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# 1846 Prepped byOllie Stewart



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## A-90-0 7

Draf t RegulatorySuppor t Documen t Fuel s an

d Fue l Additive s Registratio nRegulation s



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### i i
1 !•!*.' / -a»n J Septembe r 199 1

U.S . Environmenta l Protectio nAgenc y Offic e o f Ai r an

d Radiatio n Offic e o f Mobil e Source sP. 3

Tabl e o f Content s Pag e Chapte r 1 : Introductio n I . Backgroun d 1 II . Descriptio no f th e Progra m2 A . Scop e o f Healt hEffect s Evaluatio n3 B . Scop e o f Welfar e Provision s 6 C Scop e o f Emission s Contro l Syste mTestin g 7 III . Provision s t o Preven t Undu e Burden s 9 A . Cost/Burde nSharin g Provision s 9 B . Smal l Busines s Provision s 1 0 C . Duplicativ e Testin g Provision s 1 1 IV . Structur e o f th e Documen t 1 1 Chapte r 2 : Industr yOvervie w I . Introductio n1 4 II . Overvie wo f th e Moto r Fue l Industr y1 6 III . Overvie wo f th e Fue l Additiv e Industr y1 8 IV . Analysi s o f Currentl yRegistere d F/F AProducer s 2 2 A . Informatio n Sough t 2 4 B . Dat a Source s 25 C . Methodolog y2 6 D . Limitation s o f th e Dat a 2 9 E . Summar yo f Result s 3 0 Chapte r 3 : Progra mRequirement s an d Associate d Cost s I . Propose d Requirement s 3 4 II . Tie r 1 Requirement s an d Cost s 3 7 A . Dat a Searc han d Summar y3 7 B . Modelin g Approache s 3 9 C Characterizatio no f Emission s 3 9 D . Tota l Tie r 1 Cost s 5 1 III . Tie r 2 Requirement s an d Cost s 5 3 A . Individua l Tes t Cost s 54 B . Combine d Tes t Cost s 5 9 C . Tota l Tie r 2 Cost s 6 0 IV . Administrative/Reportin g Requirement s an d Cost s 6 1 V . Tie r 3 Requirement s 6 2 VI . Summar y6 4 Chapte r 4 : Estimate d Economi c Impact s I . Introductio n6 6 II . Analytica l Assumption s an d Approac h6 7 III . Methodolog yan d Result s 7 1 A . Produce r Impact s 7 2 B . Industr yImpact s 7 5 IV . Limitation s o f th e Analysi s 7 6 V . Conclusion s 7 8 Chapte r 5 : Summar yan d Discussio n8 0 Appendi xA : Financia l an d Employe e Siz e Informatio n

fo r Categorie s o f Manufacturer sP. 4

Exhibi t 1 Exhibi t 2 Tabl e 2- 1 Tabl e 2- 2 Tabl e 3- 1 Tabl e 3- 2 Tabl e 3- 3 Tabl e 3- 4 Tabl e 3- 5 Tabl e 3- 6 Tabl e 4- 1
Tabl e 4- 2 Tabl e 4- 3 Figur e 4- 1 Figur e 4- 2 Figur e 4- 3 Figur e 4- 4 Lis t o f Exhibits , Figures , an d Table s Pag e

Gros s Gasolin e Gallon s Sol d an d Compan yMarke t Share s - 198 9 18 a Tota l Revenue s Fro mFue l Additive s - 198 7 an d 198 9 19 a Summar yo f Collecte d Informatio n 33 a Summar yo f Financia l Informatio n 33 b Fuel/Additiv e Categorie s 65 a Summar yo f Vehicl e Requiremen t Cost s 65 b Emissio nSpeciatio n Cost s 65 c Tie r 1 Cost s 65 d Tie r 2 Cost s 65 e Estimate d Progra mCost s 65 f Assume d Testin g Requirement s fo r Product s an d Group s i neac hFuel/Additiv e Category. . 79 a Estimate d Complianc e Cost s Pe r Grou p i n Eac hFuel/Additiv e Categor y79 b Summar yo f Complianc e Cost s 79 c Distributio no f Complianc e Cost s fo r Fue l Manufacturer s 79 d Distributio no f Complianc e Cost s fo r Additiv e Manufacturer s 79 e Distributio no f Complianc e Cost s fo r Fue l an d Additiv e Manufacturer s Combine d 79 f Distributio no f Produc t Typ e b yRang e o f Complianc e Cost s 79 gP. 5

Chapte r 1

Introductio n

I . Backgroun

d

Sectio n211(a ) o f th e 197 0 Clea nAi r Ac t (CAA ) direct s th e Administrato r o f th e Environmenta l Protectio nAgenc y(EPA ) 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 . Th e basi c registratio ninformatio n require d b

yeac hfue l an

d fue l additiv e manufacture r i s specifie d unde r Sectio n211(b)(1) , an d include s suc hitem s a s commercia l identifying information , rang e o f concentration , purpos e in-use , an d chemica l composition . Unde r Sectio n211(b)(2) , EP Ai s als o give nauthorit yt o requir e manufacturer s t o conduc t test s t o determin e th e potentia l healt heffect s o f thei r fuel s and fue l additive s an

d t o requir e othe r informatio nt o identif yth e emission s produce d b ysuc hfuel s and fue l additives , thei r effeet(s ) o nth e publi c healt han d welfare , an

d thei r impac t o n vehicula r emissio n contro l performance . Althoughth e genera l registratio nregulation s o f section s 211(a ) an

d (b)(1 ) wer e implemente d i n1975 , EP Adi d no t exercis e it' s discretionaryauthorit yt o requir e health , welfare , an d emissio ncontro l system effect s testing unde r sectio n211(b)(2) ,P. 6

no r establis hprocedure s an d protocol s fo r thes e tests . However , i nth e CA

AAmendment s o f 197 7 (P L 95-95 , Augus t 7 , 1977) , Congres s adde d Sectio n21 1 (e ) t o th e statut e whic hmad e implementatio no f Sectio n211(b)(2 ) mandatoryan d provide d additiona l directio n concerning th e implementatio no f th e statute' s testin g requirements .
Sectio n211(e)(1 ) require d implementatio no f th e Sectio n 211(b ) (2 ) authorit ywithi non e yea r o f enactmen t o f th e amendments . Sectio n211(e ) (2 ) establishe d time limit s fo r complianc e b yfue l an d fue l additiv e producers . Fo r thos e fuel s an d additive s no t ye t registere d whe nth e Sectio n211(b)(2 ) regulation s ar e promulgated , th e "requisit e information " mus t b e submitte d prio r t o registration . Fo r fuel s and additive s alread yregistered , th e informatio nmus t b e provide d "no late r tha nthre e years " afte r th e ne wregulation s ar e issued . Sectio n21 1 (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 , and t o mak e othe r specifi c exemption s whe nadditiona l testin g woul d b e duplicativ e o f adequat e existing testing . Thi s analysi s support s EPA' s proposa l t o implemen t th e registratio nprogramrequirement s i nSectio n211(b)(2 ) an d (e ) o f th e Act .

II . Descriptiono f the Progra mP. 7

Unde r th e curren t fue l and fue l additiv e registratio n regulations , moto r vehicl e gasolines , diese l fuels , and thei r additive s ar e th e onl yfuel s an d additive s designate d fo r purpose s o f registration . Give nth e potentia l fo r a majo r expansio no f alternativ e fuel s int o th e marketplac e i nth e future , EP Ai s no w developing a proposa l whic hwil l expand th e designatio no f moto r vehicl e fuel s and thei r additive s require d t o register . Th e fuel/additiv e designation s ar e expecte d t o include : methanol , ethanol , an

d othe r moto r vehicl e alcoho l fuel s (i.e. , thos e containing a t leas t 5 0 percen t alcoho l b yvolume) , liquifie d petroleu

mgas , compresse d natura l gas , and , possibly , moto r vehicl e engin e oils . Thes e change s wil l expand th e type s o f fuel s an d additive s subjec t t o th e genera l registratio nrequirement s a s wel l a s th e testin g provision s propose d i n thi s Notic e o f Propose d Rulemakin g (NPRM) .

A . Scope o f HealthEffect s Evaluation Th e potentia l scop e o f th e healt heffect s testin g programi s vast , and EP Aha s take nstep 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 presen t a nunnecessary burde no nth e regulate d industry , whil e stil l requiring th e leve l o f informatio nneede d t o achiev e th e overal l goal s o f th e program . Th e 211(b ) programi s designe d t o functio na s a screening mechanism , rathe r tha na s a mandat e fo r comprehensiv e healt h effect s assessment s a s routin e requirement s fo r registration . A systemo f evaluatio ntier s ha s bee ndeveloped , enabling EP At oP. 8

determin e whethe r mor e definitiv e testin g 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 fro mth e literature , modeling techniques , and a batteryo f screening tests .
Th e purpos e o f th e tier s i s t o provid e a mean s b ywhic h additiona l testin g wil l onl yb e require d base d o nresult s o f th e requirement s o f th e previou s tiers . Tie r 1 include s characterizatio no f emissions , a comprehensiv e searc hand summary o f availabl e informatio nsource s concerning th e emissions-base d effect s o f fuel s and fue l additive s o nth e publi c healt han d welfare , and applicatio no f dat a modelin g techniques . Tie r 2 o f th e healt heffect s evaluatio nconsist s o f short-term screening test s whic haddres s th e healt hendpoint s describe d below . Th e numbe r o f test s require d wil l depend o nth e exten t t o whic hth e dat a searc hactivitie s i nTie r 1 provid e documentatio no f adequat e existing testin g comparabl e t o th e screening test s include d i n Tie r 2 . Fuel s an

d additive s wil l b e subjec t t o Tie r 3 requirement s a s determine d o na case-by-cas e basi s b yEPA , t o addres s particula r area s o f concer nwhic haris e i nth e earlie r tiers . Th e endpoint s t o b e addresse d an d th e studie s conducte d i nTie r 3 wil l b e determine d fo r eac hcase . However , Tie r 3 requirement s wil l mos t ofte ninclud e anima l inhalatio nexposure s o f chroni c (2- 3 year ) duration , t o verif yand/o r quantif yth e result s o f th e screening evaluations . Th e evaluatio n"Tiers " ar e furthe r explaine d i n chapte r 3 o f thi s report .P. 9

Sectio n211(b ) provide s littl e guidanc e i nregar d t o th e scop e o f th e healt heffect s evaluatio nprogra mothe r tha nstipulatin g whic hendpoint s must , a t a minimum , b e include d i nth e regulations . Accordin g t o Sectio n211(b ) (2 ) (A ) , th e endpoint s t o b e addresse d b y th e progra mmus t include , bu t ar e no t necessaril ylimite d to , carcinogenicity , mutagenicity , an d teratogenicity . EP Aha s chose n t o expan d th e latte r categor yt o encompas s genera l reproductiv e toxicity . EP Aals o propose s t o ad d pulmonar ytoxicit yan d neurotoxicit yt o th e lis t o f endpoints .
Consisten t wit hth e overal l concern s o f th e CAAo nadvers e ai r pollutio neffects , th e propose d healt htestin g requirement s ar e concerne d onl ywit hth e effect s o f inhalatio nexposur e t o th e evaporatio nan d combustio n product s o f fuel s an d additives . The y d 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 tim e d o the yinclud e th e effect s o f exposur e t o th e atmospheri c transformatio nproduct s o f fue l an d additiv e emissions . EPA' s proposa l t o restric t th e focu s o f th e rulemakin g 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 nth e potentia l scop e o f th e healt h effect s evaluatio nprogram . Furthe r significan t reduction s i n progra m

cost s an d overal l impac t o nth e fue l an d additiv e industr y ar e als o expecte d a s a resul t o f propose d groupin g mechanism s an d provision s fo r exemptin g relabele d product s fro mprogra mP.1 0

requirements .

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 nfo 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 naquati c ecosystem s and anima l health , bu t als o effect s whic hmaydetrac t fromhuma nwell-being .

EP Apropose s t o mee t th e welfar e effect s requirement s o f th e statut e i nassociatio nwit hth e requirement s i nth e firs t evaluatio ntier . I nTie r 1 , responsibl e producer s ar e require d t o conduc t chemica l speciatio nprocedure s t o identif yth e emissio n product s generate d b yfuel s an

d additives . Thes e procedure s wil l yiel d aninventoryo f potentiall yhazardou s ai r pollutant s whic h mayhav e significan t impact s o nth e genera l environmen t and publi c welfar e a s wel l a s o nth e publi c health . Tie r 1 als o include s a literatur e searc hfo r health-relate d informatio nwhic hwil l b e expande d t o includ e requirement s fo r collectio no f publishe d o r in

hous e dat a regarding th e welfar e effect s o f th e emissio nproducts . Furthermore , th e dat a modeling approache s i nTie r 1 , whic hwil l provid e estimate s o f th e ambien t concentration s an d genera lP.1 1

atmospheri c fate s and reactivit yo f fue l an d fue l additiv e emissions , bea r a direc t relationshi p bot ht o healt hand welfar e effect s assessment . Thus , excep t perhap s fo r a mino r increas e i n th e scop e o f th e literatur e searc han d modelin g activitie s o f Tie r 1 , n o incrementa l cost s ar e expecte d wit hrespec t t o welfar e effect s assessments .

C . Scope o f Emission s Contro l Syste m Testin g Existing regulation s unde r Sectio n211(f ) cal l fo r emissio n contro l testin g o f fuel s an d additive s onl ywhe nthei 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 ncontro l devices . Unde r th e existing fuel/additiv e registratio nprogram , fue l an d additiv e formulation s whic har e no t "substantiall ysimilar " ("su bsim" ) t o designate d certificatio nfuel 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 additiv e 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 systemt o achiev e complianc e wit hemissio nstandard 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 an d additives , and plan s t o extend th e applicabilit yo f thi s programt o othe r fue l an d additiv eP.1 2

categorie s wil l serv e t o fulfil l th e aim s o f th e emissio ncontro l testin g provision s o f Sectio n211(b) . Therefore , EP Apropose s t o integrat e th e emissio ncontro l systemtestin g provision s o f 211(b ) wit hexisting an

d planne d program s promulgate d unde r Sectio n 211(f) . I nothe 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 nproces s prio r t o registration , a s unde r th e existing registratio nprogram .
Th e onl yne wexpressio no f EPA' s authorit yunde r Sectio n 211(b ) i nregar d t o emissio ncontro l testing requirement s pertain s t o fuel s and additive s whic hwer e registere d i nth e pas t eve n thoughthe ywer e no t "su bsim " and di d no t underg o waive r applicatio nprocedures . Suc hregistration s hav e occurre d becaus e certai ncategorie s o f fuel s an d additive s di d no t come unde r th e authorit yo f Sectio n211(f ) unti l th e enactmen t o f th e 199 0 CA A Amendments . A s a result , some "non-sub-sim " product s introduce d prio r t o tha t dat e wer e allowe d t o b e registere d withou t firs t undergoin g th e emissio n contro l systemtestin g whic hth e waive r applicatio n proces s normall yentails . Rathe r tha nrequiring al l suc h"grandfathered " product s t o g o throughth e waive r process , EP A propose s t o requir e emissio ncontro l systemtestin g fo r "grandfathered " product s onl yo na case-by-cas e basi s whe nevidenc e become s availabl e tha t suc hproduct s mayhav e advers e effect s o n emissio ncontro l performance . Thus , thi s rulemaking provide s a mechanis mb

ywhic hEP Acanchoos e t o requir e specifi c 8P.1 3

"grandfathered " product s t o underg o Sectio n211(f ) waive r applicatio nprocedure s i f s o petitione d b youtsid e parties , o r i f othe r informatio navailabl 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 ncontro l systemtesting .

III . Provision s t o Prevent Undue Burden s
Sectio n21 1 (e ) (3 ) contain s severa l provision s designe d t o eliminat e undu e cos t burden s an d t o improv e th e economi c efficienc y o f th e requirements . Thes e provision s include : A. ) Cost/Burde n Sharing , B. ) Smal l Business , an d C ) Duplicativ e Testing . Eac ho f thes e ar e discusse d below .

A . Cost/BurdenSharin gProvision s Sectio n211(e ) (3 ) allow s th e Agenc yt o provid e fo r cos t and/o r burde nsharing 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 nth 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 testin g requirement s prio r t o registration . Fo r purpose s o f enacting thes eP.1 4

provisions , EP Aha s develope d a voluntarygrouping scheme , b ywhic h fuel s an

d additive s mayb e groupe d fo r testin g purposes . Representative s fromeac hgrou p wil l b e selecte d fo r testing , wit h th e result s and associate d cost s share d b yth e participatin g manufacturers . Th e propose d grouping scheme i s furthe r explaine d i nChapte r 4 o f thi s report .

B . Smal l Busines s Provision s Th e CA Agive s th e Administrato r authorit yt o provid e program exemptions , deferrals , o r modification s fo r smal l businesses . However , give nth e designo f th e propose d programand analysi s o f potentia l smal l busines s impacts , EP Adoe s no t pla nt o exercis e thi s authorit ywithi nth e fue l an d fue l additive s registratio n program . Anumbe r o f genera l provision s withi nth e propose d programstructur e shoul d assur e tha t undu e burden s ar e no t place d upo nsmal l businesses . Fo r instance , EP Ai s providin g opportunitie s fo r grou p participatio nan d cos t sharing . I n addition , th e requirement s fo r healt heffect s testin g ar e relativel ymodes t throughTie r 2 . Mor e rigorou s testin g i s t o b e required , unde r th e provision s o f Tie r 3 , onl ywhe nsignifican t hazar d potentia l ha s bee n identified . Furthermore , requirement s i n regar d t o welfar e effect s ar e minimal , an d emissio ncontro l system test s ar e no t routinel yrequired . Potentia l impact s o f th e propose d registratio nregulation s o nsmal l businesse s ar e addresse d

1 0P.1 5

i na separat e document. 1

C . Duplicativ e Testin gProvision s Unde r CAAsectio n21 1 (e ) (3 ) (c ) , th e Administrato r "may " exemp t anyfue l o r additiv e fro mth e regulation s "upo na findin g tha t any additiona l testin g o f suc hfue l o r fue l additiv e woul d b e duplicativ e o f adequat e existin g testing. " EP Awil l exercis e it s authorit yunde r thi s provisio n b yexemptin g fuel s an d additive s registere d a s relabele d product s fro mth e additiona l registratio n requirement s propose d i nthi s rulemaking . Arelabele d produc t i s a repackage d versio no f a produc t whic hi s als o registere d b yth e origina l manufacturer . Testin g o f relabele d product s woul d clearl y duplicat e th e effort s o f th e origina l manufacturer . T o furthe r avoi d duplicativ e efforts , fo r al l fuel s an d additives , testin g unde r Tie r 1 o r 2 wil l no t b e require d i f a produce r submit s th e result s o f previousl ycomplete d test s whic hsatisfactoril ymee t th e requirement s o f thi s program . Judgement s regardin g th e existenc e o f adequat e existin g testin g use d i n thi s analysi s ar e presente d i n Chapte r 4 .

IV . Structur e o f th e Documen t

Th e primar yfocu s o f thi s analysi s i s t o determin e th e impac t

ln Regulator yFlexibilit yAnalysi s o f th e Propose d Fuel s an d Fue l Additive s Registratio nProgram, " Septembe r 26 , 1991 , prepare d b yIC F Incorporate d unde r EP AContrac t No . 68-C8-0024 . 1 1P.1 6

o f thi s proposa l o nth e fuel s an d fue l additive s industry . Chapte r 2 present s an overvie wo f th e regulate d industry , including a discussio no f th e fue l an d additiv e industrya s a whole , a s wel l a s ananalysi s o f manufacturer s currentl yregistering fue l and additiv e product s wit hEPA . Informatio ncollecte d o ncurrentl y registere d manufacturers , dat a source s an d methodologyused , an d summaryo f th e finding s wil l b e presented . Chapte r 3 discusse s propose d fue l an d fue l additiv e testin g requirement s and relate d costs . Estimate d cost s ar e provide d fo r eac hactivit yrequire d unde r eac h"Tier " o f evaluatio nan d testing . Th e estimate d cost s fo r emissio ngeneration , emissio nspeciation , biologica l testing , an d complianc e wit hreporting requirement s ar e presented . Chapte r 4 present s th e projecte d financia l impact s o f th e propose d programo nth e fuel/fue l additiv e industry . Economi c impact s ar e discusse d fo r fue l manufacturers , fue l additiv e manufacturers , an

d th e industrya s a whole . Th e analytica l judgement s and assumption s o nwhic hth e analysi s i s base d and th e methodologyfo r determining th e cos t impact s o f complianc e ar e als o presented . Chapte r 5 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 nth e analysi s i s include d a s wel l a s a brie f discussio no f th e 1 2P.1 7

costs/benefit s o f th e proposal .

1 3P.1 8

Chapte r 2

Industr yOverview 2

I . Introductio n

Thi s chapte r provide s a genera l overvie wo f th e structur e an d financia l characteristic s o f th e moto r vehicl e fue l an d fue l additiv e industr yan d present s specifi c financia l informatio n o n currentl yregistere d fue l an d fue l additiv e (f/fa ) producers . Fo r purpose s o f registratio nwit hEPA , a fue l manufacture r i s define d a s anyperso nwho , fo r sal e o r introductio nint o commerce , produce s o r manufacture s a fue l o r cause s o r direct s th e alteratio no f th e chemica l compositio n of , o r th e mixtur e o f chemica l compound s in , a bul k fue l b yaddin g t o i t a n additive. 3 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 nfuel s b y addin g differen t combination s o f additives , an d thos e wh o mi x fuels . Currently , fuel s intende d fo r us e exclusivel yi noff-roa d vehicle s ar e no t designate d fo r registratio nwit hEPA .

Afue l additiv e manufacture r i s define d a s anyperso n wh o

2 Base d o n"Characterizatio n o f th e Moto r Fue l an d Fue l Additive s Industry, " September , 1991 , prepare d b yIC F Incorporate d unde r EP AContrac t No . 68-C8-0024 .

3 4 0 CF RPar t 79 . 1 4P.1 9

produce s o r manufacture s anadditiv e fo r us e a s anadditiv e and/o r sell s anadditiv e unde r hi s ow nname. 4 Include d i nthi s definitio n ar e companie s whic hmanufactur e additive s fromnon-additiv e constituent s a s wel l a s thos e whic hproduc e additive s b ymixin g 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. , "relabeiers") . Fue l additiv e product s canb e subdivide d b y purpose-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 blendin g strea mo r afte r th e fue l i s transporte d fromth e refinery . Aftermarke t additive s ar e product s markete d fo r introductio n directl yint o th e fue l systemo f a moto r vehicle .
Th e following tw o section s provid e anovervie wo f th e moto r fuel s an

d fue l additive s markets , focusing o nth e aggregat e siz e an d organizatio no f th e market s fo r thes e products . Thi s informatio ni s base d o nprevailin g definition s o f th e moto r fuel s and fue l additive s market , an d mayno t correspond directl ywit hth e registratio nprogram' s definitio n o f fue l and fue l additiv e manufacturers , whic hinclude s no t onl y"original " producers , bu t als o thos e tha t blend fuel s an d additives . Althoughth e fue l industryproduce s a rang e o f conventiona l an d alternativ e moto r vehicl e fuels , th e discussio nbelo wfocuse s ongasolin e an d diese l

4 Ibid . 1 5fuel s and thei r additives , whic har e th e product s currentl y

registere d wit hEPA . I nth e fina l sectio no f thi s chapter , informatio no ncurrentl yregistere d f/f a producer s i s presente d an d analyze d t o provid e a basi s fo r th e discussion s o f programcost s an d impact s i nth e subsequen t chapters .

II . Overvie

w o f the Moto r Fue l Industr y

A t th e presen t time , gasolin e an d diese l fue l dominat e th e moto r fue l industry . O f al l petroleu m product s refine d from crud e oil , gasolin e i s b yfa r th e larges t segment , representing 4 6 percen t o f al l crud e oi l product s refine d int o gasolin e i n1989 . I ntha t year , approximatel y2 1 percen t o f al l crud e oi l resulte d i n diese l fue l precursors . Othe r product s refine d fromcrud e oil , suc ha s je t fuel , kerosene , an d home heating oil , accounte d fo r th e remaining 3 3 percent. 5

Th e moto r fue l marke t ca nb e divide d int o five majo r marke t segment s distinguishe d b ygrad e o f fuel . Thes e five segment s and thei r percentag e o f th e entir e marke t shar e are 6 : leade d regula r gasolin e ( 3 percent) , unleade d regula r gasolin e (5 6 percent) , unleade d midgrad e gasolin e ( 8 percent) , unleade d premiu mgasolin e

5 EnergyInformatio n Administration , U.S . Departmen t o f Energy , Petroleu

m Suppl yAnnual , Volum e 2 , 1989 , p . 222 . 6 EnergyInformatio nAdministration , U.S . Departmen t o f Energy , Petroleu

mMarketin g Monthly , Septembe r 1991 . 1 6P.2 1

(1 5 percent) , an d diese l (No . 1 an d No . 2 ) fue l (1 8 percent) . Thes e share s o f th e tota l marke t hav e no t bee nconstan t ove r time , reflectin g factor s suc ha s changin g consume r preferences , substitutio namon g products , an d governmen t regulation . Ove r th e perio d 198 5 t o 1989 , th e tota l sale s volum e o f leade d regula r gasolin e decline d b y7 2 percen t a s a resul t o f th e gradua l phaseou t o f leade d gasoline . Th e fastes t growin g segmen t o f th e marke t durin g thi s perio d i s unleade d premiu mgasoline , whic hgre wb y nearl y5 7 percent . Sale s volum e o f diese l fue l gre wb y7 percen t ove r thi s period . Overall , unleade d gasolin e o f al l grade s account s fo r nearl y9 0 percen t o f al l gasolin e demand .

Th e moto r fue l industr ya s a whol e ha s relativel ylo wpric e elasticit yo f deman d (roughl y-0.5 ) du e t o th e hig hdependenc e o f man yindividual s o nmoto r fue l an d th e limite d numbe r o f fue l substitutes. 7 Th e pric e elasticit yo f deman d measure s th e chang e i ndeman d fo r a produc t (i.e. , sales ) a s a functio no f a chang e i n th e product' s price . A nelasticit yo f deman d o f -0. 5 mean s tha t a 5 0 percen t increas e i n pric e woul d resul t i na 2 5 percen t decreas e i ndemand . I na highl ycompetitiv e an d price-sensitiv e market , on e woul d generall yno t expec t a n immediat e pass-throug ho f fixe d cos t increase s t o consumers . However , du e t o th e lowe r sensitivit yo f fue l buyer s t o pric e increases , i t ma yb e possibl e fo r companie s t o increas e price s t o recove r som e o f th e cost s relate d t o th e propose d registratio n program . I t i s withi nth e differen t grade s

7 Nationa l Petroleu mNews , 199 0 Fac t Book , vol . 8 2 no.7 . 1 7P.2 2

o f fuel , no t betwee n fue l types , tha t consumer s canmor e easil y mak e substitute s i nrespons e t o pric e increases .
Th e moto r fue l marke t i s principall ycompose d o f larg e oi l an d ga s companie s involve d i nal l phase s o f th e industry , from exploratio nt o retai l sales . Thes e companie s accoun t fo r a significan t marke t shar e o f th e tota l industry . Exhibi t 1 present s marke t shar e and tota l gallon s sol d fo r th e to p 1 5 companies . I n 1989 , thes e companie s sol d a tota l o f approximatel y7 5 billio n gallon s o f gasoline , representing roughl y6 5 percen t o f th e tota l marke t o f 11 5 billio ngallons. 8 Th e entir e integrate d petroleu m industry(including activitie s beyond th e productio nand marketin g o f moto r fuel ) ha d tota l revenue s o f approximatel y$45 0 billion , tota l ne t income o f approximatel y$23. 5 billion , and a ne t profi t margi no f 5. 2 percent . Profitabilit yacros s companie s varie d considerably .

Ill . Overvie

w o f the Fue l Additive Industr y

Fue l additive s includ e an yproduct s adde d t o moto r fuel s t o enhanc e performanc e o r serve othe r usefu l purposes . Additive s ar e sol d eithe r i nbul k fo r larg e volum e blendin g wit hmoto r fuel s o r a s aftermarke t product s whic har e adde d t o moto r fuel s b yth e

8 America n Petroleu m Institute , Marke t Shar e an d Individua l Compan yDat a fo r U.S . EnergyMarkets : 1950-1989 , Discussio nPape r #014R , Octobe r 1990 . 1 8P.2 3 

### EXHIBIT1 

## GROS S GASOLIN E GALLON S SOL D AN D COMPAN YMARKETSHARE S -198 9 1989 Marke

tShar e Al l Othe rCompanie

s 40. 7 billio n gallon s

1989 Marke tShar e 8.2 %

35.0 % 1 5 Companie s 74. 6 billio n gallon s

7.4 %

7.0 %

6.8 %

6.4 % Company

m Shel l
^^^ H Amoc

o |;?#:,»; : : 1 Exxo n I I Mobi l I l Chevro n E S S Texaco rv» l Unoca

l K\N N B

P Americ a 

## ES3 Sun FFFf . Phillip * B B S ARCO DOOC J Maratho n \7;7:7;l Conoco W W . Aramc

o BSS^ j Ashlan d | | AllOthe r Companies Gros s Gallon s

(i n billions ) 9. 4 8. 5 8. 1 7. 8 7. 4 5. 0 4. 1 3. 8 3. 7 3. 6 3. 4 3. 0 2. 4 2. 3 2. 0 40. 7

3.0 % 3. 1 % 3. 1 % 3.3 %

/ / *P.2 4

consumer . Informatio n wa s no t readil yavailabl e o nth e marke t shar e o f bul k versu s aftermarke t product s i nth e additiv e market . Th e fue l additiv e marke t consist s o f numerou s segments , eac h correspondin g t o a specifi c purpos e o r use . Th e seve nmajo r produc t segment s an d thei r marke t share s are 9 : anti-knoc k agent s (8 0 percent) , corrosio n inhibitor s (1 1 percent) , detergent s (3. 3 percent) , deposi t modifier s (1. 4 percent) , meta l deactivator s (1. 3 percent) , antioxidant s (1. 3 percent) , an d othe r additive s suc ha s cetan e improver s an d de-icer s (1. 6 percent) .
Exhibi t 2 present s th e marke t shar e fo r differen t type s o f fue l additive s i n198 7 an d 1989 , a s wel l a s th e tota l revenue s fo r th e entir e market . I nterm s o f sales , th e anti-knoc k produc t segmen t increase d th e mos t dramaticall yove r th e two-yea r period , fro m$62 3 millio ni n198 7 t o $1,56 6 millio ni n1989 , thu s representin g 8 0 percen t o f industr ygros s sale s i n1989 . Annua l sale s growt hfro m198 7 t o 198 9 fo r th e anti-knoc k produc t segmen t wa s highest , wit h5 9 percent , followe d b yantioxidants , wit h11. 3 percent . Corrosio n inhibitor s an d detergent s ha d th e leas t annua l growt hbetwee n198 7 an d 198 9 wit h5. 9 percen t an d 6. 9 percent , respectively .

Whil e specifi c informatio n wa s no t readil yavailabl e o n elasticit yo f deman d i nth e fue l additiv e industry , i t woul d b e

9 "Gasoline/Fue l Additive s Coul d Gro w20 % Annually, " Th e Oi l Daily , Marc h26 , 1990 . 1 9P.2 5 

### EXHIBI T2 

## TOTA L REVENUE S FRO M FUE L ADDITIVE S -198 7 AN D 198 9 

# 198 7

20.4 %

64. 4 %



### Tota l Revenues = $96 8 millio n 

# 1989 1,4 % 1.6 % l1 ' 3 % 3.3 % 11.3 % 

### Fue l Additives ISI M Anti-knock

Agent s
^ ^ | Corrosion Inhibitor s \yysADetergent

s iii i Deposi

tModifier s Y//AMetal Deactivator s E== 3 Antioxidant

s OtherAdditive

s •

* includ o Improver* fo rdiese l fuel , de-leers , dyes , cold-flo

wImprover

s

?9. 8 % 

### Tota l Revenues = $1,962 millio n 

# n CLP.2 6

expecte d t o varyb ybul k versu s aftermarke t and purpose-in-use . Nevertheless , i t i s likel ytha t some fue l additiv e producer s ca n recove r a portio no f registration-relate d cost s throughpric e increases , particularl yfo r bul k additives . Alarg e fue l additiv e produce r ca nsprea d th e fixe d cos t increase s ove r th e entir e productio nvolume , enabling themt o rais e price s t o recove r some portio no f th e costs . However , smalle r manufacturer s ca ngenerall y increas e price s onl yt o th e leve l se t b yth e larg e manufacturers , therefor e recovering perhap s onl ya percentag e o f thei r registratio ncosts . Becaus e mos t type s o f additive s ar e limite d t o a specifi c function , i t i s withi na produc t segmen t rathe r tha n betwee nth e segment s tha t consumer s canmak e substitution s i n respons e t o pric e increases .

Th e fue l additiv e industryi s dominate d b yth e chemica l division s o f larg e oi l companie s suc ha s Amoco , Shell , Chevron , an d Exxon , a s wel l a s chemica l firms , suc ha s DuPon t and Lubrizol . Becaus e th e fue l additiv e industryi s verycapital-intensive , th e large r companie s usuall yproduc e a rang e o f chemical s and ofte n sel l thei r product s t o othe r additiv e manufacturers . Th e high capita l cost s creat e barrier s t o entrytha t coul d discourag e competitor s fromparticipatin g i nthi s industry . I n1989 , approximatel y4.7 8 billio npounds 1 0 o f fue l additive s wer e sold , "informatio n wa s no t readil yavailabl e o ngallon s o f fue l additive s produce d i n tha t year . However , assuming a naverag e densit yo f 6 pounds/gallon , 198 9 sale s o f fue l additive s i s estimate d a t 79 6 millio ngallons , abou t on e percen t o f gallon s o f fue l sol d i ntha t year . 2 0P.2 7

anincreas e o f 2 1 percen t ove r 198 7 sales . I n1989 , th e fue l additiv e industryha d tota l revenue s o f $1,96 2 million , thre e time s greate r tha n198 7 sales . Becaus e moto r fue l additiv e manufacturer s ar e ofte nmanufacturer s o f othe r chemica l product s fo r othe r market s a s well , i t i s difficul t t o estimat e separat e profi t margin s fo r th e additiv e marketplac e alone . Accordin g t o informatio npresente d i nRober t Morri s Associates ' Annua l Statemen t Studie s 1990 , before-ta xprofi t margin s fo r companie s wit hsale s o f $2 5 millio no r les s i nSI C Cod e 286 , "Industria l Organi c Chemicals, " average d approximatel ythre e t o nin e percen t o f sale s i n1989 .

I ngeneral , th e fue l marke t tend s t o b e muc hlarge r tha nth e additiv e industry , bot hi nterm s o f productio nvolum e and annua l revenues . Eve nthoughinformatio nwa s no t availabl e o ngallon s o f fue l additive s produce d and sol d i n1989 , i t appear s tha t th e amoun t o f fue l produce d i ntha t yea r i s muc hlarge r tha ntha t o f additives . Annua l revenue s i nth e fue l additiv e marke t wer e onl y abou t 0. 4 percen t o f th e revenue s i nth e petroleu mindustryi ntha t year . Whil e bot hfue l and additiv e producer s ar e likel yt o b e abl e t o recove r some portio n o f th e cost s incurre d fo r compliance , chance s fo r a nimmediat e pass-througho f al l cost s t o consumer s may b e reduce d i na competitiv e market . A s fixe d complianc e cost s ar e sprea d ove r mor e units , th e averag e complianc e cost s dro p somewha t wit heveryadditiona l uni t sold . Thi s incentiv e t o kee p sale s high suggest s tha t quickl ypassin g al l cost s throught o consumer s may 2 1P.2 8

no t b e likely . Manufacturer s mayi nth e long termb e abl e t o recove r al l costs , dependin g o nth e amoun t o f competitio nentering th e market , and o nth e numbe r o f substitute s availabl e fo r a give n product .

IV . Analvsi s o f Currentl y RegisteredFuel/Fue l Additive Producer s

A s o f mid-1990 , 76 4 fue l producer s ha d registere d 2,23 5 fue l product s wit hEPA . Th e numbe r o f fuel s registere d pe r manufacture r range s from1 t o 16 , wit hanaverag e o f 3 pe r manufacturer . Approximatel y9 0 percen t o f th e fuel s registere d ar e gasoline , 5 9 percen t unleade d and 3 2 percen t leaded . Nearl yte npercen t o f th e fuel s registere d ar e diese l fuels . Th e univers e o f fue l producer s registering fuel s wit hEP Ai s comprise d o f essentiall ytw o groups : companie s tha t refin e oi l int o fuel , (i.e. , refiners) , and companie s tha t "manufacture " fue l b yadding additive s o r reformulating th e fue l (i.e. , mixers) . Man yrefiner s represente d i nth e registratio n databas e ar e large , public , integrate d oi l companie s tha t als o distribut e and sel l moto r vehicl e fuel s a t th e retai l leve l throughthei r ow no r affiliate d ga s stations . I n contrast , mos t o f th e mixer s ar e privat e companies .

A t tha t same tim e ther e wer e 1,16 0 fue l additiv e manufacturer s registering 4,11 5 fue l additive s wit hEPA . Th e majorit yo f manufacturer s (8 0 percent ) produc e onl yaftermarke t additives , 1 5 2 2P.2 9

percen t produc e onl ybul k additives , and 5 percen t produc e both . O f th e fue l additiv e product s registered , approximatel y4 0 percen t ar e designate d fo r us e a s bul k additive s and 6 0 percen t ar e aftermarket . Th e numbe r o f product s pe r manufacture r range s fro m 1 t o 147 , wit h69 3 manufacturer s (6 0 percent ) producin g onl yon e product , and 7 3 percen t registering tw o o r less . Onl yfive percen t o f th e companie s registe r mor e the nte nadditives . Approximatel y5 0 percen t o f fue l additiv e manufacturer s registe r onl yrelabele d product s an d wil l b e exemp t fro mth e testin g requirement s propose d i nthi s rulemaking . However , th e numbe r o f registere d product s thes e exempte d manufacturer s represen t i s onl yabou t 3 2 percen t o f al l registere d additive s becaus e mos t "relabe l only " manufacturer s registe r n o mor e tha ntw o additives .

T o estimat e th e financia l effect s o f th e registratio n regulation s o n fuel/fue l additiv e producers , a n attemp t wa s mad e t o collec t financia l informatio no nal l 76 4 fue l companie s and 1,16 0 additiv e companie s registere d o no r befor e mid-1990 . O f thes e companies , informatio nwa s collecte d o n 29 2 fue l producer s (3 8 percent ) and 28 1 additiv e producer s (2 4 percent) . Th e methodology and dat a source s use d i ncollecting financia l information , along wit hassumption s an d limitation s o f th e data , ar e presente d below . Thi s informatio ni s presente d i nsi xsections : informatio nsought ; dat a source s used ; methodologyo f dat a collection/estimation ; 2 3P.3 0

limitation s o f th e collecte d data ; and summaryo f results .

A . Informatio

nSought Th e principa l dat a item s usefu l fo r assessing th e potentia l effect s o f th e propose d regulation s o n th e financia l viabilit yo f producer s ar e a s follows : 1 ) corporat e statu s (i.e . public , private) , 2 ) nam e o f paren t compan y(i f relevant) , 3 ) numbe r an d typ e o f product s (fuel s o r additives) , 4 ) annua l revenue s (sales ) fo r th e mos t recen t fisca l year , 5 ) asset s i n th e mos t recen t fisca l year , 6 ) ne t income (earnings ) fo r th e mos t recen t fisca l year , 7 ) numbe r o f employees , and 6 ) four-digi t standar d industria l classificatio n(SIC ) code s corresponding t o th e principa l lin e o f business . Corporat e statu s give s a nindicatio no f th e amoun t o f informatio n generall yavailabl e fo r anindividua l company , sinc e publi c companie s mus t mee t a numbe r o f financia l disclosur e requirement s whic hprivat e companie s d o not . Th e name o f th e paren t compan

yo f a divisio no r subsidiaryregistering a produc t wa s importan t becaus e th e mos t complet e financia l informatio ni s generall yavailabl e fo r th e paren t company . Informatio nfo r th e paren t wa s collecte d whe ninformatio nwa s no t availabl e o r estimate d o n th e operating uni t (e.g. , division) . Th e numbe r and typ e o f product s i s importan t fo r determinin g th e tota l cost s likel yt o b e incurre d b ya manufacture r i ncomplying wit hne w regulatoryrequirements . Annua l revenue s mayhel p provid e a n 2 4P.3 1

indicatio n o f th e abilit yo f a manufacture r t o pas s cost s along t o it' s customers , and i s als o on e o f th e parameter s use d b yth e U.S . Smal l Busines s Administratio n(SBA ) i ndefinin g a smal l business . Asse t informatio ncan b e use d t o calculat e retur no nasset s (ne t income/tota l assets) , anindicatio no f th e financia l healt ho f th e company . Ne t income measure s th e profitabilit yo f th e busines s an d canb e use d t o analyz e a company' s abilit yt o paycomplianc e costs . Th e numbe r o f employee s and SI C code s represen t non-financia l parameter s tha t ar e usefu l fo r estimating financia l value s wher e actua l informatio ni s no t available . I naddition , th e numbe r o f employee s i s anothe r paramete r use d b yth e SBAt o defin e a smal l business . Amanufacturer' s SI C cod e o r code s mayprovid e an indicatio n o f whethe r th e sal e o f moto r fuel s o r fue l additive s represent s th e majorit yo f thei r revenues .
Informatio nwa s collecte d fo r bot hpubli c and privat e companie s fo r whic hdat a wa s reasonabl yavailable . Fou r differen t source s wer e use d t o collec t information , a s describe d below . Whe n th e registerin g manufacture r wa s a uni t o f a paren t compan y(e.g. , a division) , attempt s wer e mad e t o collec t th e financia l informatio nfo r th e relevan t operating unit . Wher e dat a wa s no t availabl e o nth e operating unit , th e informatio nwa s eithe r estimate d fo r tha t operating uni t o r collecte d o nth e paren t company .

B . Dat a Source s 2 5P.3 2

Informatio no nth e numbe r and type s o f product s fo r eac h manufacture r wa s draw n fro mth e registratio ndatabase . Othe r informatio nabou t fue l an d fue l additiv e manufacturer s wa s collecte d fromfou r sources : Ward' s Busines s Directory1991 , Directoryo f Corporat e Affiliation s 1991 , Rober t Morri s Associates ' Annua l Statemen t Studie s 1990 , an d Dun& Bradstreet' s Industry Norm s and Ke yBusines s Ratio s presente d i nth e Dun& Bradstree t busines s informatio ndatabase . I nmos t cases , informatio nwa s collecte d fo r corporat e fisca l yea r 198 9 o r earl y1990 .

C . Methodolog

y Manufacturer s wer e firs t separate d int o thre e group s fo r whic h informatio n wa s collected : 1 ) fue l manufacturers , 2 ) additiv e manufacturer s producin g origina l product s o r re-registere d products , and 3 ) additiv e manufacturer s producin g onl yrepackage d product s fo r sal e unde r a differen t labe l (so calle d "relabeiers") . Initia l informatio nwa s sough t fromWard' s Busines s Directory199 1 an d th e Directoryo f Corporat e Affiliation s 1991 , whic hprovid e informatio n ranging fromcorporat e statu s t o asset s and ne t income . Fo r publi c companies , mos t o f th e desire d informatio nwa s generall y availabl e o nth e paren t company , bu t asse t and ne t income informatio na t th e divisiona l o r subsidiaryleve l wa s usuall yno t provided . I n contrast , littl e informatio nothe r tha nsale s an d numbe r o f employee s wa s availabl e fo r privat e companies . Wher e ne t income and asse t informatio nwa s no t availabl e throug hon e o f thes e sources , the ywer e estimate d according t o th e method s describe d
2 6P.3 3

below .


### 1 . Estimation of

Assetsand

Net Income for

Private Parent Companies Ne t income and asset s wer e estimate d usin g industry"norms " (averag e value s o r ratio s representativ e o f companie s analyze d b y th e dat a source ) from Rober t Morri s Associates ' Annua l Statemen t Studie s 199 0 o r Dun& Bradstreet' s IndustryNorm s and KeyBusines s Ratios . Th e Rober t Morri s dat a provide s averag e financia l value s and ratio s predominantl yfo r companie s wit hsale s up t o $2 5 million , and thu s wa s use d fo r companie s i nthi s sale s range . Fo r manufacturer s wit hsale s o f $2 5 millio no r more , th e companie s include d i nth e Dun & Bradstree t databas e wer e judge d mor e representativ e becaus e th e Dun& Bradstree t databas e contain s a greate r numbe r o f companie s wit hsale s o f mor e tha n$2 5 million .

Moto r fue l manufacturer s initiall ywer e divide d int o thre e categorie s base d o n th e natur e o f thei r primarybusines s activit y a s indicate d b

ythei r primarySI C code : production/distributio n (SI C code s 13 , 29 , 46 , and 517 ) , non-agricultura l retai l (SI C code s 49 , 50 , 5411 , 55 , and 59) , and agricultura l retai l (SI C code s 20 , 28 , 42 , 5153 , 5191 , and 5211) . Additiv e manufacturer s wer e divide d int o tw o categorie s according t o thei r principa l busines s activities : manufactur e o f chemical s and petroleu mproduct s (SI C code s 2 8 and 29) ; and al l others . "Relabel " an d "non-relabel " additiv e manufacturer s wer e consolidate d fo r purpose s o f estimating 2 7P.3 4

asset s and ne t income becaus e theyha d simila r busines s an d financia l characteristics .

Th e asset s o f companie s wit hannua l sale s unde r $2 5 millio n wer e estimate d fromth e averag e rati o o f revenue s t o asset s reporte d i nth e Annua l Statemen t Studie s 199 0 fo r othe r companie s o f th e same siz e i n th e same SI C code . Similarly , ne t income wa s estimate d usin g th e before-ta xprofi t margi n(expresse d a s a percentage ) and a n assume d corporat e ta xrat e o f 3 4 percent 11

. Companie s wit hsale s ove r $2 5 millio n wer e sorte d int o group s b y sale s and SI C codes , and averag e sale s wa s calculate d fo r eac h group . Thes e average s wer e use d a s searc hparameter s fo r generatin g industrynorm s fromth e Du n& Bradstree t database . The informatio n provide d b ythi s dat a sourc e include s averag e financia l value s o f balanc e shee t financia l measure s (e.g , fixe d assets , ne t income ) expresse d a s a percentag e o f sales . From th e averag e and media nvalue s provide d b yDun& Bradstreet , poin t estimate s o f asset s and ne t income wer e develope d fo r eac hprivat e manufacture r base d o nth e annua l revenue s o f tha t manufacturer . Informatio n fromthi s sourc e wa s provide d fo r th e previou s thre e years , rathe r tha nfo r a singl e year . Estimate d asset s wer e base d o ninformatio n fromth e mos t recen t year , whil e ne t income estimate s wer e base d o n

11According t o Publicatio n54 2 o f th e Interna l Revenu e Servic e o f th e U.S . Departmen t o f th e Treasuryentitle d "TaxInformatio no n Corporation s (1990 ) , " corporat e taxabl e income i s subjec t t o ta x unde r a three-bracke t graduate d system o f 1 5 percent , 2 5 percent , and 3 4 percen t fo r taxabl e income ove r $75,000 . Mos t manufacturer s fo r whic hinformatio nwa s collecte d ha d ne t income ove r $75,000 , s o a ta xrat e o f 3 4 percen t wa s used . 2 8P.3 5

a three-yea r averag e t o accoun t fo r varyin g economi c conditions . 

### 2. Estimationof

Assetsand

Net Income for

Divisionsand Subsidiaries Ne t income an

d asse t informatio n wa s estimate d a t th e divisiona l o r subsidiaryleve l whe nproduct s wer e registere d a t tha t level . Usin g a regressio nanalysis , equation s wer e develope d fo r bot hfue l and additiv e producers , on e comparing sale s an d ne t income and on e comparing sale s and asset s o f companie s fo r whic h thi s informatio nwa s available . Thes e relationship s wer e the n applie d t o companie s fo r whic honl ysale s wa s availabl e t o determin e asset s and ne t income fo r a give ndivisio no r subsidiary .

D . Limitation s o f the Dat a Complet e financia l informatio ncoul d b e collecte d o r estimate d fo r onl y29 2 o f th e 76 4 registere d fue l manufacturers , 21 6 o f th e 55 6 "original " fue l additiv e manufacturers , and 6 5 o f th e 60 4 "relabel " additiv e manufacturers . Thus , th e informatio ncollecte d mayno t b e representativ e o f th e univers e o f registere d manufacturers . I t i s possibl e tha t th e informatio ncollecte d tend s t o over-represen t companie s o f a certai nsize . Furthermore , th e estimate s develope d fromRober t Morri s Associate s and th e Dun& Bradstree t databas e reflec t an yselectio nbia s existing i nthes e dat a sets . Fo r example , i f onl ycompanie s tha t ar e strong financiall yprovid e informatio nt o Dun& Bradstreet , th e industry normdevelope d from th e dat a mayno t b e representativ e o f al l

2 9P.3 6

companie s withi ntha t sale s rang e and SI C codes . Struggling companie s tha t represen t a highcredi t ris k mayno t provid e informatio n t o thes e source s sinc e busines s credi t mayb e unavailabl e t o the munde r mos t circumstances .
Informatio nwa s collecte d o r estimate d a t th e divisiona l and subsidiaryleve l whe npossible , bu t i n some case s onl yparen t compan ydat a coul d b e obtained . Thi s inconsistenc ymayinterfer e wit hth e abilit yt o mak e industrycomparisons . Fo r example , sale s o f additiv e manufacturer s mayappea r t o b e large r tha nfo r fue l manufacturers , i f th e forme r i s base d primaril yo nparen t compan y and th e latte r o ndat a fo r th e operating unit .

E . Summar

y o f Result s Tabl e 2- 1 summarize s th e tota l numbe r o f companie s an d product s fo r moto r fue l manufacturers , "original " moto r fue l additiv e manufacturers , and moto r fue l additiv e "relabeiers" . Informatio ncollecte d fo r eac ho f th e thre e categorie s o f manufacturer s i s discusse d below .

O f th e 76 4 fue l manufacturer s registere d o nth e database , financia l informatio nwa s collecte d o r estimate d fo r 29 2 companie s (3 8 percent) . Thes e manufacturer s represen t 4 5 percen t o f th e currentl yregistere d moto r fue l products . O f thes e 2 9 2 companies , financia l dat a o nne t income and asset s wer e estimate d fo r 8 0 companies . Overall , moto r fue l manufacturer s fo r whic hinformatio n 3 0P.3 7

wa s obtaine d represente d 3 0 differen t four-digi t SI C code s and 1 7 differen t two-digi t SI C codes. 1 2 Th e mos t commo nfour digi t SI C cod e wa s 291 1 (Petroleu mRefining) , and th e mos t commo n two-digi t SI C cod e wa s 5 1 (Wholesal e Trad e o f Nondurabl e Goods) .

O f 55 6 "original " fue l additiv e manufacturer s ("non

relabelers") , informatio nwa s availabl e fo r 21 6 companie s (3 9 percent) . O f thes e companies , financia l informatio nwa s estimate d fo r abou t 4 2 percent . Thes e "non-relabelers " registere d 1,65 4 uniqu e product s (2 8 percen t o f tota l additiv e products , including relabels) , o f whic h6 2 percen t ar e bul k product s and 3 8 percen t ar e aftermarket . Thes e companie s represente d 7 7 differen t four-digi t SI C code s and 2 9 two-digi t SI C codes . Th e mos t commo nfour-digi t SI C code s wa s 291 1 (Petroleu mRefining) , and th e mos t commo n two
digi t SI C cod e wa s 2 8 (Chemical s and Allie d Products) .

O f 60 4 "relabel " fue l additiv e manufacturers , informatio nwa s availabl e fo r 6 5 companie s (1 1 percent) . O f thes e 6 5 companies , informatio nwa s estimate d fo r approximatel y8 8 percent . Thes e fue l additiv e manufacturer s registere d 18 9 product s (abou t 5 percen t o f tota l additiv e products) , o f whic hvirtuall yal l ar e aftermarket . Thes e companie s represente d 5 8 differen t four-digi t SI C code s and 2 3 two-digi t SI C codes . Th e mos t commo nfour-digi t SI C cod e wa s 284 2 (Polishe s and Sanitatio nGoods) , and th e mos t commo ntwo-digi t "Total s ar e base d o nth e primarySI C cod e indicate d fo r eac h manufacturer , althoughfrequentl ymor e tha non e SI C cod e i s liste d fo r eac hcompany . 3 1P.3 8

SI C cod e wa s 2 8 (Chemical s and Allie d Products) .
Tabl e 2- 2 compare s informatio nabou t fue l and additiv e manufacturer s including th e numbe r o f companies , thei r tota l numbe r o f products , and th e averag e annua l revenues , ne t income , an d numbe r o f employees . O f th e 57 3 registere d companie s (3 0 percent ) fo r whic hinformatio nwa s obtained , th e dat a suggest s tha t fue l additiv e manufacturer s generall yhav e mor e employee s and highe r averag e sale s and ne t income tha nfue l manufacturers . Th e likel y explanatio n fo r thi s finding i s tha t severa l verylarg e companies , includin g majo r automobil e manufacturers , chemica l companies , and genera l retailers , ar e registere d a s fue l additiv e manufacturers . Thi s informatio ni s presente d i na mor e detaile d manne r i nAppendi x A .

I nsum , anovervie wo f th e fuel/fue l additiv e industry suggest s tha t th e fue l industryi s generall ylarge r tha nth e fue l additiv e industry , bot hi nterm s o f productio nvolum e and annua l revenues . I ncontrast , a compariso no f individua l companie s registering fuel s and additive s suggest s tha t registere d additiv e manufacturer s generall ytend t o b e large r tha nregistere d fue l manufacturers . On e reaso nfo r thi s mayb e th e divers e natur e o f th e companie s registering products , particularl yadditives . Fo r man yregistere d companies , th e natur e o f thei r primarybusines s activit yi s no t relate d t o manufacturing , bu t rathe r i s relate d t o wholesal e o r retai l trade , fo r instance . Also , th e dat a suggest s 3 2P.3 9

a bimoda l distributio ni nth e siz e o f th e fue l producer s (i.e. , a smal l numbe r o f larg e companie s and a larg e numbe r o f smal l ones) . Becaus e financia l informatio ncoul d no t b e collecte d o nal l registere d companies , th e collecte d informatio nmayno t b e representativ e o f th e univers e o f registere d manufacturers . Th e cost s o f complying wit hth e propose d program ar e presente d i nth e nex t chapter , followe d b yimpact s o f complianc e cost s o n th e industry . Th e effect s o f complianc e cost s o nsmal l an d larg e fue l an d fue l additiv e producer s i s presente d i nth e Regulatory Flexibilit yAnalysis .

3 3U J Man nfuelurerIyi>e Tabl e2- 1
SUMMAR YO lCOI.I.IiCTEl ) INFOR MATIO N

Tut u I Nu m Ite rol * Co mpa nie s Product s Numbe rfo rWhic h Informatio nwu s Collecte d Co mpu nie s Product s
Fue lManufacturer s "Non-rclabel " Fue lAdditiv e Manufacturer s "Relabel " Fue lAdditiv eManufacturer s 76 4 55 6

60 4 2.23 5

1,34 9 (bulk ) 1,49 5 (aftermarket ) 2,83 4(total ) 2 2(bulk ) 93 5 (aftermarket ) 95 5 (total ) 29 2 21 6

6 5 1.00 1

1,02 9 (bulk ) 62 9 (aftermarket ) 1.654 (total ) 4(hulk ) 13 0(afiermarkei ) 134(lolal )

Note : Th etota lnumbe ro f product s represent s th enumbe ro f uniqu eproducts . Becaus esom efue ladditive s ar eregistere das bothabul kan d aftermarke tproduct , th esu mo f th ebul kan dafiermarke iproduct s mayno tequa lth etota lfigures . O f th ecompanie s fo rwhic hinformatio nwa s collected , asset s an dne tincom ewer eestimate dfo r8 0fue lmanufacturers , whic hmanulactur c atota lo f

39 2product s an d9 0"non-rclabel " additiv emanufacturers , whic hmanufactur e48 0bul kproducts , 22 5 aliermaikc tproducts , an da lola lo f 70 2products . Th einformatio npresente dinthi s tableinclude s al ! informatio ncollecte dfo raffiliates , join tventures , divisions , an dsubsidiaries .Tabl e2- 2 SUMMAR

YO F FINANCIA L INFORMATION

Tota lNo . of Companies No . o f RegisteredProduct

s AverageSale s (millions ) AverageNetIncome(thousands) 1 AverageNumbero f

Employees 2 Fue l Manufacturer s

29 2 1,00 1 XI,15 8 $36,35 5 1.62 6 Origina l Additiv e

Manufacturer s

21 6 1,65 4 $2,45 7 $150,80 4 6,66 1 Relabe l

Manufacturer s

6 5 13 4 $3,52 0 $131,88 7 22,73 7 Tota l Additiv e

Manufacturer s

28 1 1.78 8 $2,70 2 $147,08 4 10,38 0 Tota l

57 3 2,78 9 $1,91 5 $91,83 6 5,94 9

1 Netincomeis basedo ndat afor : 23 8 fue lmanufacturer

s 19 2originaladdiiivemanufacturer s 47relabelmanufacturer

s

" Averag enumber

of employee s is base dondal afo r 28 8 fue lmanufacturers
. 

### U i LA I
• 0P.42

Chapte r 3

Program Requirement s an

d Associate d Cost s

I . ProposedRequirement s

Th e propose d regulation s implementing Clea n Ai r Ac t (CAA ) sectio n211(b)(2 ) woul d requir e producer s o f moto r vehicl e fuel s and fue l additive s t o submi t informatio nregarding th e compositio n o f th e emission s produce d b ysuc hfuel s and fue l additive s and th e effect s o f th e emission s o nth e publi c healt hand welfare . A s previousl ymentioned , EP Abelieve s th e genera l regulatory mechanism s alread

yimplemente d unde r sectio n21 1 (f ) ar e adequat e t o satisf yth e emissio ncontro l systemprovision s o f sectio n 211(b) . Furthermore , a s indicate d i nchapte r on e o f thi s document , welfar e effect s ar e t o b e addresse d i nconjunctio nwit hTie r 1 healt heffect s requirements . Therefore , th e cost s resulting fro m thi s proposa l ar e associate d wit hTie r 1 healt hand welfar e effect s information , chemica l and biologica l testing , and reporting requirements .

Th e propose d requirement s fo r evaluating th e healt heffect s o f fuel s and additive s ar e organize d withi na three-tiere d structure , wit hmor e rigorou s requirement s containe d i neac hsuccessiv e tier . I npart , eac htie r operate s a s a scree nfo r determinin g th e 3 4P.4 3

applicabilit yo f requirement s containe d i nsubsequen t tiers . The tiere d approac hals o permit s fue l and additiv e producer s t o mak e ful l us e o f tes t result s and othe r informatio nwhic hmayalread yb e availabl e abou t thei r products . Tie r 1 encompasse s a literatur e searc ho nth e healt hand welfar e effect s o f fuel/additiv e emissions , dat a modelin g analyses , an d characterizatio no f emissions . Tie r 2 include s a batteryo f short-term screening test s fo r selecte d healt heffect s endpoints . Thes e testin g requirements , a s wel l a s th e emissio ncharacterizatio nprocedure s o f Tie r 1 , ca n b e mitigate d b

yth e demonstratio no f comparabl e existing informatio n from

previou s adequat e testing . Tie r 3 include s testin g t o furthe r explicat e th e result s o f Tier s 1 and 2 , an d wil l onl yb e require d whe ndetermine d necessaryb yEP Ao na case-by-cas e basis .

Th e purpos e o f thi s chapte r i s t o projec t cost s associate d wit hmeetin g thes e requirement s and submitting th e informatio n necessaryfo r registration . Th e informatio npresente d i n thi s chapte r i s organize d b ya discussio no f Tie r 1 requirement s and costs , Tie r 2 requirement s and costs , administrativ e and reporting requirement s and costs , and , finally , possibl e requirement s an d cost s associate d wit hTie r 3 .

Becaus e gasolin e an d diese l fuel s and thei r additive s ar e th e onl yproduct s currentl yrequire d t o registe r wit hEPA , an d thes e ar e th e onl yproduct s fo r whic hther e i s adequat e informatio nfo r 3 5P.4 4

analysis , cos t estimate s ar e provide d onl yfo r testin g o f thes e fuel/additiv e families . Furthermore , becaus e leade d fuel s wil l b e outlawe d a t abou t th e same tim e tha t dat a pursuan t t o thi s proposa l woul d nee d t o b e submitted , leade d gasolin e fuel s and additive s ar e no t examine d i nthi s analysis . A s presente d i nTabl e 3-1 , th e unleade d gasolin e and diese l product s include d i nthi s analysi s ar e divide d int o categorie s o nth e basi s o f thre e produc t formulatio n classes . I ngeneral , baselin e produc t formulation s ar e product s whic har e simila r i nphysical/chemica l compositio nt o th e certificatio nfuel s fo r eac hfue l family . Non-baselin e formulation s contai n n o element s othe r tha nthos e allowe d i nth e baselin e class ; however , the yexcee d th e concentratio nlimit s se t fo r certai n component s i nth e baselin e class. 1 3 "Atypical " produc t formulation s generall yrefe r t o product s whic hcontai nelement s othe r tha n carbon , hydrogen , oxygen , nitrogen , and/o r sulfur .
Identifie d fo r eac hcategoryshow ni n Tabl e 3- 1 i s th e numbe r o f producer s registering fue l and/o r fue l additiv e product s representativ e o f tha t category . Als o identifie d fo r eac hcel l i s th e numbe r o f designate d fuel/additiv e group s i ntha t category . Eac hgroup contain s fuel s and additive s wit hsimila r composition , and producer s enrolling product s i na grou p ar e allowe d t o poo l

13 Fo r purpose s o f thi s analysis , oxyge nconten t wa s use d t o differentiat e betwee nbaselin e and non-baselin e formulations . Th e baselin e clas s wa s restricte d t o formulation s having les s tha n2. 0 weigh t percen t o f oxygen , whil e th e non-baselin e clas s wa s assigne d product s simila r t o baselin e formulation s bu t havin g 2. 0 percen t oxyge no r more . 3 6P.4 5

thei r resource s and t o submi t tes t dat a o na designate d produc t representativ e o f th e group . Th e groupin g scheme i s explaine d i n greate r detai l i nChapte r 4 .

Whe npresentin g cos t projection s i nthi s chapter , a rang e o f estimate d cost s i s provide d i nsome instances . Thi s reflect s th e fac t tha t certai nprogram requirement s ar e mor e stringen t an d costl yfo r product s i nth e "atypical " categorie s tha nfo r th e "non
atypical " (baselin e and non-baseline ) products . I nsuc hinstances , differen t cost s ar e presente d fo r "atypical " and "non-atypical " products .

Cos t estimate s wer e obtaine d fromvariou s source s including engin e manufacturers , laboratorie s whic hprovid e emissio n generation , emissio n speciation , and/o r biologica l testing services , and resource s withi nEPA . Th e dat a presente d i n thi s chapte r reflec t th e cost s fo r anindividua l produce r t o mee t th e requirements , and d o no t reflec t potentia l saving s resulting fro m cost-sharing arrangement s o r from volum e discount s provide d b y laboratories . Aggregat e cost s t o industryar e discusse d i nth e following chapter .

II . Tie r 1 Requirement s an dCost s

A . Dat a Searchan dSummar

v 3 7P.4 6

Acomprehensiv e literatur e surveywil l b e required , usin g bot h publi c and in-hous e (industr yand manufacturer ) source s t d gathe r al l availabl e informatio nabou t th e speciate d component s and th e healt hand welfar e effect s o f th e emission s o f th e fue l o r additive . Th e informatio n i s t o b e compile d frompeer-reviewe d scientifi c journal s an d othe r literatur e a s wel l a s interna l industrystudies , government-sponsore d report s and assessments , proceeding s o f scientifi c meetings , and othe r documente d sources . Asearc ho f appropriat e commerciall yavailabl e toxicologi c and environmenta l dat a base s mus t b e conducte d t o locat e informatio n frompublishe d sources . Th e searc hmus t g o bac k fo r a t leas t fiftee nyear s prio r t o th e dat e o f submission , and mus t b e conducte d (or updated ) n o longe r tha nsi xmonth s prio r t o beginnin g o f testing . Th e informatio nt 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 , printe d copie s o f th e output s fromth e databas e searches , and table s summarizing al l cite d studies .

I nEPA

r s judgement , companie s wil l likel ymee t thes e dat a researc hrequirement s throughth e service s o f a contractor . EP A estimate s tha t a typica l contracto r wil l charg e 20 0 hour s fo r th e task , a t $5 0 pe r hour , fo r a tota l cos t o f $10,000 . I nadditio nt o th e cos t o f th e contractor' s service , ther e wil l b e anadditiona l fe e fo r us e o f databas e service s t o collec t th e data . EP A estimate s 12 5 hour s wil l b e spen t collecting informatio nvi a databas e searches , and a t a napproximat e cos t o f $2 0 pe r hou r fo r 3 8P.4 7

us e o f thi s service , th e tota l cos t t o a produce r fo r obtaining dat a througha databas e servic e i s estimate d a t $2,500 . I n sum , EP Aestimate s a tota l cos t o f $12,50 0 fo r conducting th e literatur e search . Thi s estimat e mayvarydepending upo n th e pric e charge d b y th e contractor , th e amoun t o f informatio navailable , and th e databas e service s used .

B . ModelingApproache s EP Apropose s t o requir e th e applicatio no f modelin g method s t o provid e estimate s o f ambien t exposure s t o fuel/additiv e emissions , t o projec t th e expecte d atmospheri c reactivit yo f variou s emissio n products , and t o evaluat e th e probabl e environmenta l partitionin g (fates ) o f emission s t o th e air , soil , and water . Again , EPA envision s tha t fue l and fue l additiv e (f/fa ) producer s wil l mak e us e o f contracto r service s fo r meetin g dat a modelin g requirements . Dat a modelin g i s estimate d t o tak e 8 0 hours , a t $5 0 pe r hour , fo r a tota l cos t o f $4,000 . I ntotal , EPAestimate s a cos t o f $16,50 0 ($12,50 0 fo r literatur e search , an d $4,00 0 fo r dat a modeling ) fo r a f/f a produce r t o fulfil l th e dat a researc hand analysi s requirement s o f Tie r 1 .

C . Characterizationo f Emission s CA Asectio n211(b ) require s f/f a producer 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 nsuc hfuel. " Unde r th e propose d requiremen t implementing thi s provision , exhaus t emission s wil l nee d t o b e generated , collected , 3 9P.4 8

sampled , and subjecte d t o test s fo r determining th e identit yand concentratio no f individua l emissio nproducts . Whe napplicable , 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 . Additive s wil l b e require d t o b e mixe d wit ha nappropriat e bas e fue l prio r t o emissio n generatio nand analysis . Th e emission s o f th e base-fuel/additiv e mixtur e wil l the nnee d t o b e compare d wit h th e emission s o f th e bas e fue l alone , s o tha t th e contributio n o f th e additiv e ca nb e determined . Th e emissio ncharacterizatio n requirement s ca nb e mitigate d b ycomparabl e dat a obtaine d through th e literatur e searc hdescribe d above . 

### 1. EmissionGeneration Thi s sectio n present s th e method s an d cost s fo r generating and 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 nTier s 2 an d 3 , a discussio n o f thes e overlapping requirement s i s als o include d i nthi s section .



### a . Vehicle Requirements Th e vehicle s use d t o generat e emission s fo r purpose s o f emissio ncharacterizatio nand biologica l testin g mus t b e ne w vehicle s o f th e mode l yea r i nwhic htesting begins . Vehicl e clas s i s on e o f th e parameter s t o b e considere d i nselecting thes e vehicles . Fo r eac hfue l famil y(i.e . unleade d gasoline , diesel) , 4 0P.4 9

th e vehicl e clas s t o b e use d fo r emissio ngeneratio nwil l b e tha t whic hconsume s th e mos t gallon s o f fue l i ntha t fue l family . Normally , vehicl e classe s includ e light-dut yvehicle s (LDV) , light

dut ytruck s (LDT) , and heavy-dut yvehicle s (HDV ) . Fo r gasolin e fuel s and additives , EPAassume s tha t light-dut yvehicle s wil l b e use d fo r testing . Fo r diese l fuel s and fue l additives , an overwhelming proportio no f tota l diese l vehicl e mile s ar e travele d b yheavy-dut yvehicles . Heavy-dut yengine s wil l b e permitte d t o b e use d fo r testin g rathe r tha nHDVs , du e t o th e lac k o f facilitie s capabl e o f testin g HDVs . I nthi s analysis , EP Aassume s us e o f a heav yheavy-dut ydiese l engin e (HDDE ) (greate r tha n33,00 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 vehicl 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 five mos t commo nfue l systeman d emissio ncontro l systemconfigurations .

I ngeneral , manufacturer s wil l b e require d t o accumulat e a minimu mo f 25,00 0 mile s (or th e comparabl e hours ) o nth e selecte d vehicl e o r engin e befor e emission s ca nb e generate d fo r testing , and wil l als o b e responsibl e fo r maintainin g th e vehicle/engin e whil e subjec t t o thes e requirements . Mileag e ca nb e accumulate d b y an yappropriat e means . Th e basi c proposa l require s onl yon e vehicle/engin e t o b e use d fo r emissio ngeneration , sampling , and speciation . Biologica l test s i n

4 1

# r P.5 0

Tier s 2 and 3 wil l b e require d t o us e emission s fromth e same vehicle/engine .

Fo r emissio n generatio nrelate d t o th e testin g o f "atypical " produc t formulations , mor e stringen t mileag e accumulatio n requirement s ar e proposed . Befor e th e emission s o f "atypical " product s mayb e use d fo r emissio ncharacterizatio nand/o r biologica l testing , mileag e accumulatio nmus t continu e unti l a stead ystat e i s reache d betwee nth e mas s o f "atypical " element s enterin g and leaving th e engine . However , i f stead ystat e i s no t reache d befor e 8 0 percen t o f th e usefu l lif e o f th e vehicl e i s reache d (80,00 0 mile s fo r LDV s an d 232,00 0 mile s fo r heav yHDVs) , tha nemissio ncharacterizatio nand biologica l testing maybegi na t thi s point .

Cos t estimate s provide d fo r producer s o f "non-atypical " produc t formulation s reflec t th e assumptio ntha t emissio n generatio n fo r purpose s o f emissio ncharacterizatio nan d biologica l testing wil l begi nwhe nth e vehicl e ha s accumulate d 25,00 0 miles . Fo r producer s o f "atypical " formulations , range s and poin t estimate s ar e provided , wit hth e minimu mcos t equivalen t t o th e cos t estimat e fo r "non-atypical " product s (i.e . testin g a t 25,00 0 miles ) , and a maximu m cos t reflecting th e cos t a manufacture r woul d incu r i f mileag e equivalen t t o 8 0 percen t o f th e vehicle' s usefu l lif e woul d nee d t o b e accumulated . The poin t estimate s use d i nth e cos t analyse s fo r "atypicals " assume s tha t emissio n 4 2P.5 1

characterizatio nan d biologica l testin g wil l generall ybegi na t 5 0 percen t o f th e vehicle' s usefu l lif e (50,00 0 mile s fo r LDV s an d 145,00 0 mile s fo r heav yHDVs) . 

### Vehicle Acquisition/Operation Costs Generally , flee t vehicl e cost s ar e separate d int o tw o categories : operatin g an d fixe d costs . Operatin g cost s ar e variabl e an d relat e directl yt o eac hmil e driven . The yinclud e suc hthing s a s fuel , oil , maintenance , an d tires . Fixe d cost s relat e t o tim e rathe r tha n mileag e an d includ e insurance , licensing , registration , taxes , an d depreciatio n(cos t o f ne wca r minu s resal e value) . Accordin g t o a nanalysi s o f busines s ca r cost s byRunzheime r International 14 , operatin g cost s (cents/mile )
an d fixe d cost s (dollars/month ) fo r a full-siz e ca r ar e $0.0 9 an d $293.16 , respectively . Assumin g a light-dut yvehicl e accumulate s approximatel y20,00 0 mile s pe r yea r (a s indicate d i nRunzheime r an d i nAutomotiv e Fleet 15 ) , th e tota l operatin g cos t pe r mil e i s approximatel y2 7 cents . Hence , fo r "non-atypical " produc t formulation s usin g a LDV , EP Aestimate s vehicl e acquisition/operatio ncost s t o b e $6,75 0 (25,00 0 mile s x $0.27/mile) . Fo r "atypical " produc t formulations , cost s ma yrang e fro m$6,75 0 t o $21,600 , wit hcost s estimate d t o b e $13,50 0 (50,00 0

"Runzheime r International , Surve van d Analvsi s o f Busines s Ca r Policie s & Cost s 1989-1990 , Northbrook , Illinois : Runzheime r Internationa l Ltd. , 1989 , p . F-7 .

15 Automotiv e Fleet , Redond o Beach , California : Bobi t Publishin g Co. , Vol . 2 9 No.5 , Marc h1990 , pp . 62-3 . 4 3P.5 2

mile s x$0.27/mile ) o naverage . Thes e estimate s provid e adequat e fund s no t onl yt o accumulat e th e require d mileag e bu t als o t o retai nvehicl e ownershi p fo r testin g purposes . Comparabl e dat a incorporating vehicl e acquisition/operating cost s int o a pe r mil e cos t ar e no t availabl e fo r a heavy-dut y engin e (HDE). . Consequently , thes e cost s ar e considere d separatel y fo r diese l fuels/additives . EP Aassume s tha t producer s o f diese l fuel/additiv e product s wil l purchas e a heav yHDD E fo r testing purposes , rathe r tha n purchasin g a HDV , accumulating miles , an d the nremovin g th e engin e from th e vehicl e fo r testing . Informatio n receive d from

engin e manufacturer s indicate s tha t th e cos t o f a heav yHDD E engin e i s abou t $13,000 . EP Aestimate s maintenanc e o f th e engin e a t thre e cent s pe r mile , an d fue l a t 1 3 cent s pe r mile . Fo r "non-atypical " diese l products , th e maintenanc e and fue l cost s fo r 25,00 0 accumulate d mile s woul d thu s b e $75 0 and $3,250 , respectively . Fo r "atypical " diese l fuel s and additives , maintenanc e and fue l woul d respectivel ycos t $4,35 0 an d $18,85 0 o n th e average . Thes e cost s coul d rang e up t o $7,00 0 and $30,16 0 i n th e even t tha t mileag e accumulatio nequivalen t t o 8 0 percen t o f th e engine' s usefu l lif e wer e required . A s wit hlight-duty , thi s provide s adequat e fund s fo r mileag e accumulatio nand retaining engin e ownershi p fo r require d testing . Mileag e AccumulationCosts A s indicate d above , EP Aenvision s emissio ncharacterizatio nt o 4 4P.5 3

b e conducte d a t 25,00 0 mile s fo r "non-atypical " (baseline and non baselin e formulations) , and a t 5 0 percen t o f th e vehicle' s usefu l lif e fo r "atypical " formulations . I nadditio nt o maintenanc e and fue l expenses , th e require d mileag e accumulatio nwil l hav e anadde d expens e fo r th e tim e and/o r personne l involve d i nth e mileag e accumulatio nactivity . EP Amake s a conservativ e assumptio n that , fo r a light-dut yvehicle , a perso nwoul d b e employe d t o accumulat e mile s b

ydrivin g o na tes t track . EPAassume s a produce r woul d choos e thi s metho d t o minimiz e possibl e damage s t o th e vehicle , rathe r the nincluding th e designate d vehicl e i na company' s fleet , i nwhic hcas e mileag e accumulatio nand vehicl e acquisition/operatio n cost s woul d b e immaterial . Assumin g a conservativ e valu e o f $ 1 pe r mil e fo r thi s service , EP Aestimate s tota l mileag e accumulatio ncost s fo r a light-dut yvehicl e t o b e $25,00 0 fo r "non-atypical " and $50,00 0 fo r "atypical " gasolin e formulations . Mileag e accumulatio nfo r a heavy-dut yengin e i s calculate d accordin g t o hour s rathe r tha nmiles . I nEPA' s judgement , hour s wil l generall yb e accumulate d vi a a dynamomete r a t a testing facility , wit hn o particula r load o r cycle s bein g applie d t o th e engine . Informatio nreceive d fro mappropriat e testing facilitie s indicate s tha t th e cost s o f "mileag e accumulation " (or equivalen t hours ) fo r a HDD E woul d b e approximatel y$3 0 pe r hour . A t thi s hourl yrate , th e cos t t o accumulat e th e equivalen t o f 25,00 0 mile s o na HD

V woul d b e approximatel y$13,440 . Th e averag e cos t fo r 4 5P.5 4

"atypical " product s woul d b e $78,000 , ranging t o a maximu mo f nearl y$125,00 0 fo r accumulating mile s equivalen t t o 8 0 percen t o f th e engine' s usefu l life . Whe nemission s hav e bee ngenerate d t o allo wcompletio no f emissio ncharacterizatio nan d biologica l testing , EP Aestimate s th e engin e wil l hav e a salvag e valu e o f $9,00 0 i f use d fo r testing "non-atypical " products , and $4,50 0 i f use d fo r testin g "atypical " products . 

### Total Vehicle Requirement Costs Tabl e 3- 2 provide s a summaryo f vehicl e requiremen t costs . I n sum , fo r testin g gasolin e fuel s and additive s usin g a LDV , EP A estimate s cost s associate d wit hvehicl e acquisition/operatio nand mileag e accumulatio nt o b e $31,75 0 fo r "non-atypical " produc t formulations , assuming emissio nspeciation/biologica l testing begin s a t 25,00 0 miles . Fo r "atypical " produc t formulations , assuming emissio nspeciatio nand biologica l testin g occu r a t 50,00 0 miles , th e averag e vehicle-relate d cost s ar e estimate d t o b e $63,500 . Reflecte d i nthes e cost s i s th e conservativ e assumptio n tha t th e vehicl e i s no t operate d a s par t o f a company' s fleet , i n whic hcase , suc hcost s woul d b e zero . I naddition , th e assumptio n i s mad e that , onc e testin g i s completed , th e manufacturer(s ) wil l sel l th e vehicle , rathe r tha nincorporating th e vehicl e int o a company' s fleet . Fue l costs , maintenanc e costs , and salvag e value s ar e include d i nth e cost s presente d above .
Wit hregar d t o HDEs , cost s associate d wit hacquiring and 4 6P.5 5

operating anengin e fo r testing diese l fuel s and additive s ar e estimate d t o b e $21,44 0 fo r "non-atypical " formulation s and $109,70 0 fo r testin g "atypical " formulations . Thes e cost s reflec t fue l costs , maintenanc e costs , and mileag e accumulatio nassuming emissio ncharacterizatio nand biologica l testin g begi na t 25,00 0 mile s fo r "non-atypical " products , an d a t 145,00 0 mile s fo r "atypica l products" . Salvag e value s ar e reflecte d i nth e cost s a s well . Thes e estimate s ar e provide d fo r th e heavy-heav ysubclas s whic hha s th e highes t usefu l lif e mileage . Cost s woul d likel yb e lowe r i f a mediu

mo r ligh t HD E wer e use d fo r testing . jb . CombustionEmissionGeneration Procedure s fo r generating emission s fo r emissio n characterizatio nar e dependen t upo nth e emissio nproduc t categorie s o f interest . Unde r th e propose d program , EP Awil l requir e speciatio n o f emission s fo r th e following emissio nproducts : regulate d emissions , hydrocarbon s and ethers , aldehyde s and ketones , alcohols , polynuclea r aromati c hydrocarbon s (PAH) , nitrate d polynuclea r aromati c hydrocarbon s (NPAH) , and atypica l elements . Th e cost s o f emissio ngeneratio nfo r emissio n characterizatio nar e discusse d below , and ar e base d upo nth e technica l requirement s o f procedure s specifi c t o th e emissio n product s o f interest . I ngeneral , th e emissio ngeneratio nmethod s ar e modifie d version s o f th e Federa l Tes t Procedure s (FTP ) fo r certificatio no f th e ne wvehicles . Th e cost s ar e base d o nth e assumptio ntha t th e f/f a manufacturer s wil l see k laboratory 4 7P.5 6

service s fo r thes e purposes , rathe r tha nconducting test s in-hous e o r erecting facilitie s capabl e o f conducting suc htests . Light-Dut y Fo r testin g gasolin e fuel s and additive s usin g a LDV , th e procedur e fo r generatio n o f combustio nemission s fo r characterizing regulate d emissions , hydrocarbon s an d ethers , aldehyde s and ketones , and alcohol s include s on e LA- 4 plu s th e firs t 50 5 second s o f th e nex t FT P driving cycle . Thre e bag s o f vapo r phas e an d thre e filter s o f particulat e phas e combustio nemission s ar e t o b e collected . Estimate s receive d b yEP Afromauto-testing laboratorie s indicat e tha t th e cos t fo r thi s servic e woul d b e approximatel y$600 .
Emission s fo r PAH/NPA H speciatio nwil l b e generate d usin g th e particulat e collectio nmetho d specifie d i nth e FTP , wit hth e additio no f a porou s polyme r be d immediatel ydownstream fromth e particulat e filter . I n orde r t o generat e th e appropriat e mas s o f particulates , th e constan t volume sample r (CVS ) maynee d t o b e modifie d a s well . Fo r generatio no f emission s fo r speciatio no f atypica l elements , a simila r procedur e woul d generall yb e used . Base d o ninformatio n receive d fromvariou s laboratories 16 , i nEPA ' s judgement , th e estimate d cos t fo r generating combustio nemission s fo r PAH , NPAH , and atypica l speciatio ni s $700 . ""Revise d Cos t Estimate s fo r Emissio nGeneration, " Augus t 14 , 1991 , Memorandu

m from Isabe l Reiff , Alic e Stratto nand Da nKapp t o Sher i Dunatchik , unde r EPAContrac t 68-C8-0024 . 4 8P.5 7

Heavy-Duty Fo r testin g diese l fuel s and additive s usin g a heav yHDDE , i t i s expecte d tha t th e EP Atransien t tes t wil l b e use d fo r generating combustio n emission s fo r th e purpos e o f chemica l speciation . EP A estimate s suc ha procedur e wil l cos t $8,000 . Thi s cos t i s base d o n estimate s receive d frombot hmanufacturer s o f HDDE s and fro m commercia l laboratorie s capabl e o f conducting thi s procedure .

c . Evaporative EmissionGeneration Volatil e fuel s and fuel/additiv e mixture s wil l b e require d t o underg o emissio ncharacterizatio nand biologica l testing fo r evaporativ e emissions . Characterizatio no f evaporativ e emission s wil l requir e emission s t o b e generate d from al l evaporative-relate d portion s o f th e FT P effectiv e a t th e time th e testin g i s done . Evaporativ e emissio n generatio nwil l b e performe d b yplacin g a vehicle , withou t an yevaporativ e emissio ncontro l system connected , i na SHED . Th e separat e evaporativ e portion s o f th e FT P (diurnal , ho t soak , etc. ) wil l b e performed , and a sampl e o f th e vapor s i n th e SHE D wil l b e withdrawnint o Tedla r bag s fo r emissio nspeciatio n i neac hportion . Speciatio nrequirement s fo r evaporativ e emission s wil l b e limite d t o th e analysi s o f hydrocarbons , ethers , an d alcohol s (i f presen t i nth e fuel/additiv e formulation) . Base d o n ou r ow nestimates , and inpu t fro mothe r EP Alaboratories , EP A estimate s anapproximat e cos t o f $50 0 t o generat e evaporativ e emission s vi a th e SHE D procedure . Evaporativ e emissio n generatio n i s no t applicabl e t o diese l fuel s and thei r additives . 4 9P.5 8



### 2 . Emission Characterization Acomplet e and precis e characterizatio no f al l emissio n product s woul d requir e tes t protocol s specifi c t o al l possibl e compounds . Becaus e thi s tas k i s inherentl yundefined , th e propose d programfocuse s o nmeasuremen t o f regulate d emission s an d o n th e identificatio no f specifie d compound s o f interest . Th e particula r compound s propose d t o b e characterize d i nfue l and fue l additiv e emissions , th e procedur e t o b e use d i nspeciating th e emission s fo r thes e compounds , and th e type s o f emission s require d fo r speciatio n ar e summarize d i nth e tabl e below . I naddition , speciatio no f th e combustio nproduct s o f atypica l element s i s propose d fo r fuel s and additive s containing suc helements .

COMPOUND S Hydrocarbons/Ether s Aldehydes/Ketone s Alcohol s PAH

NPAH PROCEDURE S GC HPL C GC HPL C

HPL C REQUIRE D EMISSION S Combustion , Evaporativ e Combustio n Combustion , Evaporativ e Combustion : Particulate , Semi-Volatil e Combustion : Particulate , Semi-Volatil e
Base d o ninformatio nreceive d fromresource s withi nEP Aan d fromoutsid e partie s involve d i nthi s business , th e estimate d cost s associate d wit hspeciatio no f th e abov e element s i s show ni nTabl e 3-3 . I nsum , fo r combustio nemission s o f unleade d gasolin e fuel s
5 0P.5 9

an d additives , th e cost s o f speciating th e emission s fo r th e compound s o f interes t ar e estimate d t o b e $130 0 fo r hydrocarbon s and ethers , $45 0 fo r aldehyde s and ketones , $40 0 fo r alcohols , $420 0 fo r PAH , $120 0 fo r NPAH , $135 0 fo r th e atypica l elements , and $20 0 fo r analysi s o f th e regulate d emissions . Cost s fo r speciating evaporativ e emission s fo r th e compound s o f interes t i s estimate d t o b e $70 0 fo r hydrocarbon s and ether s an d approximatel y$20 0 fo r alcohols . Fo r diese l fuel s and additives , cost s fo r speciating combustio nemission s fo r eac ho f th e compound s liste d abov e ar e identica l t o speciatio no f unleade d gasolin e fuel/additiv e emissions , excep t fo r th e analysi s o f th e regulate d emission s whic h i s estimate d a t $50 0 fo r diese l fuel .

D . Tota l Tier 1 Cost s Tabl e 3- 4 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 hunleade d gasolin e an d diese l fuels , and fo r "non
atypical " and "atypical " produc t formulations . Fo r presentatio n purposes , combustio n generation/speciatio ncost s hav e bee n combined . Emission s nee d t o b e generate d separatel yfo r eac ho f th e following : 1 ) speciatio no f emission s fo r hydrocarbon s and ethers , aldehyde s and ketones , alcohols , and th e regulate d emissions , 2 ) speciatio no f emission s fo r PAH , NPAH , and 3 ) speciatio no f emission s fo r atypica l elements . Wit hth e exceptio n o f th e "atypical " analysis , eac ho f th e emissio n generation/speciatio nprocedure s i s require d t o b e conducte d thre e 5 1P.6 0

times . Fo r thi s purpose , th e emissio n generation/speciatio n cost s show ni nth e tabl e hav e bee nmultiplie d b ythree . Fo r atypica l elements , th e speciatio ncost s i nth e tabl e assume tha t testing wil l begi na t a mileag e equivalen t t o 5 0 percen t o f usefu l life , rathe r tha nth e maximu mo f 8 0 percen t o f usefu l life .
Wit hth e exceptio no f "atypical " products , th e cost s show ni n th e tabl e ar e th e highes t cost s a produce r woul d likel yincu r i n fulfilling Tie r 1 requirements . 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 and tha t ther e ar e n o saving s fro mcost
sharing provisions . Unde r thes e assumptions , a produce r o f a "non
atypical " gasolin e fue l o r fue l additiv e woul d likel yincu r cost s o f $79,60 0 fo r Tie r 1 . Likewise , a produce r o f a nunleade d gasolin e "atypical " produc t woul d incu r cost s o f $114,75 0 fo r thes e requirements . Cost s t o a produce r o f "non-atypical " and "atypical " diese l produc t formulation s ar e estimate d a t $110,09 0 an d $209,050 , respectively . Thes e latte r cost s assume tha t test s ar e conducte d usin g a heav

yHD E (>33,00 0 lbs . GVWR) . Cost s ar e expecte d t o b e lowe r i f a ligh t o r mediu mHD E i s use d fo r testing .

Th e cost s presente d i nth e tabl e reflec t cost s t o a produce r whe ntestin g a fue l product . Whe na nadditiv e i s bein g tested , th e emission s o f th e base-fuel/additiv e mixtur e wil l nee d t o b e compare d wit hth e emission s o f th e bas e fue l alone , s o tha t th e contributio no f th e additiv e ca nb e determined . Thus , th e cost s t o 5 2P.6 1

a nindividua l produce r fo r testin g a nadditiv e produc t wil l b e twic e tha t show ni nth e table , reflectin g th e cos t o f testin g bot h th e bas e fue l an d th e base-fuel/additiv e mixture .

III . Tie r 2 Requirement s andCost s

Th e secon d tie r o f healt heffect s evaluatio nconsist s o f short-ter m

screenin g test s whic haddres s carcinogenicity , mutagenicity , reproductiv e an d developmenta l effects , pulmonar y toxicity , an d neurotoxicity . 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 nTie r 1 d o no t includ e comparabl e existin g informatio nfro m adequatel yperforme d an d properl ydocumente d previou s studies .

I ngeneral , laborator yanimal s ar e t o b e expose d byinhalatio n t o dilute d whol e exhaus t an d evaporativ e emissions . Th e propose d tes t guideline s generall ycal l fo r a minimu mo f si xweek s exposure , eigh t hour s pe r day , seve n day s pe r week . Th e tes t guideline s an d relate d emissio ngeneratio n procedure s ar e discusse d below , alon g wit hestimate d cost s o f performin g eac htes t o na nindividua l basis . Thes e estimate s wer e base d o nstandar d testin g cost s provide d byth e Offic e o f Toxi c Substances 1 7 (OTS ) . Th e OT S

1 7 U.S . Environmenta l Protectio nAgency , Offic e o f Pesticide s an d Toxi c Substances , "Cos t Estimate s fo r TSC ATes t Guidelines, " Memorandu mfro m

Da nAxelra d t o Sheri Dunatchik , June , 1991 . 5 3P.6 2

estimate s wer e adjuste d t o accoun t fo r modification s t o thes e standar d protocol s t o b e consisten t wit hth e scop e o f th e propose d emissions-base d healt heffect s testing program .

A . Individua l Tes t Cost s 1 . Combustio nEmissionGeneration Al l bu t on e o f th e propose d Tie r 2 test s requir e emission s t o b e generate d o na continua l basi s throughou t th e require d biologica l exposure , wit hemission s dilute d and route d directl y fromth e vehicl e o r engin e t o th e biologica l testin g chamber . Fo r testin g o f gasolin e fuels/additives , thi s wil l requir e a vehicl e t o b e drive n throughrepeate d LA- 4 drivin g cycle s fo r approximatel y eigh t hour s pe r da yfo r 4 2 days , and wil l cos t approximatel y $28,800 . Testing diese l fuel s an d additive s wil l requir e anengin e t o b e run continuousl yo na dynamometer , and i s estimate d t o cos t $14,400 . Cost s o f fue l and maintenanc e ar e reflecte d i nthes e estimates . On e require d test , th e Ame s Revers e Mutatio nAssay , i s anin-vitr o test , and doe s no t requir e continuou s emissio n generation . I nthi s assay , culture s ar e expose d t o th e particulat e matte r o f combustio nemission s whic hi s collecte d and strippe d from a collectio nfilte r and extracte d i ndichloromethane . Collectio n o f th e particulat e matte r fo r th e Ame s assayrequire s a nFT P t o b e conducte d fo r testin g gasolin e fuel s and additives , and an EPA transien t tes t fo r testing diese l fuel s and additives . Cost s associate d wit hthes e procedure s ar e estimate d a t $70 0 fo r an FTP , and $8,30 0 fo r a n EP Atransien t test . Acos t o f $10 0 fo r gasolin e 5 4P.6 3

product s and $30 0 fo r diese l product s i s include d i nthes e estimate s t o reflec t th e cos t o f extracting particulat e matte r fro m th e collectio nfilter .

2 . Evaporativ e EmissionGeneration EP Apropose s t o requir e th e us e o f a benc hmetho d (i.e. , evaporativ e chambers ) fo r evaporativ e emissio ngeneratio nfo r biologica l testin g purposes . Th e chambe r woul d b e temperatur e an d pressur e controlle d s o tha t it' s characteristic s wer e simila r t o th e hea d spac e o f th e fue l tank o f a vehicl e wher e in-us e diurna l and refueling emissio nar e generated . I ncompariso nwit hth e SHED
base d system , th e benc hmetho d woul d requir e muc hsmaller , les s expensive , and simple r equipment . Emission s coul d b e generate d clos e t o th e biologica l testing chambers , and largel yautomate d system s coul d b e used . EP Aha s develope d cost s fo r thi s procedur e base d o nth e amoun t o f hardwar e and labo r expecte d t o b e associate d wit hthi s typ e o f procedure . EP Aestimate s th e tota l cos t o f generating evaporativ e emission s fo r 8 hour s pe r dayfo r 4 2 day s usin g th e benc hmetho d describe d abov e t o b e abou t $8,000 .
3. InhalationExposure Methodology EP Aestimate s tha t i t wil l cos t approximatel y$1,10 0 fo r set
u p and operatio no f appropriat e system s fo r th e controlle d dilutio n and deliveryo f fue l and additiv e emission s t o th e biologica l

5 5P.6 4

testin g chambers . 1 8


### 4. Carcinogenicityand MutagenicityScreens Abatteryo f thre e screening studie s i s propose d and describe d below . Ame s Revers e Mutatio n Assav . Th e Ame s assayi s a ninvitro tes t whic hmake s us e o f mutan t strain s o f th e bacteriu mSalmonella typhimurium. Thes e strain s canno t gro wi na mediu mdeficien t i n histidin e du e t o an inherite d inabilit yt o produc e thi s amin o acid . Exposur e t o mutageni c (an d possibl ycarcinogenic ) substance s can elici t revers e mutations , suc htha t th e bacteri a regai nthei r abilit yt o gro wi na histidine-deficien t medium . I nthi s test , th e bacteri a wil l b e expose d t o extracte d fuel/additiv e combustio n emissio nfractions , and th e numbe r o f suc hrevers e mutation s wil l b e analyzed . Astandar d Ame s assaymake s us e o f fou r strain s o f bacteria . I nth e guidelin e fo r thi s program , however , fiv e mutan t strain s o f bacteri a ar e required . A s a result , th e direc t cost s and labo r associate d wit hroutin e Ame s assayar e expecte d t o increas e b

y2 0 percent . Adjustin g th e OTS-provide d estimat e o f $3,84 0 t o accoun t fo r thes e modification s result s i n anestimate d cos t o f slightl yabov e $4,00 0 fo r conducting a nAme s assayfo r thi s program . AnAme s batterywil l b e conducte d o nbot hparticulat e an d semi-volatile-phas e sample s o f combustio n emissions , therefor e doubling thi s cos t t o ove r $8,000 . ""Genera l Healt hTesting Guidelin e fo r Inhalatio nExposur e t o Fuel s and Fue l Additives, " Septembe r 30 , 1991 , prepare d b yYung
Sung Chen g and Edwar d B . Bar r unde r EP AContrac t 68-C8-0024 . 5 6P.6 5

Micronucleu s Assav . 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 nnucleu s during cel l division . Whil e micronucle i d o for munde r natura l conditions , exposur e t o potentiall ycarcinogeni c agent s ca ncaus e a nincreas e i nmicronucleate d cells . I n thi s assay , liv e rodent s wil l b e expose d b yinhalatio n t o th e fuel/additiv e emissions , and thei r periphera l bloo d cell s wil l subsequentl yb e examine d fo r th e presenc e o f increase d number s o f micronuclei . Thi s assayi s generall yconducte d usin g th e injectio n rout e o f exposur e and onl ya 2 4-hour tes t duration . T o b e consisten t wit hth e scop e an d inten t o f thi s program , th e propose d guideline s instea d involv e a 42-da yperio d o f inhalatio nexposure . EP Aha s adjuste d th e OT S estimate s o f $24,62 0 accordingly , an d project s th e cos t o f conducting thi s assayt o b e $44,000 .
Siste r Chromati d Exchang e (SCE) . SCE s ar e believe d t o b e cause d b y chromosome strand breakag e resulting i nexchange s o f geneti c materia l betwee n th e halve s o f a chromosome "pair " (i.e. , th e chromatids) . Whil e some SCE s occu r normally , a nincreas e i nth e frequenc yo f suc hexchange s mayb e indicativ e o f mutagenic/carcinogeni c activity . I nthi s assay , bloo d lymphocyte s and 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 nerrors . Acos t o f $16,00 0 provide d b yOT S fo r a standar d SC E protoco l wa s modifie d t o reflec t th e 4 2 da yinhalatio n 5 7P.6 6

exposur e neede d fo r thi s program , yieldin g a nestimat e o f approximatel y$49,000 . 

### 5. InhalationDevelopmental ToxicityStudy Thi s stud

yi s designe d t o provid e informatio no nth e potentia l hazar d t o a fetu s whic hmayaris e fromexposur e o f th e mothe r t o fuel/additiv e emission s during pregnancy . Pregnan t female s o f tw o differen t specie s wil l b e expose d t o emission s vi a inhalatio n during th e majo r orga ndevelopmen t perio d i nth e fetus . Th e mother s wil l b e sacrifice d o nth e da yprio r t o norma l parturition , and th e uteru s o f eac hdamexamine d fo r embryoni c o r feta l death s and anomalies . Th e OT S protoco l fo r performin g thi s tes t fo r 4 2 days , o ntw o species , remain s unchange d fo r thi s analysis , an d i s estimate d a t approximatel y$98,000 . 

### 6. Reproductionand FertilityScreen Th e purpos e o f thi s tes t i s t o determin e th e potentia l reproductiv e toxicit yt o adul t animal s cause d b yinhalatio no f fuel/additiv e emission s during a subacut e (sixweek ) exposur e period . Laboratoryanimal s wil l b e expose d t o emission s befor e matin g and during pregnancy , and effect s o nmal e and femal e reproductio norgan s and o nth e numbe r and viabilit yo f offspring wil l b e determined . Th e estimate d cos t fo r thi s stud yi s $100,000 . Thi s cos t wa s calculate d b yadjusting relevan t factor s i na cos t estimat e o f $139,71 0 provide d b yth e Offic e o f Toxi c Substance s fo r performin g a subchroni c inhalatio ntoxicit yassessment . 5 8P.6 7

7 . PulmonaryToxicityScreen Thi s stud

yinvolve s th e inhalatio nexposur e o f laboratory rodent s t o fuel/additiv e emission s during one-wee k and si xwee k periods , wit hsubsequen t examinatio no f lung tissues , cells , and fluids . Th e evaluatio nwil l includ e a lung lavag e techniqu e t o obtai ncell s and fluid s fo r cel l culture , microscopic , and biochemica l analyses . Th e cos t o f performin g thi s modifie d tes t i s estimate d t o b e $81,000 , calculate d b yadjustin g th e relevan t variable s i n a cos t estimat e provide d b yOT S o f $139,71 0 fo r a subchroni c inhalatio ntoxicit yprotocol .
8. NeurotoxicityScreen Th e neurotoxicit yscree ninclude s a batteryo f functiona l observation s and evaluation s performe d o nliv e animal s a t interval s throughou t a six-wee k perio d o f inhalatio nexposur e t o fuel/additiv e emissions . Th e proces s chart s an ydecremen t i n functio ni ntes t animal s a s compare d t o unexpose d contro l animals . Performanc e o f thi s neurotoxicit yscree ni s estimate d t o cos t $83,000 .

B . CombinedTes t Cost s Th e cost s provide d abov e reflec t th e cos t o f conducting eac h tes t individually , and doe s no t conside r an ysaving s whic hcoul d b e achieve d from

conducting an

yo f th e test s i n conjunctio nwit hon e another . I n fact , severa l o f th e test s ca n b e conducte d i n parallel , makin g us e o f th e same emissions , and sometimes , th e same 5 9P.6 8

laboratoryanimals . Assumin g tha t th e require d laboratorycapacit y i s available , i t i s likel ytha t in-viv o carcinogenicit yand mutagenicit yscreen s (micronucleu s assayand siste r chromati d exchange ) wil l b e conducte d simultaneously . Th e tota l cost s o f th e combine d test s i s estimate d a t $66,000 , fo r a saving s o f $27,000 . Likewise , i nEPA' s judgement , th e developmental , reproductive , pulmonary , and neurotoxicit yscreen s ar e likel yt o b e combine d int o tw o testing block s fo r a tota l cos t o f $220,000 , a cos t saving s o f $142,000 . Th e Ame s assaycanno t b e combine d wit han yo f th e othe r test s becaus e i t make s us e o f bacteri a rathe r tha nrodents . I f testin g i s planne d and conducte d i nthi 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 ncombustio nemission s woul d b e approximatel y$294,000 . Likewise , conducting al l biologica l test s o nevaporativ e emission s i s estimate d t o cos t $286,000 . The differenc e i s becaus e th e Ame s assayi 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 hn o cost-sharing arrangements .

C . Tota l Tier 2 Cost s Tabl e 3- 5 show s th e cost s associate d wit hmeetin g th e requirement s o f Tie r 2 . Thes e cost s reflec t th e potentia l saving s whic hcoul d b e achieve d b yconducting certai ntest s i nblocks , a s describe d above . Cost s associate d wit hth e continuou s generatio n o f emission s fo r in-viv o test s ar e assume d t o b e incurre d twic e fo r combustio nemission s and twic e fo r evaporativ e emissions . An 6 0P.6 9

additiona l FT P (or transien t tes t i nth e cas e o f diese l fuel s and additives ) i s include d fo r th e generatio no f combustio nemissio n fraction s fo r th e Ame s Assay . Th e cost s assume tha t al l biologica l test s excep t th e Ame s assaywil l b e performe d o nbot hcombustio n and evaporativ e emission s fo r th e evaluatio no f gasolin e fuel s an d additives , and o ncombustio nonl ywhe ntesting diese l fuel s an d additives .

I nsum , th e highes t cos t a nindividua l produce r woul d likel y incu r fo r fulfilling al l Tie r 2 requirement s woul d b e approximatel y $655,380 . Thi s cos t represent s th e potentia l cos t t o producer s o f anunleade d 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 nearl yhalf , o r $332,400 . Again , absen t othe r arrangements , cost s t o a nadditiv e produce r woul d b e double , reflecting cost s fo r testin g bot hth e additiv e produc t and th e base-fuel .

IV . Administrative/Reportin g Requirement s an dCost s

Th e material s t o b e submitte d t o EP Afollowing completio n o f al l Tie r 1 and Tie r 2 requirement s ar e divide d int o thre e majo r categories : notificatio ndata , a summaryreport , an d appendices . Th e notificatio n include s th e informatio nmandate d b yexisting regulation s unde r sectio n211(b)(1 ) submitte d o nEP Aform s whic h 6 1P.7 0

ar e i neffec t a t th e time o f th e submittal . Th e summaryrepor t include s a tex t summaryo f th e evaluatio nprocedures , results , and conclusion s pertainin g t o Tier s 1 and 2 . Detaile d informatio ni n suppor t o f th e genera l discussion s containe d i nth e summaryrepor t ar e t o b e submitte d a s appendice s t o tha t 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 testin g i s complete .

I nEPA' s judgement , approximatel y$52,00 0 pe r yea r wil l b e spen t b ya produce r fo r cost s relate d t o administratio n o f th e programand produc t registration . Thes e cost s tota l nearl y $160,00 0 fo r thre e years . EP Aestimate s 2 0 percen t o f th e cost s resul t frommanagemen t oversight , 6 6 percen t from professiona l an

d technica l support , and approximatel y1 4 percen t fromclerica l support .

V . Tie r 3 Requirement s

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 .

6 2P.7 1

Fuel s an d fue l additive s wil l b e subjec t t o additiona l testin g unde r th e Tie r 3 provision s o f th e registratio nprogra ma s determine d o na case-by-cas e basi s byEPA . 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 depen d
o nth e cas e a t hand . I t i s expecte d tha t Tie r 3 requirement s wil l
mos t ofte nentai l anima l inhalatio nexposure s o f chroni c (2- 3 year ) duratio nt o furthe r explicat e th e result s o f th e screenin g batterie s performe d unde r Tie r 2 . However , studie s addressin g othe r area s o f concer nwhic hma yb e highlighte d b yth e result s o f th e Tie r 1 literatur e searc ho r emissio ncharacterizatio n requirement s ma yals o b e subjec t t o Tie r 3 follow-up . Criteri a fo r determinin g th e applicabilit yo f Tie r 3 testin g wil l includ e evidenc e fo r significan t toxicit ywhic hha s no t bee nfull y evaluate d b ypreviou s scientifi c investigation . Th e potentia l exposur e ris k wil l als o b e considered .

EP Aexpect s th e cost s o f performin g chroni c test s o f thi s magnitud e t o b e approximatel y2. 5 millio ndollars . I naddition , generatin g sufficien t emission s fo r performin g thes e tests , maintainin g th e vehicl e o r engine , an d providin g sufficien t amount s o f fue l woul d cos t nearl y$300,00 0 i nth e cas e o f gasolin e fuel s an d fue l additives , an d abou t $150,00 0 fo r diese l fuel s an d fue l additives . I ntotal , th e cost s associate d wit hfulfillin g Tie r 3 requirement s ar e estimate d t o b e abou t 3 millio ndollars , regardles s o f fue l type . Thi s estimat e assume s tha t th e cos t o f 2 year s o f biologica l testin g woul d b e incurre d ove r 3 years . 6 3P.7 2

VI . Summar

y

Tabl e 3- 6 provide s a summaryo f cost s associate d wit hth e activitie s propose d fo r Tier s 1 and 2 . Fo r anindividua l produce r o f unleade d gasoline , th e cos t fo r fulfilling al l requirement s o f Tier s 1 and 2 and reporting th e result s t o EP Ai s estimate d t o b e abou t $900,00 0 i f th e produc t formulatio ni s "non-atypical " (baselin e and non-baseline) , and abou t $930,00 0 i f th e produc t formulatio ni s "atypical" . Likewise , comparabl e cost s fo r diese l fuel/additiv e producer s wil l likel yb e approximatel y$600,00 0 fo r producer s o f "non-atypical " produc t formulation s and nearl y $700,00 0 fo r producer s o f "atypical " produc t formulations . Thes e cost s reflec t th e conservativ e assumptio ntha t al l emissio n generation/speciatio ntest s an d al l biologica l test s wil l nee d t o b e conducte d du e t o lac k o f adequat e existing data . Th e estimate s represen t th e highes t cos t producer s woul d likel yincu r pe r produc t i f the ywer e t o assume individua l financia l responsibilit yfo r al l tes t costs , eithe r becaus e theyelecte d no t t o engag e i ncos t sharing provision s o r theywer e no t abl e t o d o s o (i.e. , sol e produce r i n th e group) . Aproduce r testin g anadditiv e produc t wil l hav e a n additiona l cos t o f up t o $734,98 0 fo r unleade d gasolin e product s and $442,49 0 fo r diese l fue l product s t o accoun t fo r testin g th e base-fue l i f othe r arrangement s canno t b e made . Th e lowes t cos t likel yt o b e incurre d b ya produce r (i f submitting dat a individuall yand no t a s a group ) woul d b e th e cos t o f 6 4P.7 3

conducting a literatur e searc hand registering th e produc t wit h EPA . Thi s cos t i s estimate d t o b e $65,00 0 t o $70,000 . Al l o f thes e cost s ar e one-time obligation s associate d wit hhealt heffect s testin g requirement s and reporting resulting fromthi s proposal . Cost s incurre d o na pe r manufacture r basi s an d aggregat e cost s t o th e industryar e discusse d i nth e nex t chapter .

6 5P.7 4



### Tabl e 3-1 : Fuel/Additive Categorie s Formulatio n Clas s Baselin e Formulation s

Non-Baselin e Formulation s Atypica l Formulation s Fue l Famil y

Unleaded Gasolin e 1 Grou p 52 7 Manufacturer

s 1530 Products 1 7 Group s 645 Manufacturer

s 97 6 Products 48 Group s 137 Manufacturer

s 19 7 Products Diese l
1 Grou p 305 Manufacturer

s 76 9 Products 1 Grou p 2 Manufacturers 2 Products 4 7 Group s 148 Manufacturer

s 22 3 Products



# ^i

" fl—

### Tabl e 3-2 : SummaryofVehicl e Requiremen tCost s

Vehicl e Acquistion/Operation * Engin e Acquisitio n Engin e Maintenanc e Fue l Mileag e Accumulatio n Resal e Valu e TOTALS** : Unleade d Gasolin e Fue l Famil y Baselin e an d Non-Baselin e Produc tFormulation s

$6,75 0 N/ A N/ A N/ A $25,00 0 N/ A $31,75 0 Atypica l

Produc t Formulation s $13,50 0 N/ A N/ A N/ A $50,00 0 N/ A $63,50 0 Diese l Fue l Famil y

Baselin e an d Non-Baselin e Produc tFormulation s

N/ A $13,00 0 $75 0 $3,25 0 $13,44 0 $9,00 0 $21,44 0 Atypica l

Produc t Formulation s N/ A $13,00 0 $4,35 0 $18,85 0 $78,00 0 $4,50 0 $109,70 0 Include s aquisition , maintenance , fuel , an d resal e value

. 'Resal e valu e i s subtracte d fro m engin e acquisitio n cost
.

IO IP.7 6



### Tabl e 3-3 : Emissio n Speciatio n Costs

Compound s Hydrocarbons/Ethers Aldehydes/Ketones Alcohol s PA H NPA H Atypica l Elements Regulated Emissions : Unleade d Gasolin e Diese l Speciatio n o f Combustio n Emission s $1,30 0 $45 0 $40 0 $4,20 0 $1,20 0 $1,35 0 $200 $50 0 Speciatio n o f Evaporativ

e Emission s $70 0 N/ A $20 0 N/ A N/ A N/ A N/ A N/ A



# _£~

c

### Tabl e 3-4 : Tie r1 Cost s

Dat a Researc h an d Analysi s Vehicle/Engin e Cost s * Emissio n Characterization : Combustio n Generation/Speciatio n of : HC/Ethers , Aldehydes/Ketones , Alcohols , an d Regulate d Emission s PAH , NPA H Atypical s Evaporativ e Generation/Speciatio n of : HC/Ether s an d Alcohol s TOTALS : Unleade d Gasolin e Fue l Famil y Baselin e an d Non-Baselin e Produc tFormulation s $16,50 0 $31,75 0 $8,85 0 $18,30 0 N/ A $4,20 0 $79,60 0 Atypica l

Produc t Formulation s $16,50 0 $63,50 0 $8,85 0 $18,30 0 $3,40 0 $4,20 0 $114,75 0 Diese l Fue l Famil y

Baselin e an d Non-Baselin e Produc tFormulation s $16,50 0 $21,44 0 $31,95 0 $40,20 0 N/ A N/ A $110,09 0 Atypica l

Produc t Formulation s $16,50 0 $109,70 0 $31,95 0 $40,20 0 $10,70 0 N/ A $209,05 0

* Include s aquisition , maintenance , fuel , resal e value , an d mileag e accumulation

.

^ i ^ i

### Tabl e 3-5 : Tie r2 Cost s

Combustio n Emissions : Generatio n fo r4 2 da yExposur e * Generatio n fo rAme s Assa y Biologica l Test s (Combined ) Evaporativ e Emissions : Generatio n fo r4 2 da yExposur e * Biologica l Test s (Combined ) Dilutio n System : TOTALS : Unleade d Gasolin e Fue l Famil y Baselin e an d Non-Baselin e Produc tFormulation s $57,60 0 $70 0 $294,20 0 $15,78 0 $286,00 0 $1,10 0 $655,38 0 Atypica l

Produc t Formulation s $57,60 0 $70 0 $294,20 0 $15,78 0 $286,00 0 $1,10 0 $655,38 0 Diese l Fue l Famil y

Baselin e an d Non-Baselin e Produc tFormulation s $28,80 0 $8,30 0 $294,20 0 N/ A N/ A $1,10 0 $332,40 0 Atypica l

Produc t Formulation s $28,80 0 $8,30 0 $294,20 0 N/A N/A $1,10 0 $332,40 0

* Tw o generation s necessaryfo rconductin g al l biologica l tests
.



### ( VP.7 9



### Tabl e 3-6 : Estimated Progra m Costs

Tlerl : Dat a Researc h an d Analysis : Literature Searc h Dat aModelin g Emissio n Characterization : Vehicle/Engin e Costs * Mileag e Accumulatio n Combustio n Emissio n Generatio n for : 1.) Speciatio n o

fHC/Ethers , Aldehydes/Ketones , Alcohols , Regulate d Emission s 2. ) Speciatio n o

fPAH , NPA H 3. ) Spedatlo n o

fAtypical s Evaporative Emfsslo n Generatio n for : Spedatlo n o

fHC/Ethers , Alcohol s Speciatio n o

fCombustio n Emission s for : 1.) Hydrocarbons/Ether

s 2. ) Aldehydes/Ketone s 3. ) Alcohol s 4. ) PA H 5. ) NPA H 6. ) Atypica l Elements 7. ) Regulate d Emission s Speciatio n o

fEvaporative Emission s for : 1.) Hydrocarbons/Ether

s 2. ) Alcohol s Tie r2 : Combustio n Emissio n Generatio n fo r4 2 Da yExposur

e Combustio n Emissio n Generatio n fo rAmes Assa

y Evaporative Emissio n Generatio n fo rAl l Biologica l Tests Biologica l Tests Conducte d o n Combustio n Emission s Biologica l Tests Conducte d o n Evaporative Emission s Equipmen tCosts-Dilutio n Syste m Unleaded Gasolin e Fue l Famil y Baselin e an d Non-Baselin e Produc t Formulation s $12,50 0 $4,00 0 $6,75 0 $25,00 0
$60 0 $70 0 N/ A $50 0 $1,30 0 $45 0 $40 0 $4,20 0 $1,20 0 N/ A $20 0 $70 0 $20 0

$28,80 0 $70 0 $5,84 0 $294,20 0 $290,10 0 $1,10 0 Atypica l

Produc t Formulation s $12,50 0 $4,00 0 $13,50 0 $50,00 0
$60 0 $70 0 $70 0 $50 0 $1,30 0 $45 0 $40 0 $4,20 0 $1,20 0 $1,35 0 $20 0 $70 0 $20 0

$28,80 0 $70 0 $5,84 0 $294,20 0 $290,10 0 $1,10 0 Diese l Fue l Famil y

Baselin e an d Non-Baselin e Produc t Formulation s $12,50 0 $4,00 0 $8,00 0 $13,44 0 $8,00 0 $8,00 0 N/ A N/ A $1,30 0 $45 0 $40 0 $4,20 0 $1,20 0 N/ A $50 0 N/ A N/ A

$14,40 0 $8,30 0 N/ A $294,20 0 N/ A $1,10 0 Atypica l

Produc t Formulation s $12,50 0 $4,00 0 $31,70 0 $78,00 0 $8,00 0 $8,00 0 $8,00 0 N/ A $1,30 0 $45 0 $40 0 $4,20 0 $1,20 0 $1,35 0 $50 0 N/ A N/ A

$14,40 0 $8,30 0 N/ A $294,20 0 N/ A $1,10 0
Include s acquisition , maintenance , fuel , an d resal e value

.



# 6>5iP.8 0

Chapte r 4

Estimate d Economi c Impact s

I . Introduction

Unde r Executiv e Orde r 12291 , EPAi s require d t o asses s th e potentia l impac t o f th e propose d regulation s o nth e econom yand t o determin e whethe r o r no t theywoul d resul t i na majo r rule . A majo r rul e i s define d t o b e on e whic hha s anannua l impac t o nth e econom yo f $10 0 millio n o r more , ha s a significan t advers e impac t o ncompetition , employment , investment , productivity , o r innovation , o r result s i na majo r pric e increas e fo r th e affecte d product . Base d o nth e uni t cos t estimate s presente d i nth e previou s chapter , thi s chapte r project s th e overal l financia l impact s o f th e propose d programo nth e fuel/fue l additiv e industry . Economi c impact s ar e discusse d fo r fue l manufacturers , additiv e manufacturers , and th e industrya s a whole . Th e assumption s and judgement s o nwhic hth e analysi s i s base d and th e methodologyfo r determining th e cos t impact s o f complianc e ar e als o presented .
Thi s analysi s indicate s tha t th e rul e woul d no t hav e an annua l effec t o nth e econom yo f $10 0 millio no r more , no r woul d i t resul t i nan ysignifican t advers e effect s o nth e industry . Cost s t o an individua l produce r ar e estimate d t o rang e from$50 0 t o abou t $ 2 6 6P.8 1

million , wit hth e majorit yo f producer s (5 5 percent ) incurrin g cost s betwee n$1,00 0 an d $5,000 . Tota l cos t t o th e fuel/fue l additiv e industr ya s a whol e i s estimate d t o b e approximatel y8 3 millio ndollars , sprea d ove r a thre e yea r tim e period . Thus , th e propose d regulation s ar e estimate d t o hav e a nannua l impac t o n th e economyo f abou t 2 7 millio ndollars , wel l unde r th e $10 0 millio n majo r rul e criterion .

Th e followin g section s discus s th e analytica l assumption s an d approache s o nwhic hthi s cos t analysi s i s based , methodolog yfo r determinin g produce r an d industr yimpacts , limitation s o f th e analysis , an d conclusions .

II . Analytica l Assumption s andApproac h

Th e analysi s containe d i nthi s chapte r require d certai n analytica l assumption s an d judgement s t o b e mad e regardin g expecte d
us e o f cost-sharin g provision s an d th e expecte d availabilit yo f existin g chemica l an d biologica l tes t data . I naccordanc e wit hCAA sectio n211(e) , EP Ai s proposin g a groupin g syste mpermittin g manufacturer s o f simila r fuel s an d fue l additives , o na voluntar y basis , t o satisf yth e informatio ngatherin g an d testin g requirement s o f th e progra mthroug hjointl ysupporte d test s conducte d o na formulatio ndesignate d t o represen t th e group . Th e result s o f th e test s o nth e grou p representativ e coul d b e submitte d
6 7P.8 2

jointl yfo r al l member s o f th e group , wit happlicabl e cost s t o b e share d b

yth e respectiv e manufacturers . Th e basi c conceptua l framewor k fo r th e propose d groupin g systemi s a matri xo f fuel/additiv e categorie s whic hrepresen t potentia l combination s o f fue l familie s and genera l produc t formulatio ncharacteristics . Thes e categorie s wer e define d i nth e previou s chapte r and ar e show n i nTabl e 3- 1 fo r th e unleade d gasolin e and diese l fue l families . Fo r purpose s o f thi s analysis , EP Aha s assume d tha t al l producer s wil l participat e i n th e grouping system an d tha t cost s incurre d fo r testin g th e group representativ e wil l b e divide d equall yamong th e numbe r o f product s enrolle d i nth e group .

Base d o nth e propose d grouping criteri a and th e compositiona l informatio ncontaine d i nth e registratio n database , eac hcurrently

registere d produc t wa s assigne d t o a nappropriat e categoryand group . Th e result s o f thes e assignment s ar e show ni nTabl e 3-1 . T o determin e th e cost s applicabl e t o th e group s i neac hcategory , assumption s the nha 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 existin g tes t data . Thes e assumption s ar e outline d belo w an d ar e summarize d i nTabl e 4-1 . 

### Unleaded Gasoline Baseline 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 y1,53 0 fuel/additiv e product s 6 8P.8 3

registere d b

y52 7 producers . Whil e a substantia l amoun t o f testing ha s bee nconducte d o nth e combustio nemission s o f baselin e unleade d gasolin e fuel/additiv e products , comparabl e informatio nmayno t b e availabl e o nevaporativ e emissions . Thus , fo r group s i nth e unleade d gasolin e baselin e category , EP Aassume s tha t al l Tie r 1 and Tie r 2 chemica l and biologica l test s wil l b e neede d fo r evaporativ e emissions , and onl yth e developmental , reproductive , pulmonary , and neurotoxicit ytest s wil l b e neede d fo r combustio n emissions . 

### Unleaded Gasoline Non-Baseline Category Thi s categoryo f fuel/additiv e product s i s estimate d t o contai n9 7 6 product s produce d b y64 5 manufacturers , whic har e subdivide d int o 1 7 groups . Minima l informatio n i s expecte d t o exis t fo r thes e produc t formulation s du e t o thei r relativel yrecen t introductio n o r expansio ni nth e market . Consequently , EP Aassume s tha t al l Tie r 1 and 2 test s wil l b e necessaryfo r bot hcombustio n and evaporativ e emissions . 

### Unleaded Gasoline Atypical

Category EP Aestimate s thi s categorywil l b e mad e up o f 4 8 fuel/additiv e group s consisting o f 19 7 product s manufacture d b y13 7 producers . Sufficien t informatio ni s assume d t o b e unavailabl e fo r fulfilling th e program' s healt htesting requirement s fo r product s i nthi s category . Fo r Tie r 1 requirements , EPAassume s characterizatio no f combustio nand evaporativ e emission s wil l b e 6 9P.8 4

conducte d including th e requirement s fo r speciating "atypical " emissio nproducts . Althoughther e mayb e othe r mean s t o mak e thi s determination , thi s analysi s assume s tha t evaporativ e emissio n characterizatio n wil l b e use d t o determin e whethe r a natypica l additiv e qualifie s fo r th e lowvolatilit yexemptio nfo r Tie r 2 . Fo r Tie r 2 requirements , th e amoun t o f testin g expecte d t o b e require d i s dependen t o nth e group . EP Aassume s al l group s wil l conduc t al l biologica l test s require d fo r combustio n emissions . However , sinc e onl yvolatil e fuel/additiv e mixture s wil l b e require d t o underg o biologica l testing o f evaporativ e emissions , i t appears , base d o nth e chemical/physica l characteristic s o f th e products , tha t onl y6 o f th e 4 8 group s wil l b e responsibl e fo r fulfilling thi s requirement . I nsum , EP Aassume s emissio n characterizatio no f combustio nan d evaporativ e emissions , a s wel l a s biologica l testin g o f combustio nemissions , wil l b e conducte d fo r al l "atypical " groups . Evaporativ e emissio nbiologica l testing i s assume d t o b e conducte d fo r onl ysi xo f th e groups . 

### Diesel Baseline Category A s wit hth e unleade d gasolin e baselin e category , onl yon e grou p i s define d fo r thi s category . Anestimate d 30 5 manufacturer s representing 76 9 product s ar e containe d i nthi s group . A considerabl e amoun t o f informatio nexist s o nbaselin e diese l products . Consequently , EPAassume s tha t th e onl ytest s require d fo r thi s grou

p wil l b e th e developmental , reproductive , pulmonary , and neurotoxicit ystudie s o n combustio nemission s o f diese l fuels . 7 0P.8 5

Evaporativ e emissio nassessment s ar e generall yno t applicabl e t o product s i nth e diese l categories . 

### Diesel Non-Baseline Category Amon g currentl yregistere d products , thi s categoryha s onl y on e group , containing 2 manufacturers , wit hcost s bein g divide d equall yamong th e 2 product s belongin g t o th e group . Unlik e product s i nth e diese l baselin e category , littl e informatio n i s expecte d t o exis t fo r thes e uniqu e produc t formulations . Consequently , al l healt heffect s testin g o ncombustio nemissions , bot hchemica l and biological , i s assume d t o b e neede d fo r product s identifie d wit hthi s group . 

### Diesel Atypical

Category EP Aestimate s 4 7 group s withi nthi s category , representin g a tota l o f 14 8 manufacturer s and 22 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 and 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 ncombustio nemission s wil l b e conducted .

III . Methodologyand Result s

Base d o nth e assumption s describe d above , complianc e cost s wer e calculate d fo r eac hgroup , fo r eac hproduc t withi neac hgroup , 7 1P.8 6

and fo r eac hindividua l produce r currentl yregistering unleade d gasolin e and/o r diese l fuel s o r fue l additives . Th e methodology use d i nestimatin g complianc e cost s o f th e propose d regulation s i s discusse d below , along wit himpact s o f thes e cost s o nfue l manufacturers , additiv e manufacturers , and th e combine d industry .

A . Produce r Impact s Base d o nth e assume d testin g requirement s describe d abov e fo r eac hcategory , cost s wer e calculate d usin g estimate s provide d i n Chapte r 3 and wer e assigne d t o eac hgrou p i nth e category . Contro l costs , discusse d below , wer e als o distribute d t o group s i n th e "atypical " categories . The per-group cost s wer e the ndivide d equall yamong th e numbe r o f product s assigne d t o th e grou p t o determin e th e cos t fo r eac hproduc t i neac hgroup . Individua l produce r cost s wer e the ncalculate d b ysumming th e cost s o f al l product s manufacture d b ya give nproducer .
Tabl e 4- 2 provide s a summaryo f complianc e cost s fo r eac h grou p i neac hfuel/additiv e category , presente d according t o th e Tie r 1 and 2 tes t requirement s assume d t o b e necessaryfo r eac h category . A s show ni n th e table , th e lowes t estimate d cos t pe r grou p pertain s t o group s i nth e baselin e categorie s o f eac hfue l family . Th e highes t cos t pe r group , fo r bot hfue l familie s pertain s t o group s wit h"atypical " products . Thi s i s du e i n par t t o tw o factors . First , cost s associate d wit hmileag e accumulatio n i s expecte d t o b e highe r fo r "atypical " produc t formulations , 7 2P.8 7

assuming stead

ystat e i s no t reache d unti l 5 0 percen t o f th e associate d vehicles ' usefu l life . Second , littl e o r n o healt h effect s dat a i s assume d t o b e availabl e fo r product s o f thi s uniqu e nature .

Cost s o f contro l fue l testin g associate d wit htesting additiv e product s ar e no t include d i nth e table . EP Aassume s tha t th e cost s relate d t o th e testin g o f th e contro l fue l wil l b e applicabl e t o al l group s wit h"atypical " produc t formulations . Du e t o th e larg e proportio n o f additiv e product s i nthes e categories , i t i s likel y that , fo r eac hgrou p i nthes e categories , a nadditiv e wil l b e chose na s th e group' s representative . EP Aassume s tha t manufacturer s wil l tak e advantag e o f a provisio n i n th e propose d rul e whic hallow s applicabl e cost s o f contro l fue l testin g t o b e divide d amon g product s i neac h"atypical " category , rathe r tha n requiring thes e cost s t o b e incurre d separatel yb yeac hgrou

p i n th e category . Thus , EP Aassume s tha t th e cost s o f healt heffect s testin g o f combustio nemission s o nth e contro l fue l wil l b e spli t equall yamong th e "atypical " product s i n th e respectiv e fue l family , whil e cost s associate d wit hanalysi s o f evaporativ e emission s (applicabl e onl yt o gasolin e fuels ) wil l b e spli t equall y amon g th e product s o f th e si xgroup s assume d t o b e analyzing evaporativ e emissions . Th e cost s associate d wit hcombustio n emissio nstudie s o n th e contro l fue l ar e estimate d a t $2,00 0 pe r produc t i nth e diese l fue l family , and $2,20 0 i nth e unleade d gasolin e fue l family . I naddition , si k group s i nth e unleade d
7 3P.8 8

gasolin e fue l famil yar e assigne d anadditiona l cos t o f $42,80 0 t o accoun t fo r biologica l testin g o f evaporativ e emission s o nth e contro l fuel .
Tabl e 4- 3 provide s a compariso no f complianc e cost s betwee n fue l and additiv e manufacturers . Fo r th e 71 0 fue l manufacturer s examine d i n thi s analysis , complianc e cost s rang e fromabou t $50 0 t o $ 2 million , wit ha media ncomplianc e cos t o f $2,200 . O f th e 49 5 fue l additiv e manufacturers , cost s rang e fromand $50 0 t o $2. 2 million , wit ha media ncomplianc e cos t o f $1,100 . Distribution s o f th e complianc e cost s ar e show ni nFigure s 4- 1 and 4- 2 fo r fue l and fue l additiv e manufacturers , respectively . Th e majorit yo f fue l manufacturer s hav e complianc e cost s betwee n $1,00 0 and $5,000 , whil e th e majorit yo f additiv e manufacturer s hav e complianc e cost s betwee n$10 0 and $5,000 , wit hth e larges t percen t i n th e $10 0 t o $50 0 range . Abou t 8 3 percen t o f fue l manufacturer s and 6 7 percen t o f fue l additiv e manufacturer s wil l incu r cost s o f les s tha n $10,000 . Figur e 4- 3 provide s a distributio no f complianc e cost s fo r al l fue l and fue l additiv e manufacturer s combined . Th e figur e clearl y show s tha t majorit yo f manufacturer s (7 6 percent ) hav e complianc e cost s unde r $10,000 . Onl y1 2 percen t o f th e producer s ar e expecte d t o incu r cost s betwee n$10,00 0 an d $100,000 , whil e onl y1 0 percen t ar e expecte d t o incu r cost s betwee n$100,00 0 and $ 1 million . Furthermore , onl yon e percen t o f th e fue l and additiv e 7 4P.8 9

manufacturer s examine d i nthi s analysi s wil l assume cost s i nexces s o f on e millio ndollars . Complianc e cost s fo r fue l an d fue l additiv e producer s combine d rang e from$50 0 t o ove r $ 2 million , wit ha media n cos t o f abou t $2,000 .

Th e analysi s indicate s tha t th e propose d regulatio nmayimpac t additiv e manufacturer s relativel ymor e tha nfue l manufacturers . Abou t 3 3 percen t o f additiv e manufacturer s versu s 1 7 percen t o f fue l manufacturer s wil l hav e complianc e cost s ove r $10,000 . Nonetheless , th e complianc e cost s i n gene'ra l ar e relativel ysmal l and ar e no t expecte d t o caus e significan t advers e economi c effects . Amor e detaile d analysi s o f th e financia l impact s t o smal l fue l and fue l additiv e manufacturer s i s provide d i nth e Regulatory Flexibilit yAnalysis .

i B . Industr

y Impact s Summing th e cost s acros s al l manufacturer s yield s a tota l economi c impac t t o th e fuel/fue l additiv e industryo f approximatel y 8 3 millio ndollars . 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 7 million , wel l unde r th e $10 0 millio nlimi t constituting a majo r rule . Th e thre e yea r averag e i s relevan t becaus e manufacturer s registering fuels/additive s befor e promulgatio no f th e fina l rul e wil l b e allowe d thre e year s fo r compliance . 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 i years . 7 5 'P.9 0

IV . Limitation s o f the Analvsi s

Becaus e producer s o f gasolin e and diese l fuel s an d additive s ar e currentl yth e onl yentitie s require d t o registe r wit hEPA , onl y product s i nthes e fue l familie s ar e examine d i nthi s analysis . A s mentione d previously , leade d gasolin e product s an d "relabeled " additive s ar e excluded . Th e analysi s doe s no t includ e alternativ e fuel s an

d othe r fue l familie s expecte d t o b e designate d fo r registratio ni nth e future . Whe nthese , product s ar e introduce d int o th e market , th e numbe r o f registere d product s wil l likel yris e i nth e short-term , bu t wil l likel yleve l of f i nth e long-term onc e thes e ne wproduct s replac e some o f th e existing products . i Th e analysi s provide s a breakdownof'complianc e cost s fo r fue l and fue l additiv e manufacturer s separately . O f th e 1,20 5 companie s examined , however , approximatel y2 5 produc e bot hfuel s and fue l additives . Fo r purpose s o f thi s analysis , thes e 2 5 companie s wer e categorize d a s eithe r a fue l o r anadditiv e manufacture r according t o th e typ e o f produc t (fue l o r additive ) whic haccounte d fo r th e larges t portio n o f th e tota l complianc e cost . Additionally , whe n a produc t wa s registere d b ya divisio no r subsidiaryo f a paren t company , EP Aassume d cost s woul d b e expende d a t thi s level .

I ndetermining cost s t o eac hgroup , a s wa s discusse d above , i judgement s wer e mad e concerning th e availabilit yo f existing dat a

i 7 6P.9 1

whic hcoul d mitigat e th e program' s testin g requirements . I n general , mor e dat a wa s assume d t o exis t fo r product s wit hbaselin e formulations , an d thu s les s testin g wa s assume d fo r product s i n thes e categories . However , i t i s possibl e tha t mor e o r les s dat a exist s wit hregar d t o chemica l an d biologica l testin g tha n wa s assume d i nthi 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 nper-produc t cost s wer e calculated , EP Aassume d tha t complianc e cost s woul d b e divide d equall yamon g th e numbe r o f products . However , manufacturer s hav e the 1 opportunit yt o apportio n cost s i nanymanner . I f cost s ar e divide d differentl ytha n wa s i assume d fo r thi s analysis , change s would'b e reflecte d i ncost s t o eac hmanufacturer , bu t industr ycost s woul d remai nunchanged .

i Th e per-produc t cost s als o depen d o nth e numbe r o f product s expecte d t o b e containe d i neac hgroup . However , th e numbe r o f product s assigne d t o th e group s fo r thi s analysi s ma yb 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 manufacturin g o f a produc t ha s cease d permanently . Fo r thi s reason , i t i s possibl e tha t the ( numbe r o f product s i n any grou p i s overestimated , thu s underestimatin g th e per-produc t costs . Second , th e analysi s i s base d o n product s registere d wit hEP Ao n o r befor e mid-1990 . Sinc e tha t time , additiona l fuel/fue l additiv e product s hav e bee nregistere d wit hEPAi . I nthi s instance , th e numbe r o f product s actuall ybelongin g t o a grou p ma yb e 7 7P.9 2

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 existin g registratio ndat a submitte d b ymanufacturer 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 nmayb e ina'ccurat 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 n th e numbe r o f group s pe r categorymaybe , somewha t differen t from thos e assume d here . Finally , participatio n i nth e propose d i grouping system

i s voluntary , and manufacturer s maychoos e t o defin e thei r ow

n subgroup s o r eve nwor k independentl yrathe r tha n shar e cost s among al l potentia l manufacturer s i nth e group . A s a result , th e numbe r o f participating manufacturers , and thei r respectiv e products , mayb e les s fo r an y§roup . 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 underestimatin g manufacture r and industrycosts .

V . Conclusion s

i Th e effect s o f th e propose d regulatio no n fue l an d fue l i additiv e producer s appea r t o b e relativel ysmall . I nmos t cases , th e complianc e cost s wil l b e les s tha n$10,000 , and onl ya handfu l o f producer s ar e expecte d t o incu r cost s i nexces s o f $ 1 million . Companie s having cost s i nexces s o f on e millio ndollar s tend t o i produc e a t leas t on e atypica l produc t i n,eac ho f th e fue l families . i 7 8P.9 3

Th e product s whic hthes e companie s produc e ar e predominantl y additives . Afewo f thes e companie s ar e larg e chemica l companie s producin g mor e tha n5 0 products . Th e majorit y(abou t 7 0 percent) , however , produc e les s tha n1 0 products . Th e typ e o f compan yvarie s betwee noi l refiners , chemica l companies , and far mburea u cooperatives . Th e type s o f product s the'se companie s produc e i s show ni nFigur e 4-4 . Thi s figur e provide s a distributio no f type s o f product s produce d b ymanufacturer s falling withi na give nrang e i o f complianc e costs .

I nconclusion , EP Aestimate s tha t th e propose d fuel/fue l additiv e registratio nregulatio nwil l lead t o tota l cost s o f abou t i $8 3 million . Wit hindustrycomplianc e cost s average d ove r thre e years , th e annua l economi c impac t t o th e 'industr yi s estimate d a t i $2 7 million . EP Aha s n o reaso nt o believe i competition , employment , investment , productivity , o r innovatio nwil l b e adversel yaffecte d a s a resul t o f thi s regulation . Th e impac t t o mos t companie s i s t expecte d t o b e relativel ysmal l s o a s no t t o caus e significan t i advers e effects . I nconclusion , th e propose d fue l and fue l i additiv e registratio nregulatio nwil 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 na neconomi c impac t o f $10 0 millio no r mor e annually .

7 9

### Tabj e 4-1 : Assume d Testin g Requirement s Fo rProduct s an d Group s i n eac h Fuel/Additiv e Categor y

Healt h Effect s Testin g Requirement s Combustio n Emissio n Characterizatio n Evaporativ e Emissio n Characterizatio n Carcinogenicity , Mutagenicit y Screen s for : Combustio n Emission s Evaporativ e Emission s Developmental , Reproductive , Pulmonary , an d Neurotoxicit y —Screens-for : — Combustio n Emission s Evaporativ e Emission s Unleade d Gasolin e Fue l Famil y Baselin e X

X

X X Non-Baselin e : Atypica l

X X X X

X X X

X X X *

X X * Diese l Fue l Famil y Baselin e ! Non-Baselin e

X X

X

X Atypica l

X

X

X -

* Applicabl e t o onl ysi xofth e forty-eigh tgroups .

\ 7 

## p C DTabl e 4-2 : Estimate d Complianc e Cost s Pe rGrou p i n Eac h Fuel/Additiv e Categor y

Proqra m Requirements : Tie r1 Cost s Dat aResearc h an d Analysi s Vehicl e an d Engin e Costs * Emission s Generation/Speciation : Combustio n Emission s Evaporativ e Emission s Tie r2 Costs : Combustio n Emissio n Generatio n Carcinogenicity , Mutagenicit yScreen s Developmental , Reproductive , Pulmonary , an d Neurotoxicit yScreen s Evaporativ e Emissio n Generatio n Carcinogenicity , Mutagenicit yScreen s Developmental , Reproductive , _P_ulmgnary , an d Neurotoxicit yScreen s Dilutio n Syste m Administrativ e Cost s Tota l Cos tPe rGrou p Unleade d Gasolin e Fue l Famil y Baselin e $16,50 0 $31,75 0 $ 0 $4,20 0 $28,80 0 $ 0 $220,00 0 $15,78 0 $66,00 0 $220,00 0 $1,10 0 $156,90 0 $76 1 f 03 0 Non-Baselin e

$16,50 0 $31,75 0 $27,15 0 $4,20 0 $58,30 0 $74,20 0 $220,00 0 $15,78 0 $66,00 0 $220,00 0 $1,10 0 $156,90 0 $891,88 0 Atypical** *

$16,50 0 $63,50 0 $30,55 0 $4,20 0 $58,30 0 $74,20 0 $220,00 0 $15,780* * $66,000* * $220,000* * $1,10 0 $156,90 0 $927,03 0 Diese l Fue l Famil y

Baselin e $16,50 0 $21,44 0 $ 0 N/ A $14,40 0 $ 0 $220,00 0 N/ A N/ A N/ A 

### $l,To b $156,90 0 $430 ? 34 0 Non-Baselin e

$16,50 0 $21,44 0 $72,15 0 N/ A $37,10 0 $74,20 0 $220,00 0 N/ A N/ A N/ A

" " ~ $1, 1 d o $156,90 0 $599,39 0 Atypical** *

$16,50 0 $109,70 0 $82,85 0 N/ A $37,10 0 $74,20 0 $220,00 0 N/ A N/ A N/ A

- - - $1710 0 $156,90 0 $698,35 0

* Include s acquisition , maintenance , fuel , resal e value , an d mileag e accumulation

. * * Applicabl e t o onl y6 of4 8 groups . ** * Does notinclud e cos tofcontro l fuel

.

^ 7P.9 6



### Tabl e 4-3 : Summar

yo fComplianc e Cost s

Numbe rofCompanie s Rang e ofComplianc e Cost s Low Media n Hig h Percentag e Les s tha n $10,00 0 Percentag e Greate rtha n $10,00 0 Fue l Manufacturers

71 0 $50 0 $2,20 0 $2,000,00 0 8 3 1 7 | Additive [Manufacturers I 495 i I I $50 0 | $1,10 0 I $2,200,00 0 ! 67 1 3 3 Tota l

Manufacturers

1205 $50 0 $2,00 0 $2,200,00 0 7 6 2 4



# 71 L""N O 60 0 

# Figur e4-1 : Distributio no f Complianc eCost s fo r Fue lManufacturer s

^50 0 

# 8 D

-i— • O 40 0

, ^ 

## P 30 0

3__ » 20 0 

## 3 10 0

0 54 5

1 9 2 1 100-50 0 500-100 0 1K-5 K 5 6 SIIS 1

feWSwSSSifo: 

### wm 9 3 8 1 6 5K-10 K 10K-50 K 50K-10 0 K 1 00K-500 K 500K-1 M 1M-1.5 M 1.5M+ 

# Cos t t o Manufacture r

(dollars )

C D K l15 0 

# I

o 10 0 

# u o 5 0 

# Figur e4-2 : Distributio no f Complianc eCost s fo r Additiv eManufacturer s

0 13 1

5 3

100-50 0 500-100 0 1K-5 K 5K-10 K 1 2

10K-50 K 50K-10 0 00K-500 K 500K-1 M 1M-1.5 M 1.5M + 

# Cos t t o Manufacture r

(dollars )

CD 0 080 0

70 0

60 0

50 0

40 0

30 0

20 0

10 0

0 

# Figur e4-3 : Distributio no f Complianc eCost s fo r Fue lan dAdditiv eManufacturer s Combine d

Cf l


## o 3 

# § 667



## 3 

# Z 10 9
9 1 4 100-50 0 500-100 0 1K-5 K 10K-50 K 1 5K-10 K 50K-100 K 00K-500 K rtrt 1M-1.5 M 500K-1 M 1.5M+ 

# Cos t t o Manufacture r

(dollars )

C D C D> 80 0 

# Figur e4-4 : Distributio no f Produc t Typ e b yRang eo f

Complianc eCost s

100-50 0500-100 01K-5 K 5K-10 K 10K-50 K

50K-100K100K-500 K 500K-1 M 1M-1.5 M 

# Cos t t o Manufacture r

(dollars ) 1.5M +

Baselin eUnleade d Baselin eDiese l Non-Baselin eUnleade c Non-Baselin eDiese l Atypica lUnleade d Atypica lDiese l

o oChapte r 5

Summaryand Discussio n P. 1

Thi s analysi s ha s bee nbase d o n1,20 5 differen t companie s o r i operatin g unit s (i.e . divisions ) currentl yregistering 3,69 7 product s i nth e unleade d gasolin e and ciiese l fue l families . O f thes e producers , ove r hal f (5 9 percent ) jar e fue l manufacturer s an d i 4 1 percen t ar e additiv e manufacturers,' . Th e majorit yo f thei r i product s ar e i n th e unleade d gasoline ) fue l family , spli t abou t i I equall ybetwee n fuel s and additives , whil e abou t on e quarte r ar e diese l products , mos t o f whic har e additives . Thes e producer s represen t abou t 6 3 percen t o f thos e currentl yregistered , whil e th e numbe r o f product s i s abou t 5 8 percent . Abou t 3 7 percen t o f

i currentl yregistere d manufacturer s wer e exclude d fromthi s analysi s becaus e the yproduc e onl yleade d gasolin e product s o r onl y

i "relabeled " products . Th e estimate d cost s o f complianc e fo r thes e i i producer s rang e from$50 0 t o $2. 2 million , wit ha media ncomplianc e cos t o f abou t $2,000 . Totalin g the ' cost s t o eac hmanufacture r yield s a nestimate d annua l cos t t o (industr yo f $2 7 millio nfo r thre e years . Thus , th e propose d regulation s woul d no t b e expecte d t o resul t i na majo r rule . Th e cost s presente d i nthi s analysi s wer e base d o nreasonabl e assumption s and judgement s regarding expecte d us e o f cost-sharing 8 0P. 2

provision s and th e expecte d availabilit yjo f existing chemica l an d

i biologica l tes t data . A nexaminatio no f th e sensitivit yo f th e i cost s t o assumption s mad e i nth e analysi s reveal s tha t th e

i projecte d cost s ar e no t heavil yimpacte d b ychange s i nthes e i i assumptions . Th e majo r assumption s whic hcoul d hav e animpac t on th e projecte d complianc e cost s include : (l ) expecte d participatio n i nth e propose d grouping system , 2 ) the, ' numbe r o f groups , 3 ) th e numbe r o f product s expecte d t o b e enrolle d i neac hgroup , 4 ) th e th e expecte d availabilit y ! firs t point , assuming tha t 12 0 producers ) chos e t o manne r i n whic hcost s ar e divided , and 5) , o f existin g tes t data . Addressin g th e on e ou t o f every1 0 producer s (i.e. , conduc t test s independentl yrathe r tjha n participat e i ngrou p sharing provisions , and tha t eac hwas | registering an"atypical " produc t wit hth e highes t estimate d complianc e cos t ($972,000) , th e tota l programcos t woul d increas e from$2 7 millio nt o $66 millio n annually . I t woul d tak e a t leas t 1 ou t o f every5 suc hproducer s i 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 eachlgrou p chos e t o conduc t test s independently , th e industrycos t woul d b e abou t $5 5 millio n annually , $4 5 millio nbelo wth e mago r rul e criterio n o f $10 0 millio nannually . 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 i millio nannually . Hence , eve ni f some producer s choos e no t t o participat e i nth e grouping system , j cost s ar e expecte d t o remai n belo w$10 0 millio nannually . !

8 1P. 3

Th e numbe r o f group s coul d hav e animpac t o n th e complianc e cost s a s mor e group s ar e establishe d fo r th e program . Thi s coul d occu r whe n ne wtype s o f "atypical " o r "non-jbaseline " product s ente r th e market . Th e effec t o f anincreas e i nth e numbe r o f group s woul d b e simila r t o a produce r choosing t o conduc t test s independently , a s discusse d above . Th e i numbe r o f product s pe r grou p and th e metho d b ywhic hcost s ar e divide d coul d mos t certainl yaffec t cost s t o a give nmanufacturer , bu t woul d no t increas e tota l cost s t o th e industry . |l 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 inactiv e product s I ar e no t re-registered . Finally , sinc e th e assumption s use d regarding availabilit yo f existin g tes t dat a wer e conservativ e assumptions , th e estimate d cost s o f th e propose d programcoul d actuall yb e less . Assuming , however , tha t th e assumption s wer e no t adequatel yconservative , tota l programcost s woul d onl yris e b yaliou t $100,00 0 annuall yi f n o adequat e dat a exist s fo r an yo f th e groups .
Thi s analysi s include s onl ycost s associate d wit hTie r 1 and Tie r 2 testing , average d ove r 3 years . ! However , i nth 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 . Assumin g tJe n product s o r group s ar e require d t o conduc t Tie r 3 testing (at j a nestimate d cos t o f $ 3 millio neach ) 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 npe r year . Whil e a substantia l sum , thi s onl yrepresent s 8 2 •P. 4

abou t a 3 7 percen t increas e i nannua l I cost s o f th e propose d i program . I

Manufacturer s o f ne wproduct s which | ar e i nth e gasolin e o r diese l fue l familie s wil l ofte nb e able 1 t o rel yo npreviousl y submitte d dat a fo r registratio no f thei r ne wproduct . I n suc h cases , industrycost s woul d no t ris e becaus e thes e manufacturer s woul d reimburs e manufacturer s whic hh!av e alread

yregistere d product s simila r i nnatur e t o th e ne wpro'duct . However , industry cost s woul d ris e a s product s i nfamilie s no t currentl ydesignate d fo r registratio n(i.e. , alternativ e fue l families ) ar e introduced . Thes e product s ar e no t expecte d t o b e introduce d a t suc ha rat e wher e annua l cost s t o th e industrywoul d increas e significantly . Assumin g tha t 2 0 product s ar e introduce d jinto th e marke t eac hyea r fo r th e nex t 3 years , th e impac t o nth e econom ywoul d b e abou t $2 0 millio nannually . Thi s raise s th e annua l impac t o f $2 7 millio n t o abou t $4 7 millio nannually . Again , a conservativ e cos t o f $972,00 0 wa s use d i n thi s calculation . Thi s cos t reflect s th e assumptio n tha t al l chemica l and biologica l test s 'o f Tier s 1 and 2 wil l b e i needed , and include s cos t o f contro l fuel ' testing . I t als o assume s producer s o f thes e product s wil l b e conducting test s independently .

Th e requirement s o f thi s propose d program ar e designe d s o a s no t t o presen t an unnecessaryburde no'n th e regulate d industry . Th e propose d three-tiere d structur e o f tli e testin g programprovide s 8 3 IP. 5

a mean s b

ywhic hadditiona l testin g i s require d onl yi f warrante d b yth e result s o f th e previou s tier , thu s keeping testin g burde nt o a minimu

mwhil e satisfying th e requirement s o f th e statute . I n i addition , allowance s fo r adequat e existing healt heffect s dat a mitigat e testin g requirements , and th e propose d grouping system permit s cost s t o b e share d among producer s and help s t o avoi d duplicatio no f effort . Whil e th e propose' d programi s designe d t o minimiz e th e burde no nthos 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 a nexcellen t ai r toxic s inventoryo npollutant s relate d t o th e us e o f moto r fuel s and fue l additives , and wil l als o provid e an invaluabl e sourc e o f toxicologi c dat a o nth e emission s o f thes e products . I t wil l als o assis t EP Ai nevaluating th e relativ e advers e ai r pollutio neffect s o f variou s kind s o f fuel s and additive s an d i n determinin g need s fo r relate d regulatoryaction s i nth 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 . Onth e basi s o f thi s o r othe r availabl e information , th e Administrato r may , b y regulation , 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 nmoto r .vehicles . Alternatively , manufacturer s mayvoluntaril 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 lincidence s expecte d t o b e cause d b

ymoto r vehicl e pollutant s i s estimate d t o rang e fro m35 5

8 4P. 6

t o 1236. 1 9 Currently , eac hcance r incidenc e i s estimate d t o hav e anadvers e economi c impac t ranging from$1. 6 millio n t o $8. 5 million. 2 0 Thus , th e societa l benefit s woul d outweighth e cost s associate d wit hth e propose d programi f jus t 1 0 t o 5 2 cance r incidence s wer e avoided , o r approximatel y1 t o 1 5 percen t o f vehicle-relate d cance r incidence s projecte d t o occu r i n1995 . Whil e i t i s difficul t t o accuratel ypredic t th e benefit s associate d wit hthi s program , i t i s reasonabl e t o believ e tha t healt hbenefit s o nth e orde r o f 1 0 t o 6 0 cance r o r othe r (incidence s avoide d woul d accru e ove r th e lif e o f thi s programa s a resul t o f action s take n wit hth e informatio n generate d unde r thi s program .

19 "Ai r Toxic s Emission s and Healt hRisk s fromMobil e Sources, " Ai r and Wast e Managemen t Associatio nPape r 89-34A.6 , b yJonatha n Adle r and Penn

yCareyo f th e U.S . Environmenta l Protectio nAgency .
20 "Poin t Estimate s o f th e Valu e o f a Statistica l Life, " b y Leland B . Deck , Ph.D. , Offic e o f A'i r Qualit yPlannin g and Standards , U.S . Environmenta l Protectio nAgency . 8 5 I

### P. 7



# APPENDI XA

FINANCIA

L AN D EMPLOYE E SIZ E INFORMATIO N FORCATEGORIE S OF MANUFACTURER SPRODUCTION/DISTRIBUTIO N FUE L MANUFACTURER S

Sales Rang e (millions? ) Companie s

Numbe r —Products —

Percen tPere c m ufToia l Numbe ro l Tota l -Sale s (million s $)- — Lo wHig h Averag e —Ne tIncom e (thousaiu KSj — Lo wHig h A\crag c Averag e Numbe r ol ' Employee s | O S | >5-I 0 j >10-1 5 | > 15-2 0

>20-2 5 >25-5 0 > 50-7 5 >-75--IOO- >100-15 0 > 150-20 0 > 200-50 0 > 500-754» >750-1,00 0 > 1,00 0 TOTA L 2 4

1 2 6 8 8 27 17 5 7 6 1 4 6 5 3 0 175 13.7 *

6.9 % 3.4 % 4.6 % 4.6 % 15.4 % 9.7 % 2.9 % 4.0 % 3.4 % 8.0 % 3.4 % 2.9 % 17.1 % 6 0

3 1 9 2 0 2 2 7 5 6 6 1 3 3 1 3 0 5 9 5 0 2 7 22 6 71 9 8.3% .

4.3 % 13 % 2.8 % 3.1 % 10.4 % 9.2 % 1.8 % 4.3 % 4.2 % 8.2 % 7.0 % 3.8 % 31.4 % 0

6 1 2 1 6 2 1 2 6 5 3 8 0 10 1 15 5 21 1 52 0 75 5 1,10 0 5

I D 1 3 2 0 2 5 5 0 7 5 10 0 135 - 20 0 50 0 71 8 85 0 56,70 0 2

8 1 3 1 9 2 3 3 5 6 6 91 » 1-2-3 - 17 2 30 7 61 5 80 3 8,94 2 -63 0

4 0 6 9 8 4 11 1 32 7 69 9 1.12 0 800A 2.31 0 3.49 9 8,89 7 -19.00 0 2.41 3 28 1

26 4 146 21 6 182 95 0 17.70 0 1.41 8 _2,470
_ 3.06 9 6.66 9 11.40 8 16 . IS O 1,656,05 6 -I K 9 K 11 8 129 135 57 2 2.01 3 1.264 1.63 3 2,70 4 5.28 6 10,52 0 7,68 0 243.75 6 8 |



### 2 7J j 3 5 4 0 6 7 6 9 12 1 2117 33 5 41 1 62 2 3O K 1,88 5 12,191 1

N.. u N , i imoiii c 1I.11.1 wci c nu l availabl e lo ral l companies . Th e numbe ro l companie s fo rwhic h nc l incom e Uai a ai e no i picbciilci l i s nolci l m TaMje Z-J..

b

oNON-AGRICULTURA LRETAI LFUE LMANUFACTURER S Companies ----Products - ----Sale s (million s $)---

- —Nc l Incom e (ihou.saiu KS)-- - Sale s Rang e (millions! ) Number Percen t o fTou l Numbe r Percen t o fTota l Lo w Hig h Averag e Lo w Hig h Averag e Averag e Numbe r 41 I Employee s 0- 5 >5-1 0 >10-1 5 1 > 15-20

>20-2 5 >25-5 0 > 50-7 5 > 75-10 0 >10 0 15 0 | > 150-20 0 | > 200-50 0 \ > 500-75 0 >750-1,00 0 > 1.00 0 TOTA L 1 0

4 2 2 4 5 9 - 1 - 5 1 5 2 1 0
5 1 19.6 %

7.8 % 3.9 % 3.9 % 7.8 % 9.8 % 17.6 % 2.0%

_ 9.8 % 2.0 % 9.8 % 3.9 % 2.0 % 0.0 % 2 2

7 6 4 1 0 I I 2 1 2 1 1 2 1 4 5 3 0 11 8 18.6 %

5.9 % 5.1 % 3.4 % 8.5 % 9.3 % 17.8 % 1.7 % 9.3 % 1.7 % 11.9 % 4.2 % 2.5 % 0.0 % 0

6 1 2 1 6 2 2 2 6 5 2 8 1 11 0 17 5 20 1 50 6 90 0

- - 4

8 1 2 1 7 2 5 5 0 7 0 8 1 14 0 17 5 42 0 72 7 90 0

- 1

7 1 2 1 7 2 3 3 7 5 9 8 1 12 3 17 5 28 5 61 6 90 0

- - 3 0

5 5 5 5 11 6 11 1 38 5 93 6 1,45 8 i:S77 - 2,64 5 3,08 6 8,00 0 16.39. 3

-- 3 4

21 4 13 4 11 6 78 4 90 0 1,26 0 1,45 8 2,063 - 2.64 5 7,01 3 9.29 2 16.39 3

-- 3 2

11 6 9 5 11 6 35 9 68 1 1.03 8 1.45 8 1,787 1 2.64 5 4,57 2 8,64 6 16.39 3

-• ' J | M 6 2 10 8 8 5 20 3 26 8 70 0 85 6 21 3 2.92 0 3.88 4 95 3

- - •

_ _ S.-i * S. l iiwout cd.ii. i wu ci».> i availabl e I m al l companies

. Th e nuinhc i o l companie s lo rwhic h ne tincom e dat a ai e nu l pic.sciitci l i s note d i n Ta_VJC Z~_Z.AGRICULTURA LRETAI LFUE LMANUFACTURER S

Sales Rang

e (millions! ) Companies

Number —Products — -Sale s (million s $)- — —Nc l Incom e (Ihousaiul s $) —

Percen t o fTota l Number Percen t o fTota l L tt w Hig h Averag e Lo w Hig h Averag e Averag e Numbe r o fEmployee s 0- 5 >51 0 >10-1 5
> 15-2 0 >20-2 5 >25-5 0 >5G-7 5 | > 75^00 "

• >100-15 0

> 150-20 0 > 200-50 0 | | > 500-75 0 | > 750-1,00 0

> 1,00 0 TOTA L 1 6

2 2 1 1 3 1 5 1 0 - 0 0 0 1 1 3 6 4 25.0 % 34.4 % 17.2 % 4.7 % 1.6 % 7.8 % 1.6 % 0.0%

_ 0.0 % 0.0 % 0.0 % 1.6 % 1.6 % 4.7%

. 4 2

4 5 2 3 5 3 1 2 2 26.6 % 28.5 % 14.6 % 3.2 % 1.9 % 7.6 % 1.3 % 0 j 0.0 % 0 0 0 5 4 1 7 15 8 0.0 %

0.0 % 0.0 % 3.2 % 2.5 % 10.8 % 0

6 1 1 1 6 2 1 2 6 5 1

-

- -

•"" "

- 70 6 87 9 1.12 0 5

1 0 1 5 1 9 2 1 4 2 5 1

-

-

—

- 70 6 87 9 43.00 0 3

7 1 2 1 8 2 1 3 5 5 1

- -

•—

- -

- - 70 6 87 9 15.10 7 7

0 5 1 7 4 9 7 41 6 81 6

-

- -

- -

- - 12,50 8 5.61 0 8.23 0 18 5

25 9 49 9 8 8 9 7 64 0 81 6

-

—

- -

- - 12.50 8 5.61 0 1.216,94 2 4 7 4 1 13 9 K I 9 7 53 3 81 6

-

—

- -

- - 12.50 8 5,61 0 415.91 9 1 4 1 3 1 1 3 1 J 2 7 4 0 6 7 7 5

- -

- -

- -

- - 90 0 3,50 0 18.75 0

Noic : Ne tincom e dat awer e no tavailabl e fo ral l companies

. Th e numbe ro l companie s fo rwhic h nc l incom e dat a ai e no tpresente d i s note d i n T«t»f c Z'Z.A L LFUE LMANUFACTURER S

Sale s Rang e (million s J ) Co m panic *

Numbe r Percen t

o fTota l —Products —

Numbe r Percen t

o fTota l ----Sale s (million s $)---
-

Lo wHig h Averag e —Ne tIncom e (thousand s $) — Lo wHig h Average Averag e Numbe r o fEmployee s 0- 5 >5-1 0
> 10-1 5 > 15-2 0

> 20-2 5 >25-5 0 > 50-7 5 >75-IO O
> 100-15 0 | > 150-20 0 | > 20 0 50 0 | > 500-75 0 | > 75 0 1.00 0

> 1,00 0 TOTA L 5 0

3 8 2 0 1 3 1 3 3 7 2 7 7 1 2 7 1 9 9 7 3 3 29 2 17.1 %

13.0 % 6.8 % 4.5 % 4.5 % 12.7 % 9.2% - 2.4%

. 4.1 % 2.4%

. 6.5%

. 3.1%

. 2.4%

. 11.3 % 12 4

8 3 4 0 2 9 3 5 9 8 8 9 1 9 4 2 3 2 7 3 6 0 3 4 24 3 1,00 1 12.4 %

8.3%

. 4.0%

. 2.9%

. 3.5%

. 9.8%

. 8.9%

. 1.9%

. 4:2% ~ 3.2%-

. 7.3% - 6.0%

. 3.4%

. 24.3%

. 0

6 1 1 1 6 2 1 2 6 5 1 8 0 H H - 15 5 20 1 50 6 75 5 1,10 0 5

1 0 1 5 2 0 2 5 5 0 7 5 10 0 —140 - 20 0 50 0 72 7 90 0 56,70 0 2

7 1 3 1 8 2 3 3 5 6 3 8 9 .1.2 3 17 2 30 1 62 5 82 8 9,50 2 -63 0

0 5 1 7 4 9 7 32 7 69 9 1,12 0 -80 0 2.31 0 3.08 6 8,00 0 -19.00 0 2,41 3 28 1

2 M 49 9 21 6 78 4 95 0 17,70 0 1.45 8 2,47 0 3.06 9 7.01 3 12.50 8 16.39 3 1.656,05 6 2 2 6 0 I2 K i n l-> 3 58 0 1.664 1.29 1 1.69 7 2.69 6 5.06 3 10.30 0 8.62 9 259.89 6 I O | 3 0 | 3 4 | 4 7 7 0 8 7 16 9 29 4 55 2 38 3 1.22 7 1.16 8 1,98 3 12,82 5

Note : Tw o o f.h e companie s d o m. thav e SI C code s an d ar e no . coun.c d i n th e previou s tables

. Ne i incom e dal a wer e no tavailabl e lo ral l companies

. Th e numhe ro l companie s lo rwhic h ne tincom e dat a ar e mi tpresente d i s noti d i n T*>/ « i ^ADDITIVE S I N CHEMICAL . PETROLEUM . AN D COA L PRODUCT S INDUSTRIE S Compatrio t —-Produeis--- - ---Sale s (milium s S) — - -Ne tIncom e (thousand s S)-~ - Sale s Rang e (millions! )

0- 5 >5-1 0 >10-1 5 > 15-2 0 >20-2 5 >25-5 0 > 50-7 5 >75-10 0 > 100-15 0 > 150-20 0 | >200-50 0 \ > 500-75 0 H > 750-1.00

0 | > 1,00 0

TOTA L Numbe r

2 4 1 1 1 0 9 6 1 4 7 6 5 4 5 5 4 2 5 13 5 Percen

t ofTou l 17.8 % 8.1 % 7.4 % 6.7 % 44% . 10.4% . 5.2 % 4.4% . 3.7% . 3.0 % 3.7 % 3.7 % 3 0 % 18.5% . Numbe r

5 3 1 9 9 1 5 5 2 4 10 0 5 8 1 2 3 4 2 5 8 2 26 3 5 6 35 8 1,23 0 Percen t o fToia l 4.3% . 1.5% . 7.4% . 4.5 % 2.0 % 8.1% . 4.7% . 1.0 % 2.8% . 2.0% . 6.7% . 21.4% . 4.6% . 29.1 % Lo w 0

6 1 1 1 6 2 3 2 6 5 5 8 5 i'2t r 15 1 25 0 51 7 80 4 1.07 1 Hig h 5

1 0 1 5 2 0 2 5 5 0 7 5 10 0 150 " 19 0 34 6 67 0 92 0 86,17 3 Averag e3

8 1 3 1 9 2 4 3 6 6 7 9 6 F36 - 17 0 29 3 58 8 84 8 12,33 9 Lo w

-8,25 0 -58 4 10 9 -1,00 0 38 0 73 6 1.53 4 2.53 0 4,440 - 5.23 2 7,00 0 21,16 2 19.55 7 60,00 0 Hig h

17 2 40 9 51 5 68 6 1,03 0 2.20 0 2.19 1 3,70 0 5,55 0 7,00 0 11,18 6 59,00 0 39.02 7 4,440.58 1 Averag e

-44 8 135

. 29 K 25 3 65 7 1.444 1,88 9 3.13 9 4.88 6 6,07 4 8.89 3 32.69 2 31.91 2 729.62 2 Averag e Numbe r

o fEmployee s 

# 27 

# 1 °\ 12 0 n o 12 8 | 18 4 40 6 45 4 81 M 1,03 6 1.64 4 3.61 5 3.28 7 2 1 ,K2 4

Note : Ne tincom e dal a wer e no tavailabl e fo ral l companies . Th e numbe ro fcompanie s fo rwhic h ne . incom e dat a ar e no i piesenie d is note d i n 1VLJ &Z."Z.AL LOTHE R ADDITIVE S NO I I N CHEMICAL

. PETROLEUM

. AN D COA LPRODUCT S INDUSTRIE * Companies —Products — —Sale s (million s $)— - — N c l Incom e (thousand s %) — Sale s Rang e (millionsS ) Numbe r Percen t o fTota l Numbe r Percen t o fTota l Lo w Hig h Averag e Lo w Hig h Averag e Averag e Numbe r o fEmployee s 0- 5 >5-1 0 >HM 5 1 > 15-2

0 1 >20-2 5 | >25*5 0 | > 50-7 5 \ > 75-10 0 > 100-15 0 > 150-20 0 > 200-50 0 >500-75 O | > 750-1,00 0 1 > 1,00

0 1 TOTAL 1 6 8 6 4 1 1 0 2 1 5 4 5 2 2 1 5 8 1 19.8 % 9.9 % 7.4 % 4.9 % 1.2 % 12.3 % 2.5 % 1.2 % 6.2 % 4.9 % 6.2 % 2.5 % 2.5 % 18.5 % 3 9

1 4 2 7 3 6 1 1 9 5 2 1 6 1 5 1 0 3 6 23 1 42 4 9.2 %

3.3 % 6.4 % 8.5 % 0.2 % 4.5%
. 1.2% 0.5 % 3.8% ~ 3.5 % 2.4 % 0.7 % 1.4%

- 54.5%
. 0

6 1 0 1 6 2 3 2 7 6 9 10 0 107

- 16 0 21 8 53 8 96 0 1,13 0 5

1 0 1 5 2 0 2 3 5 0 7 0 10 0

19 2 30 0 70 6 1,00 0 96,14 6 2

8 1 3 1 8 2 3 4 0 7 0 10 0

16 9 24 9 62 2 98 0 13,611 - 8

1 2 8 0 11 6 38 0 49 3 2,00 0 3,04 9 3.2 % 5,23 2 -24,00 0 28.79 3 40,98 3 -6,00 0 18 6

21 6 43 6 49 4 38 0 1,76 0 2,01X 1 3,04 9 4,85 8 7.10 4 10,77 2 46.00 0 42.95 1 3.835.00 0 7 0

10 8 28 7 34 1 38 0 94 4 2,00 0 3,04 9 3.82 9 5,74 7 2,53 3 37,39 6 4 1.967 670,24 4 2 3 4 8 7 5 25 1 10 0 21 1 37 1 20 0 83 6 64 7 2.02 6 3.05 0 6,33 2 52.80 2

Not e Ne tincom e dai a wer e n m availabl e fo ral l companies

. Th e numbe ro l companie s fo rwhic h nc l incom e dat a ar e no tpresente d i s note d i n T+IU. 2.-Z

.AL L ADDITIVE S Companie * —Products — ----Sale s (million s $)---
- —Nc l Incom e (thousand s S|--- - Sales Rang e (millions* ) Numbe r Percen t o fTota l Numbe r Percen t o fTota l Lo w Hig h Averag e Lo w Hig h Averag e Averag eNumbe r o f Employee s 0- 5 >5-1 0 >10-I 5 > 15-2 0 >20-2 5 >25-5 0 > 50-7 5 D >75-10 0
> 100-15 0 > 150-20 0 > 200-50 0 >500-75 0 D >750-I.OO O

> 1,00 0 TOTA L 4 0

1 9 1 6 1 3 7 2 4 9 7 1 0 8 1 0 7 6 4 0 21 6 18.5 %

8.8 % 7.4 % 6.0 % 3.2% . 11.1 % 4.2% . 3.2% * 4.6 % 3.7 % 4.6 % 3.2 % 2.8 % 18.5 % 9 2

3 3 11 8 9 1 2 5 11 9 6 3 1 4 5t T 4 0 9 2 26 6 6 2 58 9 1,65 4 5.6 %

2.0 % 7.1 % 5.5 % 1.5 % 7.2% . 3.8% . 0.8 % 370% - 2.4% . 5.6 % 16.1 % 3.7% . 35.6% . 0

6 1 0 1 6 2 3 2 6 5 5 8 5

—107 -

15 1 21 8 51 7 80 4 1.07 1 5

1 0 1 5 2 0 2 5 5 0 7 5 10 0 150 - 19 2 34 6' 70 6 1.00 0 96,14 6 2

8 1 3 1 9 2 4 3 8 6 8 9 7 13 1 17 0 27 1 59 8 89 2 12,81 6 -8.25 0

-58 4 8 0 -1,00 0 38 0 49 3 1,53 4 2.53 0 3.29 6 5.23 2 -24,00 0 21.16 2 19,55 7 -6,00 0 18 6

40 9 51 5 68 6 1,03 0 2.20 0 2.19 1 3.70 0 5.55 0 7,10 4 11,18 6 59,00 0 42.95 1 4.440,58 1 -27 5 12 5 29 5 28 0 61 7 1,23 6 1,90 5 3.12 6 4.41 6 5.K8 7 5.71 3 34,03 6 35.26 4 707,35 5 2 61 5 7| 10 3 \ 15 3 | 12 4 19 5 3 9 8 41 7 8 2 2 84 1 1,83 5 3.45 4 4.30 2 33.441 1

Nol i Nc

. incom e dat awct e no tavailabl e fo ral l companies

. Th e numhe i o l companie s fo rwhic h ne tincom e dat a ar e no i picscnic d i s note d i n TVM * Z~2-.RELABEL S ONL YI NCHEMICAL
. PETROLEUM
. AN D COA LPRODUCT S INDUSTRIE S Compaaie * -—Products- — —Sale s (million s $)—

- —Ne t Incom e(thousand s $)- — Sale s Rang e (millions* )

0- 5 >5-1 0 >10-1 5 > 15-2 0 | >20-2 5 | >25-5 0 | >50-7 5 | >75-10 0 | > 100-150

- > 150-20 0 >200-50 0 >50O-75 O Q>75O-l,0O O

> 1,00 0 TOTA L Numbe r

1 2 4 5 1 2 1 0 0 

### o0 0 1 0 3 2 9 Percen t o f Tota l 41.4 % 13.8 % 17.2 % 3.4 % 6.9 % 3.4 % 0.0 % 0.0 % 00%

- 0.0 % 0.0 % 3.4 % 0.0 % 10.3 % Numbe r

2 5 7 9 5 2 1 0 0 0

- 0 0 1 0 6 5 6 Percen t o f Tota l 44.6 % 1Z5 % 16.1 % 8.9 % 3.6 % 1.8 % 0.0 % 0.0 % 0.0 % 0.0% , 0.0 % 1.8 % 0.0 % 10.7 % Lo w 2

7 1 3 1 6 2 1 4 0

-

- -

—

- -

- - 51 0

~ 1,50 0 Hig h 5

1 0 1 5 1 6 2 3 4 0

—

- -

—

— ' 51 0

— 5.67 2 Averag e4

9 1 4 1 6 2 2 4 0

- -

-

- -

—

- 51 0

— 3.02 4 Lo w 3 3

24 0 24 8

- 72 1 1.76 0

- -

- -

—

~

- - 61,37 2

- - 681.00 0 Hig h

17 2 40 9 51 5

- 78 9 1,76 0

-

-

—

- -

- - 61,37 2

- 681,(KM ) Averag e

6 2 33 1 42 6

- 75 5 1,76 0

-

-

—

-

~ 61,37 2

- - 681.00 0 Averag eNumbe r

o f Employee s

4 3 5 6 ,2 7 10 0 17 0 12 0

- -

- .

-

— i 3,28 4 j " 16,91 1 1

0 1AL LOTHE RRELABEL S NO TI NCHEMICAL , PETROLEUM , AN D COA LPRODUCT S INDUSTRIE S Companies -—Products-— —Sale s (million s $)- — -—Ne tIncom e(thousand s $)— - Sale s Rang e (millions* ) 

### 1 

### 0- 5 | >5-1 0

> 10-1 5 > 15-2 0 >20-2 5 >25-5 0 >50-7 5
^ > 75-100 - > 100-15 0 > 150-20 0 > 200-50 0 >500-75 0 >750-1,00 0 > 1,00 0 TOTA L Numbe r 5

9 1 3 1 2 1

1 2 2 1 2 5 3 6 Percen t o f Tou l 13.9 % 25.0 % 2.8 % 8.3 % 2.8 % 5.6 % 2.8 % 2.8%
_ 2.8 % 5.6 % 5.6 % 2.8 % 5.6 % 13.9 % Numbe r

8 9 5 3 1 2 2 1 1 8 5 4 2 2 7 7 8 Percen t o f Tota l 10.3 % 11.5 % 6.4 % 3.8 % 1.3 % 2.6 % 2.6 % 1.3 % 1.3 % 10.3 % « 6.4 % 5.1 % 2.6 % 34.6 % Lo w 1

6 1 5 1 6 2 1 3 0 7 0 9 2 15 0 17 5 27 6 62 6 79 9 11,04 5 Hig h 4

1 0 1 5 1 9 2 1 3 2 7 0 9 2 150 ~ 18 0 42 9 62 6 96 0 126.93 2 Averag e 3

8 1 5 1 8 2 1 3 1 7 0 9 2 150 " 17 8 35 3 62 6 88 0 42,98 5 Lo w

-2,89 9 4 8

- 20 1

- - 51 0

-

—

.. -

- - 9,00 0 74,00 0 35,00 0 207,00 0 Hig h 7 4

32 3

- - 22 6

- 54 4

-

—

—=^

_

- - 9,00 0 74,00 0 35,00 0 4,224,00 0 Averag e

-69 2 14 5

— 21 5

- - 52 7

-

—

- -

- - 9,00 0 74,00 0 35,00 0 1,066,40 0 Averag eNumbe r

o f Employee s

5 3 7 7 6 0 12 6 12 0 15 0 1,00 0 47 5 30 0 30 0 3,40 0 4.50 0 5,61 2 279,04 3AL LRELABEL S Compaaifla —Products- — —Sale s (million s $)---

- -—Ne t Incom e(thousand s $)- — Sale s Rang e (millions* )

0- 5 >5-1 0 > 10-1 5 > 15-2 0 | >20-2 5

>25-5 0 ~~>SfclS~ >75-10 0 | > 100-15 0 1 > 150-20

0 | >200-50 0 >500-75 0 > 750-1.00 0 > 1.00 0 \ TOTA L Numbe r 1 7 1 3 6 4 3 3 1

- 1 1 2 2 2 2 8 6 5 Percen t o f Tota l 26.2 % 20.0 % 9.2 % 6.2 % 4.6 % 4.6 % _±S% 1.5 % 1.5 % 3.1 % 3.1 % 3.1 % 3.1 % 1X3 % Numbe r

3 3 1 6 1 4 8 3 3 2 1 1 8 5 5 2 3 3 13 4 Percen t o f Tota l 24.6 % 11.9 % 10.4 % 6.0 % 2.2 % 2.2 % 1.5 % 07% ~ 0.7 % 6.0 % 3.7 % 3.7 % 1.5 % 24.6 % Lo w 1

6 1 3 1 6 2 1 3 0 7 0 92

- 15 0 17 5 27 6 51 0 79 9 1,50 0 Hig h 5

1 0 1 5 1 9 2 3 4 0 7 0

— - —_92
_ 15 0 18 0 42 9 62 6 96 0 126,93 2 Averag e4

8 1 5 1 7 2 2 3 4 7 0 9 2 15 0 17 8 35 3 56 8 88 0 28.00 0 Lo w

-2.89 9 4 8 24 8 20 1 72 1 51 0

~

— "

— 9,00 0 61,37 2 35,00 0 207,00 0 Hig h

17 2 40 9 51 5 22 6 78 9 1,76 0

-

- -

" rr -

- - 9,00 0 74.00 0 35,00 0 4.224,00 0 Averag e

-13 9 19 5 42 6 21 5 75 5 93 8

—

— —--—^
_

- - 9.00 0 67,68 6 35,00 0 1,002,16 7 Averag eNumbe r

o f Employee s

4 61 7 1 1 11 6 12 0 15 3 14 0 1,00 0 47 5

—_

_30 0

30 0 3,40 0 3.89 2 5,61 2 180,74 4