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47 OF 283 
_ . P.2 

. .•' •• 3oo?q-EHS-n-l 

••?• /• \ 7 • 

PRELIMINARY ECONOMIC IMPACT ANALYSIS SUPPORTING THE 

ADVANCED NOTICE OF PROPOSED RULEMAKING TO 

DEFINE COMMERCIAL EXPLOSIVES AS 

EXTREMELY HAZARDOUS SUBSTANCES 

PURSUANT TO SECTION 302 OF SARA TITLE III 

December 20, 1989 

Prepared for 

Jerry Newsome 

Economics and Technology Division 

Office of Toxic Substances 

U.S. Environmental Protection Agency 

Washington, D.C. 20460 
P.3 

ACKNOWLEDGEMENTS 

This report summarizes work performed by ICF Incorporated for the U.S. 

Environmental Protection Agency (EPA) under EPA Contract No. 68-D8-0116, Work 

Assignment No. 2-20. EPA's Work Assignment Manager is Mr. Jerry Newsome of 

the Office of Toxic Substances, Office of Pesticides and Toxic Substances. 

ICF staff contributing to this report include Terri Bimes, Robert Costa, James 

Dickson, Susan Kito, George Lowden, Nancy O'Connor, and Ellen Warhit. 

DISCLAIMER 

This document has been reviewed and approved for publication by the 

Office of Toxic Substances, Office of Pesticides and Toxic Substances, U.S. 

Environmental Protection Agency. The use of trade names or commercial 

products does not constitute an endorsement or recommendation for use by the 

U.S. Environmental Protection Agency. 
P.4 

TABLE OF CONTENTS 

Chapter Page 

1. INTRODUCTION 1-1 

1.1. PURPOSE OF THIS REPORT 1-1 

1.2. ORGANIZATION OF THIS REPORT 1-2 

2. DESCRIPTION OF THE POTENTIALLY REGULATED POPULATION 2-1 

2.1. DESCRIPTION OF COMMERCIAL EXPLOSIVES 2-1 

2.2. REGULATED POPULATION 2-2 

2.2.1. Manufacturers 2-2 

2.2.2. Distributors and Importers 2-2 

2.2.3. Users 2-4 

2.2.4. Summary 2-12 

3. COST ANALYSIS 3-1 

3.1. ASSUMPTIONS . 3-1 

3.1.1. State Emergency Response Commissions 3-2 

3.1.2. Local Emergency Planning Committees 3-3 

3.1.3. Private Facilities 3-3 

3.2. TOTAL COST ESTIMATES ..'.' . 3-9 

4. BENEFITS ANALYSIS 4-1 

5. SENSITIVITY ANALYSIS AND LIMITATIONS 5-1 

5.1. ESTIMATED NUMBER OF FACILITIES SUBJECT TO REPORTING .. . 5-1 

5.1.1. Explosives Manufacturing, Distribution, and 

Importation , 5-1 

5.1.2. Mining Sites 5-2 

5.1.3. Construction Facilities and Sites 5-2 

5.1.4. Other Industries 5-2 

5.2. ESTIMATED ACTIVITIES OF TEMPORARY SITES 5-3 

APPENDIX A. SUMMARY OF ATF REGULATIONS A-l 
LIST OF TABLES 

P.5 

TABLE Page 

2-1 Numbers of Facilities Potentially Affected If Explosives Are 

Listed As EHSs 2-3 

2-2 1988 Consumption of Explosives in the United States 2-5 

2-3 Number of Metal and Non-metal Mines 2-7 

3-1 Unit Costs for Activities Conducted by SERCs and LEPCs under 

Sections 302 and 303 3-4 

3-2 Unit Costs for Permanent Facilities Subject to Reporting under 

Sections 302 and 303 3-6 

3-3 Unit Costs for Activities at Transient Facilities under Sections 

302 and 303 3-7 

3-4 Estimated Number of Permanent Sites and Additional Transient Sites 

Affected by the Listing of Explosives as EHSs 3-10 

3-5 Total Estimated Costs to Facilities under Option 1 -- Listing all 

Commercial Explosives Including Fireworks as EHSs 3-12 

3-6 Estimated Costs to SERCs and LEPCs under Options 1 and 2 ... . 3-13 

3-7 Total Estimated Cost by Option 3-15 

A-l Licenses and Permits Issued by ATF A-3 

•ll -
P.6 

1 INTRODUCTION 

The Comprehensive Environmental Response, Compensation, and Liability 

Act of 1980 (CERCLA or Superfund) provides authority for Federal response 

action at certain sites where there is a release or threat of release of 

hazardous substances. The Superfund Amendments and Reauthorization Act of 

1986 (SARA) revises and extends the authorities established under CERCLA. 

Title III of SARA establishes authorities for emergency planning and 

preparedness, emergency release reporting, Community Right-to-Know inventory 

reporting, and annual toxic chemical release reporting. Title III is intended 

to encourage and support State and local planning for emergencies caused by 

the release of hazardous chemicals and to provide citizens and governments 

with information concerning potential chemical hazards present in their 

communities. Title III is organized into three subtitles. Subtitle A 

establishes a framework for State and local emergency planning. Under section 

301 of Subtitle A, States have established State Emergency Response 

Commissions (SERCs), which have, in turn, appointed Local Emergency Planning 

Committees (LEPCs). Section 302 requires the U.S. Environmental Protection 

Agency (EPA) to designate Extremely Hazardous Substances (EHSs) and to 

establish threshold planning quantities (TPQs) for each EHS; to date, there 

are 360 designated EHSs listed in 40 CFR Part 355. Every facility where an 

EHS is present at or above its TPQ is required to notify the SERC and to 

cooperate with the LEPC in the planning process specified under section 303 of 

Title III. 

Section 304 of Title III establishes reporting requirements for releases 

of EHSs and hazardous substances designated under CERCLA section 102(b). The 

owners or operators of facilities must notify the local emergency coordinator 

and any potentially affected State as soon as the owner or operator has 

knowledge of a release of an EHS or a CERCLA hazardous substance, if the 

release equals or exceeds a reportable quantity (RQ), or for those EHSs that 

have not been assigned an RQ, one pound. 

Subtitle B of Title III provides a mechanism for public awareness of 

hazardous chemicals present in the community. Subtitle C of Title III 

contains general provisions concerning trade secret protection, enforcement, 

citizen suits, and public availability of information. 

1.1 PURPOSE OF THIS REPORT 

In response to public concern about explosives in the community, EPA is 

considering listing commercial explosives as EHSs under section 302 of Title 

III of SARA. Commercial explosives can pose an extreme hazard to emergency 

response personnel during a fire. EPA is considering two alternatives for 

listing explosives. The first would list only those explosives characterized 

by the Bureau of Alcohol, Tobacco, and Firearms (ATF) as high explosives, low 

explosives, or blasting agents. The second would also include fireworks that 

are exempt under ATF regulations. 

The purpose of this report is to estimate the costs that may be incurred 

by SERCs, LEPCs, and the owners or operators of facilities that manufacture, 
P.7 

1-2 

process, store, or use commercial explosives if these materials were to be 

listed as EHSs under SARA Title III. 

In this report, costs are estimated for activities required by two 

sections of Title III, sections 302 and 303. Under section 302, facilities 

that store EHSs in quantities above their TPQs are required to notify the SERC 

and LEPC that they are covered facilities. SERCs, in turn are required to 

notify EPA. Under section 303, LEPCs are required to prepare emergency 

response plans. The section mandates minimum plan provisions and establishes 

a framework for cooperation between covered facilities and the LEPC. SERCs 

are required to review and coordinate emergency plans. To ensure that plans 

are adequate, section 303 requires that covered facilities designate a 

Facility Emergency Coordinator and participate in the emergency planning 

process. 

1.2 ORGANIZATION OF THIS REPORT 

The remainder of this preliminary analysis is organized in three 

chapters: 

Chapter 2 describes the estimated population of affected facilities that 

manufacture, distribute, or use explosives. 

Chapter 3 describes the activities that are required under section 302 

and 303 that are likely to result in costs to the regulated community, 

and presents an estimate of the costs to the affected population. 

Chapter 4 describes the benefits derived from listing explosives as 

EHSs. 

Chapter 5 discusses the limitations of the estimates in this report. 

Appendix A summarizes the regulations developed by the Bureau of 

Alcohol, Tobacco, and Firearms for manufacturers, distributors, 

importers, and users of explosives. 
P.8 

2 DESCRIPTION OF THE POTENTIALLY AFFECTED POPULATION 

This chapter provides background information on which industries would 

be affected if explosives are listed as Extremely Hazardous Substances (EHSs), 

how many facilities would be affected, and what regulations currently apply to 

facilities that store explosives. 

2.1 DESCRIPTION OF COMMERCIAL EXPLOSIVES 

The manufacture, sale, and storage of explosives is regulated by the 

Bureau of Alcohol, Tobacco, and Firearms (ATF). ATF groups explosives into 

three categories: high explosives, low explosives, and blasting agents. High 

explosives will detonate even when unconfined (e.g., dynamite). Low 

explosives are defined as materials that deflagrate when confined (e.g., black 

powder, safety fuses, igniters, igniter cords, and fuse lighters). Blasting 

agents are defined as compounds used for blasting that cannot be detonated 

using a number 8 blasting cap when unconfined (e.g., ammonium nitrate-fuel oil 

mixtures, or ANFO). All three categories of explosives are considered to be 

"commercial explosives." The categorization of explosives is used by ATF to 

ensure that adequate precautions (i.e., storage facilities and isolation 

distances) are used to store the explosives. ATF has developed minimum 

criteria for storage facilities that must be met before a facility may store 

explosives. If storage facilities are designed for more powerful explosives 

(e.g., high explosives), they may be used to store explosives in a lower 

category (e.g., blasting agents). 

It is important to note that ANFO, which constitutes approximately 50 

percent of the total quantity of commercial explosives used in the United 

States, is regulated only as a mixture. That is, neither ammonium nitrate nor 

fuel oil is considered a commercial explosive. Many facilities purchase 

ammonium nitrate for on-site mixture of ANFO. Until mixed, the ammonium 

nitrate would not be considered an EHS under sections 302 and 303 of Title 

III. 

At present, EPA has not determined if fireworks would be specifically 

exempted if explosives are listed as EHSs. In general, fireworks are made 

using low explosives, typically black powder, perchlorate mixtures, and 

potassium chlorate base explosives. Under the ATF regulations, fireworks are 

treated differently depending on whether they are categorized by the 

Department of Transportation as Class "B" explosives or Class "C" explosives. 

Class "B" explosives, also referred to as "display fireworks" or "special 

fireworks," are subject to all ATF regulations. Class "C" fireworks, also 

referred to as "common fireworks," are not regulated by ATF once they are in a 

finished, packaged state suitable for retail sale. 

2.2 REGULATED POPULATION 

For purposes of this report, the potentially affected population is 

divided into three categories: manufacturers, distributors, and users. For 

purposes of this analysis, manufacturers are defined to be chemical plants 

that combine basic chemicals to produce explosives and components of 
P.9 

2-2 

explosives. Distributors are defined to be facilities that sell explosives. 

Users are defined to be facilities that use explosives; they may either 

purchase explosives or purchase the components of blasting agents for 

combination and use on-site. Table 2-1 summarizes the number of facilities 

potentially affected by the listing of explosives a$ EHS chemicals. 

2.2.1 Manufacturers 

Explosive manufacture (including manufacture of high explosives, 

blasting accessories, black powder, and related products) is categorized in 

Standard Industrial Classification (SIC) code 2892. According to the 1982 

Census of Manufactures, 73 companies manufactured explosives in 1982, 

operating a total of 114 establishments. The Census data include both 

privately owned and operated plants and government-owned, contractor-operated 

plants. 

Establishments primarily engaged in the manufacture of fireworks are 

classified in SIC code 2899, Chemical Preparations, N.E.C. The 1982 Census of 

Manufactures reported a total of 1,439 establishments in this SIC code. For 

purposes of this analysis it is assumed that all 1,439 establishments in this 

SIC code manufacture fireworks and would be affected if explosives are listed 

as EHS chemicals. This is considered a conservative estimate because fireworks 

manufacturers are only one of many types of manufacturers in this 

classification. 

2.2.2 Distributors and Importers 

All importers and distributors of explosives, other than finished Class 

"C" fireworks, must obtain a license from ATF. In 1989 ATF has issued 228 

licenses to companies importing explosives. Also in 1989, ATF has also issued 

3,358 licenses to companies distributing black powder and 1,236 licenses to 

companies distributing other explosives, for a total of 4,594 distributing 

facilities. Because ATF requires all distributors and importers to obtain a 

separate license for each facility at which the companies conduct business, 

these numbers should include all distributors and importers potentially 

subject to sections 302 and 303. 

As discussed in Appendix A, ATF defines "manufacturing" to include the 

mixture of non-explosive components on-site to form explosives (e.g., 

combination of ammonium nitrate and fuel oil to form ANFO). For purposes of 

this analysis, sites that produce ANFO for use on-site are classified as 

"users" of explosives. 

U.S. Bureau of the Census, "1982 Census of Manufactures, Industry 

Statistics," Table 2. 
P.10 

2-3 

TABLE 2-1 

ESTIMATED NUMBERS OF FACILITIES AFFECTED 

IF EXPLOSIVES ARE LISTED AS EHSs 

Industry 

Number of 

Establishments 

114 

4,594 

228 

4,778 

2,042 

9,450 

18,118 

980 

NA 

NA 

6 

90 

200 

9 

18 

Number 

of Sites 

114 

4,594 

228 

4,778 

2,042 

,450-56,700 

,118-108,708 

980 

NA 

NA 

20 

270-1,080 

200 

Explosive Manufacturers 

Explosive Distributors 

Explosive Importers 

Mining 

Metal/Non-metal 

Coal 

Heavy Construction 

Highway 

Non-highway 

Other 

Drilling - Oil and Gas 

Drilling - Drinking Water 

Forestry 

Demolition 

Seismic Activity 

Special Effects 

Subtotal 

Fireworks 

Manufacture 

Distribution - Wholesale 

Display Services 

Permits (Displays) 

Distribution - Retail 

Subtotal - Fireworks 

TOTAL (with fireworks) 

40,002 40,824-179,444 

1,439 

3,772 

892 

3,235 

17,233 

26,571 

66,573 

10 

36 

77 

1,439 

3,772 

700-46,384 

3,235 

17,233 

379-72,063 

203-251,507 

Source: ICF estimates. 
P.11 

2-4 

ATF does not require distributors or importers of "common fireworks" and 

other DOT class "C" explosives to obtain a license. Retail sales of 

fireworks fall into SIC code 5999 (part), Other Miscellaneous Retail Stores, 

N.E.C. In 1982, the Bureau of the Census categorized 17,233 facilities in SIC 

code 5999, but it is likely that only a small fraction of these facilities 

distribute fireworks. Wholesale sales of fireworks are categorized in SIC 

code 5099 (part), Other Durable Goods, which had a total of 3,772 facilities 

in 1982. To be conservative, this analysis assumes that all Miscellaneous 

Retail Stores and all Wholesale Distributors of Other Durable Goods sell 

fireworks and would be affected if fireworks were included on the EHS list. 

2.2.3 Users 

By far the largest category of potentially affected facilities includes 

facilities using explosives. Data collected by the Bureau of Mines show four 

major uses of explosives: coal mining, metal mining, quarrying and nonmetal 

mining, and construction. "Other uses" account for approximately 3 percent of 

the total quantity of explosives sold in the United States. Table 2-2 shows 

the estimated quantity of explosives consumption in 1988, by use. Explosives 

may be used by many firms at multiple sites. Consequently, it is important to 

estimate not only the number of firms or permanent establishments that may 

store explosives, but also the number of temporary, or transient, locations at 

which explosives may be used, and for which notification to the SERC and LEPC 

would be necessary. This section is organized by major category of use: 

mining, construction, and other uses. 

Mining 

Use of explosives is prevalent in the mining industry. According to a 

study conducted by the U.S. Bureau of Mines, coal mining facilities purchased 

67 percent of the explosives manufactured in 1987, metal mines purchased 9 

percent, and quarrying and non-metal mining purchased 13 percent. (See Table 

2-2.) Overall, the mining industry accounted for 89 percent of the explosives 

purchased in the United States in 1988. Except at quarrying and 

Class C explosives, as described by the U.S. Department of 

Transportation regulations, are found at 49 CFR Part 173.100(p), (r), (t), and 

(x). 

4 U.S. Bureau of the Census, "1982 Census of Retail Trade," Volume 1, 

Table 2. Number of establishments includes 1,663 facilities operating at the 

end of the ye ar but not throughout the year, and excludes 1,293 facilities not 

in business at the end of the year. 

5 U.S. Bureau of the Census, "1982 Census of Wholesale Trade," Volume 1, 

Table 4. 

"Other uses" is a combined reporting category in the Bureau of Mines 

survey. Data are not collected on which uses comprise the "other uses" 

category. 
TABLE 2-2 

1988 CONSUMPTION OF EXPLOSIVES IN THE UNITED STATES 

Explosives 

Permissibles 

Other high explosives 

Water gels and slurries 

Ammonium nitrate-fuel 

oil blasting agents 

Unprocessed ammonium 

nitrate 

TOTAL 

Coal Mining 

27,000 

20,000 

240,000 

515,000 

2.335.000 

3,137,000 

Metal Mining 

10,000 

100,000 

60,000 

270,000 

440,000 

Quarrying 

Nonmetal M 

250 

65,000 

220,000 

180,000 

125.000 

590,250 

and 

ning 

Construction 

Work 

200 

45,000 

80,000 

90,000 

105.000 

320,200 

All Other 

Purposes 

10,000 

20,000 

20,000 

.140. ooq 

190,000 

Total 

27,670 

150,769 

658,273 

867,393 

2.973.801 

4,677,906 

Source: Branch of Industrial Minerals, U.S. Bureau of Mines, Mineral Industry Surveys, "Apparent Consumption of Industrial Explosives and 

Blasting Agents in the United States, 1988," August 22, 1989. 

Note: Data may not add to totals shown because of independent rounding. 

Note: Permissibles are defined as grades of high explosives approved by brand name by the Mine Safety and Health Administration of the U.S. 

Bureau of Mines for use in underground coal mines, including water gels and slurries. 
P.13 

2-6 

non-metal mining facilities, the most commonly purchased explosive material 

was unprocessed ammonium nitrate. Unprocessed ammonium nitrate accounted for 

74 percent of the explosives purchased by coal mining facilities, 61 percent 

of the explosives purchased by the metal mining facilities, and 33 percent of 

the explosives purchased by quarrying and non-metal mining facilities. 

Explosives are used in the mining industry for the removal of rock and 

for the construction of mining shafts and tunnels. Virtually all metal and 

nonmetal mines are believed to use explosives; coal mines use explosives to a 

lesser extent. 

Metal and Nonmetal Mines 

For purposes of this preliminary analysis, it is assumed that all nonmetal and metal mines would be affected if commercial explosives are listed as 

EHSs. Table 2-3 shows the estimated number of metal and non-metal mines in 

the United States. As shown in the table, mines are classified as both 

producing and intermittent/non-producing. Because it is unclear from the data 

whether intermittent/non-producing mines are operating intermittently or are 

closed, this analysis assumes that all 4,778 mines may operate at some point 

during the year, and thus may have explosives on site. 

Coal Mines 

The Mine Safety and Health Administration (MSHA) reports that there are 

currently 1,301 producing and 294 non-producing underground coal mines, 1,379 

producing and 88 non-producing surface coal mines (strip or augur mines), and 

741 producing and 83 non-producing surface facilities. Surface facilities 

include preparation plants, dredging operations, and reclamation projects. 

Non-producing mines are defined as active mines that are currently not 

producing any coal. These non-producing mines include new facilities that 

could potentially use explosives in the construction of a shaft in 

anticipation of coal mining, as well as mines that are temporarily idle, but 

that still maintain ventilation or a sump pump. 

Based on the types of mines and the method of mining used, MSHA 

estimated that, in September 1988, approximately 575 underground coal mines 

were using explosives, including 500 small and 75 large mines. In addition 

Unprocessed ammonium nitrate is low density ammonium nitrate produced 

primarily for combination with fuel oil. 

o 

Conversation with Peter Tooker, American Mining Congress, November 17, 

1989. 

9 Conversation with Fred Menke, Mine Safety and Health Administration, 

Department of Labor, November 22, 1989. 

10 Ibid. 
P.14 

2-7 

TABLE 2-3 

NUMBER OF METAL AND NON-METAL MINES 

1989 

Mine Type 

Underground Mines 

Open Pit Mines 

Quarries 

Total Mines 

Pr oducing 

242 

533 

1,780 

2,555 

Intermittent/ 

Non Producing 

171 

515 

1,537 

2,223 

Total Mines 

413 

1,048 

3.317 

4,778 

Source: Metal/Nonmetal Division, Mine Safety and Health 

Administration, U.S. Department of Transportation, 

"Employment/Operations in Metal/Nonmetal Industries," 

July 8, 1989 printout. 
P.15 

2-8 

1 _ 

virtually all above-ground coal mines are assumed to use explosives. For 

this analysis, it is estimated that a total of 2,042 coal mines will be 

subject to the section 302 and 303 notification and planning requirements. 

This estimate consists of all 1,467 producing and non-producing surface mines 

and 575 underground mines. 

Construction 

As shown in Table 2-2, construction facilities purchased 320 million 

pounds of explosives in 1988, or about 7 percent of the explosives sold. The 

most common explosive purchased by these facilities is unprocessed ammonium 

nitrate, which accounted for 33 percent of the explosives purchased by 

construction facilities in 1988. Water gels and slurries accounted for an 

additional 18 percent of the sales to construction facilities. 

Based on preliminary data, it appears that the use of explosives in 

construction is very specialized. That is, relatively few construction 

contractors use explosives; most hire specialized explosives contractors if 

the work requires explosive demolition. Thus, although relatively few 

contractors use explosives, the explosive specialists probably work at 

numerous sites throughout the course of a year. In many cases, explosives are 

only temporarily stored on site; the explosives are generally used and/or 

removed within 24 hours. 

Explosives are used by construction facilities for several purposes: 

utility and sewer line construction, earth dam or footwater projects for the 

Department of Agriculture, street and highway construction, demolition, 

tunnelling, and excavation. The use of explosives in several of these uses, 

including utility work and highway construction, appears to be relatively 

rare. For example, most excavation for utility work is performed 

mechanically. The use of explosives in new highway construction also appears 

to be an exception to standard practice; many highway contractors use large 

loaders equipped with rippers to move soil, unless a very deep cut is 

Conversation with Fred Menke, Mine Safety and Health Administration, 

Department of Labor, December 13, 1989. 

Branch of Industrial Minerals, U.S. Bureau of Mines, Mineral Industry 

Surveys, "Apparent Consumption of Industrial Explosives and Blasting Agents in 

the United States, 1988," August 22, 1989. 

Conversation with Donald Lahr, Washington Metropolitan Area Transit 

Authority, December 12, 1989. 

Conversation with Larry Schneider, Division of Explosives, Department 

of Mines and Minerals in Lexington, Kentucky, November 27, 1989; conversation 

with Wendell Moody, Department of Agriculture, November 27, 1989. 
P.16 

2-9 

required. Explosives, however, may be used for tunnelling or construction 

in mountains. 

For purposes of this analysis, it is assumed that all construction 

contractors (i.e., 9,450 highway contractors and 18,118 non-highway 

contractors) have at least one fixed facility at which explosives are stored 

in an amount greater than the TPQ. This estimate will overstate the number of 

facilities subject to reporting, because most contractors rely on a relatively 

small number of explosives specialists. 

This analysis also assumes that, on average, each contractor uses 

explosives at between one and six sites per year. The range is intended to 

account for the wide variation in the need for and use of explosives. Some 

contractors may have no sites that require the use of explosives. Other 

contractors, operating in areas with more rocky soil, may require explosives 

at all sites. 

Other Uses 

Explosives are used for a large number of purposes unrelated to mining 

and construction. Although these uses collectively account for only 3 percent 

of explosives consumption annually, the total estimated number of sites 

subject to section 302 and 303 reporting and planning requirements may be 

quite large. Other explosives use include drilling and well perforation, 

fireworks, forestry, seismic exploration, special effects, well perforation, 

and automotive uses. 

Drilling 

In 1986, approximately 26,000 oil and gas wells were drilled in the 

United States, as well as 13,000 dry holes and an unknown number of other 

18 

wells. On October 3, 1988, 980 oil and gas drilling crews were operating, 

although more than 1,000 were operating in October 1987.19 The need for 

explosives in drilling wells depends on the geology of the site. On the east 

15 

16 

Conversation with Eric Staton, Air Power, Inc., November 27, 1989. 

Conversation with Tim More, National Association of General 

.rs, November 27, 1989. 

U.S. Bureau of the Census, "County Business Patterns, 1986: United 

Contractors, November 27, 1989 

17 

States." 

18 

American Petroleum Institute, "Basic Petroleum Data Book: Petroleum 

Industry Statistics," Volume VIII, Number 1, January 1988, section III, Table 

2b. 

19 Oil and Gas Journal, October 10, 1988, p. 83. 
P.17 

2-10 

coast, for example, explosives generally are not used for water wells.20 In 

the mid-west, however, explosives may be used in almost all drilling 

operations, to perforate the well, cut the casing, or for tube cutting. 

Under normal practices, explosives are brought to the site on the day of the 

blast, and either used or removed within 24 hours. Normally, only one well 

will be completed in a day. The average charge per well is estimated to be 

about 5 to 50 pounds, with the explosives pre-packaged as a "bullet."22 

Because the explosives are pre-packaged, it is likely that only enough 

explosive is brought to a site to satisfy the needs of that day's drilling. 

For purposes of this analysis, it is assumed that all 980 oil and gas 

drilling crews have a fixed facility storing explosives in quantities greater 

than the TPQ. By assuming that all drilling crews have a facility subject to 

the section 302 and 303 notification and planning requirements, the estimate 

will overstate the number of oil and gas facilities affected, but will 

compensate for the lack of data on other drilling contractors. The analysis 

further assumes that no wells require explosives in amounts greater than the 

TPQ, and that no well sites would be subject to the section 302 and 303 

notification and planning requirements. 

Fireworks 

Under ATF regulations, a permit is required to purchase Class "B" 

fireworks outside the purchaser's state of residence. As of August 1989, ATF 

had issued 3,235 one-time permits, most of which were estimated to be for 

the purchase of display fireworks.24 One-time "User-Limited" permits allow 

the purchase of explosives outside of one's state of residence. They are 

valid for one-year, but may be used for one purchase only. The 3,235 permits 

represent the annual number of facilities that display fireworks. 

For this analysis, it is assumed that all 892 establishments in SIC code 

7999 (part), Display Services and Concession Operators of Amusement Devices, 

are pyrotechnic firms that store explosives at levels that equal or exceed the 

TPQ. These firms are assumed to produce, on average, between one show per 

month and one show per week (i.e., operate at 12 to 52 sites per year). Also, 

Conversation with Clint Yost, Branham Contractors Inc., Pasadena, 

Maryland, December 12, 1989. 

21 

Conversation with David Wessen, December 11, 1989. 

22 

Conversation with David Wessen, Vann Systems, Inc., December 13, 

1989. 

Bureau of Alcohol, Tobacco, and Firearms, monthly summary of 

explosives licensees and permitees for the month ending August 31, 1989. 

Conversation with Bureau of Alcohol, Tobacco, and Firearms. 

U.S. Bureau of the Census, 1982 Census of Service Industries. 
P.18 

2-11 

this analysis assumes that the 3,235 purchasers of one-time permits are 

fireworks users purchasing fireworks in quantities greater than the TPQ. 

Automotive 

Sodium azide, an explosive on ATF's list, is used as a propellant in air 

bags in the automobile industry. Although the air bags in individual cars 

would be exempt from reporting under the consumer products exemption of SARA 

Title III, manufacturing plants may be subject to sections 302 and 303 if 

explosives are listed as EHSs. Because the only domestic sodium azide plant 

recently blew up, air bag vendors are currently importing sodium azide from 

foreign countries.26 Sodium azide is currently designated as an EHS, however, 

so there would be no incremental impact on the automobile industry if 

explosives are listed as EHSs. 

Forestry 

Explosives are used in forestry to build trails, roads, ponds, and fire 

lines. The use of explosives for fighting fires is expected to be relatively 

small. The primary user is assumed to be the U.S. Forest Service. Although 

Federal facilities are encouraged and expected to comply with Title III 

requirements, they are not required to, so the costs of forestry applications 

are not considered in this report. 

Demolition 

The use of explosives for building demolition is rare. Only six of the 

members of the National Association of Demolition Contractors use explosives 

for the implosion of buildings. Explosives often cannot be used for a variety 

of reasons: lack of affordable insurance, restrictions on the use of 

explosives under city ordinances, lack of room for safe demolition, relatively 

high cost of preparing the building, and difficulty in removing concrete slab 

floors if a building has collapsed on itself. It was estimated that there are 

probably fewer than 20 demolition sites per year involving explosives. 

Instead, most demolition work is performed by mechanical means, using cutting 

torches or wrecking balls. 

Seismic Exploration 

Explosives are used in mineral prospecting, especially oil and gas 

prospecting. In 1988, 181 seismic crews were active, including 151 land-based 

26 Conversation with Doug Greenhouse, National Association of Automobile 

Dealers, November 27, 1989. 

Conversation with Mr. Baker, National Association of Demolition 

Contractors, November 21, 1989. 
P.19 

2-12 

crews and 30 marine crews. Not all crews use explosives; some use a 

"vibroseis" that mechanically vibrates the ground. About half of the crews 

are believed to use explosives. 

For seismic exploration, the crew will establish a temporary magazine 

holding enough explosives for the duration of the project (about 5,000 

pounds). Individual charges range from 5 to 10 pounds, in wells sited at 300 

to 500 foot intervals. A typical exploration may cover a ten mile line, with 

about two miles of seismic wells worked in a day. The durations of projects 

range from one to four months. 

For purposes of this analysis, it is assumed that 90 crews use 

explosives in seismic exploration, and that each crew surveys between 3 and 12 

sites per year. Therefore, this analysis assumes that between 270 and 1,080 

seismic exploration sites will have explosives stored in quantities that 

exceed the TPQ. 

Special Effects 

Explosives are used in many movies for special effects. For purposes 

of this analysis, it is assumed that there would be no more than 200 

individual movie locations using explosives per year. 

2.2.4 Summary 

Explosives are used at a large number of sites for a large number of 

purposes. Some of the facilities where explosives come to be located are 

stationary and permanent; others are only temporary. For example, facilities 

such as mines and explosives manufacturing and distributing sites are likely 

to be permanent. Other facilities that use explosives do so only for 

temporary time periods. Use of explosives for tunnelling, construction 

excavation, or drilling is likely to be on a short-term basis. The explosives 

may be on-site for time periods ranging from a half-day to a year. The 

companies engaged in transient operations often operate at many sites over the 

course of a year. If the amount of explosives required or stored at each site 

equals or exceeds the TPQ, then the SERC and the LEPC would need to be 

notified that an EHS is present at the site. 

28 Society of Exploration Geophysicists, as reported in the Oil & Gas 

Journal. October 31, 1988, p. 91. 

Conversation with Donald Robertson, seismologist, December 11, 1989. 

U.S. Geophysical News, October 15, 1989. About 113 active crews were 

operating, of which 56 were dynamite crews. Cited by David Wessen, December 

13, 1989. 

Society of Explosive Engineers, "1989 Membership Directory and Desk 

Reference." 
3 COST ANALYSIS 

This chapter discusses the methodology and assumptions underlying the 

estimated costs that would be imposed on facilities, local governments, and 

States if explosives were to be listed as EHSs. All costs are estimated in 

second quarter 1989 dollars. 

For purposes of this report, sites are characterized as being either 

permanent facilities or transient facilities. Permanent facilities (e.g., 

manufacturing plants, explosives distributors, and mines) are assumed to 

participate in the emergency planning process if explosives are listed as 

EHSs. Transient facilities (e.g., drilling sites and construction sites) are 

mobile. Although they are required to report to SERCs and LEPCs, they are 

assumed to store explosives at a particular site only temporarily and would be 

unlikely to participate in the emergency planning process. 

Compliance costs are estimated by identifying the activities that an 

individual facility, Local Emergency Planning Committee (LEPC), or State 

Emergency Response Commission (SERC) must perform to comply with sections 302 

and 303 of Title III. For each activity, estimates are made of the personnel 

requirements and labor costs to complete the activity. The total costs per 

affected entity (i.e., government or facility) are calculated by summing the 

estimated costs to comply with all relevant activities for each entity. Total 

costs are estimated by multiplying the costs per entity by the number of 

entities likely to incur the costs. 

As discussed in Appendix A, most facilities using explosives are subject 

to ATF storage requirements, which require that all explosives are stored in 

specific, designated magazines. In addition, all manufacturers, importers, 

and distributors (except manufacturers that immediately use the explosives onsite) must maintain detailed records regarding the source and disposition of 

explosives, and must perform an annual inventory. Consequently, owners and 

operators of facilities regulated by ATF would incur little additional cost to 

determine whether explosives are at their facilities in quantities that equal 

or exceed the TPQ. 

3.1 ASSUMPTIONS 

Under section 304, facilities are required to report to appropriate 

emergency response personnel releases of EHSs and CERCLA hazardous substances 

in quantities equal to or greater than a reportable quantity (RQ).1 Section 

304 specifically exempts the reporting of releases that result in exposure 

solely to persons within the facility boundaries. Because explosives 

generally take the form of solids or semi-solids, they are unlikely to be 

sufficiently volatile that releases would result in off-site exposure. Of 

course, an explosion could affect persons off-site and would need to be 

If a substance does not have a reportable quantity specified by 

regulation, the reportable quantity is set by default to one pound. 

2 40 CFR 355.40(a)(2)(i), 52 FR 13396. 
P.21 

3-2 

reported to the National Response Center under CERCLA section 103(a) and to 

the SERC and LEPC of any area likely to be affected by the release under 

section 304 of Title III. However, because accidental explosions are likely 

already to be reported to the appropriate authorities, this analysis assumes 

that there would be no incremental costs associated with compliance with 

episodic release reporting. 

To develop the cost estimates, assumptions are made about the personnel 

that would be performing required activities, the length of time needed to 

complete the activities, the wage rates of the personnel, and the number of 

affected facilities. The assumed direct labor needs are disaggregated into 

management, technical, and clerical categories. Industry average wage rates 

are identical to those used in the April 1987 RIA, but have been updated to 

second-quarter 1989 dollars using U.S. Department of Labor wage and salary 

indices for clerical, professional specialty and technical occupations, and 

managerial and administrative occupational categories. The sections below 

describe the nature of activities expected to result in costs to the affected 

population. 

3.1.1 State Emergency Response Commissions 

SERCs are responsible for receiving and storing information on covered 

facilities, notifying EPA of covered facilities, and reviewing LEPC plans. 

The listing of commercial explosives as EHS chemicals would increase the 

number of facilities required to notify SERCs that they are subject to the 

provisions of section 302 of Title III. Under section 302(d) of Title III, 

SERCs are then required to notify EPA of each notification received. For 

purposes of this analysis, it is assumed that SERCs already have mechanisms in 

place to record and transmit information to EPA. Consequently, the 

incremental cost to SERCs associated with the additional reports is expected 

to be low relative to the costs to facilities of reporting the information. 

For this analysis, it is assumed that SERCs would require 15 minutes of 

clerical time to receive each notification, record the name of the facility 

for transmittal to EPA, and file the notification. No other incremental costs 

are assumed to be incurred by SERCs. In particular, it is assumed that SERCs 

would not review LEPC plans solely because of the listing of explosives, and, 

therefore, that there would be no incremental review cost associated with the 

listing of explosives. 

U.S. Environmental Protection Agency, "Regulatory Impact Analysis in 

Support of Rulemaking Under Sections 302, 303, and 304 of Title III of the 

Superfund Amendments and Reauthorization Act of 1986," Office of Toxic 

Substances, April 10, 1987. 

U.S. Department of Labor, Bureau of Labor Statistics, computer 

printout dated July 25, 1989. The indices (June 1989 to September 1986) are 

administrative -- 146.4:131.7, professional -- 152.1:135.4, and executive --

147.3:132.4. 
P.22 

3-3 

3.1.2 Local Emergency Planning Committees 

The listing of commercial explosives would increase the number of 

facilities reporting the presence of EHSs to LEPCs pursuant to sections 302 

and 303. The increase in the number of reports would lead to additional 

efforts on the part of LEPCs to log in the notifications and to incorporate 

sites with permanent and temporary storage of explosives into their emergency 

plans. In this report, the level of effort required of a LEPC is assumed to 

depend on the type of facility reporting. For permanent facilities (i.e., 

those facilities assumed to permanently store explosives), it is assumed that 

two hours of technical time would be needed to review the notification, call 

the facility to verify the information, and discuss the notification with 

emergency response personnel (e.g., the fire department). An additional 15 

minutes of clerical time would be used to receive and file the notification. 

For sites that store or use explosives only for short time intervals 

(i.e., transient facilities), it is assumed that the extent of review by LEPC 

technical personnel would be much shorter (i.e., 15 minutes), and that 15 

additional minutes of clerical time would be required to receive and file the 

notification. This shorter review time reflects the assumption that, due to 

the temporary nature of the reporting site, the LEPC would essentially pass 

the information along to the fire department, without extensive planning or 

site evaluation. This analysis further assumes that LEPCs would not review 

and revise emergency plans solely because of the receipt of notifications of 

explosives facilities. Instead, any necessary plan revisions are assumed to 

be incorporated into the annual plan review process, at no incremental costs. 

Table 3-1 summarizes the unit cost estimates used in this analysis to 

estimate the impacts on SERCs and LEPCs of listing commercial explosives as 

EHS chemicals. 

3.1.3 Facilities 

Facilities storing commercial explosives would incur costs to comply 

with sections 302 and 303 if commercial explosives are listed as EHSs under 

section 302. The costs incurred by a particular facility depend on whether 

the facility is permanent or transient. Permanent facilities are assumed to 

incur higher costs because they would be more likely to participate actively 

in the emergency planning process. Transient facilities, such as drilling and 

construction sites, are assumed to incur lower costs, because explosives are 

unlikely to be in place long enough to warrant participation in the emergency 

planning process. 

Cost estimates are developed by first identifying the activities likely 

to be performed by facilities to meet the regulatory requirements. Four 

activities are likely to be necessary for compliance: 

• Familiarization with the regulatory requirements; 

• Inventory comparison with the TPQ; 

• Emergency planning notification under section 302; and 
TABLE 3-1 

UNIT COSTS FOR ACTIVITIES CONDUCTED BY SERCs AND LEPCs UNDER SECTIONS 302 AND 303 

Line 

No. Compliance Activities 

Personnel Hours 

Clerical Technical Manager 

Unit Costs a/ 

(second quarter 1989 dollars) 

Clerical Technical Manager Other Total 

SERCs, All Notifications 

1 File Notification 

LEPCs, Permanent Facilities 

2 Review Notification 

3 File Notification 

4 Subtotal 

LEPCs, Transient Facilities 

5 Review Notification 

6 File Notification 

7 Subtotal 

0.25 XXX XXX $3.86 $0.00 $0.00 $0.00 $3.86 

XXX 

0.25 

0.25 

2.00 

XXX 

2.00 

XXX 

XXX 

0.00 

$0.00 

$3.86 

$3.86 

$49.68 

$0.00 

$49.68 

$0.00 

$0.00 

$0.00 

$0.00 

$0.00 

$0.00 

$49.68 

$3.86 

$53.54 

XXX 

0.25 

0.25 

0.25 

XXX 

0.25 

XXX 

XXX 

0.00 

$0.00 

$3.86 

$3.86 

$6.21 

$0.00 

$6.21 

$0.00 

$0.00 

$0.00 

$0.00 

$0.00 

$0.00 

$6.21 

$3.86 

$10.07 

Note: Assumes all facilities incur costs for "small" facilities. 

Source: April 1987 RIA, Tables B-3 and B-4, U.S. Bureau of Labor Statistics ..., pp. 19 and 20. 

a/ Costs updated from third quarter 1986 dollars to second quarter 1989 dollars using Bureau of Labor Statistics 

Indices: clerical -- 1.119, Technical -- 1.123, and Manager -- 1.113. Wage rates used (second quarter 1989): 

clerical -- $15.45, technical -- $24.84, managerial -- $38.03. 
P.24 

3-5 

• Coordination with the LEPC under section 303. 

It is assumed in this analysis that all facilities that use explosives 

would be subject to the reporting and planning requirements of sections 302 

and 303 of Title III for the first time. There may, however, be some 

facilities already subject to sections 302 and 303 because of their use of 

EHSs other than explosives. For example, EPA estimates that about 166,000 

facilities in agriculture, mining, and construction (SIC codes 07, 08, 09, 10, 

11, 12, 13, 14, 15, 16, and 17), store at least one EHS in quantities that 

equal or exceed the TPQ. Many of these facilities may also store explosives. 

In all, about 20 percent of all facilities with more than 10 employees in all 

affected industries are estimated to be covered by section 302 and 303 

notification and planning requirements. By assuming that these facilities 

with explosives are newly regulated facilities, this analysis will tend to 

overestimate the costs, because facilities already complying with the Title 

III requirements would, in reality, incur only the cost of reporting a single 

additional chemical to the SERCs and LEPCs. That is, facilities currently 

reporting under sections 302 and 303 would actually incur minimal additional 

cost for rule familiarization and emergency planning notification, and no 

additional cost f.or development of a tracking system or coordination with the 

LEPC. 

The remainder of this section describes the activities assumed to be 

required of facilities to comply with sections 302 and 303 of Title III. 

Tables 3-2 and 3-3 summarize these activities and the estimated times and unit 

costs used in this analysis. 

Familiarization With The Regulatory Requirements 

Each permanent facility not currently subject to the requirements of 

sections 302 and 303 of Title III is assumed to incur a one-time cost of 

$62.87 (i.e., one hour of technical time and one hour of managerial time) to 

become familiar with the regulatory requirements. For purposes of this 

analysis, it is assumed that only those facilities potentially subject to the 

reporting requirements would review the regulations. Because explosives are 

anticipated as being listed as a class of chemicals, with the total quantity 

of explosives being listed as a single compound, this analysis further assumes 

that facilities would not require in-house or outside legal or environmental 

expertise to become familiar with the regulatory requirements. 

Transient facilities (i.e, facilities that use explosives periodically 

and tend to hire explosives contractors to satisfy their temporary needs) are 

assumed not to incur costs for rule familiarization. Rather, drilling rig 

crews or explosives contractor crews are assumed to incur a one-time cost to 

become familiar with the requirements. As the crews move to different sites, 

5 April 1987 RIA, Table A-ll. 

6 Ibid. Table A-8B. 
TABLE 3-3 

UNIT COSTS FOR ACTIVITIES AT TRANSIENT FACILITIES UNDER SECTIONS 302 AND 303 

Line 

No. 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

Compliance Activities 

Rule Familiarization 

Inventory Comparison 

Notify SERC 

Compose letter 

Type letter 

Mail (Postage) 

Subtotal b/ 

Designate FEC & Related 

Activities: 

Meetings 

Travel 

Document preparation 

-compose 

-process 

Mail (Postage) 

Review LEPC planning 

activities with facility 

management 

Subtotal c/ 

Total d/ 

Clerical 

XXX 

XXX 

XXX 

0.5 

XXX 

0.5 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

0.0 

0.5 

Personnel 

Technica 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

0.0 

0.0 

Hours 

I Manager 

XXX 

XXX 

1.0 

XXX 

XXX 

1.0 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

0.0 

1.0 

Unit Costs a/ 

(second quarter 1989 dollars) 

Clerical 

$0.00 

$0.00 

$0.00 

$7.73 

$0.00 

$7.73 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

$0.00 

$7.73 

Technical 

$0.00 

$0.00 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

$0.00 

$0.00 

$0.00 

Manager 

$0.00 

$0.00 

$38.03 

$0.00 

$0.00 

$38.03 

XXX 

XXX 

XXX 

XXX 

XXX 

$0.00 

$0.00 

$38.03 

Other 

$0.00 

$0.00 

$0.00 

$0.00 

$4.00 

$4.00 

XXX 

XXX 

XXX 

XXX 

XXX 

XXX 

$0.00 

$4.00 

Total 

$0.00 

$0.00 

$38.03 

$7.73 

$4.00 

$49.76 

$0.00 

$0.00 

$0.00 

$0.00 

$0.00 

$0.00 

$0.00 

$49.76 

Note: Assumes all facilities incur costs for "small" facilities. 

Source: April 1987 RIA, Tables B-3 and B-4, U.S. Bureau of Labor Statistics ..., pp. 19 and 20. 

a/ Costs updated from third quarter 1986 dollars to second quarter 1989 dollars using Bureau of Labor Statistics 

Indices: clerical -- 1.119, Technical -- 1.123, and Manager -- 1.113. Wage rates used (second quarter 1989): 

clerical -- $15.45, technical -- $24.84, managerial -- $38.03. 

b/ Sum of lines 3, 4, and 5. 

c/ Sum of lines 7, 8, 9, 10, 11, and 12. 

d/ Sum of lines 1, 2, 6, and 13. 
TABLE 3-2 

UNIT COSTS FOR PERMANENT FACILITIES SUBJECT TO REPORTING UNDER SECTIONS 302 AND 303 

Line 

No. Compliance Activities 

Personnel Hours 

Unit Costs a/ 

(second quarter 1989 dollars) 

Clerical Technical Manager Clerical Technical Manager Other Total 

1 Rule Familiarization XXX 1.0 1.0 $0.00 

2 Inventory Comparison XXX 0.5 XXX $0.00 

Notify SERC 

3 Compose letter XXX XXX 1.0 $0.00 

4 Type letter 0.5 XXX XXX $7.73 

5 Mail (Postage) XXX XXX XXX $0.00 

6 Subtotal b/ 0.5 XXX 1.0 $7.73 

Designate FEC & Related 

Activities: 

7 Meetings XXX 4.0 0.8 XXX 

8 Travel XXX XXX XXX XXX 

Document preparation 

9 -compose XXX 4.0 1.0 $0.00 

10 -process 0.4 XXX XXX $6.18 

11 Mail (Postage) XXX XXX XXX XXX 

12 Review LEPC planning 

activities with facility 

management XXX 2.0 0.4 XXX 

13 Subtotal c/ 0.4 10.0 2.2 $6.18 

14 Total d/ 0.9 11.5 4.2 $13.91 

$24.84 $38.03 $0.00 $62.87 

$12.42 $0.00 $0.00 $12.42 

XXX $38.03 $0.00 $38.03 

XXX $0.00 $0.00 $7.73 

XXX $0.00 $4.00 $4.00 

XXX $38.03 $4.00 $49.76 

$99.36 $30.42 XXX $129.78 

XXX XXX $25.00 $25.00 

$99.36 $38.03 XXX $137.39 

XXX XXX XXX $6.18 

XXX XXX $4.00 $4.00 

$49.68 $15.21 XXX $64.89 

$248.40 $83.66 $29.00 $367.24 

$285.66 $159.72 $33.00 $492.29 

Note: Assumes all facilities incur costs for "small" facilities. 

Source: April 1987 RIA, Tables B-3 and B-4, U.S. Bureau of Labor Statistics .... pp. 19 and 20. 

a/ Costs updated from third quarter 1986 dollars to second quarter 1989 dollars using Bureau of Labor Statistics 

Indices: clerical -- 1.119, technical -- 1.123, and manager -- 1.113. Wage rates used (second quarter 1989): 

clerical -- $15.45, technical -- $24.84, managerial -- $38.03. 

b/ Sum of lines 3, 4, and 5. 

c/ Sum of lines 7, 8, 9, 10, 11, and 12. 

d/ Sum of lines 1, 2, 6, and 13. 
P.27 

3-8 

they would not need to refamiliarize themselves with the requirements. 

Instead, they are assumed to be knowledgeable and to report as appropriate. 

Inventory Comparison with the TPQ 

The analysis assumes that all fixed facilities with explosives would 

estimate whether explosives are present on the premises in quantities greater 

than or equal to the TPQ to determine whether they are required to comply with 

section 302 provisions. Because (1) the existing ATF regulations of 

explosives require facilities to maintain extensive records on the amount of 

explosives on hand, and (2) the listing would consider explosives as a single 

category of extremely hazardous substance, this analysis assumes that 

facilities would incur minimal technical and management labor requirements for 

inventory comparison. In particular, one-half hour is assumed to be needed to 

verify that the quantity of explosives at the facility, indeed, equals or 

exceeds the TPQ. 

Transient facilities, because they use mobile magazines, are assumed not 

to incur costs to determine whether the quantity of explosives warrants 

reporting under section 302. They are assumed to know already if the amount 

of explosives in each magazine equals or exceeds the TPQ. 

Emergency Planning Notification Under Section 302 

All facilities with at least one EHS present in quantities equal to or 

above the TPQ are required to notify their SERC and LEPC that they are subject 

to the requirements for emergency planning. The analysis assumes that all 

fixed and transient facilities with explosives are covered facilities for 

emergency planning purposes under sections 302 and 303. One hour of 

management time and one-half hour of clerical time is assumed to be needed to 

draft and send the notification letter to the SERC and LEPC. 

Tracking System Development Under Section 302 

Under the ATF regulations, manufacturers, importers, and distributors 

are already required to track the types and quantities of explosives stored at 

their facilities. Consequently, it is assumed they would incur no additional 

cost under this regulation for these activities. Because the safety 

precautions and storage requirements for explosives require special storage 

facilities, and because users of explosives would report explosives as a 

single substance, this analysis assumes that facilities would incur no 

incremental costs to establish a tracking system. 

Coordination With the LEPC Under Section 303 

Under section 303, the LEPC is responsible for developing a coordinated 

emergency response plan to allow response personnel to deal with emergencies 

in an effective manner. Emergency response plans typically delineate routes 

for response personnel to use in an emergency, establish evacuation routes, 

and define the roles and interactions of the different response agencies 

(e.g., State police, local police, fire departments, and hospitals). Each 

facility reporting under section 302 must designate a facility emergency 
P.28 

3-9 

coordinator (FEC) to interact with the LEPC. The FEC must participate in the 

planning process and respond to the LEPC on request. The activities performed 

by the FEC generally include meetings, travel, document preparation 

(composition, process, and review), document transmittal (postage), and review 

of LEPC planning activities with management. 

For purposes of this analysis, it is assumed that all fixed facilities 

will participate in the emergency planning process. These planning 

participation activities are assumed to require 0.4 hours of clerical time, 10 

hours of technical time, and 2.2 hours of management time, for a total 

planning participation cost of $367. Facilities that are assumed to 

permanently store explosives, therefore, will incur an estimated total cost of 

about $500. 

Transient facilities are assumed to be at a site for an insufficient 

duration to warrant designation of the FEC or participation in the LEPC 

planning process. These facilities are assumed to incur only the notification 

costs, estimated to be about $50. 

3.2 TOTAL COST ESTIMATES 

To estimate the total costs to facilities of complying with sections 302 

and 303 of Title III if explosives are listed as EHSs, facilities were 

categorized as permanent establishments, additional sites, and fireworks 

distribution and display facilities. Table 3-4 shows the estimated number of 

facilities for each industry estimated to use explosives. 

The estimated number of permanent establishments is taken from 

Table 2-1, and represents the estimated number of operating facilities 

expected to use or store explosives over long periods of time. For example, 

EPA estimates that there are approximately 90 seismic crews that use 

explosives; each is assumed to operate from a unique, permanent establishment 

and could incur compliance costs of $500 per facility. EPA estimates that 

about 67,000 permanent facilities will be subject to section 302 and 303 

notification and planning requirements under Option 1. If fireworks are 

excluded under Option 2, the number of permanent facilities would be about 

41,000. 

Table 3-4 also shows the estimated number of additional, transient sites 

for each industry. These numbers are taken from Table 2-1 by subtracting the 

permanent facilities from the total number of sites. In Table 2-1, for 

example, it was estimated that seismic exploration crews would operate at 

between three and twelve sites per year, resulting in between 270 and 1,080 

sites per year that could be affected by the listing of explosives as EHSs. 

Assuming that the crews only need to become familiar with the notification 

requirements once and will participate in the planning process only in the 

location of their permanent place of business, the estimated number of 
P.29 

3-10 

TABLE 3-4 

ESTIMATED NUMBER OF PERMANENT SITES AND ADDITIONAL TRANSIENT SITES 

AFFECTED BY THE LISTING OF EXPLOSIVES AS EHSs 

Industry 

Number of 

Permanent 

Establishments 

Number of 

Additional Sites Where 

Explosives are Located 

Low High 

Explosives Manufacturers 

Explosives Distributors 

Explosives Importers 

Mining 

Metal/Non-metal 

Coal 

Heavy Construction 

Highway 

Non-highway 

Other 

Drilling - oil & gas 

Drilling - drinking water 

Forestry 

Demolition 

Special Effects 

Seismic Activity 

4 

4 

2 

9 

18 

114 

594 

228 

778 

,042 

,450 

,118 

980 

NA 

NA 

6 

200 

90 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

L80 

47,250 

90,590 

0 

0 

0 

14 

0 

990 

Subtotal 40,600 180 138,844 

Fireworks 

Manufacture 

Distribution - wholesale 

Permits (Displays) 

Subtotal 

Display Services 

Distribution - retail 

Subtotal - fireworks 

TOTAL -- Option 1 

TOTAL -- Option 2 

1,439 

3,772 

3,235 

8,446 

892 

17,233 

26,571 

67,171 

40,600 

0 

0 

0 

0 

9,812 

0 

9,812 

9,992 

180 

0 

0 

0 

0 

45,492 

0 

45,492 

184,336 

138,844 

Source: ICF estimates. 
P.30 

3-11 

"transient" sites for this industry is estimated to be between 180 and 990 

sites per year. (That is, at the low end, 270 sites minus 90 permanent 

locations; at the high end, 1,080 sites minus 90 permanent locations.) Under 

Option 1, the number of transient sites is estimated to range from about 

10,000 to about 184,000 sites per year. Under Option 2, the number of 

transient sites is estimated to range from about 180 to about 139,000 sites 

per year. Most of the transient sites under the high estimate are in the 

heavy construction industry and the fireworks display services industry. 

As discussed above, permanent establishments are estimated to incur 

total costs of approximately $500 per facility and transient sites are 

estimated to incur total costs of approximately $50 per facility. Retail 

distribution of fireworks and fireworks display services are estimated to 

incur intermediate costs of about $125, including costs for rule 

familiarization, inventory comparison, and notification of the SERC and LEPC. 

They are treated slightly differently because they are likely to be permanent 

facilities but are assumed not to actively participate in the planning 

process. Nevertheless, it is assumed that they will need to familiarize 

themselves with the regulatory requirements and perform an inventory analysis. 

Table 3-5 shows the low and high estimates for the costs to facilities 

if explosives are listed as EHSs. To obtain the estimates, each number of 

facilities shown in Table 3-4 was multiplied by the estimated cost for the 

specific type of facility. All permanent facilities (except fireworks display 

and retail establishments) were assumed to incur a unit cost of $500; 

transient facilities were assumed to incur a unit cost of $50; and fireworks 

display and retail establishments were assumed to incur a unit cost of $125. 

Under Option 1, the low estimate of about $27 million includes the costs for 

the estimated 67,171 permanent facilities and 9,992 transient facilities to 

comply with the regulatory requirements. The high estimate of about $36 

million includes the costs for the estimated 67,171 permanent facilities and 

184,336 temporary facilities to comply with the requirements. Under Option 2, 

the low estimate is about $20 million, whereas the high estimate is about $27 

million. 

Table 3-6 shows the estimated costs to SERCs and LEPCs. For SERCs, the 

total estimated number of reports is multiplied by the estimated handling cost 

per report of about $4. For LEPCs, the estimated number of reports from 

permanent facilities is multiplied by the estimated handling cost of about $54 

per report, whereas the estimated number of reports from transient facilities 

is multiplied by the estimated handling cost of about $10 per report. Under 

Option 1, the total cost to SERCs and LEPCs is estimated to range from about 

$4 million to about $6 million per year. Under Option 2, the estimated costs 

are estimated to range from about $2 million to about $4 million per year. 

To the extent that seismic crews purchase explosives directly for use 

at a site, rather than import explosives from a fixed base, these estimates 

may overestimate the planning costs associated with the "permanent" 

facilities. 
P.31 

TABLE 3-5 

TOTAL ESTIMATED COSTS TO FACILITIES 

UNDER OPTION 1 -- LISTING ALL COMMERCIAL 

EXPLOSIVES INCLUDING FIREWORKS AS EHSs 

($ 000) 

Industry 

Explosives Manufacturers 

Explosives Distributors 

Explosives Importers 

Mining 

Metal/Non-metal 

Coal 

Heavy Construction 

H i ghway 

Non-highway 

Other 

Drilling - oil & gas 

Drilling - drinking water 

Forestry 

Demolition 

Special Effects 

Seismic Activity 

Low Estimate 

$56 

$2,262 

$112 

$2,352 

$1,005 

$4,652 

$8,919 

$482 

$0 

$0 

$3 

$98 

$53 

High Estimate 

$56 

$2,262 

$112 

$2,352 

$1,005 

$7,003 

$13,427 

$482 

$0 

$0 

$4 

$98 

$94 

Subtotal $19,996 $26,896 

Fireworks 

Manufacture 

Distribution - wholesale 

Permits (Displays) 

Subtotal 

Display Services 

Distribution - retail 

Subtotal - Fireworks 

TOTAL -- Option 1 

TOTAL -- Option 2 

$708 

$1,857 

$1,593 

$4,158 

$600 

$2,155 

$6,913 

$26,909 

$19,996 

$708 

$1,857 

$1,593 

$4,158 

$2,375 

$2,155 

$8,688 

$35,584 

$26,896 

Source: ICF estimates. 
P.32 

TABLE 3-6 

ESTIMATED COSTS TO SERCs AND LEPCs 

UNDER OPTIONS 1 AND 2 

Option 1 -- Fireworks included 

Low Estimate 

Number of 

Facilities 

Cost 

($ 000) 

High Estimate 

Number of 

Facilities 

Cost 

($ 000) 

Costs to SERCs 77,163 $298 251,507 $971 

Costs to LEPCs 

Permanent Facilities 

Transient Facilities 

67,171 

9,992 

$3,596 

$101 

67,171 

184,336 

$3,596 

$1,856 

TOTAL COST $3,995 $6,423 

Option 2 -- Fireworks Excluded 

Low Estimate 

Number of 

Facilities 

Cost 

($ 000) 

High Estimate 

Number of 

Facilities 

Cost 

($ 000) 

Costs to SERCs 40,780 $157 179,444 $693 

Costs to LEPCs 

Permanent Facilities 

Transient Facilities 

TOTAL COST 

40,600 

180 

$2,174 

$2 

$2,333 

40,600 

138,844 

$2,174 

$1,398 

$4,265 

Source: ICF estimates. 
P.33 

3-14 

Table 3-7 summarizes the total estimated number of affected facilities 

and the total estimated costs under each Option. Under Option 1, the total 

number of regulated facilities is estimated to be between 77,000 and 252,000, 

with total costs ranging from $31 million to $42 million per year. Under 

Option 2, the total number of regulated facilities is estimated to be between 

41,000 and 180,000 facilities, with estimated total costs of between $22 

million and $31 million per year. 
P.34 

3-15 

TABLE 3-7 

TOTAL ESTIMATED COST BY OPTION 

(costs in thousand 1989 dollars) 

Option 1 

Low 

Estimate 

High 

Estimate 

Option 2 

Low High 

Estimate Estimate 

Number of Facilities 

Number of Sites 

Number of Reports 

67,171 

9,992 

77,163 

184,336 

251,507 

40,600 

180 

40,780 

138,844 

179,444 

Total Cost to Facilities $26,909 

Total Cost to SERCs $298 

Total Cost to LEPCs $3,697 

$35,584 $19,996 $26,896 

$971 $157 $693 

$5,453 $2,176 $3,572 

TOTAL COSTS $30,903 $42,007 $22,329 $31,160 

Source: ICF estimates 
P.35 

4. BENEFITS ANALYSIS 

This chapter describes the expected benefits to be derived from the 

listing of commercial explosives as EHS chemicals under section 302 of SARA 

Title III. Although the benefits are not quantified, they are very real, 

reflecting primarily the advantages that are derived from increased 

communication and information flow between industry and the community. 

The benefits can be separated into three distinct categories: (1) 

health benefits derived from improved explosives inventory management by 

facilities; (2) health benefits derived from improved emergency planning by 

communities/fire departments; and (3) increased information regarding use and 

presence of explosives in communities throughout the nation. 

Improved Inventory Management 

If explosives are listed as EHSs under section 302 of Title III, 

facilities with inventories above the threshold planning quantity (TPQ) must 

notify the SERC and LEPC and, if requested, must participate in the planning 

process. These responsibilities provide an incentive for owners and operators 

of facilities who store or use explosives to minimize the amount of explosives 

stored on-site and, if possible, to ensure that inventories are maintained 

below the TPQ. Reduced inventories will reduce the likelihood of accidents at 

facilities and will likely reduce the number and extent of injury and damage 

when accidents do occur. 

Further, even in cases where inventories are maintained above the TPQ 

and facilities must report to the SERC and LEPC, it is expected that owners 

and operators will become more aware of the methods used to store and handle 

explosives at their facilities and will be motivated to improve those methods. 

This motivation may be partially augmented by the likely visit of LEPC 

officials to evaluate the risk to the community, or may be self-motivated. In 

either case, the final result will be reduced risks to the community from 

explosives. These reduced risks will translate into health benefits 

attributed to listing explosives as EHS chemicals. 

Improved Planning for Emergencies 

Perhaps the group expected to benefit most from the listing of 

explosives as EHS chemicals are the fire fighters and other emergency response 

personnel who will be alerted in advance of the presence of explosives at a 

facility. This increased awareness and ability to plan for emergencies is 

expected to save the lives of and reduce injuries to emergency response 

personnel. 

Improved Information and Data 

Several sections of the Title III statute address the desire on the part 

of communities for information about the chemical and physical hazards within 

their midst. The community's right-to-know is partially satisfied when 

substances are added to the EHS list because it gives the community greater 

access to information. Listing of explosives as EHSs will increase 
P.36 

4-2 

information about hazardous materials stored at facilities. With increased 

information often comes understanding and reduced anxiety. The public derives 

benefits from knowing about hazards in their community; the increased 

knowledge enables the public to better understand and cope with the risks. 

Improved information and data on explosive use and storage can also be 

used to increase our general understanding of how explosives are used in our 

communities and to fill data gaps on the extent of the various uses of 

explosives. Although ATF regulates explosives, there are gaps in their 

regulatory coverage, as well as in data bases on explosives usage. By listing 

commercial explosives as EHS chemicals, many of these regulatory and 

informational gaps will be filled. 
P.37 

5. SENSITIVITY ANALYSIS AND LIMITATIONS 

Lack of authoritative data on the population potentially affected by the 

listing of explosives as EHSs is one of the primary limitations of this 

analysis. Many of the facility estimates, especially transient drilling and 

seismic facilities, were obtained through telephone calls with people active 

in the various industries. Because the estimates have not been developed from 

representative survey data, they are subject to significant error. 

5.1. ESTIMATED NUMBER OF FACILITIES SUBJECT TO REPORTING 

The estimated number of facilities required to meet the section 302 and 

303 reporting and planning requirements was presented in Chapter 2 of this 

report. These estimates, however, may be higher or lower than the actual 

number of affected facilities because of an incorrect estimation of the number 

of reporting firms or sites. Table 2-1 summarizes the facility estimates, 

presenting both the number of establishments and the number of sites that 

manufacture, use, or store explosives. Some estimates in the table are 

presented in ranges; however, in some cases, those ranges may not be 

sufficiently broad to reflect the true impact of the regulation. 

Many of the facilities affected by the listing of explosives as EHSs may 

already be subject to sections 302 and 303 because of their use of other EHSs. 

In the April 1987 RIA, for example, about 21 percent of all construction and 

mining facilities were estimated to be required to notify their SERCs and 

LEPCs of the storage of EHSs and to participate in the section 303 planning 

process. Chemical plants manufacturing explosives (as opposed to users of 

explosives that mix blasting agents) may also be covered because of the 

storage of EHSs on the current list. 

In the analysis in Chapter 3, it was assumed that all facilities using 

explosives store explosives in quantities greater than the TPQ. Some 

applications for explosives, however, may require relatively small explosive 

quantities. By bringing only the required amount of explosives to a site, 

firms may be able to avoid reporting for some sites. Even applications having 

large total requirements for explosives may use incremental quantities of 

explosives. For example, progressive demolition or seismic exploration may 

require individual charges below the TPQ. By having only the required charge 

at a site at any given time, firms may be able to avoid notifying SERCs and 

LEPCs about the presence of explosives. 

The remainder of this section will discuss, for each of the segments 

presented in Chapter 2, the possible factors that could increase or decrease 

the estimated number of affected facilities or sites. 

5.1.1. Explosives Manufacturing, Distribution, and Importation 

The Agency is confident that the estimated numbers of manufacturers, 

distributors, and importers of explosives are close to the actual numbers of 

facilities that will be required to comply with sections 302 and 303 of Title 

III if explosives are listed as EHSs. However, the analysis has included in 
P.38 

5-2 

manufacturing only those facilities that are categorized as explosives 

manufacturers by the Bureau of the Census; distributors were estimated using 

ATF data. The different data sources were used because distributors are 

required to have an ATF license for each place of business, whereas ATF 

defines manufacturers in such a way as to include many end-use industries that 

mix explosive components on-site. It is possible, therefore, that some 

distributors of explosives are categorized as manufacturers by ATF and thus 

have not been included in the estimated number of distributors or 

manufacturers in Chapter 2. 

5.1.2. Mining Sites 

There was a consensus that explosives are widely used in mining, and the 

number of mining sites is well known. Consequently, the number of mining 

sites that would be affected should be close to the estimates presented in 

Table 2-1. By including intermittent and nonproducing mining sites, however, 

the analysis may overestimate the number of potentially affected facilities. 

5.1.3. Construction Facilities and Sites 

Although it is virtually certain that the number of construction 

facilities incurring full compliance costs has been overestimated in this 

analysis, the number of potentially affected sites is probably within the 

range developed in Chapter 2. This analysis assumes that all construction 

facilities are potential users of explosives in amounts greater than the TPQ. 

As discussed in Chapter 2, however, most construction contractors will use 

specialized explosives subcontractors when explosives are needed at a site. 

Consequently, it is virtually certain that the number of construction 

facilities permanently storing explosives is less than the 27,000 

establishments derived from Census data. Unfortunately, data are not 

currently available to better define the scope of the affected community. 

The analysis further assumed that, on average, all construction 

establishments would use explosives at between 1 and 6 sites per year. 

Although this assumption is meant to encompass the minority of contractors 

that use explosives extensively, it may cause a significant overestimation of 

the total number of affected sites. 

5.1.4. Other Industries 

The data used to characterize several other of the end-use industries 

are relatively poor. Consequently, the number of affected facilities and 

sites may be less than or greater than the estimates provided in Chapter 2. 

Drilling 

There may be significant errors in the estimates of the number of 

drilling sites using explosives in excess of the TPQ. For example, it is 

estimated that the amount of explosives used in drilling applications is about 

5 to 50 pounds per well. The analysis assumes that 50 pounds would be below 

the TPQ and, therefore, explosive use in drilling operations at individual 

wells would not be reported. If the TPQ is set at one pound, however, the 
P.39 

5-3 

number of wells reporting could be as high as 39,000, which represents the 

estimated number of oil and gas wells (26,000) and dry holes (13,000) drilled 

per year. 

Also, estimates were not available on the number of drinking water 

drilling companies that use explosives or the number of drinking water wells 

drilled annually. In all likelihood, the use of explosives for drinking water 

wells depends on the geology of the site. 

Seismic Activity 

In Chapter 2, individual wells drilled for seismic exploration are 

assumed not to need to be reported because of the amount of explosives used 

for this activity. If the TPQ were set at one pound, all individual wells 

would be required to report. The number of reporting wells could then be as 

high as 190,000, assuming a 10-mile exploration line, 300 foot intervals 

between wells, and 12 sites per exploration crew per year. 

Fireworks 

The number of sites that would report because of fireworks may be either 

over- or underestimated. The analysis assumed that all retail stores not 

otherwise accounted for in the Census data for SIC code 5900 may potentially 

sell explosives. Because many states do not allow fireworks sales, the number 

of stores that would be required to report may be overestimated. However, the 

number of facilities that sell fireworks may be underestimated if fireworks 

are sold at retail establishments in other industries (e.g., drugs and 

sundries, convenience stores, or retail motor fuels). 

5.2. ESTIMATED ACTIVITIES OF TEMPORARY SITES 

In Chapter 3, temporary sites were assumed not to participate in the 

planning process. Because explosives use in many applications (e.g., most 

construction activities, drilling, and seismic exploration) requires that 

explosives be brought to the site only on the day they are needed, it seems 

unlikely that the users of explosives at the sites will participate in the 

emergency planning process. Consequently, the analysis assumed that the only 

cost associated with the sites is the cost to submit a notification to the 

SERC and the LEPC. It is conceivable, however, that explosives use at some of 

the sites will occur over a relatively long time span. For example, a 

construction project may use explosives over a period of some months, although 

explosives may be used at the site only a few days during the period. It is 

possible that the long duration over which explosives may be used will lead 

the operator of the site to participate in the emergency planning process. If 

these sites do participate, the cost may be about $500 per site, rather than 

$50. 
P.40 

APPENDIX A. SUMMARY OF ATF REGULATIONS 

The Bureau of Alcohol, Tobacco, and Firearms (ATF) regulates the 

manufacture, sale, and interstate transport of explosives. This appendix 

describes the current ATF regulations, specifically the types of activities 

regulated by ATF and the number of facilities with ATF licenses and permits. 

ATF regulations are developed pursuant to the authority of Title XI of 

the Organized Crime Control Act of 1970 (18 U.S.C. Chapter 40); ATF 

regulations are found in Part 55 of the Code of Federal Regulations. ATF 

annually publishes a list of commercial explosives; the most recent list of 

explosive materials was published on December 28, 1988 (53 FR 52561) and 

contains 224 items. The ATF list of commercial explosives is intended to 

include any and all mixtures that contain any of the materials on the list. 

Although the list is comprehensive, it is not all inclusive. That is, 

materials that meet the statutory definition of explosives are covered under 

the ATF regulations even if they are not explicitly listed in the Federal 

Register. 

The ATF regulations (1) require that facilities obtain a license or 

permit to manufacture, distribute, or import explosives, or to use explosives 

in interstate commerce and (2) require that explosives be properly stored. 

The ATF regulations categorize explosives both by type (i.e., high explosives, 

low explosives, and blasting agents) and by use. High explosives will 

detonate even when unconfined (e.g., dynamite). Low explosives are defined as 

materials that deflagrate when confined (e.g., black powder, safety fuses, 

igniters, igniter cords, and fuse lighters). Blasting agents are defined as 

compounds used for blasting that cannot be detonated using a number 8 blasting 

cap when unconfined (e.g., ammonium nitrate-fuel oil mixtures). All three 

categories of explosives are considered to be "commercial explosives." The 

categorization of explosives is used by ATF to ensure that adequate 

precautions (i.e., storage facilities and isolation distances) are used to 

store the explosives. If storage facilities are designed for more powerful 

explosives (e.g., high explosives) they may be used to store explosives in a 

lower category (e.g., blasting agents). ATF has developed minimum criteria 

for storage facilities that must be met before a facility may store 

explosives. 

ATF regulates three principal categories of explosive use. The first 

category includes those persons who manufacture or trade in explosives; anyone 

wishing to manufacture, distribute, or import explosives must obtain a 

license. The second category includes persons wishing to purchase explosives 

outside of their state of residence; anyone doing so must obtain a permit. 

The third category includes persons who purchase explosives in their state of 

residence; there is no requirement to obtain either a permit or a license, 

although the explosives dealer must maintain a record of the transaction. 

There are currently about 13,000 licenses and permits. Table A-l 

summarizes the number of licenses and permits issued by ATF as of August, 

1989. This number represents a lower bound on the number of sites potentially 

subject to sections 302 and 303 of Title III, because the number does not 

include in-state purchasers and does not include all sites at which explosives 

are manufactured (as discussed below). 
-«' . I-

* 

1 1 

*J 

w 

A-2 

TABLE A-l 

LICENSES AND PERMITS ISSUED 

High 

Permits Issued Explosives 

Licenses 

Manufacturers 771 

Importers 100 

Dealers 726 

Manufacturers- 4 

Limited 

Subtotal 1,601 

Permits 

Users 3,160 

Users-Limited 36 

Subtotal 3,196 

TOTAL 4,797 

Source: Bureau of Alcohol, Tobacco, 

Note: The number of ATF licenses and 

five years: 9,557 in 1985; 10 

in 1988. 

Low 

Explosives 

205 

126 

485 

5 

821 

526 

3,235 

3,761 

4,582 

and Firearms 

permits have 

060 in 1986; 

BY ATF 

Blasting 

Agents 

217 

2 

25 

3 

247 

64 

5 

69 

316 

as of Aug 

Black 

Powder 

3,348 

3,358 

3,358 

ust 31, 1989 

risen steadily over 

10,487 in 1987; and 

Total 

1,193 

228 

4,594 

12 

6,027 

3,750 

3,276 

7,026 

13,053 

the last 

12,292 

P.41 
P.42 

A-3 

A.l LICENSES 

ATF issues licenses to individuals or companies that manufacture or sell 

explosives. Importers, manufacturers, and distributors of explosives must all 

obtain licenses. Applicants for licenses are required to meet age and 

character requirements, must be familiar with all published state laws and 

local ordinances relating to explosive materials, must have premises in the 

state from which they intend to conduct business, and must not have willfully 

violated any of the provisions of Title XI of the Organized Crime Control Act 

of 1970 of the ATF regulations. License applications are submitted to the 

Service Center Director for the internal revenue district in which the 

business premises are to be located. The application is then forwarded to the 

regional regulatory administrator. ATF defines several activities requiring a 

license: 

• Dealer. Any person engaged in the business of distributing 

explosive materials at wholesale or retail. 

• Importer. Any person engaged in the business of importing 

or bringing explosive materials into the United States for 

purposes of sale or distribution. 

• Manufacturer. Any person engaged in the business of 

manufacturing explosive materials for purposes of sale or 

distribution or for his own use. Under the ATF regulations, 

manufacture includes the mixing of binary agents (such as 

ammonium nitrate and fuel oil) to form blasting agents (such 

as ammonium nitrate-fuel oil mixture, referred to as ANFO). 

• Manufacturer-Limited. Any person engaged in the business of 

manufacturing explosive materials for his own use and not 

for sale or distribution. Manufacturer-limited licenses are 

used primarily by persons mixing blasting agents on a onetime basis; the license is valid for 30 days. 

Although there are no routine reporting requirements for commercial 

explosives, licensees are required to keep extensive records on the source and 

disposition of explosive materials. Licensees must take physical inventories 

of explosives on hand at least once a year and keep the inventory record on 

file for inspection. A special inventory is required at the time of 

commencing business, at the time of changing the location of business to 

another region, at the time of discontinuing business, and at any time the 

regional regulatory administrator issues a written request. Each special 

inventory is to be submitted to the regional regulatory administrator, and a 

duplicate is to be retained by the importer, manufacturer, or dealer. 

Licensees must also record the importation, acquisition, name and 

identification marks of the manufacturer, quantity of explosives purchased, 

and description of materials. If they distribute any explosive materials to 

another licensee or permittee, they must record the same information, as well 

as the license or permit number of the licensee or permittee to whom the 

explosive materials are distributed. 
P.43 

i * 

A-4 

A licensed manufacturer is exempt from these record keeping requirements 

if the explosive materials are manufactured for his own use and are used 

within a 24-hour period at the same site. For example, the mixing of ammonium 

nitrate and fuel oil constitutes "manufacturing" under ATF regulations. If 

the mixture is used within 24 hours, the manufacturer does not need to record 

its manufacture or use. If it is not used within 24 hours or if it is sold, 

the manufacturer must keep records of its manufacture and use or sale. 

A separate license must be obtained for each separate business premise 

at which the applicant is to manufacture, import, or distribute explosive 

materials. A separate license is not required, however, for manufacturing for 

on-site use within the same region. That is, individuals manufacturing 

explosives for on-site use, such as the combining of ammonium nitrate and fuel 

oil for blasting (as opposed to sale or distribution), do not have to obtain 

site-specific licenses. The license to manufacture allows the licensees to 

manufacture at any number of sites within the same region. 

A.2 PERMITS 

ATF issues permits to individuals or companies intending to purchase or 

ship explosives outside of their state of residence. Permits are required for 

individuals who intend to acquire explosives for use in a state other than the 

one in which they reside, or from a foreign country. They are also required 

for all persons who intend to transport explosive materials in interstate or 

foreign commerce. There are, however, certain exceptions allowed by the 

regulations. For example, it is not necessary to obtain a permit to acquire 

explosives from a contiguous state if the state in which the user resides has 

enacted legislation specifically authorizing residents to purchase explosive 

materials in a contiguous state. Washington, Wyoming, Delaware, Vermont, and 

Kentucky currently allow such purchases; Pennsylvania allows such purchases 

for black powder only. Finally, a permit is not required for the lawful 

purchase of black powder in quantities that do not exceed 50 pounds and that 

will be used solely for sporting, recreational, and for other specified 

purposes. 

There are certain non-technical requirements that must be met before an 

individual may obtain a permit. The applicant must be 21 years of age and 

generally must be of good character. Permits are denied to applicants who are 

under indictment or have been convicted of a crime punishable by imprisonment 

for a term exceeding one year, who are fugitives from justice, who use or are 

addicted to drugs, or who are mentally defective or have been committed to a 

mental institution. Applications are submitted to the Service Center Director 

for the internal revenue district in which the applicant resides or in which 

his business is located. ATF issues two classes of permits: 

• User. Any person authorized (a) to acquire for his own use 

explosive materials from a licensee in a State other than 

the State in which he resides or from a foreign country, and 

(b) to transport explosive materials in interstate or 

foreign commerce. 
A .. , 

% « 

P.44 

A-5 

User-limited. A user permit valid only for a single 

purchase transaction. 

A.3 CONSUMPTIVE USE 

Under the ATF regulations, users who purchase and use explosives within 

their own state are not required to obtain either a permit or a license. (As 

discussed above, however, if the user combines two compounds, such as ammonium 

nitrate and fuel oil, then the user would be a manufacturer subject to 

licensing requirements.) 

A.4 LIMITATIONS AND EXEMPTIONS 

There are a number of exemptions to these regulations. For example, the 

regulations do not cover several classes of explosive materials: 

Explosive materials found in medicines and medicinal agents; 

Small arms ammunition and components of small arms 

ammunition; 

Industrial and laboratory chemicals which are intended for 

use as reagents; 

Gasoline, fertilizers, and propellant actuated industrial 

tools; 

Black powder in quantities less than 50 pounds (with certain 

exceptions); 

Military and other agencies and their contractors; 

Importation and distribution of fireworks classified as 

Class C explosives and generally known as "common 

fireworks;" 

Transportation of explosive materials via railroad, water, 

highway, or air (which is regulated by the U.S. Department 

of Transportation). 

In summary, the ATF data fail to provide information on large number of 

sites that have and use commercial explosives, including (1) users of 

explosives who purchase the explosives in their state of residence, (2) 

manufacturers of blasting agents licensed on a regional basis who manufacture 

the blasting agents on-site, other than at their primary place of business, 

and (3) most fireworks dealers and users.