses .
3 ) Th e chang e i n a company' s RO Adirectl yattributabl e t o th e F/F Aregistratio n progra mwa s examine d t o determin e th e leve l o f financia l distres s cause d b ythi s change . Th e result s o f th e analysi s ar e discusse d below . Sinc e testin g requirement s wil l impos e one-tim e cost s that , fo r purpose s o f thi s analysis , ar e assume d t o b e incurre d ove r a thre e yea r period , th e complianc e cos t use d i s th e tota l complianc e cos t divide d b ythree .

A . Comparin g th e Rati o o f Complianc e Cos t t o Sale s Exhibi t 5- 6 provide s a summar yo f complianc e cost s fo r smal l 9 4P.1 9

an d larg e companie s withi n eac ho f th e industries . Amon g al l additiv e manufacturers , complianc e cost s ar e estimate d t o rang e from$40 0 t o nearl y$ 4 million , wit hth e media nadditive manufacture r expecte d t o incur cost s o f abou t $900 . Thirty-on e percen t o f registere d additiv e manufacturer s ar e estimate d t o incur cost s abov e $10,000 . I n comparison , fue l manufacture r cost s rang e from$40 0 t o abou t $1. 7 million , wit hth e media n fue l manufacture r having complianc e cost s o f $500 , an d 1 6 percen t incurring cost s abov e $10,000 . Exhibi t 5- 7 show s complianc e cost s a s a percen t o f sale s fo r smal l an

d larg e companie s an d als o show s th e rati o o f thes e result s betwee n smal l and larg e companies . Ahigh"small/large " rati o indicate s tha t th e smal l compan yi s affecte d significantl ymor e tha n th e comparabl e larg e company . Arati o o f "1 " indicate s tha t complianc e cost s a s a percen t o f sale s i s th e same fo r smal l an d larg e companies . A s larg e companie s experienc e a relativel y greate r complianc e cos t burden , th e ratio s i nth e tabl e woul d b e les s tha n "1" , an

d woul d i nfac t approac h"0" . Th e minimum/maximu m value s i n th e tabl e illustrat e th e exten t t o whic hth e cost-to sale s rati o o f th e mos t lightly/heavil yimpacte d smal l compan y compare s t o th e cost-to-sale s rati o o f th e mos t lightly/heavil y impacte d larg e company .
Fo r additiv e manufacturers , th e analysi s reveal s tha t complianc e cost s tend t o b e substantiall yhighe r i ncompariso nt o 9 5P.2 0

sale s fo r smal l companie s tha n fo r larg e companies . Th e typica l smal l additiv e company' s cost-to-sale s rati o i s abou t 3 1 time s greate r tha n fo r a typica l larg e manufacturer . I n comparison , typica l smal l an

d larg e fue l manufacturer s hav e a 1: 1 rati o meaning that , relativ e t o sales , smal l companie s fac e complianc e cost s tha t ar e th e same a s larg e companies .

I n sum , fo r bot hfue l an d additiv e manufacturers , some smal l companie s hav e complianc e cos t t o sale s ratio s a t leas t te n percen t highe r tha n th e corresponding rati o fo r th e respectiv e media nlarg e companies . Nevertheless , i t i s importan t t o not e tha t complianc e cos t t o sale s ratio s tend t o b e verysmal l fo r thi s regulation . A s a result , a te n percen t differenc e betwee nsmal l an d larg e compan

y ratio s ha s littl e statistica l significance . Acompan ymaypaya relativel yhighcomplianc e cos t compare d wit hanothe r fir m i nth e industry(e.g. , $5,00 0 versu s $400 ) withou t having muc himpac t on it s financia l health . I n thi s case , althoughcomplianc e cos t t o sale s ratio s mayb e a usefu l too l i n comparing impact s o f smal l an d larg e manufacturers , a compariso no f th e magnitud e o f change s i n ROAi s a mor e direc t indicato r o f th e impact s o f complianc e cost s o n a company' s financia l health . Th e discussio ni n th e nex t sectio n focuse s o n using chang e i nROAa s a measur e o f complianc e cos t impacts .

B . Analysi s o f Chang e i nROA ROAi s a genera l indicato r o f financia l healt han d i s 9 6P.2 1

frequentl yuse d fo r determining th e borrowing potentia l o f a compan yan d fo r comparing th e financia l healt ho f companie s withi n an industry . Analysi s o f th e chang e i na company' s ROAcan indicat e whethe r complianc e cost s represen t a significan t portio n o f th e capita l availabl e t o a smal l busines s and , whethe r complianc e cost s ar e likel yt o resul t i nfinancia l hardshi p including , ultimately , closur e o f tha t company . Standar d ROAthresholds , wer e use d t o measur e th e financia l healt ho f eac hregistere d compan y(se e Figur e 5-4) . I n general , a compan ywit h an ROAles s tha n 2. 5 percen t

, . . , . . . Figur e5-4: Measure of financial

health and 

### i s alread yconsidere dt o b edistress . i n financia l distress . Pollutio n contro l cost s coul d hasten , bu t ar e no t th e caus e of , closure . A t thi s level , a compan ymayexperienc e difficultie s obtaining additiona l loan s o r othe r capital . AnROAles s tha n- 4 percen t indicate s tha t a compan yi s i nsever e financia l distress . Finally , an ROAles s tha n -3 0 percen t generall yindicate s closure . I n thi s analysis , eac hcompany' s ROAafte r complianc e cost s .(calculate

d b ysubtracting one-thir d o f complianc e cost s fro m annua l ne t income ) wa s compare d t o th e company' s initia l RO At o identif ycompanie s tha t wer e likel yt o b e pushe d ove r on e o r mor e o f th e thre e ROAthresholds . Companie s having a n ROAo f les s tha n 9 7P.2 2

2. 5 percen t befor e complianc e cost s wer e no t identifie d a s a compan ypushed int o financia l distres s a s resul t o f th e regulation .

A s show

n i n Exhibi t 5-8 , complianc e cost s o f th e F/F A Registratio n Program coul d potentiall ycaus e 4 5 additiv e manufacturer s (1 5 percen t o f small ) an d 2 5 fue l manufacturer s ( 5 percen t o f small ) t o g o int o some leve l o f financial distress. 25 Tw o companie s produc e bot hfuel s an d additive s an

d bot har e include d i n bot hth e additiv e an d fue l manufacture r analysi s i nth e table . Therefore , ther e ar e sixty-eigh t uniqu e F/F Acompanie s potentiall ypushe d int o some leve l o f financia l distress , al l o f whic har e classifie d a s smal l (i.e. , hav e sale s < $5 0 million) . O f companie s potentiall ypushe d int o financia l distress , ove r hal f (about 5 9 percent ) woul d b e pushe d int o th e firs t leve l o f distres s (i.e. , -4%_ROA<2.5% ) an d les s tha n one-fourt h(1 9 percent ) woul d potentiall yb e pushe d int o closure . Characteristic s particula r t o companie s pushe d int o closur e ar e examine d i n th e nex t section . I t i s importan t t o note , however , tha t thes e companie s hav e severa l course s o f actio n availabl e t o them , othe r tha n closure , i n respons e t o th e impact s o f th e regulation . Thes e option s ar e discusse d i n sectio n VI I o f thi s chapter .
C . Examinationo f Manufacturer s Potentiall y Pushedint o Closur e "Companie s tha t produc e bot hfuel s an d additive s ar e liste d unde r bot ho f th e heading s i n th e table . 9 8Twelv e manufacturer s (nin e additive , on e fuel , an d tw o tha t produc e both ) appea r t o b e i n dange r o f closur e a s a resul t o f complianc e cost s o f th e F/F ARegistratio nProgram . Al l o f th e companie s ar e classifie d a s smal l unde r thi s program . Exhibi t 5- 9 profile s thes e manufacturer s according t o numbe r o f employees , annua l sales , complianc e costs , an d retur no nasset s (befor e an d afte r complianc e costs) . Analysi s o f thes e manufacturer s reveal s tha t al l ar e financiall yhealth y(i.e. , hav e ROA s greate r tha n 2.5% ) befor e complianc e costs . Th e averag e ROAo f th e fourtee n companie s i s 4.2 1 percen t befor e complianc e costs , an d -134.2 5 percen t after . Thes e companie s generall yhav e fewe r tha n five employee s an

d les s tha n $500,00 0 i n sales . Annua l complianc e cost s ar e greate r tha n annua l sale s fo r abou t hal f o f th e companies . Th e averag e complianc e cos t o f th e fourtee n companie s i s $273,400 , slightl ymor e tha n th e averag e annua l sale s o f $272,593 .
An examinatio n o f th e numbe r an d type s o f product s produce d b y thes e fourtee n companie s reveal s tha t mor e tha nhal f produc e thre e o r fewe r product s an d al l produc e a t leas t on e atypica l product . Nin e companie s produc e mor e atypica l tha nbaselin e product s (sixo f whic hproduc e onl yatypica l products) , an d thre e produc e fewe r atypica l tha n baselin e products . Companie s wit honl yatypica l product s tend t o hav e th e lowes t adjuste d ROA 2 6 (i.e. , mos t likel y t o close ) an

d companie s wit hth e fewes t atypica l product s tend t o hav e th e highes t adjuste d ROA , suggesting tha t i t i s thei r produc t

26 RO Aafte r complianc e costs . 9 9mi xrathe r tha n thei r siz e tha t cause s themt o b e mor e heavil y

impacted . I t shoul d b e note d tha t thes e atypica l product s ar e onl y registere d du e t o a "grandfathering " provisio nunde r whic htheyar e no t require d t o obtai n a waive r fo r thei r "dissimilar " product . Ordinarily , product s whic har e no t "substantiall ysimilar " t o designate d certificatio n fuel s mus t showtha t th e produc t doe s no t adversel yaffec t th e abilit yo f a moto r vehicle' s emissio ncontro l systemt o achiev e complianc e wit hemissio nstandard s during th e usefu l lif e o f th e vehicle . Sinc e thes e product s wer e no t require d t o obtai n suc ha waiver , littl e i s know nabou t thei r health , welfare , o r emissio n contro l systemeffects . I f thei r manufacturer' s attempte d t o registe r suc hproduct s today , th e registration s woul d b e denied .

VI . Assessingthe Effectivenes s o f Smal l Busines s Provision s Nearl yhal f o f al l atypica l produc t manufacturers ' ar e considere d smal l fo r thi s program (i.e. , hav e sale s unde r $5 0 million ) and nearl yone-thir d qualif yfo r specia l provision s fo r thei r atypica l product s (i.e. , hav e sale s unde r $1 0 million) . The estimate d impact s discusse d abov e wer e base d o ncomplianc e cost s whic htoo k int o accoun t th e specia l provision s provide d fo r qualifying manufacturer s o f atypica l products . T o asses s the effectivenes s o f thes e provisions , thi s analysi s compare s th e financia l impact s whic hth e regulation s woul d hav e onsmal l 10 0P.2 5

atypica l producer s i n th e absenc e o f thes e specia l provision s t o th e impact s identifie d above . Th e result s showtha t th e specia l provision s fo r manufacturer s o f atypica l product s lowe r complianc e cost s fo r 6 0 smal l atypica l companie s b ya tota l o f $20,458,00 0 (as compare d wit hcost s tha t woul d otherwis e occur) . Withou t thes e provisions , a n additiona l 1 5 otherwis e health ycompanie s woul d potentiall yb e pushe d int o closure .

VTI . Mitigatin

gcirTMTM»-»»nce s tha t Reduc e Advers e Impact s Th e foregoing analysi s o f financia l effect s o n companie s projecte d t o experienc e significan t reduction s i nthei r rate s o f retur n a s a resul t o f thei r complianc e cost s represent s a "wors t case " picture . Mitigating circumstance s exis t t o reduc e th e impact s o f th e regulations . First , thi s analysi s ha s assume d n o change s i n price s o r sales . I n man

ycases , however , regulatorycost s ca nb e partiall y o r full ypasse d o n t o customers . Fo r example , du e t o th e high dependenc e o n moto r fue l i nth e U.S . an d th e limite d numbe r o f substitutes , th e moto r fue l industryha s a relativel ylowpric e elasticit yo f demand (roughly-0.2 6 i nth e shor t run rising t o - 0.8 6 i n th e long run). 2 7 Thi s suggest s tha t companie s can increas e ""Analyzin g Gasolin e Demand s Elasticitie s ( ASurvey)" , Caro l Dah l & Thoma s Sterner , EnergyEconomics , Jul y1991 . 10 1price s t o recove r a larg e portio no f th e cost s relate d t o th e

registratio n programwithou t appreciabl ylosing sales . Fo r fue l additives , ther e als o appear s t o b e a goo d dea l o f flexibilit y regarding th e passthrougho f cost s t o prices . Th e segment s o f th e fue l additiv e industryappea r t o b e oligopolisti c i nnature , s o smalle r manufacturer s can generall yincreas e price s onl yt o th e leve l se t b

yth e larg e manufacturers . However , a t leas t a percentag e o f registratio n cost s ar e recoverabl e b ysmalle r firms , thu s reducing th e impact s note d i nth e preceding sections . Moreover , th e complianc e cost s represen t an increas e i nth e fixe d cost s o f production , rathe r tha ni n variabl e costs . Thus , th e complianc e cost s pe r produc t uni t drop wit heveryadditiona l uni t sold , a s th e fixe d complianc e cost s ar e spread ove r mor e an d mor e units . Thi s mean s tha t competing manufacturer s tha t ar e abl e t o maintai n sale s level s o f thei r product s wil l greatl yreduc e thei r uni t testing costs . Second , th e requiremen t tha t an yne wmanufacturer s entering th e marke t compensat e th e existing manufacturer s fo r thei r rightfu l shar e o f th e grou p testing cost s confer s a certai ndegre e o f protectio n o n th e existing manufacturer s i ntha t an ypotentia l ne w competitor s woul d fac e simila r costs .
I n addition , t o th e exten t tha t a produc t (particularl yfue l additives ) ha s unusua l characteristics , it s manufacture r ofte nha s a marke t "niche" , resulting i n a rang e ove r whic hi t ca n rais e 10 2price s an d no t los e sales . Thi s i s an importan t consideration , give n tha t man

yo f th e larges t complianc e cost s ar e face d b yfirms tha t ar e paying a substantia l percentag e o f th e tota l testing cost s o f tha t testing grou p becaus e o f thei r uniqu e produc t mix . Thus , thei r unusua l qualitie s can allowa pric e increas e tha t offset s (o r help s t o offset ) th e impac t o f th e testing costs . Anothe r respons e ope n t o producer s facing substantia l testing cost s i s t o dro p th e produc t o r product s wit hth e greates t cost s and/o r smalles t profi t potential . Thi s respons e i s likel yt o hav e some residua l impact s o nprofitability . Thi s residua l impact , however , i s likel yt o b e relativel ysmall , a s th e fir mi s firs t dropping thos e product s wit hrelativel yhighcost s an d smal l sales/profi t potential . Ultimatel ythi s respons e woul d reduc e th e numbe r o f competing product s an d mak e i t easie r fo r remaining firm s t o increas e marke t share . Finally , a manufacture r face d wit ha highcomplianc e cos t becaus e th e produc t ha s unusua l characteristic s (i.e. , th e produc t i s atypical ) ha s th e optio no f reformulating th e produc t t o a "baseline " standard , whic hwoul d enabl e th e produc t t o b e groupe d wit hothe r simila r products , reducing complianc e cost s t o mor e nomina l amounts .

VIII.Limitation s o f the Analysi s 10 3Severa l limitation s t o thi s smal l busines s impac t analysi s ar e

identified . First , o f necessity , i t assesse s th e impac t o f th e start-u p programonly . I t account s neithe r fo r th e impact s o f testing futur e uniqu e product s no r ho wtesting cost s fro mth e start-u p programwil l b e allocate d among additiona l manufacturer s tha t introduc e product s belonging t o existing produc t groups . Second , i t assume s tha t a compan yi s willing t o us e profit s an d resource s fromth e entir e compan yt o cove r complianc e cost s o f thi s regulation . Ho wrealisti c thi s assumptio n i s depends , i npart , on ho wintegra l fue l an d additiv e product s ar e t o th e cor e busines s o f th e company .
IX . Conclusion s Thi s smal l busines s impac t analysi s show s tha t th e F/F A Registratio n Programwil l no t hav e significan t financia l impact s on th e majorit yo f smal l an d larg e companie s i nth e regulate d community . However , th e analysi s show s that , unles s cost s canb e passe d throughi n pric e increases , 1 0 percen t o f al l registere d additiv e manufacturer s (1 5 percen t o f small additiv e manufacturers ) an d 3 percen t o f al l registere d fue l manufacturer s ( 4 percen t o f small fue l manufacturers ) mayg o int o some leve l o f financia l distres s a s a resul t o f th e regulations . I n total , abou t 6 percen t o f al l fue l an

d additiv e manufacturer s combine d ma yb e pushe d int o some leve l o f financia l distres s an d 1. 2 percen t ar e potentiall yi n dange r o f closure . Arevie wo f th e mos t heavil yimpacte d companie s 10 4P.2 9

suggest s tha t th e reaso n fo r thei r difficult yi n withstanding th e financia l impact s o f thi s regulatio n i s du e i n par t t o thei r smal l siz e (e.g. , nearl yal l hav e fewe r tha n 5 employee s an d sale s belo w $500,000 , upo n whic hnearl yan ycomplianc e cos t impac t coul d b e significant ) an

d th e natur e o f th e product s theyproduce . Some o f thes e companies , however , mayhav e marke t niche s tha t readil y permi t produc t price s t o increas e t o cove r complianc e costs , o r theymayb e abl e t o ceas e productio no f a relativel yhigh-cos t produc t an

d thu s avoi d cost s tha t woul d caus e undu e financia l hardship .
However , usin g EPA' s criteri a cite d a t th e beginning o f thi s chapter , th e analysi s indicate s tha t smal l businesses , particularl y smal l additiv e manufacturers , ar e disproportionatel yimpacte d b y th e program . Th e rati o o f complianc e cos t t o sale s i s a t leas t te n percen t greate r fo r th e majorit yo f smal l additiv e companie s whe n compare d t o larg e additiv e companies . Conversely , smal l fue l manufacturer s experienc e impact s simila r t o thos e o f larg e manufacturers . Finally , th e analysi s support s EPA' s definitio no f smal l busines s fo r thi s regulation . I t als o show s tha t EPA' s specia l provisio n fo r smal l atypica l manufacturer s prevent s an additiona l 1 5 companie s frompotentiall ybein g pushe d int o closure , an d save s th e affecte d companie s roughl y2 0 millio n dollars .

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### Exhibit5- 2 Profiles o f AdditiveManufacturers F/F A Progra mDefinition Summar yStatistics

Smal l Larg e TOTA L Numbe r 295 16 3 458 Percen t 64% 36% 100%

Employee o Selee Ain u NetIncom e RO A

Employee s Sai d A M U NetIncom e RO A Minim i
_ _

0 $30,00 0 $12,06 3 $49 2 4.08 *

1 0 $30,000,00 0 $23,436,38 3 $1377.37 9 3.42 * Lowe rQnartll e

3 $900,00 0 $296,68 8 $13,62 1 4. 3 9 *

72 2 $176,414,56 6 $102,843,13 3 $3,863,43 6 3.70 * Media e Uppe rQurtll e Smal l Addttrr e Meaefectarer a

1 6 $4,282,99 3 $1,671,04 2 $81,82 6 4.90 * Larg e Addltlr e M

3,34 8 $972,793,13 3 $681,922,81 4 $41,710,68 6 6.12 * 3 2

$1X116.18 3 $3,288,94 9 $270,26 4 3.11 * •nnfaetarer a 14^3 3 $3,403,300,00 0 $2,733,103,63 1 $173,983,07 3 6.44 * Maxima l

1.11 0 $49,000,00 0 $24,873,32 0 $1343,97 0 3.41 *

332.70 0 $113,068,000,00 0 $133,063393,62 0 $10,047,009,08 1

7.44 * Arena e

3 1 $9,688,73 8 $4,476,36 7 $234,29 0 4.86 *

14,76 4 $4,974,436,42 0 $4,903,814,56 1 $344352,61 1 6.12 *

### Exhibit5- 3 Profiles o f AdditiveManufacturers SB A Definition Summar yStatistics

Smal l Larg e TOTA L Numbe r 300 15 8 458 Percent|



### 65 % 1 35 % | 100 % |

Employee s Sals a Asset s NetIncom e RO A

Employee s Sales Assets NetIncom e RO A Mlnlmn m

0 $50,00 0 $12,06 3 $49 2 4.08 *

1 $4,000,00 0 $1349.11 1 $75,64 3 4.88 * Lowe rQaartll e

5 $950,00 0 $313,00 5 $1430 1 4.60 *

75 3 $139,76330 0 $79,430,76 7 $4,488,07 4 5.65 * Media n Uppe rQaarUl e

Smal l AddlUr e Maaafactarer s

1 9 $4,923,21 7 $1,949,92 6 $96,02 9 4.92 * Lara e AddltlT e M

3,60 0 $999,672,63 3 $702,821,79 2 $43,036,86 1 6.12 * 6 0

$19,400,00 0 $8,910,13 6 $464,17 8 5.21 * anafactorer s 1430 0 $3.403300.00 0 $2,733,105,65 1 $173,983,07 5 644 * Mai l an a

130 0 $20,090,000,00 0 $19329^78,71 3 $1352,458,49 9

6.93 *

332.70 0 $115,068,000,00 0 $133,063393,62 0 $10,047,009,08 1

7.44 * Areref e

6 6 $91,674,72 9 $79,016,06 7 $3398,10 8 4.92 *

15,10 4 $4,975,876,70 2 $4,889318,19 3 $343324,20 8 6.03 *

### Exhibit5- 4 Profiles o f FuelManufacturers F/F A Progra mDefinition Summar yStatistics P.3 3

Smal l Larg e TOTA L Numbe r 46 5 173 63 8 Percent

73 % 27 % 100 %

Minimu m Lowe rQaartl U Medla a Uppe rQaartU e Maxima * Averag e Smal l Fue l Maaafactarer s Employee s Sale s Assets NetIncom e RO A 0 $49,00 0 $13,16 4 $29 2 2.21 * 8

$3,000,00 0 $882,30 3 $2834 4 3.25 * 2 2

$9,000,00 0 $2,711,66 4 $97,03 7 337 * 5 1

$22,000,00 0 $6,782,32 1 $263,63 9 3.90 * 29,43 7

$49,66533 4 $13337,04 1 $630,73 7 3.19 * 15 4

$14,707,89 4 $4335^2 4 $178,33 4 334 * Larg e fue l Maaafactarer s Employee s Sale s Assets NetIncom e RO A 0 $50,000,00 0 $15,643,98 3 $653,62 1 4,19 * 21 3

$85,917,70 2 $27,204,04 0 $1,198,32 1 4.40 % 44 3

$268,822,00 0 $87,279,65 8 $4,269,96 0 4,89 * 3,02 5

$1,775,820,00 0 $628,866,62 2 $36,751,77 2 3.85 * 67,30 0

$62,359,000,00 0 $68309,097.98 8 $4,969,802,31 8

7.86 * 4,31 5

$2,633,133,84 8 $1,688.06136 3 $116,891,83 2 3.16 %

### ExhibitS-S Profiles o f Fue lManufacturers SBA Definition Summar yStatistics

Smal l Larg e TOTA L

Mlnlmam Lower QnarUla Numbe r 38 1 257 638 Percent

60% 40% 100 %

Median UpperQaartll e| Mai la ma t Average SmallFue

lMaaafactarere Bmployees Sale s Assets Ne tIncome RO A 0

$49,00 0 $13,16 4 $29 2 Z22 * 7

$2,300,00 0 $672,49 0 $21,23 1 3.17 * 1

8 $8,993,33 2 $2,710,22 6 $97,00 1 338 * 4 5

$27,23639 7 $8,478,54 4 $349,40 0 4.00 * 1.300

$3300,000,00 0 $13«317,6_ 7 $123,24330 4 &46f t 3 0

$64,794,32 8 $21,395,29 5 $1,141,177 3.62 * LargeFoo

lMaaafactarers Employees Sale s Assets Ne tIncome RO A 0

$200,00 0 $55,41 8 $1,397 232 * 8 0

$18,618,75 0 $5,700,19 1 $218,13 5 3.83 * 20 3

$49,000,00 0 $15,324,29 1 $641,03 0 4.18 * 1,000

$451,834,00 0 $148,384,46 8 $7,61439 0 5.13 * 6730 0

$62,339,000,00 0 $68309,097,98 8 $4,969,802,31 8 733 * 3.098

$1,710,114,27 0 $1,108378,74 9 $77,021,61 9 432 *

### Exhibit5- 6 Summar yo f ComplianceCost

s perManufacturer P.3 5

Typ eof Manufacture r Minimum Additive Manufacturers Small Large Total Fuel Manufacturers Small Large Total $40 0 $40 0 $40 0 $40 0 $40 0 $40 0 Media n

$50 0 $5,02 9 $91 5 $50 0 $10,98 8 $50 0 Maximum

$1,207,89 1 $3,717^9 6 $3,71729 6 $500,90 0 $1,672,70 0 $1,672,70 0 % withcosts

> $10,00 0 25 % 43 % 31 %
3 % 53 % 16 %P.3 6



### Exhibit5-7 Comparisono

f Smallan dLargeCompan

y ComplianceCostt

oSales Ratios *

Additiv eManof

a Small Large Snail/Larg e Fue lManufactu r Small Larg e Small/Larg e Minimu m

cturer s 0.00027 % 0.000001 % 26 1 ers 0.000268 % 0.000001 % 24 6 Lowe r

Quartil e
0.00152 % 0.00008 % 1 9

0.000740 % 0.000562 %

1 Medla a
0.01213 % 0.00039 % 3 1

0.001709 % 0.003216 %

1 Uppe r Quartil e
0.11905 % 0.00363 % 3 3

0.006177 % 0.006169 %

1 Maximu m
82.5454 % 0.28265 % 29 2

64.217948 % 0.320947 % 20 0 

# 1

Three-yea raverag

ecompliancecosttosales ; allfigures intabl ear erounded. **Th emaximu m3-yea raverag ecompliancecos ttosales fo rlarg ecompanies was 1 4times largertha nth e maximu m3-yea raverag ecompliancecos ttosales fo rsmallcompanies .P.3 7



### Exhibit5- 8 EstimatedImpacts o

nRO A

Typ eo f Manafactare r "Plaaada lDbtreu " (•4«.<ROA<2.5% ) Additive Manufacturers Smal l22 Larg e0 Fuel Manufacturers Smal l2 6 Larg e0 "Sever eFinancia l Dbtreaa " (•3.%*<ROA< -

4 « ) 1 1 0
4 0 "Cloiare " (ROA<-39« ) 12* * 0
3* * 0 N I B patha d ea r Inteo f coaeanla a •ra idafre e « rJarire u 45 0
25 * 0 •Eightfue lmanufacturer

s ha da nRO A of les s tha n2.5 % befor

ecompliancecosts wer

e incorporated, an

dar ethu s no tincludedinth

enumbe rof companies pushed

int ofinancialdistress. **Includes twocompanies producin gbot hfuels an dadditivesP.3 8



### Exhibit5- 9 Summar yProfileo

f Manufacturers PotentiallyPushedintoClosure Manufacturer' s Product Mix * Tota l 1 1 6 1 4 4 1 3 3 7 18 3 Atypica

lBaseline 1 0 1 0 42 1 0 40 40 1 0 21 21 25 3 15 1 2 AVERAGE 4. 3 22. 2 #o f Employees 6

1 4 4 4 3 2 4 4 0 4 2

3 Annua

l Sales $110,00 0 $166,09 6 $260,00 0 $240,00 0 $310,00 0 $340,00 0 $85,00 0 $430,00 0 $300,00 0 $340,00 0 $410,00 0 $280,00 0 $272,59 3 Compliance

Cost $272,40 0 $272,40 0 $500,90 0 $272,40 0 $386,70 1 $386,70 1 $114,40 0 $272,60 0 $228,60 0 $229,00 0 $230,10 0 $114,60 0 $273,40 0 ROA

4.21 % 4.29 % 2.58 % 4.35 % 4.40 % 4.41 % 4.17 % 4.46 % 4.39 % 4.41 % 4.45 % 4.38 %

4.21 % Adjusted

RO A
-310.00 % -194.75 % -227.84 % -128.03 % -137.13 % -123.34 % -171.42 % -64.97 % -82.37 % -71.24 % -57.33 % ^2.57 %

-134.25 % Th efirstcolumnindicates tota lnumbe rof products, th

esecondcohimni s numbe rof atypica l noducts , an

dth ethir dcolumni s numbe

rof baselineproducts.

# DRAF T Chapte r 6 Perspective : Summar y& Societa l Benefit s

Thi s analysi s ha s bee n base d o n 1,07 6 differen t companie s registering a tota l o f 4,19 8 product s i n th e gasolin e an d diese l fue l families . O f thes e producers , nearl y6 0 percen t ar e fue l manufacturer s and abou t 4 0 percen t ar e additiv e manufacturers . The majorit yo f thei r product s ar e i n th e gasolin e fue l famil y(7 8 percent) , whil e abou t 2 2 percen t ar e diese l products . Manufacturer s o f leade d gasolin e product s wer e exclude d fromthi s analysis . Th e estimate d cost s o f complianc e wit hstandar d requirement s fo r thes e producer s rang e from$40 0 t o $3. 7 million , wit habou t 7 8 percen t having cost s $10,00 0 o r less . Totaling th e cost s t o eac hmanufacture r yield s an estimate d annua l cos t t o industryo f $2 2 millio n fo r thre e years . Thus , th e regulation s ar e no t expecte d t o resul t i n a "significan t regulatoryaction" , a s define d unde r Executiv e Orde r 12866 . Th e componen t cost s presente d i nthi s analysi s wer e generall y base d o n th e result s o f a surveyo f th e applicabl e testing industry . Thes e cost s wer e the n accumulate d fo r variou s group s an d reallocate d t o individua l product s an d manufacturer s base d on reasonabl e assumption s an d judgement s regarding th e expecte d us e o f cost-sharing provision s an d th e expecte d availabilit yo f existing 10 6P.4 0

chemica l and biologica l tes t data . Th e majo r assumption s onwhic h thi s analysi s wa s base d whic hcoul d hav e an impac t o n th e projecte d complianc e cost s include : 1 ) expecte d participatio n i nth e grouping system , 2 ) th e numbe r o f groups , 3 ) th e numbe r o f product s expecte d t o b e enrolle d i n eac hgroup , 4 ) th e manne r i nwhic hcost s ar e assigned , an

d 5 ) th e expecte d availabilit yo f existing tes t data . Th e sensitivit yo f th e cost s t o thes e assumption s i s examine d below . First , i t i s possibl e tha t some manufacturer s maychoos e no t t o tak e advantag e o f grouping opportunities . I f on e ou t o f every 1 0 producer s (i.e. , 10 7 producers ) chos e t o conduc t test s independentl yrathe r tha nparticipating i ngrou p cost-sharing provisions , an

d i f eac hwa s registering a gasolin e baselin e produc t (whichi s estimate d t o hav e th e highes t grou p complianc e cost , $797,000) , the n th e tota l programcos t woul d increas e fro m$2 2 millio n t o $5 1 millio n annually . I t woul d tak e a t leas t on e ou t o f everythre e suc hproducer s t o conduc t test s independentl ybefor e th e annua l cost s woul d excee d $10 0 million . I f on e produce r o f eac hgrou

p chos e t o conduc t test s independently , th e industrycos t woul d b e abou t $4 4 millio n annually . I t woul d tak e 3 t o 4 producer s o f eac hgrou p conducting test s independentl yt o rais e industrycost s beyond $10 0 millio nannually . Hence , eve n i f some producer s choos e no t t o participat e i nth e grouping system , cost s ar e expecte d t o remai n belo w$10 0 millio n annually .

10 7P.4 1

Second , th e tota l cost s ar e sensitiv e t o th e numbe r o f group s establishe d fo r th e program . Fo r example , complianc e cost s woul d b e highe r i f ne wtype s o f atypica l o r non-baselin e product s entere d th e marke t o r i f product s i nfamilie s no t currentl ydesignate d fo r registratio n wer e introduced . Fo r example , a s discusse d i n Chapte r 3 , EP Aestimate s tha t standar d testing o f th e representativ e from al l o f th e baselin e grou p (s ) o f th e alternativ e fue l familie s woul d add a tota l o f abou t thre e millio n dollar s t o th e cost s o f th e program . Furthermore , th e curren t numbe r o f group s mayb e eithe r highe r o r lowe r tha n estimate d i n thi s analysis . Th e overal l effec t o f an increas e i n th e numbe r o f group s woul d b e quantitativel ysimila r t o th e effec t o f producer s choosing t o conduc t test s independently . Conversely , industrycost s woul d b e lowe r i f th e numbe r o f group s i s les s tha n assume d i n thi s analysis . Unlik e th e effec t o f th e numbe r o f groups , however , th e numbe r o f product s pe r s e doe s no t necessaril yimpac t tota l program costs . Manufacturer s o f ne wproduct s whic har e i n th e gasolin e o r diese l fue l familie s wil l ofte n b e abl e t o rel yo n previousl y submitte d dat a fo r registratio n o f thei r ne wproducts . I n such cases , industrycost s woul d no t ris e becaus e thes e manufacturer s woul d reimburs e manufacturer s whic hhav e alread yregistere d product s simila r i n natur e t o th e ne wproduct .

Next , th e numbe r o f product s pe r grou p an d th e metho d b

ywhic h cost s ar e divide d coul d mos t certainl yaffec t cost s t o a give n manufacturer , bu t woul d no t increas e tota l cost s t o th e industry . 10 8P.4 2

I n fact , industrycost s coul d actuall yb e les s becaus e ther e mayb e fewe r products , henc e fewe r groups , onc e inactive product s ar e no t re-registered . Finally , sinc e th e assumption s use d regarding availabilit yo f existing tes t dat a wer e conservativ e assumptions , th e estimate d cost s o f th e programcoul d actuall yb e less . Thi s analysi s include s onl ycost s associate d wit hTie r 1 an d Tie r 2 testing , average d ove r 3 years . However , i n th e ensuing year s o f th e program , some o f th e registere d product s ar e likel yt o b e subjec t t o Tie r 3 testing . Assuming te n product s o r group s ar e require d t o conduc t Tie r 3 testing (at anestimate d cos t o f $ 3 millio n each ) i n th e thre e yea r perio d following th e initia l complianc e period , th e tota l cos t woul d b e $3 0 million , o r $1 0 millio n pe r year . Th e requirement s o f thi s programar e designe d s o a s no t t o presen t an unnecessaryburde n o nth e regulate d industry . Th e three-tiere d structur e o f th e testing programprovide s a mean s b y whic hadditiona l testing i s require d onl yi f warrante d b yth e result s o f th e previou s tier , thu s keeping testing burde nt o a minimu mwhil e satisfying th e requirement s o f th e statute . I n addition , allowance s fo r adequat e existing healt heffect s dat a mitigat e testin g requirements , an d th e grouping system permit s cost s t o b e share d among producer s an d help s t o avoi d duplicatio n o f effort . Specia l provision s ar e als o provide d fo r smal l businesses , marketer s o f relabele d additives , and manufacturer s o f 10 9P.4 3

aeroso l additives . Whil e th e program

i s designe d t o minimiz e th e burde nonthos e require d t o comply , i t als o ha s a numbe r o f societa l benefits . First , i t wil l provid e an excellen t ai r toxic s inventoryon pollutant s relate d t o th e us e o f moto r fuel s an d fue l additives , an d wil l als o provid e an invaluabl e sourc e o f toxicologi c dat a on th e emission s o f thes e products . I t wil l als o assis t EP Ai n evaluating th e relativ e advers e ai r pollutio neffect s o f variou s kind s o f fuel s an

d additive s and i n determining need s fo r relate d regulatoryaction s i n th e future . Fo r instance , informatio ni s t o b e submitte d t o EP Aregarding th e carcinogenicit yo f a fue l o r additiv e product . On th e basi s o f thi s o r othe r availabl e information , th e Administrato r may , b yregulation , contro l o r prohibi t th e manufactur e o r sal e o f toxi c fuel s o r fue l additive s fo r us e i n moto r vehicles . Alternatively , manufacturer s may voluntaril yreformulat e o r withdrawproduct s whic har e show nt o hav e unacceptabl e healt hrisks . Incidence s o f cance r o r othe r advers e healt heffect s mayb e mitigate d b ythes e events . I n 1995 , th e numbe r o f cance r incidence s cause d b ymoto r vehicl e pollutant s i s projecte d t o b e abou t 350. 2 8 Currently , eac hcance r incidenc e i s estimate d t o hav e an advers e impac t t o societ yranging from $1. 6

""Moto r Vehicle-Relate d Ai r Toxic s Study, " U.S . Environmenta l Protectio n Agency , Offic e o f Mobile 1 Sources , EPA 420-R-93-005 , April , 199 3 availabl e i n Ai r docke t A-91-19 . 11 0millio n t o $8. 0 millio n wit ha mea n valu e o f $4. 8 million. 2 9 Thus ,

th e societa l benefit s woul d outweighth e cost s associate d wit hth e programi f jus t 9 t o 4 2 cance r incidence s wer e avoide d (o r abou t 1 4 cance r incidence s whe n using th e mea nvalu e o f a statistica l lif e equa l t o $4. 8 million) , o r approximatel y2 t o 1 2 percen t o f vehicle-relate d cance r incidence s projecte d t o occu r i n1995 . Th e avoidanc e o f othe r healt heffect s evaluate d unde r thi s programwil l provid e additiona l socia l an d financia l benefits . Thes e benefit s ar e difficul t t o quantif ywit han yaccuracy . Nevertheless , i t i s reasonabl e t o believ e that , a s a resul t o f action s take nb yEPAan

d industrybase d o n informatio n generate d b ythi s program , th e saving s associate d wit hth e avoidanc e o f cance r an d othe r advers e healt heffect s wil l mor e tha n offse t th e associate d program costs .

""Revie wo f Existing Valu e o f Lif e Estimates : Valuatio n Document, " Memorandu mfromBo bUnsworth , Ji mNeumann , an d W . Eri c Browne , Industria l Economic s Incorporated , th e Ji mDeMocker , Offic e o f Polic yAnalysi s an d Review , U.S . Environmenta l Protectio n Agency , Novembe r 6 , 1992 . Il lP.4 5



# DRAFT Appendi xAP.4 6 

## i

Tie r 2 Biologica l Tes t Cos t Dat a Th e Tie r 2 biologica l tes t cos t estimate s ar e base do na modifie d90-day

subchroni c toxicit y stud y whic hrequire s a 5-da y pe r wee krepea t inhalatio nexposur e usin gapproximatel y 34 0 rats . Figur e A- l i nthi s appendi xprovide s anoverview o f thi s tes t an

d a genera l outlin e o f th e exposur e timin gandth e sequenc e o f events . Specifi c test s for carcinogenicity , mutagenicity , neurotoxicity , andteratogenicity/reproductiv e effect s mak e us e o f th e same ra t population . Therefore , cos t estimate s for mos t o f th e healt heffect s test s liste di nthi s appendi xar e incrementa l t o th e cos t o f th e subchroni c inhalatio ntoxicit y assay describe dabove . Tabl e A- l provide s estimate s o f th e cost s associate dwit hth e modifie dsubchroni c inhalatio ntoxicit y assay . Tabl e A- 2 estimate s th e cost s associate dwit ha Fertility/Teratology stud y whic hrun s concurrentl y

wit hth e abov e inhalatio nassay . Tabl e A- 3 estimate s th e cost s associate dwit ha modifie dSalmonell a mutagenicit y assay whic hi s independen t o f th e othe r assay s i nthi s scenario . Th e informatio npresente di nthes e table s wa s derive dfro m cos t estimate s develope dfo r th e Toxi c Substance s Contro l Ac t (TSCA ) healt heffec t guideline s foundi n4 0 CFR , par t 798 , andwer e provide db

y th e EP A

Offic e o f PollutionPreventio nandToxi c Substance s (OPPTS) 1 . Th e table s show

th e numbe r o f hour s andcos t o f direc t labo r wit h facilit y

overhea dadded , direc t cos t o f supplies , genera l and administrativ e fe e calculatio nfo r th e tester , anda fee-for-profi t calculation . Thes e ar e al l component s o f th e estimate dfina l cos t calculatio nfo r th e particula r healt heffec t test . Th e cos t estimate s includ e tota l estimate dhour s pe r worker , hour s pe r task , rat e o f pa y

pe r worke r (adjuste dup10 % fro m 199 0 estimate s fo r inflation) , andcompute dcoa t pe r worker . Direc t cost s o f testing , overtime , supplies , contracte dlabor , etc. , ar e describe di nterm s o f unit s neede dt o complet e th e testing , cos t pe r unit , and compute dcos t pe r item . Analytica l chemistr y i s a bes t estimat e o f "typical " sampl e verificatio nandanalysi s costs . Neurotoxicit y

testin gi s comprise do f th e Glia l Fibrillar y Acidi c Protein(GFAP ) assay anda histopathologi c examinatio no f nerv e fiber s i nth e tes t animal . Th e cos t estimat e fo r th e neurohistopatholog y portio no f Neurotoxicit y testin gi s $42,00 0 an d i s derive dfrom."Neurotoxicity : Identifyin gandControllin gPoison s o f th e Nervou s System . New Development s i nNeuroscience. " Congres s o f th e Unite dStates , Offic e o f Technology Assessment , 1990 , pag e 22 5 (attached) . Teratologi c effect s ar e teste dunde r th e Fertilit y Assay/Teratolog y

guideline . Carcinogenicit y andmutagenicit y ar e covere db

y th e Salmonell a mutagenicit y assay (Tabl e A-3) , th e

HJ.S . EPA , OPPTS , "Cos t estimate s fo r TSCA Tes t Guidelines" , Memorandu

m fro m DanAxelra dt o Sher i Dunatchik , June , 1991 .P.4 7 . 

# 1

Siste r Chromati dExchange (SCE ) assay , an dth e Micronucleu s (MN ) assay . Cos t estimate s fo r the GFAP , MN , an dSCE assays are summarize

dbelow :

no . o f tes t sample s person-hours/sampl e hourl y rat e ($US ) estimate dfina l coa t ($US ) GFAP 4 0 2. 5 3 6 360 0 M

N 4 0 2. 0 3 6 290 0 SC E 4 0

5. 0 3 6 720 0



# J

### Figur e A-1
. Suggeste d Timin g an d Organizatio n o fTie r2 Studie s

Acclimatizatio n An d Cullin g Exposure

2 5 ? + 2 5 d"

_ : $- 2_ L 

# f J L Exposur e fo rSubchroni c Study (Genera l Toxicit

yan d Othe rEndpoints)



### J L 1 0 1 1 1_

_ 

# r 1 3 1 4 2 5 9 Exposur e fo rFertility/TeratologyStudies (Exposur e end s at Gestatio n Da y15 ) Estrou s Cycl e Analyses Matin g Termination , (w / above d" ) (Gestatio n Da y20 ) 

### Analysi s 5d%5 ¥ Perfuse d for neuro , testis , lun g histology 20d"+2 0¥ Fixe d fo r genera l histology 5d"+5 ?

Tissues fo r GFAP , MN , SC E

Fetal/Uterin e Analysi s 20-2 5 pregnancies NOTE : Thi s diagra m illustrates testin g aton e dosag e level , usin g 7 5 animals . Complete Tie r2 requires testin g atfou r dosag e level s (high , medium , low , an d control) , requirin g a minimu m o f30 0 animal s (4 x75) , piu s a n additiona l grou p o f2 0 animal s exposed atth e hig h dose an d hel d 2 8 days fo rstudyo frecover ypotential . Timin g o

fSalmonell a mutagenicit

yassa yi s independen to

fthi s testin g scenario .P.4 9 

# 1 Tabl e A- 1 : Componen tCosts o f90-da ySubchroni cInhalatio n Assa y Protoco l estimte : Rat , subchroni cinhalatio n assay : 1 3 weeks-5days/w k Directlabo r Stud yDir./Ph D Tox
. Q.A
. Inspecto r Boar d Cert
. Pathologis t Slide Evaluation Supervise

Necropsy La b anima l Vet
. Clinica l Chemis t Clinica l La b Tech
. Histologis t Histolog yTech
. Snr
. Anima l Tech
. Set-up Compd. prep. Data Record Keep. Necropsy Exposure Anima l Tech
. Setup Body WtsJObserv. Necropsy Exposure Bleeding Anima l Caretake r(2 ) Room setup Bedding Change Room Maintenance Cage cleaning Feeding Washing Feeders, Clean chamber Hematologis t Biostatisticia n ReportWriter/Dat a Wor d Proces s ./Typis t Compute rCode r Subtota l Overhea d Hrs
. X225 % Tota l DirectLabo r Total
. Hrs
. 6 0 15 0 6 1 2 5 5 0 3 0 15 4 8 0 24 1

63 5

38 9

6 0 8 4 1 1 3 1 6 240 2 Hrs./Tas k

i 6 0 15 0 5 4 7 2 5 5 0 3 0 15 4 8 0 2 0 1 5 2 3 7 17 6 2 0 4 0 1 5 55 0 1 0 1 5 2 4 2 0 3 0 2 5 2 5 250 6 0 8 4 1 1 3 1 6 240 2 Wage/Hr
.

37.9 8 15.3 3 43.6 3 25.9 2 11.7 9 10.9 3 11.4 4 9.7 1 10.8 6

8.8 1

7.5 5

12.4 2 25.3 9 13. 6 10.0 8 11.6 4 Cos t($ )

2278. 8 2299. 5 2661.4 3 64 8 589. 5 327. 9 1761.7 6 776. 8 2617.2 6

5594.3 5

5873. 9

745. 2 203.1 2 557. 6 131.0 4 186.2 4 27252. 4 61317. 9 88570. 3Tabl e A-1 : Componen tCosts o f90daySubchroni c Inhalatio n Assay , cont . Protoco l Estimate : Rat , Subchroni c inhalatio n assay : 1 3 weeks-5days/wee k P.5 0 

# 1

Othe rDirec

tCosts Overtime : Animal Technicians Rat s Fee d Beddin g Disposable s Histologysupplie s Clinica l path , supplie s Vet
. ophthalmologist #o f

La b Supplie s (10 % o

fSubtot
. Di rLabor

) TOTA LOthe rD.C. s TOTA LCOST Gen' l + Admin.(22% ) SUBTOTA L FE E (20%) Estimate d tes tcost Analytica l chemistr

y EST D FINA LCOST Units 150 34 0 106 205 0 30 5 1 1 2 Uni tCost

4.4 1 9.35 22. 5 0.2 5 5. 5 1440 108 0 1000

2481 6 Cos

t($) 661. 5 317 9 238 5 512. 5 1677. 5 1440 108 0 200 0 2725.2 4 15660.74 10423 1 22930.8 3 127161. 9 25432.3 7 152594. 2
177410. 2P.5 1

Tabl e A-2 : Componen tCosts o fFertilityAssessment/Teratolog ywithi n Subchroni c Inhalatio n Assa

y Protoco l Estimate : Rat , Fertilit yAssessment/Teratology : 1 3 weeks , 5 days/wee k Direc tlabo r StudyDir./Ph D Tox
. Q.A
. Inspecto r Cert' d Pathologist Supervise

Necropsy Lab anima l Vet
. Snr
. Anima l Tech
. Set-up Matings/Observation Data Record Keep. Necropsy Estrus/Cell

Eval. C-Sections Fetal Evaluation Anima l Tech
. Setup Matings/Observation Necropsy Breeding Estrus/Cell

Eval. C-Sections Fetal Evaluation Biostatisticia n Repor tWriter/Dat a Wor d Process/Typis t Compute rCode r Tota l Hr s 5 . 8 3 1 4 4 22 6

34 0

3 1 8 7 8 Hrs/Tas k 8

3 1 4 4 1 0 6 2 8 7 5 2 2 0 6 7 1 5 9 0 2 0 2 8 8 0 4 0 6 7 3 1 8 7 8 Wage/Hr
. 37.9 8 15.33 43.6 3 25.9 2 10.8 6

8.8 1

25.3 9 13. 6 10.0 8 11.64 Cos

t($) 303.8 4 475.2 3 174.52 103.68 2454.3 6



### 2995. 4

76.1 7 244. 8 70.5 6 93.1 2 Subtota l Overhead Hrs
. X225 % 1038 1038 6991.6 8 15731.2 8 Tota l Direc

tLabo r 22722.9 6Tabl e A-2 : Componen tCosts ofFertilityAssessment/Teratolog ywithi n Subchroni c Inhalatio n Assay , cont . Protoco l Estimate : Rat , Fertilit yAssessmen t Othe rDirec

tCosts # o fUnits Fixitive s 1 Stain s 1. 5 Disposable s 6 3 La b Supplie s (10 % o

fSubtot
. Dir
. Labor

) TOTA LOthe rD.C. s TOTA LCOST Gen' l + Admin.(22% ) SUBTOTA L FE E (20%) Estimate d testcost Analytica l chemistr

y Estimate d Fina l Cost Teratology : 1 3 week-5days/wee k Uni tCost 66 0 11 0 5. 5

1700 Cost($) 66 0 165 346. 5 699.1 7 1870.6 7 24593.6 3 5410. 6 30004.2 3 6000.8 5 36005.0 8

37705.0 8 

# 1Tabl e A-3 : ComponentCost s o fSalmonell a Mutagenicit yAssa y("Ame s Assay" ) Protoco l Estimate : Salmonell a typhimuriu m Reverse Mutatio n Assa y (Direc tPlat e Incorporatio n Method) 

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Direc tLabo r Stud yDirector/PhD . Q.A . Inspecto r Geneticis t Plate Counting La b Technicia n Setup Agar Ovrly/Plating Repor tProc/Typin g Compute rCodin g SUBTOTA L Overhead (225 % dir. labor

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e Analytica l Chem . Estimated Fina l Cos

t Tota l Hrs . #o

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1.2

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3

7 1 3 3 1

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2 5

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45.9 9 171.2 7 10.9 3 10.0 8 11.6 4 218. 6

30.2 4 11.6 4 623.1 4 1402.0 7 2025.2 1

3 0 36 0 1 2 62.3 1 464.3 1 2489.5 2 547.6 9 3037.2 1 607.4 4 3644.6 5 1020 4664.6 5P.5 4 _T_pWr »EtmmkComtdvudon I* RagtUrtntNaniUxk Substances • 225 ^^-Pwtoool e fcrwMehCe_ i Es4hnetae>¥Mra! Pgndlara . C«r*- M MotorNturo -Optra * AaMl yp-ftctepyBaHftfh r XXX _*« •xx x X X X XX X XX aw-- - xx x _UKErC«airf'&KM0lDgyA-nM-t.1M a



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