p.1 

OAR Box 1846 

Prepped by Ollie Stewart 

Document Number: 

78) lll-B-1 

Docket Number: 

A-90-07 

Printed 11/18/2008 7:30:17 AM Sheet 78 of 93 
P.2 

A -90-07 

Draft 

Regulatory Support Document 

Fuels and Fuel Additives Registration Regulations 

jj)l(g Iflf l Q 

fl ! 

I ! 

EPA AIR 

7 iqe? \,-J\; 

i i 

1 !•!*.'/ 

-a»nJ 

September 1991 

U.S. Environmental Protection Agency 

Office of Air and Radiation 

Office of Mobile Sources 
P.3 

Table of Contents 

Page 

Chapter 1: Introduction 

I. Background 1 

II. Description of the Program 2 

A. Scope of Health Effects Evaluation 3 

B. Scope of Welfare Provisions 6 

C Scope of Emissions Control System Testing 7 

III. Provisions to Prevent Undue Burdens 9 

A. Cost/Burden Sharing Provisions 9 

B. Small Business Provisions 10 

C. Duplicative Testing Provisions 11 

IV. Structure of the Document 11 

Chapter 2: Industry Overview 

I. Introduction 14 

II. Overview of the Motor Fuel Industry 16 

III. Overview of the Fuel Additive Industry 18 

IV. Analysis of Currently Registered F/FA Producers 22 

A. Information Sought 24 

B. Data Sources 25 

C. Methodology 26 

D. Limitations of the Data 29 

E. Summary of Results 30 

Chapter 3: Program Requirements and Associated Costs 

I. Proposed Requirements 34 

II. Tier 1 Requirements and Costs 37 

A. Data Search and Summary 37 

B. Modeling Approaches 39 

C Characterization of Emissions 39 

D. Total Tier 1 Costs 51 

III. Tier 2 Requirements and Costs 53 

A. Individual Test Costs 54 

B. Combined Test Costs 59 

C. Total Tier 2 Costs 60 

IV. Administrative/Reporting Requirements and Costs 61 

V. Tier 3 Requirements 62 

VI. Summary 64 

Chapter 4: Estimated Economic Impacts 

I. Introduction 66 

II. Analytical Assumptions and Approach 67 

III. Methodology and Results 71 

A. Producer Impacts 72 

B. Industry Impacts 75 

IV. Limitations of the Analysis 76 

V. Conclusions 78 

Chapter 5: Summary and Discussion 80 

Appendix A: Financial and Employee Size Information 

for Categories of Manufacturers 
P.4 

Exhibit 1 

Exhibit 2 

Table 2-1 

Table 2-2 

Table 3-1 

Table 3-2 

Table 3-3 

Table 3-4 

Table 3-5 

Table 3-6 

Table 4-1 

Table 4-2 

Table 4-3 

Figure 4-1 

Figure 4-2 

Figure 4-3 

Figure 4-4 

List of Exhibits, Figures, and Tables 

Page 

Gross Gasoline Gallons Sold and 

Company Market Shares - 1989 18a 

Total Revenues From Fuel Additives -

1987 and 1989 19a 

Summary of Collected Information 33a 

Summary of Financial Information 33b 

Fuel/Additive Categories 65a 

Summary of Vehicle Requirement Costs 65b 

Emission Speciation Costs 65c 

Tier 1 Costs 65d 

Tier 2 Costs 65e 

Estimated Program Costs 65f 

Assumed Testing Requirements for Products 

and Groups in each Fuel/Additive Category.. 79a 

Estimated Compliance Costs Per Group in 

Each Fuel/Additive Category 79b 

Summary of Compliance Costs 79c 

Distribution of Compliance Costs for Fuel 

Manufacturers 79d 

Distribution of Compliance Costs for 

Additive Manufacturers 79e 

Distribution of Compliance Costs for Fuel 

and Additive Manufacturers Combined 79f 

Distribution of Product Type by Range of 

Compliance Costs 79g 
P.5 

Chapter 1 

Introduction 

I. Background 

Section 211(a) of the 1970 Clean Air Act (CAA) directs the 

Administrator of the Environmental Protection Agency (EPA) to 

register motor vehicle fuels and fuel additives prior to their sale 

or introduction into commerce. The basic registration information 

required by each fuel and fuel additive manufacturer is specified 

under Section 211(b)(1), and includes such items as commercial 

identifying information, range of concentration, purpose in-use, 

and chemical composition. Under Section 211(b)(2), EPA is also 

given authority to require manufacturers to conduct tests to 

determine the potential health effects of their fuels and fuel 

additives and to require other information to identify the 

emissions produced by such fuels and fuel additives, their 

effeet(s) on the public health and welfare, and their impact on 

vehicular emission control performance. 

Although the general registration regulations of sections 

211(a) and (b)(1) were implemented in 1975, EPA did not exercise 

it's discretionary authority to require health, welfare, and 

emission control system effects testing under section 211(b)(2), 
P.6 

nor establish procedures and protocols for these tests. However, 

in the CAA Amendments of 1977 (PL 95-95, August 7, 1977), Congress 

added Section 211 (e) to the statute which made implementation of 

Section 211(b)(2) mandatory and provided additional direction 

concerning the implementation of the statute's testing 

requirements. 

Section 211(e)(1) required implementation of the Section 

211(b) (2) authority within one year of enactment of the amendments. 

Section 211(e) (2) established time limits for compliance by fuel 

and fuel additive producers. For those fuels and additives not yet 

registered when the Section 211(b)(2) regulations are promulgated, 

the "requisite information" must be submitted prior to 

registration. For fuels and additives already registered, the 

information must be provided "no later than three years" after the 

new regulations are issued. Section 211 (e) (3) allowed the 

Administrator to exempt or make special allowances for small 

businesses, to provide for cost and/or burden sharing, and to make 

other specific exemptions when additional testing would be 

duplicative of adequate existing testing. This analysis supports 

EPA's proposal to implement the registration program requirements 

in Section 211(b)(2) and (e) of the Act. 

II. Description of the Program 
P.7 

Under the current fuel and fuel additive registration 

regulations, motor vehicle gasolines, diesel fuels, and their 

additives are the only fuels and additives designated for purposes 

of registration. Given the potential for a major expansion of 

alternative fuels into the marketplace in the future, EPA is now 

developing a proposal which will expand the designation of motor 

vehicle fuels and their additives required to register. The 

fuel/additive designations are expected to include: methanol, 

ethanol, and other motor vehicle alcohol fuels (i.e., those 

containing at least 50 percent alcohol by volume), liquified 

petroleum gas, compressed natural gas, and, possibly, motor vehicle 

engine oils. These changes will expand the types of fuels and 

additives subject to the general registration requirements as well 

as the testing provisions proposed in this Notice of Proposed 

Rulemaking (NPRM). 

A. Scope of Health Effects Evaluation 

The potential scope of the health effects testing program is 

vast, and EPA has taken steps consistent with the Act to limit the 

focus of the requirements so as not to present an unnecessary 

burden on the regulated industry, while still requiring the level 

of information needed to achieve the overall goals of the program. 

The 211(b) program is designed to function as a screening 

mechanism, rather than as a mandate for comprehensive health 

effects assessments as routine requirements for registration. A 

system of evaluation tiers has been developed, enabling EPA to 
P.8 

determine whether more definitive testing is needed for specified 

fuels or additives based upon toxicity and exposure data obtained 

from the literature, modeling techniques, and a battery of 

screening tests. 

The purpose of the tiers is to provide a means by which 

additional testing will only be required based on results of the 

requirements of the previous tiers. Tier 1 includes 

characterization of emissions, a comprehensive search and summary 

of available information sources concerning the emissions-based 

effects of fuels and fuel additives on the public health and 

welfare, and application of data modeling techniques. Tier 2 of 

the health effects evaluation consists of short-term screening 

tests which address the health endpoints described below. The 

number of tests required will depend on the extent to which the 

data search activities in Tier 1 provide documentation of adequate 

existing testing comparable to the screening tests included in Tier 

2. Fuels and additives will be subject to Tier 3 requirements as 

determined on a case-by-case basis by EPA, to address particular 

areas of concern which arise in the earlier tiers. The endpoints 

to be addressed and the studies conducted in Tier 3 will be 

determined for each case. However, Tier 3 requirements will most 

often include animal inhalation exposures of chronic (2-3 year) 

duration, to verify and/or quantify the results of the screening 

evaluations. The evaluation "Tiers" are further explained in 

chapter 3 of this report. 
P.9 

Section 211(b) provides little guidance in regard to the scope 

of the health effects evaluation program other than stipulating 

which endpoints must, at a minimum, be included in the regulations. 

According to Section 211(b) (2) (A) , the endpoints to be addressed by 

the program must include, but are not necessarily limited to, 

carcinogenicity, mutagenicity, and teratogenicity. EPA has chosen 

to expand the latter category to encompass general reproductive 

toxicity. EPA also proposes to add pulmonary toxicity and 

neurotoxicity to the list of endpoints. 

Consistent with the overall concerns of the CAA on adverse air 

pollution effects, the proposed health testing requirements are 

concerned only with the effects of inhalation exposure to the 

evaporation and combustion products of fuels and additives. They 

do not specifically address the possible adverse effects of 

exposure to fuels and additives in the liquid state, nor at this 

time do they include the effects of exposure to the atmospheric 

transformation products of fuel and additive emissions. EPA's 

proposal to restrict the focus of the rulemaking to exposure of 

combustion and evaporative emissions of fuels and additives 

represents a major reduction in the potential scope of the health 

effects evaluation program. Further significant reductions in 

program costs and overall impact on the fuel and additive industry 

are also expected as a result of proposed grouping mechanisms and 

provisions for exempting relabeled products from program 
P.10 

requirements. 

B. Scope of Welfare Provisions 

Section 211(b) (2) (B) states that the Administrator may require 

manufacturers to furnish "reasonable and necessary" information for 

determining "the extent to which (fuel and fuel additive) emissions 

affect the public health or welfare". The term "welfare effects" 

refers generally to the impact which air pollution produced by 

motor vehicle fuels and additives may have on the environment, 

including not only effects on aquatic ecosystems and animal health, 

but also effects which may detract from human well-being. 

EPA proposes to meet the welfare effects requirements of the 

statute in association with the requirements in the first 

evaluation tier. In Tier 1, responsible producers are required to 

conduct chemical speciation procedures to identify the emission 

products generated by fuels and additives. These procedures will 

yield an inventory of potentially hazardous air pollutants which 

may have significant impacts on the general environment and public 

welfare as well as on the public health. Tier 1 also includes a 

literature search for health-related information which will be 

expanded to include requirements for collection of published or inhouse data regarding the welfare effects of the emission products. 

Furthermore, the data modeling approaches in Tier 1, which will 

provide estimates of the ambient concentrations and general 
P.11 

atmospheric fates and reactivity of fuel and fuel additive 

emissions, bear a direct relationship both to health and welfare 

effects assessment. Thus, except perhaps for a minor increase in 

the scope of the literature search and modeling activities of Tier 

1, no incremental costs are expected with respect to welfare 

effects assessments. 

C. Scope of Emissions Control System Testing 

Existing regulations under Section 211(f) call for emission 

control testing of fuels and additives only when their composition 

departs significantly from the general range of fuel formulations 

which would ordinarily be anticipated by manufacturers of motor 

vehicle engines and emission control devices. Under the existing 

fuel/additive registration program, fuel and additive formulations 

which are not "substantially similar" ("sub sim") to designated 

certification fuels (as defined in 56 FR 5352, February 19, 1991) 

cannot be introduced into commerce unless a waiver is issued by 

EPA. To obtain such a waiver, the producer of the fuel or additive 

must show that the "dissimilar" product does not adversely affect 

the ability of a motor vehicle's emission control system to achieve 

compliance with emission standards during the useful life of the 

vehicle. 

The current waiver program has proven to be both practical and 

effective as applied to gasoline fuels and additives, and plans to 

extend the applicability of this program to other fuel and additive 
P.12 

categories will serve to fulfill the aims of the emission control 

testing provisions of Section 211(b). Therefore, EPA proposes to 

integrate the emission control system testing provisions of 211(b) 

with existing and planned programs promulgated under Section 

211(f). In other words, new fuels and additives which do not meet 

the "sub sim" criteria will be subject to the regular Section 

211(f) waiver application process prior to registration, as under 

the existing registration program. 

The only new expression of EPA's authority under Section 

211(b) in regard to emission control testing requirements pertains 

to fuels and additives which were registered in the past even 

though they were not "sub sim" and did not undergo waiver 

application procedures. Such registrations have occurred because 

certain categories of fuels and additives did not come under the 

authority of Section 211(f) until the enactment of the 1990 CAA 

Amendments. As a result, some "non-sub-sim" products introduced 

prior to that date were allowed to be registered without first 

undergoing the emission control system testing which the waiver 

application process normally entails. Rather than requiring all 

such "grandfathered" products to go through the waiver process, EPA 

proposes to require emission control system testing for 

"grandfathered" products only on a case-by-case basis when evidence 

becomes available that such products may have adverse effects on 

emission control performance. Thus, this rulemaking provides a 

mechanism by which EPA can choose to require specific 

8 
P.13 

"grandfathered" products to undergo Section 211(f) waiver 

application procedures if so petitioned by outside parties, or if 

other information available to the Agency indicates that such 

review is appropriate. Consequently, this analysis includes no 

costs directly related to emission control system testing. 

III. Provisions to Prevent Undue Burdens 

Section 211 (e) (3) contains several provisions designed to 

eliminate undue cost burdens and to improve the economic efficiency 

of the requirements. These provisions include: A.) Cost/Burden 

Sharing, B.) Small Business, and C ) Duplicative Testing. Each of 

these are discussed below. 

A. Cost/Burden Sharing Provisions 

Section 211(e) (3) allows the Agency to provide for cost and/or 

burden sharing among producers of any fuel or fuel additive which 

is manufactured or processed by two or more persons so that 

requirements can be met without duplication of effort. Under one 

scenario, a manufacturer may already have incurred all necessary 

costs of registration, and another manufacturer might wish to rely 

on the results of this existing testing for purposes of registering 

a similar product. Another case involves two or more producers of 

similar products who need to undertake the same testing 

requirements prior to registration. For purposes of enacting these 
P.14 

provisions, EPA has developed a voluntary grouping scheme, by which 

fuels and additives may be grouped for testing purposes. 

Representatives from each group will be selected for testing, with 

the results and associated costs shared by the participating 

manufacturers. The proposed grouping scheme is further explained 

in Chapter 4 of this report. 

B. Small Business Provisions 

The CAA gives the Administrator authority to provide program 

exemptions, deferrals, or modifications for small businesses. 

However, given the design of the proposed program and analysis of 

potential small business impacts, EPA does not plan to exercise 

this authority within the fuel and fuel additives registration 

program. A number of general provisions within the proposed 

program structure should assure that undue burdens are not placed 

upon small businesses. For instance, EPA is providing 

opportunities for group participation and cost sharing. In 

addition, the requirements for health effects testing are 

relatively modest through Tier 2. More rigorous testing is to be 

required, under the provisions of Tier 3, only when significant 

hazard potential has been identified. Furthermore, requirements in 

regard to welfare effects are minimal, and emission control system 

tests are not routinely required. Potential impacts of the 

proposed registration regulations on small businesses are addressed 

10 
P.15 

in a separate document.1 

C. Duplicative Testing Provisions 

Under CAA section 211 (e) (3) (c) , the Administrator "may" exempt 

any fuel or additive from the regulations "upon a finding that any 

additional testing of such fuel or fuel additive would be 

duplicative of adequate existing testing." EPA will exercise its 

authority under this provision by exempting fuels and additives 

registered as relabeled products from the additional registration 

requirements proposed in this rulemaking. A relabeled product is 

a repackaged version of a product which is also registered by the 

original manufacturer. Testing of relabeled products would clearly 

duplicate the efforts of the original manufacturer. To further 

avoid duplicative efforts, for all fuels and additives, testing 

under Tier 1 or 2 will not be required if a producer submits the 

results of previously completed tests which satisfactorily meet the 

requirements of this program. Judgements regarding the existence 

of adequate existing testing used in this analysis are presented in 

Chapter 4. 

IV. Structure of the Document 

The primary focus of this analysis is to determine the impact 

lnRegulatory Flexibility Analysis of the Proposed Fuels and 

Fuel Additives Registration Program," September 26, 1991, prepared 

by ICF Incorporated under EPA Contract No. 68-C8-0024. 

11 
P.16 

of this proposal on the fuels and fuel additives industry. Chapter 

2 presents an overview of the regulated industry, including a 

discussion of the fuel and additive industry as a whole, as well as 

an analysis of manufacturers currently registering fuel and 

additive products with EPA. Information collected on currently 

registered manufacturers, data sources and methodology used, and 

summary of the findings will be presented. 

Chapter 3 discusses proposed fuel and fuel additive testing 

requirements and related costs. Estimated costs are provided for 

each activity required under each "Tier" of evaluation and testing. 

The estimated costs for emission generation, emission speciation, 

biological testing, and compliance with reporting requirements are 

presented. 

Chapter 4 presents the projected financial impacts of the 

proposed program on the fuel/fuel additive industry. Economic 

impacts are discussed for fuel manufacturers, fuel additive 

manufacturers, and the industry as a whole. The analytical 

judgements and assumptions on which the analysis is based and the 

methodology for determining the cost impacts of compliance are also 

presented. 

Chapter 5 provides a summary and discussion of the information 

presented. The sensitivity of projected costs to assumptions used 

in the analysis is included as well as a brief discussion of the 

12 
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costs/benefits of the proposal. 

13 
P.18 

Chapter 2 

Industry Overview2 

I. Introduction 

This chapter provides a general overview of the structure and 

financial characteristics of the motor vehicle fuel and fuel 

additive industry and presents specific financial information on 

currently registered fuel and fuel additive (f/fa) producers. For 

purposes of registration with EPA, a fuel manufacturer is defined 

as any person who, for sale or introduction into commerce, produces 

or manufactures a fuel or causes or directs the alteration of the 

chemical composition of, or the mixture of chemical compounds in, 

a bulk fuel by adding to it an additive.3 By this definition, 

those entities required to register fuels include not only refiners 

of crude oil, but also operators who formulate their own fuels by 

adding different combinations of additives, and those who mix 

fuels. Currently, fuels intended for use exclusively in off-road 

vehicles are not designated for registration with EPA. 

A fuel additive manufacturer is defined as any person who 

2Based on "Characterization of the Motor Fuel and Fuel 

Additives Industry," September, 1991, prepared by ICF Incorporated 

under EPA Contract No. 68-C8-0024. 

340 CFR Part 79. 

14 
P.19 

produces or manufactures an additive for use as an additive and/or 

sells an additive under his own name.4 Included in this definition 

are companies which manufacture additives from non-additive 

constituents as well as those which produce additives by mixing two 

or more other registered additives and those which repackage 

existing additives for sale under a different label (i.e., 

"relabeiers"). Fuel additive products can be subdivided by 

purpose-in-use as bulk additives and/or aftermarket additives. 

Bulk additives are products which are added to fuel before the fuel 

is commercially available for introduction into the fuel tank of a 

motor vehicle, whether added at the refinery as part of the 

original blending stream or after the fuel is transported from the 

refinery. Aftermarket additives are products marketed for 

introduction directly into the fuel system of a motor vehicle. 

The following two sections provide an overview of the motor 

fuels and fuel additives markets, focusing on the aggregate size 

and organization of the markets for these products. This 

information is based on prevailing definitions of the motor fuels 

and fuel additives market, and may not correspond directly with the 

registration program's definition of fuel and fuel additive 

manufacturers, which includes not only "original" producers, but 

also those that blend fuels and additives. Although the fuel 

industry produces a range of conventional and alternative motor 

vehicle fuels, the discussion below focuses on gasoline and diesel 

4Ibid. 

15 
fuels and their additives, which are the products currently 

registered with EPA. In the final section of this chapter, 

information on currently registered f/fa producers is presented and 

analyzed to provide a basis for the discussions of program costs 

and impacts in the subsequent chapters. 

II. Overview of the Motor Fuel Industry 

At the present time, gasoline and diesel fuel dominate the 

motor fuel industry. Of all petroleum products refined from crude 

oil, gasoline is by far the largest segment, representing 46 

percent of all crude oil products refined into gasoline in 1989. 

In that year, approximately 21 percent of all crude oil resulted in 

diesel fuel precursors. Other products refined from crude oil, 

such as jet fuel, kerosene, and home heating oil, accounted for the 

remaining 33 percent.5 

The motor fuel market can be divided into five major market 

segments distinguished by grade of fuel. These five segments and 

their percentage of the entire market share are6: leaded regular 

gasoline (3 percent), unleaded regular gasoline (56 percent), 

unleaded midgrade gasoline (8 percent), unleaded premium gasoline 

5Energy Information Administration, U.S. Department of Energy, 

Petroleum Supply Annual, Volume 2, 1989, p. 222. 

6Energy Information Administration, U.S. Department of Energy, 

Petroleum Marketing Monthly, September 1991. 

16 
P.21 

(15 percent), and diesel (No. 1 and No. 2) fuel (18 percent). 

These shares of the total market have not been constant over time, 

reflecting factors such as changing consumer preferences, 

substitution among products, and government regulation. Over the 

period 1985 to 1989, the total sales volume of leaded regular 

gasoline declined by 72 percent as a result of the gradual phaseout 

of leaded gasoline. The fastest growing segment of the market 

during this period is unleaded premium gasoline, which grew by 

nearly 57 percent. Sales volume of diesel fuel grew by 7 percent 

over this period. Overall, unleaded gasoline of all grades 

accounts for nearly 90 percent of all gasoline demand. 

The motor fuel industry as a whole has relatively low price 

elasticity of demand (roughly -0.5) due to the high dependence of 

many individuals on motor fuel and the limited number of fuel 

substitutes.7 The price elasticity of demand measures the change 

in demand for a product (i.e., sales) as a function of a change in 

the product's price. An elasticity of demand of -0.5 means that a 

50 percent increase in price would result in a 25 percent decrease 

in demand. In a highly competitive and price-sensitive market, one 

would generally not expect an immediate pass-through of fixed cost 

increases to consumers. However, due to the lower sensitivity of 

fuel buyers to price increases, it may be possible for companies to 

increase prices to recover some of the costs related to the 

proposed registration program. It is within the different grades 

7National Petroleum News, 1990 Fact Book, vol. 82 no.7. 

17 
P.22 

of fuel, not between fuel types, that consumers can more easily 

make substitutes in response to price increases. 

The motor fuel market is principally composed of large oil and 

gas companies involved in all phases of the industry, from 

exploration to retail sales. These companies account for a 

significant market share of the total industry. Exhibit 1 presents 

market share and total gallons sold for the top 15 companies. In 

1989, these companies sold a total of approximately 75 billion 

gallons of gasoline, representing roughly 65 percent of the total 

market of 115 billion gallons.8 The entire integrated petroleum 

industry (including activities beyond the production and marketing 

of motor fuel) had total revenues of approximately $450 billion, 

total net income of approximately $23.5 billion, and a net profit 

margin of 5.2 percent. Profitability across companies varied 

considerably. 

Ill. Overview of the Fuel Additive Industry 

Fuel additives include any products added to motor fuels to 

enhance performance or serve other useful purposes. Additives are 

sold either in bulk for large volume blending with motor fuels or 

as aftermarket products which are added to motor fuels by the 

8American Petroleum Institute, Market Share and Individual 

Company Data for U.S. Energy Markets: 1950-1989, Discussion Paper 

#014R, October 1990. 

18 
P.23 

EXHIBIT 1 

GROSS GASOLINE GALLONS SOLD AND 

COMPANY MARKET SHARES -1989 

1989 Market Share 

All Other Companies 

40.7 billion gallons 

1989 Market Share 

8.2% 

35.0% 

15 Companies 

74.6 billion gallons 

7.4% 

7.0% 

6.8% 

6.4% 

Company 

m Shell 

^^^H Amoco 

|;?#:,»;::1 Exxon 

I I Mobil 

I l Chevron 

E S S Texaco 

rv» l Unocal 

K\NN BP America 

ES3

 Sun 

FFFf. Phillip* 

B B S ARCO 

DOOCJ Marathon 

\7;7:7;l Conoco 

W W . Aramco 

BSS^j Ashland 

| | AllOther 

Companies 

Gross Gallons 

(in 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.24 

consumer. Information was not readily available on the market 

share of bulk versus aftermarket products in the additive market. 

The fuel additive market consists of numerous segments, each 

corresponding to a specific purpose or use. The seven major 

product segments and their market shares are9: anti-knock agents 

(80 percent), corrosion inhibitors (11 percent), detergents (3.3 

percent), deposit modifiers (1.4 percent), metal deactivators (1.3 

percent), antioxidants (1.3 percent), and other additives such as 

cetane improvers and de-icers (1.6 percent). 

Exhibit 2 presents the market share for different types of 

fuel additives in 1987 and 1989, as well as the total revenues for 

the entire market. In terms of sales, the anti-knock product 

segment increased the most dramatically over the two-year period, 

from $623 million in 1987 to $1,566 million in 1989, thus 

representing 80 percent of industry gross sales in 1989. Annual 

sales growth from 1987 to 1989 for the anti-knock product segment 

was highest, with 59 percent, followed by antioxidants, with 11.3 

percent. Corrosion inhibitors and detergents had the least annual 

growth between 1987 and 1989 with 5.9 percent and 6.9 percent, 

respectively. 

While specific information was not readily available on 

elasticity of demand in the fuel additive industry, it would be 

9"Gasoline/Fuel Additives Could Grow 20% Annually," The Oil 

Daily, March 26, 1990. 

19 
P.25 

EXHIBIT 2 

TOTAL REVENUES FROM FUEL ADDITIVES -1987 AND 1989 

1987 

20.4% 

64.4 % 

Total Revenues = $968 million 

1989 

1,4% 

1.6%

 l1 '3 % 

3.3% 

11.3% 

Fuel Additives 

ISI M Anti-knock Agents 

^ ^ | Corrosion Inhibitors 

\yysA Detergents 

iii i Deposit Modifiers 

Y//A Metal Deactivators 

E==3 Antioxidants 

Other Additives • 

* includo Improver* for diesel fuel, 

de-leers, dyes, cold-flow Improvers 

?9.8 % 

Total Revenues = $1,962 million 

n CL 
P.26 

expected to vary by bulk versus aftermarket and purpose-in-use. 

Nevertheless, it is likely that some fuel additive producers can 

recover a portion of registration-related costs through price 

increases, particularly for bulk additives. A large fuel additive 

producer can spread the fixed cost increases over the entire 

production volume, enabling them to raise prices to recover some 

portion of the costs. However, smaller manufacturers can generally 

increase prices only to the level set by the large manufacturers, 

therefore recovering perhaps only a percentage of their 

registration costs. Because most types of additives are limited to 

a specific function, it is within a product segment rather than 

between the segments that consumers can make substitutions in 

response to price increases. 

The fuel additive industry is dominated by the chemical 

divisions of large oil companies such as Amoco, Shell, Chevron, and 

Exxon, as well as chemical firms, such as DuPont and Lubrizol. 

Because the fuel additive industry is very capital-intensive, the 

larger companies usually produce a range of chemicals and often 

sell their products to other additive manufacturers. The high 

capital costs create barriers to entry that could discourage 

competitors from participating in this industry. In 1989, 

approximately 4.78 billion pounds10 of fuel additives were sold, 

"information was not readily available on gallons of fuel 

additives produced in that year. However, assuming an average 

density of 6 pounds/gallon, 1989 sales of fuel additives is 

estimated at 796 million gallons, about one percent of gallons of 

fuel sold in that year. 

20 
P.27 

an increase of 21 percent over 1987 sales. In 1989, the fuel 

additive industry had total revenues of $1,962 million, three times 

greater than 1987 sales. Because motor fuel additive manufacturers 

are often manufacturers of other chemical products for other 

markets as well, it is difficult to estimate separate profit 

margins for the additive marketplace alone. According to 

information presented in Robert Morris Associates' Annual Statement 

Studies 1990, before-tax profit margins for companies with sales of 

$25 million or less in SIC Code 286, "Industrial Organic 

Chemicals," averaged approximately three to nine percent of sales 

in 1989. 

In general, the fuel market tends to be much larger than the 

additive industry, both in terms of production volume and annual 

revenues. Even though information was not available on gallons of 

fuel additives produced and sold in 1989, it appears that the 

amount of fuel produced in that year is much larger than that of 

additives. Annual revenues in the fuel additive market were only 

about 0.4 percent of the revenues in the petroleum industry in that 

year. While both fuel and additive producers are likely to be able 

to recover some portion of the costs incurred for compliance, 

chances for an immediate pass-through of all costs to consumers may 

be reduced in a competitive market. As fixed compliance costs are 

spread over more units, the average compliance costs drop somewhat 

with every additional unit sold. This incentive to keep sales high 

suggests that quickly passing all costs through to consumers may 

21 
P.28 

not be likely. Manufacturers may in the long term be able to 

recover all costs, depending on the amount of competition entering 

the market, and on the number of substitutes available for a given 

product. 

IV. Analvsis of Currently Registered Fuel/Fuel Additive Producers 

As of mid-1990, 764 fuel producers had registered 2,235 fuel 

products with EPA. The number of fuels registered per manufacturer 

ranges from 1 to 16, with an average of 3 per manufacturer. 

Approximately 90 percent of the fuels registered are gasoline, 59 

percent unleaded and 32 percent leaded. Nearly ten percent of the 

fuels registered are diesel fuels. The universe of fuel producers 

registering fuels with EPA is comprised of essentially two groups: 

companies that refine oil into fuel, (i.e., refiners), and 

companies that "manufacture" fuel by adding additives or 

reformulating the fuel (i.e., mixers). Many refiners represented 

in the registration database are large, public, integrated oil 

companies that also distribute and sell motor vehicle fuels at the 

retail level through their own or affiliated gas stations. In 

contrast, most of the mixers are private companies. 

At that same time there were 1,160 fuel additive manufacturers 

registering 4,115 fuel additives with EPA. The majority of 

manufacturers (80 percent) produce only aftermarket additives, 15 

22 
P.29 

percent produce only bulk additives, and 5 percent produce both. 

Of the fuel additive products registered, approximately 40 percent 

are designated for use as bulk additives and 60 percent are 

aftermarket. The number of products per manufacturer ranges from 

1 to 147, with 693 manufacturers (60 percent) producing only one 

product, and 73 percent registering two or less. Only five percent 

of the companies register more then ten additives. 

Approximately 50 percent of fuel additive manufacturers 

register only relabeled products and will be exempt from the 

testing requirements proposed in this rulemaking. However, the 

number of registered products these exempted manufacturers 

represent is only about 32 percent of all registered additives 

because most "relabel only" manufacturers register no more than two 

additives. 

To estimate the financial effects of the registration 

regulations on fuel/fuel additive producers, an attempt was made to 

collect financial information on all 764 fuel companies and 1,160 

additive companies registered on or before mid-1990. Of these 

companies, information was collected on 292 fuel producers (38 

percent) and 281 additive producers (24 percent). The methodology 

and data sources used in collecting financial information, along 

with assumptions and limitations of the data, are presented below. 

This information is presented in six sections: information sought; 

data sources used; methodology of data collection/estimation; 

23 
P.30 

limitations of the collected data; and summary of results. 

A. Information Sought 

The principal data items useful for assessing the potential 

effects of the proposed regulations on the financial viability of 

producers are as follows: 1) corporate status (i.e. public, 

private), 2) name of parent company (if relevant), 3) number and 

type of products (fuels or additives), 4) annual revenues (sales) 

for the most recent fiscal year, 5) assets in the most recent 

fiscal year, 6) net income (earnings) for the most recent fiscal 

year, 7) number of employees, and 6) four-digit standard industrial 

classification (SIC) codes corresponding to the principal line of 

business. 

Corporate status gives an indication of the amount of 

information generally available for an individual company, since 

public companies must meet a number of financial disclosure 

requirements which private companies do not. The name of the 

parent company of a division or subsidiary registering a product 

was important because the most complete financial information is 

generally available for the parent company. Information for the 

parent was collected when information was not available or 

estimated on the operating unit (e.g., division). The number and 

type of products is important for determining the total costs 

likely to be incurred by a manufacturer in complying with new 

regulatory requirements. Annual revenues may help provide an 

24 
P.31 

indication of the ability of a manufacturer to pass costs along to 

it's customers, and is also one of the parameters used by the U.S. 

Small Business Administration (SBA) in defining a small business. 

Asset information can be used to calculate return on assets (net 

income/total assets), an indication of the financial health of the 

company. Net income measures the profitability of the business and 

can be used to analyze a company's ability to pay compliance costs. 

The number of employees and SIC codes represent non-financial 

parameters that are useful for estimating financial values where 

actual information is not available. In addition, the number of 

employees is another parameter used by the SBA to define a small 

business. A manufacturer's SIC code or codes may provide an 

indication of whether the sale of motor fuels or fuel additives 

represents the majority of their revenues. 

Information was collected for both public and private 

companies for which data was reasonably available. Four different 

sources were used to collect information, as described below. When 

the registering manufacturer was a unit of a parent company (e.g., 

a division), attempts were made to collect the financial 

information for the relevant operating unit. Where data was not 

available on the operating unit, the information was either 

estimated for that operating unit or collected on the parent 

company. 

B. Data Sources 

25 
P.32 

Information on the number and types of products for each 

manufacturer was drawn from the registration database. Other 

information about fuel and fuel additive manufacturers was 

collected from four sources: Ward's Business Directory 1991, 

Directory of Corporate Affiliations 1991, Robert Morris Associates' 

Annual Statement Studies 1990, and Dun & Bradstreet's Industry 

Norms and Key Business Ratios presented in the Dun & Bradstreet 

business information database. In most cases, information was 

collected for corporate fiscal year 1989 or early 1990. 

C. Methodology 

Manufacturers were first separated into three groups for which 

information was collected: 1) fuel manufacturers, 2) additive 

manufacturers producing original products or re-registered 

products, and 3) additive manufacturers producing only repackaged 

products for sale under a different label (so called "relabeiers"). 

Initial information was sought from Ward's Business Directory 1991 

and the Directory of Corporate Affiliations 1991, which provide 

information ranging from corporate status to assets and net income. 

For public companies, most of the desired information was generally 

available on the parent company, but asset and net income 

information at the divisional or subsidiary level was usually not 

provided. In contrast, little information other than sales and 

number of employees was available for private companies. Where net 

income and asset information was not available through one of these 

sources, they were estimated according to the methods described 

26 
P.33 

below. 

1. Estimation of Assets and Net Income for Private Parent 

Companies 

Net income and assets were estimated using industry "norms" 

(average values or ratios representative of companies analyzed by 

the data source) from Robert Morris Associates' Annual Statement 

Studies 1990 or Dun & Bradstreet's Industry Norms and Key Business 

Ratios. The Robert Morris data provides average financial values 

and ratios predominantly for companies with sales up to $25 

million, and thus was used for companies in this sales range. For 

manufacturers with sales of $25 million or more, the companies 

included in the Dun & Bradstreet database were judged more 

representative because the Dun & Bradstreet database contains a 

greater number of companies with sales of more than $25 million. 

Motor fuel manufacturers initially were divided into three 

categories based on the nature of their primary business activity 

as indicated by their primary SIC code: production/distribution 

(SIC codes 13, 29, 46, and 517) , non-agricultural retail (SIC codes 

49, 50, 5411, 55, and 59), and agricultural retail (SIC codes 20, 

28, 42, 5153, 5191, and 5211). Additive manufacturers were divided 

into two categories according to their principal business 

activities: manufacture of chemicals and petroleum products (SIC 

codes 28 and 29); and all others. "Relabel" and "non-relabel" 

additive manufacturers were consolidated for purposes of estimating 

27 
P.34 

assets and net income because they had similar business and 

financial characteristics. 

The assets of companies with annual sales under $25 million 

were estimated from the average ratio of revenues to assets 

reported in the Annual Statement Studies 1990 for other companies 

of the same size in the same SIC code. Similarly, net income was 

estimated using the before-tax profit margin (expressed as a 

percentage) and an assumed corporate tax rate of 34 percent11. 

Companies with sales over $25 million were sorted into groups by 

sales and SIC codes, and average sales was calculated for each 

group. These averages were used as search parameters for 

generating industry norms from the Dun & Bradstreet database. The 

information provided by this data source includes average financial 

values of balance sheet financial measures (e.g, fixed assets, net 

income) expressed as a percentage of sales. From the average and 

median values provided by Dun & Bradstreet, point estimates of 

assets and net income were developed for each private manufacturer 

based on the annual revenues of that manufacturer. Information 

from this source was provided for the previous three years, rather 

than for a single year. Estimated assets were based on information 

from the most recent year, while net income estimates were based on 

11According to Publication 542 of the Internal Revenue Service 

of the U.S. Department of the Treasury entitled "Tax Information on 

Corporations (1990) , " corporate taxable income is subject to tax 

under a three-bracket graduated system of 15 percent, 25 percent, 

and 34 percent for taxable income over $75,000. Most manufacturers 

for which information was collected had net income over $75,000, so 

a tax rate of 34 percent was used. 

28 
P.35 

a three-year average to account for varying economic conditions. 

2. Estimation of Assets and Net Income for Divisions and 

Subsidiaries 

Net income and asset information was estimated at the 

divisional or subsidiary level when products were registered at 

that level. Using a regression analysis, equations were developed 

for both fuel and additive producers, one comparing sales and net 

income and one comparing sales and assets of companies for which 

this information was available. These relationships were then 

applied to companies for which only sales was available to 

determine assets and net income for a given division or subsidiary. 

D. Limitations of the Data 

Complete financial information could be collected or estimated 

for only 292 of the 764 registered fuel manufacturers, 216 of the 

556 "original" fuel additive manufacturers, and 65 of the 604 

"relabel" additive manufacturers. Thus, the information collected 

may not be representative of the universe of registered 

manufacturers. It is possible that the information collected tends 

to over-represent companies of a certain size. Furthermore, the 

estimates developed from Robert Morris Associates and the Dun & 

Bradstreet database reflect any selection bias existing in these 

data sets. For example, if only companies that are strong 

financially provide information to Dun & Bradstreet, the industry 

norm developed from the data may not be representative of all 

29 
P.36 

companies within that sales range and SIC codes. Struggling 

companies that represent a high credit risk may not provide 

information to these sources since business credit may be 

unavailable to them under most circumstances. 

Information was collected or estimated at the divisional and 

subsidiary level when possible, but in some cases only parent 

company data could be obtained. This inconsistency may interfere 

with the ability to make industry comparisons. For example, sales 

of additive manufacturers may appear to be larger than for fuel 

manufacturers, if the former is based primarily on parent company 

and the latter on data for the operating unit. 

E. Summary of Results 

Table 2-1 summarizes the total number of companies and 

products for motor fuel manufacturers, "original" motor fuel 

additive manufacturers, and motor fuel additive "relabeiers". 

Information collected for each of the three categories of 

manufacturers is discussed below. 

Of the 764 fuel manufacturers registered on the database, 

financial information was collected or estimated for 292 companies 

(38 percent). These manufacturers represent 45 percent of the 

currently registered motor fuel products. Of these 2 92 companies, 

financial data on net income and assets were estimated for 80 

companies. Overall, motor fuel manufacturers for which information 

30 
P.37 

was obtained represented 30 different four-digit SIC codes and 17 

different two-digit SIC codes.12 The most common four digit SIC 

code was 2911 (Petroleum Refining), and the most common two-digit 

SIC code was 51 (Wholesale Trade of Nondurable Goods). 

Of 556 "original" fuel additive manufacturers ("nonrelabelers"), information was available for 216 companies (39 

percent). Of these companies, financial information was estimated 

for about 42 percent. These "non-relabelers" registered 1,654 

unique products (28 percent of total additive products, including 

relabels), of which 62 percent are bulk products and 38 percent are 

aftermarket. These companies represented 77 different four-digit 

SIC codes and 2 9 two-digit SIC codes. The most common four-digit 

SIC codes was 2911 (Petroleum Refining), and the most common twodigit SIC code was 28 (Chemicals and Allied Products). 

Of 604 "relabel" fuel additive manufacturers, information was 

available for 65 companies (11 percent). Of these 65 companies, 

information was estimated for approximately 88 percent. These fuel 

additive manufacturers registered 189 products (about 5 percent of 

total additive products), of which virtually all are aftermarket. 

These companies represented 58 different four-digit SIC codes and 

23 two-digit SIC codes. The most common four-digit SIC code was 

2842 (Polishes and Sanitation Goods), and the most common two-digit 

"Totals are based on the primary SIC code indicated for each 

manufacturer, although frequently more than one SIC code is listed 

for each company. 

31 
P.38 

SIC code was 28 (Chemicals and Allied Products). 

Table 2-2 compares information about fuel and additive 

manufacturers including the number of companies, their total number 

of products, and the average annual revenues, net income, and 

number of employees. Of the 573 registered companies (30 percent) 

for which information was obtained, the data suggests that fuel 

additive manufacturers generally have more employees and higher 

average sales and net income than fuel manufacturers. The likely 

explanation for this finding is that several very large companies, 

including major automobile manufacturers, chemical companies, and 

general retailers, are registered as fuel additive manufacturers. 

This information is presented in a more detailed manner in Appendix 

A. 

In sum, an overview of the fuel/fuel additive industry 

suggests that the fuel industry is generally larger than the fuel 

additive industry, both in terms of production volume and annual 

revenues. In contrast, a comparison of individual companies 

registering fuels and additives suggests that registered additive 

manufacturers generally tend to be larger than registered fuel 

manufacturers. One reason for this may be the diverse nature of 

the companies registering products, particularly additives. For 

many registered companies, the nature of their primary business 

activity is not related to manufacturing, but rather is related to 

wholesale or retail trade, for instance. Also, the data suggests 

32 
P.39 

a bimodal distribution in the size of the fuel producers (i.e., a 

small number of large companies and a large number of small ones). 

Because financial information could not be collected on all 

registered companies, the collected information may not be 

representative of the universe of registered manufacturers. The 

costs of complying with the proposed program are presented in the 

next chapter, followed by impacts of compliance costs on the 

industry. The effects of compliance costs on small and large fuel 

and fuel additive producers is presented in the Regulatory 

Flexibility Analysis. 

33 
U J 

Mann fuel u re r Iyi>e 

Tabl e 2- 1 

SUMMARY Ol COI.I.IiCTEl) INFORM ATION 

Tutu I Num Iter ol* 

Com pan ies Products 

Number for Which 

Information wus Collected 

Com pun ies Products 

Fuel Manufacturers 

"Non-rclabel" Fuel Additive 

Manufacturers 

"Relabel" Fuel Additive Manufacturers 

764 

556 

604 

2.235 

1,349 (bulk) 

1,495 (aftermarket) 

2,834 (total) 

22 (bulk) 

935 (aftermarket) 

955 (total) 

292 

216 

65 

1.001 

1,029 (bulk) 

629 (aftermarket) 

1.654 (total) 

4 (hulk) 

130 (afiermarkei) 

134 (lolal) 

Note: The total number of products represents the number of unique products. Because some fuel additives are registered as both a bulk and 

aftermarket product, the sum of the bulk and afiermarkei products may not equal the total figures. 

Of the companies for which information was collected, assets and net income were estimated for 80 fuel manufacturers, which manulacturc 

a total of 392 products and 90 "non-rclabel" additive manufacturers, which manufacture 480 bulk products, 225 aliermaikct products, and a 

lolal of 702 products. 

The information presented in this table includes al! information collected for affiliates, joint ventures, divisions, and subsidiaries. 
Table 2-2 

SUMMARY OF FINANCIAL INFORMATION 

Total No. of Companies 

No. of Registered Products 

Average Sales (millions) 

Average Net Income (thousands)1 

Average Number of Employees2 

Fuel 

Manufacturers 

292 

1,001 

XI,158 

$36,355 

1.626 

Original Additive 

Manufacturers 

216 

1,654 

$2,457 

$150,804 

6,661 

Relabel 

Manufacturers 

65 

134 

$3,520 

$131,887 

22,737 

Total Additive 

Manufacturers 

281 

1.788 

$2,702 

$147,084 

10,380 

Total 

573 

2,789 

$1,915 

$91,836 

5,949 

1

 Net income is based on data for: 

238 fuel manufacturers 

192 original addiiive manufacturers 

47 relabel manufacturers 

" Average number of employees is based on dala for 288 fuel manufacturers. 

Ui 

LAI 

•0 
P.42 

Chapter 3 

Program Requirements and Associated Costs 

I. Proposed Requirements 

The proposed regulations implementing Clean Air Act (CAA) 

section 211(b)(2) would require producers of motor vehicle fuels 

and fuel additives to submit information regarding the composition 

of the emissions produced by such fuels and fuel additives and the 

effects of the emissions on the public health and welfare. As 

previously mentioned, EPA believes the general regulatory 

mechanisms already implemented under section 211 (f) are adequate 

to satisfy the emission control system provisions of section 

211(b). Furthermore, as indicated in chapter one of this document, 

welfare effects are to be addressed in conjunction with Tier 1 

health effects requirements. Therefore, the costs resulting from 

this proposal are associated with Tier 1 health and welfare effects 

information, chemical and biological testing, and reporting 

requirements. 

The proposed requirements for evaluating the health effects of 

fuels and additives are organized within a three-tiered structure, 

with more rigorous requirements contained in each successive tier. 

In part, each tier operates as a screen for determining the 

34 
P.43 

applicability of requirements contained in subsequent tiers. The 

tiered approach also permits fuel and additive producers to make 

full use of test results and other information which may already be 

available about their products. Tier 1 encompasses a literature 

search on the health and welfare effects of fuel/additive 

emissions, data modeling analyses, and characterization of 

emissions. Tier 2 includes a battery of short-term screening tests 

for selected health effects endpoints. These testing requirements, 

as well as the emission characterization procedures of Tier 1, can 

be mitigated by the demonstration of comparable existing 

information from previous adequate testing. Tier 3 includes 

testing to further explicate the results of Tiers 1 and 2, and will 

only be required when determined necessary by EPA on a case-by-case 

basis. 

The purpose of this chapter is to project costs associated 

with meeting these requirements and submitting the information 

necessary for registration. The information presented in this 

chapter is organized by a discussion of Tier 1 requirements and 

costs, Tier 2 requirements and costs, administrative and reporting 

requirements and costs, and, finally, possible requirements and 

costs associated with Tier 3. 

Because gasoline and diesel fuels and their additives are the 

only products currently required to register with EPA, and these 

are the only products for which there is adequate information for 

35 
P.44 

analysis, cost estimates are provided only for testing of these 

fuel/additive families. Furthermore, because leaded fuels will be 

outlawed at about the same time that data pursuant to this proposal 

would need to be submitted, leaded gasoline fuels and additives are 

not examined in this analysis. As presented in Table 3-1, the 

unleaded gasoline and diesel products included in this analysis are 

divided into categories on the basis of three product formulation 

classes. In general, baseline product formulations are products 

which are similar in physical/chemical composition to the 

certification fuels for each fuel family. Non-baseline 

formulations contain no elements other than those allowed in the 

baseline class; however, they exceed the concentration limits set 

for certain components in the baseline class.13 "Atypical" product 

formulations generally refer to products which contain elements 

other than carbon, hydrogen, oxygen, nitrogen, and/or sulfur. 

Identified for each category shown in Table 3-1 is the number 

of producers registering fuel and/or fuel additive products 

representative of that category. Also identified for each cell is 

the number of designated fuel/additive groups in that category. 

Each group contains fuels and additives with similar composition, 

and producers enrolling products in a group are allowed to pool 

13For purposes of this analysis, oxygen content was used to 

differentiate between baseline and non-baseline formulations. The 

baseline class was restricted to formulations having less than 2.0 

weight percent of oxygen, while the non-baseline class was assigned 

products similar to baseline formulations but having 2.0 percent 

oxygen or more. 

36 
P.45 

their resources and to submit test data on a designated product 

representative of the group. The grouping scheme is explained in 

greater detail in Chapter 4. 

When presenting cost projections in this chapter, a range of 

estimated costs is provided in some instances. This reflects the 

fact that certain program requirements are more stringent and 

costly for products in the "atypical" categories than for the "nonatypical" (baseline and non-baseline) products. In such instances, 

different costs are presented for "atypical" and "non-atypical" 

products. 

Cost estimates were obtained from various sources including 

engine manufacturers, laboratories which provide emission 

generation, emission speciation, and/or biological testing 

services, and resources within EPA. The data presented in this 

chapter reflect the costs for an individual producer to meet the 

requirements, and do not reflect potential savings resulting from 

cost-sharing arrangements or from volume discounts provided by 

laboratories. Aggregate costs to industry are discussed in the 

following chapter. 

II. Tier 1 Requirements and Costs 

A. Data Search and Summarv 

37 
P.46 

A comprehensive literature survey will be required, using both 

public and in-house (industry and manufacturer) sources td gather 

all available information about the speciated components and the 

health and welfare effects of the emissions of the fuel or 

additive. The information is to be compiled from peer-reviewed 

scientific journals and other literature as well as internal 

industry studies, government-sponsored reports and assessments, 

proceedings of scientific meetings, and other documented sources. 

A search of appropriate commercially available toxicologic and 

environmental data bases must be conducted to locate information 

from published sources. The search must go back for at least 

fifteen years prior to the date of submission, and must be 

conducted (or updated) no longer than six months prior to beginning 

of testing. The information to be submitted to EPA as a result of 

the data search includes a summary of the general findings, printed 

copies of the outputs from the database searches, and tables 

summarizing all cited studies. 

In EPAr s judgement, companies will likely meet these data 

research requirements through the services of a contractor. EPA 

estimates that a typical contractor will charge 200 hours for the 

task, at $50 per hour, for a total cost of $10,000. In addition to 

the cost of the contractor's service, there will be an additional 

fee for use of database services to collect the data. EPA 

estimates 125 hours will be spent collecting information via 

database searches, and at an approximate cost of $20 per hour for 

38 
P.47 

use of this service, the total cost to a producer for obtaining 

data through a database service is estimated at $2,500. In sum, 

EPA estimates a total cost of $12,500 for conducting the literature 

search. This estimate may vary depending upon the price charged by 

the contractor, the amount of information available, and the 

database services used. 

B. Modeling Approaches 

EPA proposes to require the application of modeling methods to 

provide estimates of ambient exposures to fuel/additive emissions, 

to project the expected atmospheric reactivity of various emission 

products, and to evaluate the probable environmental partitioning 

(fates) of emissions to the air, soil, and water. Again, EPA 

envisions that fuel and fuel additive (f/fa) producers will make 

use of contractor services for meeting data modeling requirements. 

Data modeling is estimated to take 80 hours, at $50 per hour, for 

a total cost of $4,000. In total, EPA estimates a cost of $16,500 

($12,500 for literature search, and $4,000 for data modeling) for 

a f/fa producer to fulfill the data research and analysis 

requirements of Tier 1. 

C. Characterization of Emissions 

CAA section 211(b) requires f/fa producers "to determine the 

emissions resulting from the use of the fuel or additive contained 

in such fuel." Under the proposed requirement implementing this 

provision, exhaust emissions will need to be generated, collected, 

39 
P.48 

sampled, and subjected to tests for determining the identity and 

concentration of individual emission products. When applicable, 

evaporative emissions will also be generated, collected, and 

subjected to most of the same methods of chemical analysis. 

Additives will be required to be mixed with an appropriate base 

fuel prior to emission generation and analysis. The emissions of 

the base-fuel/additive mixture will then need to be compared with 

the emissions of the base fuel alone, so that the contribution of 

the additive can be determined. The emission characterization 

requirements can be mitigated by comparable data obtained through 

the literature search described above. 

1. Emission Generation 

This section presents the methods and costs for generating and 

sampling the emissions to be used in chemical speciation 

procedures. Because many of the same methods will be needed for 

generating emissions to be used for biological testing in Tiers 2 

and 3, a discussion of these overlapping requirements is also 

included in this section. 

a. Vehicle Requirements 

The vehicles used to generate emissions for purposes of 

emission characterization and biological testing must be new 

vehicles of the model year in which testing begins. Vehicle class 

is one of the parameters to be considered in selecting these 

vehicles. For each fuel family (i.e. unleaded gasoline, diesel), 

40 
P.49 

the vehicle class to be used for emission generation will be that 

which consumes the most gallons of fuel in that fuel family. 

Normally, vehicle classes include light-duty vehicles (LDV), lightduty trucks (LDT), and heavy-duty vehicles (HDV) . For gasoline 

fuels and additives, EPA assumes that light-duty vehicles will be 

used for testing. For diesel fuels and fuel additives, an 

overwhelming proportion of total diesel vehicle miles are traveled 

by heavy-duty vehicles. Heavy-duty engines will be permitted to be 

used for testing rather than HDVs, due to the lack of facilities 

capable of testing HDVs. In this analysis, EPA assumes use of a 

heavy heavy-duty diesel engine (HDDE) (greater than 33,000 lbs. 

gross vehicle weight rating (GVWR)) because this subclass reflects 

the most gallons of diesel fuel consumed among vehicles operating 

on diesel fuel. The specific vehicle model to be selected for 

testing is to be any one of the five most common fuel system and 

emission control system configurations. 

In general, manufacturers will be required to accumulate a 

minimum of 25,000 miles (or the comparable hours) on the selected 

vehicle or engine before emissions can be generated for testing, 

and will also be responsible for maintaining the vehicle/engine 

while subject to these requirements. Mileage can be accumulated by 

any appropriate means. The basic proposal requires only one 

vehicle/engine to be used for emission generation, sampling, and 

speciation. Biological tests in 

41 
r 

P.50 

Tiers 2 and 3 will be required to use emissions from the same 

vehicle/engine. 

For emission generation related to the testing of "atypical" 

product formulations, more stringent mileage accumulation 

requirements are proposed. Before the emissions of "atypical" 

products may be used for emission characterization and/or 

biological testing, mileage accumulation must continue until a 

steady state is reached between the mass of "atypical" elements 

entering and leaving the engine. However, if steady state is not 

reached before 80 percent of the useful life of the vehicle is 

reached (80,000 miles for LDVs and 232,000 miles for heavy HDVs), 

than emission characterization and biological testing may begin at 

this point. 

Cost estimates provided for producers of "non-atypical" 

product formulations reflect the assumption that emission 

generation for purposes of emission characterization and biological 

testing will begin when the vehicle has accumulated 25,000 miles. 

For producers of "atypical" formulations, ranges and point 

estimates are provided, with the minimum cost equivalent to the 

cost estimate for "non-atypical" products (i.e. testing at 25,000 

miles) , and a maximum cost reflecting the cost a manufacturer would 

incur if mileage equivalent to 80 percent of the vehicle's useful 

life would need to be accumulated. The point estimates used in the 

cost analyses for "atypicals" assumes that emission 

42 
P.51 

characterization and biological testing will generally begin at 50 

percent of the vehicle's useful life (50,000 miles for LDVs and 

145,000 miles for heavy HDVs). 

Vehicle Acquisition/Operation Costs 

Generally, fleet vehicle costs are separated into two 

categories: operating and fixed costs. Operating costs are 

variable and relate directly to each mile driven. They include 

such things as fuel, oil, maintenance, and tires. Fixed costs 

relate to time rather than mileage and include insurance, 

licensing, registration, taxes, and depreciation (cost of new car 

minus resale value). According to an analysis of business car 

costs by Runzheimer International14, operating costs (cents/mile) 

and fixed costs (dollars/month) for a full-size car are $0.09 and 

$293.16, respectively. Assuming a light-duty vehicle accumulates 

approximately 20,000 miles per year (as indicated in Runzheimer and 

in Automotive Fleet15), the total operating cost per mile is 

approximately 27 cents. Hence, for "non-atypical" product 

formulations using a LDV, EPA estimates vehicle 

acquisition/operation costs to be $6,750 (25,000 miles x 

$0.27/mile). For "atypical" product formulations, costs may range 

from $6,750 to $21,600, with costs estimated to be $13,500 (50,000 

"Runzheimer International, Survev and Analvsis of Business Car 

Policies & Costs 1989-1990, Northbrook, Illinois: Runzheimer 

International Ltd., 1989, p. F-7. 

15Automotive Fleet, Redondo Beach, California: Bobit 

Publishing Co., Vol. 29 No.5, March 1990, pp. 62-3. 

43 
P.52 

miles x $0.27/mile) on average. These estimates provide adequate 

funds not only to accumulate the required mileage but also to 

retain vehicle ownership for testing purposes. 

Comparable data incorporating vehicle acquisition/operating 

costs into a per mile cost are not available for a heavy-duty 

engine (HDE).. Consequently, these costs are considered separately 

for diesel fuels/additives. EPA assumes that producers of diesel 

fuel/additive products will purchase a heavy HDDE for testing 

purposes, rather than purchasing a HDV, accumulating miles, and 

then removing the engine from the vehicle for testing. Information 

received from engine manufacturers indicates that the cost of a 

heavy HDDE engine is about $13,000. EPA estimates maintenance of 

the engine at three cents per mile, and fuel at 13 cents per mile. 

For "non-atypical" diesel products, the maintenance and fuel costs 

for 25,000 accumulated miles would thus be $750 and $3,250, 

respectively. For "atypical" diesel fuels and additives, 

maintenance and fuel would respectively cost $4,350 and $18,850 on 

the average. These costs could range up to $7,000 and $30,160 in 

the event that mileage accumulation equivalent to 80 percent of the 

engine's useful life were required. As with light-duty, this 

provides adequate funds for mileage accumulation and retaining 

engine ownership for required testing. 

Mileage Accumulation Costs 

As indicated above, EPA envisions emission characterization to 

44 
P.53 

be conducted at 25,000 miles for "non-atypical" (baseline and nonbaseline formulations), and at 50 percent of the vehicle's useful 

life for "atypical" formulations. In addition to maintenance and 

fuel expenses, the required mileage accumulation will have an added 

expense for the time and/or personnel involved in the mileage 

accumulation activity. EPA makes a conservative assumption that, 

for a light-duty vehicle, a person would be employed to accumulate 

miles by driving on a test track. EPA assumes a producer would 

choose this method to minimize possible damages to the vehicle, 

rather then including the designated vehicle in a company's fleet, 

in which case mileage accumulation and vehicle 

acquisition/operation costs would be immaterial. Assuming a 

conservative value of $1 per mile for this service, EPA estimates 

total mileage accumulation costs for a light-duty vehicle to be 

$25,000 for "non-atypical" and $50,000 for "atypical" gasoline 

formulations. 

Mileage accumulation for a heavy-duty engine is calculated 

according to hours rather than miles. In EPA's judgement, hours 

will generally be accumulated via a dynamometer at a testing 

facility, with no particular load or cycles being applied to the 

engine. Information received from appropriate testing facilities 

indicates that the costs of "mileage accumulation" (or equivalent 

hours) for a HDDE would be approximately $30 per hour. At this 

hourly rate, the cost to accumulate the equivalent of 25,000 miles 

on a HDV would be approximately $13,440. The average cost for 

45 
P.54 

"atypical" products would be $78,000, ranging to a maximum of 

nearly $125,000 for accumulating miles equivalent to 80 percent of 

the engine's useful life. When emissions have been generated to 

allow completion of emission characterization and biological 

testing, EPA estimates the engine will have a salvage value of 

$9,000 if used for testing "non-atypical" products, and $4,500 if 

used for testing "atypical" products. 

Total Vehicle Requirement Costs 

Table 3-2 provides a summary of vehicle requirement costs. In 

sum, for testing gasoline fuels and additives using a LDV, EPA 

estimates costs associated with vehicle acquisition/operation and 

mileage accumulation to be $31,750 for "non-atypical" product 

formulations, assuming emission speciation/biological testing 

begins at 25,000 miles. For "atypical" product formulations, 

assuming emission speciation and biological testing occur at 50,000 

miles, the average vehicle-related costs are estimated to be 

$63,500. Reflected in these costs is the conservative assumption 

that the vehicle is not operated as part of a company's fleet, in 

which case, such costs would be zero. In addition, the assumption 

is made that, once testing is completed, the manufacturer(s) will 

sell the vehicle, rather than incorporating the vehicle into a 

company's fleet. Fuel costs, maintenance costs, and salvage values 

are included in the costs presented above. 

With regard to HDEs, costs associated with acquiring and 

46 
P.55 

operating an engine for testing diesel fuels and additives are 

estimated to be $21,440 for "non-atypical" formulations and 

$109,700 for testing "atypical" formulations. These costs reflect 

fuel costs, maintenance costs, and mileage accumulation assuming 

emission characterization and biological testing begin at 25,000 

miles for "non-atypical" products, and at 145,000 miles for 

"atypical products". Salvage values are reflected in the costs as 

well. These estimates are provided for the heavy-heavy subclass 

which has the highest useful life mileage. Costs would likely be 

lower if a medium or light HDE were used for testing. 

jb. Combustion Emission Generation 

Procedures for generating emissions for emission 

characterization are dependent upon the emission product categories 

of interest. Under the proposed program, EPA will require 

speciation of emissions for the following emission products: 

regulated emissions, hydrocarbons and ethers, aldehydes and 

ketones, alcohols, polynuclear aromatic hydrocarbons (PAH), 

nitrated polynuclear aromatic hydrocarbons (NPAH), and atypical 

elements. The costs of emission generation for emission 

characterization are discussed below, and are based upon the 

technical requirements of procedures specific to the emission 

products of interest. In general, the emission generation methods 

are modified versions of the Federal Test Procedures (FTP) for 

certification of the new vehicles. The costs are based on the 

assumption that the f/fa manufacturers will seek laboratory 

47 
P.56 

services for these purposes, rather than conducting tests in-house 

or erecting facilities capable of conducting such tests. 

Light-Duty 

For testing gasoline fuels and additives using a LDV, the 

procedure for generation of combustion emissions for characterizing 

regulated emissions, hydrocarbons and ethers, aldehydes and 

ketones, and alcohols includes one LA-4 plus the first 505 seconds 

of the next FTP driving cycle. Three bags of vapor phase and three 

filters of particulate phase combustion emissions are to be 

collected. Estimates received by EPA from auto-testing 

laboratories indicate that the cost for this service would be 

approximately $600. 

Emissions for PAH/NPAH speciation will be generated using the 

particulate collection method specified in the FTP, with the 

addition of a porous polymer bed immediately downstream from the 

particulate filter. In order to generate the appropriate mass of 

particulates, the constant volume sampler (CVS) may need to be 

modified as well. For generation of emissions for speciation of 

atypical elements, a similar procedure would generally be used. 

Based on information received from various laboratories16, in EPA' s 

judgement, the estimated cost for generating combustion emissions 

for PAH, NPAH, and atypical speciation is $700. 

""Revised Cost Estimates for Emission Generation," August 14, 

1991, Memorandum from Isabel Reiff, Alice Stratton and Dan Kapp to 

Sheri Dunatchik, under EPA Contract 68-C8-0024. 

48 
P.57 

Heavy-Duty 

For testing diesel fuels and additives using a heavy HDDE, it 

is expected that the EPA transient test will be used for generating 

combustion emissions for the purpose of chemical speciation. EPA 

estimates such a procedure will cost $8,000. This cost is based on 

estimates received from both manufacturers of HDDEs and from 

commercial laboratories capable of conducting this procedure. 

c. Evaporative Emission Generation 

Volatile fuels and fuel/additive mixtures will be required to 

undergo emission characterization and biological testing for 

evaporative emissions. Characterization of evaporative emissions 

will require emissions to be generated from all evaporative-related 

portions of the FTP effective at the time the testing is done. 

Evaporative emission generation will be performed by placing a 

vehicle, without any evaporative emission control system connected, 

in a SHED. The separate evaporative portions of the FTP (diurnal, 

hot soak, etc.) will be performed, and a sample of the vapors in 

the SHED will be withdrawn into Tedlar bags for emission speciation 

in each portion. Speciation requirements for evaporative emissions 

will be limited to the analysis of hydrocarbons, ethers, and 

alcohols (if present in the fuel/additive formulation). Based on 

our own estimates, and input from other EPA laboratories, EPA 

estimates an approximate cost of $500 to generate evaporative 

emissions via the SHED procedure. Evaporative emission generation 

is not applicable to diesel fuels and their additives. 

49 
P.58 

2. Emission Characterization 

A complete and precise characterization of all emission 

products would require test protocols specific to all possible 

compounds. Because this task is inherently undefined, the proposed 

program focuses on measurement of regulated emissions and on the 

identification of specified compounds of interest. The particular 

compounds proposed to be characterized in fuel and fuel additive 

emissions, the procedure to be used in speciating the emissions for 

these compounds, and the types of emissions required for speciation 

are summarized in the table below. In addition, speciation of the 

combustion products of atypical elements is proposed for fuels and 

additives containing such elements. 

COMPOUNDS 

Hydrocarbons/Ethers 

Aldehydes/Ketones 

Alcohols 

PAH 

NPAH 

PROCEDURES 

GC 

HPLC 

GC 

HPLC 

HPLC 

REQUIRED EMISSIONS 

Combustion, 

Evaporative 

Combustion 

Combustion, 

Evaporative 

Combustion: 

Particulate, 

Semi-Volatile 

Combustion: 

Particulate, 

Semi-Volatile 

Based on information received from resources within EPA and 

from outside parties involved in this business, the estimated costs 

associated with speciation of the above elements is shown in Table 

3-3. In sum, for combustion emissions of unleaded gasoline fuels 

50 
P.59 

and additives, the costs of speciating the emissions for the 

compounds of interest are estimated to be $1300 for hydrocarbons 

and ethers, $450 for aldehydes and ketones, $400 for alcohols, 

$4200 for PAH, $1200 for NPAH, $1350 for the atypical elements, and 

$200 for analysis of the regulated emissions. Costs for speciating 

evaporative emissions for the compounds of interest is estimated to 

be $700 for hydrocarbons and ethers and approximately $200 for 

alcohols. For diesel fuels and additives, costs for speciating 

combustion emissions for each of the compounds listed above are 

identical to speciation of unleaded gasoline fuel/additive 

emissions, except for the analysis of the regulated emissions which 

is estimated at $500 for diesel fuel. 

D. Total Tier 1 Costs 

Table 3-4 provides total estimated costs of Tier 1 

requirements. As shown in the table, costs are provided for 

producers of both unleaded gasoline and diesel fuels, and for "nonatypical" and "atypical" product formulations. For presentation 

purposes, combustion generation/speciation costs have been 

combined. Emissions need to be generated separately for each of 

the following: 1) speciation of emissions for hydrocarbons and 

ethers, aldehydes and ketones, alcohols, and the regulated 

emissions, 2) speciation of emissions for PAH, NPAH, and 3) 

speciation of emissions for atypical elements. With the exception 

of the "atypical" analysis, each of the emission 

generation/speciation procedures is required to be conducted three 

51 
P.60 

times. For this purpose, the emission generation/speciation costs 

shown in the table have been multiplied by three. For atypical 

elements, the speciation costs in the table assume that testing 

will begin at a mileage equivalent to 50 percent of useful life, 

rather than the maximum of 80 percent of useful life. 

With the exception of "atypical" products, the costs shown in 

the table are the highest costs a producer would likely incur in 

fulfilling Tier 1 requirements. Underlying these costs are the 

assumptions that little or no previous data exists to offset 

speciation requirements and that there are no savings from costsharing provisions. Under these assumptions, a producer of a "nonatypical" gasoline fuel or fuel additive would likely incur costs 

of $79,600 for Tier 1. Likewise, a producer of an unleaded 

gasoline "atypical" product would incur costs of $114,750 for these 

requirements. Costs to a producer of "non-atypical" and "atypical" 

diesel product formulations are estimated at $110,090 and $209,050, 

respectively. These latter costs assume that tests are conducted 

using a heavy HDE (>33,000 lbs. GVWR). Costs are expected to be 

lower if a light or medium HDE is used for testing. 

The costs presented in the table reflect costs to a producer 

when testing a fuel product. When an additive is being tested, the 

emissions of the base-fuel/additive mixture will need to be 

compared with the emissions of the base fuel alone, so that the 

contribution of the additive can be determined. Thus, the costs to 

52 
P.61 

an individual producer for testing an additive product will be 

twice that shown in the table, reflecting the cost of testing both 

the base fuel and the base-fuel/additive mixture. 

III. Tier 2 Requirements and Costs 

The second tier of health effects evaluation consists of 

short-term screening tests which address carcinogenicity, 

mutagenicity, reproductive and developmental effects, pulmonary 

toxicity, and neurotoxicity. These tests will be required for all 

fuels and additives to the extent that the results of the data 

search activities in Tier 1 do not include comparable existing 

information from adequately performed and properly documented 

previous studies. 

In general, laboratory animals are to be exposed by inhalation 

to diluted whole exhaust and evaporative emissions. The proposed 

test guidelines generally call for a minimum of six weeks exposure, 

eight hours per day, seven days per week. The test guidelines and 

related emission generation procedures are discussed below, along 

with estimated costs of performing each test on an individual 

basis. These estimates were based on standard testing costs 

provided by the Office of Toxic Substances17 (OTS) . The OTS 

17 U.S. Environmental Protection Agency, Office of Pesticides 

and Toxic Substances, "Cost Estimates for TSCA Test Guidelines," 

Memorandum from Dan Axelrad to Sheri Dunatchik, June, 1991. 

53 
P.62 

estimates were adjusted to account for modifications to these 

standard protocols to be consistent with the scope of the proposed 

emissions-based health effects testing program. 

A. Individual Test Costs 

1. Combustion Emission Generation 

All but one of the proposed Tier 2 tests require emissions to 

be generated on a continual basis throughout the required 

biological exposure, with emissions diluted and routed directly 

from the vehicle or engine to the biological testing chamber. For 

testing of gasoline fuels/additives, this will require a vehicle to 

be driven through repeated LA-4 driving cycles for approximately 

eight hours per day for 42 days, and will cost approximately 

$28,800. Testing diesel fuels and additives will require an engine 

to be run continuously on a dynamometer, and is estimated to cost 

$14,400. Costs of fuel and maintenance are reflected in these 

estimates. One required test, the Ames Reverse Mutation Assay, is 

an in-vitro test, and does not require continuous emission 

generation. In this assay, cultures are exposed to the particulate 

matter of combustion emissions which is collected and stripped from 

a collection filter and extracted in dichloromethane. Collection 

of the particulate matter for the Ames assay requires an FTP to be 

conducted for testing gasoline fuels and additives, and an EPA 

transient test for testing diesel fuels and additives. Costs 

associated with these procedures are estimated at $700 for an FTP, 

and $8,300 for an EPA transient test. A cost of $100 for gasoline 

54 
P.63 

products and $300 for diesel products is included in these 

estimates to reflect the cost of extracting particulate matter from 

the collection filter. 

2. Evaporative Emission Generation 

EPA proposes to require the use of a bench method (i.e., 

evaporative chambers) for evaporative emission generation for 

biological testing purposes. The chamber would be temperature and 

pressure controlled so that it's characteristics were similar to 

the head space of the fuel tank of a vehicle where in-use diurnal 

and refueling emission are generated. In comparison with the SHEDbased system, the bench method would require much smaller, less 

expensive, and simpler equipment. Emissions could be generated 

close to the biological testing chambers, and largely automated 

systems could be used. EPA has developed costs for this procedure 

based on the amount of hardware and labor expected to be associated 

with this type of procedure. EPA estimates the total cost of 

generating evaporative emissions for 8 hours per day for 42 days 

using the bench method described above to be about $8,000. 

3. Inhalation Exposure Methodology 

EPA estimates that it will cost approximately $1,100 for setup and operation of appropriate systems for the controlled dilution 

and delivery of fuel and additive emissions to the biological 

55 
P.64 

testing chambers. 18 

4. Carcinogenicity and Mutagenicity Screens 

A battery of three screening studies is proposed and described 

below. 

Ames Reverse Mutation Assav. The Ames assay is an in vitro test 

which makes use of mutant strains of the bacterium Salmonella 

typhimurium. These strains cannot grow in a medium deficient in 

histidine due to an inherited inability to produce this amino acid. 

Exposure to mutagenic (and possibly carcinogenic) substances can 

elicit reverse mutations, such that the bacteria regain their 

ability to grow in a histidine-deficient medium. In this test, the 

bacteria will be exposed to extracted fuel/additive combustion 

emission fractions, and the number of such reverse mutations will 

be analyzed. A standard Ames assay makes use of four strains of 

bacteria. In the guideline for this program, however, five mutant 

strains of bacteria are required. As a result, the direct costs 

and labor associated with routine Ames assay are expected to 

increase by 20 percent. Adjusting the OTS-provided estimate of 

$3,840 to account for these modifications results in an estimated 

cost of slightly above $4,000 for conducting an Ames assay for this 

program. An Ames battery will be conducted on both particulate and 

semi-volatile-phase samples of combustion emissions, therefore 

doubling this cost to over $8,000. 

""General Health Testing Guideline for Inhalation Exposure to 

Fuels and Fuel Additives," September 30, 1991, prepared by YungSung Cheng and Edward B. Barr under EPA Contract 68-C8-0024. 

56 
P.65 

Micronucleus Assav. Micronuclei are sub-cellular structures 

containing chromosomes and chromosome fragments not incorporated 

into the main nucleus during cell division. While micronuclei do 

form under natural conditions, exposure to potentially carcinogenic 

agents can cause an increase in micronucleated cells. In this 

assay, live rodents will be exposed by inhalation to the 

fuel/additive emissions, and their peripheral blood cells will 

subsequently be examined for the presence of increased numbers of 

micronuclei. This assay is generally conducted using the injection 

route of exposure and only a 2 4-hour test duration. To be 

consistent with the scope and intent of this program, the proposed 

guidelines instead involve a 42-day period of inhalation exposure. 

EPA has adjusted the OTS estimates of $24,620 accordingly, and 

projects the cost of conducting this assay to be $44,000. 

Sister Chromatid Exchange (SCE). SCEs are believed to be caused by 

chromosome strand breakage resulting in exchanges of genetic 

material between the halves of a chromosome "pair" (i.e., the 

chromatids). While some SCEs occur normally, an increase in the 

frequency of such exchanges may be indicative of 

mutagenic/carcinogenic activity. In this assay, blood lymphocytes 

and lung cells from animals which have undergone inhalation 

exposure to vehicle emissions will be examined microscopically 

after being labeled and stained to permit visualization of DNA 

replication errors. A cost of $16,000 provided by OTS for a 

standard SCE protocol was modified to reflect the 42 day inhalation 

57 
P.66 

exposure needed for this program, yielding an estimate of 

approximately $49,000. 

5. Inhalation Developmental Toxicity Study 

This study is designed to provide information on the potential 

hazard to a fetus which may arise from exposure of the mother to 

fuel/additive emissions during pregnancy. Pregnant females of two 

different species will be exposed to emissions via inhalation 

during the major organ development period in the fetus. The 

mothers will be sacrificed on the day prior to normal parturition, 

and the uterus of each dam examined for embryonic or fetal deaths 

and anomalies. The OTS protocol for performing this test for 42 

days, on two species, remains unchanged for this analysis, and is 

estimated at approximately $98,000. 

6. Reproduction and Fertility Screen 

The purpose of this test is to determine the potential 

reproductive toxicity to adult animals caused by inhalation of 

fuel/additive emissions during a subacute (six week) exposure 

period. Laboratory animals will be exposed to emissions before 

mating and during pregnancy, and effects on male and female 

reproduction organs and on the number and viability of offspring 

will be determined. The estimated cost for this study is $100,000. 

This cost was calculated by adjusting relevant factors in a cost 

estimate of $139,710 provided by the Office of Toxic Substances for 

performing a subchronic inhalation toxicity assessment. 

58 
P.67 

7. Pulmonary Toxicity Screen 

This study involves the inhalation exposure of laboratory 

rodents to fuel/additive emissions during one-week and six week 

periods, with subsequent examination of lung tissues, cells, and 

fluids. The evaluation will include a lung lavage technique to 

obtain cells and fluids for cell culture, microscopic, and 

biochemical analyses. The cost of performing this modified test is 

estimated to be $81,000, calculated by adjusting the relevant 

variables in a cost estimate provided by OTS of $139,710 for a 

subchronic inhalation toxicity protocol. 

8. Neurotoxicity Screen 

The neurotoxicity screen includes a battery of functional 

observations and evaluations performed on live animals at intervals 

throughout a six-week period of inhalation exposure to 

fuel/additive emissions. The process charts any decrement in 

function in test animals as compared to unexposed control animals. 

Performance of this neurotoxicity screen is estimated to cost 

$83,000. 

B. Combined Test Costs 

The costs provided above reflect the cost of conducting each 

test individually, and does not consider any savings which could be 

achieved from conducting any of the tests in conjunction with one 

another. In fact, several of the tests can be conducted in 

parallel, making use of the same emissions, and sometimes, the same 

59 
P.68 

laboratory animals. Assuming that the required laboratory capacity 

is available, it is likely that in-vivo carcinogenicity and 

mutagenicity screens (micronucleus assay and sister chromatid 

exchange) will be conducted simultaneously. The total costs of the 

combined tests is estimated at $66,000, for a savings of $27,000. 

Likewise, in EPA's judgement, the developmental, reproductive, 

pulmonary, and neurotoxicity screens are likely to be combined into 

two testing blocks for a total cost of $220,000, a cost savings of 

$142,000. The Ames assay cannot be combined with any of the other 

tests because it makes use of bacteria rather than rodents. If 

testing is planned and conducted in this fashion, EPA estimates 

that the total cost for conducting all of the required biological 

tests on combustion emissions would be approximately $294,000. 

Likewise, conducting all biological tests on evaporative emissions 

is estimated to cost $286,000. The difference is because the Ames 

assay is required only for combustion emissions. These costs 

represent total costs of conducting all biological tests with no 

cost-sharing arrangements. 

C. Total Tier 2 Costs 

Table 3-5 shows the costs associated with meeting the 

requirements of Tier 2. These costs reflect the potential savings 

which could be achieved by conducting certain tests in blocks, as 

described above. Costs associated with the continuous generation 

of emissions for in-vivo tests are assumed to be incurred twice for 

combustion emissions and twice for evaporative emissions. An 

60 
P.69 

additional FTP (or transient test in the case of diesel fuels and 

additives) is included for the generation of combustion emission 

fractions for the Ames Assay. The costs assume that all biological 

tests except the Ames assay will be performed on both combustion 

and evaporative emissions for the evaluation of gasoline fuels and 

additives, and on combustion only when testing diesel fuels and 

additives. 

In sum, the highest cost an individual producer would likely 

incur for fulfilling all Tier 2 requirements would be approximately 

$655,380. This cost represents the potential cost to producers of 

an unleaded gasoline fuel product. The highest potential Tier 2 

cost to a diesel fuel producer would be nearly half, or $332,400. 

Again, absent other arrangements, costs to an additive producer 

would be double, reflecting costs for testing both the additive 

product and the base-fuel. 

IV. Administrative/Reporting Requirements and Costs 

The materials to be submitted to EPA following completion of 

all Tier 1 and Tier 2 requirements are divided into three major 

categories: notification data, a summary report, and appendices. 

The notification includes the information mandated by existing 

regulations under section 211(b)(1) submitted on EPA forms which 

61 
P.70 

are in effect at the time of the submittal. The summary report 

includes a text summary of the evaluation procedures, results, and 

conclusions pertaining to Tiers 1 and 2. Detailed information in 

support of the general discussions contained in the summary report 

are to be submitted as appendices to that report. Producers who 

must conduct additional testing under Tier 3 will be required to 

submit a final report when the designated Tier 3 testing is 

complete. 

In EPA's judgement, approximately $52,000 per year will be 

spent by a producer for costs related to administration of the 

program and product registration. These costs total nearly 

$160,000 for three years. EPA estimates 20 percent of the costs 

result from management oversight, 66 percent from professional and 

technical support, and approximately 14 percent from clerical 

support. 

V. Tier 3 Requirements 

All costs associated with Tier 1 and Tier 2 requirements are 

assumed to be incurred in the first 3 years after the rule is 

promulgated, and Tier 3 costs are assumed to be incurred over the 

following 3 years. However, yearly costs may actually be less if 

producers finance the costs over a longer period of time. 

62 
P.71 

Fuels and fuel additives will be subject to additional testing 

under the Tier 3 provisions of the registration program as 

determined on a case-by-case basis by EPA. The endpoints to be 

addressed and the nature of the studies to be performed will depend 

on the case at hand. It is expected that Tier 3 requirements will 

most often entail animal inhalation exposures of chronic (2-3 year) 

duration to further explicate the results of the screening 

batteries performed under Tier 2. However, studies addressing 

other areas of concern which may be highlighted by the results of 

the Tier 1 literature search or emission characterization 

requirements may also be subject to Tier 3 follow-up. Criteria for 

determining the applicability of Tier 3 testing will include 

evidence for significant toxicity which has not been fully 

evaluated by previous scientific investigation. The potential 

exposure risk will also be considered. 

EPA expects the costs of performing chronic tests of this 

magnitude to be approximately 2.5 million dollars. In addition, 

generating sufficient emissions for performing these tests, 

maintaining the vehicle or engine, and providing sufficient amounts 

of fuel would cost nearly $300,000 in the case of gasoline fuels 

and fuel additives, and about $150,000 for diesel fuels and fuel 

additives. In total, the costs associated with fulfilling Tier 3 

requirements are estimated to be about 3 million dollars, 

regardless of fuel type. This estimate assumes that the cost of 2 

years of biological testing would be incurred over 3 years. 

63 
P.72 

VI. Summary 

Table 3-6 provides a summary of costs associated with the 

activities proposed for Tiers 1 and 2. For an individual producer 

of unleaded gasoline, the cost for fulfilling all requirements of 

Tiers 1 and 2 and reporting the results to EPA is estimated to be 

about $900,000 if the product formulation is "non-atypical" 

(baseline and non-baseline), and about $930,000 if the product 

formulation is "atypical". Likewise, comparable costs for diesel 

fuel/additive producers will likely be approximately $600,000 for 

producers of "non-atypical" product formulations and nearly 

$700,000 for producers of "atypical" product formulations. These 

costs reflect the conservative assumption that all emission 

generation/speciation tests and all biological tests will need to 

be conducted due to lack of adequate existing data. The estimates 

represent the highest cost producers would likely incur per product 

if they were to assume individual financial responsibility for all 

test costs, either because they elected not to engage in cost 

sharing provisions or they were not able to do so (i.e., sole 

producer in the group). A producer testing an additive product 

will have an additional cost of up to $734,980 for unleaded 

gasoline products and $442,490 for diesel fuel products to account 

for testing the base-fuel if other arrangements cannot be made. 

The lowest cost likely to be incurred by a producer (if submitting 

data individually and not as a group) would be the cost of 

64 
P.73 

conducting a literature search and registering the product with 

EPA. This cost is estimated to be $65,000 to $70,000. All of 

these costs are one-time obligations associated with health effects 

testing requirements and reporting resulting from this proposal. 

Costs incurred on a per manufacturer basis and aggregate costs to 

the industry are discussed in the next chapter. 

65 
P.74 

Table 3-1: Fuel/Additive Categories 

Formulation 

Class 

Baseline 

Formulations 

Non-Baseline 

Formulations 

Atypical 

Formulations 

Fuel Family 

Unleaded 

Gasoline 

1 Group 

527 Manufacturers 

1530 Products 

17 Groups 

645 Manufacturers 

976 Products 

48 Groups 

137 Manufacturers 

197 Products 

Diesel 

1 Group 

305 Manufacturers 

769 Products 

1 Group 

2 Manufacturers 

2 Products 

47 Groups 

148 Manufacturers 

223 Products 

^i" fl— 
Table 3-2: Summary of Vehicle Requirement Costs 

Vehicle Acquistion/Operation* 

Engine Acquisition 

Engine Maintenance 

Fuel 

Mileage Accumulation 

Resale Value 

TOTALS**: 

Unleaded Gasoline Fuel Family 

Baseline and 

Non-Baseline 

Product Formulations 

$6,750 

N/A 

N/A 

N/A 

$25,000 

N/A 

$31,750 

Atypical 

Product 

Formulations 

$13,500 

N/A 

N/A 

N/A 

$50,000 

N/A 

$63,500 

Diesel Fuel Family 

Baseline and 

Non-Baseline 

Product Formulations 

N/A 

$13,000 

$750 

$3,250 

$13,440 

$9,000 

$21,440 

Atypical 

Product 

Formulations 

N/A 

$13,000 

$4,350 

$18,850 

$78,000 

$4,500 

$109,700 

Includes aquisition, maintenance, fuel, and resale value. 

'Resale value is subtracted from engine acquisition cost. 

IOI 
P.76 

Table 3-3: Emission Speciation Costs 

Compounds 

Hydrocarbons/Ethers 

Aldehydes/Ketones 

Alcohols 

PAH 

NPAH 

Atypical Elements 

Regulated Emissions: 

Unleaded Gasoline 

Diesel 

Speciation of 

Combustion 

Emissions 

$1,300 

$450 

$400 

$4,200 

$1,200 

$1,350 

$200 

$500 

Speciation of 

Evaporative 

Emissions 

$700 

N/A 

$200 

N/A 

N/A 

N/A 

N/A 

N/A 

_£~c 
Table 3-4: Tier 1 Costs 

Data Research and Analysis 

Vehicle/Engine Costs * 

Emission Characterization: 

Combustion Generation/Speciation of: 

HC/Ethers, Aldehydes/Ketones, 

Alcohols, and Regulated Emissions 

PAH, NPAH 

Atypicals 

Evaporative Generation/Speciation of: 

HC/Ethers and Alcohols 

TOTALS: 

Unleaded Gasoline Fuel Family 

Baseline and 

Non-Baseline 

Product Formulations 

$16,500 

$31,750 

$8,850 

$18,300 

N/A 

$4,200 

$79,600 

Atypical 

Product 

Formulations 

$16,500 

$63,500 

$8,850 

$18,300 

$3,400 

$4,200 

$114,750 

Diesel Fuel Family 

Baseline and 

Non-Baseline 

Product Formulations 

$16,500 

$21,440 

$31,950 

$40,200 

N/A 

N/A 

$110,090 

Atypical 

Product 

Formulations 

$16,500 

$109,700 

$31,950 

$40,200 

$10,700 

N/A 

$209,050 

* Includes aquisition, maintenance, fuel, resale value, and mileage accumulation. 

^i 

^i 
Table 3-5: Tier 2 Costs 

Combustion Emissions: 

Generation for 42 day Exposure * 

Generation for Ames Assay 

Biological Tests (Combined) 

Evaporative Emissions: 

Generation for 42 day Exposure * 

Biological Tests (Combined) 

Dilution System: 

TOTALS: 

Unleaded Gasoline Fuel Family 

Baseline and 

Non-Baseline 

Product Formulations 

$57,600 

$700 

$294,200 

$15,780 

$286,000 

$1,100 

$655,380 

Atypical 

Product 

Formulations 

$57,600 

$700 

$294,200 

$15,780 

$286,000 

$1,100 

$655,380 

Diesel Fuel Family 

Baseline and 

Non-Baseline 

Product Formulations 

$28,800 

$8,300 

$294,200 

N/A 

N/A 

$1,100 

$332,400 

Atypical 

Product 

Formulations 

$28,800 

$8,300 

$294,200 

N/A 

N/A 

$1,100 

$332,400 

* Two generations necessary for conducting all biological tests. 

(V 
P.79 

Table 3-6: Estimated Program Costs 

Tlerl: 

Data Research and Analysis: 

Literature Search 

Data Modeling 

Emission Characterization: 

Vehicle/Engine Costs * 

Mileage Accumulation 

Combustion Emission Generation for: 

1.) Speciation of HC/Ethers, 

Aldehydes/Ketones, Alcohols, 

Regulated Emissions 

2.) Speciation of PAH, NPAH 

3.) Spedatlon of Atypicals 

Evaporative Emfsslon Generation for: 

Spedatlon of HC/Ethers, Alcohols 

Speciation of Combustion Emissions for: 

1.) Hydrocarbons/Ethers 

2.) Aldehydes/Ketones 

3.) Alcohols 

4.) PAH 

5.) NPAH 

6.) Atypical Elements 

7.) Regulated Emissions 

Speciation of Evaporative Emissions for: 

1.) Hydrocarbons/Ethers 

2.) Alcohols 

Tier 2: 

Combustion Emission Generation 

for 42 Day Exposure 

Combustion Emission Generation 

for Ames Assay 

Evaporative Emission Generation 

for All Biological Tests 

Biological Tests Conducted on 

Combustion Emissions 

Biological Tests Conducted on 

Evaporative Emissions 

Equipment Costs-Dilution System 

Unleaded Gasoline Fuel Family 

Baseline and 

Non-Baseline 

Product 

Formulations 

$12,500 

$4,000 

$6,750 

$25,000 

$600 

$700 

N/A 

$500 

$1,300 

$450 

$400 

$4,200 

$1,200 

N/A 

$200 

$700 

$200 

$28,800 

$700 

$5,840 

$294,200 

$290,100 

$1,100 

Atypical 

Product 

Formulations 

$12,500 

$4,000 

$13,500 

$50,000 

$600 

$700 

$700 

$500 

$1,300 

$450 

$400 

$4,200 

$1,200 

$1,350 

$200 

$700 

$200 

$28,800 

$700 

$5,840 

$294,200 

$290,100 

$1,100 

Diesel Fuel Family 

Baseline and 

Non-Baseline 

Product 

Formulations 

$12,500 

$4,000 

$8,000 

$13,440 

$8,000 

$8,000 

N/A 

N/A 

$1,300 

$450 

$400 

$4,200 

$1,200 

N/A 

$500 

N/A 

N/A 

$14,400 

$8,300 

N/A 

$294,200 

N/A 

$1,100 

Atypical 

Product 

Formulations 

$12,500 

$4,000 

$31,700 

$78,000 

$8,000 

$8,000 

$8,000 

N/A 

$1,300 

$450 

$400 

$4,200 

$1,200 

$1,350 

$500 

N/A 

N/A 

$14,400 

$8,300 

N/A 

$294,200 

N/A 

$1,100 

Includes acquisition, maintenance, fuel, and resale value. 

6>5i 
P.80 

Chapter 4 

Estimated Economic Impacts 

I. Introduction 

Under Executive Order 12291, EPA is required to assess the 

potential impact of the proposed regulations on the economy and to 

determine whether or not they would result in a major rule. A 

major rule is defined to be one which has an annual impact on the 

economy of $100 million or more, has a significant adverse impact 

on competition, employment, investment, productivity, or 

innovation, or results in a major price increase for the affected 

product. Based on the unit cost estimates presented in the 

previous chapter, this chapter projects the overall financial 

impacts of the proposed program on the fuel/fuel additive industry. 

Economic impacts are discussed for fuel manufacturers, additive 

manufacturers, and the industry as a whole. The assumptions and 

judgements on which the analysis is based and the methodology for 

determining the cost impacts of compliance are also presented. 

This analysis indicates that the rule would not have an annual 

effect on the economy of $100 million or more, nor would it result 

in any significant adverse effects on the industry. Costs to an 

individual producer are estimated to range from $500 to about $2 

66 
P.81 

million, with the majority of producers (55 percent) incurring 

costs between $1,000 and $5,000. Total cost to the fuel/fuel 

additive industry as a whole is estimated to be approximately 83 

million dollars, spread over a three year time period. Thus, the 

proposed regulations are estimated to have an annual impact on the 

economy of about 27 million dollars, well under the $100 million 

major rule criterion. 

The following sections discuss the analytical assumptions and 

approaches on which this cost analysis is based, methodology for 

determining producer and industry impacts, limitations of the 

analysis, and conclusions. 

II. Analytical Assumptions and Approach 

The analysis contained in this chapter required certain 

analytical assumptions and judgements to be made regarding expected 

use of cost-sharing provisions and the expected availability of 

existing chemical and biological test data. In accordance with CAA 

section 211(e), EPA is proposing a grouping system permitting 

manufacturers of similar fuels and fuel additives, on a voluntary 

basis, to satisfy the information gathering and testing 

requirements of the program through jointly supported tests 

conducted on a formulation designated to represent the group. The 

results of the tests on the group representative could be submitted 

67 
P.82 

jointly for all members of the group, with applicable costs to be 

shared by the respective manufacturers. The basic conceptual 

framework for the proposed grouping system is a matrix of 

fuel/additive categories which represent potential combinations of 

fuel families and general product formulation characteristics. 

These categories were defined in the previous chapter and are shown 

in Table 3-1 for the unleaded gasoline and diesel fuel families. 

For purposes of this analysis, EPA has assumed that all producers 

will participate in the grouping system and that costs incurred for 

testing the group representative will be divided equally among the 

number of products enrolled in the group. 

Based on the proposed grouping criteria and the compositional 

information contained in the registration database, each currentlyregistered product was assigned to an appropriate category and 

group. The results of these assignments are shown in Table 3-1. 

To determine the costs applicable to the groups in each category, 

assumptions then had to be made with regard to the applicability of 

various program requirements to each category and the likelihood 

that some of these requirements could be satisfied by relying on 

adequate existing test data. These assumptions are outlined below 

and are summarized in Table 4-1. 

Unleaded Gasoline Baseline Category 

EPA has designated one group for this category, which is 

estimated to contain approximately 1,530 fuel/additive products 

68 
P.83 

registered by 527 producers. While a substantial amount of testing 

has been conducted on the combustion emissions of baseline unleaded 

gasoline fuel/additive products, comparable information may not be 

available on evaporative emissions. Thus, for groups in the 

unleaded gasoline baseline category, EPA assumes that all Tier 1 

and Tier 2 chemical and biological tests will be needed for 

evaporative emissions, and only the developmental, reproductive, 

pulmonary, and neurotoxicity tests will be needed for combustion 

emissions. 

Unleaded Gasoline Non-Baseline Category 

This category of fuel/additive products is estimated to 

contain 97 6 products produced by 645 manufacturers, which are 

subdivided into 17 groups. Minimal information is expected to 

exist for these product formulations due to their relatively recent 

introduction or expansion in the market. Consequently, EPA assumes 

that all Tier 1 and 2 tests will be necessary for both combustion 

and evaporative emissions. 

Unleaded Gasoline Atypical Category 

EPA estimates this category will be made up of 48 

fuel/additive groups consisting of 197 products manufactured by 137 

producers. Sufficient information is assumed to be unavailable for 

fulfilling the program's health testing requirements for products 

in this category. For Tier 1 requirements, EPA assumes 

characterization of combustion and evaporative emissions will be 

69 
P.84 

conducted including the requirements for speciating "atypical" 

emission products. Although there may be other means to make this 

determination, this analysis assumes that evaporative emission 

characterization will be used to determine whether an atypical 

additive qualifies for the low volatility exemption for Tier 2. 

For Tier 2 requirements, the amount of testing expected to be 

required is dependent on the group. EPA assumes all groups will 

conduct all biological tests required for combustion emissions. 

However, since only volatile fuel/additive mixtures will be 

required to undergo biological testing of evaporative emissions, it 

appears, based on the chemical/physical characteristics of the 

products, that only 6 of the 48 groups will be responsible for 

fulfilling this requirement. In sum, EPA assumes emission 

characterization of combustion and evaporative emissions, as well 

as biological testing of combustion emissions, will be conducted 

for all "atypical" groups. Evaporative emission biological testing 

is assumed to be conducted for only six of the groups. 

Diesel Baseline Category 

As with the unleaded gasoline baseline category, only one 

group is defined for this category. An estimated 305 manufacturers 

representing 769 products are contained in this group. A 

considerable amount of information exists on baseline diesel 

products. Consequently, EPA assumes that the only tests required 

for this group will be the developmental, reproductive, pulmonary, 

and neurotoxicity studies on combustion emissions of diesel fuels. 

70 
P.85 

Evaporative emission assessments are generally not applicable to 

products in the diesel categories. 

Diesel Non-Baseline Category 

Among currently registered products, this category has only 

one group, containing 2 manufacturers, with costs being divided 

equally among the 2 products belonging to the group. Unlike 

products in the diesel baseline category, little information is 

expected to exist for these unique product formulations. 

Consequently, all health effects testing on combustion emissions, 

both chemical and biological, is assumed to be needed for products 

identified with this group. 

Diesel Atypical Category 

EPA estimates 47 groups within this category, representing a 

total of 148 manufacturers and 223 products. Because of the unique 

nature of these products, EPA assumes adequate data is unavailable 

for fulfilling chemical and biological testing requirements of this 

category. Thus, for purposes of this analysis, EPA assumes all 

Tier 1 and 2 tests on combustion emissions will be conducted. 

III. Methodology and Results 

Based on the assumptions described above, compliance costs 

were calculated for each group, for each product within each group, 

71 
P.86 

and for each individual producer currently registering unleaded 

gasoline and/or diesel fuels or fuel additives. The methodology 

used in estimating compliance costs of the proposed regulations is 

discussed below, along with impacts of these costs on fuel 

manufacturers, additive manufacturers, and the combined industry. 

A. Producer Impacts 

Based on the assumed testing requirements described above for 

each category, costs were calculated using estimates provided in 

Chapter 3 and were assigned to each group in the category. Control 

costs, discussed below, were also distributed to groups in the 

"atypical" categories. The per-group costs were then divided 

equally among the number of products assigned to the group to 

determine the cost for each product in each group. Individual 

producer costs were then calculated by summing the costs of all 

products manufactured by a given producer. 

Table 4-2 provides a summary of compliance costs for each 

group in each fuel/additive category, presented according to the 

Tier 1 and 2 test requirements assumed to be necessary for each 

category. As shown in the table, the lowest estimated cost per 

group pertains to groups in the baseline categories of each fuel 

family. The highest cost per group, for both fuel families 

pertains to groups with "atypical" products. This is due in part 

to two factors. First, costs associated with mileage accumulation 

is expected to be higher for "atypical" product formulations, 

72 
P.87 

assuming steady state is not reached until 50 percent of the 

associated vehicles' useful life. Second, little or no health 

effects data is assumed to be available for products of this unique 

nature. 

Costs of control fuel testing associated with testing additive 

products are not included in the table. EPA assumes that the costs 

related to the testing of the control fuel will be applicable to 

all groups with "atypical" product formulations. Due to the large 

proportion of additive products in these categories, it is likely 

that, for each group in these categories, an additive will be 

chosen as the group's representative. EPA assumes that 

manufacturers will take advantage of a provision in the proposed 

rule which allows applicable costs of control fuel testing to be 

divided among products in each "atypical" category, rather than 

requiring these costs to be incurred separately by each group in 

the category. Thus, EPA assumes that the costs of health effects 

testing of combustion emissions on the control fuel will be split 

equally among the "atypical" products in the respective fuel 

family, while costs associated with analysis of evaporative 

emissions (applicable only to gasoline fuels) will be split equally 

among the products of the six groups assumed to be analyzing 

evaporative emissions. The costs associated with combustion 

emission studies on the control fuel are estimated at $2,000 per 

product in the diesel fuel family, and $2,200 in the unleaded 

gasoline fuel family. In addition, sik groups in the unleaded 

73 
P.88 

gasoline fuel family are assigned an additional cost of $42,800 to 

account for biological testing of evaporative emissions on the 

control fuel. 

Table 4-3 provides a comparison of compliance costs between 

fuel and additive manufacturers. For the 710 fuel manufacturers 

examined in this analysis, compliance costs range from about $500 

to $2 million, with a median compliance cost of $2,200. Of the 495 

fuel additive manufacturers, costs range from and $500 to $2.2 

million, with a median compliance cost of $1,100. Distributions of 

the compliance costs are shown in Figures 4-1 and 4-2 for fuel and 

fuel additive manufacturers, respectively. The majority of fuel 

manufacturers have compliance costs between $1,000 and $5,000, 

while the majority of additive manufacturers have compliance costs 

between $100 and $5,000, with the largest percent in the $100 to 

$500 range. About 83 percent of fuel manufacturers and 67 percent 

of fuel additive manufacturers will incur costs of less than 

$10,000. 

Figure 4-3 provides a distribution of compliance costs for all 

fuel and fuel additive manufacturers combined. The figure clearly 

shows that majority of manufacturers (76 percent) have compliance 

costs under $10,000. Only 12 percent of the producers are expected 

to incur costs between $10,000 and $100,000, while only 10 percent 

are expected to incur costs between $100,000 and $1 million. 

Furthermore, only one percent of the fuel and additive 

74 
P.89 

manufacturers examined in this analysis will assume costs in excess 

of one million dollars. Compliance costs for fuel and fuel 

additive producers combined range from $500 to over $2 million, 

with a median cost of about $2,000. 

The analysis indicates that the proposed regulation may impact 

additive manufacturers relatively more than fuel manufacturers. 

About 33 percent of additive manufacturers versus 17 percent of 

fuel manufacturers will have compliance costs over $10,000. 

Nonetheless, the compliance costs in gene'ral are relatively small 

and are not expected to cause significant adverse economic effects. 

A more detailed analysis of the financial impacts to small fuel and 

fuel additive manufacturers is provided in the Regulatory 

Flexibility Analysis. 

i 

B. Industry Impacts 

Summing the costs across all manufacturers yields a total 

economic impact to the fuel/fuel additive industry of approximately 

83 million dollars. Averaging the industry costs over three years 

brings the annual costs to approximately $27 million, well under 

the $100 million limit constituting a major rule. The three year 

average is relevant because manufacturers registering 

fuels/additives before promulgation of the final rule will be 

allowed three years for compliance. Annual costs may in fact be 

less if the compliance costs are financed over more than three 

i 

years. 

75 ' 
P.90 

IV. Limitations of the Analvsis 

Because producers of gasoline and diesel fuels and additives 

are currently the only entities required to register with EPA, only 

products in these fuel families are examined in this analysis. As 

mentioned previously, leaded gasoline products and "relabeled" 

additives are excluded. The analysis does not include alternative 

fuels and other fuel families expected to be designated for 

registration in the future. When these, products are introduced 

into the market, the number of registered products will likely rise 

in the short-term, but will likely level off in the long-term once 

these new products replace some of the existing products. 

i 

The analysis provides a breakdown of'compliance costs for fuel 

and fuel additive manufacturers separately. Of the 1,205 companies 

examined, however, approximately 25 produce both fuels and fuel 

additives. For purposes of this analysis, these 25 companies were 

categorized as either a fuel or an additive manufacturer according 

to the type of product (fuel or additive) which accounted for the 

largest portion of the total compliance cost. Additionally, when 

a product was registered by a division or subsidiary of a parent 

company, EPA assumed costs would be expended at this level. 

In determining costs to each group, as was discussed above, 

i 

judgements were made concerning the availability of existing data 

i 

76 
P.91 

which could mitigate the program's testing requirements. In 

general, more data was assumed to exist for products with baseline 

formulations, and thus less testing was assumed for products in 

these categories. However, it is possible that more or less data 

exists with regard to chemical and biological testing than was 

assumed in this analysis for all categories, and the estimated 

costs would be lower or higher as a result. 

When per-product costs were calculated, EPA assumed that 

compliance costs would be divided equally among the number of 

products. However, manufacturers have the1 opportunity to apportion 

costs in any manner. If costs are divided differently than was 

i 

assumed for this analysis, changes would'be reflected in costs to 

each manufacturer, but industry costs would remain unchanged. 

i 

The per-product costs also depend on the number of products 

expected to be contained in each group. However, the number of 

products assigned to the groups for this analysis may be subject to 

error for a variety of reasons. First, producers are not required 

to notify EPA if manufacturing of a product has ceased permanently. 

For this reason, it is possible that the(number of products in any 

group is overestimated, thus underestimating the per-product costs. 

Second, the analysis is based on products registered with EPA on or 

before mid-1990. Since that time, additional fuel/fuel additive 

products have been registered with EPAi. In this instance, the 

number of products actually belonging to a group may be 

77 
P.92 

underestimated, thus overestimating the per-product costs for that 

group. Third, grouping assignments for this analysis were based on 

existing registration data submitted by manufacturers concerning 

the chemical composition of their fuels and additives. To the 

extent that this information may be ina'ccurate or out-of-date, 

EPA's assumptions as to appropriate group assignments may be 

erroneous. Thus, the actual number of products per group and even 

the number of groups per category may be, somewhat different from 

those assumed here. Finally, participation in the proposed 

i 

grouping system is voluntary, and manufacturers may choose to 

define their own subgroups or even work independently rather than 

share costs among all potential manufacturers in the group. As a 

result, the number of participating manufacturers, and their 

respective products, may be less for any §roup. If so, the number 

of products by which the costs were divided may be overestimated, 

thus underestimating manufacturer and industry costs. 

V. Conclusions 

i 

The effects of the proposed regulation on fuel and fuel 

i 

additive producers appear to be relatively small. In most cases, 

the compliance costs will be less than $10,000, and only a handful 

of producers are expected to incur costs in excess of $1 million. 

Companies having costs in excess of one million dollars tend to 

i 

produce at least one atypical product in ,each of the fuel families. 

i 

78 
P.93 

The products which these companies produce are predominantly 

additives. A few of these companies are large chemical companies 

producing more than 50 products. The majority (about 70 percent), 

however, produce less than 10 products. The type of company varies 

between oil refiners, chemical companies, and farm bureau 

cooperatives. The types of products the'se companies produce is 

shown in Figure 4-4. This figure provides a distribution of types 

of products produced by manufacturers falling within a given range 

i 

of compliance costs. 

In conclusion, EPA estimates that the proposed fuel/fuel 

additive registration regulation will lead to total costs of about 

i 

$83 million. With industry compliance costs averaged over three 

years, the annual economic impact to the 'industry is estimated at 

i 

$27 million. EPA has no reason to believei competition, employment, 

investment, productivity, or innovation will be adversely affected 

as a result of this regulation. The impact to most companies is 

t 

expected to be relatively small so as not to cause significant 

i adverse effects. In conclusion, the proposed fuel and fuel 

i 

additive registration regulation will not have significant adverse 

effects on the industry, nor will it result in an economic impact 

of $100 million or more annually. 

79 
Tabje 4-1: Assumed Testing Requirements 

For Products and Groups in each Fuel/Additive Category 

Health Effects Testing Requirements 

Combustion Emission Characterization 

Evaporative Emission Characterization 

Carcinogenicity, Mutagenicity 

Screens for: 

Combustion Emissions 

Evaporative Emissions 

Developmental, Reproductive, 

Pulmonary, and Neurotoxicity 

—Screens-for: — 

Combustion Emissions 

Evaporative Emissions 

Unleaded Gasoline Fuel Family 

Baseline 

X 

X 

X 

X 

Non-Baseline : Atypical 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X * 

X 

X * 

Diesel Fuel Family 

Baseline ! Non-Baseline 

X 

X 

X 

X 

Atypical 

X 

X 

X -

* Applicable to only six of the forty-eight groups. 

\ 7 

p 

CD 
Table 4-2: Estimated Compliance Costs Per Group in Each Fuel/Additive Category 

Proqram Requirements: 

Tier 1 Costs 

Data Research and Analysis 

Vehicle and Engine Costs* 

Emissions Generation/Speciation: 

Combustion Emissions 

Evaporative Emissions 

Tier 2 Costs: 

Combustion Emission Generation 

Carcinogenicity, Mutagenicity Screens 

Developmental, Reproductive, 

Pulmonary, and Neurotoxicity Screens 

Evaporative Emission Generation 

Carcinogenicity, Mutagenicity Screens 

Developmental, Reproductive, 

_P_ulmgnary, and Neurotoxicity Screens 

Dilution System 

Administrative Costs 

Total Cost Per Group 

Unleaded Gasoline Fuel Family 

Baseline 

$16,500 

$31,750 

$0 

$4,200 

$28,800 

$0 

$220,000 

$15,780 

$66,000 

$220,000 

$1,100 

$156,900 

$761 f030 

Non-Baseline 

$16,500 

$31,750 

$27,150 

$4,200 

$58,300 

$74,200 

$220,000 

$15,780 

$66,000 

$220,000 

$1,100 

$156,900 

$891,880 

Atypical*** 

$16,500 

$63,500 

$30,550 

$4,200 

$58,300 

$74,200 

$220,000 

$15,780** 

$66,000** 

$220,000** 

$1,100 

$156,900 

$927,030 

Diesel Fuel Family 

Baseline 

$16,500 

$21,440 

$0 

N/A 

$14,400 

$0 

$220,000 

N/A 

N/A 

N/A 

$l,Tob 

$156,900 

$430?340 

Non-Baseline 

$16,500 

$21,440 

$72,150 

N/A 

$37,100 

$74,200 

$220,000 

N/A 

N/A 

N/A 

" "~ $1,1 do 

$156,900 

$599,390 

Atypical*** 

$16,500 

$109,700 

$82,850 

N/A 

$37,100 

$74,200 

$220,000 

N/A 

N/A 

N/A 

- - - $17100 

$156,900 

$698,350 

* Includes acquisition, maintenance, fuel, resale value, and mileage accumulation. 

** Applicable to only 6 of 48 groups. 

*** Does not include cost of control fuel. 

^ 7 
P.96 

Table 4-3: Summary of Compliance Costs 

Number of Companies 

Range of Compliance Costs 

Low 

Median 

High 

Percentage Less than $10,000 

Percentage Greater than $10,000 

Fuel 

Manufacturers 

710 

$500 

$2,200 

$2,000,000 

83 

17 

| Additive 

[Manufacturers 

I 495 

i 

I 

I $500 

| $1,100 

I $2,200,000 

! 67 

1

 33 

Total 

Manufacturers 

1205 

$500 

$2,000 

$2,200,000 

76 

24 

71 L 
""N O 

600 

Figure 4-1: Distribution of Compliance Costs 

for Fuel Manufacturers 

^50 0 

8 

D 

-i— • 

O 400 

, ^ 

P 

300 

3__» 20 0 

3 

100 

0 

545 

19 21 

100-500 500-1000 1K-5K 

56 

SIIS 1 

feWSwSSSifo: wm 

9 

38 

16 

5K-10K 10K-50K 50K-100 K

1 00K-500K 500K-1M 1M-1.5M 1.5M+ 

Cost to Manufacturer (dollars) 

CD 

Kl 
150 

I 

o 100 

u 

o 

50 

Figure 4-2: Distribution of Compliance Costs 

for Additive Manufacturers 

0 

131 

53 

100-500 500-1000 1K-5K 5K-10K 

12 

10K-50K 50K-100 00K-500K 500K-1M 1M-1.5M 1.5M+ 

Cost to Manufacturer (dollars) 

CD 

00 
800 

700 

600 

500 

400 

300 

200 

100 

0 

Figure 4-3: Distribution of Compliance Costs 

for Fuel and Additive Manufacturers Combined 

Cfl 

o 

3 

§ 

667 

3 Z 109 

9 14 

100-500 500-1000 1K-5K 10K-50K 1 

5K-10K 50K-100K 

00K-500K rtrt 1M-1.5M 

500K-1M 1.5M+ Cost to Manufacturer (dollars) 

CD 

CD 
> 

800 

Figure 4-4: Distribution of Product Type 

by Range of Compliance Costs 

100-500 500-1000 1K-5K 5K-10K 10K-50K 50K-100K100K-500K 500K-1M 1M-1.5M 

Cost to Manufacturer (dollars) 

1.5M+ 

Baseline Unleaded 

Baseline Diesel 

Non-Baseline Unleadec 

Non-Baseline Diesel 

Atypical Unleaded 

Atypical Diesel 

o 

o 
Chapter 5 

Summary and Discussion 

P.1 

This analysis has been based on 1,205 different companies or 

i 

operating units (i.e. divisions) currently registering 3,697 

products in the unleaded gasoline and ciiesel fuel families. Of 

these producers, over half (59 percent) jare fuel manufacturers and 

i 

41 percent are additive manufacturers,'. The majority of their 

i 

products are in the unleaded gasoline) fuel family, split about 

i 

I 

equally between fuels and additives, while about one quarter are 

diesel products, most of which are additives. These producers 

represent about 63 percent of those currently registered, while the 

number of products is about 58 percent. About 37 percent of 

i 

currently registered manufacturers were excluded from this analysis 

because they produce only leaded gasoline products or only 

i 

"relabeled" products. The estimated costs of compliance for these 

i 

i 

producers range from $500 to $2.2 million, with a median compliance 

cost of about $2,000. Totaling the' costs to each manufacturer 

yields an estimated annual cost to (industry of $27 million for 

three years. Thus, the proposed regulations would not be expected 

to result in a major rule. 

The costs presented in this analysis were based on reasonable 

assumptions and judgements regarding expected use of cost-sharing 

80 
P.2 

provisions and the expected availability jof existing chemical and 

i 

biological test data. An examination of the sensitivity of the 

i 

costs to assumptions made in the analysis reveals that the 

i 

projected costs are not heavily impacted by changes in these 

i 

i 

assumptions. The major assumptions which could have an impact on 

the projected compliance costs include: (l) expected participation 

in the proposed grouping system, 2) the,' number of groups, 3) the 

number of products expected to be enrolled in each group, 4) the 

the expected availability 

!first point, assuming that 

120 producers) chose to 

manner in which costs are divided, and 5), 

of existing test data. Addressing the 

one out of every 10 producers (i.e., 

conduct tests independently rather tjhan participate in group 

sharing provisions, and that each was| registering an "atypical" 

product with the highest estimated compliance cost ($972,000), the 

total program cost would increase from $27 million to $66 million 

annually. It would take at least 1 out of every 5 such producers 

i 

to conduct tests independently before the annual costs would exceed 

$100 million. If one producer of eachlgroup chose to conduct tests 

independently, the industry cost would be about $55 million 

annually, $45 million below the magor rule criterion of $100 

million annually. It would take 3 to 4 producers of each group 

conducting tests independently to raise industry costs beyond $100 

i million annually. Hence, even if some producers choose not to 

participate in the grouping system, j costs are expected to remain 

below $100 million annually. ! 

81 
P.3 

The number of groups could have an impact on the compliance 

costs as more groups are established for the program. This could 

occur when new types of "atypical" or "non-jbaseline" products enter 

the market. The effect of an increase in the number of groups 

would be similar to a producer choosing to conduct tests 

independently, as discussed above. The i number of products per 

group and the method by which costs are divided could most 

certainly affect costs to a given manufacturer, but would not 

increase total costs to the industry. |ln fact, industry costs 

could actually be less because there may be fewer products, hence 

fewer groups, once inactive products I are not re-registered. 

Finally, since the assumptions used regarding availability of 

existing test data were conservative assumptions, the estimated 

costs of the proposed program could actually be less. Assuming, 

however, that the assumptions were not adequately conservative, 

total program costs would only rise by aliout $100,000 annually if 

no adequate data exists for any of the groups. 

This analysis includes only costs associated with Tier 1 and 

Tier 2 testing, averaged over 3 years. ! However, in the ensuing 

years of the program, some of the registered products are likely to 

be subject to Tier 3 testing. Assuming tJen products or groups are 

required to conduct Tier 3 testing (at j an estimated cost of $3 

million each) in the three year period following the initial 

compliance period, the total cost would be $30 million, or $10 

million per year. While a substantial sum, this only represents 

82 • 
P.4 

about a 37 percent increase in annual I costs of the proposed 

i 

program. I 

Manufacturers of new products which| are in the gasoline or 

diesel fuel families will often be able1 to rely on previously 

submitted data for registration of their new product. In such 

cases, industry costs would not rise because these manufacturers 

would reimburse manufacturers which h!ave already registered 

products similar in nature to the new pro'duct. However, industry 

costs would rise as products in families not currently designated 

for registration (i.e., alternative fuel families) are introduced. 

These products are not expected to be introduced at such a rate 

where annual costs to the industry would increase significantly. 

Assuming that 20 products are introduced jinto the market each year 

for the next 3 years, the impact on the economy would be about $20 

million annually. This raises the annual impact of $27 million to 

about $47 million annually. Again, a conservative cost of $972,000 

was used in this calculation. This cost reflects the assumption 

that all chemical and biological tests 'of Tiers 1 and 2 will be 

i 

needed, and includes cost of control fuel' testing. It also assumes 

producers of these products will be conducting tests independently. 

The requirements of this proposed program are designed so as 

not to present an unnecessary burden o'n the regulated industry. 

The proposed three-tiered structure of tlie testing program provides 

83 I 
P.5 

a means by which additional testing is required only if warranted 

by the results of the previous tier, thus keeping testing burden to 

a minimum while satisfying the requirements of the statute. In 

i 

addition, allowances for adequate existing health effects data 

mitigate testing requirements, and the proposed grouping system 

permits costs to be shared among producers and helps to avoid 

duplication of effort. While the propose'd program is designed to 

minimize the burden on those required to comply, it also has a 

number of societal benefits. First, it will provide an excellent 

air toxics inventory on pollutants related to the use of motor 

fuels and fuel additives, and will also provide an invaluable 

source of toxicologic data on the emissions of these products. It 

will also assist EPA in evaluating the relative adverse air 

pollution effects of various kinds of fuels and additives and in 

determining needs for related regulatory actions in the future. 

For instance, information is to be submitted to EPA regarding the 

carcinogenicity of a fuel or additive product. On the basis of 

this or other available information, the Administrator may, by 

regulation, control or prohibit the manufacture or sale of toxic 

fuels or fuel additives for use in motor .vehicles. Alternatively, 

manufacturers may voluntarily reformulate or withdraw products 

which are shown to have unacceptable health risks. Incidences of 

cancer or other adverse health effects may be mitigated by these 

events. In 1995, the number of cancer lincidences expected to be 

caused by motor vehicle pollutants is estimated to range from 355 

84 
P.6 

to 1236.19 Currently, each cancer incidence is estimated to have 

an adverse economic impact ranging from $1.6 million to $8.5 

million.20 Thus, the societal benefits would outweigh the costs 

associated with the proposed program if just 10 to 52 cancer 

incidences were avoided, or approximately 1 to 15 percent of 

vehicle-related cancer incidences projected to occur in 1995. 

While it is difficult to accurately predict the benefits associated 

with this program, it is reasonable to believe that health benefits 

on the order of 10 to 60 cancer or other (incidences avoided would 

accrue over the life of this program as a result of actions taken 

with the information generated under this program. 

19"Air Toxics Emissions and Health Risks from Mobile Sources," 

Air and Waste Management Association Paper 89-34A.6, by Jonathan 

Adler and Penny Carey of the U.S. Environmental Protection Agency. 

20"Point Estimates of the Value of a Statistical Life," by 

Leland B. Deck, Ph.D., Office of A'ir Quality Planning and 

Standards, U.S. Environmental Protection Agency. 

85 I 
P.7 

APPENDIX A 

FINANCIAL AND EMPLOYEE SIZE INFORMATION 

FOR CATEGORIES OF MANUFACTURERS 
PRODUCTION/DISTRIBUTION FUE L MANUFACTURER S 

Sales Range 

(millions?) 

Companies 

Number 

— Products— 

Percent Perec m 

ufToial Number ol Total 

-Sales (millions $)-— 

Low High Average 

— Net Income (thousaiuK Sj — 

Low High A\cragc 

Average Number 

ol' Employees 

| OS 

| >5-I0 

j >10-15 

| > 15-20 

>20-25 

>25-50 

> 50-75 

>-75--IOO-

>100-150 

> 150-200 

> 200-500 

> 500-754» 

>750-1,000 

> 1,000 

TOTAL 

24 

12 

6 

8 

8 

27 

17 

5 

7 

6 

14 

6 

5 

30 

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% 

60 

31 

9 

20 

22 

75 

66 

13 

31 

30 

59 

50 

27 

226 

719 

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 

12 

16 

21 

26 

53 

80 

101 

155 

211 

520 

755 

1,100 

5 

ID 

13 

20 

25 

50 

75 

100 

135-

200 

500 

718 

850 

56,700 

2 

8 

13 

19 

23 

35 

66 

91» 

1-2-3-

172 

307 

615 

803 

8,942 

-630 

40 

69 

84 

111 

327 

699 

1.120 

800A 

2.310 

3.499 

8,897 

-19.000 

2.413 

281 

264 

146 

216 

182 

950 

17.700 

1.418 

_2,470_ 

3.069 

6.669 

11.408 

16. ISO 

1,656,056 

-IK 

9K 

118 

129 

135 

572 

2.013 

1.264 

1.633 

2,704 

5.286 

10,520 

7,680 

243.756 

8 | 

27 Jj 

35 

40 

67 

69 

121 

2117 

335 

411 

622 

3OK 

1,885 

12,1911 

N..u N, i imoiiic 1I.11.1 wcic nul available lor all companies. The number ol companies for which ncl income Uaia aie noi picbciilcil is nolcil m TaMje Z-J.. 

bo 
NON-AGRICULTURAL RETAIL FUEL MANUFACTURERS 

Companies ----Products - ----Sales (millions $)---- — Ncl Income (ihou.saiuK S)---

Sales Range 

(millions!) Number 

Percent 

of Toul Number 

Percent 

of Total Low High Average Low High Average 

Average Number 

41I Employees 

0-5 

>5-10 

>10-15 

1 > 15-20 

>20-25 

>25-50 

> 50-75 

> 75-100 

>100 150 

| > 150-200 

| > 200-500 

\ > 500-750 

>750-1,000 

> 1.000 

TOTA L 

10 

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% 

22 

7 

6 

4 

10 

I I 

21 

2 

11 

2 

14 

5 

3 

0 

118 

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 

12 

16 

22 

26 

52 

81 

110 

175 

201 

506 

900 

--

4 

8 

12 

17 

25 

50 

70 

81 

140 

175 

420 

727 

900 

-

1 

7 

12 

17 

23 

37 

59 

81 

123 

175 

285 

616 

900 

--

30 

55 

55 

116 

111 

385 

936 

1,458 

i:S77-

2,645 

3,086 

8,000 

16.39.3 

--

34 

214 

134 

116 

784 

900 

1,260 

1,458 

2,063-

2.645 

7,013 

9.292 

16.393 

--

32 

116 

95 

116 

359 

681 

1.038 

1.458 

1,7871 

2.645 

4,572 

8,646 

16.393 

-• 

'

J

| 

M 

62 

108 

85 

203 

268 

700 

856 

213 

2.920 

3.884 

953 

- - • 

__ 

S.-i* S.l iiwoutc d.ii.i wu c i».>i available Im all companies. The nuinhci ol companies lor which net income data aie nul pic.sciitcil is noted in Ta_VJC Z~_Z. 
AGRICULTURAL RETAIL FUEL MANUFACTURERS 

Sales Range 

(millions!) 

Companies 

Number 

—Products— -Sales (millions $)-— —Nc l Income (Ihousaiuls $) — 

Percent 

of Total Number 

Percent 

of Total Lt tw High Average Low High Average 

Average Numbe r 

o f Employees 

0-5 

>51 0 

>10-15 

> 15-20 

>20-25 

>25-50 

>5G-75 

| > 75^00 " 

• 

>100-150 

> 150-200 

> 200-500 

|| > 500-750 

| > 750-1,000 

> 1,000 

TOTA L 

16 

22 

11 

3 

1 

5 

1 

0 -

0 

0 

0 

1 

1 

3 

64 

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%. 

42 

45 

23 

5 

3 

12 

2 

26.6% 

28.5% 

14.6% 

3.2% 

1.9% 

7.6% 

1.3% 

0 j 0.0% 

0 

0 

0 

5 

4 

17 

158 

0.0% 

0.0% 

0.0% 

3.2% 

2.5% 

10.8% 

0 

6 

11 

16 

21 

26 

51 

-

--

• """ 

-

706 

879 

1.120 

5 

10 

15 

19 

21 

42 

51 

-

-

— 

-

706 

879 

43.000 

3 

7 

12 

18 

21 

35 

51 

--

• — 

--

--

706 

879 

15.107 

7 

0 

51 

74 

97 

416 

816 

-

--

--

--

12,508 

5.610 

8.230 

185 

259 

499 

88 

97 

640 

816 

-

— 

--

--

12.508 

5.610 

1.216,942 

47 

41 

139 

KI 

97 

533 

816 

-

— 

--

--

12.508 

5,610 

415.919 

14 1 

31 1 

31 J 

27 

40 

67 

75 

--

--

--

--

900 

3,500 

18.750 

Noic: Net income data were not available for all companies. The number ol companies for which ncl income data aie not presented is noted in T«t»fc Z'Z. 
A L L FUE L MANUFACTURER S 

Sales Range 

(millions J) 

Com panic* 

Number 

Percent 

of Total 

—Products— 

Number 

Percent 

of Total 

----Sales (millions $)----

Low High Average 

—Ne t Income (thousands $) — 

Low High AverageAverage Numbe r 

of Employees 

0-5 

>5-10 

> 10-15 

> 15-20 

> 20-25 

>25-50 

> 50-75 

>75-IOO 

> 100-150 

| > 150-200 

| > 200 500 

| > 500-750 

| > 750 1.000 

> 1,000 

TOTA L 

50 

38 

20 

13 

13 

37 

27 

7 

12 

7 

19 

9 

7 

33 

292 

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% 

124 

83 

40 

29 

35 

98 

89 

19 

42 

32 

73 

60 

34 

243 

1,001 

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 

11 

16 

21 

26 

51 

80 

H H -

155 

201 

506 

755 

1,100 

5 

10 

15 

20 

25 

50 

75 

100 

—140-

200 

500 

727 

900 

56,700 

2 

7 

13 

18 

23 

35 

63 

89 

.1.23 

172 

301 

625 

828 

9,502 

-630 

0 

51 

74 

97 

327 

699 

1,120 

-800 

2.310 

3.086 

8,000 

-19.000 

2,413 

281 

2 M 

499 

216 

784 

950 

17,700 

1.458 

2,470 

3.069 

7.013 

12.508 

16.393 

1.656,056 

22 

60 

I2K 

i n 

l->3 

580 

1.664 

1.291 

1.697 

2.696 

5.063 

10.300 

8.629 

259.896 

IO | 

30 | 

34 | 

47 

70 

87 

169 

294 

552 

383 

1.227 

1.168 

1,983 

12,825 

Note: Two of .he companies do m.t have SIC codes and are no. coun.cd in the previous tables. 

Nei income dala were not available lor all companies. The numher ol companies lor which net income data are mit presented is notid in T*>/« i ^ 
ADDITIVES IN CHEMICAL . PETROLEUM . AN D COA L PRODUCTS INDUSTRIES 

Compatriot —-Produeis---- ---Sales (miliums S)— - -Net Income (thousands S)-~-

Sales Range 

(millions!) 

0-5 

>5-10 

>10-15 

> 15-20 

>20-25 

>25-50 

> 50-75 

>75-100 

> 100-150 

> 150-200 

| >200-500 

\ > 500-750 

H > 750-1.000 

| > 1,000 

TOTA L 

Number 

24 

11 

10 

9 

6 

14 

7 

6 

5 

4 

5 

5 

4 

25 

135 

Percent 

of Toul 

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%. 

Number 

53 

19 

91 

55 

24 

100 

58 

12 

34 

25 

82 

263 

56 

358 

1,230 

Percent 

of Toial 

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% 

Low 

0 

6 

11 

16 

23 

26 

55 

85 

i'2tr 

151 

250 

517 

804 

1.071 

High 

5 

10 

15 

20 

25 

50 

75 

100 

150" 

190 

346 

670 

920 

86,173 

Average 

3 

8 

13 

19 

24 

36 

67 

96 

F36-

170 

293 

588 

848 

12,339 

Low 

-8,250 

-584 

109 

-1,000 

380 

736 

1.534 

2.530 

4,440-

5.232 

7,000 

21,162 

19.557 

60,000 

High 

172 

409 

515 

686 

1,030 

2.200 

2.191 

3,700 

5,550 

7,000 

11,186 

59,000 

39.027 

4,440.581 

Average 

-448 

135 

. 29K 

253 

657 

1.444 

1,889 

3.139 

4.886 

6,074 

8.893 

32.692 

31.912 

729.622 

Average Number 

of Employees 271 °\ 

120 

no 

128 | 

184 

406 

454 

81M 

1,036 

1.644 

3.615 

3.287 

21 ,K24 

Note: Net income dala were not available for all companies. The number of companies for which ne. income data are noi piesenied is noted in 1VLJ& Z."Z. 
ALL OTHER ADDITIVES NOI IN CHEMICAL. PETROLEUM. AND COAL PRODUCTS INDUSTRIE* 

Companies —Products— — Sales (millions $)—- — N c l Income (thousands %)— 

Sales Range 

(millionsS) Number 

Percent 

of Total Number 

Percent 

of Total Low High Average Low High Average 

Average Number 

of Employees 

0-5 

>5-10 

>HM5 

1 > 15-20 

1 >20-25 

| >25*50 

| > 50-75 

\ > 75-100 

> 100-150 

> 150-200 

> 200-500 

>500-75O 

| > 750-1,000 

1 > 1,000 

1 TOTAL 

16 

8 

6 

4 

1 

10 

2 

1 

5 

4 

5 

2 

2 

15 

81 

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% 

39 

14 

27 

36 

1 

19 

5 

2 

16 

15 

10 

3 

6 

231 

424 

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 

10 

16 

23 

27 

69 

100 

107-

160 

218 

538 

960 

1,130 

5 

10 

15 

20 

23 

50 

70 

100 

192 

300 

706 

1,000 

96,146 

2 

8 

13 

18 

23 

40 

70 

100 

169 

249 

622 

980 

13,611 

-8 

12 

80 

116 

380 

493 

2,000 

3,049 

3.2% 

5,232 

-24,000 

28.793 

40,983 

-6,000 

186 

216 

436 

494 

380 

1,760 

2,01X1 

3,049 

4,858 

7.104 

10,772 

46.000 

42.951 

3.835.000 

70 

108 

287 

341 

380 

944 

2,000 

3,049 

3.829 

5,747 

2,533 

37,396 

4 1.967 

670,244 

2 3 

48 

75 

251 

100 

211 

371 

200 

836 

647 

2.026 

3.050 

6,332 

52.802 

Note Net income daia were nm available for all companies. The number ol companies for which ncl income data are not presented is noted in T+IU. 2.-Z. 
ALL ADDITIVES 

Companie* —Products— ----Sales (millions $)---- — Ncl Income (thousands S|----

Sales Range 

(millions*) Number 

Percent 

of Total Number 

Percent 

of Total Low High Average Low High Average 

Average Number 

of Employees 

0-5 

>5-10 

>10-I5 

> 15-20 

>20-25 

>25-50 

> 50-75 

D >75-100 

> 100-150 

> 150-200 

> 200-500 

>500-750 

D >750-I.OOO 

> 1,000 

TOTAL 

40 

19 

16 

13 

7 

24 

9 

7 

10 

8 

10 

7 

6 

40 

216 

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% 

92 

33 

118 

91 

25 

119 

6 3 

14 

5tT 

40 

92 

266 

62 

589 

1,654 

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 

10 

16 

23 

26 

55 

85 

— 107-

151 

218 

517 

804 

1.071 

5 

10 

15 

2 0 

25 

5 0 

75 

100 

150 -

192 

346 ' 

706 

1.000 

96,146 

2 

8 

13 

19 

24 

38 

6 8 

97 

131 

170 

271 

598 

892 

12,816 

-8.250 

-584 

8 0 

-1,000 

380 

493 

1,534 

2.530 

3.296 

5.232 

-24,000 

21.162 

19,557 

-6,000 

186 

409 

515 

686 

1,030 

2.200 

2.191 

3.700 

5.550 

7,104 

11,186 

59,000 

42.951 

4.440,581 

-275 

125 

295 

280 

617 

1,236 

1,905 

3.126 

4.416 

5.K87 

5.713 

34,036 

35.264 

707,355 

26 1 

57 | 

103 \ 

153 | 

124 

195 

3 9 8 

417 

8 2 2 

841 

1,835 

3.454 

4.302 

33.4411 

Nol i Nc. income data wcte not available for all companies. The numhei ol companies for which net income data are noi picscnicd is noted in TVM * Z~2-. 
RELABELS ONLY IN CHEMICAL. PETROLEUM. AND COAL PRODUCTS INDUSTRIES 

Compaaie* -—Products-— — Sales (millions $)—- —Net Income (thousands $)-— 

Sales Range 

(millions*) 

0-5 

>5-10 

>10-15 

> 15-20 

| >20-25 

| >25-50 

| >50-75 

| >75-100 

| 

> 100-150-

> 150-200 

>200-500 

>50O-75O 

Q >75O-l,0OO 

> 1,000 

TOTAL 

Number 

12 

4 

5 

1 

2 

1 

0 

0 

o0 

0 

1 

0 

3 

29 

Percent 

of Total 

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% 

Number 

25 

7 

9 

5 

2 

1 

0 

0 

0-

0 

0 

1 

0 

6 

56 

Percent 

of Total 

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% 

Low 

2 

7 

13 

16 

21 

40 

-

--

— 

--

--

510 

~ 

1,500 

High 

5 

10 

15 

16 

23 

40 

— 

--

— 

— 

' 

510 

— 

5.672 

Average 

4 

9 

14 

16 

22 

40 

--

-

--

— 

-

510 

— 

3.024 

Low 

33 

240 

248 

-

721 

1.760 

--

--

— 

~ 

--

61,372 

--

681.000 

High 

172 

409 

515 

-

789 

1,760 

-

-

— 

--

--

61,372 

-

681,(KM) 

Average 

62 

331 

426 

-

755 

1,760 

-

-

— 

-

~ 

61,372 

--

681.000 

Average Numbe r 

of Employees 

43 

56 

,27 

100 

170 

120 

--

-. 

-

— 

i 

3,284 j 

" 

16,911 1 

01 
ALL OTHER RELABELS NOT IN CHEMICAL, PETROLEUM, AND COAL PRODUCTS INDUSTRIES 

Companies -—Products-— — Sales (millions $)-— -—Net Income (thousands $)—-

Sales Range 

(millions*) 

1 0-5 

| >5-10 

> 10-15 

> 15-20 

>20-25 

>25-50 

>50-75 

^> 75-100-

> 100-150 

> 150-200 

> 200-500 

>500-750 

>750-1,000 

> 1,000 

TOTAL 

Number 

5 

9 

1 

3 

1 

2 

1 

1 

2 

2 

1 

2 

5 

36 

Percent 

of Toul 

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% 

Number 

8 

9 

5 

3 

1 

2 

2 

1 

1 

8 

5 

4 

2 

27 

78 

Percent 

of Total 

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% 

Low 

1 

6 

15 

16 

21 

30 

70 

92 

150 

175 

276 

626 

799 

11,045 

High 

4 

10 

15 

19 

21 

32 

70 

92 

150~ 

180 

429 

626 

960 

126.932 

Average 

3 

8 

15 

18 

21 

31 

70 

92 

150" 

178 

353 

626 

880 

42,985 

Low 

-2,899 

48 

-

201 

--

510 

-

— 

..-

--

9,000 

74,000 

35,000 

207,000 

High 

74 

323 

--

226 

-

544 

-

— 

— =^_ 

--

9,000 

74,000 

35,000 

4,224,000 

Average 

-692 

145 

— 

215 

--

527 

-

— 

- -

--

9,000 

74,000 

35,000 

1,066,400 

Average Number 

of Employees 

53 

77 

60 

126 

120 

150 

1,000 

475 

300 

300 

3,400 

4.500 

5,612 

279,043 
ALL RELABELS 

Compaaifla —Products-— —Sales (millions $)---- -—Net Income (thousands $)-— 

Sales Range 

(millions*) 

0-5 

>5-10 

> 10-15 

> 15-20 

| >20-25 

>25-50 

~~>SfclS~ 

>75-100 

| > 100-150 

1 > 150-200 

| >200-500 

>500-750 

> 750-1.000 

> 1.000 

\ TOTAL 

Number 

17 

13 

6 

4 

3 

3 

1-

1 

1 

2 

2 

2 

2 

8 

65 

Percent 

of Total 

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% 

Number 

33 

16 

14 

8 

3 

3 

2 

1 

1 

8 

5 

5 

2 

33 

134 

Percent 

of Total 

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% 

Low 

1 

6 

13 

16 

21 

30 

70 

92-

150 

175 

276 

510 

799 

1,500 

High 

5 

10 

15 

19 

23 

40 

70 

— - —_92_ 

150 

180 

429 

626 

960 

126,932 

Average 

4 

8 

15 

17 

22 

34 

70 

92 

150 

178 

353 

568 

880 

28.000 

Low 

-2.899 

48 

248 

201 

721 

510 

~ 

— 

" 

— 

9,000 

61,372 

35,000 

207,000 

High 

172 

409 

515 

226 

789 

1,760 

-

--

" rr-

--

9,000 

74.000 

35,000 

4.224,000 

Average 

-139 

195 

426 

215 

755 

938 

— 

— 

—--—^_ 

--

9.000 

67,686 

35,000 

1,002,167 

Average Numbe r 

of Employees 

46 1 

71 1 

116 

120 

153 

140 

1,000 

475 

—__ 300 

300 

3,400 

3.892 

5,612 

180,744