p. 1



# OAR Box 1394 Prepped by Ollie Stewart



## Document

Number: 

# 4 ) ll-A-1 7 Docket Number: 

# A-94-5 2

Printed 7/3/20087:22:10AM

Sheet 4 of 57P. 2 

# CELCAII

Unite dState s Environmenta

l Protectio n Agenc y Offic e Of Air Qualit y Plannin g AndStandard s Researc h Triangl e Park , N C 2771 1 EPA-452/R-00-00 7

Ma y 200 1 FINA L REPOR T Ai r 

# Economi c Impac tAnalysi s o f Propose d Reinforce d Plastic s NESHA P

Fina l Repor t

JM26 2M

EP A Ai n LOCKE T

## Economi c Impac t Analysi s o f Propose dReinforce dPlastic s NESHA P

U.S
. Environmenta l Protectio n Agenc y Offic e o f Ai r Qualit y Plannin g an dStandard s Innovativ e Strategie s an dEconomic s Group , MD-1 5 Researc h Triangl e Park , N C 2771 1

Prepare dUnde r

Contrac t By : Researc h Triangl e Institut e Cente r for Economic s Researc h Researc h Triangl e Park , N C 2771 1



## Ma y 200 1

e dP. 4

Thi s repor t

ha s bee n reviewe db y th e Emissio n Standard s Divisio n ofth e Offic e o f Ai r Qualit y Plannin g an d Standard s o f

th e Unite dState s Environmenta l Protectio n Agenc y an dapprove dfor publication
. Mentio n o f trad e name s o r

commercia l product s i s no t intende dt o constitut e endorsemen t o r recommendatio n fo r

use . Copie s ofthi s repor t

ar e availabl e throug h th e Librar y Service s (MD-35) , U.S
. Environmenta l Protectio n Agency , Researc h Triangl e Park , N C 27711 , o r fro mth e Nationa l Technica l Informatio n Service s 528 5 Por t Roya l Road , Springfield , V A 22161
.P. 5



### CONTENT S Sectio n Pag e 1 Introductio n 1- 1 1. 1 Organizatio n ofth e Repor t 1- 1 2 Industr

y Profil e 2- 1 2. 1 Productio n 2- 3 2.1. 1 Materia

l Input s 2- 5 2.1.1. 1 Plasti c Resin s 2- 5 2.1.1. 2 Reinforcement s 2- 6 2.1.1. 3 Nonreinforcin g Filler s 2- 8 2.1.1. 4 Additive s 2- 9 2.1. 2 Productio n Processe s 2-1 0 2.1.2. 1 Open Moldin g Processe s 2-1 1 2.1.2. 2 Close dMoldin g Processe s 2-1 5 2. 2 Product s 2-2 0 2. 3 Cos t

o f Productio n 2-2 0 2. 4 Use s andConsumer s o f Reinforce dPlastic s 2-2 2 2. 5 Manufacturin g Facilitie s '
. 2-2 9 2.5. 1 Locatio n 2-3 1 2.5. 2 Employmen

t 2-3 1 2. 6 Facilit

y Ownership 2-3 1 2.6. 1 Siz e Distributio n 2-3 3 2.6. 2 Issue s o f

Vertica l an dHorizonta

l Integratio n 2-3 3 2. 7 Small Businesse s 2-3 6 2.7. 1 Identifying Small Businesse s 2-3 6

mP. 6

Engineerin g Cost s 3- 1 3. 1 Identifyin g Regulate dEntitie s 3- 1 3. 2 Nationa l Contro l Cos t Estimate s 3- 1 Economi c Impac t

Analysi s 4- 1 4. 1 Reinforce dPlasti c Composit e Market s 4- 2 4. 2 Producers , Costs , an dSuppl y 4- 6 4. 3 Consumers , Value , an dDeman d4- 8 4. 4 Baselin e an dWith-Regulatio n Equilibriu m4-1 0 4. 5 Result s 4-1 0 4.5. 1 Market-Leve l Impact s 4-1 2 4.5. 2 Industry-Leve l Impact s 4-1 6 4.5.2. 1 Change s i n Operatin g Profi t 4-1 6 4.5.2. 2 Product-Lin e an dFacility-Leve l Impact s 4-2 0 4.5.2. 3 Change s i n Employmen t 4-2 1 4. 6 Socia l Cost s 4-2 1 4. 7 Sensitivit y Analysi s fo r Profi t Rat e 4-2 5 4. 8 Ne w Sourc e Analysi s 4-2 6 Initia l Regulator y Flexibilit y Analysi s 5- 1 5. 1 Identifyin g Smal l Businesse s 5- 2 5. 2 Screening-Leve l Analysi s 5- 2 5.2. 1 Recommende dAlternativ e 5- 3 5.2. 2 MAC T Floo r

Alternativ e 5- 6 5.2. 3 Above-the-MAC T Floo r Alternativ e 5- 6 5. 3 Economi c Analysi s 5- 6 5. 4 Assessmen t

5-1 2 5. 5 Projecte dReportin g an dRecordkeepin g Requirement s 5-1 3 5. 6 Othe r

Federa l Rule s Tha t

Ma y Impac t

Reinforce dPlasti c Composit e Productio n Facilitie s 5-1 4 i vP. 7



### 5. 7 Alternative s to th e Propose dRul e 5-1 4 Reference s R- l Appendi x A Summar

y Datafo r Companie s Ownin g Reinforce d Plasti c Composite Facilitie s A- l Appendi x B Economi c Model ofth e Merchan t Sector ofth e U.S
. Reinforce d Plasti c Composite s Industr y B- 1P. 8

LIS T O F FIGURE S Numbe r Pag e 2- 1 Productio n Flow s fo r Reinforce dPlasti c Composite s 2- 4 2- 2 Han dLay-u p Processin g 2-1 2 2- 3 Spray-u p Processin g 2-1 3 2- 4 Filamen t

Windin g 2-1 4 2- 5 Pultrusio n 2-1 6 2- 6 Injectio n Moldin g 2-1 9 2- 7 Consumptio n o f

Reinforce dPlasti c Composite s b y Marke t Segment : 199 7 2-2 7 2- 8 Geographi c Distributio n o f Majo r Sourc e Facilitie s 2-3 2 2- 9 Alternativ e Chain s o f Ownershi p ; 2-3 4 2-1 0 RP C Firm s b y Siz e 2-3 7 4- 1 Suppl y Curv e for aRepresentativ e Directl y Affecte dMerchan t Facilit y 4- 7 4- 2 Deman dCurv e for RPC s 4- 9 4- 3 Marke t

Equilibriu mWithou t

an dWit h Regulatio n 4-1 1 4- 4 Sensitivit y o f

Change s i n Consume r

Surplu s t o th e Elasticit y o f Deman d4-2 5 4- 5 Baselin e Equilibriu mwithou t Regulatio n 4-2 7 4- 6 With-Regulatio n Equilibriu mCas e 1 : Ne w Source s Adde d4-2 9 4- 7 With-Regulatio n Equilibriu mCas e 2 : N o Ne w Source s Adde d4-2 9 5-1(a ) Distributio n o f

Cost-to-Sale s Ratio s fo r Smal l Companies : Recommende d Alternativ e 5- 5 5-1(b ) Distributio n o f

Cost-to-Sale s Ratio s for Larg e Companies : Recommende d Alternativ e 5- 5 5-2(a ) Distributio n o f

Cost-to-Sale s Ratio s fo r Smal l Companies : MAC T Floo r Alternativ e 5- 8 5-2(b ) Distributio n o f

Cost-to-Sale s Ratio s fo r Larg e Companies : MAC T Floo r Alternativ e 5- 8 5-3(a ) Distributio n o f

Cost-to-Sale s Ratio s for Smal l Companies : Above-the

MACT-Floo r

Alternativ e "
. 5-1 0

v iP. 9



### 5-3(b ) Distributio n o f

Cost-to-Sale s Ratio s fo

r Larg e Companies : Above-the

MACT-Floor

Alternativ e 5-1 0

v nP.1 0



### LIS T O F TABLE S Number Pag e 2- 1 SI C Code s fo

r Potentiall y AffectedProduct s 2- 2 2- 2 Consumptio n o f

Reinforce dPlastic s by Resi n Type : 1991-199 3 2- 7 2- 3 Consumptio n o f

Fibrou s Reinforcement s in Plastics : 199 0 2- 8 2- 4 Consumptio n o f

Nonreinforcin g Filler s i

n Plastics : 199 0 2- 9 2- 5 Consumptio n o f

Plastic s Additives : 199 0 2-1 0 2- 6 Reinforce dPlastic s Shipment s b y Productio n Process : 199 0 2-1 1 2- 7 Compatibilit

y o f RPC Productio n Processe s wit h Shap e Characteristic s andSpecifi c Product s 2-2 1 2- 8 Plasti c Resi n Prices : 1996-199 9 2-2 3 2- 9 Selecte dPlasti c Reinforcemen t andFiller Prices : 1997 2-24 2-1 0 Demandfo

r Reinforce dPlasti c Composites : Som e Example s 2-2 6 2-1 1 Consumptio n o f

Reinforce d Plasti c Composite s b y End Use : 1984

- 1997 (IO 6 

### lbs ) 2-2 8 2-1 2 Consumptio n o f

Reinforce dUnsaturate dPolyeste r by EndUse : 1984

- 199 3 (IO 6 

### lbs ) 2-3 0 2-1 3 Distributio n o f

Majo r Sourc e Facilitie s b y Employmen t 2-3 3 2-1 4 Distributio n o f

Potentiall y AffectedFirm s by Employmen t 2-3 5 2-1 5 Distributio n o f

Potentiall y AffectedFirm s B y Sale s 2-3 5 2-1 6 Small Busines s Administratio n Siz e Standard s fo r RPC—Companie s by SI C 2-3 8 4- 1 Reinforce dPlastic s Composite s Shipment s b y End-Us e Market : 199 7 (IO 6 

### lbs ) 4- 4 4- 2 Estimate dMarke

t Quantitie s andPrice s fo

r Reinforce dPlastic s Composite s b

y Produc t Group : 199 7 4- 5 4- 3 Market-Leve l Impact s ofth e Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : 1997
. . ; 

### 4-1 3 4- 4 Summar

y o f Complianc e Cost s an

dMarket Pric e Changes : 1997 ($/lb ) 4-1 5 4- 5 Industry-Leve l Impact s o f Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : 1997 4-1 7

v mP.1 1



### 4- 6 Distributiona

l Impact s on Merchan

t Thermoset

Producer s Associate d wit h Reinforce dPlasti c Composite s NESHAP Regulator y Alternatives : 1997 4-1 9 4- 7 Socia

l Cost s wit

h Reinforce dPlasti c Composite s NESHAP Regulator y Alternatives : 1997 4-2 3 4- 8 Summar

y o f Economi c Impact s Unde

r Rang e o f Industr y Profi t Rates : Recommende dAlternativ e 4-2 7 4- 9 New Sourc e Analysi s o f Unit Productio n andComplianc e Cost s ($1997 ) 4-3 0 4-1 0 Change s i

n Facilit y Constructio n Unde

r th e Propose dNESHAP : 2000-200 5 4-3 2 5- 1 Summar

y Statistic s fo

r SBREF A Screenin g Analysis : Recommende d Alternativ e 5-4 5- 2 Summar

y Statistic s fo

r SBREF A Screenin g Analysis : MAC T Floor Alternativ e 5-7 5- 3 Summar

y Statistic s fo

r SBREF A Screenin g Analysis : Above-the-MACT

Floor Alternativ e 5- 9 5-4 Summar

y o f Small Busines s Impact s o f Reinforce dPlasti c Composite s NESHA P 5-1 1

i xP.1 2

SECTIO N 1 INTRODUCTIO N

Th e Clea n Ai r

Act' s (CAA's ) purpos e i s t o protec t an denhanc e th e qualit y ofth e nation' s ai r

resource s (Sectio n 101(b))
. Unde r th e authorit y o f

Sectio n 11 2 ofth e CA A a s amende di n 1990 , th e U.S
. Environmenta l Protectio n Agenc y (EP A o r th e Agency ) i s currentl y developin g aNationa l Emissio n Standar dfo r Hazardou s Ai r

Pollutant s (NESHAP ) t o reduc e emission s generate ddurin g th e productio n o f reinforce dplasti c composite s (RPCs)
. Thi s repor t

evaluate s th e economi c impact s o f thre e regulator y alternative s tha t ar e designe d t o contro l thes e releases
. 1. 1 Organizatio n o f

th e Repor t Thi s repor t

i s divide dint o fou r

section s an dtw o appendice s tha t describ e th e industr y an deconomi c methodolog y an dpresen t result s ofthi s economi c impac t analysi s (EIA) :

• Sectio n 2 provide s asummar y profil e fo r th e manufactur e o f

RPCs
. It present s dat ao n manufacturin g plant s an dth e companie s tha t ow n an doperat e thes e plants
.

• Sectio n 3 review s th e regulator y contro l alternative s an dassociate dcost s o f compliance
. Thi s sectio n wil l b e include di n th e final EI A an dwil l b e base do n EPA' s engineerin g analysi s conducte di n suppor t ofth e propose dNESHA P a s describe di n th e Backgroun dInformatio n Documen t (BID)
.

• Sectio n 4 detail s th e methodolog y fo r assessin g th e economi c impact s ofth e propose dNESHA P an dth e result s ofth e analysis , whic h includ e market , industry , an dsocia l welfar e impacts
.

• Sectio n 5 provide s th e Agency' s screenin g an deconomi c analyse s ofth e regulation' s impac t

o n affecte dsmal l businesses
.

• Appendi x A provide s alis t o f companie s tha t

ow n directl y affecte dfacilitie s an d include s sales , employment , an dsiz e classification
.

• Appendi x B provide s adetaile ddescriptio n ofth e Agency' s economi c model
. 1- 1P.1 3



### SECTIO N 2 INDUSTR

Y PROFIL E

Plastic s ar e one ofth e mos t

use dmaterial s in U.S
. industria l an dcommercia

l activitie s andcontribute to virtuall y all product s consume dfro mpackagin g to moto r

vehicles
. Plastic s ca n b e divide dinto tw o majo r group s b y resi n type : thermoset o r thermoplastic
. Whe n additiona

l strengt h i s required , man

y plastic s ca

n b e reinforce dwit

h structura

l material s to produc e RPCs
. I n the productio n o f

RPCs , polymer s andreinforcin g material s ca n b e compounde d wit h avariet y o f fillers t o minimiz e resi n requirement s andadditive s tha t chang e th e physica

l propertie s ofth e desire dcomposite
. The polyme r i s mos t ofte n athermosettin g resi n an

dth e typica l reinforcemen

t i s glas s fiber. Compoundin g consist s o f mixin g thes e variou s material s (sometime s i

n severa l stages ) an

dreforming th e homogeneou s mas s into ausabl e for msuc h a s pellets , flakes , or

sheet s fo r processin g into th e final product
. A wide variet y o f RPC processe s hav e evolve dto facilitat e efficien t productio n o f

man y differen t type s o f composite s wit

h differen t physica l properties
. Th e fundamenta l characteristic s ofth e resultin g composite s include lightweight , high strength-to-weight ratio , nonconductivity , variou s degree s o f

corrosion-resistance , an

ddimensiona

l stability
. I n 1997 , 3. 4 billio n pound s o f RPC s wer

e consume di

n the Unite dStates
. Th e RP C market i s divide dinto anumbe

r o f segment s accordin g to it s enduse . The market segment s include genera

l aviation , aerospace , appliances , busines s equipment , construction , consume r goods , corrosion-resistant

products , electrical/electronics , marine , an dlandtransportatio n (e.g. , motor

vehicles , trucks , buses)
. The transportatio n segmen t wa s the larges t

consume r o f RPC s wit h 1,095 millio n pounds , or 3 2 percent

ofth e tota

l consume di

n 1997
. The constructio n segmen

t followedwit

h 70 0 millio n pound s o f

reinforce dplastic s consume di n 1997 (SPI , 1998)
. Reinforce dplastic s ar

e use din th e productio n o f man y differen t products , a s indicate d by the involvement

o f 4 2 differen

t SI C codes , a s Tabl e 2- 1 shows
. The SI C code s wer

e

2- 1P. M



### Tabl e 2-1
. SI C Code s fo r Potentiall y Affecte dProduct s SI C Definitio n 243 4 Woo dKitche n Cabinet s 251 9 Househol dFurniture , NE C 252 2 Offic e Furniture , Excep t Woo d 254 1 Woo dOffic e an dStor e Fixtures , Partitions , Shelving , andLocker s 259 9 Furniture an dFixtures , NEC 282 1 Plastic s Materia l andSyntheti c Resins , andNonvulcanizabl e Elastomer s 308 2 Unsupporte dPlastic s Profil e Shape s 308 3 Laminate dPlastic s Plate , Sheet , andProfil e Shape s 308 4 Plastic s Pip e 308 7 Custo mCompoundin g o f Purchase dPlastic s Resin s 308 8 Plastic s Plumbin g Fixture s 308 9 Plastic s Products , NEC 328 1 Cu

t Stone andSton e Product s 329 6 Minera

l Wool 329 9 Nonmetalli c Minera l Products , NE C 343 1 Enamele dIron an dMeta l Sanitar y War e 349 9 Fabricate dMeta l Products , NE C 353 1 Constructio n Machiner y andEquipmen

t 353 3 Oi l an

dGa s Fiel dMachiner

y andEquipment 354 6 Power-Driven Handtool s 356 1 Pump s andPumpin g Equipmen t 356 4 Industria

l andCommercia

l Fan s an dBlower s an

dAi r Purificatio n Equipmen

t 358 9 Servic e Industr y Machinery , NE C 361 2 Power , Distribution , an dSpecialt y Transformer s 361 3 Switchgea

r an dSwitchboar

dApparatu s 362 1 Motor s andGenerator s 364 7 Vehicula

r Lightin g Equipmen

t 366 3 Radi o andTelevisio n Broadcastin g an dCommunication s Equipment 367 9 Electroni c Components , NEC 371 1 Motor

Vehicle s andPassenger

Ca r Bodie s 371 3 Truck

an dBu s Bodie s 371 4 Motor

Vehicl e Part s andAccessorie s 371 5 Truck

Trailer s 371 6 Motor

Home s 372 8 Aircraf

t 374 3 Aircraf

t Part s an dEquipment , NE C 379 2 Trave l Trailer s an dCamper s 379 9 Transportatio n Equipment , NEC 382 1 Laborator

y Apparatu s andFurnitur

e 394 9 Sportin g andAthleti c Goods , NEC 399 3 Sign s an

dAdvertisin g Specialtie s 399 9 Manufacturin g Industries , NE C
2-2P.1 5

obtaine dfro mth e update d199 3 EP A surve y an dsubsequen t screenin g fo r

potentiall y affecte dreinforce dplastic s producers
. Th e remainde r

ofthi s sectio n provide s abrie f introductio n t o th e reinforce dplastic s industry
. Althoug h th e reinforce dplastic s sourc e categor y include s onl y thermose t materials , thi s profil e provide s abroade r pictur e ofth e RP C industry
. Sectio n 2. 1 provide s an overvie w ofth e RP C productio n processes , includin g adescriptio n ofth e majo r input s t o productio n an ddirectl y affecte dproductio n processes . Sectio n 2. 2 characterize s th e resultin g reinforce d plastic s product s an dpresent s historica l dat ao n thei r consumptio n acros s variou s en duses . Sectio n 2. 3 detail s th e cost s o f production
. Sectio n 2. 4 describe s use s an dconsumer s o f reinforce dplastics
. Sectio n 2. 5 summarize s U.S
. productio n facilities , an dSectio n 2. 6 describe s th e firms tha t

ow n thes e facilities
. 2. 1 Productio n Th e basi c stage s o f

productio n fo r

RPC s ar e compoundin g an dprocessing , a s Figur e 2- 1 illustrates
. Polymer s an dreinforcin g material s ar e compounde dwit h avariet y o f fillers t o minimiz e resi n requirement s an dadditive s tha t chang e th e physica l propertie s ofth e desire dcomposite
. Th e polyme r i s mos t ofte n athermosettin g resi n suc h a s polyeste r (unsaturated) , viny l ester , phenolic , o r epoxy ; however , thermoplasti c resin s suc h a s nylon s an dpolyolefin s ar e increasingl y bein g utilized
. Compoundin g consist s o f mixin g thes e variou s material s (sometime s i n severa l stages ) an dthe n reformin g th e homogeneou s mas s int o ausabl e for

msuc h a s pellets , flakes , o r sheet s fo r

processin g int o th e final product
. Processin g involve s shapin g and/o r moldin g th e compounde dplasti c materia l int o th e desire dfinal product
. A wid e variet y o f RP C processe s hav e evolve dt o facilitat e efficien t productio n o f

man y differen t

type s o f composite s wit h differen t physica l properties
. RP C productio n processe s ca n b e separate dint o tw o broa dcategories : ope n moldin g an dclose d molding
. Ope n moldin g refer s t o processe s wher e th e plasti c resins , polymers , reinforcements , an dothe r additive s ar e expose dt o th e ai r durin g th e shapin g and/o r curin g stage s o f processing
. Thi s categor y include s suc h manua l contac t moldin g processe s a s han d lay-u p an dspray-up , a s wel l a s processe s wit h agreate r degre e o f

automation , suc h a s centrifuga l casting , filament winding , pultrusion , an dcontinuou s lamination
. Close d moldin g processe s isolat e th e inpu t material s insid e close dmold s durin g th e mixin g an d curin g stages . Thes e includ e mor e capital-intensiv e productio n method s suc h a s matc h di e molding , reactio n injectio n molding , rotationa l molding , an dthermoforming
.
2-3P.1 6



### Polymer s (thermose t

resins , thermoplasti c resins ) 

### Fillers ,

Reinforcements , an d Additive s

•r V 

### Compoundin g

Compounde d Plasti c Material
Processin g

i f %



### >VOC s Reinforce dPlasti c Composit e Figur e 2-1 . Productio n Flow s fo r Reinforce d Plasti c Composite s

Pollutio n release s ca

n occu r throughout

th e productio n processes . Spill s o f additive s an dplasti c pellet s ca

n occu r durin g transpor

t to th e facility
. Leak s o f

chemica l additive s ca

n occu r whil e th e additive s ar

e bein g incorporate dinto th e plastic
. Volatil e organi c compound s (VOCs) , fugitiv e emissions , andwastewate r discharg e ar

e release ddurin g the actua l processin g ofth e reinforce dplasti c part . Th e finishing operation s o f cleanin g ca

n als o releas e VOCs , fugitive emissions , an dwastewater

discharg e (EPA , 1995)
. The result ofth e processin g stag e i s th e final par t o r produc t referre dt o a s aRPC
. RPC s rang e fro

msmall part s fo

r toy s or automotiv e use s t

o composit

e structure s such a s boa

t hulls , automobil e panels , o r th e fuselag e ofa n aircraft
. Thus , som e RPC s constitute afinal produc t suc h a s abathtub or

showe r stall , wherea s other s ar

e intermediat

e product s suc

h a s

2-4P.1 7

panels , pipes , an dmoldin g compound s tha t serv e a s input s t o manufacturin g processe s an d constructio n activities
. Th e remainde r

ofthi s sectio n describe s th e manufactur e o f RPC s i n term s ofth e inpu t material s used , th e productio n processe s employed , an dth e type s o f product s ultimatel y produced
. 2.1.1 Material

Inputs Thi s sectio n describe s th e differen t type s o f plasti c resins , reinforcements , fillers, an d additive s tha t

ar e mos t commonl y use di n th e productio n o f RPCs
. I t

include s adiscussio n o f bot h thermose t

an dthermoplasti c materials ; however , EPA' s RP C sourc e categor y onl y include s thermose t

materials
. 2.1.1.1 Plastic Resins Ther e ar e tw o broa dcategorie s o f plasti c resins : thermoplastic s an dthermosets
. Thermoplasti c resin s becom e sof t whe n heate dan dma y b e shape do r molde dwhil e i n a heate dsemi-flui dstate . Onc e th e thermoplasti c resi n i s molde dt o th e prope r state , i t i s coole dunti l hardened
. I n contrast , thermose t resin s ar e usuall y liquid s o r lo w meltin g poin t solid s i n thei r

initia l form
. Whe n use dt o produc e finishedgoods , thes e thermosettin g resin s ar e "cured " b y th e us e of acatalyst , heat , o r acombinatio n ofth e two . Onc e cured , thermose t resin s canno t

b e converte dbac k

t o thei r origina l liqui dform
. Unlik e thermoplasti c resins , cure dthermoset s wil l no t mel t an dflo w whe n heate dan donc e forme dthe y canno t b e reshaped
. Thermoplastic s hav e certai n advantage s a s substitute s fo r thermose t

resins
. Thermoplastic s hav e faste r processin g tha n thermoset s becaus e ther e i s n o curin g necessary ; the y hav e lo w toxicit y an dca n b e remelte dan drecycled
. Improvement s i n thermoplasti c resin s ove r

th e pas t 2 0 year s hav e increase dth e advantage s ove r thermose t

resins
. Thermoplastic s hav e hig h delamination , chemical , an ddamag e resistance , an dlo w moistur e absorptio n (Berglund , 1998)
. Th e damag e resistanc e o f thermoplastic s i s du e t o hig h impac t strengt h an dfractur e resistance
. Thermoset s hav e bette r resistanc e t o matri x microcrackin g i n th e composit e laminate , whil e thermoplastic s hav e highe r strain s t o failur e (Schwartz , 1997)
. Difference s i n th e characteristic s an dstrength s betwee n thermoset s an d thermoplastic s lea dt o les s tha n perfec t substitutio n an dagradua l increas e i n th e us e o f thermoplastic s for

reinforce dplastics
. Thermoplastics ' shar e o f al l resin s use dfor

reinforce d plastic s increase db y 1 percen t fro m199 1 t o 1993
.

2- 5P.1 8

Fro m199 1 t o 1993 , thermose t an dthermoplasti c us e fo r reinforce dplastic s increased , wit h thermoset s accountin g for consistentl y mor e tha n twic e th e quantit y o f thermoplastics , a s Tabl e 2- 2 shows
. Thes e figure s includ e th e weigh t o f resins , reinforcements , an dfillers. Thermose t

unsaturate dpolyester s accounte dfo r roughl y 6 0 percen t

ofth e tota l reinforce d plastic s shippe ddurin g eac h o f thes e years . Othe r

thermosets , mainl y epoxie s an dphenolics , accounte dfo r

a n additiona l 7 t o 1 0 percen t o f tota l usage . Recen t

innovation s i n thermoplasti c resi n formulatio n hav e improve dbot h thei r performanc e propertie s an d cost-effectivenes s t o th e poin t tha t thei r us e fo r RP C productio n i s increasing
. Thermoplastic s ar e widel y use dbecaus e o f thei r abilit y t o mode l comple x shapes , thei r eas e o f fabrication , an dthei r

cost-effectiv e performanc e characteristics
. A s show n i n Tabl e 2-2 , polypropylene , thermoplasti c polyester , an dnylo n accoun t fo r 8 0 percen t

ofth e 84 8 millio n pound s o f

thermoplasti c resin s use dfo r reinforce dplastic s i n 1993
. Th e averag e annua l growt h rat e fo r unsaturate dpolyester , th e mos t commonl y use d thermose t i n reinforce dplastics , wa s 8. 5 percen t fo r th e perio d199 1 t o 1997
. Ove r th e sam e period , th e averag e annua l growt h rat e fo r polypropylene , th e mos t commonl y use d thermoplasti c i n reinforce dplastic s a s o f 1993 , wa s 1 0 percent . 2.1.1.2 Reinforcements Mos t reinforcin g material s use di n RP C productio n ar e fibers, rovings , fabrics , o r mats . Fiberglas s i s th e mos t commo n materia l use dfo r mats , bu t

the y ca n als o b e mad e fro m asbestos , paper , metals , sisal , nylon , o r cotton . Reinforcement s ar e use di n fou r basi c forms : (1 ) premixe dcompound s i n injectio n moldin g an dextrusion ; (2 ) wove n mat s i n laminates ; (3 ) preforme dwove n mat s i n spray-u p o r pres s mol dprocessing ; an d(4 ) prepregs , whic h ar e semi-cure dwove n mat s impregnate dwit h resins
. Th e amoun t o f fiber reinforcemen t

varie s b y resi n an dreinforcin g fiber (e.g. , fiberglass varie s fro m5 t o 4 5 percen t b y weight , clot h fro m3 0 t o 7 0 percent , an dcarbo n an dothe r expensiv e fiber s fro m3 0 t o 6 5 percent ) (Rauch , 1991)
. Usin g reinforcin g fiber s provide s th e followin g attribute s t o composites :

• improve dtensil e an dflexura l strength , stiffness , modulus , an dimpac t resistance ;

• resistanc e t o crazin g an dcracking ; an d

• reduce dshrinkag e (Rauch , 1991)
.

2- 6P.1 9



### Tabl e 2-2 . Consumptio n o f Reinforce d Plastic s b

y Resi n Type : 1991-1993 "

Plastic s Resin s Thermosettin g resin s Unsaturate dpolyester s Epoxies , othe r Thermoplasti c resin s Polypropylen e Polyester s Nylo n Styrenics b Polycarbonat e Other c Reinforce dplastics , tota l 199 1 1,64 1 1,46 7 17 4 71 9 20 5 18 7 17 3 5 1 6 5 3 8 2,36 0 Quantit y (IO 6 lbs )

199 2 1,79 2 1,55 2 24 0 75 7 22 0 19 5 18 3 5 1 7 0 3 8 2,54 9 199 3

1,87 8 1,61 3 26 5 84 8 24 6 23 0 20 6 5 4 7 3 3 9 2,72 6

aReflect s weigh

t o f resins , fillers , reinforcements , andother additives
. b Include s SMA , ABS , SAN , etc . c Include s modifie dPPE , PPS , LCP , ketones , etc . Sources : Societ

y ofth e Plastic s Industry , Inc
. Facts and Figures ofthe U.S. Plastics Industry. Washington , DC
. Septembe

r 1994
. Modern Plastics. "Resi n Supply : What' s i n th e Pipelin e fo

r '93? " Januar

y 1993
. Modern Plastics. "Resi n Supply : Plottin g aCours e fo r Globa l Supply. " Januar

y 1994
.



### The relativ e improvemen

t in eac h o f

thes e parameter s i s afunction ofth e typ e o f fiber, amoun t o f fiber, orientatio n o f

fiber, fiber

surfac e treatment , andth e characteristic s o f the matri x polymer
. Fiberglas s i s th e mos t

widely use dreinforcemen

t fo r plastics , wit

h carbo n th e leas t used , a s Tabl e 2- 3 shows
. Mos t reinforcemen

t material s wer

e mad e o f inorgani c materials , such a s fiberglas s (roughly 8 7 percent o f all fibrou s reinforcements) , asbesto s (2. 9 percent) , andcarbo n andother

hig h performing/high cos t fibers ( 1 percent)
. Cellulos e i s th e majo r natura l organi c use da s areinforcement
. I t represente dabout

9 percent of all fibrou s reinforcement s in 1990
. A 198 9 EP A rulin g tha

t wil l eventuall y ba

n the manufacture ,
2- 7P.2 0

Tabl e 2-3 . Consumptio n o f Fibrou s Reinforcement s i n Plastics : 199 0 Quantit y Reinforcemen t(IO 6 lbs ) Fiberglas s 90 0 Cellulos e 9 0 Asbesto s 3 0 Carbo n andother

hig h performanc e . 1 0 Tota l 1,030 Source : Rauch Associates , Inc.
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : 1991
. Tabl e 2-12
. processing , an ddistributio n o f mos t product s tha t

contai n asbestos , ha s an dwil l continu e t o reduc e th e consumptio n o f asbesto s a s areinforcemen t agen t an dthereb y alte r

th e distributio n o f reinforcemen t

material s use dt o mak e composite s (Rauch , 1991)
. 2.1.1.3 Nonreinforcing Fillers Nonreinforcin g filler s no t onl y reduc e th e cos t

o f composite s bu t

frequentl y impar t performanc e improvement s tha t migh t no t otherwis e b e achieve db y th e reinforcemen t an d resi n ingredient s alone
. Performanc e enhancement s offere db y som e nonreinforcin g fillers includ e easie r

processin g characteristics ; improve dmechanical , electrical , thermal , an d aestheti c properties ; an dresistanc e t o shrinkag e (Rauch , 1991)
. Filler s tha t d o no t offer performanc e improvement s ar e sometime s referre dt o a s extenders
. I n compariso n t o resi n an dreinforcements , filler s ar e th e leas t expensiv e ofth e majo r

ingredients
. I n general , fillers ar e nonmetalli c minerals , metalli c powders , an dorgani c material s adde di n fairl y hig h percentages , usuall y mor e tha n 5 percen t i n term s o f

volume , an di n som e case s severa l time s th e weigh t

o f th e polymer
. A s Tabl e 2- 4 shows , th e majorit y o f nonreinforcin g fillers use di n reinforce dplastic s ar e inorganic , particularl y calciu mcarbonate
. I n 1990 , roughl y 4. 2 billio n pound s o f fillers wer e use di n plastic s products
. Nonmetalli c mineral s accoun t for 9 0 percen t

ofth e tota l consumptio n i n 1990 ; calciu mcarbonat e i s th e dominan t minera l filler, wit h roughl y 3.1 7 billio n pound s used , o r 7 5 percen t

o f al l fillers consume dtha t year . Calciu mcarbonat e i s b y fa r th e mos t commonl y use dminera l filler i n RP C production
. Kaoli n cla y offer s 2- 8P.2 1



### Tabl e 2-4 . Consumptio n of Nonreinforcin g Filler s i n Plastics : 199 0 Quantit y Product(IO 6 lbs ) Inorganic s Mineral s Calciumcarbonat

e 3,17 0 Kaoli n 18 5 Tal c 14 5 Mic a3 4 Other mineral s 45 0 Othe r Inorgani c Glas s sphere s 2 3 Natural 20 3 Tota l 4,21 0 Source : Rauc h Associate s Inc
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : 1991
. Tabl e 2-7
.



### severa l advantage s includin g lo w water absorption , chemica

l resistance , an

dimprove d electrica l properties
. Som

e calcine dgrade s o f

kaoli n even offe

r additiona l reinforcemen

t ' when adde dto amatri x o f

nylo n o r polyolefi n resin s (Rauch , 1991)
. 2.1.1.4 Additives A wid e variet

y o f additive s ar

e use di n composite s to modif y material s propertie s an

d performance
. Althoug h thes e material s ar e generally use di

n relativel y lo w quantitie s a s compare dt o resins , reinforcements , andfillers, they perfor mcritica l function s includin g air release , color , fire resistance , lubricity , spee dcuring , stati c reduction , surfac e smoothness , therma l conductivity , an

dother s (SP

I Composite s Institute , 1995)
. Plasticizer s ar

e th e mos t commo n additiv e to plastics , a s Tabl e 2- 5 shows
. I n 1990 , roughly 3. 5 billio n pound s o f fillers, wer

e use di n plastic s products
. Plasticizer s accounte d fo r 5 2 percent

o f additiv e consumptio n i

n 199 0 followedb

y flam e retardant s an

dcolorant s wit h 1 9 an d1 3 percent , respectively
. Plasticizer s ar e essentia l fo r producin g RPC s i

n som e applications
.

2- 9P.2 2



### Tabl e 2-5 . Consumptio n of Plastic s Additives : 199 0 Quantit y Additiv e (10 6 lbs ) Plasticizer s 1,81 0 Flam e Retardant s 66 1 Colorant s 45 6 Impac t Modifier s 16 0 Lubricant s 11 2 Stabilizer s 9 9 Organi c Peroxide s 4 7 Blowin g Agent s 1 4 Antistat s 9 Others 1 13 0 Tota l 3,49 8

aInclude s viscosit

y depressants , moldreleas e agents , surfactants , slip agents , biocides , antiblockin g agent s an d catalysts
. Source : Rauch Associate s Inc
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : 1991
. Tabl e 2-6
.



### 2.1.2 Production Processes Applicatio n development

in the productio n o f

composite s require s careful selectio n no t only o f whic h material s to us e but als o ofth e productio n proces s tha t ca n combin e thes e input s into th e desire dfor

mmos t efficiently
. Tabl e 2- 6 provide s datao n the distributio n o f th e volume o f

reinforce dplastic s b

y proces s fo

r 1990
. I n 1990 , approximatel y 2. 6 billio n pound s o f RPC s wer

e shippe dfro

mRPC facilitie s i

n th e Unite dStates
. Approximately 1.0 4 billio n pound s o f

RPCs , or 6 5 percent

ofth e total , wer

e produce dusin g open moldin g processes . Handlay-up , spray-up , an dcontinuou s laminatio n processe s accounte dfo r about 6 2 percent ofth e RPC s produce dwit h open moldin g processes . Approximatel y 90 0 millio n pound s o f RPC s wer

e produce dusin g close dmoldin g processe s i n 1991
. About

two-third s o f

2-1 0P.2 3

Tabl e 2-6 . Reinforce d Plastic s Shipment s b y Productio n Process : 199 0

Processin g Metho d Open moldin g Han dlay-up , spray-u

p andcontinuou s laminatin g Filament winding , pultrusion , andcentrifuga l castin g Close dmoldin g Compressio n Injectio n Other Tota l Quantit y (10 6 lbs ) 1,67 4 1,03 8 63 6 90 1 36 0 52 3 1 8 2,57 5 Share of Total (% ) 6 5 4 0 2 5 3 5 1 4 2 0 1 10 0 Source : Rauch Associate s Inc
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : 1991
.
thi s tota l wer e produce dusin g injectio n moldin g processes , wit h compressio n moldin g processe s accountin g fo r mos t ofth e remainin g RPC s mad e usin g close dmoldin g processes . Thi s sectio n provide s amor e detaile ddescriptio n o f thes e processe s wit h specia l attentio n give n t o th e five processe s tha t contribut e mos t

t o emission s a t

RP C facilities
. A s presente d below , thes e processe s ca n b e segregate dint o ope n an dclose dmoldin g categories
. 2.1.2.1 Open Molding Processes Ope n moldin g processe s ca n b e broke n dow n int o thos e tha t ar e simple , wit h minima l capita l requirements , an dthos e tha t ar e mor e heavil y automated , wit h highe r tooling , start-up , an dothe r capita l costs . Han dlay-u p an dspray-u p ar e tw o contac t moldin g processe s tha t

fit th e first categor y o f

ope n moldin g processes . Thes e tw o productio n processe s us e th e simples t materials , technology , an dmanufacturin g method s an dar e ideall y suite dfo r low-to

mediu mvolum e productio n o f larger , mor e comple x structura l shapes
. Othe r ope n moldin g processes , suc h a s centrifuga l an drotationa l casting , lamination , filament winding , an d pultrusio n processes , hav e muc h highe r start-u p capita l costs , ofte n i n th e million s o f dollars
. Thes e processe s hav e relativel y lo w labo r cost s pe r uni t output . Ope n moldin g processe s typicall y onl y ar e cost-efficien t whe n use di n mas s productio n o f unifor mRPC s becaus e o f

hig h capita l cost s (SP I Composite s Institute , 1995)
. Th e followin g section s provid e mor e detaile ddescription s o f fou r ope n moldin g processe s tha t contribut e t o
2-1 1P.2 4



### hazardou s air

pollutant (HAP ) an dVO C emission s a

t th e RP C productio n facilities—han d lay-up , spray-up , filament

winding , andpultrusio n (LeFla man dProctor , 1995)
. Hand Lay-Up. Handlay-u

p i s one ofth e mos t

commo n low-to-mediu mvolum e RPC productio n processes . I

t typicall y involve s manua

l applicatio n o f

genera l polyeste r liqui d resin s to areinforcement , such a s glas s fiber mat s or woven roving , tha

t ar e lai dagains t

th e smoot h surfac e o f

a n open mold
. Serrate droller s or squeegee s draw n acros s th e preparatio n help to releas e an

y ai r tha t ma y b e entrappe din th e reinforcemen t material
. Chemica

l curing , ofte n induce db y acatalys t

additive , harden s th e resi n an dreinforcemen t into astructura

l for mtha t i s exceptionall y stron g fo

r it s weight
. The resi n offers aunifor mmatri x fo

r th e reinforcin g materia

l i n much th e sam

e wa y tha t concret e doe s when use di

n conjunctio n wit

h reinforcin g bar s made o f

steel (SP I Composite s Instimte , 1995)
. The mol di s th e primar

y piec e o f equipment

necessar y fo r th e handlay-u

p process , a s Figur e 2- 2 illustrates
. Prio r

t o han dlay-u

p production , th e mol d(whic h i s ofte n itsel f a composite ) i s spraye dwit

h atinte dgel-coa

t andallowe dto partiall y cure . The gel-coa t side ofth e final produc t

take s on the colo r

ofth e pigment

use dto tint

th e gel-coa

t an dha s a smoot h surfac e an

ddecorativ e finish , much lik e tha t provide dby ahigh qualit

y paint
. Th e appearanc e an

dtexture ofth e othe

r side i s rough an dabrasive , unles s correctiv e measures , suc h a s applyin g atightl y woven sai l clot h t o th e bac k

surfac e prio r

to curing , or

sandin g th e back-surfac e afte

r curin g ar e performed
. I

n mos t application s o f

han dlay-up , only asingl e finishe dside i s require d(SP I Composite s Instimte , 1995)
.
Resi n Reinforcemen t



### Figur e 2-2 . Han d Lay-u p Processin g Source : SP

I Composite s Institute
. Introduction to Composites. Societ y of th e Plastic s Industry , Inc
. Washington , DC : 1995
. 

### 2-1 2P.2 5



### Spray Up. Th e spray-u

p proces s i s ver

y simila r to han dlay-u

p processing
. I

t to o i s bes t suite dto low-to-mediu mvolum e productio n o f

larger composite s wit

h complex shapes
. Unsaturate dpolyester s ar

e als o th e mos t

commonly use dpolymer , although isophthalti c polyester s andviny l ester s ma y als o b e used
. A s wit

h han dlay-up , th e polymers , reinforcements , fillers, andadditive s ar e applie dto a

n open mol dtha

t ha s been spraye dwit

h a pigmente dgel-coa

t andallowe dto partiall y cure . The primar

y differenc e fro

mhan dlay-u

p i s tha t th e input material s i

n th e spray-u

p proces s ar e applie dt o th e mol dsimultaneously , usin g either a n air-atomize do

r airles s spray-u p gun . Bot

h type s o f spray-u p gun s ar e designe dto automaticall y chop acontinuou s fee do f glas s fiber

in length s rangin g fro

m0. 5 to 1.

5 inche s an

dthe n mix bot

h th e fiber anda user-determine damount

o f catalys t into afan-shape dspra

y o f polyme r or polymer/fille

r mixtur e (SP I Composite s Instimte , 1995)
. Thi s proces s i s illustrate di n Figur e 2-3
. Spray-U p Gu n 

# I -Catalys t

^

_Ope n Mol d / -Continuou s Rovin g Reinforcemen t 

### Figure 2-3 . Spray-u p Processin g Source : SP

I Composite s Institute
. Introduction to Composites. Societ y o f th e Plastic s Industry , Inc
. Washington , DC : 1995
. 

### For som e application s requirin g adde dstructura l strength , mor

e fiber reinforcemen

t mat s o r roving s ca

n b e han dlaid-up between application s ofth e sprayedmixture
. Roller s or brushe s ar e generally use dto remov e entrappe dai r fro mth e mixtur

e afte r i t ha s bee n applie d t o th e mold
. Twenty-fiv e t o 3 0 pound s o f laminat e ca n b e applie dper

minut e usin g som

e type s of spray-u p equipment
. Thi s spee do f applicatio n ca

n lessen the labor

input requirement s relativ e to han dlay-u p but i s somewha

t offse t by th e nee dfo

r askille dspray-u

p gu n operator t o ensur e produc t qualit y (SP I Composite s Institute , 1995)
. 2-1 3P.2 6



### Filament Winding. Filamen

t windin g i s ahighly automate dRPC productio n proces s suite dto hig h volum

e productio n o f

stron g surface-of-revolutio n composites , b e they open (e.g. , springs) , cylindrica

l (e.g. , pipes) , o

r close d(e.g. , storag e tank s an dpressure bottles)
. Thi s proces s i s extremel y versatile , offering awid e choic e o f inpu t materials
. Traditiona

l polyme r choice s hav e been dominate dby thermoset resin s (e.g. , polyesters , viny l esters , bispheno l A fumarat

e resins , furanes , andepoxies) , but th e us e o f thermoplasti c resin s (e.g. , nylon , polycarbonates , an

dacrylic ) i s under

development

andgainin g popularity
. Figur e 2- 4 offers asimpl e schemati c o f asampl e filament

windin g process . The basi c step s involv e drawin g acontinuou s stran do f reinforcin g materia

l throug h aresi n bat

h an dthen wrappin g th e impregnate dreinforcemen t aroun darevolvin g mold , calle damandrel
. Dependin g o n the shap e ofth e intende dRPC , th e mandre l ca n advanc e i

n one directio n a s i

t rotate s (fo

r spring s an dtubula r shapes ) o r

ca n rotate o n tw o axe s (for

close dcylinder s o r

spheres ) (SPI Composite s Instimte , 1995)
. Laminat e Continuou s Stran d Rovin g

Mandre l



### Figure 2-4 . Filamen tWindin g Source : SP

I Composite s Institute
. Introduction to Composites. Societ y ofth e Plastic s Industry , Inc
. Washington , DC : 1995
.


### Th e mos t commo n reinforcemen

t materia l use di s direc t

processe droving s o f

glas s fiber; however , th e choic e o f reinforcemen

t fiber s i s virtuall y unlimite dan dnumerou s reinforcemen

t applicatio n method s ar

e commonly used
. I

n fact , tw o o

r mor e differen t reinforcement s ca

n b e applie di

n differen t pattern s to asingl e composite
. Th e abilit y t o var y the type , form , quantity , an dorientatio n o f

reinforcemen

t material s a s filament-wound RPC s ar e produce dallow s productio n designer s t o optimiz e th e trade-of f betwee n inpu t

cost s and
2-1 4P.2 7



### performanc e requirement s o f composite s intende dfo

r agiven application
. Thi s i s becaus e they ca n limi t th e us e o f mor e costly , higher

performanc e reinforcement s t o strategi c location s in th e composit

e strucmr e andsubstitute lowe

r cos t fiber s elsewhere
. Th e us e o f hybri dreinforcement

method s i s increasingl y commo n i n filament

windin g processes . Limitation s o f

filamen t windin g include relativel y hig h VO C emission s an dcapita l investment

requirement s (SP

I Composite s Instimte , 1995)
. Pultrusion. The pultrusio n process , shown i n Figur e 2-5 , create s profil e shape s lik e rods , plates , beams , an dchannel s b y pullin g continuou s strand s o f reinforcement s throug h a resi n bath , on e or

mor e pre-shapin g guides , andultimatel y throug h aheate dshapin g di e wher e th e pultrude dRPC i s cure dinto it s permanent cross-sectiona

l shape
. Th e las t

stag e i n th e proces s i s th e cutof

f wher e equipmen

t i s use dto cut

th e pultrude dprofil e to it s intende d length
. Pullin g i s achieve dusin g either intermittent

o r continuou s pullin g devices
. Whil e development

i s underwa

y t o incorporat

e th e us e o f

thermoplasti c resin s i

n pultrusio n processes , a

t present mos t application s ar

e limite dto th e us e o f

thermoset resins , primarily polyester , but

phenolics , epoxies , andester s ar e als o used
. Commonly use dreinforcemen t material s include continuou s fibe r glas s rovings , surfacin g mats , graphit e fibers , choppe d an

d continuou s stran dmats , an dwoven tape s (SPI Composite s Instimte , 1995)
. Advantage s o f pultrusio n include greate

r reinforcemen

t orientation , anecessar

y attribute fo

r som e RP C applications , andlowe

r capita l equipment

cost s tha n mos t other high-volume RPC productio n processes . Th e primar

y limitation s ofth e proces s ar e a n inabilit y to var y th e cross-sectiona

l characteristic s alon g th e lengt h ofth e pultrude dcomposite an dstres s resistanc e tha

t i s limite d to th e directio n ofth e reinforcemen t materia l (SP I Composite s Instimte , 1995)
. 2.1.2.2 Closed

Molding Processes Close dmoldin g processes , such a s th e man y variant s o f

compressio n molding , us e pre-prepare dmoldin g compound s lik e sheet moldin g compound s (SMC) , bul k moldin g compound s (BMC) , andreinforce dthermoplasti c sheet s a s feedstock s to thei r productio n processes . Thes e moldin g compound s ar e prepare dto facilitat

e mas s productio n of awide variet y o f composites , eac h wit

h it s own specia

l physica l attributes
. Thes e compound s hav e the advantag e o f

a n extende dshelf-life
. Each compoun di s produce dusin g fixedproportion s ofth e appropriate polymers , reinforcements , fillers , andothe r additive s neede dto impar

t the specifi c physica

l propertie s an

dappearanc e to th e composit e produce d(SP

I Composite s Instimte , 1995)
. Thi s sectio n provide s mor e detaile ddescription s ofth e mos t commo n compressio n moldin g processe s a s wel l a s aclose dmoldin g proces s calle dinjectio n molding
. 2-1 5P.2 8

Hea t Sourc e Continuou s Stran d Rovin g - —, „ I Ma t o rClot h C l M H

Resi n Applicato r 

# mw ?

Pullin g Devic e 

### Figure 2-5 . Pultrusio n Source : SP

I Composite s Institute
. Introduction to Composites. Societ y o f th e Plastic s Industry , Inc
. Washington , DC : 1995
.


### Compression Molding. Ther e ar e fou r primar y high-volume RPC productio n processe s commonly calle dcompressio n moldin g processe s (andman y variation s o f

thes e processes) :

• Shee t Moldin g Compoun d(SMC) ,

• Bul k Moldin g Compoun d(BMC) , includin g Transfe r Molding ,

• We t Syste mCompressio n Molding , an d

• Reinforce dThermoplasti c Shee t Compressio n Molding
. Fo r eac h o f thes e processes , th e chosen composit e materials , includin g all resins , reinforcements , filler, andadditives , ar e compresse dinto adesire dshap e i n amatcheddi e hydrauli c pres s unde

r pressure rangin g fro

m25 0 t o 3,00 0 ps i (SPI Composite s Institute , 1995)
. The composit

e feedstock

i s then hel din plac e whil e th e resi n matri x quickly cure s into it s permanent

hardene dshape
. Significan t difference s amon g thes e processe s determin e their suitabilit y fo r agiven application
. The following section s offe r brie f description s o f eac h o f th e main high-volume moldin g processes .

2-1 6P.2 9



### Sheet Molding Compound. SMC i s produce dby mixin g all ofth e composit e materials , excep t

fo r th e reinforcin g fibers , into apaste . The past e i s then uniformly sprea

d onto tw o separat

e "carrier films" tha

t ar e fe dthroug h a

n SMC machin e wher

e th e past e i s compounde dwit

h th e reinforcements
. The carrier films ar e hel dapart , one abov e the other , whil e reinforcements , cu

t fro mcontinuou s stran drovings , ar e uniformly distribute do

n th e lowe r carrier filmandthen forcedtogether lik e afiber reinforcemen

t sandwic h a s they ar

e fe d throug h asystemo f

roller s tha

t compac t andconsolidate th e SMC
. Th e SMC , wit h the carrier filmstil l i

n place , i s then rolle du p an dencase di

n anylo n sleev e tha

t prevent s evaporatio n o f

volatile s fro

mth e resi n matri x tha

t woul dallo w th e compoun dt o finis h curing
. Afte

r aperio do f

storag e in aclimat

e controlle darea , th e SMC i s thickene dt o th e desire dviscosit

y fo r it s intende dapplicatio n andthen take n to amoldin g pres s wher e i t i s cu t t o it s desire dshape
. The carrier films ar e then remove dan

dth e SMC permanentl y compresse dinto it s ultimate shap e in aheate dmatche ddi e mol d(SPI Composite s Instimte , 1995)
. SMC moldin g ha s hig h start-up capita l cost s associate dwit

h it
. However , whil e th e toolin g cost s o f

SM C compressio n moldin g ar e much highe

r tha n fo r mos t other RP C productio n processes , they ar e stil l generally lowe

r tha n woul db e require dto produc e equally stron g shape s fro

mmeta l inputs
. Retoolin g a

n SMC proces s to modif

y th e desig n of a composite i s much quicke

r tha n i n meta l stam p moldin g operation
. Other advantage s include th e abilit y to consolidat

e man y part s into asingl e RPC
. Thes e attribute s mak e SM C moldin g ver y attractiv e to suc h high-volume enduser s a s producer s o f automobiles , appliances , construction , an

delectrica l produc t industries
. SM

C compressio n moldin g i s use dto produc e mor e composite s o f

greate r valu e tha n an y othe r RPC productio n proces s (SP I Composite s Instimte , 1995)
. Bulk Molding Compound. Bul k moldin g compound , lik

e SMC , i s mor

e amateria

l tha n aprocess . BMC generally consist s o f approximatel y 2 0 percent

reinforcement , 5 0 percent fillers an dadditives , and3 0 percent resi n matrix
. Th e compoun dca n b e tinte dt o adesire dcolo r

and , through strategi c selectio n o f input materials , ca

n b e prepare dt

o affor d exceptiona

l mechanica

l andfire retardant

properties
. The basi c proces s entail s combinin g th e desire dcomposit

e material s into amoldin g compoun dtha t resemble s putt

y an dthen placin g th e compoun dint

o acompressio n mold
. Moldin g typically take s plac e a t temperature s betwee n 25 0 and35 0 ° F anda t pressure s rangin g fro

m35 0 to 2,00 0 ps i (SP

I Composite s Instimte , 1995)
. BM

C i s als o use din transfe

r moldin g andinjectio n moldin g processe s to
2-1 7P.3 0

produc e mor e comple x shape s wit h close r mol dtolerance s tha n ca n b e achieve dusin g matche ddi e compressio n molds
. Th e advantage s o f

BM C includ e reduce dcost s an dimprove dstiffnes s an dfire retardanc e du e t o lowe r

reinforcemen t

loading s an dincrease dfille r loadings
. BM C ca n als o b e molde dint o intricatel y detailed , precis e shape s wit h insert s affixe ddurin g th e moldin g process . Wet System Compression Molding. We t syste mcompressio n moldin g differ s fro m SM C an dBM C compressio n moldin g i n tha t amatri x o f

liqui dresi n mixe dwit h fillers an d additive s i s pumpe do r

poure dont o dr y reinforcemen t mat s tha t

hav e bee n place dinsid e o f th e matche ddi e mold
. Thus , unlik e SM C an dBM C processing , th e resi n i s no t introduce dt o th e reinforcement s prio r

t o molding
. Hydrauli c pressur e i s exerte do n th e mold , forcin g th e resi n t o permeat e th e reinforcemen t material s an dfixing, an dth e composit e remain s unde r pressur e unti l i t

ha s full y cured
. Typica l curin g temperature s ar e 25 0 t o 35 0 °F , muc h lik e SM C an dBM C molding , bu t th e pressur e requirement s ar e muc h lower , i n th e rang e o f 25 0 t o 1,00 0 ps i (SP I Composite s Instimte , 1995)
. Lik e SM C an dBMC , we t syste mmoldin g ca n produc e RPC s wit h tw o finishe d surfaces
. Othe r

advantage s ofthi s proces s includ e equipmen t an dtoolin g savings , du e t o th e reduce dpressur e requirements , an dhighe r reinforcemen t

loading , whic h afford s superio r mechanica l properties
. Th e disadvantage s o f we t syste mmoldin g includ e a n inabilit y t o provid e undercut s o r

reinforcin g rib s t o ad dstrengt h t o th e composite , highe r labo r costs , an d mor e proces s wast e tha n i s typica l wit h BM C an dSM C moldin g processes . Reinforced

Thermoplastic Sheet

Molding. Reinforce dthermoplasti c shee t moldin g i s quit e simila r

t o SMC , i n tha t

th e composit e material s ar e al l combine dan dshape dint o sheet s prio r t o molding , bu t

a s th e nam e implies , thi s proces s i s designe dfor us e with thermoplasti c resins
. Anothe r

differenc e i s tha t

th e shee t i s cu t t o fit entirel y withi n th e mol dan di s preheate dprio r

t o placemen t

i n th e mold
. Whe n th e mol di s close dan dpressur e i s applied , th e thermoplasti c resin s star t t o flo w an dconfor mt o th e shap e ofth e mold
. Th e temperatur e ofth e mol di s the n controlle dfo r 3 0 t o 9 0 second s t o permi t th e molde dshee t

t o solidif y an d permi t remova l ofth e RP C fro mth e mol d(SP I Composite s Instimte , 1995)
. Thi s proces s i s sometime s calle dstamping , becaus e th e mol duse di s simila r t o astee l stampin g press . Advantage s ofthi s proces s includ e unlimite dshel f lif e for th e inpu t sheets , fas t moldin g cycles , recyclabl e scrap , an dpotentia l for part s consolidatio n relativ e t o metals
. 2-1 8P.3 1



### Capita l cost s ar e comparabl e to SMC molding
. Ther e are , a s yet , fe

w supplier s ofth e input sheet s becaus e thi s proces s i s new . Injection Molding. Injectio n moldin g i s perhap s the mos t versatil e an

dwidely applie d proces s fo r mas s producin g fairl

y complex composite s o f

absolut e dimensiona

l accuracy . I

t ca n b e use dfo

r part s o f an y siz e fo r whic h amol dca

n b e buil t an di s ideally suite dto high

volume applications
. Eac h compressio n moldin g machin e i s capabl e o f producin g thousand s o f detaile dRPC s per

hour
. A s illustrate din Figur e 2-6 , the sam

e equipment

ca n b e use dt

o mol dbot h thermoplasti c resin s andthermoset resin s into RPCs
. Th e only differenc e i s th e temperamr

e a t whic h th e resi n i s kep t

durin g th e curin g stag e ofth e proces s withi n the mold
. Thi s proces s i s mos t

commonly use dto shap e RPC s fro mthermoplasti c resin s (e.g. , nylon , acetal , PVC , polyethylene , SAN , polycarbonate , andABS) , whic h require coole r curin g temperatures , but

compressio n moldin g o f

thermoset resin s (e.g. , polyester , phenolic , epoxy andurethane ) i s gainin g popularit y (SP I Composite s Instimte , 1995)
.

• Injectio n Chambe r(Hot )

r — Hoppe r

Mold (Cool ) *— Scre w o rPlunge r Thermoplasti c Injectio n Machin e

Injectio n Chambe r(Cool )

Hoppe r


## pssref t

'
— Scre w o rPlunge r Thermoset Injectio n Machin e 

### Figure 2-6 . Injectio n Moldin g Source : SP

I Composite s Institute
. Introduction to Composites. Societ y o f th e Plastic s Industry , Inc
. Washington , DC : 1995
. 

### 2-1 9P.3 2



### Th e basi c step s in th e standar dinjectio n moldin g proces s consis t o f conveyin g granula r or pelietize dthermoplasti c resi n from asupply hoppe r t o a n openin g a

t the opposite en dofaheate dmeta

l chamber , usin g a

n auge r to contro l the rate tha

t th e resi n advance s to th e tip
. The resi n i s thu s heate dt o asemi-flui dstate meltin g or plasticizin g th e resi n andca n b e injecte dinto th e mol da t th e ti p ofth e chambe

r wit h atwis t ofth e auger . Th e mol di s kep t a t acoo l temperamre andhel dclose dwhil e th e resi n cool s dow n an dsolidifies
. Onc e th e resi n ha s solidified , th e mol di s opene dto ejec t th e composit

e fromth e mol dandth e whol e proces s ca n b e restarted
. 2. 2 Product

s Ther e i s grea t diversit y in th e type s o f

product s mad

e usin g mos t

o f thes e processes . Among th e open moldin g processes , produc t diversit y i s especiall y extensiv e i

n th e han d lay-up , spray-up , andfilamen t windin g processes . Amon g close dmoldin g processes , produc t diversit y i s greates t

fo r th e compressio n andinjectio n moldin g processes . Tabl e 2- 7 describe s th e basi c shap e characteristic s tha t ar e bes t produce dby eac h RPC productio n proces s andlist s example s o f composit e product s tha

t result fro meach process . 2. 3 Cost

s of Productio n Ther e ar e thre e variabl e input s in reinforce dplasti c production : ra w materials , labor , an denergy . Ra

w material s include plasti c resins , reinforcin g materials , an dfillers. Labor an denerg y ar

e use dthroughout

productio n a s wel l a s fo

r final produc t

transport . Price s fo r thermoset resin s hav e increase dsinc e 1996 , whil e mos t thermoplasti c price s hav e falle

n ove r the sam e period , a s Tabl e 2- 8 shows
. Among thermoset resins , unsaturate dpolyester

an dphenolic s ar

e clos e i n price , whil e epox

y ha s ahighe

r pric e tha n both
. PV C andpolypropylen e ar e th e leas t expensiv e thermoplastics , whil e the pric e o f nylo n i s mor e tha n fou r time s greate

r tha n thes e two . Tabl e 2- 9 provide s price s fo r fibrous reinforcin g materials
. For

1997 , th e pric e o f

fiberglass, th e mos t

commo n reinforcement , i s approximatel y $1.1 1 pe

r pound
. The pric e o f

carbo n i s th e mos t

expensiv e an

di s primarily use di n hig h performanc e application s ($1 0 to $3 0 per pound)
. Man y producer s us e fillers i n orde r to minimiz e th e amoun

t o f higher-cos t

resin s neede dper

uni t output (se e Tabl e 2-9)
. RP

C manufacmrer s frequentl

y selec t calcium carbonat e becaus e o f

it s relativ e low cos t

($0.0 8 per

pound)
. Othe

r popula r low cos t fillers include kaolin e andalumin atrihydrat e ($0.0 5 and$0.1 3 pe

r poun drespectively)
. A s note di n
2-2 0P.3 3



### Tabl e 2-7
. Compatibilit y o f RP C Productio n Processe s with Shap e Characteristic s an d Specifi c Product s

Proces s Shap e Characteristi c ProductExample s Ope n moldin g processe s Handlay-u

p andspray-up

Filamen t windin g

Pultrusio n Continuou s laminatin g Centrifuga l castin g Close dmoldin g processe s Compressio n moldin g SM C compressio n moldin g BMC compressio n moldin g

Reinforce dthermoplasti c sheet moldin g Large , complex

Round , rigid

Unifor mcross-sectio n Thin , flat , o

r curve dprofile s
Unifor mwall thicknes s

Larg e o r small shape s ca

n b e smoothly ribbed , embossed , o r high complex Smalle r complex

Simple , thinwal l Boa t hulls , auto an

dtruc k bod y parts , swimmin g pools , tanks , corrosio n resistant equipment , furniture , duc t work , an dequipment

housing s Pressure bottles , airplan e bodies , undergroun dstorag e tanks , driv e shaft s fo r car s an dtrucks , sailboa

t masts , an d gu n barrel s Corrosio n resistan t

rods , beams , channels , andplate s . Fla t andcorrugate dpaneling , panel s fo r truc k trailers , roa

dsigns , and refrigerato r

liner s Large r pipes , tank s

Automotiv e bod

y panel s an

dfron t en d assemblies , appliances , air conditioner base , offic e equipmen

t housin g Air conditioner

components , pum

p housings , computer

components , powe r tools , motor

parts , gea r cases , circui t boar dcovers , garbag e disposa

l housing s Materia l handlin g pellets , tray , an

d shelving ; automotiv e bumpe r beams , floo r pans , batter

y trays , radiato r supports ; helmets ; flooring ; concrete pourin g forms ; an

dchair shell s (continued )



### 2-2 1P.3 4



### Tabl e 2-7 . Compatibilit

y o f RP C Productio n Processe s wit h Shap e Characteristic s an d Specifi c Product

s (Continued )
Proces s Shap e Characteristi c ProductExample s Close dmoldin g processe s (continued ) We t systemcompressio n Contoured , medium-wall moldin g thicknes s Transfer moldin g Simpl e configuration s

Ba g moldin g Simple , large , contoure d Reactio n injectio n moldin g Large , intricate , hig h (RIM ) performance , soli do r cellula r
Rotationa l moldin g Hollo w bodies , complex Trays , outboar dmotor shrouds , appliances , automotiv e applications , andsink s Bod y component s fo

r trucks , sport s ca

r bodies , automotiv e bod

y panels , marin e parts , small boats , plumbin g components , equipment

housings , an

d electrica l component s Hig h performanc e aircraf

t parts , an d aerospac e component s Automobil e andtruc k

bod y panels , bumpe r beam s fo r car s andtrucks , floor pan s fo r car s andtrucks , an

d pick-up truc k

bed s Wate r pressure tanks , water

softene r tanks , andfilter s Sources : Rauch Associate s Inc
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : 1991
. SP I Composite s Institute
. Introduction to Composites. Societ y ofth e Plastic s Industry , Inc
. Washington , DC : 1995
.


### Sectio n 2.1.1.4 , additive s ar e als o use di n relativel y lo w quantitie s t o enhanc e particula r propertie s o f

RPC s . The Agenc y compute daweighte daverag e pric e fo r additive s i

n 199 7 o f $0.8 8 per pound
. 2. 4 Use s an

d Consumer

s o f Reinforce d Plastic s RPC s ar e a n input into the productio n ofavariet y o f product s rangin g fro

mchildren' s toy s to aerospac e component s andbathmb s to boa t hulls
. Therefore , th e demandfo r RPC s i s derive dfro

mth e demandfo

r thes e products , whic h ca

n b e foun dwithi n one ofth e following majo r segment s ofth e marke

t fo r RPCs :

2-2 2P.3 5



### Tabl e 2-8 . Plasti c Resi n Prices : 1996-199 9

Resi n Thermoset s Epoxy " Unsaturate dPolyester " Phenolic " Thermoplastic s ABS b Polypropylene " Polystyrene " PVC " Nylon0 199 6
1.25-1.3 7 ,73-.8 4 ,72-.8 2
.96-1.0 1 ,42-.4 4 .48-.5 0 .39-.4 0 1.28-1.3 8 Pric e ($/lb )

1997
1.30-1.42 .75-.8 6 J4-.8 4
.88-.9 1 .39-.4 1 .38-.4 0 .38-.4 1 1.28-1.3 8 199 8

1.30-1.42 .75-.8 6 J4-.8 4
.68-.7 1 .29-.3 1 .38-.4 0 .27-.3 0 1.39-1.49 1999

1.30-1.42 J5-.8 6 .74-.8 4
.64-.6 7 .28-3 0 .41-.4 3 .29-.3 2 1.29-1.3 9

" Genera l purpose . b Medium-impact
. c Typ e 6
. Source : Plastics News. "Resi n Pricing. " Update dMa y 13 , 1999
. A s obtaine don Ma y 17 , 1999
. <http://www.plasticsnews.com>
.



### • Aircraft/Military : flight surfaces , cabi n interiors , aerospac e components , militar y helmets , armament , rocke t launchers
.
• Appliances/Busines s Machines : refrigerators , freezers , ranges , microwav e ovens , power tools , small appliances , compute r housings , calculators
.
• Constmction : swimmin g pools , rai n gutters , mold s fo r concrete , bathmbs , showe r stalls , whirlpools , spas , highwa y signs , coolin g tower

components , panelin g fo

r greenhouses , patios , railing s an dother architectura

l components .
• Consume

r Products : fishing rods , golf clubs , skis , tenni s rackets , furniture , campers , snowmobiles , exercis e equipment , seating , counte r tops , servin g trays , boxe s an dcontainers , microwav e cookware
.
• Corrosio n Resistant

Products : pip e fittings , ducts , hoods , tanks , pumps , filtratio n equipment , an

dawide variet

y o f othe r chemica l resistant product s fo

r us e i n the waste/wastewater

treatment , chemica

l processing , semiconductor , an d petrochemica

l industries
. 2-2 3P.3 6

Tabl e 2-9 . Selecte d Plasti c Reinforcemen tan d Fille r Prices : 199 7

Inpu t Pric e ($/lb ) Reinforcements Fiberglas s Cellulos e Carbo n Averag e Filler s Calciu mcarbonate Kaoli n Alumin atrihydrate Tal c Mic a Othe r mineral s Glas s sphere s Natura l Averag e Additive s Averag e $1.1 1 $0.52 ° $10-3 0 $1.2 5 $0.08 " $0.05 " $0.1 3 $0.3 0 $0.21 " $0.08 " $0.78 " $0.05 " $0.0 9 $0.8 8

" Pric e compute dby dividin g valu e b y quantit y an dadjustin g by aproducer

pric e index (PPI ) wher

e appropriate
. Sources : U.S
. Geologica

l Survey
. 1997
. Mineral s Yearbook : Clays , [online ] <http://minerals.usgs.gov / minerals/pubs/commodity/myb>
. Obtaine dJanuar y 21 , 2000
. U.S
. Geologica

l Survey
. 1997
. Mineral s Yearbook : Mica , [online ] <http://minerals.usgs.gov / minerals/pubs/commodity/myb>
. Obtaine dJanuar y 21 , 2000
. Rauch Associates
. 1991
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : Rauch Associates , Inc
. Murphy , John
. 1994
. The Reinforced Plastics Handbook. Oxford , UK : Elsevie r Advance d Technology
. U.S
. Burea

u o f Labor Statistics
. 2000
. Produce r Pric e Index—Commodities : WPUSOP9200 , Intermediat

e Material s Les s Foo dandEnergy , 1990-2000
. [online ] <http://www.bls.gov>
. Obtaine d Januar y 20 , 2000
. Shearer , Brent
. Apri l 15 , 1996
. "Carbo n Fiber s Adjustin g to Changes. " Chemical Marketing Reporter.

2-2 4

### • Electronic/Electrical : rods , tubes , circui t breake r boxes , molde dparts , housings , substatio n equipment , electroni c connections , pol e lin e hardware , microwav e antennas , andman

y other electrica l andelectroni c applications
.
• Marine : boa

t hulls , motor

covers , marin e docks , moorings , floats , buoys , canoes , kayaks , an dother component s andhardwar

e fo r naval , pleasure , an

dcommercia

l wate r craft
.
• Transportation : bod

y panel s fo

r cars , buses , an

dtracto r trailers , tmc k

cabs , boxca r doors , subwa

y seating , heater

housings , fron

t en dassemblies , driv e shafts , win ddeflectors , gril l openin g panels , tai l ligh t housings , fende

r liners , instmment panels , andothe

r divers e part s andaccessorie s fo r landtransportatio n an

dutilit y vehicles
.
• Other : al l other

composite s applications
. One significan t new categor

y o f application s th e repair/replacement o f component s ofth e civi l infrastructure
. Produc t example s include : guardrails , sig n posts , andstructura l support s fo

r highway s andbridges
. Ove r time , th e nee dfo

r lightweigh

t structura l material s tha

t mee t strength , stiffness , an dother mechanica

l propert y requirement s fo

r hig h performanc e application s ha s prompte d majo r development s in productio n practice s in th e end-us e markets
. Th e characteristic s demande dvar

y b y th e market

(e.g. , constmction , transportation , consume r goods , or other produc t manufacmrer)
. For

example , th e abilit

y t o replac e a

n assembly o f

severa l meta l part s wit h asingl e molde dcomposit e i s ver y appealin g to manufacmrer s o f appliance s an

d transportatio n equipment
. Th e chemica l resistanc e propertie s o f

RPC s allo w user s i

n th e constmctio n andmarin e market segment s to avoi dth e highe r maintenanc e cost s associate d wit h th e meta l an dwoo dmaterial s tha

t they traditionall y used
. Th e strength-to-weigh

t ratio s fo r composite s ar

e typically greate

r tha n thos e o f metals
. A s a n example , phenoli c composite s hav e greate r yiel dstrength s tha

n steel o r aluminum , althoug h resistanc e to bendin g an dthe resistanc e to elongatio n ma y b e superio r

i n metal s dependin g on th e typ e o f

reinforcemen

t in th e plasti c (Murphy , 1994)
. Composite s hav e low flammabilit

y properties , whic h mak

e composite s superio r

to woo dfo

r application s susceptibl e to fire. Tabl e 2-1 0 provide s som e example s o f

thes e desire ddemand characteristic s fo

r selecte denduse s an

dassociate dproducts
.

2-2 5P.3 8



### Tabl e 2-10 . Deman d fo r Reinforce d Plasti c Composites : Some Example s End-Use r Industrie s and ProductMarkets Demand Characteristic s ProductExample s Aircraft/aerospace/militar

y Appliances/busines s equipment
Constructio n

Marin e
Transportatio n Lightweight , moldability , and versatil e natur

e Part s consolidation , desig n flexibility , andhig h strengt h t o weigh t ratio s Corrosio n resistance , high strengt h t o weigh t ratio , custo mfinishing , longe r life-cycl e and/o r

fewe r maintenanc e requirement s Large , rigid, continuou s shape s wit h smooth , corrosion-resistant finishe s an

dhigh strengt

h to weigh t ratio s Part s consolidation , ligh

t weight , continuou s shape s wit

h smoot h corrosion-resistant

finishe s Structure s an dinterior s o f

bot h militar y an dcommercia

l plane s Dishwasher

panels , freezers , small appliances , compute

r housings , an dradio s Beams , columns , roo f

trusses , soffit , siding , flooring , bathtubs , sinks , showe

r stalls , whirlpool s andspa s Boa t hulls , je t skis , an dothe r marin e craf

t
Bod y panels , fron

t ends , bumpers , andinterio r

dashboard s fo

r automobiles , mobil e homes , buses , an dtrucks
. Source : Societ

y o f th e Plastic s Industry , Inc
. Introduction to Composites. 2n ded
. Washington , DC
. Th e Composite s Institute
. 1992
.



### Landtransportatio n product s consume dth e mos t reinforce dplastic s i

n 1997 , followed by construction , a s Figur

e 2- 7 illustrates
. The lan dtransportatio n segmen t alOn e use d 1,095 millio n pounds , whic h account s fo r 3 2 percent

ofth e 3. 4 billio n pound s o f RPC s consume din 1997
. Constmctio n applications , th e secon dlarges t end-us e category , consume d70 0 millio n pound s o f composite s durin g 1997
. Othe r significan t market segment s ar e marin e an

delectrical products
. Producer s servin g th e marin e segmen t wil l no t b e subjec t to th e propose dcontrols ; the y will b e separately addresse db y th e Agency
.

2-2 6P.3 9

Reinforced Plastic s Shipment s = 3,422 millio n lbs . Aircraft / Aerospace / Militar y Appliances / Miscellaneou s 3.2 % 0.7 %

Lan d Transportatio n 32.0 %

Marine

10.3 % Busines s Equipmen t 5.4 %

Electrical / Electroni c 10.2 % Constructio n 20.5 %

Consume r Product s 6.1 %
Corrosion

Resistant Equipmen t 11.6 %



### Figure 2-7 . Consumptio n o f Reinforce d Plasti c Composite s by Marke tSegment : 1997 "Include s reinforce dthermoset andthermoplasti c resins , reinforcements , andfillers
. Source : Societ

y o f th e Plastic s Industry , Inc
. 1998
. Facts and Figures of

the U.S. Plastics Industry. Washington , DC : SPI
. 

### Tabl e 2-1 1 indicate s tha

t consumptio n ha s rise n fro

m198 9 level s i

n all end-us e categorie s excep t

fo r aviation/aerospace/military , whic h ha s decline dbecaus e o f the recent reduction s i

n U.S
. governmen

t spendin g o

n defense
. Tota

l shipment s hav e increase dever y yea r sinc e 1991
. Th e growt

h rate fo r consumptio n b y lan dtransportatio n wa s highes t fo r th e perio d1984-1997 , followedby electrica l applications
. Cause s fo

r aggregat e growt h var y : 2-2 7

### Tabl e 2-11 . Consumptio n o f Reinforce d Plasti c Composite s b y End Use : 1984-199 7 (IO 6 

### lbs) a2-28 End Us e Aircraft / aerospace / militar y Appliances / busines s equipment Constructio n Consumer product s Corrosion

resistant equipment Electrical / electroni c Marin e Land transportatio n Miscellaneou s Total " 1984

2 9

12 3

43 0 14 3 31 0

18 9 30 9 54 0 8 0 2,15 3 198 5

3 2

13 3

44 5 14 2 29 5

19 1 33 5 56 3 8 2 2,21 8 198 6

3 7

13 7

45 6 14 9 29 1

20 1 34 0 58 5 8 3 2,27 9 1987

3 6

14 1

50 6 16 7 32 9

21 4 41 3 65 6 7 5 2,53 6 198 8

3 9

15 0
49 5 169 34 9

23 0 45 2 69 5 8 0 2,65 8 198 9

4 1

15 1

47 0 15 8 33 5

22 9 40 5 67 7 7 6 2,54 2 199 0

3 9

15 3

46 8 16 5 35 0

24 1 37 5 70 5 7 9 2,57 5 199 1

3 9

13 5

42 0 14 9 .35 5

23 1 27 5 68 2 74 2,36 0 199

2 3 2

14 3

48 3 16 2 33 2

26 0 304 75 0 8 3 2,54 9 199 3

2 5

14 8

53 0 16 6 35 2

27 5 31 9 82 2 8 9 2,72 6 199 4

24

16 1
59 7 17 5 37 6
29 9 36 4 94 6 10 2 3,04 3 199

5 2 4

16 7

62 7 18 4 39 5

31 5 37 5 98 4 10 7 3,17 6 199 6

24

17 0

64 3 19 2 40 5

32 8 38 3 1,00 9 11 1 3,26 3 199 7

24

185

70 0 21 0 39 6

34 8 35 3 1,095 11 1 3,42 2 Averag e

Annua l Growt h Rate (1984-1997 ) -3.4 %

2.3 %

3.2 % 2.3 % 2.3 %

4.7. % 0.1. % 5.3 % 2.8 % 3.2 %

aInclude s thermosettin g an dthermoplasti c resins , reinforcements , an dfillers. b Part s ma

y no t su mt o total s du e t o independent rounding
. Sources : Lindsay , Karen F
. 1996
. "Stat e o f th e Industry : 1995-96. " Composites Design and Application. February
. Rauc h Associates
. 1991
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : Rauch Associates , Inc
. Societ y ofth e Plastic s Industry , Inc
. 1994
. Facts and Figures of

the U.S. Plastics Industry. Washington , DC : SPI
. Societ y ofth e Plastic s Industry , Inc
. (SPI)
. 1998
. Facts and Figures of

the U.S. Plastics Industry. Washington , DC : SPI
.P.4 1

acros s individua l marke t segments . Growt h ma y b e drive n b y advance s i n RP C productio n processe s o r

increase ddeman dfo r

specifi c final products
. Deman di n som e end-us e categorie s i s strongl y influence db y flucmation s i n consume r confidenc e o r

b y change s i n governmen t

spendin g priorities
. Th e growt h fo r

particula r

RP C processe s an dresin s ma y diffe r fro mth e observe d aggregat e rate s o f

growt h fo r

th e market s the y serve , whic h i s significan t becaus e th e RP C sourc e categor y t o b e regulate dinclude s onl y thermosettin g resins—mainl y unsaturate d polyesters
. Tabl e 2-1 2 present s informatio n o n consumptio n o f reinforce dunsaturate d polyester s base do n consumptio n dat ab y en dus e fo r 198 4 throug h 199 3 fro mPredicasts Basebook an dModern Plastics. I n contras t t o th e aggregat e growt h rate s acros s end-us e markets , Tabl e 2-1 2 show s tha t growt h fo r

reinforce dunsaturate dpolyester s wa s positiv e i n electrical/electroni c (0. 7 percent) , aircraft/aerospace/militar y (0. 6 percent) , appliances / busines s equipmen t

(0. 4 percen t

annually) , an dcorrosio n resistan t equipmen t

(0. 2 percent)
. It appear s tha t

reinforce dunsaturate dpolyester s ar e losin g marke t shar e i n man y en duse s a s technologica l advance s allo w thermoplasti c resin s t o b e use di n awide r rang e o f processe s an dapplications
. Som e RP C processe s ma y serv e multipl e end-us e market s and , thus , hav e adifferen t growt h rat e tha n thos e liste di n Table s 2-1 1 an d2-12
. I n particular , industr y source s cite di n Modern Plastics stat e tha t pultrude dpart s usin g reinforce dpolyester s ar e replacin g aluminum , wood , an dpolyviny l chlorid e i n variou s market s an dar e expecte dt o hav e a1 5 t o 2 5 percen t

growt h rat e ove r

th e nex t 5 year s {Modern Plastics, 1993)
. Pultrusio n i s afull y automate dfabricatio n proces s wit h lo w toolin g an dlabo r cost s tha t

produce s continuous , cross-sectiona l composit e profiles , al l o f whic h ar e expecte dt o allo w i t t o continu e it s stron g growt h an dpenetratio n o f traditiona l materia l profil e market s i n th e 1990s
. Growt h i s expecte dt o b e particularl y significan t i n th e electrica l an dcorrosion-resistan t markets , wit h opportunitie s increasin g i n th e constmctio n an daerospac e market s (Modern Plastics, 1994)
. 2. 5 Manufacturin g Facilitie s Th e informatio n provide di n thi s sectio n i s base do n EPA' s 199 3 surve y ofth e reinforce dplastic s industr y (EPA , 1993)
. Althoug h roughl y 70 0 facilitie s participate di n th e survey , onl y 43 3 facilitie s wer e determine dt o b e potentia l majo r source s o f

HA P emission s fro mth e productio n o f

reinforce dplastics
. Thus , thi s sectio n focuse s o n thos e 43 3 facilitie s likel y t o b e subjec t

t o th e propose dai r

regulations
.
2-2 9

### Tabl e 2-12
. Consumptio n o f Reinforce dUnsaturate dPolyeste r b y En dUse : 1984-199 3 (IO 6 

### lbs) "

K > 1> J O End Us e Aircraft/aerospace

/ militar y Appliances/busines s equipment Constructio n Plumbin g fixture s Panel s andsidin g Glazin g andskylight s Pipe , fittings , condui t Consume r product s Corrosion-resistant

equipment Electrical/electroni c Marin e Landtransportatio n Miscellaneou s Total ' Predicas t Cod e 30752-2 0 30754-0 0 30760-0 0 30765-0 0 30761-0 0 30761-4 0 30766-0 0 30770-0 0 N A 30755-0 0 30752-4 0 30752-0 0 N A 198 4

2 6 8 6 42 0 10 9 12 5 4 5 14 1 13 0 31 0 N A 30 8 20 0 N A 1,592 198 5

2 8 8 5 40 0 10 1 12 2 4 1 13 6 13 2 32 0 4 8 32 0 22 0 5 2 1,60 5 198 6 3 2 8 7 40 2 10 2 123 4 0 13 7 13 0 32 2 5 2 32 4 20 0 5 0 1,59 9 1987

3 3 9 0 39 3 10 0 11 5 3 9 13 9 13 0 32 6 5 5 35 0 19 5 5 0 1,62 2 198 8 3 4 9 3 41 4 11 2 11 7 4 2 14 3 13 5 33 8 5 3 37 5 20 7 5 1 1,70 0 198 9 3 5 9 3 42 6 11 5 125 5 0 .15 8 13 8 35 0 5 3 35 3 22 1 5 2 1,72 1 199 0

3 4 9 3 38 4 106 10 9 3 6 13 9 12 7 33 6 5 3 30 0 21 5 4 8 1,59 0 199 1 3 6 8 4 33 7 8 8 9 9 24 12 6 12 0 32 9 5 0 22 1 18 5 4 5 1,40 7 1992 3 1 8 8 38 7 9 4 10 8 2 7 12 2 12 2 29 9 5 3 24 3 19 0 5 2 1,55 2 199 3

2 5 9 1 41 8 9 6 11 6 2 9 12 2 12 4 N A 5 5 25 5 20 7 NA 1,61 3 Averag e

Annual Growt h Rat e ('84-'93) b 0.6 % 0.4 % -0.7 % -1.3 % -1.6 % -5.8 % -1.4 % -0.9 % 0.2 % 0.7 % -3.7 % -0.5 % -0.7 % -0.5 %

*Include s weigh

t o f resin , reinforcements , andfillers. b Or wides t rang e o f availabl e years . c Part s ma y not su mto total s du e to independent rounding
. Sources : Modern Plastics. "Resi n Supply : Plottin g aCours e fo r Globa l Supply. " Januar

y 1994
. Predicasts Basebook. November 1992
. Foster

City , CA : Informatio n Acces s Corporation
.P.4 3



### 2.5.1 Location Base don th e 199 3 update dindustr y screenin g survey , Figur

e 2- 8 identifie s th e locatio n ofth e 43 3 majo

r sourc e facilitie s producin g reinforce dplastic s i n 1993
. Ohio , Indiana , California , Texas , an dPennsylvani aar

e th e to p five state s i

n orde r o f numbe r o f majo r sourc e facilities
. 2.5.2 Employment Th e 199 3 survey dataindicat e tha t employmen

t a t thes e majo

r sourc e facilitie s range d fro m2 t o 1,25 0 per

facilit y i n 1997 wit

h a n averag e o f

8 4 employee s fo

r thos e facilitie s reportin g thei r

employmen

t level
. Tabl e 2-1 3 provide s th e distributio n o f majo r sourc e facilitie s reportin g employmen t data
. Ove

r 8 0 percent

ofth e 38 9 facilitie s reportin g employmen

t datahad10

0 employee s o

r fewer
. The vas t

majorit y ofth e remainin g facilitie s reporte demploymen

t level s betwee n 10 1 and500
. Les s tha n 3 percent

o f facilitie s reportin g employmen

t reporte dhav e mor

e tha n 500 employees
. 2. 6 Facilit

y Ownershi p Facilitie s compris e asit

e o f lan dwit h plant andequipment

tha t combin e input s (ra

w materials , fuel , energy , andlabor) to produc e output s (reinforce dplastics)
. Companie s tha t own thes e facilitie s ar

e lega l busines s entitie s tha

t hav e th e capacit

y to conduc t

busines s transaction s an

dmak e busines s decision s tha

t affec t th e facility
. The term s facility , establishment , plant , an

dmill ar e use dsynonymously i

n thi s analysi s an

drefe r to th e physica

l locatio n wher

e product s ar

e manufactured
. Likewise , th e term s compan y an dfirmar e use d synonymously an

drefe r to th e lega

l busines s entitie s tha

t ow n th e facilities
. A s seen i

n
' Figur e 2-9 , th e chai n o f

ownership ma

y b e a s simpl e a s one facilit y owne db y one compan

y or a s comple x a s multipl e facilitie s owne dby subsidiar y companies
. Potentiall y affectedfirms include entitie s tha t own facilitie s manufacturin g reinforce d plastics
. I n 1993 , 35 6 companie s owne dth e 43 3 majo r sourc e facilities , accordin g to th e EP A industr y survey (EPA , 1993)
. Annua l sale s datawer

e availabl e fo

r 31 4 o f thes e companie s (8 8 percent)
. Base don th e availabl e smal l compan y sale s an demploymen

t observations , the Agenc y als o estimate dsale s fo r 3 9 ofth e 4 2 remainin g companie s by calculatin g th e rati o o f

sale s to employmen

t fo r eac h SI C code andapplyin g the appropriat e rati o to th e numbe

r o f employee s fo

r eac h compan

y without sale s data
. Appendi x A list s thes e companie s andtheir

sale s an demploymen

t figures wher

e available
.
2-3 1P.4 4



### Figur e 2-8
. Geographi c Distributio n of Majo r Sourc e Facilitie s 2-3 2P.4 5

Tabl e 2-13 . Distributio n o f Majo r Sourc e Facilitie s b y Employmen t Employmen tRange Numbe r o f Facilitie s Share o f

Reportin g Facilitie s (% ) 0-10 0 31 3 80. 5 101-25 0 4 6 11. 8 251-50 0 2 0 5. 1 501-75 0 4 1. 0 751-1,00 0 5 1. 3 > 1,00 0 1 0. 3 Tota l reportin g 38 9 100. 0 No t Availabl e 4 4

2.6.1 Size Distribution Fir msiz e i s likel y t o b e afacto r i n th e distributio n ofth e regulator y action' s financia l impacts
. Th e 35 6 firm s ownin g th e 43 3 manufacturin g facilitie s rang e i n siz e fro m3 t o 647,00 0 employees
. Tabl e 2-1 4 show s th e siz e distributio n o f potentiall y affecte dfirms b y tota l employment
. Th e majorit y o f firms (7 8 percen t

o f thos e wit h employmen t

data ) hav e 50 0 employee s o r

fewer
. Onl y 5 percen t

repor t employmen t

betwee n 50 0 an d1,000 , whil e 1 8 percen t

repor t employmen t

ove r 1,000
. Thus , i t

appear s tha t

thi s industr y i s compose do f alarg e numbe r

o f ver y smal l an dver y larg e firms, whic h likel y result s fro malarg e numbe r o f smalle r specialt y produc t

manufacturer s an dlarge r integrate dmanufacmrer s o f durabl e products
. Th e majorit y o f

firms (8 2 percen t

o f thos e wit h sale s data ) generate dles s tha n $10 0 millio n i n annua l sales , a s Tabl e 2-1 5 shows
. Nin e percen t repor t annua l sale s betwee n $10 0 millio n an d$ 1 billion , an d9 percen t repor t sale s ove r

$ 1 billio n annually
. Th e distributio n o f

sale s appear s t o b e les s skewe dtha n th e distributio n o f employmen t

acros s firms. 2.6.2 Issues of

Vertical and Horizontal

Integration Vertica l integratio n i s apotentiall y importan t dimensio n i n analyzin g firm-level impact s becaus e th e regulatio n coul daffec t averticall y integrate dfirmo n mor e tha n on e 2-3 3P.4 6



### Paren t Compan y Paren t Compan y Paren t Compan y (Direc t Owner )

Othe r Companie s o r Legal Entitie s

Subsidiar y Compan y (Direc t Owner ) Subsidiar y Compan y (Direc t Owner )

A B C 

### Figure 2-9 . Alternativ e Chains o f Ownershi p level
. For example , th e regulatio n ma y affec t companie s fo

r whomreinforce dplasti c productio n i s only one o f

severa l processe s in whic h th e firmi s involved
. A compan y tha t produce s reinforce dplastic s fo r exampl e ma

y als o b e involve din manufacturin g automobiles , aircraft , sportin g goods , an dappliances
. Thi s firmwoul db e considere dverticall y integrate d becaus e i t i s involve din mor

e tha n one leve l o f

productio n includin g reinforce dplastics
. A regulatio n tha

t increase s the cos t

o f manufacturin g reinforce dplastic s 2-3 4P.4 7

Tabl e 2-14 . Distributio n o f Potentiall y Affecte d Firm s b y Employmen t Employmen tRang e 0-10 0 101-25 0 251-50 0 501-75 0 751-1,00 0 > 1,00 0 Tota l No t Availabl e Numbe r o f Firm s 19 4 5 5 2 2 1 0 7 6 1 34 9 7

Tabl e 2-15 . Distributio n o f Potentiall y Affecte d Firm s B y Sale s Company Sale s Les s tha n $5 M $5Mto$10 M $10MtoS25 M S25 M to S50

M $50MtoS100 M $100Mto$250 M S250 M to S500 M S500Mto$l B $1 B or greater Tota l No t Availabl e Numbe r o f Firm s 12 7 6 5 5 2 2 7 20 1 2 1 3 6 3 1 35 3 3

2-3 5 Share o f Tota l (% ) 55. 6 15. 8 6.3 2. 9 2. 0 17.5 100. 0

Share o f Tota l (% ) 36. 0 18. 4 14. 7 7. 6 5. 7 3. 4 3. 7 1. 7 8. 8 100. 0P.4 8

wil l als o affec t

th e cos t o f producin g th e final product s tha t us e reinforce dplastic s i n th e productio n process . Horizonta l integratio n i s als o apotentiall y importan t dimensio n i n firm-level impac t analysis
. Thi s i s becaus e adiversifie dfirmma y ow n facilitie s i n unaffecte dindustries , givin g the mresource s t o spen do n complyin g wit h thi s regulation—i f the y s o choose
. Th e potentiall y affecte dfirms i n Appendi x A demonstrat e som e diversificatio n a s evidence db y th e numbe r

o f subsidiarie s an ddivision s listed
. Mos t ar e par t o f large r firms o r holdin g companie s tha t

ar e involve di n severa l differen t industries
. 2. 7 Smal l Businesse s Th e Regulator y Flexibilit y Ac t (RFA ) o f

198 0 a s amende db y th e Smal l Busines s Regulator y Enforcemen t

Fairnes s Ac t

(SBREFA ) o f

199 6 require s tha t

th e Agenc y giv e specia l consideratio n t o smal l entitie s affecte db y Federa l regulation
. Thi s sectio n focuse s o n identifyin g th e smal l businesse s affecte db y th e propose dNESHAP
. 2.7.1 Identifying Small Businesses Th e followin g secondar y source s wer e use dt o obtai n dat afor th e 43 3 affecte d manufacmrer s identifie di n th e industr y screenin g surve y (EPA , 1993) :

Busines s an dCompan y ProFil e (Informatio n Acces s Corporation , 1998 ) Du n an dBradstree t

Marke t Identifier s (Du n & Bradstreet , 1998 ) Ward' s Busines s Director y o f U.S
. an dPrivat e an dPubli c Companie s (Gal e Research , 1998 ) Worldscop e (Disclosur e Inc. , 1998 ) Standar d& Poor' s Corporation s (Dialo g Informatio n Service , 1997 ) Manufacturin g US A (Gal e Research , 1996 ) Compan y 10- K

Report s W e identifie dth e ultimat e paren t compan y an dobtaine dsale s an demploymen t dat afor companie s for

whic h dat aar e available
. Base do n availabl e secondar y data , th e Agenc y ha s determine dtha t

35 6 paren t

companie s ar e affecte db y th e regulation
. Employmen t dat acoul d b e obtaine dfro mth e abov e source s fo r 34 9 o f thes e paren t

companie s (9 8 percent)
.
2-3 6P.4 9



### Th e Small Busines s Administratio n (SBA ) define s small businesse s base don industr y siz e standard s (SBA , 1996)
. Tabl e 2-1 6 present s th e siz e standard s fo r th e SI C code s covere d by th e industr

y survey . A s shown , th e small busines s definitio n fo r th e RP C industr

y range s fro m50 0 to 1,00

0 employees
. W

e develope dacompany' s siz e standar dbase do n th e reporte dSI

C cod e fo r it s facilities
. I

n determinin g th e companies ' SIC , w e made th e followin g assumptions :

• I n case s wher

e companie s own facilitie s wit h multipl e SICs , th e mos t conservativ e SB A definitio n wa s used
. Fo r example , i f

acompany owne d facilitie s withi n SIC s 371 4 (siz e standar d= 75 0 employees ) and308 9 (siz e standar d= 50 0 employees) , w e assume dth e siz e standar dto b e 75 0 employees
.
• Thirty-eigh

t facilitie s repor

t a n SI C cod e o f 3079
. T o ou

r knowledge , thi s SI

C cod e i s no t

currentl y used
. Therefore , w e assigne dSI C 308 9 t o thes e facilities
.
• Twenty-fou

r facilitie s repor

t n o SI C code
. W

e assigne dthes e facilitie s th e mos t conservativ e siz e standar

do f 1,00 0 employees
. Base don th e SBA' s definitions , 27 8 companie s out o f 35 6 (7 8 percent) wer

e identifie da s small , a s Figur

e 2-1 0 shows
. Thes e companie s own 30 2 facilitie s (7 0 percent o f all RPC facilities)
. Appendi x A list s th e companie s identifie da s small fo r thi s analysis
.



## J^^H^^^^^^H^ ^ \ Larg e Busines s l^^H^^^^^^M ^ ] Busines s 

## 78 % H^^^^^^^H^ . J 22 %

Figure 2-10 . RP C Firms b y Siz e 2-3 7P.5 0



### Tabl e 2-16 . Smal

l Busines s Administratio n Siz e Standard s fo r RPC—Companie s b y SI C

SI C 243 4 251 9 252 2 254 1

. 259 9 282 1 308 2 308 3 308 4 308 7 308 8 308 9 328 1 329 6 329 9 343 1 349 9 353 1 353 3 354 6 356 1 Smal l Busines s

Standar d 50 0 50 0 50 0 50 0 50 0 75 0 50 0 50 0 50 0 50 0 50 0 50 0 50 0 75 0 50 0 75 0 50 0 75 0 50 0 50 0 50 0 SI C 356 4 358 9 361 2 361 3 362 1 364 7 366 3 367 9 371 1 371 3 371 4 371 5 371 6 372 8 374 3 379 2 379 9 382 1 394 9 399 3 399 9 Smal l Busines s

Standar d 50 0 50 0 75 0 75 0 1,00 0 50 0 75 0 50 0 1,00 0 50 0 75 0 50 0 1,00 0 1,00 0 1,00 0 50 0 50 0 50 0 50 0 50 0 50 0 Source : U.S
. Small Busines s Administration
. Siz e Standard s b y SI C Industry
. 1996
. Availabl e <http://www.sba.govgopher/Government-Contracting/Size/sizeall.txt>
.

2-3 8P.5 1



### SECTION 3 ENGINEERIN G COS T ANALYSI S

Durin g th e productio n o f

RPCs , aportio n ofth e monomer s (i.e. , styrene , methyl methacrylate ) use dt o transfor mplasti c resi n into adurabl e produc t ar e release dint

o the environment
. To contro l thes e emissions , EP A ha s develope dnationa

l emissio n standard s fo r thes e HAP s under

th e authorit

y o f Sectio n 11 2 ofth e CAA
. Thi s sectio n present s the Agency' s estimate s ofth e nationa l complianc e cost s associate dwit h thre e regulator

y alternative s develope dt

o reduc e HA

P emissions
. A detaile ddiscussio n ofth e methodologie s use dt o develop thes e estimate s i s provide di n th e BID
. 3. 1 Identifyin g Regulate d Entitie s Base don informatio n provide dfro mEPA' s 199 3 survey ofth e reinforce dplastic s industry , 43 3 facilitie s wer e determine dto b e potentia l majo r source s o f

HA P emission s fro

m th e productio n o f

reinforce dplastics
. Ohio , Indiana , California , Texas , andPennsylvani aar e th e to p five state s i

n orde r o f numbe r o f majo r sourc e facilities
. Base do n availabl e datao

n firmownership , 30 2 facilitie s (6 9 percent) ar e owne db y small businesses
. Additiona l informatio n on thes e facilitie s andthei r ownership i s provide din Sectio n 2
. 3. 2 Nationa

l Control Cos tEstimate s The Agenc y develope dfacility-specifi c estimate s o f annua l complianc e cost s fo

r each ofth e following thre e regulator y alternatives :

• the MACT floo

r applie dto all existin g sources ,

• above-the-floor

control s applie dt

o all sources , and

• th e recommende dalternativ e tha t applie s contro l cost s a s follows : / source s tha

t emit less than 100tons o f

HAP s per year—MAC T floo

r controls ; / source s owne dby small firms (a s classifie db y th e SB A definitions ) tha

t emit less than 250tons o f

HAP s per year—MAC T floo

r controls ; an

d

3- 1P.5 2



### / source s owne dby larg e firms (a s classifie dby SB A definitions ) tha t emit mor e tha n 10 0 ton s o f HA P per year—above-the-floor

controls
. Th e engineerin g analysi s provide destimate s o f tota l annua l complianc e cost s associate dwit

h th e require dpollutio n contro l equipment o r les s pollutio n intensiv e metho d tha t bring s eac h facilit

y int o complianc e wit

h th e propose dstandards
. Note , however , tha t thi s cos t estimate doe s no t

account fo r behaviora l response s (i.e
. change s i

n pric e an doutput rates)
. Insteadthes e estimate s ar e input s to th e economi c model a s describe di n Sectio n 4 an

d includ e th e following :

• th e capita

l cost s associate dwit

h new contro l equipmen

t a s appropriatel y annualize dove

r th e equipment

lifetim e a t a7 percent

discount rate , and

• variabl e cost s associate dwit h th e operatio n maintenanc e o f pollutio n contro l equipment , cos t

o f energ y require dt

o operat e contro l equipment , material s replacement

cost s (replacement

o f existin g resins/gelcoat s wit h alow HA

P resin/ge l coat) , andother

administrativ e cost s associate dwit h monitoring , recordkeeping , andreporting
. The nationwid e complianc e cos t estimate s fo

r th e require dcontrol s under eac h regulator

y alternativ e ar

e a s follows: 1



### • recommende dalternative—$26. 1 million ;

• MACT floor—$16.3 million ; and

• above-the-MAC T floor—$67.4 million
.

'Al l dolla r amount s are expresse di

n $1997
. 

### 3- 2P.5 3



### SECTIO N 4 ECONOMI C IMPAC T ANALYSI S

The propose dNESHAP require s producer s o f RPC s tha t us e selecte dthermosettin g resin s t o meet

emissio n standard s fo

r release s o f

HAP s t o th e atmosphere
. T o mee t thes e standards , mos t

producer s wil l hav e t

o instal l equipment

designe dt

o capmr e pollutant s no w release dto th e environment or t o chang e productio n t o les s pollution-intensiv e methods
. Thes e action s wil l hav e financial implication s fo r th e affectedproducers
. The y wil l hav e broader societa l implication s becaus e thes e effects ' ar e transmitte dthroug h market relationship s to other

producer s andconsumers . Thes e potentia l economi c impact s ar

e th e subjec t ofthi s section
. EP A i s examinin g thre e regulator y alternative s fo

r addressin g th e problemo f HA P release s fromthes e sources : 1 ) th e MAC T floo

r applie dto al l sources , 2 ) above-the-floo r

control s applie dt o al l sources , an d 3 ) th e recommended,alternativ e tha t applie s contro l cost s a s follows :

• source s tha

t emit less than 100tons o f

HAP s per year—MAC T floor

controls ;

• source s owne dby small firms (a s classifie db y the SB A definitions ) tha

t emit less than 250tons o f

HA P per year—MAC T floor

controls ; an

d

• source s owne db

y larg e firms (a s classifie dby SB A definitions ) tha t emit mor e tha n 10 0 ton s o f HA P per year—above-the-floor

controls
. Thi s sectio n provide s result s fo r each alternative
. To measur e th e siz e anddistributio n o f the economi c impact s o f

thes e alternatives , EP A compare dbaselin e condition s o f RPC market s in 199 7 wit

h thos e fo r th e counterfacma

l or with-regulatio n condition s expecte dt o result fro mimplementin g each alternative
. Th e mai n element s ofthi s analysi s ar e
4- 1P.5 4

• identificatio n o f

market s for

RP C product s an ddescriptio n o f firmbehavio r withi n thes e markets ;

• economi c characterizatio n ofth e regulate dfacilitie s i n term s o f whethe r the y ar e a commercia l o r

captiv e producer , commodit y produced , an dcos t o f production ;

• characterizatio n o f

baselin e deman dfo r

eac h product ;

• developmen t

o f a n economi c mode l tha t evaluate s behaviora l response s t o additiona l cost s o f

regulatio n i n amarke t

context ; an d

• presentatio n an dinterpretatio n o f economi c impac t

estimate s develope db y th e model
. 4. 1 Reinforce d Plasti c Composit e Market s RPC s ar e consume da s input s i n th e productio n o f awid e variet y o f

product s tha t

ca n b e foun dwithi n th e followin g broa dmarke t segments :

• Aircraft/Military : fligh t surfaces , cabi n interiors , aerospac e components , militar y helmets , armament , rocke t launchers , etc .

• Appliance/Business : refrigerators , freezers , ranges , microwav e ovens , powe r tools , smal l appliances , compute r housings , calculators , etc .

• Constmction : swimmin g pools , rai n gutters , mold s fo r concrete , bathmbs , showe r stalls , whirlpools , spas , highwa y signs , coolin g towe r components , panelin g fo r greenhouses , patios , railing s an dothe r architectura l component s

• Consume r

Products : fishing rods , gol f clubs , skis , tenni s rackets , furniture , campers , snowmobiles , exercis e equipment , seating , counte r tops , servin g trays , boxe s an dcontainers , microwav e cookware , etc .

• Corrosio n Resistan t

Products : pip e fittings , ducts , hoods , tanks , pumps , filtration equipment , an dawid e variet y o f othe r chemica l resistan t

product s fo r

us e i n th e waste/wastewate r

treatment , chemica l processing , semiconductor , an d petrochemica l industrie s

• Electronic/Electrical : rods , tubes , circui t breake r boxes , molde dparts , housings , substatio n equipment , electroni c connections , pol e lin e hardware , microwav e antennas , an dman y othe r electrica l an delectroni c application s

• Lan dTransportation : bod y panel s fo r cars , buses , an dtracto r

trailers , tmc k

cabs , boxca r doors , subwa y seating , heate r housings , fron t

en dassemblies , driv e shafts , win ddeflectors , gril l openin g panels , tai l ligh t housings , fende r

liners , instmmen t 4- 2P.5 5



### panels , andothe

r divers e part s andaccessorie s fo r lan dtransportatio n an

dutilit y vehicle s

• Other : al l other

composite s applications , includin g th e repair/replacement o f component s ofth e civi l infrastructur e such a s guardrails , sig n posts , an dstructura l support s fo

r highway s andbridge s Som e ofth e directl y affected operation s ar e performe da s par

t o f large r integrate d process . Thes e captiv e producer s do no t engag e i n commercia

l transaction s involvin g the RPC product
. They produc e an dsel l aproduc t (e.g. , appliances ) tha

t incorporate s th e RPC produc t tha t they als o produce
. Othe

r RPC producer s do sell thei r product s in th e market wher e th e RPC produc t

i s use da s a

n input to anothe r product , whic h als o coul db e applianc e manufacture
. Presumably , eac h producer ha s conducte da"mak

e or buy " decision , som

e decidin g to buy the RP

C commodity , other s to self-produc e it
. Each ofth e produc t

group s abov e i s taken a s aseparat e composit

e commodit

y wit h a singl e pric e an

duniqu e supply anddeman dcharacterization
. I n additio n to thes e segments , sufficien t market informatio n i s availabl e to separat e the constmctio n segmen

t int o thre e distinc t end-us e markets—genera

l constmction , plumbin g fixtures, andpanels
. Operatin g a t thi s broadlevel o f

produc t aggregatio n when ther

e ar e literall y thousand s o f

specifi c product s obviously mask s baselin e pric e difference s an dmarket shift s withi n eac h segment . However , without substantia

l additiona

l dat afurthe

r disaggregatio n i s no t

possible
. A s show n i

n Tabl e 4-1 , mor

e tha n 3. 1 billio n pound s o f

RPC product s wer

e shippe d i n 1997 t o domesti c an

dforeign consumer s i

n thes e markets
. Base do

n industr y survey response s andhistorica

l averag e growt

h rates , EP

A estimate dtha

t 1. 4 billio n pound s o f RPCs , o r 4 5 percent

ofth e tota

l shipments , wer

e manufacture db y facilitie s directly affected by th e regulation
. Facilitie s usin g unaffecte dresin s (i.e. , thermoplastic s or unaffected thermosets ) produce d1.

7 billio n pound s o f

RPCs
. Bot h segment s include "in-house " productio n o f RPC s b y captiv e facilitie s and merchant productio n b

y commercia

l RPC suppliers
. The captiv e facilitie s ar e likely t o b e owne db y large r integrate dfirms manufacturin g durabl e products , whil e the commercia l facilitie s ar

e typically smalle

r specialt y firms. Given limite ddataon th e typ e o f facility , the Agenc y approximate dthi s distributio n by usin g the SB A criteri afo r larg e an dsmall businesses
. I

n th e directly affectedsegment , facilitie s owne db y larg e businesse s ar

e assume d to b e captivel y owne dandoperated
. Facilitie s owne db y small businesse s ar

e assume dt

o b e

4-3P.5 6



### Tabl e 4-1 . Reinforce d Plastic s Composite s Shipment s b y End-Us e Market : 199

7 (IO 6 

### lbs) a

End-Us e Marke t Aircraft/aerospac e Appliances/busines s equip
. Genera l constructio n Plumbin g fixture s Panel s Consume r product s Corrosion-resistant

product s Electrical/electroni c Lan dtransportatio n Miscellaneou s Tota l Tota l 24. 0 185. 0 163.5 " 403. 3 202.6 " 210. 0 396. 0 348. 0 1,095. 0 111. 0 3,138. 4 Directl y

Merchan t 0. 5 12. 0 44. 6 172. 7 22. 7 31. 0 120. 7 18. 0 112. 2 21. 3 555. 6 Affected "

Captiv e 5. 3 8. 5 71. 9 230. 6 100. 7 56. 0 30. 9 81. 2 255. 2 19. 3 859. 8 Indirectl y Affected '

Merchan t 1. 6 96. 1 18. 0 0. 0 14. 5 43. 8 194. 5 45. 2 222. 2 36. 9 672. 9 Captiv e

16. 6 68. 4 29. 0 0. 0 64. 6 79. 2 49. 9 203. 6 505. 4 33. 4 1,050. 1

aInclude s weigh

t o f resin , reinforcements , an

d fillers
. Total s ma

y no t su mdu e to independent

rounding
. b Estimate s base don projecte dfacilit y datadevelope dfro

mICRsurvey response s an d historica l averag e annua l output rates . The merchant/captiv e distributio n wa s determine dby the siz e o f the ownin g compan

y (i.e. , larg e = captiv e an

d small = merchant)
. • c Compute da s th e differenc e between tota l shipment s and directl y affectedshipments
. Merchant/captiv e quantitie s wer

e calculate dusin g th e sam

e merchant

/ captiv e rati o observe dfo

r the affectedsegment . dEP A estimate
. Source : Societ

y o f Plastic s Industry , Inc
. 1998
. Facts and Figures of

the U.S. Plastic Industry. 1998Edition. SPI , Washington , DC : Septembe r 1998
. 

### merchant producers
. For

th e unaffecte dsegment , th e Agenc y compute dth e merchant/captiv e distributio n usin g th e rati o observe dfo r the regulate dsegment . Followin g the abov e approach , EP A estimate dtha

t 555. 6 millio n pound s o f

regulate d thermose t RPC s wer

e exchange di n market s durin g 1997 , or 3 9 percent

ofth e directly affectedsegmen

t o f 1,415. 4 millio n pounds
. Captivel y produce dresin s tha t ar e directly affectedby th e regulatio n accounte dfo r th e remainin g 859. 8 millio n pounds
. A s shown i n Tabl e 4-1 , th e sam

e merchant/captiv e proportion s ar e applie dto th e indirectl y affected segment . Th e directly an

d indirectly affectedmerchant supply then constitute s the market quantit y fo r eac h RP C produc t a s shown in Tabl e 4-2
. Publicly availabl e datao

n market price s fo r RPC s a t thi s level o f

aggregatio n doe s no t exist
. Absen

t thes e data , EP

A compute dmarket

price s fo r each market

segmen t b y takin g th e 4- 4P.5 7



### Tabl e 4-2 . Estimate d Marke tQuantitie s and Price s fo r Reinforce d Plastic s Composite s by ProductGroup : 1997

Produc tGrou p Aircraft/aerospac e Appliances/busines s equip
. Genera l constructio n Plumbin g fixture s Panel s Consume r product s Corrosion-resistant

product s Electrical/electroni c Lan dtransportatio n Miscellaneou s Totals/Averag e Directl y Affecte d 0.5 1 11.9 8 44.6 1 172.6 6 22.6 7 30.9 5 120.6 6 18.0 4 112.2 2 21.3 4 555.6 4 Quantit

y (IO 6 lbs/yr) Indirectl y Affecte d 1.57 96.1 1 17.9 9 0.0 0 14.5 5 43.7 7 194.47 45.2 3 222.2 2 36.9 5 672.8 6 Tota

l Marke t 02.0 8 108.0 9 62.5 9 172.6 6 37.2 3 74.7 2 315.1 3 63.2 7 334.4 4 58.2 9 1,228.5 0 Pric e ($/lb) °

$38.3 5 $2.3 7 $3.4 6 $3.4 8 $3.2 4 $3.4 1 $3.7 7 $3.2 9 $3.4 4 $3.4 1 $3.4 8

aComputation s base do

n multiplyin g the per-uni t

estimate s ofth e facility-specifi c cost s o f material s (i.e. , resins , fillers , an

dreinforcements ) b y the U.S
. Censu s estimate ofth e averag e rati o o f sale s to costs-of

material s fo

r NAIC S code 326199 A (reinforce dan dfiberglas s plastic s products , nee) , which wa s 2.28
. Th e unit cos t ofth e highes t

cos t supplier i n each marke

t wa s assume dt

o b e equa l t o th e commodit

y pric e fo r tha t market segment . 

### highes t value s tha

t resul t fro mth e multiplicatio n ofth e facility-specifi c cost s o f material s (i.e. , resins , fillers, andreinforcements) 1 

### b y th e U.S
. Censu s Burea

u estimate ofth e averag e rati o o f sale s t o costs-of-material s fo r NAIC S cod

e 326199 A (reinforce dan

dfiberglas s plastic s products , nee) , whic h wa s 2.28
. Assumin g perfec t competitio n fo

r thi s analysis , the resultin g sale s estimate i s deeme da s the bes t approximatio n o f

facility-specifi c pricin g wit h th e highes t

(or marginal ) supplie

r i n eac h marke

t determinin g marke

t price
. Tabl e 4- 2 present s th e estimate dprice s fo r RPC s i n 1997 fo r eac h RPC produc t

groupin g a s well a s th e directl y an dindirectl y affectedmarket quantities
.

'Give n the limite ddatao

n us e o f thes e material s by market , th e Agenc y compute daweighte daverag e pric e ($1.0 0 per poun dresin , $1.2 5 per

poun dreinforcement , and$0.0 9 per poun dfo r filler ) an dapplie di

t to estimat e materia l cost s fo r each producer

wit h the exceptio n o f

aerospace/military
. I

n tha t case , EP A use d dat ao n carbo n reinforcemen

t price s only
. 4-5P.5 8



### Market impact s ofth e regulatio n ar e conditiona

l o n th e behavio r

o f firms. For

thi s analysis , firms ar

e viewe da s aprice-takers ; tha t is , each firmtake s th e market pric e a s given
. Thi s assumptio n o f

"perfec t competition " seem s appropriat e given th e numbe

r an d distributio n o f

buyer s andseller s o f

RPC s acros s th e Unite dState s andth e reasonabl y homogeneou s namr

e o f RP C products
. Therefore , th e Agenc y modele dten national , perfectly competitiv e market s base don th e produc t group s identifie dabove
. 4. 2 Producers , Costs , an d Supply A s describe dabove , RP

C facilitie s ar

e classifie dinto tw o type s o f producers : captiv e or merchant
. Severa

l factor s woul dsugges t

tha t th e impac t

o f the regulatio n o

n th e choice s o f captiv e producer s (i.e. , th e us e o f "in-house " RPC s productio n methods , substitute materials , an

dRP C output levels ) i s small becaus e RPC s typically represent asmal l cos t shar e o f their final products
. I

n addition , qualit

y andcontro l issue s ma

y preclud e thes e operation s fro

mobtainin g RPC s fro

moutsid e suppliers
. Therefore , th e market analysi s focuse s only on th e merchant segmen t o f RPC production
. Tw o type s o f

merchant supplier s operate in thes e markets :

• facilitie s directl y affectedby th e regulatio n becaus e the y face additiona

l cost s wit h th e implementatio n o f

th e NESHAP an

d

• facilitie s indirectl y affectedb y th e regulatio n becaus e they produc e aclos e substitute fo

r th e product s produce db y th e regulate dentities
. Althoug h thi s secondtyp e o f supplie r doe s no t incu r additiona l contro l costs , i

t will b e affectedb y an y change s in market

price s tha t occur wit h the regulation
. The engineerin g analysi s projecte deac h directly affectedfacility' s 1997 product-lin e quantitie s base do n the Informatio n Collectio n Reques t (ICR) survey dat aandhistorica l industr y averag e annua

l output growt h rates . Each individua

l merchant

facilit y i s include di

n the economi c model
. Th e output fro mindirectl y affectedproducer s i s the differenc e between tota l merchan t shipment s produce dandtha t fro maffectedproducer s (se e Tabl e 4-1)
. Absen t adetaile d characterizatio n o f

thes e producer s andbecaus e they ar e no t subjec t to th e regulation , thi s componen t o f supply wa s include di

n th e economi c model a s asingl e representativ e supplie r wit h agenera l functiona l for mtha t allow s fo r increase s i

n their productio n i

n respons e to pric e increase s (se e Appendi x B fo r details)
. Fo r affectedfacilities , th e Agency develope duni t cos t curve s fo r eac h RPC produc t lin e base do

n th e reporte dproductio n andth e associate dmarke t pric e fro mTabl e 4- 2 (se e 4- 6P.5 9



### Appendi x B fo

r details)
. Given fixedfactor s o f productio n (i.e. , plant

an dequipment) , eac h RP C produc t lin e a t adirectly affectedfacilit

y i s characterize dby a

n upward-slopin g supply function , a s show n in Figur e 4-1
. I n thi s case , th e supply function i s tha t portio n ofth e margina l cos t curv e bounde db y zero andth e technica l capacit y a t th e facilit y wit h productio n cost s bein g measure da s th e are aunder th e curv e up to their

output level
. Supplier s selec t thei r output leve l accordin g t o thi s schedul e a s lon g a s th e marke t pric e i s sufficientl

y high t o cove r averag e variabl e cost s (i.e. , greater tha n C 0 

### i n Figur

e 4-1 ) an dth e resultin g revenu e surplu s i s larg e enough to cove r an y fixedcosts . If

the market

pric e fall s belo w th e minimu m averag e variabl e costs , then th e firm' s bes t respons e i s to ceas e productio n becaus e tota l revenu e doe s no t

cove r th e tota l variabl e cost s o f

production
. Thes e individua l supply decision s ar

e then aggregate d(i.e. , horizontall y summed) to develo p th e market supply curve . Onc e w e apply thi s characterizatio n ofth e supply function to eac h affectedproducer , w e deriv e thei r

productio n cost s by takin g th e integra l ofth e are aunder

th e curv e correspondin g to thei r productio n rate an

dmarket price
.


### $/l b



# a lbs/yea r Figure 4-1 . Supply Curv e fo r a Representativ e Directl y Affected MerchantFacilit y

4- 7P.6 0



### A s detaile din Appendi x B , thi s analysi s employ s a n "intermediate " m

n analysi s i

n whic h som

e factor s ar

e fixed(capital ) an

dother s ar

e variabl e (labor , materials , etc.)
. Thi s allow s u s to avoi dth e consequence s o f assumin g th e ver

y shor t m n o r th e long mn . Th e ver

y shor t run i s acas e in whic h al l factor s o f productio n ar

e fixed andproducer s ar

e unabl e to respon dand , thus , incu

r aone-to-on e reductio n in profit s du e to regulation , whil e th e long mn i s acas e in whic h all factor s ar e variabl e andal l regulator y cost s ar e passe don to consumers . Therefore , ou

r modelin g approac h addresse s economi c viabilit y fo r bot h the short-m n criteri a(i.e. , product-lin e revenue s cove r all variabl e costs ) andth e long-m n criteri a (i.e. , facilit y revenue s cove

r tota l costs)
. 4. 3 Consumers , Value , and Demand Tw o type s o f

consumer s us e RPC products :

• "in-house " consumer s o f RPC s produce dby captiv e producers , and

• other firms tha t purchas e RPC s fro

mmerchant

producers
. Larg e integrate dfirms consum e RPC s manufacture dwithi n th e firm, andn o explici t RPC deman di s reveale dthroug h amarket transaction
. Rather , th e decisio n t o consum e RPC s produce d"in-house " i s th e resul t of a"mak e o r buy " decisio n tha

t consider s th e valu e to th e firmo f manufacturin g thes e input s a s oppose dt o purchasin g themoffsite
. Althoug h thes e choice s ar e no t explicitl y addresse din th e economi c model , i t i s likel y tha

t thes e consumer s ar e les s responsiv e to change s in RP C cost s becaus e th e cos t

shar e o f tota l productio n i s smal l an dthei r supply option s ma

y b e limite dfo

r corporat e or technica l reasons . A s aresult , th e impact s on thes e producer s ar e determine dusin g afull-cos t absorptio n approac h wit

h th e estimate dregulator

y cost s causin g adolla

r fo r dolla r reductio n i

n their profits
. A variet y o f consumer s purchas e RPC product s commercially andincorporat e the m into othe r higher-order

products
. For

example , automobil e manufacmrer s us e RPC bumper s andinterio r

components ; electrica

l appliance s an

delectroni c product s us e RPC s a s interna l component s andexterna

l housings
. The valu e o f

thes e product s depend s o

n the availabilit

y an dcos t o f substitutio n fo

r the produc t

(i.e. , meta

l insteado f

plastic) , the feature s ofth e alternativ e produc t

tha t affec t it s degre e o f

substitutabilit

y i n higher-order

products , an

dthe pric e ofth e higher-orde

r product
. For th e economi c analysis , eac h commodit y market wa s modele da s havin g asingl e aggregat e consume

r wit h adownward-slopin g market demandcurv e (se e Figur

e 4-2)
. The
4- 8P.6 1

$/l b

D
lbs/yea r Figur e 4-2 . Deman d Curv e fo r RPC s

Agenc y constmcte dthi s curv e fo r eac h RP C commodit y usin g baselin e quantity , pric e data , an dassumption s abou t

th e responsivenes s t o change s i n pric e (derive ddeman delasticity)
. Factor s tha t

influenc e th e magnimd e ofthi s pric e responsivenes s includ e th e

• price-responsivenes s ofth e en dproduc t mad e wit h RPCs ,

• cos t shar e ofth e RP C inpu t

i n tota l productio n ofth e en dproduct , an d

• eas e o f

substitutio n betwee n thi s inpu t ari dothe r

input s i n production
. Althoug h dat alimitation s preven t estimatio n o f

thes e parameters , knowledg e abou t th e relationship s o f

thes e factor s make s i t

possibl e t o develo p informe dassumption s abou t RP C consume r responsivenes s t o pric e change s i n commercia l markets
. I f w e assum e o r

expec t tha t th e

• deman delasticit y ofth e final commodit y i s on e (i.e. , a1 percen t increas e i n pric e result s i n a1 percen t

decreas e i n quantit y demanded) ,

• cos t shar e o f RPC s i n tota l productio n cos t i s small , an d

• eas e o f

substitutio n betwee n input s difficult , the n 4- 9P.6 2



### th e elasticit

y o f deman dfo

r RPC s woul db e inelasti c (i.e. , les s tha n one)
. Fo r

thi s analysis , th e Agenc y use dademandelasticit y of-0. 5 (i.e. , a1 percent increase/decreas e i

n the pric e o f RPC s woul dresul t

i n a0. 5 percent

decrease/increas e in th e quantit y o f RP C product s demanded)
. Appendi x B provide s adetaile ddescriptio n ofth e equation s tha t characteriz e th e market deman dcurves . 4. 4 Baselin e an

d With-Regulatio n Equilibriu m The competitiv e model o f

pric e formation , a s shown i n Figur e 4- 3 (a) , posit s tha

t market price s andquantitie s ar

e determine dby th e intersectio n ofth e marke t supply an d demandcurves . Under

th e baselin e scenario , amarket pric e andquantit

y (P,Q ) ar e determine dby th e downward-slopin g market deman dcurv e (DM

### ) an

dthe upward-slopin g market supply curv e (S M 

### ) tha

t reflect s th e su

mofth e individua

l supply curve s o f

directl y affectedan

dindirectl y affectedfacilitie s tha t produc e agiven product
. Wit h th e regulation , th e cos t

o f productio n increase s fo

r supplier s usin g regulate d thermose t resins
. Thes e additiona

l cost s include avariabl e componen t consistin g ofth e operatin g an

dmaintenancecost s andafixedcomponen t tha t doe s no t var y wit h output (i.e. , expenditure s fo

r control-relate dcapita

l equipmen

t to comply wit

h the regulator

y alternative)
. The impositio n ofth e regulator y contro l cost s i s represente da s a n upwar dshif t i n the supply curv e fo r eac h directl y affectedfacility
. A s aresul t ofth e upwar

dshif t i n thes e individua

l supply curves , th e market

supply curv e fo

r RPC product s wil l shif

t upwar da s show n i

n Figur e 4-3(b ) t o reflec t

th e increase dcost s o f

productio n a

t facilitie s usin g thermoset

resins
. I n baselin e without

th e propose dstandards , th e industr y produce s tota

l output , Q , a

t price , P , wit

h directl y affectedfacilitie s producin g th e amoun t q d

### an dindirectl y affected facilitie s accountin g fo

r Q minu s q

d 

### , o r q; . Wit h th e regulation , the market pric e increase s fro mP to P ' andmarket

output (a s determine dfro

mth e marke

t demandcurve , D M 

### ) decline s fro mQ t o Q'
. Thi s reductio n i

n market output i s the ne t resul t o f reduction s a

t directl y affectedfacilitie s andincrease s a t indirectly affectedfacilities
. 4. 5 Results Th e simpl e analytic s presente dabov e sugges t that , whe n facedwit

h higher cost s o f RPC produc t

production , producer s wil l attemp t to mitigat e their impact s by makin g adjustment s to shif

t a s muc h ofth e burden on other economi c agent s a s market condition s allow
. The adjustment s availabl e t o facilit y operator s include changin g productio n processes , changin g inputs , changin g output rates , o r even closin g th e facility
. Thi s analysi s focuse s o n 4-1 0P.6 3

3 d 

### Facilitie s Directly Affected 

## + P

Facilitie s Indirectl y Affected Market

a) Baselin e Equilibriu m 

# \cc §M' y CM

.

! ! D M i i 

### q ' q Facilitie s Directly Affected q q ' Facilitie s Indirectl y Affected Q ' Q Market

b ) With-Regulatio n Equilibrium Figure 4-3 . MarketEquilibrium Withou tan d Wit h Regulatio n

th e las t tw o option s becaus e they appea r to b e th e mos t

viabl e fo r RP C facilities , a

t leas t i n th e near-term . A larg e segmen t ofth e RP C industr y i s affectedby th e regulation , an dw e woul dexpec t

upwar dpressure on price s a s producer s facing higher cost s reduc e output

rate s in respons e to thes e costs . Change s i n market price s and , throug h th e impac t o f pric e o n 4-1 1P.6 4



### quantit y demanded , output

fo r eac h produc t

wil l lea dt o change s i

n th e profitabilit

y o f produc t lines , facilities , andfirms. Thes e market andindustr

y adjustment s wil l als o determin e th e socia

l cost s ofth e regulation
. To estimat e thes e economi c impacts , th e concepma l model describe dabov e wa s operationalize di

n amultipl e spreadsheet

model , a s detaile di

n Appendi x B
. I

n summary , thi s mode l characterize s producer s an dconsumer s o f

eac h RPC produc t

andthei r behaviora l response s to th e impositio n ofth e regulator y complianc e costs . Thes e cost s ar e expresse dpe

r poun do f RPC produc t

fo r eac h facilit

y andserv e a s th e input

to th e market

model , or "cost

shifters " ofth e baselin e supply curve s a t th e facility
. Given thes e cost s fo r directly affected facilities , th e mode l determine s anew equilibriu msolutio n i n acomparativ e stati c approac h wit h higher market price s andreduction s i

n output fo r eac h RPC product
. Th e followin g section s provid e th e Agency' s estimate s o f thes e economi c impact s fo r th e recommende dalternativ e an dcompar e andcontras t

thes e result s wit

h th e projecte d impact s under

th e MACT floo

r andabove-the-MAC T floo r alternatives
. 4.5.1 Market-Level

Impacts Th e increase dcos t

o f productio n du e to th e regulatio n i s expecte dto slightl y increas e th e pric e o f

composite s andmarginally reduc e their production/consumptio n fro mbaselin e levels
. A s show n in Tabl e 4-3 , th e recommende dalternativ e i s projecte dto increas e th e averag e pric e o f

RP C product s by 0. 3 percent , or $0.0 1 pe r pound
. Th e pric e impact s ar e attenuate db y th e existenc e o f aperfec t substitute fo

r th e regulate dRPC products
. Thi s substitute i s RP C product s mad e fro mthermoplasti c resins , whic h ar e no t subjec t to th e regulation
. Wit

h highe r RPC produc t

prices , the y ar

e expecte dto increas e productio n by 0. 3 percent . The combine deffec t o f highe r cost s du e to regulatio n an

dsubstitutio n to unaffected RPC product s i s expecte dto caus e a0. 8 percent reductio n i

n productio n a

t regulate d facilities
. The ne

t result o f thes e reduction s a

t affectedfacilitie s an

dth e increase s a

t unaffecte dfacilitie s i s amarket declin e i n outpu t

o f 0. 2 percent . The siz e ofth e projecte dpric e increas e fo r each commodit

y i s primaril y determine d by th e leve l anddistributio n o f complianc e cost s incurre db y the facilitie s manufacturin g thes e commodities
. I

n general , market s wit

h higher per-uni t complianc e cost s ar

e expecte dt

o experienc e th e mos t

significan t pric e changes
. A s shown i n Tabl e 4-4 , market

price s ar e projecte dt o increas e a

t or abov e the industr

y averag e fo

r five ofth e te

n markets
. A

n additiona l facto r in determinin g the change s i n market price s acros s th e product s i s th e 4-1 2

### Tabl e 4-3
. Market-Leve l Impact s ofth e Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : 199 7

Aircraft/Aerospac e Marke t Pric e (per

lb ) Market Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected) Appliances/Busines s Equipmen t Market Pric e (per

lb ) Marke t Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Genera l Constructio n Market Pric e (per

lb ) Market Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected) Plumbin g Fixture s Market Pric e (per

lb ) Market Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Panel s Market Pric e (per

lb ) Market Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected) Consume r Products Market Pric e (per

lb ) Market Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected) Baselin e $38.3 5 2.0 8 0.5 1 1.5 7 $2.3 7 108.0 9 11.9 8 96.1 1 $3.4 6 62.5 9 44.6 1 17.9 8 $3.4 8 172.6 6 172.6 6

— $3.2 4 37.2 3 22.6 7 14.5 5 $3.4 1 74.7 2 30.9 5 43.7 7 MAC T Floo r

Absolut e Chang e <$0.0 1 <-0.0 1 <-0.0 1 <0.0 1 <$0.0 1 -0.0 2 -0.0 7 0.0 4 $0.0 2 -0.2 1 -0.4 3 0.2 1 $0.0 1 -0.2 9 -0.2 9

— <$0.0 1 -0.0 4 -0.0 8 0.0 4 $0.0 1 -0.1 7 -0.3 9 0.2 2 Relativ e

Chang e <0.1 % <-0.1 % <-0.1 % <0.1 % <0.1 % <-0.1 % -0.6 % <0.1 % 0.5 % -0.2 % -1.0 % 0.5 % 0.3 % -0.2 % -0.2 % N A 0.1 % -0.1 % -0.3 % 0.1 % 0.4 % -0.2 % -1.3 % 0.4 % Recommende d Alternativ e

Absolute Chang e <$0.0 1 <-0.0 1 <-0.0 1 <0.0 1 <$0.0 1 -0.0 2 -0.0 7 0.04 $0.0 2 -0.2 2 -0.4 3 0.2 1 $0.0 1 -0.2 9 -0.2 9

— <$0.0 1 -0.0 4 -0.0 8 0.0 4 $0.0 1 -0.1 7 -0.3 9 0.2 2 Relativ e

Chang e <0.1 % <0.1 % <0.1 % <0.1 % <0.1 % <-0.1 % -0.6 % <0.1 % 0.5 % -0.2 % -1.0 % 0.5 % 0.3 % -0.2 % -0.2 % N A 0.1 % -0.1 % -0.3 % 0.1 % 0.4 % -0.2 % -1.3 % 0.4 % Above-the-MACT-Floo r

Absolute Chang e $0.0 1 <-0.0 1 <-0.0 1 <0.0 1 <$0.0 1 ,-0.1 2 -0.3 3 0.2 1 $0.0 6 -0.5 2 -1.2 9 0.7 7 $0.0 5 -1.2 8 -1.2 8

— $0.0 1 -0.0 6 -0.1 2 0.0 7 $0.0 3 -0.4 6 -1.0 7 0.6 1 Relativ e

Chang e <0.1 % <0.1 % -0.1 % <0.1 % 0.2 % -0.1 % -2.7 % 0.2 % 1.7 % -0.6 % -2.9 % 1.7 % 1.5% -0.7 % -0.7 % NA 0.2 % -0.1 % -0.5 % 0.2 % 1.0% -0.5 % -3.5 % 1.0% (continued )

### Tabl e 4-3
. Market-Leve l Impact s ofth e Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : (continued ) 199 7

Corrosion-Resistan t Marke t Pric e (per

Ib ) Marke t Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected) Electrical/Electri c Marke t Pric e (per

lb ) Marke t Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected) Lan d Transportatio n Marke t Pric e (per

lb ) Marke t Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Miscellaneou s Marke t Pric e (per

lb ) Market Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected) Thermosets/Thermoplastic s (Indirectl y Affected ) Total Marke t Pric e (per

lb ) Marke t Quantit y (Million s lbs/yr) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Baselin e $3.7 7 315.1 3 120.6 6 194.4 7 $3.2 9 63.2 7 18.0 4 45.2 3 $3.4 4 334.4 4 112.2 2 222.2 2 $3.4 1 58.2 9 21.3 4 36.9 5 $3.4 8 1,228.5 0 555.6 4 672.8 6 MAC T Floo r

Absolute Chang e $0.0 2 -0.7 8 -1.7 7 0.9 9 <$0.0 1 -0.0 4 -0.0 9 0.0 5 $0.0 1 -0.5 5 -1.3 4 0.7 8 $0.0 1 -0.0 9 -0.2 0 0.1 1 $0.0 1 -2.2 0 ^1.6 6 2.4 6 Relativ e

Chang e 0.4 % -0.2 % -1.5 % 0.4 % 0.1 % <-0.1 % -0.5 % 0.1 % 0.3 % -0.1 % -1.2 % 0.3 % 0.2 % -0.1 % -0.9 % 0.2 % 0.3 % -0.2 % -0.8 % 0.3 % Recommende d Alternativ e

Absolute Chang e $0.0 2 -0.7 8 -1.7 7 0.9 9 <$0.0 1 -0.0 4 -0.0 9 0.0 5 $0.0 1 -0.5 5 -1.3 4 0.7 8 $0.0 1 -0.0 9 -0.2 0 0.1 1 $0.0 1 -2.2 0 -4.6 6 2.4 6 Relativ e

Chang e 0.4 % -0.2 % -1.5 % 0.4 % 0.1 % <-0.1 % -0.5 % 0.1 % 0.3 % -0.1 % -1.2 % 0.3 % 0.2 % -0.1 % -0.9 % 0.2 % 0.3 % -0.2 % -0.8 % 0.3 % Above-the-MACT-Floo r

Absolute Chang e $0.0 4 -1.9 2 ^t.3 8 2.4 6 $0.0 1 -0.0 9 -0.2 3 0.1 4 $0.0 2 -1.4 6 -3.5 8 2.1 1 $0.0 3 -0.3 2 -0.7 5 0.43
. $0.0 3 -6.2 3 -13.0 4 6.8 1 Relativ e

Chang e 1.1 % -0.6 % -3.6 % 1.1 % 0.2 % -0.1 % -1.3 % 0.2 % 0.7 % -0.4 % -3.2 % 0.7 % 0.9 % -0.5 % -3.5 % 0.9 % 0.9 % -0.4 % -2.3 % 0.8 %

### Tabl e 4-4
. Summar y of Complianc e Cost s an dMarke t Pric e Changes : 199 7 ($/lb )

Aircraft / Aerospac e Appliances / Busines s Equipment General Constructio n Plumbin g Fixture s Panel s Consume r Product s Corrosion

Resistan t Electrical/ Electri c Lan d Transportatio n Miscellaneou s Total Directl y

Affected Share 25 % 11 %

71 % 100 % 61 % 41 % 38 % 29 % 34 % 37 % 45 % MAC T Floo r Incrementa

l Complianc e Cos t Mea n $0.0 3 $0.0 2
$0.0 6 $0.0 7 $0.0 2 $0.0 7 $0.0 9 $0.0 3 $0.0 7 $0.0 6 $0.0 7 Ma

x $0.0 3 $0.0 6
$0.3 8 $4.2 2 $0.1 5 $0.2 9 $0.4 5 $0.1 5 $0.2 8 $0.1 6 $4.2 2 Standar d Deviatio n N A $0.0 3
$0.0 7 $0.4 4 $0.0 4 $0.0 8 $0.1 2 $0.0 4 $0.0 5 $0.0 5 $0.1 9 MarketPric e

Chang e Absolut e <$0.0 I <$0.0 1
$0.0 2 $0.0 1 <$0.0 1 $0.0 1 $0.0 2 <$0.0 1 $0.0 1 $0.0 1 $0.0 1 Relativ e

<0.1 % <0.1 %

0.5 % 0.3 % 0.1 % 0.4 % 0.4 % 0.1 % 0.3 % 0.2 % 0.3 % Recommende d Alternativ e Incrementa

l Complianc e Cos t Mea n $0.0 3 $0.0 2
$0.0 6 $0.0 7 $0.0 2 $0.0 7 $0.0 9 $0.0 3 $0.0 7 $0.0 6 $0.0 7 Ma

x $0.0 3 $0.0 6
$0.3 8 $4.2 2 $0.1 5 $0.2 9 $0.4 5 $0.1 5 $0.2 8 $0.1 6 $4.2 2 Standar d Deviatio n N A $0.0 3
$0.0 7 $0.4 4 $0.0 4 $0.0 8 $0.1 2 $0.0 4 $0.0 5 $0.0 5 $0.1 9 MarketPric e

Chang e Absolute <$0.0 1 <$0.0 1
$0.0 2 $0.0 1 <$0.0 1 $0.0 1 $0.0 2 <$0.0 1 $0.0 1 $0.0 1 $0.0 1 Relativ e <0.1 % <0.1 %

0.5 % 0.3 % 0.1 % 0.4 % 0.4 % 0.1 % 0.3 % 0.2 % 0.3 % Above-the-MACT-Floo r Incrementa l Complianc e

Cos t Mean $0.2 4 $0.1 2
$0.3 4 $0.9 2 $0.1 3 $0.4 6 $0.3 7 $0.1 7 $0.3 5 $0.3 2 $0.5 2 Ma

x $0.2 4 $0.3 6
$1.4 5 $69.2 7 $0.8 5 $3.2 6 $2.4 6 $0.9 2 $1.6 6 $1.3 3 $69.2 7 Standar d Deviatio n N A $0.2 0
$0.3 8 $7.2 1 $0.2 3 $0.6 4 $0.4 6 $0.2 1 $0.3 4 $0.3 5 $2.5 1 Marke tPric e

Chang e Absolute $0.0 1 <$0.0 1
$0.0 6 $0.0 5 $0.0 1 $0.0 3 $0.0 4 $0.0 1 $0.0 2 $0.0 3 $0.0 3 Relativ e

<0.1 % 0.2 %

1.7 % 1.5 % 0.2 % 1.0 % 1.1 % 0.2 % 0.7 % 0.9 % 0.9 % NA : No t applicable
. Only one facilit y i s affected i

n thi s market
.P.6 8 •*~~*"~ i

marke t shar e o f substitut e product s (i.e. , thermoplasti c RPCs)
. A s discusse dabove , supplier s o f thes e product s ar e expecte dt o limi t th e abilit y o f

affecte dproducer s t o increas e price s i n thes e markets
. A s show n i n Tabl e 4-4 , th e pric e increase s i n market s wher e thes e supplier s accoun t fo r greate r share s o f tota l outpu t

ar e les s tha n thos e market s wit h asmalle r presenc e o f thes e suppliers
. Th e genera l constmctio n marke t show s th e highes t

percentag e increase s i n price s (0. 5 percent ) becaus e the y hav e highe r averag e per-uni t

complianc e cost s ($0.0 6 pe r pound ) an dahig h marke t shar e o f affecte dproduct s (7 1 percent)
. Th e othe r regulator y alternative s hav e simila r directiona l effect s o n pric e an dquantit y (i.e. , highe r

price , decline s i n output)
. Th e expecte dpric e an dquantit y adjustment s unde r th e recommende dan dMAC T floo r alternative s ar e ver y simila r becaus e man y o f

thes e facilitie s emi t les s tha n 10 0 ton s o f

HAP s annuall y and , a s aresult , d o no t requir e th e above-the-floo r control s unde r

th e recommende dalternative
. However , subjectin g al l facilitie s t o th e above-the-MAC T floo r

alternativ e i s projecte dt o heighte n th e increas e i n RP C marke t price s (i.e. , 0. 9 percen t

increas e vs . 0. 3 percen t

unde r th e recommende dalternative ) an dth e declin e i n marke t quantit y (i.e. , 0. 4 percen t declin e vs . 0. 2 percen t

unde r th e recommende d alternative)
. Furthermore , th e above-the-MAC T floo r alternativ e show s greate r displacemen t o f marke t productio n wit h affecte dproducer s reducin g outpu t b y 2. 3 percen t

a s oppose dt o th e 0. 8 percen t

declin e projecte dunde r

th e recommende dalternative
. 4.5.2 Industry-Level

Impacts Industr y revenues , costs , an dprofitabilit y chang e a s RP C price s an dproductio n level s adjus t t o th e impositio n ofth e regulation
. A s aresul t o f thes e changes , th e recommende d alternativ e i s projecte dt o decreas e RP C industr y pre-ta x earning s b y $1 2 millio n (se e Tabl e 4-5)
. I n addition , 2 9 facilitie s an d7 3 produc t line s ar e projecte dt o clos e wit h th e mle , an dth e losse s i n employmen t attributabl e t o th e ml e tota l 80 9 employees
. Th e les s stringen t MAC T floo r

alternativ e project s simila r results , whil e th e economi c impact s ofth e mor e stringen t alternativ e ar e significantl y higher
. Th e followin g section s discus s thes e industry-leve l impact s i n detai l wit h additiona l emphasi s o n th e rule' s distributiona l impacts
. 4.5.2.1 Changes in Pre-Tax Earnings Th e projecte dchang e i n pre-ta x earning s i s th e ne t resul t o f change s fo r

directl y an d indirectl y affecte dmerchan t facilitie s plu s change s fo r directl y affecte dcaptiv e facilities
. Afte r accountin g for

marke t adjustments , th e directl y affecte dmerchan t producer s ar e

4-1 6

### Tabl e 4-5 . Industry-Leve l Impact s o f Reinforced Plasti c Composite s NESHA P Regulator y Alternatives : 199 7

4-= - i MerchantThermose tProducer s (Directl y Affected )

Revenue s ($10 6

/yr) Cost s ($10 6

/yr ) Complianc e Productio n Pre-ta x earning s ($10 6

/yr ) Operatin g Entitie s Produc t Line s Facilitie s Employment Captiv e Thermose tProducer s Pre-ta x earning s ($10 6

/yr) " Employment

b Thermoset/Thermoplasti c Producer s (Indirectl y Affected ) Pre-ta x earning s ($10 6

/yr) Employment Al l Producer s Pre-ta x earning s (S10 6

/yr) Employment Baselin e $1,95 7 $1,86 9

— $1,86 9 $8 7
47 1 29 9 18,22 3 N A 20,26 3

N A 30,66 8
N A 69,15 3 MAC T Floo r

Absolut e Chang e -$1 0 -$ 9 $ 7 -$1 6 -$ 1
-7 3 -2 9 -90 0 -$ 9 N A
$ 7 9 1
-S l -80 9 Percentag e Chang e -0.5 % -0.5 % N A -0.8 % -0.7 %
15.5 % -9.7 % -4.9 % N A N A

N A 0.3 %
N A -1.2 % Recommende d Alternativ e

Absolute Chang e -$1 0 -$ 9 $ 7 -$1 6 -$ 1
-7 3 -2 9 -90 0 -$1 8 NA
$ 7 9 1 -$1 2 -80 9 Percentag e Chang e -0.5 % -0.5 % N A -0.8 % -0.7 %
15.5 % -9.7 % -4.9 % NA NA

NA 0.3 %
NA -1.2 % Above-the-MACT-Floo r

Absolut e Chang e -$2 2 -$1 4 $2 8 -$4 2 -$ 8
-16 2 -9 0 -2,28 5 -$3 1 NA
$2 1 26 5
-$1 9 -2,02 1 Percentag e

Chang e -1.1 % -0.7 % NA -2.2 % -9.8 %
34.4 % -30.1 % -12.5 % NA NA

NA 0.9 %
NA -2.9 %

aChang e i

n profit i s equa l t o th e engineerin g cos t

estimate
. b Although thes e producer s incur complianc e costs , EP

A didno t projec t change s in employment
.P.7 0

expecte dt o incu r

$ 7 millio n annuall y i n regulator y complianc e costs . A s show n i n Tabl e 4-5 , base do n projecte dindividua l an dmarke t responses , th e economi c analysi s estimate s th e ne t effec t o f revenu e an dcos t

change s fo r

thes e producer s t o resul t i n adeclin e i n pre-ta x earning s o f

$ 1 millio n pe r

year . Thi s reductio n i n profit s i s les s tha n th e regulator y cost s the y incu r becaus e thes e producer s reduc e thei r production , resultin g i n highe r marke t price s fo r eac h RP C product , whic h effectivel y shift s aportio n ofth e regulator y burde n ont o consumers . A s show n i n Tabl e 4-5 , unaffecte dmerchan t producer s increas e thei r productio n i n respons e t o th e highe r

marke t price s and , thereby , experienc e gain s i n pre-ta x earning s o f $ 7 millio n pe r

year . Thus , th e aggregat e increas e i n merchan t industr y profit s o f

$ 6 millio n i s a resul t ofth e ne t

chang e i n profit s at

affecte dan dunaffecte dmerchan t producers , thereb y highlightin g a n importan t distributiona l impac t

ofthi s ml e tha t

unaffecte dmerchan t producers , mainl y thermoplasti c producers , unambiguousl y gai n a t th e expens e o f

affecte d merchan t producer s an dconsumer s o f RP C products
. Lastly , althoug h no t include di n th e marke t analysis , th e Agenc y project s directl y affecte dcaptiv e facilitie s t o incu r alos s i n pre ta x earning s o f

$1 8 millio n annually , whic h i s assume dt o b e equa l t o th e aggregat e engineerin g estimat e o f

complianc e costs , reflectin g th e Agency' s inabilit y t o predic t highe r price s fo r thei r en dproduct s and , thus , shif t cost s t o thei r

ultimat e consumers . Additiona l distributiona l impact s ofth e ml e withi n th e directl y affecte dmerchan t producer s ar e no t

apparen t fro mth e reporte ddeclin e i n thei r aggregat e pre-ta x earnings
. Th e regulatio n create s bot h gainer s an dloser s withi n th e directl y affecte dmerchan t segment . A s show n i n Tabl e 4-6 , asubstantia l subse t ofth e merchan t

facilitie s ar e projecte dt o experienc e profi t increase s unde r

th e recommende dalternativ e (i.e. , 9 3 facilitie s representin g 3 1 percen t ofth e secto r

tota l o f 29 9 facilities)
. Thei r

gai n i n operatin g profi t

i s projecte dt o b e $3. 9 millio n annually
. However , th e majorit y o f directl y affecte dmerchan t facilitie s (i.e. , 17 7 facilities , o r

5 9 percen t

ofth e secto r

total ) ar e projecte dt o los e pre-ta x earning s o f $4. 7 millio n pe r

year . Th e remainin g 2 9 facilitie s ar e projecte dt o ceas e operation s and , thus , foreg o $0. 3 millio n i n baselin e pre-ta x earnings
. Th e merchan t facilitie s wit h profi t

gain s ten dt o hav e highe r

outpu t rate s (averag e o f

4. 2 millio n pound s pe r

facility ) an dlowe r per-uni t complianc e cost s (<$0.0 1 pe r pound ) tha n th e negativel y affecte dfacilities
. Facilitie s tha t

experienc e profi t

losse s o r shutdow n ar e generall y lower-volum e facilitie s (averag e o f

0. 8 millio n pound s pe r

year ) an dhav e highe r

per-uni t complianc e cost s (averag e rangin g fro m$0.0 4 t o $0.2 5 pe r pound)
.
4-1 8

### Tabl e 4-6 . Distributional Impact s on MerchantThermosetProducers Associate d wit h Reinforce d Plasti c Composite s NESHA P Regulator y Alternatives : 199

7

4 ^ I Facilitie s Productio n Tota l (IO 6 lbs/yr ) Averag e (lbs/facility ) Complianc e Cost s Tota l ($10<7yr ) Averag e ($/lb ) Chang e in Pre-ta x earning s ($10 6 /yr) Chang e in Employment Mor

e Profitabl e 94
39 3 4. 2

$0. 9 <$0.0 1
$4. 1

1 6 MAC T Floo r Les s Profitabl e 17 6
16 0 0. 9

$6. 1 $0.0 4
-$4. 3

-27 2 Closur e

2 9
3 0. 1

$0. 6 $0.2 5
-$0. 3

-64 4 Total

29 9
55 6 1. 9

$7. 7 $0.0 1
-$0. 6

-90 0 Recommended Alternativ e More Profitabl e 9 3
38 7 4. 2

$1. 1 <$0.0 1
$3. 9

1 6 Les s Profitabl e 17 7
16 6 0. 9

$6. 4 $0.0 4
-$4. 7

-27 1 Closur e

2 9
3 0. 1

$0. 6 $0.2 5
-$0. 3

-64 4 Tota

l 29 9
55 6 1. 9

$8. 1 $0.0 1
-$1. 1

-90 0 Above-the-MACT-Floo r More Profitabl e 4 7
32 5 6. 9

$4. 3 $0.0 1
$10. 2

2 2 Les s Profitabl e 16 2
21 7 1. 3

$23. 6 $0.1 1
-$15. 7

-3 7 Closur e

9 0
1 4 0. 2

$8. 5 $0.6 1
-$2. 9

-2,27 0 Tota l

29 9
55 6 1.9

$36. 4 $0.0 7
-$8. 4

-2,28 5

Notes : Mor

e profitable—include s facilitie s wit h higher pre-ta x earning s wit

h th e regulator

y alternatives
. Les s profitable—include s facilitie s wit h lowe r pre-ta x earning s wit

h the regulator

y alternatives
. Closure—include s facilitie s tha t woul dceas e productio n wit h the regulator

y altematives
.P.7 2

A s wit h th e market-leve l results , ther e i s littl e differenc e i n th e industry-leve l profitabilit y an dth e distributio n o f profi t change s betwee n th e recommende dan dles s stringen t MAC T floo r

alternative
. However , th e sam e conclusio n canno t b e draw n whe n examinin g th e above-the-MAC T floo r alternative
. Eighty-fou r percen t ofth e affecte d merchan t producer s becom e les s profitabl e o r clos e (profi t

losse s o f $18. 6 million) , an d estimate s o f

captiv e produce r

profi t losse s increas e t o $31. 0 million
. Fiftee n percen t ofthe
. affecte dmerchan t

producer s becom e mor e profitabl e ($10. 2 million) , whil e supplier s o f thermoplasti c RPC s experienc e alarg e increas e i n profit s ($21. 0 million ) becaus e the y benefi t fro mhighe r

price s an dincrease doutput . 4.5.2.2 Product-Line and Facility-Level

Impacts I n th e fac e o f

highe r productio n costs , som e facilitie s ma y findtha t thei r mos t economi c respons e i s t o prematurel y clos e th e facilit y (presumabl y ever y curren t productio n facility wil l eventuall y clos e a s ne w technologie s replac e ol dan dcurren t method s becom e economicall y unviable)
. Suc h achoic e i s optima l wit h regulatio n condition s whe n th e facilities ' projecte drevenue s fal l shor t o f thei r variabl e cost s (productio n an dcompliance)
. Unde r th e recommende dalternative , 2 9 merchan t facilitie s ar e projecte dt o close , o r 1 0 percen t ofth e tota l directl y affecte dmerchan t facilities
. A s show n i n Tabl e 4-6 , facilitie s expecte dt o clos e hav e extremel y lo w baselin e outpu t rate s (averag e o f

0. 1 millio n pound s pe r facility ) an dsignificantl y highe r per-uni t complianc e cost s ($0.2 5 pe r pound)
. A les s sever e respons e i s availabl e t o producer s wit h multipl e productio n lines : clos e line s tha t ar e expecte dt o b e unprofitabl e wit h th e regulation
. Thi s analysi s project s tha t 7 3 produc t line s a t directl y affecte dmerchan t facilitie s (1 5 percen t

ofth e total ) ar e expecte dt o clos e wit h th e recommende dalternative
. Th e produc t line s mos t

affecte db y th e regulatio n ar e th e manua l an dmechanica l resi n application s becaus e thes e processe s typicall y hav e highe r complianc e costs . Ninety-seve n percen t ofth e produc t

lin e closure s emplo y thes e processes . Th e numbe r

o f projecte dclosure s doe s no t decreas e unde r

th e les s stringen t

MAC T floo r alternative
. However , th e projecte dclosure s increas e significantl y unde r th e above-th e floo r alternative
. Th e numbe r o f facilit y closure s triple s t o 9 0 (3 0 percen t ofth e total) , an d th e numbe r

o f produc t lin e closure s mor e tha n double s t o 16 3 (3 5 percen t ofth e total)
. Thes e impac t

estimate s shoul db e considere dupper-boun destimate s becaus e th e facilitie s ma y no t

ceas e operation s fo r

variou s reasons . Fo r

example , facility operator s ma y 4-2 0P.7 3

believ e tha t

marke t deman dcondition s ma y chang e an dallo w th e facilit y t o becom e profitabl e i n th e fumre
. I n addition , th e term s o f contractua l agreement s fo r independen t supplier s ma y requir e the mt o continu e operation s o r ma y allo w th e supplie r

t o pas s o n a greate r portio n o f

thes e additiona l cost s tha n th e marke t mode l projects
. 4.5.2.3 Changes in Employment I n respons e t o th e decrease dlevel s o f output , aggregat e employmen t i n th e merchan t segmen t ofth e RP C industr y i s projecte dt o decreas e b y 1. 2 percent , o r 80 9 employees , unde r th e recommende dalternative
. Thi s i s th e ne t resul t o f employmen t

losse s fo r

merchan t thermose t producer s (90 0 employees ) an demploymen t gain s for unaffecte d(i.e. , thermoplastic ) producer s (9 1 employees)
. Althoug h captiv e producer s incu r complianc e cost s tha t wil l likel y influenc e level s o f employment , EP A di dno t attemp t t o projec t

change s i n employmen t

for thes e facilities
. Employmen t change s for

th e MAC T floor

alternativ e ar e identica l (80 9 employees , o r 1. 2 percent ) bu t

mor e tha n doubl e unde r th e mor e stringen t above-the-floo r

alternativ e (2,02 1 employees , o r 2. 9 percent)
. 4. 6 Socia l Cost s Th e valu e o f

aregulator y actio n i s traditionall y measure db y th e chang e i n economi c welfar e tha t

i t generates . Welfar e impacts , o r th e socia l cost s require dt o achiev e th e environmenta l improvements , resultin g fromthi s regulator y actio n wil l exten dt o th e man y consumer s an dproducer s o f RP C products
. Consumer s wil l experienc e welfar e impact s du e t o change s i n marke t

price s an dconsumptio n level s associate dwit h impositio n ofth e regulation
. Producer s wil l experienc e welfar e impact s resultin g fro mchange s i n thei r revenue s associate dwit h impositio n ofth e regulatio n an dth e correspondin g change s i n productio n an dmarke t

prices
. However , i t

i s importan t

t o emphasiz e tha t

thi s measur e doe s no t includ e benefit s tha t

occu r outsid e th e market , tha t

is , th e valu e o f

reduce dlevel s o f

ai r pollutio n wit h th e regulation
. Fo r thi s analysis , base do n applie dwelfar e economic s principles , socia l cost s a s describe dabov e ar e measure da s th e su mo f th e expecte dchange s i n consume r an dproduce r surplu s (se e Appendi x B fo r amor e complet e discussion)
. Consumer s experienc e reduction s i n consume r

surplu s becaus e o f

increase dmarke t

prices
. Producer s ma y experienc e eithe r increase s o r

decrease s i n produce r

surplu s (i.e. , profits ) a s aresul t o f increase dmarke t

price s an dchange s i n productio n an dcomplianc e costs .

4-2 1P.7 4



### Th e nationa

l estimate o f

complianc e cost s i s ofte

n use da s a

n approximatio n ofth e socia l cos t ofth e mle
. Unde

r the recommende dalternative , the engineerin g analysi s estimate dannua

l cost s o f $26. 1 million
. However , thi s estimat e doe s no t account fo r behaviora l response s b

y producer s or

consumer s t o impositio n ofth e regulatio n (e.g. , shiftin g cost s to other

economi c agents , shuttin g dow n produc t line s or facilities)
. Accountin g fo

r thes e response s result s i

n asocia l cos t estimate tha

t differs fro mth e engineerin g estimate a s wel l a s provide s insight s on ho w the regulator y burde n i s distribute dacros s societ y (i.e. , th e man y consumer s andproducer s o f RP C products)
. Therefore , base don th e market analysi s describe dabove , th e annua l socia l cost s ofth e recommende dalternativ e ar e projecte dt

o b e $25. 7 million
. Th e sligh

t differenc e betwee n th e tw o estimate s i s du e to th e reduction s i n RP C produc t output triggere dby th e mle
. For th e nationa

l complianc e cos t

estimate , th e regulator

y burden fall s solely o

n affectedfacilities , whos e owner s experienc e aprofit los s exactl y equa

l to tha t amount . I

n thi s case , thi s i s entirel y alos s i n producer

surplu s wit

h n o chang e (by assumption ) i n consume

r surplus
. However , th e Agency' s economi c analysi s demonstrate s tha t thes e cost s ar

e allocate dbetwee n consumer s an dproducer s base don th e market position s o f

each. 2 

### Tabl e 4- 7 provide s th e socia l cost s andthei r

distributio n acros s stakeholder s fo r each regulator y alternative
. On th e producer

side , supplier s usin g regulate dthermosettin g resin s incu r complianc e costs . Som

e o f thes e cost s ar

e passe don to consumer s throug h highe r prices , wit

h the remainde r absorbe dby the owner s ofth e directl y affectedfacilities
. A s shown , fo r th e recommende dalternative , the los s in producer surplu s fo r thes e supplier s i s $19. 1 millio n annually
. However , producer s usin g unregulate dresin s will als o sell thei r RP C product s a

t th e sam e (higher) pric e becaus e thes e product s ar e assume dt

o b e perfec t

substimte s fo

r thos e produce dusin g thermosets
. Becaus e they d o n o incur an y complianc e costs , the owner s o f thes e facilitie s wil l hav e profit increase s o f

$7. 1 millio n annually
. On net , RPC suppliers '

2 I n th e lon g run , w e woul dexpec t tha t all cost s ofth e rul e woul db e passe do n to consumer s i

n the for mof higher produc t prices
. Thi s i s becaus e investor s wil l no t inves t i n new plant s an

dequipment

unles s they expec t t o cove r al l their cost s o f productio n andear

n aretur n o n investmen

t appropriate fo

r th e ris k they ar e incurring
. However , currentl y fixedasset s specifi c t o RPC produc t productio n are the resul t

o f pas t investmen t decision s tha

t canno t b e reverse dtoday
. Thus , ove r th e next 1 0 to 2 0 year s owner s o f

thes e facilitie s will hav e to decide how bes t to us e thes e resources . Th e economi c mode l develope dfo

r thi s analysi s ha s attempte dto captur e thes e decisions
. 4-2 2

### Tabl e 4-7
. Social Cost s with Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : 199 7 Socia l Cos tComponen t Consumer Surplu s Loss/Gai n ($10 6

/yr) Aircraft/Aerospac e Appliances/Busines s Equipment Genera l Constructio n Plumbin g Fixture s Panel s Consumer Product s Corrosion-Resistant Electrical/Electri c LandTransportatio n Miscellaneou s Producer Surplu s Loss/Gai n ( $ 10 6

/yr ) Thermoset s (Directl y Affected) Merchant Captiv e Thermosets/Thermoplastic s (Indirectl y Affected ) Socia l Cost s o f Regulatio n ($10 6

/yr) MAC T Floo r -$13.7 5 -$0.0 1 -$0.1 0 -$1.2 6 -$1.7 9 -$0.2 1 -$1.0 3 -$5.2 4 -$0.2 1 -$3.3 7 -$0.5 2 -$2.1 1 -$9.2 3 -$0.6 0 -$8.6 3 $7.1 2 -$15.8 5 Recommende d Alternativ e -$13.7 3 -$0.0 1 -$0.1 0 -$1.2 6 -$1.7 8 -$0.2 1 -$1.0 3 -$5.2 4 -$0.2 1 -$3.3 7 -$0.5 2 -$11.9 5 -$19.0 8 -$1.0 5 -$18.0 3 $7.1 2 -$25.6 9 Above-the-MACT-Floo r -$43.2 9 -$0.0 1 -$0.5 4 -$4.6 1 -$8.5 7 -$0.3 6 -$3.0 2 -$13.8 3 -$0.5 9 -$9.7 0 -$2.0 8 -$18.7 3 -$39.3 4 -$8.3 7 -$30.9 6 $20.6 1 -$62.0 2P.7 6



### profit s ar e expecte dto decreas e by $1 2 millio n becaus e th e losse s ofth e directly affected secto r outweig h th e gain s ofth e indirectl y affectedsector . I t i s importan

t to point out tha t by modelin g thes e product s a s perfec t substimtes , th e Agenc y ha s unambiguously overstate dbot h th e profit

los s by affectedproducer s an dprofit gai n by unaffecte dproducers
. If modele dseparately wit

h interactio n measure dthroug h a cross-pric e demandelasticit y (inelasti c or

moderatel y elastic) , then th e projecte dpric e increas e woul db e highe

r fo r affectedproduct s an

dlowe r fo r unaffecte dproducts
. I

n addition , thes e differentiate dpric e change s woul dcaus e th e consumer surplu s change s describe dbelo w to understate impact s o n th e consumer s o f

directl y affectedRP

C product s andoverstate impact s on consumer s o f unaffecte dproducts
. On th e consume

r side , welfar

e losse s ar e criticall y dependant

on consumers ' abilit

y t o findsubstimte s fo

r RPC product s andon th e term s the y ca n purchas e thos e products
. Becaus e RPC product s mad e fro mthermoplastic s ar

e assume dhere to b e perfec t substimte s fo r thos e produce dby th e regulate dentities , consumer s ar e indifferen

t i n their sourc e o f supply fo r thes e products , andthere i s asingl e marke t pric e fo r eac h RPC produc t

regardles s ofth e input

use di n it s production
. Thus , jus t a s producer s ofth e indirectl y affectedsecto r ca n b e expecte dto gain wit

h th e mle , their

customer s wil l experienc e losse s in economi c welfar e du e to the highe

r price s fo r RPC products
. Under

th e recommende dalternative , the los s i n consume

r welfar e i s $13. 7 millio n annually
. Consumer s o f corrosion-resistant

an d lan dtransportatio n ar

e expecte dt o experienc e th e larges t consumer surplu s losse s (se e Tabl e 4-7)
. A n importan

t model parameter

affecting the estimate dconsume r surplu s losse s i s th e elasticit y o f demandfo

r the RPC products
. A s discusse dabove , th e Agenc y believe s tha t a valu e of-0. 5 i s warrante dbase don arevie w ofth e impacte dfacto r deman delasticities
. However , a s shown in Figur e 4-4 , i f th e valu e i s large

r (smaller) , the consume

r surplu s losse s estimate woul db e mor

e (less)
. Thus , in returnin g to th e socia l cost s ofth e recommende dalternative , i t i s simply Directl y affectedproducer s -$19. 1 millio n Indirectly affectedproducer s +$7. 1 millio n Consumer s -$13. 7 millio n Socia l cos t $25. 7 millio n In comparison , th e socia

l cost s ofth e MAC T floo

r alternativ e ar

e about $15. 9 million , thos e ofth e abov e MAC T floo

r alternative , $62. 0 million
.

4-24P.7 7



### Los s i n Consume r Surplu s -

• ($10 6 

### /yr ) 30- 1 20 - 

### 10 -
-0. 1 -0. 5

Elasticit y o f Demand i —



### 1. 0 - 1

-2. 0 

### Figure 4-4 . Sensitivit

y of Change s i n Consume r Surplu s t o th e Elasticit

y of Demand (Elasticit y of Suppl y = 1.0)

4. 7 Sensitivit

y Analysi s fo r ProfitRat

e Th e baselin e profitabilit

y o f producer s i s akey parameter in th e Agency' s economi c modeling
. However , obtainin g profit datafo r firms tha t produc e reinforce dplasti c composite s i s difficul

t becaus e thes e firms ar

e mos t ofte n privatel y owne dand , thus , d o no t publis h th e requisite financial information
. I n lie u o f firm-specific profit

rates , th e Agenc y applie da n industr y averag e profit

rate o f 4. 4 percent

fo r eac h facility
. A s applie dfo r thi s analysis , thi s rate reflect s th e maximumprofit rate fo r a n individua

l facility , i.e. , athreshol d level o f profitability
. Thos e facilitie s whos e tota l revenu e minu s productio n cost s resulte di n aretur n o f les s tha n 4. 4 percent

o f revenue s use dth e lowe

r rate fo r determinatio n o f economi c viabilit

y or regulatio n induce dclosure
. I n 1997 , th e baselin e yea

r ofth e economi c analysis , the industr y averag e profit

rat e wa s 6. 5 percent

a s reporte dfo

r SI C 3 0 b y th e Censu s Bureau' s Quarterly Financia l Repor t (QFR)
. Thi s profit

rate reflect s incom

e befor e incom e taxe s a s ashar

e o f sale s fo r firms wit h les s tha n $2 5 millio n in assets . However , thi s analysi s mus t addres s th e impact s o

n man y firms tha t hav e les s tha

n $2 5 millio n i

n asset s whic h ofte

n hav e lowe

r profit rates . Th e pre ta x earning s fo

r plasti c companie s wit

h les s tha n $ 5 millio n i

n sale s wa s o

n averag e two
4-2 5P.7 8



### Industr y Averag e 4.7 % 6.0 % 6.5 % 5.5 % 5.2 % Adiuste dAverag e 3.0 % 4.0 % 4.4 % 3.7 % 3.5 % third s o f tha t fo r plasti c companie s wit

h betwee n $1 0 and$2 5 millio n in sale s (SPI , 1998)
. Thus , to better

reflec t th e profit rate s fo r smaller companie s fo

r ou r analysis , the Agenc y use d thi s two-third s rati o to adjus t th e QF Rreporte dindustr

y averag e profit

rate s fo r firms les s tha n $2 5 millio n in assets , i.e. ,

Yea r 199 9 199 8 1997 199 6 199 5 A s shown , th e profitabilit

y measure s rang e over

thi s time perio dfro

m3 to 6. 5 percent o f sales
. Therefore , a s asensitivity , th e Agenc y evaluate dthe economi c impact s fo r th e recommende dalternativ e fo r thi s broade

r rang e o f baselin e profitabilit

y scenarios
. A s show n in Tabl e 4-8 , th e market

impact s ar

e slightly greater

(lower) under

th e lowe r (higher) profit rate scenari o wit

h ver y sligh t difference s in socia

l costs . However , the estimate dnumbe r o f product-lin e andfacilit

y closure s i s affectedb y th e chang e i n profit rat e scenario s wit

h mor e (less ) product-line s andfacilitie s closin g under th e lowe r (higher) profit

rate scenario
. Interestingly , th e closin g o f les s profitabl e product-line s andfacilitie s under the 3 percent scenari o result s i

n a n aggregat e profit gain by merchant

facilitie s tha

t continu e to operat

e wit h regulation
. Thi s aggregat

e gain result s fro

mthei r increase drevenue s associate dwit h thei r gain i n market shar e andthe highe

r price s wit h regulation
. 4. 8 Ne w Source Analysi s New supplier s o f

RPC s hav e a

n investment

decision : whethe

r to commit

t o anew facilit y o f agiven scale
. The

y hav e n o fixedfactor s andthu s ma y selec t an y technicall y feasibl e facilit

y configuration
. Of

course , they ma

y als o elec t

no t t o mak e a n investment

i n thi s industry
. Economi c theor y suggest s investor s ar

e expecte dto inves t

i n aprojec t whe n the discounte dvalu e ofth e expecte dstrea mo f profit s ove

r th e lifetim

e ofth e investmen

t exceed s th e cost s ofth e investment , or alternativel y when the interna l rat e o f retur n (IRR) i s greate r tha n th e opportunit

y cos t o f capital
. Commodit

y price s andproductio n cost s ar e centra l to thi s decision
. Th e competitiv e model o f

pric e formatio n i s provide di n Figur e 4-5
. I n the figure, the willingnes s o f

existin g supplier s t

o produc e alternativ e rate s o f RPC s i s represente db

y S E 

### an d th e demandfo

r RPC s i s shown a s D 0 

### . The equilibriu mmarket price , P 0 

### , i s determine db

y th e intersectio n o f

thes e curves . I

f thi s pric e exceed s the annualize dcapita l cost s discounte da

t 4-2 6P.7 9



### Tabl e 4-8 . Summar

y of Economi c Impact

s Unde r Rang e of

Industry ProfitRates : Recommended Alternativ e

Economi c ImpactMeasure Al l Composite s Market pric e (percent

change ) Market outpu t (percent change ) Directl y affectedproducer s Indirectl y affecte dproducer s Chang e i n Pre-ta x earning s (S10 6

/yr ) Merchant facilitie s Captiv e facilitie s Closure s Produc t line s Facilitie s Socia l cost s ($10 6

/yr) 3.0 %
0.5 % -0.3 % -1.2 % 0.5 % $2. 6 -S18. 0 9 7 4 5 $25. 3 Industr

y Profi tRat

e 4.4 % 0.3 % -0.2 % -0.8 % 0.3 % -Sl. l -$18. 0
7 3 2 9 $25. 7 6.5 %

0.2 % -0.1 % -0.6 % 0.3 % -$2. 1 -$18. 0 33 1 7 $25. 8



### $/lb

= P 0 r l / S B

\ / \n

\ D

D 0 

### Q o Q , Figure 4-5 . Baselin e Equilibrium withou tRegulatio n lbs/year

4-2 7P.8 0

th e opportunit y cos t

o f capita l fo r

a n investmen t

i n thi s ris k

clas s divide db y th e profit

maximizin g outpu t

rat e plu s th e uni t

cos t o f othe r inputs , th e produce r

commit s t o ane w facility ; otherwis e n o investmen t occurs . Figur e 4- 5 show s aconstan t cos t industr y wher e marke t pric e i s exactl y equa l t o th e uni t cos t o f ne w facilities , S N . I n agrowin g industry , th e deman dfo r th e commodit y i s shiftin g outwar d(e.g. , t o D,) , placin g upwar dpressur e o n price s an dprovidin g th e incentiv e fo r investor s t o ad dne w productiv e capacity. 3 A s ne w capacit y enter s th e market , th e ne w equilibriu mpric e i s P, , whic h i s exactl y equa l t o th e uni t cos t o f suppl y fro mne w facilities
. I n thi s example , i t i s th e sam e valu e a s th e ol dprice , P 0 . Th e ne w equilibriu mquantity , Q, , include s th e additiona l outpu t supplie db y ne w sources : (Q--Qo)

- Th e NESHA P wil l increas e existin g suppliers ' cost s o f producin g RPC s i f

the y us e thermosettin g resin s b y shiftin g existin g supply , S c , up . I t wil l als o increas e th e cost s o f suppl y fro mne w facilitie s usin g thes e resins
. Thes e increase s i n cost s wil l plac e upwar d pressur e o n prices
. A s show n i n Figur e 4-6 , wit h deman dcurve , D, , price s woul db e expecte dt o increas e wit h shift s i n suppl y unti l th e pric e o f RPCs , P,' , i s equa l t o th e uni t cos t o f suppl y fro mne w facilitie s includin g th e cos t ofth e NESHAP
. However , a s show n i n Figur e 4-7 , n o ne w capacit y expansio n wil l tak e plac e i n th e fumr e tim e perio d(1 ) i f th e per uni t complianc e cost s at

ne w facilitie s exceeded , P,'
. Thus , th e simpl e analytic s presente d sugges t tha t th e ml e wil l likel y caus e investor s t o dela y constmctio n o f ne w facilitie s until

the price increases just

enough t o cove r

al l th e cost s o f

production
. Give n th e uncertaint y abou t ne w facilit y uni t

cost s (productio n an dcompliance ) an d fumr e marke t

conditions , th e Agenc y i s limite dt o genera l assessment s ofth e mle' s impac t o n th e rat e o f

ne w facility constmction
. T o infor mthes e assessments , th e Agenc y performe dth e followin g analysis :

• computed

a test ratio for each ofthe ten affected

RPC markets. Th e numerato r o f thi s rati o i s th e engineerin g estimat e ofth e uni t cost s o f complianc e for

ne w source s ($0.0 2 pe r

poun dfo r

ane w facility subjec t

t o th e MAC T floor

standar d an d$0.0 6 for

afacility subjec t

t o th e above-the-MAC T floor standard)
. Th e denominato r

for thi s rati o i s th e uni t

cos t of ane w supplier , whic h i s assume dt o b e equa l t o th e baselin e marke t price
. A s show n i n Tabl e 4-9 , thi s rati o i s smal l unde r th e MAC T floo r

standar d(les s tha n 1 percent ) an dincrease s t o approximatel y 1. 7 percen t unde r th e above-the-floo r

standard
.
For simplicity , impact s ar

e considere dfo

r one futur e tim e period
. 4-2 8P.8 1



### Q' , Q , lbs/yea

r Figure 4-6 . With-Regulatio n Equilibrium Cas e 1 : New Source s Adde d

$/l b P, '



# / y S ' E

c \ 

### S'x



### Q' , Q , lbs/yea r Figure 4-7 . With-Regulatio n Equilibrium Cas e 2 : N o New Source s Added

4-2 9

### Tabl e 4-9 . New Sourc e Analysi s o f UnitProductio n an d Complianc e Cost s ($1997 )

o Marke t Aircraft/aerospac e Appliances/busines s equipment Genera l constructio n Plumbin g fixture s Panel s Consume r product s Corrosion-resistan t Electrical/electri c Landtransportatio n Miscellaneou s Tota l New Sourc e Uni t Cost s ($/lb) a $38.3 5 $2.3 7 $3.4 6 $3.4 8 $3.2 4 $3.4 1 $3.7 7 $3.2 9 $3.4 4 $3.4 1 $3.4 8 MAC T Floo r

Ne w Sourc e Uni t Complianc e Costs ($/lb ) $0.0 2 $0.0 2 $0.0 2 $0.0 2 $0.0 2 $0.0 2 $0.0 2 $0.0 2 $0.0 2 $0.0 2 $0.0 2 Cos tShare

(% ) 0.04 % 0.68 % 0.47 % 0.47 % 0.50 % 0.48 % 0.43 % 0.49 % 0.47 % 0.48 % 0.47 % Above-the-MAC T Floo r

Ne w Sourc e Uni t Complianc e Costs ($/lb ) $0.0 6 $0.0 6 $0.0 6 $0.0 6 $0.0 6 $0.0 6 $0.0 6 $0.0 6 $0.0 6 $0.0 6 $0.0 6 Cos tShar e

(% ) 0.15 % 2.46 % 1.68 % 1.67 % 1.80 % 1.71 % 1.54 % 1.77 % 1.69 % 1.71 % 1.67 %

aEqua l to th e baselin e marke t

pric e b y assumption
.P.8 3

projected percentage changes in

facility construction with regulation for a future time period

(2005). Usin g th e concepma l approac h presente di n Figure s 4- 5 an d 4-6 , th e Agenc y estimate dth e chang e i n facility constmctio n fo r th e perio d200 0 t o 200 5 a s follows :

AFacilitie s = -^2 1 = n d * Q 2005 - ^ (4.1 )

wher e
n.

d= Elasticit y o f

deman d(-0.5 ) Z = Averag e siz e o f ane w facilit y (2. 4 millio n lbs/yr )
C200 5

A P P = Fo r

2000 , th e Composit e Fabricator s Associatio n (CFA , 2000 ) estimate dan RP C composit e deman do f 3. 5 billio n pounds. 4 Fo r th e perio d200 0 t o 2005 , th e engineerin g analysi s independentl y projecte dresi n growt h o f 123. 9 millio n pounds
. Usin g acomposite-to-resi n weigh t rati o o f 1.6 , th e Agenc y estimate daRP C composit e growt h o f 198. 3 millio n pounds
. Thus , th e quantit y for

th e baselin e yea r

o f 200 5 wa s estimate dt o b e approximatel y 3. 7 billio n pounds
.

= Calculate dusin g th e rati o o f averag e ne w sourc e per-uni t contro l cost s t o baselin e pric e for

eac h alternativ e (0.4 7 percen t fo r th e MAC T floor alternativ e an d1.6

7 percen t fo r th e above-the-floo r

alternative ) Usin g thi s approach , th e Agenc y estimate da5 percen t reductio n i n facilit y constmctio n unde r th e MAC T floor

alternativ e an da1 5 percen t reductio n unde r

th e above-the-floo r alternativ e ove r

th e 200 0 t o 200 5 tim e perio d(se e Tabl e 4-10)
. Thes e result s sugges t

minima l impact s o n facility constmctio n unde r th e MAC T floor alternative
. However , facility constmctio n impact s woul dincreas e significantl y i f al l ne w producer s wer e subjec t

t o th e above-the-floo r

standard
. A s describe dearlie r i n thi s section , th e appropriat e contro l standar dunde r th e recommende dalternativ e i s determine db y th e siz e ofth e ne w source : Thus , th e contro l cost s influenc e th e decisio n t o ente r th e marke t

and, perhaps , th e producer' s selectio n o f plan t size
. Sinc e th e uni t

contro l cost s ar e smalle r for facilitie s wit h lo w outpu t rates , i t i s possibl e tha t

th e averag e siz e o f

ne w facilitie s ma y ten d t o b e smalle r

t o b e subjec t

t o th e MAC T floor

rathe r tha n above-the-MAC T floor standards
.

4 Exclude s marin

e uses . 4-3 1P.8 4

Tabl e 4-10
. Change s i n Facility Constructio n Unde r th e Propose d NESHAP : 2000-200 5 Numbe r o f

Facilitie s Withou t Regulatio n Ne w source

s 84 MAC T Floo r Chang e Absolute Relativ e

- 5 -4.8 % Above-the-MAC T Floo r Change Absolute Relativ e -1 3 -15.5 %

~3 i

4-3 2P.8 5

SECTIO N 5 INITIA L REGULATOR Y FLEXIBILIT Y ANALYSI S

Sectio n 11 2 ofth e CA A require s th e Agenc y t o lis t categorie s an dsubcategorie s o f majo r source s and , i n som e cases , are asource s o f HA P an dt o the n establis h nationa l emissio n standards
. Reinforce dPlasti c Composite s (RPC ) productio n facilitie s tha t wer e majo r source s wer e include do n th e initia l lis t o f sourc e categories
. Majo r source s o f

HA P ar e thos e tha t

hav e th e potentia l t o emi t 1 0 ton s pe r

yea r (tpy ) o r mor e o f an y on e HA P o r

2 5 tp y o r mor e o f an y combinatio n o f

HAP
. Th e HA P emitte db y source s i n thi s sourc e categor y includ e styrene , methy l methacrylate , an dmethylen e chloride
. Thes e HA P hav e bee n demonstrate dt o caus e advers e healt h effects
. Therefore , th e propose dml e protect s ai r qualit y an dpromote s publi c healt h b y reducin g th e curren t emissio n level s o f

thes e HAP
. Th e objectiv e ofthi s propose dml e i s t o appl y standard s base do n maximu m achievabl e contro l technolog y t o al l majo r source s i n thi s sourc e category . Th e criteri ause d t o establis h MAC T ar e containe di n sectio n 11 2 (d ) ofth e CAA
. Thi s regulator y actio n wil l potentiall y affec t th e economi c welfar e o f owner s o f

RP C facilities
. Thes e individual s ma y b e owners/operator s wh o directl y conduc t th e busines s o f th e firm(i.e. , "mo man dpo p shops " o r partnerships ) or , mor e commonly , investor s o r stockholder s wh o emplo y other s t o conduc t th e busines s ofth e firmo n thei r behal f (i.e. , privatel y hel do r

publicl y trade dcorporations)
. Th e individual s o r agent s wh o manag e thes e facilitie s hav e th e capacit y t o conduc t busines s transaction s an dmak e busines s decision s tha t affec t th e facility
. Th e lega l an dfinancial responsibilit y fo r complianc e wit h aregulator y actio n ultimatel y rest s wit h thes e agents ; however , th e owner s mus t bea r th e financia l consequence s ofth e decisions
. Environmenta l regulation s lik e thi s ml e potentiall y affec t al l businesses , larg e an dsmall , bu t smal l businesse s ma y hav e specia l problem s i n complyin g wit h suc h regulations
. Th e Regulator y Flexibilit y Ac t (RFA ) o f

198 0 require s tha t

specia l consideratio n b e give n t o smal l entitie s affecte db y federa l regulation
. Th e RF A wa s amende di n 199 6 b y th e Smal l Busines s Regulator y Enforcemen t Fairnes s Ac t

(SBREFA ) t o strengthe n th e RFA' s analytica l an dprocedura l requirements
. Unde r SBREFA , th e Agenc y implement s th e RF A a s 5- 1P.8 6

writte n wit h aregulator y flexibilit y analysi s require donl y fo r mle s tha t

wil l hav e a significant

impac t o n asubstantial

numbe r o f smal l entities
. I n accordanc e wit h Sectio n 60 3 ofth e RFA , th e Agenc y ha s prepare dthi s initia l regulator y flexibilit y analysi s (IR F A ) tha t examine s th e impac t

ofth e propose dml e o n smal l entitie s withi n thi s sourc e categor y alon g wit h regulator y alternative s tha t coul dreduc e tha t impact
. A s detaile di n thi s section , EP A identifie dth e businesse s tha t thi s propose dml e wil l affec t an dconducte da n economi c analysi s t o determin e whethe r thi s ml e i s likel y t o impos e asignifican t

impac t o n asubstantia l numbe r ofth e smal l businesse s withi n thi s industry
. Th e analysi s employe dher e i s a"sale s test, " whic h compute s th e annualize dcomplianc e cost s a s ashar e o f

sale s fo r eac h company . I n addition , i t provide s informatio n abou t th e impact s o n smal l businesse s afte r

accountin g fo r

produce r response s t o th e regulatio n an dth e resultin g change s i n marke t

price s an doutpu t

fo r RP C products
. A s require db y Sectio n 609(b ) ofth e RFA , a s amende db y SBREFA , th e Agenc y convene daSmal l Busines s Advocac y Revie w (SBAR ) pane l t o obtai n advic e an d recommendation s o f

representative s ofth e smal l entitie s tha t potentiall y woul db e subjec t t o th e mle' s requirements
. Prio r t o convenin g th e SBA Rpanel , EP A conducte da"sale s test " fo r smal l businesse s base do n aearlie r provision s considere dfo r inclusio n i n th e propose d mle
. Th e result s o f

tha t analysi s indicate dmuc h mor e significan t impact s o n smal l entitie s tha n th e ml e a s i t

i s currentl y bein g proposed
. Th e reductio n i n impact s i s adirec t resul t o f th e SBA Rpanel' s recommendation s incorporate di n thi s propose dmle
. 5. 1 Identifyin g Smal l Businesse s A s describe di n Sectio n 2 ofthi s report , th e Agenc y identifie dasubstantia l numbe r o f smal l businesse s potentiall y affecte db y th e propose dNESHAP
. Base do n SB A definitions , 27 8 companie s ar e classifie da s small , o r 7 8 percen t

ofth e total
. Thes e companie s ow n 30 2 facilities , o r

7 0 percent , o f

al l RP C facilities
. 5. 2 Screening-Leve l Analysi s Fo r th e purpose s o f

assessin g th e potentia l impac t ofthi s ml e o n thes e smal l businesses , th e Agenc y considere dth e recommende dalternative , th e MAC T floor, an dan above-the-MACT-floo r

alternativ e an dcalculate dth e shar e o f annua l complianc e cos t relativ e t o baselin e sale s fo r eac h company . Whe n acompan y own s mor e tha n on e affecte d facility , th e cost s fo r

eac h facilit y i t

own s ar e summe dt o develo p th e numerato r o f th e tes t ratio
. Fo r

thi s screening-leve l analysis , annua l complianc e cost s wer e define da s th e 5- 2P.8 7



### engineerin g contro l cost s impose don thes e companies ; thus , they do no t reflec t th e change s in productio n expecte dto occu r in respons e to imposin g thes e cost s an dth e resultin g market adjustments
. Th e result s ofthi s initia l screenin g analysi s ar

e discusse dbelow
. 5.2.1 Recommended

Alternative A s shown in Tabl e 5-1 , th e aggregat e complianc e cost s ofth e recommende d alternativ e fo

r smal l businesse s tota

l $8. 1 million , or

3 1 percent

ofth e tota

l industr y cost s o f $26. 1 million
. Th e averag e tota l annua l complianc e cos t

wa s projecte da

t roughly $30,00 0 per small compan

y a s compare dto th e averag e o f 230,00 0 per

larg e company . Th e annua l complianc e cost s fo

r small businesse s rang e fro m0.0 1 to 7.5 0 percent

o f sales
. Th e averag e (median ) complianc e cost-to-sale s rati o (CSR ) i s 0.6 6 (0.40 ) percent fo r th e identifie dsmall businesse s wit

h sale s dat aand0.07 (<0.01 ) percen t fo r th e larg e businesse s wit

h sale s data
. A s shown , 4 6 small companie s (1 7 percent) ar e affecteda

t th e 1 percent

to 3 percent

level an d7 ( 3 percent ) companie s ar e affecteda

t or abov e th e 3 percent

level
. Thus , atota

l o f 5 3 smal l companies , or

1 9 percent , ar

e expecte dto incur

cost s greater

tha n 1 percent

o f thei r sales
. Furthermore , th e distributio n ofth e CSRs , a s shown in Figure s 5-1(a ) and(b) , demonstrate tha

t small companie s ar

e disproportionall y affectedrelativ e to larg e companies
. Simila r analysi s o f

earlier provision s under

consideratio n fo

r inclusio n i

n thi s ml e indicate dgreater

impact s on smal l businesse s tha n thi s propose dmle
. Almos t 4 2 percent

o f the tota l industr y complianc e cost s wer

e expecte dto b e incurre db y smal l businesse s base do n requirement s ofth e draf

t version s ofthi s mle
. Th e averag e tota l annua l complianc e cos t

wa s projecte da

t roughly $50,00 0 pe

r small company , whic h represente dclos e to 1 percent o f sales
. Th e Agenc y estimate dtha t 2 2 percent

o f small businesse s (or

6 0 firms) woul d experienc e a

n impac t greate r tha n 1 percent

o f sales , an d7 percen t o f small businesse s (o r

1 9 firms ) woul dexperienc e impact s greate r tha n 3 percent

o f sales
. Th e reductio n i

n small busines s cost s betwee n earlier version s ofthi s ml e andthe propose dml e ar e attributabl e t

o EPA' s outreac h an

daccommodatio n fo

r small firms, whic h include s the conduc t ofth e Smal

l Busines s Advocac y Panel
.

5- 3Tabl e 5-1 . Summar y Statistic s fo r SBREF A Screenin g Analysis : Recommende d Alternativ e Smal l Larg e Al l Companie s Tota l Numbe r

o f Companie s Tota l Annua l Complianc e Cost s (TACC ) ($10 6 ) Averag e (TACC ) pe r

compan y ($10 6 ) 27 8 $8. 1 $0.0 3 7 8 $18. 0 $0.2 3 35 6 $26. 1 $0.0 7 Numbe r Shar e Numbe r Shar e Numbe r Shar e Companie s wit h Sale s Data " 27 5 100 % 7 8 100 % 35 3 100 % Complianc e cost s ar e <1 % o f sale s 22 2 81 % 7 7 99 % 29 9 85 % Complianc e cost s ar e :> 1 t o 3 % o f sale s 4 6 17 % 0 0 % 4 6 13 % Complianc e cost s ar e ^ 3 % o f sale s 7 3 % 1 1 % 8 2 % Complianc e Cost-to-Sale s Ratio s Averag e 0.66 % 0.07 % 0.53 % Media n 0.40 % <0.01 % 0.21 % Maximu m7.50 % 3.53 % 7.50 % Minimu m0.01 % <0.01 % <0.01 %

" Annua l sale s datawere unavailabl e fo r thre e ultimate parent

companies
. CSR s canno t b e compute dfo

r thes e companies
. Note : Assume s n o marke t response s (i.e. , pric e andoutpu t adjustments ) b y regulate dentities
.P.8 9

100 % 90 % 80 %

_70 % -*-* ; 60 % g 50 % | 40 %

" " 30 % 20 % 10 % 0 % 0 % >0-0.5 % >0.5-1 % >1-3 % >3-5 % >5-7 % >7-10 % >10-15 % >15-20 % >20 % Cost-to-Sale s Ratio s Rang e 

### Figure 5- 1 (a) . DistHbutio n of Cost-to-Sale s Ratio s fo r Small Companies : Recommende d Alternativ e

100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % 0 >0-0.5 % >0.5-1 % >1-3 % >3-5 % >5-7 % >7-10 % >10-15 % >15-20 % >20 % Cost-to-Sale s Ratio s Rang e 

### Figure 5-l(b) . Distributio n o f Cost-to-Sale s Ratio s for Larg e Companies : Recommende d Alternativ e

5- 5P.9 0



### 5.2.2 MACT

FloorAlternative A s shown i

n Tabl e 5-2 , th e aggregat

e complianc e cost s ofth e MACT floor alternativ e fo r smal l businesse s tota

l $7. 7 million , whic h i s nearl y hal f (4 7 percent) ofth e tota

l industr y cost s o f $16. 3 million
. Th e annua l complianc e cost s fo

r small businesse s rang e fro m0.0 1 t o 7.5 0 percent

o f sales
. The averag e (median ) complianc e CS Ri s 0.6 6 (0.40 ) percent fo r th e identifie dsmall businesse s wit h sale s dat aand0.0 3 (<0.01 ) percent fo r th e larg e businesse s wit h sale s data
. A s shown , 4 5 smal l companie s (1 6 percent) ar e affecteda

t th e 1 percent

to 3 percent level an d7 companie s ( 3 percent) ar e affecteda

t or abov e th e 3 percent

level
. A tota

l o f 5 2 smal l companies , o

r 1 9 percent , ar

e affectedabov e th e 1 percent tes t ratio , representin g adecreas e o f

only one compan

y a s compare dto th e recommende dalternative
. A s shown i n Figure s 5-2(a

) and(b) , th e relativ e impact s betwee n smal l andlarg e companie s ar e simila r to th e recommende dalternative
. 5.2.3 Above-the-MA CT FloorA Iter

native A s show n in Tabl e 5-3 , th e aggregat e complianc e cost s ofth e above-the-MAC T floor alternativ e fo

r small businesse s total $40. 2 million , or 6 0 percent

ofth e tota

l industr y cost s o f $67. 4 million
. The annua

l complianc e cost s fo

r smal l businesse s rang e fro m0.0 1 to 25.8 9 percent o f sales
. Th e averag e (median ) complianc e CS Ri s 3.9 7 (2.65 ) percent fo r the identifie dsmall businesse s wit h sale s dataand0.1 5 (0.03 ) percent fo r th e larg e businesse s wit h sale s data
. A s shown , 8 8 small companie s (3 2 percent) ar e affecteda

t th e 1 percent

to 3 percent leve l an d126 companie s (4 6 percent) ar e affecteda

t o r abov e th e 3 percent

level
. Thus , atota

l o f 21 4 small companie s incur cost s greate

r tha n 1 percent

o f their sales , whic h i s fou r time s th e numbe

r affectedunder

th e recommende dalternative
. Figure s 5-3(a ) and(b ) sho w tha t the disproportionate relativ e impac t betwee n smal l andlarg e companie s i s even mor e pronounce dtha

n under th e recommende dalternative
. 5. 3 Economi c Analysi s The Agenc y als o analyze dth e economi c impact s on small businesse s under with

regulatio n condition s expecte dt o resul t fro mimplementin g th e propose dNESHAP
. Unlik e th e screening-leve l analysi s describe dabove , thi s approac h examine s small busines s impact s in ligh t ofth e expecte dbehaviora

l response s o f

producer s an

dconsumer s to the regulation
. A s show n in Tabl e 5-4 , operatin g profit s fo r facilitie s owne dby small businesse s ar e projecte dt

o declin e by $ 1 millio n under the recommende dalternative
. I n addition , 7 3 produc t line s and2 9 facilitie s ar

e projecte dto clos e under

th e MAC T floor

atlemativ e 5- 6Tabl e 5-2 . Summar y Statistic s fo r SBREF A Screenin g Analysis : MAC T Floo r Alternativ e Smal l Larg e Al l Companie s Tota l Numbe r

o f Companie s Tota l Annua l Complianc e Cost s (TACC ) ($10 6 ) Averag e TAA C pe r

compan y ($10 6 ) 27 8 $7. 7 $0.0 3 7 8 $8. 6 $0.1 1 35 6 $16. 3 $0.0 5 Numbe r Shar e Numbe r Shar e Numbe r Shar e Companie s wit h Sale s Data " Complianc e cost s ar e <1 % o f sale s Complianc e cost s ar e s 1 t o 3 % o f sale s Complianc e cost s ar e ^3 % o f sale s 27 5

22 3 4 5 7 100 %

81 % 16 % 3 % 7 8

7 7 1 0 100 %

99 % 1 % 0 % 35 3

30 0 4 6 7 100 %

85 % 13 % 2 % Complianc e Cost-to-Sale s Ratio s Averag e Media n Maximu m Minimu m 0.66 % 0.40 % 7.50 % 0.01 % 0.03 % <0.01 % 1.25 % <0.01 % 0.52 % 0.20 % 7.50 % <0.01 %

aAnnua l sale s dat awere unavailabl e fo r thre e ultimate parent

companies
. CSR s canno t

b e compute dfo

r thes e companies
. Note : Assume s n o market response s (i.e. , pric e andoutpu t adjustments ) b y regulate dentities
.P.9 2

> > o c o 3 O * o 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % 0 >0-0.5 % >0.5-1 % >1-3 % >3-5 % >5-7 % >7-10 % >10-15 % >15-20 % >20 % Cost-to-Sale s Ratio s Rang e 

### Figure 5-2(a) . Distributio n of Cost-to-Sale s Ratio s fo r Smal l Companies : MAC T Floo r Alternativ e

100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % >0-0.5 % >0.5-1 % >1-3 % >3-5 % >5-7 % >7-10 % >10-15 % >15-20 % >20 % Cost-to-Sale s Ratio s Rang e 

### Figure 5-2(b) . Distributio n o f Cost-to-Sale s Ratio s fo r Large Companies : MAC T Floo r Alternativ eTabl e 5-3 . Summar y Statistic s fo r SBREF A Screenin g Analysis : Above-the-MACT-FIoo r Alternativ e Smal l Larg e Al l Companie s Tota l Numbe r

o f Companie s Tota l Annua l Complianc e Cost s (TACC ) ($10 6 ) Averag e TAC C pe r

compan y ($10 6 ) 27 8 $40. 2 $0. 1 7 8 $27. 2 $0. 3 35 6 $67. 4 $0. 2 Numbe r Shar e Numbe r Shar e Numbe r Shar e Companie s wit h Sale s Data 3 27 5 100 % 7 8 100 % 35 3 100 % Complianc e cost s ar e <1 % o f sale s 6 1 22 % 7 6 97 % 13 7 39 % Complianc e cost s ar e *> 1 t o 3 % o f

sale s 8 8 32 % 1 1 % 8 9 25 % Complianc e cost s are s 3 % o f sale s 12 6 46 % 1 1 % 12 7 36 % Complianc e Cost-to-Sale s Ratio s Averag e 3.97 % 0.15 % 3.13 % Media n 2.65 % 0.03 % 1.75 % Maximu m25.89 % 3.68 % 25.89 % Minimu m0.01 % <0.01 % <0.01 %

aAnnua l sale s dat awer

e unavailabl e fo

r thre e ultimat

e paren t companies
. CSR s canno t

b e compute dfo

r thes e companies
. Note : Assume s n o market response s (i.e. , pric e an

doutput adjustments ) by regulate dentities
.P.9 4

* » o c o 3 o * a > 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % 

# fci

0 % >0-0.5 % >0.5-1 % >1-3 % >3-5 % >5-7 % >7-10 % >10-15 % >15-20 % >20 % Cost-to-Sale s Ratio s Rang e 

### Figure 5-3(a) . Distributio n of Cost-to-Sale s Ratio s fo r Small Companies : Above-the MACT-FIoo r Alternativ e

100 % 90 % 80 %

~. 70 % > ; 60 % g 50 % g 40 %

" " 30 % 20 % 10 % 0 % 0 >0-0.5 % >0.5-1 % >1-3 % >3-5 % >5-7 % >7-10 % >10-15 % >15-20 % >20 % Cost-to-Sale s Ratio s Rang e 

### Figure 5-3(b) . Distributio n o f Cost-to-Sale s Ratio s fo r Larg e Companies : Above-the MACT-FIoo r Alternativ e 

# -m~=

5-1 0

### Tabl e 5-4
. Summar y o f Smal l Busines s Impact s of Reinforce dPlasti c Composite s NESHA P

Thermose tProducer s (Directl y Affected ) Revenue s ($10 6

/yr) Cost s ($10 6

/yr) Complianc e Productio n Operatin g Profit

($10 6 /yr) Operatin g Entitie s Produc t Line s Facilitie s Employmen

t Baselin e

$1,95 7 $804

— $80 4 $1,15 2 47 1 299 ' 18,22 3 MAC T Floo r

Alternativ e Absolute Relativ e Chang e Chang e -$1 0 -0.5 % -$ 9 -1.2 % $7 NA -$1 6 -2.0 % -$ 1 -0.1 % -7 3 15.5 % -2 9 -9.7 % -91 6 -5.0 % Recommende d Alternativ e Absolute Relativ e Chang e Chang e -$1 0 -0.5 % -$ 9 -1.1 % $ 7 NA -$1 6 -2.0 % -$ 1 -0.1 % -7 3 15.5 % -2 9 -9.7 % -91 6 -5.0 % Above-the-MACT - Floo r Alternativ e Absolut e Relativ e Chang e Chang e -$2 5 -1.3 % -$1 5 -1.9 % $2 8 N A -$4 3 -5.3 % -$1 0 -0.9 % -16 3 34.6 % -9 0 -30.1 % -2,31 0 -12.7 % Note : Thes e estimate s incorporate the expecte dmarke t (i.e. , pric e an doutput ) adjustment s ofth e regulate dentities
. 'Thre e ofth e 302 facilitie s owne db y small companie s are exclude dfro mth e market

analysis
. They are treate da s captiv e producer s becaus e the y perfor monly intermediate operation s such a s compounding
.P.9 6



### andth e recommende dalternative , whil e 16 3 produc t line s and9 0 facilitie s ar

e projecte dto clos e under

th e above-the-MACT-floor alternative
. 5. 4 Assessmen t Althoug h an

y facilit y closure s ar

e caus e fo r concern , the numbe

r o f facilitie s a

t ris k fo r closure woul db e th e sam

e if thi s propose dml e require donly the MAC T floor level o f contro l fo r all facilities
. Th e MACT floor i s th e leas t

stringent level allowe db

y stamte . A s a resul t ofth e SBA

Rpanel , thi s ml e contain s asignifican t numbe r o f accommodation s fo

r smal l business
. Th e result s presente dher e confir mtha t th e mitigatin g measure s employe dby th e Agenc y hav e minimize dth e potentia l negativ e impact s ofth e propose dml e on small businesse s whil e stil l satisfying th e objective s ofth e CAA
. Th e shar e o f small companie s affecteda t les s tha n 1 percent

exceed s 8 0 percent

under bot h the recommende dalternativ e andth e MAC T floor

alternative
. Furthermore , only 3 percent o f small companie s ar

e projecte dto b e affecteda

t or abov e th e 3 percent

leve l fo r bot h th e recommende dandMAC T floor alternative , whil e 4 6 percent ofth e small companie s excee dthi s leve l under th e above

the-MACT-floor

alternative
. Th e economi c analysis , whic h include s market response s to the regulation , provide s th e followin g results : 2 9 facilitie s (1 0 percent) owne dby small businesse s ar e projecte dto clos e under

th e recommende dalternativ e andth e MAC T floor alternative
. The numbe

r o f facilitie s increase s to 9 0 (3 0 percent) under the mor e stringent above-the-floor

MAC T alternative
. Thes e result s ar e consistent

wit h th e industry' s profitabilit y andcharacterizatio n o f cos t curve s an dengineerin g cost s provide din earlier sections
. Thi s industr

y i s characterize dby averag e profit margin s o f

3 to 4 percent

(Dun andBradstreet , 1997)
. Unde r baselin e conditions , small facilitie s hav e highe r per-uni t cost s o f production , reflectin g economie s o f

scal e i n the productio n o f

RPC
. I n addition , analysi s ofth e engineerin g cost s show s tha t thes e facilitie s als o hav e highe r per-uni t complianc e cost s under

with-regulatio n alternatives
. Therefore , th e economi c impact s ar e likel y to fal

l disproportionatel y o

n small facilities
. However , a s note di n Sectio n 4 , thes e entitie s ma y hav e contractua

l obligation s tha t allo w the mto continu e operatio n andpotentiall y mitigat e thes e impact s throug h term s tha t dea l wit h contingencies
. Th e economi c analysi s als o show s tha t producer s usin g resin s not directly affectedb

y th e regulatio n experienc e profit gain s (e.g. , $8. 7 millio n gain unde r th e recommende d alternative)
. Thi s occur s becaus e the price s ofth e commoditie s they produc e wil l increase , but they d o no t incu r complianc e costs . Given the distributio n o f small an dlarg e entitie s 5-1 2P.9 7



### identifie di

n th e regulate dsegment , i

t i s likel y tha

t asignifican

t numbe r o f thes e producer s ma y b e small
. Thus , acomplet e analysi s ofth e smal l busines s impact s ofth e propose dml e woul dcomput

e anet effec t usin g th e projecte dimpact s o n bot h directly (thermoset) and indirectl y affected(thermoplastic ) producers
. Datalimitation s on th e distributio n o f small businesse s acros s th e indirectl y affectedsegmen t do no t allo w fo r quantitativ e estimate s o f ne t impacts
. However , th e qualitativ e analysi s doe s sugges t tha t small businesse s usin g resin s no t directl y affectedby th e ml e wil l experienc e offsetting gain s under with-regulatio n conditions
. W e d o no t anticipate an

y impact s ofth e propose dNESHA P o n small government s o r small nonprofit

organizations
. W

e hav e n o evidenc e tha

t either small government s or nonprofit organization s own or

operat e source s tha

t wil l b e impacte dby thi s propose d NESHAP
. 5. 5 Projecte d Reportin g an d Recordkeepin g Requirement s Th e projecte dreportin g an drecordkeepin g fo

r thes e small businesse s include initia l notifications , startup notification s andcomplianc e reports . W e estimate tha

t 30 2 existin g facilitie s owne dby smal l businesse s wil l b e impacte db y thes e requirements , and5 3 new facilitie s wil l b e impacte din th e first thre e years . Th e professiona l skill s require dt

o complet e thes e report s include the abilit y to calculate emission s an dresi n us e andrea

dan d follo w repor

t forma t guidance
. Al l facilitie s impacte db y thi s propose dml e shoul dhav e personne l wit

h th e necessar

y skill s becaus e the y woul dnee dthes e skill s to comply wit h other regulator y requirement s such a s Toxi c Releas e Inventor y (TRI ) reporting
. Thes e recordkeepin g an

dreportin g requirement s ar e specifically authorize db

y sectio n 11 4 ofth e CA

A (4 2 U.S.C
. 7414 ) an

dar e consistent

wit h the Genera

l Provision s o f

4 0 CF R par t 63
. All informatio n submitte dto u s fo r whic h aclai mo f

confidentialit

y i s made will b e safeguardedaccordin g to ou r policie s i n 4 0 CF Rpar t 2
. Provision s to minimiz e the reportin g andrecordkeepin g requirement s o n small busines s hav e bee n incorporate dint o thi s propose dmle
. Thes e provision s include allowing : th e facilit y t o substantiate resi n an

dgel coa t HA P content s wit

h Materia l Safet y Dat aSheet s rather then requirin g testin g o f

each resi n andgel coat ; us e o f resi n purchas e record s t

o determin e resi n use ; an

dexemptio n o f

facilitie s tha

t ca n demonstrat

e tha t al l thei r resi n and gel coat s comply wit

h th e require dHA

P content limit s fro mth e requirement

to kee p record s

5-1 3P.9 8

o f resi n us e an dcalculat e poin t valu e averages . Thes e provision s hav e als o bee n extende dt o al l companie s subjec t

t o th e propose dNESHAP
. 5. 6 Othe r Federa l Rule s Tha tMa y Impac tReinforce d Plasti c Composit e Productio n Facilitie s Thes e facilitie s ma y als o b e subjec t t o th e NESHA P bein g develope dfo r plasti c part s an dproducts
. Ther e shoul db e n o duplicatio n o f effor t a s aresul t

ofthi s propose dml e an d th e Plasti c Part s an dProduct s NESHA P bein g develope dbecaus e thes e NESHA P wil l cove r differen t operations
. Facilitie s subjec t t o thi s propose dml e ar e als o subjec t t o emission s estimat e reportin g unde r th e TR I requirements
. I n thi s propose dmle , w e coul ddetermin e n o way s t o combin e TR I an dth e reportin g requirement s ofth e propose dNESHA P becaus e th e objective s an dstamtor y authoritie s o f thes e requirement s ar e different. 5. 7 Alternative s t o th e Propose d Rul e W e hav e incorporate dsignifican t alternative s int o th e propose dml e t o minimiz e th e impac t o n smal l busines s bu t

stil l mee t

th e objective s ofth e CAA
. A s require db y sectio n 609(b ) ofth e RFA , EP A conducte doutreac h t o smal l entitie s an dconvene daSBA Rpane l t o revie w advic e an drecommendation s fro mrepresentative s o f th e smal l entitie s tha t

potentiall y woul db e subjec t t o th e propose dml e requirements
. Th e pane l convene do n Apri l 6 , 200 0 an dwa s comprise do f representative s fro mOMB , th e SB A Offic e o f Advocacy , th e EP A Smal l Busines s Advocac y Chair , an dth e Emissio n Standard s Divisio n ofth e Offic e o f Ai r Qualit y Plannin g an dStandard s o f EPA
. Th e pane l solicite d advic e fro m1 7 smal l entit y representative s (SER ) fro macross-sectio n ofth e differen t industr y sector s likel y t o b e directl y regulate db y thi s action
. O n Apri l 18 , 2000 , th e pane l distribute dapackag e o f

descriptiv e an dtechnica l material s explainin g th e mle-in-progres s t o th e SER
. O n Ma y 2 , 2000 , th e pane l me t wit h th e SE Rt o hea r

thei r comment s o n preliminar y option s for

regulator y flexibility an drelate dinformation
. Th e pane l als o receive dwritte n comment s fro mth e SE Ri n respons e t o bot h th e outreac h material s an dth e discussion s at

th e meeting
. Consisten t

wit h RFA/SBREF A requirements , th e pane l evaluate dth e assemble d material s an dsmall-entit y comment s o n issue s relate dt o th e element s ofth e IRFA
. A cop y ofth e pane l repor t

i s include di n th e docke t for thi s propose dmle
.

5-1 4P.9 9

Th e pane l considere dnumerou s regulator y flexibility option s i n respons e t o concern s raise db y th e SER
. Th e majo r concern s include dth e affordabilit y an dtechnica l feasibilit y o f add-o n controls , th e resi n an dge l coa t HA P content s require dt o mee t som e ofth e MAC T floors, an dth e regulator y treatmen t o f specialit y products
. Thes e ar e th e majo r

pane l recommendation s an dEPA' s response .

• Recommen dsettin g highe r threshold s tha n EP A ha dinitiall y considere dfor requirement s t o us e add-o n controls
. Response : I n th e recommende dregulator y alternative , EP A propose s t o allo w facilitie s owne db y smal l firms t o emi t 25 0 tp y (a s distinc t

fro mth e 10 0 tp y limi t fo r facilitie s owne db y larg e firms ) befor e installin g add-o n controls
.
• Recommen dsettin g th e ne w sourc e floo r fo r small-owne dsource s a t th e leve l o f th e existin g sourc e floor. Response : Th e recommende dregulator y alternativ e include s thi s provision
.
• Recommen destablishin g separat e floors fo r specialit y products
. Response : Th e recommende dregulator y alternativ e include s thi s provision
.
• Explor e pollution-preventio n alternative s t o add-o n controls
. Response : Th e EP A di dexplor e thi s possibilit y wit h industr y sources . Althoug h w e coul dno t

devis e aworkabl e pollution-preventio n alternativ e t o includ e i n th e recommende dregulator y alternative , th e Agenc y i s requestin g commen t o n ho w suc h amechanis mmigh t b e structure dwithi n th e requirement s o f th e CAA
.
• Recommen dallowin g individua l facilitie s t o us e th e sam e resi n i n al l resi n applicatio n processes . Response : Th e recommende dregulator y alternativ e include s thi s provision
.
• Reconside r

th e resi n HA P conten t

requiremen t

for toolin g resins
. Response : Th e recommende dregulator y alternativ e include s arevise dprovision
.
• Recommen dseparat e floor s for whit e an dnon-whit e ge l coats . Response : Th e recommende dregulator y alternativ e include s thi s provision
.
• Reconside r

th e Agency' s estimate s o f th e cos t o f add-o n controls
. Response : Eve n thoug h th e recommende dregulator y alternativ e eliminate s th e likelihoo dtha t

existin g small-owne dfacilitie s wil l b e subjec t t o add-o n controls , 5-1 5p. 1



### EP A ha s reconsidere dit s cos t estimate s in ligh

t o f thos e offeredby the industry
. A s discusse delsewher

e i n thi s preamble , EP

A continue s to believ e ou

r estimate s ar e realistic
.
• Recommen dgroupin g high-strengt h application s wit

h corrosion-resistant operations
. Response : Th e recommende dregulator y alternativ e include s thi s provision
. Detaile dinformatio n on al l thes e recommendation s i s containe di n th e pane l repor

t i n the docket fo r thi s propose drule
.

5-1 6P. 2

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America n Busines s Informatio n (ABI)
. 1999
. America n Busines s Dis c [compute r file]. Berglund , Lars
. 1998
. "Thermoplasti c Resins. " Handbook of Composites, S.T
. Peters , ed
. Ne w York : Chapma n an dHall
. Composit e Fabricator s Associatio n (CFA)
. 2000
. "Industr y Composite s Deman dfor 1999-2000. " <http://www.cfa-hq.org>
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. Dialo g Informatio n Service
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. Standar dan dPoor' s Corporation s [compute r file]. Pal o Alto , CA : Dialo g Informatio n Service
. Disclosur e Incorporated
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. Worldscop e [compute r file]. Bethesda , MD : Disclosur e Inc
. Du n & Bradstreet
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. Industry Norms & Key Business Ratios, Desk-Top Edition 1996- 97. Murra y Hill , NJ : Du n & Bradstreet
. Du n & Bradstreet
. 1998
. Dun' s Marke t Identifier s [compute r

file]. Ne w York , NY : Dialo g Corporation
. Du n & Bradstreet
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. Million Dollar Directory: America's Leading Public and Private Companies. Bethlehem , PA : Du n & Bradstree t Corporation
. Gal e Research , Inc
. 1996
. Manufacturing USA. Detroit , MI : Gal e Research , Inc
. Gal e Research , Inc
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. Ward's Business Directory of U.S. Private and

Public Companies. Detroit , MI : Gal e Research , Inc
. Informatio n Acces s Corporation
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. LeFlam , Greg , an dMelani e Proctor , PE S Inc. , memorandu mt o Madelein e Strum , U.S
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. Industr y Descriptio n Memorandum
. Octobe r 17 , 1995 :

R- lP. 3

Lindsay , Kare n F
. 1996
. "Stat e o f th e Industry : 1995-96. " Composites Design and Application February
. Modern Plastics. "Resi n Supply : What' s i n th e Pipelin e fo r '93? " Januar y 1993
. Modern Plastics. "Resi n Supply : Plottin g aCours e fo r Globa l Supply. " Januar y 1994
. Murphy , John
. 1994
. The Reinforced Plastics Handbook. Oxford , UK : Elsevie r Advance d Technology
. Plastics News. "Resi n Pricing. " Update dMa y 13 , 1999
. <http://www.plasticsnews.com>
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. Predicasts Basebook. Novembe r 1992
. Foste r

City , CA : Informatio n Acces s Corporation
. Rauc h Associates
. 1991
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : Rauc h Associates , Inc
. Schwartz , Mel
. 1997
. Composite Materials: Processing, Fabrication, and Applications. Uppe r Saddl e River , NJ : Prentic e Hall
. Shearer , Brent
. Apri l 15 , 1996
. "Carbo n Fiber s Adjustin g t o Changes. " Chemical Marketing Reporter. Societ y ofth e Plastic s Industry , Inc
. (SPI)
. 1994
. Facts and Figures ofthe U.S. Plastics Industry. Washington , DC : SPI
. Societ y ofth e Plastic s Industry , Inc
. (SPI)
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. Facts and Figures ofthe U.S. Plastics Industry. Washington , DC : SPI
. Societ y ofth e Plastic s Industr y (SPI ) Composite s Institute
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. Introduction to Composites. Secon dEdition
. Washington , DC : Societ y o f th e Plastic s Industry , Inc
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. Introduction to Composites. Thir dEdition
. Washington , DC : Societ y ofth e Plastic s Industry , Inc
. U.S
. Burea u o f

Labo r Statistics
. 2000
. Produce r Pric e Index—Commodities : WPUSOP9200 , Intermediat e Material s les s foo dan denergy . 1990-2000
. [online ] <http://www.bls.gov>
. Obtaine dJanuar y 20 , 2000
. U.S
. Environmenta l Protectio n Agenc y (EPA)
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. "Surve y o f Reinforce dPlastic s Industry. " Washington , DC : U.S
. Environmenta l Protectio n Agency
. R- 2P. 4



### U.S
. Environmenta

l Protectio n Agency , Office o f Enforcemen

t andComplianc e Assurance
. 1995
. EPA Office of

Compliance Sector

Notebook

Project: Profile ofthe Rubber and Plastics Industry. Washington , DC : U.S
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. U.S
. Geologica

l Survey
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. Mineral s Yearbook : Clays , [online ] <http://minerals.usgs.gov/minerals/pubs/commodity/myb>
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. Geologica

l Survey
. 1997
. Mineral s Yearbook : Mica , [online ] <http://minerals.usgs.gov/minerals/pubs/commodity/myb>
. Obtaine dJanuar y 21 , 2000
. U.S
. Small Busines s Administration
. 1996
. Siz e Standard s by SI C Industry
. <http://www.sba.govgopher/Government-Contracting/Size/sizeall.txt>
.

R- 3P. 5



# Appendi x A

Summar y Dat a fo r Companie s Ownin g Reinforce d

Plasti c Composit e Facilitie sP. 6



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s Company Nam e 20t h Centur y Fiberglas s Inc
. A
. R
. E. , Inc
. A.F.P
. Imagin g A.O
. Smit h Corporatio n A- l Fiberglas s Inc
. AB C Industries , Inc
. Accent Marbl e Compan

y Inc
. Accr aIndustrie s Inc
. Accurate Glas s Inc
. Acm e Fiberglas s Inc
. Acm e Reinforce dPlastic s Inc
. Aer o Transportatio n Corporatio n Aeroqui p Inoa

c Compan y Agc o Inc
. Ake r Plastic s Compan

y Inc
. Alc o Industries , Inc
. Allen Group (The ) Allianc e Equipmen

t Compan y Inc
. Allie dMoulde dProds
. Inc
. Alte c Industrie s Inc
. America n Acryli c Corporatio n America n Bluegras s Marbl e Compan y America n Marbl e Compan

y Inc
. America n Reinforce dPlastics , Inc
. America n Slat e & Marbl e o f

Hickory , Inc
. America n Standar dCompanie s Americh Corporatio n Amero n Internationa

l Corporatio n Facilitie s Sale s (# ) ($10 6 ) 1 $95. 0 2 S19. 1 1 S37. 0 2 $1,645. 7 1 $5. 1 3 $8. 0 1 $5. 0 1 $1. 9 1 $3. 0 1 $2. 5 1 $3. 1 1 $5. 8 1 $65. 0 1 $2,317. 5 3 $36. 0 1 $225. 0 1 $369. 5 1 $1. 2 1 $17. 7 1 $250. 0 1 $3. 5 1 $2. 9 1 $0. 9 1 $1. 2 1 $1. 7 1 $5,805. 0 2 $10. 0 1 $533. 5 Employment 800 17 5 190 13,00 0 5 0 7 5 10 0 1 5 3 5 2 5 1 5 7 6 56 0 7,80 0 40 0 2,00 0 2,90 0 2 0 24 0 1,80 0 3 6 6 3 1 9 2 5 3 3 44,00 0 5 0 2,76 1 Small

Busines s No Ye s Ye s N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s N o N o Ye s N o N o Ye s Ye s N o Ye s Ye s Ye s Ye s Ye s No Ye s N o (continued )



### A- lP. 7



### Tabl e A-l . Summar

y Dat a fo r Companie s Re

i (continued ) Facili t

Company Nam e (#) Amste d Industrie s An-Cor Indl
. Plastic s Inc
. Appalachia

n Plastic s Inc
. Applie dComposites , Corporatio n Aqu aBat h Aqua-Air Manufacturers , Inc
. Arj o Holdin g Compan

y Armorcas t Prods
. Compan

y Arro w Dynamics , Inc
. ArrowheadPlasti c Eng
. Inc
. Ashwort h Bros
. Inc
. Athen aMarbl e Inc
. Attba r Plastic s Inc
. Austi n Countertop s Inc
. Avnet Baile y Corporatio n Baj aProduct s Ltd
. Baltek Corporatio n Bathcraf t Inc
. Beden-Baug h Product s Inc
. Bedfor dReinforce dPlastic s Beetl e Plastic s Inc
. Beldin g Tan

k Technolog y Bertc h Cabine t

Manufacturin g Inc
. Bittner Industrie s Inc
. Blu e Dolphi n Fiberglas s Pool s Bolfin g Brother s Marbl e Inc
. 

### nforce d Plasti c
ie s Sale s ($10 6 ) 1 $1,200. 0 1 $7. 5 1 $2. 5 1 $10. 0 1 $15. 0 1 $0. 5 1 $16. 0 1 $2. 8 1 $18. 0 1 $10. 0 1 $64. 3 1 $2. 0 1 $8. 0 1 $4. 9 1 $5,390. 6 1 $79. 0 2 $4. 5 1 $48. 6 1 $14. 0 1 $1. 4 1 $5. 1 1 $5. 3 1 $7. 1 1 $42. 9 1 $2. 5 1 $6. 3 1 $2. 2 

### Composit e Facilitie s

Employment 9,00 0 15 0 3 9 20 0 3 5 1 5 15 0 4 0 5 0 199 60 0 2 6 15 0 5 0 N A 1,24 5 4 2 1,13 1 17 0 2 0 8 0 4 4 5 0 37 5 1 5 5 0 5 5 Small Busines s N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s N o Ye s Ye s Ye s No No Ye s No Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s (continued )



### A- 2P. 8



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued ) Facilitie s Sale s

Company Nam e (#) Bowi e Mfg
. Inc
. Bradley Specialt

y Corporatio n Breme n Gla s Inc
. . Bristo l Fiberlight

Industrie s Builder s Marbl e Inc
. Bul k Moldin g Compound s Inc
. C & K Plastic s Inc
. Cambridg e Industrie s Canadia n Pacifi c Lt

d
. Capita l Marbl e Creation s Capo n Valley Marbl e Inc
. Carolin aCounter s Carsonite Intl
. Corporatio n CDRSystem s Corporatio n ; Centra l Marbl e Product s Inc
. Centur y Marbl e Compan

y Inc
. Chanc e Industries , Inc
. CharlomaFiberglas s Inc
. Clar k Mfg
. Coasta l Engineere dProducts , Inc
. Compagni e D e Saint-Gobai n S.A
. Composites , USA , Inc
. Comtech Telecommunication s Corporatio n Concep t Plastic s Inc
. Conley Corporatio n Contemporar

y Product s Inc
. Continenta

l Campe r Compan y Inc
. Cor e Material s Corporatio n ($10 6 ) $3. 9 $1. 1 $16. 0 $16. 0 $1. 0 $15. 0 $1. 5 $346. 0 > $9,560. 0

$1. 7 $5. 2 $0. 8 $17. 0 1 $38. 0

$0. 5 $1. 7 $50. 0 $5. 1 $63. 0 N A $91,384. 0 $3. 0 $20. 9 $12. 0 $12. 3 I $6. 1 1 $10. 9

$52. 5 Employment

4 4 1 8 14 5 16 0 3 5 4 5 2 0 3,83 1 33,60 0 4 0 5 0 1 2 12 0 20 0 1 2 4 0 40 5 5 0 30 0 N A 101,09 4 4 0 192 25 0 12 0 9 0 9 5 41 9 Smal l Busines s Ye s

. Ye s Ye s Ye s Ye s Ye s Ye s No N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s No Ye s Ye s Ye s Ye s Ye s Ye s Ye s (continued )


### A- 3P. 9



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued )
Company Nam e Covermaster

Inc
. CR/L P Limite dPartnershi p Cran e Corporatio n Creativ e Pultrusions , Inc
. Culture dMarbl e Product s Ltd
. Custo mFibreglas s Mfg
. Compan y Custo mFiberglas s Moldings , Inc
. Custo mMarbl e Inc
. Cytec Industrie s Dasc o Pro , Inc
. DeltaFiberglas s & Environmenta l Product s DeltaFiberglas s Structure s Denali Inc
. DiamondCoac h Corporatio n DiamondFiberglas s Fabricators , Inc
. Dixie-Pacifi c Manufacturin g Compan y Dom-Fab , Inc
. Do w Chemica

l Dyson-Kissner-Mora

n Corporatio n Eagl e Craf t Inc
. Eagle-Picher

Industrie s Inc
. Ebonit e Internationa

l Eckle r Industrie s E dIndustries , Inc
. Electric-Glas s Inc
. Elje r Industrie s Elmor e Industrie s Facilitie s (#) 1 4 4 2

3

3

2 1 Sale s ($10 6 ) $2. 8 $86. 0 $1,847. 7 $1. 8 $1. 0 $18. 0 $0. 8 $1. 0 $1,290. 6 $7. 9 $7. 5 $9. 3 $71. 1 $10. 0 $12. 0 $27. 0 $6. 4 $20,018. 0 $500. 0 $1. 8 $848. 5 $16. 0 $12. 0 $5. 6 $2. 7 $397. 4 $1. 2 Employment

2 6 1,182 10,000 27 0 1 3 15 0 2 6 2 9 5,20 0 7 0 5 0 9 0 74 3 10 0 8 5 25 0 5 0 40,28 9 4,50 0 2 6 7,50 0 25 0 11 0 6 0 2 7 3,70 0 1 2 Small Busines s Ye s N o N o Ye s Ye s Ye s Ye s Ye s N o Ye s Ye s Ye s No Ye s Ye s Ye s Ye s N o N o Ye s No Ye s Ye s Ye s Ye s No Ye s (continued )



### A- 4P.1 0



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued ) Company Nam e Emsi g Mfg
. Corporatio n Enuro Fiberglas s Systems , Inc
. Epoch Industrie s Escalad e Inc
. Esse f Corporatio n Esteriin e Technologiie s Corporatio n E-T- M Ents
. Inc
. Evan s Industrie s Eveland s Inc
. Fabal l USA , Li e Falco n Buildin g Product s Fedder s Corporatio n F G Products , Inc
. Fiber Pad , Inc
. Fiber Pr o Fibercas t Company Fiberdome Inc
. Fiberflex Inc
. Fiberglas s & Plasti c Fab , Inc
. Fiberglas s Engineerin g Corporatio n Fiberglas s Form s Inc
. Fiberglas s Industrie s Inc
. Fiberglas s Plu s Recreationa l Fiberglas s Products , Inc
. Fiberglas s Specialtie s Inc
. Fiberglas s System s Celsta r Group , Th e Facili t (# ) ies Sale s

($10 6 ) $25. 0 5 $35. 0 $6. 4 $93. 2 $306. 1 1 $391. 0 $24. 0 $42. 0 I $2. 4 $7. 3 1 $633. 2 1 $314. 1 1 $7. 0 1 $2. 9 1 $2. 0 1 $22. 7 1 $3. 2 1 $6. 2 1 $1. 0 1 $42. 0 1 $1. 5 1 $5. 1 1 $0. 7 1 $2. 8 1 $4. 6 1 $5. 0 1 ' $20. 0 Employmen t 30 0 1,50 0 5 0 70 0 2,10 0 3,36 0 40 0 40 0 1 5 5 0 4,10 0 2,70 0 5 5 4 9 1 5 20 0 6 0 8 0 2 0 • 42 0 2 5 5 0 1 0 3 5 8 0 8 0 180 Small Busines s Ye s No Ye s No N o N o Ye s Ye s Ye s Ye s No N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s (continued )



### A- 5P.1 1



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued )

Company Nam e Fibre Bod y Industries , Inc
. Fibrenetic s Inc
. Fibre x Corporatio n Fleetwoo dEnterprises , Inc
. Florid aLine o f

Astatul aInc
. For Better Living , Inc
. Foremos t Interior s Inc
. Formic aCorporatio n Fowler Mfg
. Inc
. G
. W
. Fiberglas s Inc
. Gencor p Inc
. Genera l Electri c Compan

y Genera l Motor s Corporatio n Gesma r Corporatio n GH M Inc
. Gibbo n Fiberglas s Gla s Master

Inc
. Glasform s Inc
. Glasg o Plastic s Inc
. Globa l Glas s Inc
. Goodyea r Tire & Rubbe

r Compan y Gorman-Rupp Compan

y Goul dInc
. GP I Corporatio n GpmIndustries , Inc
. Grayso n Too l Compan

y Gruber Sys
. Inc
. Facilitie s (#)

2

2

2 2 Sale s

($10 6 ) $12. 7 $1. 0 $30. 0 $2,874. 4 $1. 9 $81. 5 $1. 4 $338. 0 $6. 1 $38. 1 $1,568. 0 $90,840. 0 $164,000. 0 $4. 1 $1. 0 $1. 2 $5. 5 $11. 0 $15. 0 $8. 2 $13,155. 0 $150. 8 $157. 4 N A $6. 3 $2. 5 $20. 0 Employment

12 0 1 4 25 0 18,000 2 4 52 2 2 6 3,28 4 5 0 37 5 9,46 0 276,00 0 647,00 0 5 0 5 0 1 8 5 0 11 0 3 5 9 0 95,30 2 96 0 1,50 0 N A 5 0 3 5 16 0 Small Busines s Ye s Ye s Ye s N o Ye s N o Ye s N o Ye s Ye s N o N o N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s No No No Ye s Ye s Ye s Ye s (continued )



### A- 6P.1 2



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued ) Facilitie s Sale s

Company Nam e (#) H & RInd
. Inc
. 1 Harsc o Corporatio n Hartzel l Fa

n Inc
. Hasbrouc k

Plastic s Inc
. Hell aNort h Americ aLt

d Hemc o Corporatio n Henderson , Black

andGreen , Inc
. Heritag e Marbl e o f

Ohi o Inc
. Hes s Compan

y Ind
. Inc
. Hoo dManufacturin g Hydr o Systems , Inc
. Hy-Te c Fiberglas s Inc
. I
. M
. Pena , Inc
. Image s Product s Cor

p Imc o Reinforce dPlastic s Inc
. Industria l Dielectric s Inc
. Industria l Fiberglas s Specialtie s Industria l Lining s Inc
. Internationa

l Gratin g Inc
. Internationa

l Marbl e An dGranite Supply Internationa

l Pape r . Nort h America n Filtratio n Inc
. Iten Ind
. Jaso n Ind
. Inc
. Jaso n Internationa

l Johnso n Truck

Bodie s Jone s Plasti c AndEngineerin g Corporatio n ($10 6 ) $5. 7 $1,629. 0 $38. 0 $1. 3 $68. 7 $3. 0 $17. 5 $2. 4 $18. 4 $2. 5 $8. 0 $1. 0 $1. 4 $5. 7 $4. 6 $50. 0 $7. 0 $1. 7 $4. 5 $8. 0 I $20,143. 0

$3. 0 $27. 2 $9. 0 $5. 7 $31. 0 $98. 6 Employment

4 5 14,200 25 0 1 0 55 0 3 0 N A 2 5 17 5 4 0 7 0 1 2 1 5 5 0 5 0 25 0 2 8 3 0 4 4 1 5 87,00 0 5 0 25 0 12 5 5 0 27 0 1,31 0 Small Busines s Ye s N o Ye s Ye s N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s N o Ye s Ye s Ye s Ye s Ye s No (continued )



### A- 7P.1 3



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued )
Company Nam e Facilitie s (# ) Sale s

($10 6 ) Employmen t K2Inc
. Keller Products , Inc
. Kerric o Corporatio n Kivett' s Inc
. Kob e Steel Ltd
. Kohler Compan y Kreider Mfg
. Inc
. Kruege r Internationa

l Inc
. Laminate dProducts , Inc
. Larso n Compan

y GLN V Holding s Lawrenc e Wittma

n & Company , Inc
. Lee r Inc
. Lehigh Culture dMarbl e Inc
. Leucadi aNationa

l Corporatio n Libert y Polygla s Inc
. Lipper t Corporatio n L l Culture dMarbl e Louisvill e Til e Distributor s LundInternationa

l Holdin g Inc
. M
. C
. Gil l Corporatio n Ma c Moldin g Compan

y Inc
. MagnumMolding s Marbelit e Corporatio n Marbl e Creation s Marbl e Design s Inc
. Marbl e Work s $302. 7 $37. 0 $2. 0 $6. 2 $1,533. 5 $155. 6 $2. 6 $345. 0 $12. 2 N A $21. 9 $6. 4 $70. 0 $5. 2 $5,193. 9 $5. 0 $8. 0 $2. 6 $12. 0 $46. 4 $39. 0 $4. 3 $0. 5 $3. 4 $2. 0 $1. 3 $1. 0 Small Busines s 4,60 0 35 0 1 0 10 0 13,43 7 1,80 0 4 0 3,00 0 15 0 N A 20 5 5 0 50 0 5 0 3,91 9 5 0 10 0

• 3 0 15 0 26 7 195 7 5 9 4 0 3 5 1 9 1 6 N

o Ye s Ye s Ye s No N o Ye s No Ye s Ye s Ye s Ye s Ye s Ye s No Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s (continued )



### A-8P. M



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued ) Facilitie s Sale s

Company Name (# ) Marblecas t

Product s Inc
. Marmon Group Masc o Corporatio n . McClari n Plastic s Inc
. McClur e Ind
. Inc
. Melcher Mfg
. Compan

y Inc
. Menash aCorporatio n . Mes aFiberglass , Inc
. Mes aFully Forme dInc
. Michian aFiberglas s Inc
. Micro-Fa b Inc
. Mile s Fiberglas s & Plastic s Millenniu mProduct s Inc
. Mince y Marbl e Mfg
. Inc
. Miracl e Recreatio n Equipment Compan y Molde dFiber

Glas s Compan

y ( Monac o Coac h Corporatio n Monarch Lt

d Morriso n Molde dFiber

Glas s '. Mr
. Tub s Inc
. Murph y Bod y Compan y Nationa l Fiber Glas s Product s New Englan dPlasti c Coate dProduct s Ne w Yor k Blowe r Compan y (The ) Newpor t Laminate s NiagaraFiberglas s Inc
. ($10 6 ) $2. 1 $6,100. 0 I $2,927. 0 $13. 5 $1. 0 $1. 7 > $915. 0

$3. 0 $13. 5 $4. 9 $2. 0 $6. 0 $19. 1 $4. 8 1 $50. 0 5 $60. 0 $441. 9 $9. 0 3 $100. 0 1 $9. 9 $24. 0 $9. 3 $7. 5 I $82. 0 I $2. 0 1 $2. 4 Employmen t 3 5 30,00 0 20,50 0 9 8 1 1 1 7

. 5,50 0 3 2 22 0 5 0 3 0 7 0 17 5 105 30 0 90 0 2,40 0 8 7 90 0 8 5 13 5 8 0 8 0 70 0 4 0 4 5 Small Busines s Ye s N o N o Ye s Ye s Ye s N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s No N o Ye s N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s (continued )



### A- 9P.1 5



### Tabl e A-l
. Summar y Dat afo r Companie s Reinforce dPlasti c Composit e Facilitie s (continued ) Facili

Company Nam e (# ] No n Metalli c Resources , Inc
. Nordi c Fiberglas s Inc
. Northwes t Bodie s Inc
. Nov aGroup , Inc
. Nov aMarbl e Product s Oasi s Industrie s Odo mFiberglas s Inc
. Olympi c Fiberglas s Ind
. Inc
. Omeg aPolyme

r Technologie s Osborn e Ind
. Inc
. Owens-Cornin g Oxfor dCmp , Inc
. P & J Partnershi p Pacifi c Tan

k Limite d Parkso n Corporatio n Partheno n Marbl e Products , Inc
. Pear l Bath s Inc
. PermaGrai n Products , Inc
. Peterso n Prods
. Phil Carter

System , Inc
. (The ) Phillip s Electronic s Nort

h Americ aCorporatio n P I U S Holding s Inc Picken' s Plastic s Inc
. Piedmon t Composite s Piedmont Fiberglas s Pilling s F.R.P
. Pinta' s Culture dMarbl e Inc
. Plas/Stee l Prods
. tie s Sale s ($10 6 ) I • $4. 7 I $6. 9 1 $5. 0 1 $54. 0 1 $6. 4 1 $5. 0 1 $1. 1 1 $3. 9 1 $49. 1 1 $12. 0 5 $4,373. 0 1 $2. 8 1 $4. 5 1 $0. 9 1 $50. 0 1 $1. 7 1 $15. 0 1 $22. 0 1 $6. 0 1 $5. 1 1 $7,000. 0 1 $6. 6 1 $5. 5 1 $22. 2 1 $0. 7 1 $3. 7 1 $1. 3 1 $17. 5 Employment 4 0 11 1 7 5 5 0 4 0 7 5 2 0 N A 38 0 14 0 18,10 0 5 5 9 2 1 5 16 0 3 0 9 0 20 0 4 9 5 0 30,00 0 5 0 6 8 175 1 5 N A 2 5 30 0 Small Busines s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s N o Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s No Ye s Ye s Ye s Ye s Ye s Ye s Ye s (continued )


### A-1 0P.1 6



### Tabl e A-l
. Summar y Dat afo r Companie s Reinforce dPlasti c Composit e Facilitie s (continued )

Company Name Plas-Tech , Ltd
. Plasti c Composite s Corporatio n Plasti c Development

Compan y Plasti-Fa b Poly Foa mInternational Polyme r Concrete Corporatio n Polyply , Inc
. Premix , Inc
. Prestigiou s Accessorie s Inc
. Primero , Inc
. Prodeli n Corporatio n Prototyp e Concept s Inc
. R & D Marbl e Inc
. RV Nationa

l Holding s Radiant Marbl e Compan

y Raven Industries , Inc
. Re dEwal dInc
. Retterbus h Injectio n Molde d Robro y Industries , Inc
. Rockwel l Internationa

l Corporatio n Roco r Transportatio n Cos
. Rom aMarbl e Inc
. RP M Inc Rubbe r & Plasti c Applicator s Rynon e Mfg
. Corporatio n Ryob i Nort

h Americ a S
. R
. Smith , Inc
. Facilitie s (#)

2

3

2 2 Sale s ($10' ) $12. 7 $2. 8 $5. 0 $3. 3 $37. 4 $1. 4 $2. 0 $124. 0 $11. 1 $1. 3 $50. 0 $2. 7 $2. 5 $137. 1 $5. 2 $120. 4 $7. 0 $1. 3 $130. 0 $7,762. 0 $60. 0 $1. 8 $1,350. 5 $1. 7 $9. 1 $600. 0 $14. 9 Employment

10 0 • 4 5 5 0 4 2 54 2 1 6 2 5 52 0 5 4 2 0 25 0 5 0 5 3 1,38 7 5 0 1,36 8 10 0 2 0 1,00 0 45,00 0 65 0 2 7 6,65 1 3 0 20 0 3,80 0 12 0 Small Busines s Ye s Ye s Ye s Ye s No Ye s Ye s No Ye s Ye s Ye s Ye s Ye s No Ye s N o Ye s Ye s No No N o Ye s No Ye s Ye s No Ye s (continued )



### A-l lP.1 7



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued ) Facilitie s Sale s

Company Nam e (#) Schmit t Marbl e Prods
. Inc
. Sc mContainer

Machiner y Lt d Sea l Reinforce dFiberglas s Seymou r Manufacturin g Compan

y Inc
. Shenandoa

h Fiberglas s Prods
. Sherma n Utilit y Structures , Inc
. SMC Corporatio n Southeas t Marbl e Inc
. Spac e Table s Spear s Manufacturin g Specialt y Plastic s Associates , Inc
. Specialt y Plastics , Inc
. Squar e D Compan

y '. St
. Croi x o f

Par k Fall s Ltd
. St
. Mary' s Marble , L.L.C
. Standar dGlas , Inc
. Sunris e Fiberglas s Corporatio n Sunset Plastic s Inc
. Superior Hom e Prods
. Inc
. Syn-Mar , Inc
. TakaraBelmon

t Us a Taylor Ind
. Inc
. Tec o Inc
. Tecto n Product s Th e Alph aCorporatio n ($10 6 ) $2. 5 $208,152. 0 $1. 6

' $22. 0 $2. 0 $110. 9 $200. 8 $2. 2 $2. 5 $89. 0 $3. 9 $3. 0 > $1,856. 0

$12. 0 $4. 3 $1. 8 $2. 5 1 $3. 0

$35. 0 $0. 7 $42. 0 1 $1. 8 1 $22. 0 1 $2. 0 1 $150. 0 Employment 5 0 2,39 9 1 9 16 0 2 6 87 5 1,40 0 3 5 1 2 87 5 5 3 6 5 16,000 13 0 6 5 1 5 3 0 3 5 17 5 1 2 9 8 1 7 180 2 0 32 5 Small Busines s Ye s N o Ye s Ye s Ye s N o N o Ye s Ye s N o Ye s Ye s No Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s (continued )



### A-1 2P.1 8



### Tabl e A-l . Summar

y Dat a fo r (continued )
Company Nam e Thysse n A g Tiffan y Marbl e Mfg
. Inc
. TomSmit h Fiberglas s Inc
. Tompkin s Ind
. Inc
. Trai l Wagon s Inc
. Tr i Cit y Marbl e Trinit y Industrie s TR W Inc
. U.S
. Fiberglas s Prods
. Inc
. Ultra/Gla s o f

Lakevill e Inc
. Unite dState s Marbl e Inc
. Unite dTechnologie s Corporatio n Universa l Plastic s Inc
. VenduraIndustries , Inc
. Venetia n Marbl e Verte x Plastic s Inc
. Viatec , Inc
. VM C Fiberglas s Products , Inc
. W
. H
. Brad

y Compan y Walnut Investigatio n Company Warminste

r Fiberglas s Compan

y Wayne Mf

g Compan y Werne r Ladde r Compan y Wester n Recreationa

l Vehicles , Inc
. Wexco , Inc
. Willia mKreysle r & Associates , Inc
. Wilso n Marbl e Compan

y 

### Companie s Reinforce d Plasti c Composit e Facilitie s
Facilitie s Sale s (#) ($10' ) 4 $40,753. 4 1 $1.0*
. 1 $0. 7 9 $1,400. 0 1 $3. 8 1 $5. 0 1 $2,234. 7 1 $1,000. 0 1 $10. 3 1 $1. 5 1 $4. 0 1 $22,802. 0 1 $3. 4 1 $1. 5 2 $0. 8 1 $2. 3 2 $16. 0 1 $14. 0 2 $426. 1 1 $6. 3 2 $7. 0 1 $6. 0 1 $253. 1 1 $20. 0 1 $46. 1 1 $2. 0 1 $0. 8 Employmen t 127,87 3 2 1 9 14,000 5 0 1 5 16,300 79,70 0 5 0 1 5 4 0 170,60 0 5 5 2 4 2 0 1 9 15 0 25 0 2,50 0 5 0 10 0 15 0 2,70 0 40 0 27 5 2 0 2 0 Small Busines s N o Ye s Ye s N o Ye s Ye s N o N o Ye s Ye s Ye s N o Ye s Ye s Ye s Ye s Ye s Ye s N o Ye s Ye s Ye s No Ye s Ye s Ye s Ye s (continued )



### A-1 3P.1 9



### Tabl e A-l . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued )

Company Nam e Xeno n Company , Inc
. Xere s Yanke e Plasti c Compan

y Zane' s Fiberglas s Shop , Inc
. Zehrc o Plastics , Inc
. Facilitie s (#) 1 6 1 1 2 43 3 Sale s

($10 6 ) $1. 0 $54. 0 $0. 8 $5. 7 $20. 1 $763,429. 6 Employmen t 9 49 3 8 5 0 190 2,126,58 6 Small

Busines s Ye s Ye s Ye s Ye s Ye s 27 8 N A = no t availabl e Sources : America

n Busines s Informatio n (ABI)
. 1999
. America n Busines s Dis c [compute

r file]. Disclosure Inc
. 1998
. Worldscop e [compute r file]. Bethesda , MD : Disclosure Inc.
. Dun & Bradstreet
. 1998
. Dun' s Marke t Identifier s [compute

r file]. Ne w York , NY : Dialo g Corporation
. Du n & Bradstreet
. 1999
. Million Dollar Directory: America's Leading Public and Private Companies. Bethlehem , PA : Du n & Bradstree t

Corporation
. Gal e Research , Inc
. 1998
. Ward's Business Directory of U.S. Private and

Public Companies. Detroit , MI
. Gal e Research , Inc
. Gal e Research , Inc
. 1996
. Manufacturing USA. Detroit , MI
. Gal e Research , Inc
. Informatio n Acces s Corporation
. 1998
. Busines s & Compan y ProFil e [compute

r file]. Foste

r City , CA : Informatio n Acces s Corporation
. Selecte dCompan

y 10- K Reports
.



### A-1 4P.2 0



# Appendi x B

Economi c Mode l o f th e Merchan t Secto r o f th e U.S . Reinforce d Plasti c Composite s Industr yP.2 1



### Implementatio n ofth e propose dNESHAP wil l affec t th e cost s o f

productio n i

n th e U.S
. RP C industr y fo r producer s tha

t us e thermose t

resins
. Response s a

t th e facilit y level t o thes e additiona

l cost s collectivel y determin e th e market impact s ofth e regulation
. Specifically , th e cos t

ofth e regulatio n ma

y induc e som

e facilitie s to alter

their current level o f productio n or

even to close
. Thes e choice s affect , an din tur n ar e affectedby , th e market pric e fo r each product
. The economi c impac t analysi s employ s standar

dconcept s i

n microeconomic s t o model th e supply o f each produc t

andth e impact s ofth e regulatio n o n productio n cost s andth e output decision s o f

merchant facilities. 1 

### Th e main element s ofth e analysi s ar e a s follows :

• characteriz e productio n o f eac h produc t

a t th e individua

l facilit y andmarket levels ,
• characteriz e demandfo r each product , and

• develo p th e solutio n algorith mto determin e th e with-regulatio n equilibrium
. The following section s provid e the supply.an ddeman dspecification s fo r eac h produc t

market a s implemente din th e EI

A model an

dsummariz e th e model' s solutio n algorithm
. B. l Supply o f

Reinforce d Plastic s Product s Cos t curve s wer

e constructe dfo

r eac h produc t

line a t existin g RPC facilitie s usin g thermosettin g resins
. Facilitie s usin g thermoplasti c resin s ar e no t subject to th e propose d regulation s andar

e treate da s a

n aggregat e producer
. Therefore , fo

r aparticula

r end-us e market , th e market

supply o f RPC s ca n b e expresse da s Q s 

### = q D 

### + q'
. (B.l ) wher e q D 

### i s th e supply fro

mdirectl y affectedthermosettin g facilitie s an dq 1 

### i s th e supply fro

m indirectl y affectedthermosettin g an dthermoplasti c facilities
. B. 1.1 Thermosetting Facilities (q°) (Directly Affected) Existin g merchant

producer s o f

RPC s hav e th e abilit

y t o var y output i n the face o f productio n cos t

changes
. Economi c theor

y provide s the rational e fo

r believin g tha

t supply function s fo

r existin g supplier s ar

e upwar dsloping
. Fo r

thi s analysis , th e generalize d Leontie f technolog y i s assume dto characteriz e th e productio n o f RPC s a t each facility
. Thi s technolog y i s appropriate given th e fixed-proportion materia l input s (resins , filler, and

1 A s note di

n Sectio n 4 , th e impac t

ofth e regulatio n on captiv e producer s i s determine dthrough afull-cos t absorptio n approac h tha

t doe s not incorporate marke

t change s an

dresult s i n profit s bein g reduce dby th e estimate dcomplianc e cost s fo r thes e producers
. 

### B- 1P.2 2



### reinforcements ) andth e primar y variable-proportio n input s o f labo r andenergy . Applyin g Hotelling' s lemmato th e generalize dLeontie f profit function produce dth e following genera l for mofth e supply function fo r eac h RPC produc t

line :

+ 

# 1 2 

### (B.2 )
wher e p i s th e market

pric e fo r th e reinforce dplasti c product , ->• an dp ar e model parameters , an d j indexe s producer s (i.e. , individua l existin g facilities)
. Th e theoretica l restriction s o

n the model parameter s tha

t ensur e upward-slopin g supply curve s ar e Y j > 0 andP < 0
. Figure B- 1 illustrate s the theoretica l supply function o f

Eq
. (B.2)
. A s shown , th e upward-slopin g supply curv e i s specifie dove r aproductiv e rang e wit

h alowe r boun do f zero 

# i i tha t correspond s wit

h ashutdow n pric e equa

l to 2 an 

### d a

n uppe r boun dgiven b

y th e 4Y J 

### productiv e capacit

y o f aTM tha t i s approximate dby th e parameter Yj

- Th e curvatur

e ofth e supply functio n i s determine db y th e p parameter .

n * v= n-V1 Q./ 1 I j i Y

j Q j M

J 

### Figure B-1 . Theoretical Supply Functio n fo r Existin g Facilitie s

To specif y the supply function o f

Eq
. (B.2 ) fo

r thi s analysis , th e P parameter i s compute dby substitutin g a n assume dmarket

supply elasticity , (c;) , fo

r aparticula

r reinforce d
B- 2P.2 3



### plasti c product , th e market pric e ofth e produc t

(p) , andth e production-weighte daverag e annua l productio n level o f

existin g facilitie s (q ) int

o th e following equation: 2

P ="^4 q 

### (B.3 )
Absen t literature estimates , th e market-leve l supply elasticitie s wer e assume dt

o b e 1 (unitar

y elasticity ) (i.e. , a1 percent chang e in pric e lead s to a1 percent chang e i n output)
. Th e 1997 market price s o f each produc t

wer e derive da s describe di

n Sectio n 4 , andth e averag e annua l productio n leve l o f

eac h produc t

fo r eac h facilit

y wa s derive dfro

mth e facilit

y database
. Th e P parameter

fo r eac h produc t

wa s calculate dby incorporatin g thes e value s into Eq
. (B.3)
. Th e parameter , Yj, approximate s th e productiv e capacit y an dvarie s acros s produc t line s a t eac h facility
. Thi s parameter doe s no t influenc e the facility' s productio n responsivenes s to pric e change s a s doe s th e P parameter . Thus , th e parameter Y j wa s use dto calibrate th e mode l s o tha

t eac h existin g facility' s supply equatio n i s consistent wit h the baselin e productio n data
. Productio n decision s a

t th e individua

l facilitie s ar

e affectedby th e tota

l annua l variabl e complianc e costs , c j ; 

### whic h ar e expresse dper

poundo f reinforce dplastic s product
. Eac h suppl y equatio n wil l b e directl y affectedb y thes e regulator y contro l costs , whic h enter a s ane t pric e chang e (i.e. , P

j - Cj)
. Thus , wit

h th e regulatio n the supply function fo r each existin g facilit

y fro mEq
. (B.2 ) abov e becomes :

, • 1 ' 2 1 p- c

. J J . 

### q = Y + - —(B.4 )
' 2 p.-c . y 

### '

. J J . 

### The total annua

l variabl e complianc e cost s pe r poun dar e projecte dgiven the annua l productio n pe r

facilit y an dth e regulator

y cos t estimate s fo

r eac h facilit

y provide dby th e engineerin g analysis
.

2 Equatio n B. 3 i s determine dby 1 ) takin g th e derivativ e ofth e supply function (B.2 ) wit h respec t to price , 2 ) multiplyin g th e expressio n b y p/ q t o yiel dater

mfo r th e supply elasticity , and3 ) solv e th e resultin g equatio n fo r th e P parameter . 

### B- 3P.2 4

I n evaluatin g th e impact s ofth e propose drule , w e shif t th e individua l suppl y curve s b y th e variabl e portio n ofth e complianc e cost s an dthe n evaluat e th e closur e decisio n wit h th e tota l complianc e cost s (fixed , o r annua l capital , cost s plu s variabl e cost s associate dwit h ne w productio n level)
. Therefore , ou r modelin g approac h addresse s th e economi c viabilit y o f th e product-lin e an devaluate s whethe r i t continue s t o cove r

variabl e cost s with regulatio n a s wel l a s th e economi c viabilit y ofth e plan t an devaluate s whethe r

i t continue s t o cove r

tota l cost s (variabl e plu s fixed) wit h regulation
. I n orde r t o evaluat e th e economi c viabilit y ofth e plant , th e Agenc y determine d baselin e estimate s o f

variabl e an dfixe dproductio n costs . A s note dabove , applyin g th e suppl y functio n specificatio n t o eac h directl y affecte dproduce r generate s an estimat e o f production , o r

variable , cost s b y takin g th e integra l o f th e are aunde r

th e curv e correspondin g t o thei r productio n rat e an dmarke t price
. Lackin g direc t

informatio n fro meac h facility , t o approximat e plant-leve l fixe dcosts , th e Agenc y applie da n industr y averag e profi t rat e o f 4. 4 percen t fo r eac h facility. 3 Thus , fixedcost s at eac h facilit y i wer e the n derive das : Fixe dCostS

j = Sales j - Variabl e Costs , - ProfitS i wher e Profits ; = 4.4 % * SaleSj
. Give n thi s baselin e characterizatio n o f eac h facility , th e Agenc y evaluate dthei r

economi c viabilit y wit h regulatio n an dpredicte dafacility closure s i f profit s wer e no t

positive , i.e. , tota l revenue s di dno t excee dtota l productio n cost s an dtota l regulator y costs . B.l.2 Thermosetting and Thermoplastic Facilities (q 1 ) (Indirectly Affected) Becaus e thi s industr y segmen t i s no t directl y affecte db y th e regulatio n i t wa s no t necessar y t o mode l thei r suppl y a t

a n individua l facilit y leve l a s wa s necessar y for directl y affecte dthermosettin g facilities
. EP A specifie dasingl e representativ e functio n t o expres s th e suppl y o f

RPC s fro mindirectl y affecte dfacilities , whic h allow s the mt o increas e thei r productio n i n respons e t o highe r prices , i.e. , 

### q'=A'[p] * (B.5 )

3 A s applie dfo

r thi s analysis , thi s rat

e reflect s the maximu

mprofi t rat e fo r a n individua

l facility , i.e. , a threshol dlevel o f

profitability
. Thos e facilitie s whos e tota l revenu e minu s productio n cost s resulte di n a retur n o f les s tha n 4. 4 percent

o f revenue s usedth e lowe

r rat e fo r determinatio n o f

economi c viabilit

y o r regulatio n induce dclosure
. B- 4P.2 5



### wher e q 1 

### i s th e quantit

y supplie dfro

mindirectl y unaffecte dfacilities , A 1 

### i s apositiv e constant , an

d£ ' i s th e supply elasticity
. Absen t literature or

econometri c estimates , th e supply elasticit

y wa s assume dto hav e avalu e o f one . Th e multiplicativ e supply parameter , A 1 

### , i s determine dfo

r eac h produc t

by bac k solvin g Eq
. (B.5 ) given the supply elasticit y and baselin e value s fo

r th e market

pric e andquantit

y supplie din eac h market

segment . Th e resultin g RPC product s fro mthes e facilitie s ar

e modele da s perfec t

substitute s fo

r RPC product s fro

mthermosettin g facilities
. Therefore , they supply a t the sam e pric e fo r each end-us e market

whic h serve s to dampen th e abilit y ofth e directl y affectedproducer s to increas e price s in respons e t o regulation
. Although i t ma y b e mor e appropriat

e to model a s imperfect substitute s wit

h cross-pric e elasticities , th e Agenc y di dno t hav e sufficien

t informatio n t o provid e thos e mode l parameter s andchos e a n optio n tha

t woul db e aworst
cas e scenari o fo

r affectedindustr

y segmen t (i.e. , conservativ e modelin g approach)
. B. 2 Demand fo r Reinforce d Plastic s Product s A singl e equatio n expresse s th e demandfo r each reinforce dplasti c composite s product , Q D 

### = B D 

### [p] 11 

### " (B.6 )
wher e Q D 

### i s th e quantit

y demanded , B D 

### i s apositiv e constant , andn D 

### i s th e demandelasticity
. Absen t literatur e or econometri c estimates , the demandelasticit y wa s assume dto hav e a valu e of-0.5
. The multiplicativ e demandparameter , B D 

### , wa s determine dfo r each produc t

b y back solvin g Eq
. (B.6 ) given th e deman delasticit y andbaselin e value s fo

r th e market

pric e andquantit

y demande di

n eac h market

segment . B. 3 With-Regulatio n MarketEquilibrium Determinatio n Facilit y response s andmarket

adjustment s ca

n b e conceptualize da s a

n interactiv e process . Facilitie s fac e increase dproductio n cost s du e to compliance , whic h cause s facility

specifi c productio n response s (i.e. , output reduction)
. The cumulativ e effect o f thes e response s lead s t o a

n increas e in th e market

pric e tha t al l producer s (directl y an dindirectl y affected) an

dconsumer s face , whic h lead s t o furthe r response s by producer s (directly and indirectl y affected

) a s wel l a s consumer s an

dthu s new market

prices , an ds o on . The ne

w equilibriu mafte

r imposin g th e regulatio n i s th e resul t of aserie s o f

iteration s between producer an dconsume

r response s an

dmarket adjustment s unti l astabl e market pric e arise s wher e tota l market supply equal s tota

l market demand , tha

t i s Q s 

### = QD



### . B- 5P.2 6



### Th e algorithmfo

r derivin g th e post-complianc e equilibri ain al l market s ca n b e generalize dto five recursiv e steps : 1 ) Impos e th e contro l cost s on eac h affectedfacility , thereb y shiftin g inwar dtheir supply curv e andreducin g thei r productio n level a

t th e given market

price
. 2 ) Recalculate th e market supply o f eac h reinforce dplasti c produc t by horizonta

l summatio n acros s all suppliers
. 3 ) Determin e the new price s fo r al l produc t

markets
. 4 ) Recalculate th e supply function s o f al l facilitie s wit

h th e new prices , resultin g i n a new market

supply o f eac h product
. Evaluat

e market deman da t th e new prices
. 5 ) Go to Ste

p 3 , resultin g in ne w price s fo r each product
. Repea

t unti l equilibriu m condition s ar

e satisfie di n al l markets
. B. 4 Economi c Welfare Impact s Th e economi c welfar

e implication s ofth e market pric e andoutput

change s wit

h th e regulatio n ca

n b e examine dusin g tw o slightl y differen t tactics , each givin g asomewha t differen t insigh t but th e sam e implications : change s in th e ne t benefit s o f

consumer s and producer s base don th e pric e change s andchange s i n the tota l benefit s andcost s o f

thes e product s base don th e quantit y changes
. Thi s analysi s focuse s on th e first measure—th e change s in th e ne t

benefit s o f

consumer s andproducers
. Figur e B- 2 depict s th e chang e i

n economi c welfar

e by first measurin g th e chang e in consume r surplu s andthen the chang e i n producer surplus
. I

n essence , th e demandandsupply curve s previousl y use da s predictiv e device s ar e no w bein g use da s avaluatio n tool
. Thi s metho do f

estimatin g th e chang e in economi c welfar e wit h th e regulatio n divide s societ y into consumer s andproducers
. In amarket environment , consumer s andproducer s o f the goo do r servic e deriv e welfar

e fro mamarket

transaction
. Th e differenc e between the maximumpric e consumer s ar e willin g to pa

y fo r agoo dandth e pric e they actuall y pa y i s referre dto a s "consumer

surplus. " Consume

r surplu s i s measure da s the are aunder th e demandcurv e andabov e th e pric e ofth e product
. Similarly , the differenc e betwee n the minimumpric e producer s ar e willin g t o accep t fo r agoo dan dthe pric e they actuall y receiv e i s referre dto a s "producer

surplus " or

profits
. Produce

r surplu s i s measure da s the are aabov e the supply curv e andbelo w the pric e ofth e product
. Thes e area s ca n b e thought

o f a s consumers ' ne t

benefit s o f

consumptio n andproducers ' ne t benefit s o f

production , respectively
. B- 6P.2 7

$/ Q

P , P , _

A . , _ ^y^^ S '

/ / s

^ - D

Q 2 Q , Q/ t (a ) Chang e i n Consume r Surplu s wit h Regulatio n $/ Q

P n P , - B 

# ^v^ > S '

^ - D

Q 2 Q , Q/ t (b ) Chang e i n Produce r Surplu s wit h Regulatio n $/ Q

P n P , .^l** - 

## -=^-T^>\\COCO

^ ^ D

Q 2 Q , Q/ t (c) Ne t Chang e i n Economi c Welfar e wit h Regulatio n 

### Figure B-2 . Economi c Welfare Change s wit h Regulation : Consume r an d Produce r Surplu s B- 7P.2 8



### In Figur e B-2 , baselin e equilibriu moccur s a t th e intersectio n ofth e demandcurve , D , an dsupply curve , S
. Pric e i s P , wit h quantit y Q,
. Th e increase dcos t

o f productio n wit

h th e regulatio n wil l caus e th e market supply curv e to shif

t upwar dto S'
. Th e ne

w equilibriu m pric e ofth e produc t

i s P 2 

### . Wit

h ahigher pric e fo r th e product , there i s les s consume r welfare , al l els e bein g unchange da s rea l income s ar

e reduced
. I

n Figur e B-2(a) , are aA represent s th e dolla r valu e ofth e annua

l net los s in consumers ' benefit s wit h th e increase dprice
. The rectangula r portio n represent s th e los s in consume r surplu s on th e quantit

y stil l consumed , Q 2 

### , whil e th e triangula

r are arepresent s th e foregone surplu s resultin g fro mth e reduce d quantit y consumed , Q*-Q 2 

### . I n additio n to the change s in consume r welfare , produce

r welfar e als o change s wit

h th e regulation
. Wit

h th e increas e in market

price , producer s receiv e higher revenue s o

n th e quantit y stil l purchased , Q 2 

### . I

n Figur e B-2(b) , are aB represent s th e increas e i n revenue s du e to thi s increas e i

n price
. Th e differenc e i

n th e are aunder

th e supply curv e u

p to the origina

l market price , are aC , measure s th e los s in producer surplus , which include s the los s associate dwit

h th e quantit

y n o longe

r produced
. Th e ne t

chang e in produce

r welfar e i s represente db y are aB-C
. Th e chang e in economi c welfar e attributabl e to th e complianc e cost s o f the regulatio n i s th e su mo f consume r andproducer

surplu s changes , tha

t is , - (A ) + (B-C)
. Figur

e B-2(c ) show s the net

(negative ) chang e in economi c welfar e associate dwit

h th e regulatio n a s are a D
. However , thi s analysi s doe s no t include th e benefit s tha

t occur outsid e th e marke

t (i.e. , th e valu e ofth e reduce dlevel s o f air pollutio n wit

h th e regulation)
. Includin g thi s benefit ma y reduc e th e ne t

cos t ofth e regulatio n or

even mak e it positive
.

B- 8P.2 9

TECHNICA

L REPOR T DAT A (Please read

Instructions on reverse before completing) L REPOR T NO
. EPA-452/R-00-00

7 2

.
4
. TITL E AN D SUBTITL E Economi c Impac t

Analysi s o f

Propose dReinforce dPlastic s NESHA P

7.AUTH0R(S ) Tayle r H
. Bingham , Brook s M
. Depro , an dMar k C
. Buckle y RT

I

9
. PERFORMIN G ORGANIZATIO N NAM E AN D ADDRES S Researc h Triangl e Institut e (RTI ) Cente r fo r Economic s Research , Hobb s Bldg
. Researc h Triangl e Park , N C 27709

12
. SPONSORIN G AGENC Y NAM E AN D ADDRES S Joh n Seitz , Directo r Offic e o f Ai r Qualit y Plannin g an dStandard s Offic e o f Ai r an dRadiatio n U.S
. Environmenta l Protectio n Agenc y Researc h Triangl e Park , N C 2771 1 3
. RECIPIENT S ACCESSIO N NO
.
5
. REPOR T DATE Ma y 200 1 6
. PERFORMIN G ORGANIZATIO N COD E

8
. PERFORMIN G ORGANIZATIO N REPOR T NO
. RT I Projec t Numbe r 7647-14 0

10
. PROGRA M ELEMEN T NO
.

11
. CONTRACT/GRAN T NO
. 68-D-99-02

4

13
. TYP E O FREPOR T AND PERIO D COVERE D Fina l

14
. SPONSORIN G AGENCY COD E EPA/200/04

15
. SUPPLEMENTAR Y NOTE S

16
. ABSTRAC T Thi s repor t

evaluate s th e economi c impact s ofth e propose dNESHA P fo r reinforce dplastic s manufacturing
. Th e industr y impac t

an dsocia l cost s ofth e rul e ar e estimate db y incorporatin g th e expecte dcost s o f complianc e t o apartia l equilibriu mmode l ofth e U.S
. industr y an dprojectin g th e marke t impact s fo r

th e variou s end-us e markets
. Th e repor t als o provide s th e initia l regulator y flexibility analysi s (IRFA ) tha t evaluate s smal l busines s impacts
.

17
. KE Y WORD S AND DOCUMEN T ANALYSI S
a . DESCRIPTOR S economi c impact s smal l busines s impact s socia l cost s

18
. DISTRIBUTIO N STATEMEN T Releas e Unlimite d b
. IDENTIFIERS/OPE N ENDE D TERM S Ai r Pollutio n contro l Economi c Impac t

Analysi s Regulator y Flexibility Analysi s

19
. SECURIT Y CLAS S (Report) Unclassifie d 20
. SECURIT Y CLAS S (Page) Unclassifie d c . COSAT I Field/Grou p

21
. NO
. O FPAGE S

22
. PRIC E

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