p. 1



# OAR Box 

# 1415 Prepped by Ollie Stewart



### Document

Number: 

# 30 ) V-B- 1 Docket Number: 

# A-94-5 2

Printed 7/15/20089:38:26

AM Sheet 30of 130P. 2

Unite d State s Environmenta

l Protection Agenc y Office Of Ai r Qualit

y Planning And Standard

s Researc h Triangl e Park

, N C 2771 1 Augus t200 2

FINA L REPOR

T Ai r 

# Economic Impac

tAnalysi s o

f th e Fina l Reinforced Plastic s NESHA P
Fina l Repor t

'. - .v.r.c .P. 3

EPA452/R-02-00 7 Augus t 200 2

Economi c Impac t

Analysi s o f th e Fina l Reinforce dPlastic s NESHA P

By : Brook s M
. Depr o Mar k C
. Buckley Tayler H
. Bingha

m Center fo r Regulator y Economic s andPolic y Researc h RT I Researc h Triangl e Park , N C 2770 9

Prepare dfor : Tyler J
. Fo x U.S
. Environmental Protectio n Agenc y Offic e of Air Qualit y Plannin g andStandard s Innovativ e Strategie s andEconomic s Group

(MD-C339-01 ) Researc h Triangl e Park , N C 2771 1
EPA Contrac t

No
. 68-D-99-02 4 RT I Projec t

No
. 7647.003.27 1
To mCurran , Directo r U.S
. Environmental Protectio n Agenc y Offic e of Ai r Qualit y Plannin g andStandard s Offic e of Ai r an dRadiatio n Researc h Triangl e Park , N C 2771 1P. 4



### Thi s repor t ha s been reviewe dby th e Emissio n Standard s Divisio n o f th e Office o

f Air Qualit y Plannin g andStandard s o

f th e Unite dState s Environmenta l Protectio n Agency an

dapprovedfo

r publication
. Mentio n o

f trad e name s o r

commercia

l product s i s no t

intende d t o constitut

e endorsement

o r recommendatio n fo

r use . Copie s o

f thi s repor t ar e availabl e throug h th e Librar y Service s (MD-C267-01) , U.S
. Environmenta

l Protectio n Agency , Research Triangl e Park , N C 27711 , o r fro mth e Nationa

l Technical Information 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- 7 2.1.1. 4 Additive s 2- 8 2.1. 2 Productio n Processe s 2-1 0 2.1.2. 1 Ope n Moldin g Processe s 2-1 0 2.1.2. 2 Close dMoldin g Processe s 2-1 4 2. 2 Product s 2-1 9 2. 3 Cos t

of Productio n 2-1 9 2. 4 Use s andConsumer s of Reinforce dPlastic s 2-1 9 2. 5 Manufacturin g Facilitie s 2-2 9 2.5. 1 Locatio n 2-2 9 2.5. 2 Employment

2-2 9 2. 6 Facilit

y Ownershi p : 2-2 9 2.6. 1 Siz e Distributio n 2-3 1 2.6. 2 Issue s o f

Vertical an dHorizontal Integratio n 2-3 4 2. 7 Smal l Businesse s 2-3 4 2.7. 1 Identifyin g Smal l Businesse s 2-3 4

u iP. 6

Engineerin g Cos t

Analysi s 3- 1 3. 1 Identifyin g Regulate dEntitie s 3- 1 3. 2 National Contro l Cos t Estimate s 3- 1 Economi c Impac t

Analysi s J.
. 4- 1 4. 1 Reinforce dPlasti c Composite 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 m!...
. 4-1 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 in Pre-Tax Earning s 4-1 8 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 2 4. 6 Socia

l Cost s 4-2 2 4. 7 Sensitivit

y Analysi s for

Profi t Rat e 4-2 6 4. 8 Ne w Sourc e Analysi s 4-2 7 Final Regulator

y Flexibility Analysi s .' ,5- 1 5. 1 Statement

o f Nee dan dObjective s o f

th e Rul e 5- 2 5. 2 Identifyin g Smal l Businesse s 5- 3 5. 3 Screening-Leve l Analysi s 5- 3 5.3. 1 Recommende d Alternativ e 5- 3 5.3. 2 MACTFloorAlternativ e 5- 5 5.3. 3 Above-the-MAC T Floo r Alternativ e 5- 5 5. 4 Economi c Analysi s 5-1 1 5. 5 Assessmen t

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

i vP. 7

5. 7 Other

Federa l Rule s Tha

t Ma y Impac t Reinforce dPlasti c Composite Productio n Facilitie s 5-1 4 5. 8 Alternative s t o th e Propose dRul e 5-1 4 Reference s R- l Appendi x A Summar

y Dat afor Companie s Ownin g Reinforce d Plasti c Composite Facilitie s i A- l Appendi x B Economi c Mode l of th e Merchant

Sector of th e U.S
. Reinforce d Plasti c Composite s Industr y >. B- lP. 8

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

Windin g '. 2-1 3 2- 5 Pultrusio n 2-1 5 2- 6 Injectio n Moldin g 2-1 8 2- 7 Consumptio n o f

Reinforce dPlasti c Composite s b y Marke t Segment :

, 199 7 , 2-2 6 2- 8 Geographi c Distributio n p f Majo r Sourc e Facilitie s 2-3 0 2- 9 Alternativ e Chain s of Ownershi p 2-3 2 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 Consumer

Surplu s t o th e Elasticity o f Deman d4-2 5 4- 5 Baselin e Equilibriu mwithou t Regulatio n 4-2 8 4- 6 With-Regulatio n Equilibriu mCas e 1 : Ne w Source s Adde d4-3 0 4- 7 With-Regulatio n Equilibriu mCas e 2 : N o Ne w Source s Adde d4-3 0 5-l(a ) Distributio n o f

Cost-to-Sale s Ratio s for

Smal l Companies : Recommende d Alternativ e 5- 6 5-1(b ) Distributio n o f

Cost-to-Sale s Ratio s fo

r Larg e Companies : Recommende d Alternativ e 5- 6 5-2(a) Distributio n o f

Cost-to-Sale s Ratio s for

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 fo

r Smal l Companies : Above-the

MACT-Floo r

Alternativ e 5-1 0 5-3(b ) Distributio n o f

Cost-to-Sale s Ratio s for

Larg e Companies : Above-the

MACT-Floo r

Alternativ e 5-1 0

v iP. 9

LIS T O F TABLE S Number • ' ' Pag e 2- 1 SI C Code s fo

r Potentiall y Affecte dProduct s 2- 2 2- 2 Consumptio n o

f Reinforce dPlastic s by Resi n Type : 1991-199 3 2- 6 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 of

Plastic s Additives : 199 0 2- 9 2- 6 Reinforce dPlastic s Shipment s by Productio n Process : 199 0 2-1 0 2- 7 Compatibilit

y of RP C Productio n Processe s wit h Shap e Characteristic s an

dSpecifi c Product s 2-2 0 2- 8 Plasti c Resi n Prices : 1996-199 9 2-2 2 2- 9 Selecte dPlasti c Reinforcement an dFille r

Prices : 199 7 2-2 3 2-1 0 Deman dfo

r Reinforce dPlasti c Composites : Some Example s , 2-2 5 2-1 1 Consumptio n o

f Reinforce dPlasti c Composite s b y En dUse : 1984

- 199 7 (IO 6 lbs ) 2-2 7 2-1 2 Consumptio n of

Reinforce dUnsaturate dPolyeste r by En dUse : 1984

- 199 3 (10 6 lbs ) 2-2 8 2-1 3 Distributio n o

f Majo r Sourc e Facilitie s by Employment 2-3 1 2-1 4 Distributio n o

f Potentiall y Affecte dFirm s b y Employment

2-3 3 2-1 5 Distributio n o

f Potentiall y Affecte dFirm s B y Sale s 2-3 3 2-1 6 Smal l Busines s Administratio n Siz e Standard s for RPC—Companie s by SI C 2-3 6 4- 1 Reinforce dPlastic s Composite s Shipment s b y End-Us e Market : 199 7 (10 s lbs ) 4- 4 4- 2 Estimate dMarke t

Quantitie s an dPrice s fo

r Reinforce dPlastic s Composite s b

y Produc t Group : 199 7 4- 5 4- 3 Market-Leve l Impact s of th e Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : 199 7 4-1 3 4- 4 Summar

y of Complianc e Cost s an dMarke t Pric e Changes : 199 7 ($/lb ) 4-1 5 4- 5 Industry-Leve l Impact s of Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : 199 7 4-1 7 4- 6 Distributional Impact s on Merchan t Thermose t

Producer s Associate d wit h Reinforce dPlasti c Composite s NESHA P Regulator y Alternatives : 199 7 4-1 9 vi iP.1 0

4- 7 Socia

l Cost s wit

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

y of Economi c Impact s Under

Rang e of Industr y Profi t Rates : Recommende dAlternativ e , . 4-2 7 4- 9 Ne w Sourc e Analysi s of Uni t Productio n an dComplianc e Cost s ($1997 ) 4-3 1 4-1 0 Change s i n Facilit

y Constructio n Under

th e Propose dNESHAP : 2000-200 5 4T3 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 Floo r ' Alternativ e , 5- 7 5- 3 Summar

y Statistic s fo

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

Floo r Alternativ e 5- 9 5- 4 Summar

y o f Smal l Busines s Impact s o f Reinforce dPlasti c Composite s NESHA P 5-1 2

v mP.1 1

SECTIO N 1 INTRODUCTIO N

Th e Clea n Air Act' s (CAA's ) purpos e i s t o protec t andenhanc e th e qualit

y o f th e nation' s air

resource s (Sectio n 101(b))
. Under th e authorit

y of Sectio n 11 2 o f

th e CA A a s amende di n 1990 , th e U.S
. Environmenta l Protectio n Agenc y (EPA o r th e Agency ) i s currentl y developin g aNationa l Emissio n Standardfo

r Hazardou s Ai r

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

t evaluate s th e economi c impact s of thre e regulator

y alternative s that

ar e designe dt o contro l thes e releases
. 1. 1 Organizatio n of

th e Report Thi s report

i s divide dint o fou

r section s an dtw o appendice s that describ e di e industr

y andeconomi c methodolog y andpresen t result s o f thi s economi c impac t

analysi s (EIA) :

• Sectio n 2 provide s asummar y profil e for

th e manufacture 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 dies e plants
.

• Sectio n 3 review s th e regulator y contro l alternative s an dassociate dcost s of compliance
. Thes e cost s ar e base do n EPA' s engineerin g analysi s conducte di n suppor t of th 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 for assessin g th e economi c impact s of th e propose dNESHAP an

dth e result s o f

th 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 of th e regulation' s impac t

on affecte dsmal l businesses
.

• Appendi x A provide s alis t of 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 of th e Agency' s economi c model
.
1- 1P.1 2

SECTIO N 2 INDUSTR

Y PROFIL E

Plastic s ar e on e ofth e mos t

use dmaterial s i n U.S
. industrial an dcommercia l activitie s • andcontribut e t o virtuall y al l product s consume dfro mpackagin g t o moto r

vehicles
. Plastic s ca

n b e divide dint o tw o major

group s by resi n type : thermose t o r thermoplastic
. Whe n additional strengt h i s required , many plastic s ca n b e reinforce dwit

h structura

l material s t o produc t

RPCs
. In th e productio n of

RPCs , polymer s andreinforcin g material s ca n b e compounde dwit

h a variet y of fillers to minimiz e resi n requirement s andadditive s dia t chang e th e physica

l propertie s of th e desire dcomposite
. Th e polymer i s mos t ofte n athermosettin g resi n an dth e typical reinforcement

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 ) andreformin g th e homogeneou s mas s int o ausabl e for msuc h a s pellets , flakes , or

sheet s fo r processin g int o th e final product
. A wid e variet y of RP C processe s hav e evolve dto facilitate efficient productio n of

many differen

t type s o f composite s wit

h differen t physica l properties
. Th e fundamenta l characteristic s of

th e resultin g composite s includ e lightweight , hig h strengtii-to-weight ratio , nonconductivity , variou s degree s of corrosion-resistance , an ddimensional stability
. I n 1997 , 3. 4 billio n pound s of RPC s were consume di n di e Unite dStates
. Th e RP C marke t i s divide dint o anumbe

r of segment s accordin g t o it s en duse . Th e marke t segment s includ e genera

l aviation , aerospace , appliances , busines s equipment , construction , consumer goods , corrosion-resistan t

products , electrical/electronics , marine , an dlan dtransportatio n (e.g. , motor vehicles , trucks , buses)
. Th e transportatio n segment wa s th e larges t

consumer o f RPC s wit h 1,09 5 millio n pounds , o r 3 2 percen t

o f th e tota l consume di n 1997
. Th e constructio n segmen t followe dwit

h 70 0 millio n pound s o

f reinforce dplastic s consume di n 199 7 (SPI , 1998)
. Reinforce dplastic s ar

e use di n the productio n of man y different products , a s indicate dby di e involvement

o f 4 2 differen

t SI C codes , a s Tabl e 2- 1 shows
. Th e SI C code s wer e obtaine d fro mth e update d199 3 EPA surve y an dsubsequen t screenin g for

potentiall y affecte dreinforce d plastic s producers
. Th e remainde

r of thi s sectio n provide s abrie f introductio n t o di e reinforce dplastic s industry
. Although th e reinforce dplastic s sourc e categor y include s only tiiermoset materials , dii s 2- 1P.1 3



### Tabl e 2-1
. SI C Code s for

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 andStore Fixtures , Partitions , Shelving , andLocker s 259 9 Furnitur e andFixtures , NE C 282 1 Plastic s Material an dSyntheti c Resins , andNonvulcanizabl e Elastomer s 308 2 Unsupporte dPlastic s Profil e Shape s 308 3 Laminate dPlastic s Plate , Sheet , an dProfil 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 , NE C 328 1 Cu t

Ston e an dSton e Product s 329 6 Minera l Woo l 329 9 Nonmetalli c Mineral Products , NE C 343 1 Enamele dIro n andMetal Sanitar y War e 349 9 Fabricate dMeta l Products , NE C 353 1 Constructio n Machiner y andEquipment 353 3 Oi l an dGa s Fiel dMachiner y andEquipment 354 6 Power-Drive n Handtool s 356 1 Pump s an dPumpin g Equipmen t 356 4 Industria l andCommercia l Fan s andBlower s an dAi r Purificatio n Equipment 358 9 Servic e Industr y Machinery , NE C 361 2 Power , Distribution , an dSpecialt y Transformer s 361 3 Switchgea

r andSwitchboar

dApparatu s 362 1 Motor s an dGenerator s 364 7 Vehicula

r Lightin g Equipment 366 3 Radi o an dTelevisio n Broadcastin g andCommunication s Equipmen t 367 9 Electroni c Components , NE C 371 1 Moto r

Vehicle s andPassenger

Ca r Bodie s 371 3 Truc k

an dBu s Bodie s 371 4 Moto r

Vehicl e Part s andAccessorie s 371 5 Truc k

Trailer s 371 6 Moto r

Home s 372 8 Aircraf

t 374 3 Aircraf

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

y Apparatu s andFurnitur e 394 9 Sportin g andAthleti c Goods , NE C 399 3 Sign s an dAdvertisin g Specialtie s 399 9 Manufacturin g Industries , NE C

2-2P. M

profil e provide s abroade r

picture of th e RP C industry
. Sectio n 2. 1 provide s a n overvie w o

f th e RP C productio n processes , includin g adescriptio n of th e majo r input s t o productio n anddirecti y affectedproductio n processes . Sectio n 2. 2 characterize s th e resultin g reinforce dplastic s product s andpresent s historical dat aon diei r consumptio n acros s variou s en duses . Sectio n 2. 3 detail s me cost s of

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 , andSectio n 2. 6 describe s th e firms tha t ow n thes e facilities
. i 2. 1 Productio n Th e basi c stage s o f

productio n fo

r RPC s are compoundin g an dprocessing , a s Figure 2- 1 illustrates
. Polymer s an dreinforcin g material s are compounde dwid i avariet y of fillers to minimiz e resi n requirement s an dadditive s tha

t chang e th e physica

l propertie s o f

th e desire d composite
. Th e polymer

i s mos t ofte n athermosettin g resi n suc h a s polyester (unsaturated) , vinyl ester , phenolic , or

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 dies e variou s material s (sometime s i n severa l stages ) andtiien reformin g di e homogeneou s mas s int o ausabl e for msuc h a s pellets , flakes , or sheet s fo r processin g into di e final product
. Processin g involve s shapin g and/or moldin g di e compounde dplasti c material into di e desire dfinal product
. A wid e variet y of RP C processe s hav e evolve dt o facilitate efficien t productio n of

many differen

t type s of composite s wid i differen

t physical properties
. RP C productio n processe s ca

n b e separate dinto tw o broa dcategories : ope n moldin g andclose d molding
. Open moldin g refer s t o processe s where th e plasti c resins , polymers , reinforcements , an dodier additive s ar

e expose dto di e air

durin g di e shapin g and/o r curin g stage s of

processing
. Thi s categor

y include s suc h manua

l contac t moldin g processe s a s han dlay-up andspray-up , a s wel l a s processe s widi agreater degre e of automation , suc h a s centrifuga l casting , filament winding , pultrusion , an dcontinuou s lamination
. Close dmoldin g processe s isolat e di e inpu t material s insid e close dmold s durin g th e mixin g an dcurin g stages . Thes e includ e more capital

intensiv e productio n metiiod s suc h a s matc h di e molding , reactio n injectio n molding , rotational molding , an

dthermoforming
. Pollutio n release s ca

n occur throughou t

di e productio n processes . Spill s of additive s an d plasti c pellet s ca

n occur durin g transpor

t t o di e facility
. Leak s o f

chemica l additive s ca

n occur whil e di e additive s are bein g incorporate dint o th e plastic
. Volatil e organi c compound s (VOCs) , fugitiv e emissions , andwastewater discharg e are release ddurin g di e actua l processin g o

f di e reinforce dplasti c part . Th e finishing operation s o f cleanin g ca

n als o releas e VOCs , fugitiv e emissions , an

dwastewater

discharg e (EPA , 1995)
.

2- 3P.1 5

Polymer s (thermose t

resins , thermoplasti c resins ) Fillers ,

Reinforcements , an d Additive s

Compoundin g

Compounde d Plasti c Materia l

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

Th e resul t of di e processin g stag e i s th e final part o r produc t referre dt o a s aRPC
. RPC s rang e fro msmall part s for

toy s o r automotiv e use s t o composit e structure s suc h a s boat hulls, , automobil e panels , o r

th e fuselag e of

a n aircraft
. Thus , som e RPC s constitut e afinal produc t suc h a s abatiitub o r

shower stall , wherea s other s ar e intermediat e product s suc h a s panels , pip?s , andmoldin g compound s dia t serv e a s input s t o manufacturin g processe s an dconstructio n activities
. Th e remainder

of dii s sectio n describe s di e manufacture of RPC s i n term s of

di e inpu t material s used , th e productio n processe s employed , an ddi e type s o f product s ultimatel y produced
.

2-4P.1 6

2.1.1 Material

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

t ar e mos t commonly use di n th e productio n of RPCs
. It 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 diermose t materials
. 2.1.1.1 Plastic Resins There are tw o broadcategorie s of plasti c resins : dierrhoplastic s an dtiiermosets. Thermoplasti c resin s become sof t when heate dan dma

y b e shape do r

molde dwhil e in aheate d semi-flui dstate . Onc e th e tiiermoplastic resi n i s molde dt o th e proper state , i t i s coole dunti l hardened
. In contrast , thermose t resin s ar e usuall y liquid s or

lo w meltin g poin t

solid s i n diei r initial form
. Whe n use dt o produc e finishe dgoods , thes e thermosettin g resin s are "cured " b y th e us e of acatalyst , heat , o r

acombinatio n of

di e two . Onc e cured , diermose t resin s canno t

b e converte dbac k

t o thei r original liqui dform
. Unlike tiiermoplastic resins , cure dthermoset s wil l no t melt andflo w when heate dandonc e forme dthe y canno t b e reshaped
. Thermoplastic s hav e certai n advantage s a s substitute s for diermose t

resins ! Thermoplastic s hav e faste

r processin g tha

n thermoset s becaus e there i s n o curin g necessary ; diey hav e lo w toxicit

y an dcan b e remelte dan drecycled
. Improvement s i n tiiermoplastic resin s ove r di e pas t 2 0 year s hav e increase ddi e advantage s ove r diermose t

resins
. Thermoplastic s hav e hig h delamination , chemical , anddamag e resistance , an dlo w moisture absorptio n (Bergiund ; 1998)
. Th e damag e resistanc e of

thermoplastic s i s du e t o hig h impac t strengt h an dfractur

e resistance
. Thermoset s hav e better

resistanc e t o matri x microcrackin g i n th e composite laminate , whil e thermoplastic s hav e higher strain s t o failur

e (Schwartz , 1997)
. Difference s i n di e characteristic s an dstrengdi s betwee n thermoset s andthermoplastic s leadt o les s tha n perfec t substitutio n an da gradua l increas e i n th e us e o

f thermoplastic s for

reinforce dplastics
. Thermoplastics ' share of all resin s use dfo

r reinforce dplastic s increase db y 1 percen t fromi 99 1 t o 1993
. Fro m199 1 to 1993 , thermose t andthermoplasti c us e fo

r reinforce dplastic s increased , wit h thermoset s accountin g fo r consistentl y mor e tha

n twic e th e quantit

y of thermoplastics , a s Tabl e 2- 2 shows
. Thes e figure s includ e th e weigh t o f resins , reinforcements , andfillers. Thermose t

unsaturate dpolyester s accounte dfor roughl y 6 0 percen t

of di e total reinforce d plastic s shippe ddurin g eac h o f thes e years . Othe r

thermosets , mainl y epoxie s andphenolics , accounte dfo

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

innovation s i n tiiermoplastic resi n formulatio n hav e improve dbot h thei r performanc e propertie s andcost-effectivenes s t o th e point tha t thei r us e fo r RP C productio n i s increasing
. Thermoplastic s are widely use dbecaus e of

2- 5P.1 7

Tabl e 2-2 . Consumptio n of 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 Polycarbonate Other * Reinforce dplastics , total 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 7 220 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 6 230 20 6 5 4 7 3 3 9 2,72 6
* Reflect s weigh

t o f resins , fillers, reinforcements , an dothe r 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
. September

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 for Globa l Supply. " January 1994
.
thei r abilit y to model comple x shapes , thei r eas e of fabrication , an ddiei r

cost-effectiv e performanc e characteristics
. A s show n i n Tabl e 2-2, polypropylene , thermoplasti c polyester , an d nylo n account

fo r 8 0 percen t

o f th e 84 8 millio n pound s o f thermoplasti c resin s use dfor reinforce dplastic s i n 1993
. Th e averag e annua

l growti i rat e fo

r unsaturate dpolyester , th e mos t commonly use d diermose t i n reinforce dplastics , wa s 8. 5 percen t for 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 dtiiermoplastic in reinforce dplastic s a s of 1993 , wa s 1 0 percent . 2.1.1.2 Reinforcements Mos t reinforcin g material s use din RP C productio n are fibers , rovings , fabrics , o r mats . Fiberglas s i s di e mos t

commo n materia

l use dfor mats , but the y ca n als o b e mad e fromasbestos , 2- 6P.1 8

paper , metals , sisal , nylon , or cotton . Reinforcement s ar e use di n fou r basi c forms : (1 ) premixe d compound s i n injectio n moldin g andextrusion ; (2 ) woven mat s i n laminates ; (3 ) preforme d wove n mat s i n spray-u

p o r pres s mol dprocessing ; and(4 ) prepregs , whic h are semi-cure dwoven mat s impregnate dwit

h resins
. Th e amount

o f fiber reinforcement

varie s by resi n an dreinforcin g fiber (e.g. , fiberglas s varie s fro

m5 t o 4 5 percen t

b y weight , cloti i from3 0 to 7 0 percent , an dcarbo n an dotiie r expensiv e fibers fro

m3 0 t o 6 5 percent ) (Rauch , 1991)
. Usin g reinforcin g fibers provide s th e followin g attribute s t o composites :

• improve dtensil e an

dflexura l strengtii , stiffness , modulus , andimpac t resistance ;

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

• reduce dshrinkag e (Rauch , 1991)
. Th e relativ e improvement

i n eac h o f thes e parameter s i s afunctio n of th e typ e o f

fiber, amount

o f fiber, orientatio n of

fiber, fiber

surfac e treatment , andth e characteristic s ofth e 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

reinforcement

material s were mad e o

f inorgani c materials , suc h a s fiberglas s (roughly 8 7 percen t of al l fibrou s reinforcements) , asbesto s (2. 9 percent) , andcarbo n , an dother hig h performing/hig h cos t fiber s ( 1 percent)
. Cellulos e i s th e major natural organi c use da s areinforcement
. It represente dabout

9 percen t of al l fibrou s reinforcement s i n 1990
. A 198 9 EP A rulin g tha

t wil l eventuall y ba

n th e manufacture , processing , anddistributio n of mos t product s tha

t contai n asbestos , ha s an

dwil l continu e t o reduc e di e consumptio n o f asbesto s a s a reinforcement

agen t andthereb y alter

th e distributio n of

reinforcement

material s use dt o make composite s (Rauch , 1991)
. 2.1.1.3 Nonreinforcing Fillers Nonreinforcin g fillers no t

only reduc e th e cos t

of composite s bu t

frequently impar

t performanc e improvement s tha t might no t otherwis e b e achieve dby th e reinforcement an dresi n ingredient s alone
. Performanc e enhancement s offere dby some nonreinforcin g fillers includ e easier processin g characteristics ; improve dmechanical , electrical , thermal , an daestheti c properties ; an

dresistanc e t o shrinkag e (Rauch , 1991)
. Filler s tha t d o no t offe r performanc e improvement s ar

e sometime s referre dt o a s extenders
. In compariso n t o resi n an d reinforcements , filler s ar

e th e leas t expensiv e of

th e major ingredients
. In general , fillers are nonmetalli c minerals , metalli c powders , an dorgani c material s adde di n fairly hig h percentages , usuall y mor

e tiian 5 percen t

i n term s of

volume , an di n some case s severa l times th e weigh

t o f th e polymer
. 2- 7P.1 9

Tabl e 2-3 . Consumptio n o f Fibrou s Reinforcements i n Plastics : 199 0 Quantit y Reinforcemen t

(10 * lbs ) Fiberglas s 90 0

' Cellulos e 9 0 Asbesto s 3 0 Carbo n andother

hig h performanc e ,1 0 , Tota J L03 0 Source : Rauc h Associates , Inc.
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : 1991
. Tabl e 2-12
.

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 of fillers wer e use di n plastic s products
. Nonmetalli c mineral s account for 9 0 percen t

o f th e total consumptio n i n 1990 ; calciu mcarbonate i s th e dominan t mineral filler , widi roughl y 3.1 7 billio n pound s used , or 7 5 percen t

o f all fillers consume dthat

year . Calciu mcarbonate i s b y fa r th e mos t commonl y use dmineral filler

in RP C production
. Kaoli n cla y offer s severa

l advantage s includin g lo w wate r absorption , chemica

l resistance , an dimprove delectrical properties
. Som e calcine dgrade s o f kaoli n eve n offe

r additiona l reinforcement

whe n adde dt o amatri x o f nylo n o r polyolefi n resin s (Rauch , 1991)
. 2.1.1.4 Additives A wid e variet

y of additive s are use di n composite s t o modif y material s propertie s an d performance
. Altiioug h dies e material s ar e generall y use din relativel y lo w quantitie s a s compare dt o resins , reinforcements , an dfillers, die y perfor mcritical function s includin g ai r release , color , fire resistance , lubricity , spee dcuring , stati c reduction , surfac e smoodiness , therma l conductivity , andodier s (SPI Composite s Institute , 1995)
. Plasticizer s ar

e th e mos t commo n additiv e t o plastics , a s Tabl e 2- 5 shows
. In 1990 , roughl y 3. 5 billio n pound s o f additives , wer e use din plastic s products
. Plasticizer s accounte d fo r 5 2 percen t

o f additiv e consumptio n i n 199 0 followe dby flame retardant s an dcolorant s wit h 1 9 an d1 3 percent , respectively
. Plasticizer s ar e essential for producin g RPC s i n some applications
.
2-8P.2 0



### Tabl e 2-4
. Consumptio n o

f Nonreinforcin g Filler s i n Plastics : 1990 Quantit y Produc t(10 * lbs )

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


### Tabl e 2-5
. Consumptio n o

f Plastic s Additives : 1990 Quantit y Additiv e (10 6 lbs ) Plasticizer s 1,81 0 Flame Retardant s 66 1 Colorant s 45 6 Impac t Modifier s 160 Lubricant s 11 2 Stabilizer s 9 9 Organi c Peroxide s 4 7 Blowin g Agent s 1 4 Antistat s 9 Others " 13 0 Total 3,49 8

* Include s viscosit

y depressants , mol dreleas e agents , surfactants , sli p 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- 9P.2 1

2.1.2 Production Processes Applicatio n development

i n th e productio n of

composite s require s carefu l selectio n no t only o f whic h material s t o us e bu t als o of th e productio n proces s tha t ca n combin e thes e input s int o th e desire dfor

mmos t efficiently
. Tabl e 2- 6 provide s dat ao n di e distributio n o f di e volum e of reinforce dplastic s by proces s fo r 1990
. I n 1990 , approximatel y 2. 6 billio n pound s o f RPC s were shippe dfro mRP C facilitie s i n th e Unite dStates
. Approximatel y 1.6 7 billio n pound s o f RPCs , o r 6 5 percen t

of th e total , wer

e produce dusin g ope n moldin g processes . Han dlay-up , spray-up , an dcontinuou s laminatio n processe s accounte dfor about 6 2 percen t

of di e RPC s produce dwid i ope n moldin g processes . Approximatel y 90 0 millio n pound s of RPC s wer e produce dusin g close dmoldin g processe s i n 1991
. Abou t two-third s o f

thi s total wer e produce d usin g injectio n moldin g processes , wit h compressio n moldin g processe s accountin g fo r mos t o f th e remainin g RPC s mad e usin g close dmoldin g processes . Thi s sectio n provide s amore detaile d descriptio n o f

thes e processe s wit

h specia l attentio n give n t o th e five processe s diat contribut e mos t t o emission s a

t RP C facilities
. A s presente dbelow , thes e processe s ca n b e segregate dint o ope n an dclose dmoldin g categories
. Tabl e 2-6 . Reinforce d Plastic s Shipments b y Productio n Process : 199 0

Processin g Metho d Ope n moldin g Han dlay-up , spray-up andcontinuou s laminatin g Filamen t winding , pultrusion , andcentrifuga l castin g Close dmoldin g Compressio n Injectio n Othe r Tota l Quantit y (10 * lbs ) 1,67 4 1,03 8 63 6 90 1 360 52 3 1 8 2,57 5 Shar e o f Tota l (% ) 6 5 4 0 2 5 3 5 , 1 4 2 0 1 100 Source : Rauc h Associate s Inc
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : 1991
. 2.1.2.1 Open Molding Processes Open moldin g processe s ca n b e broke n dow n int o thos e dia t ar e simple , witi i minima l capita l requirements , anddios e that ar e more heavil y automated , wit h highe r tooling , start-up , an dother capita l costs . Han dlay-up andspray-up are tw o contac t moldin g processe s diat

fit th e
2-1 0P.2 2

first categor y o f open moldin g processes . Thes e tw o productio n processe s us e th e simples t materials , technology , andmanufacturin g method s andare ideall y suite dfo r low-to-mediu m volum e productio n of

larger , mor

e comple x structura

l shapes
. Other

open moldin g processes , suc h a s centrifuga

l an drotational casting , lamination , filament winding , an dpultrusio n processes , hav e muc h higher start-up capita

l costs , ofte

n i n di e million s of

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 only ar e cost-efficient when use di n mas s productio n of unifor mRPC s becaus e of

hig h capital cost s (SP I Composite s Institute , 1995)
. Th e followin g section s provid e more detaile d description s o f

fou r open moldin g processe s tiiat contribut e t o hazardou s air pollutan t (HAP ) an d VO C emission s a

t th e RP C productio n facilities—han d lay-up , spray-up , filament winding , an d pultrusio n (LeFla

mandProctor , 1995)
. Hand Lay-Up. Han dlay-up i s on e of di e mos t commo n low-to-mediu mvolum e RP C productio n processes . I t

typicall y involve s manua

l applicatio n of

genera l polyester liqui dresin s t o areinforcement , suc h a s glas s fiber mat s or woven roving , that

are lai dagains t

di e smoodi surfac e of a n ope n mold
. Serrate droller s or squeegee s draw n acros s th e preparatio n hel p t o releas e an y ai r diat ma y b e entrappe di n di e reinforcement material
. Chemica

l curing , ofte

n induce db y acatalys t

additive , harden s th e resi n an dreinforcemen t int o astructural for

mdia t i s exceptionall y stron g fo

r it s weight
. Th e resi n offer s aunifor mmatri x fo

r th e reinforcin g material in muc h th e same wa

y tiiat concrete doe s when use di n conjunctio n widi reinforcin g bar s mad e o f stee l (SPI Composite s Institute , 1995)
. Th e mol di s th e primar

y piec e o f equipment

necessar y fo r th e han dlay-up process , a s Figure 2- 2 illustrates
. Prio r t o han dlayrup production , th e mol d(whic h i s ofte n itsel f a composite ) i s spraye dwit

h atintedgel-coa

t an dallowe dt o partiall y cure . Th e gel-coa t sid e o f th e final produc t

take s on di e colo r

of di e pigmen t

use dt o tin t

th e gel-coa

t andha s asmoot

h surfac e anddecorativ e finish , much like tha t provide dby ahig h qualit

y paint
. Th e appearanc e an dtextur e o f

th e other sid e i s roug h andabrasive , unles s correctiv e measures , suc h a s applyin g a tightl y woven sai l clot

h t o th e bac k

surfac e prio r

t o curing , o r

sandin g th e back-surfac e afte r curin g ar e performed
. I

n mos t application s of

han dlay-up , onl y asingl e finishe dsid e i s require d (SPI Composite s Institute , 1995)
. Spray Up. Th e spray-up proces s i s ver y simila r t o han dlay-u p processing
. It to o i s bes t suite dto low-to-mediu mvolume productio n o f larger composite s wit

h comple x shapes
. Unsaturate dpolyester s ar

e als o di e mos t

commonly use dpolymer , althoug h isophtiialti c polyester s an

dviny l ester s ma

y als o b e used
. A s wit

h han dlay-up , th e polymers , reinforcements ,
2-1 1P.2 3

Resi n Reinforcemen t

Figur e 2-2 . Han d Lay-u p Processin g Source : SPI Composite s Institute
. Introduction to Composites. Societ y o f th e Plastic s Industry , Inc
. Washington , DC : 1995
. fillers, an dadditive s are applie dt o a n ope n mol dtha

t ha s bee n spraye dwiti i apigmente dgel-coat andallowe dt o partiall y cure . Th e primar

y differenc e fro

mhan dlay-u p i s tha

t th e inpu t 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 of spray-up gun s are designe dt o automaticall y cho p acontinuou s fee do f glas s fiber i n length s rangin g from0. 5 t o 1. 5 inche s an dtiien mix boti i th e fiber an dauser-determine d amount of catalys t int o afan-shape dspra

y of polyme r o r polymer/filler

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

-Continuou s

Rovin g Reinforcemen t Figur e 2-3 . Spray-u p Processin g Source : SP

I Composite s Institute
. Introduction to Composites. Societ y ofth e Plastic s Industry , Inc
. Washington , DC : 1995
. 2-1 2P.2 4

Fo r som e application s requirin g adde dstructura l strengtii , mor

e fiber reinforcement

mat s or roving s ca

n b e handlaid-u p between application s o f th e spraye dmixture
. Roller s o r brushe s ar e generally use dto remov e entrappe dair fro mth e mixture afte

r i t ha s bee n applie dt o di e mold
. Twenty-fiv e t o 3 0 pound s of laminate ca

n b e applie dpe r

minute usin g some type s o f spray-up equipment
. Thi s spee dof

applicatio n ca

n lesse n th e labo r

inpu t requirement s relativ e t o han d lay-u p but i s somewha

t offse t by di e nee dfo

r askille dspray-up gun operato r t o ensure produc t qualit y (SPI Composite s Institute , 1995)
. Filament Winding. Filament

windin g i s ahighl y automate dRP C productio n proces s suite dt o hig h volum e productio n o f stron g surface-of-revolutio n composites , b e the y open (e.g. , springs) , cylindrica

l (e.g. , pipes) , or

close d(e.g. , storag e tank s andpressure botdes)
. Thi s proces s i s extremel y versatile , offering awid e choic e o f inpu t materials
. Traditional polymer choice s hav e bee n dominate dby diermose t resin s (e.g. , polyesters , vinyl esters , bispheno l A fumarat e resins , furanes , andepoxies) , bu t di e us e of tiiermoplastic resin s (e.g. , nylon , polycarbonates , an

d acrylic ) i s under

development

andgainin g popularity
. Figur e 2- 4 offer s a simpl e schemati c of

asampl e filament

windin g process . Th e basi c step s involv e drawin g a continuou s stran do

f reinforcin g materia

l throug h aresi n bath andtiien wrappin g di e impregnate d reinforcemen

t aroun darevolvin g mold , calle damandrel
. Dependin g on th e shap e of th e intende dRPC , th e mandre l ca n advanc e i n on e directio n a s i t rotate s (fo

r spring s an dtubula

r shapes ) or ca n rotat e on tw o axe s (fo

r close dcylinder s o r

spheres ) (SPI Composite s Institute , 1995)
. Laminate Continuou s Stran d Rovin g

Mandre l

Resi n Applicator- J Figure 2-4 . Filamen tWindin g Source : SPI Composite s Institute
. Introduction to Composites. Societ y of th e Plastic s Industry , Inc
. Washington , DC : 1995
.

2-1 3P.2 5

Th e mos t commo n reinforcement

material use di s direc t

processe d roving s of

glas s fiber; however , th e choic e o

f reinforcement

fiber s i s virtuall y unlimite dandnumerou s reinforcement applicatio n method s ar

e commonly used
. In fact , tw o o r more differen

t reinforcement s ca

n b e applie di n different

pattern s to asingl e composite
. Th e abilit y t o var y th e type , form* quantity , andorientatio n o f

reinforcement

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 an dperformanc 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 , highe r

performanc e reinforcement s t o strategi c location s in di e composit e structur e an d
. substitut e lowe r

cos t fiber s elsewhere
. Th e us e of hybri dreinforcement

method s i s increasingl y commo n in filament

windin g processes . Limitation s of filament windin g includ e relativel y hig h VO C emission s an dcapita l investmen t

requirement s (SP I Composite s Institute , 1995).' ' Pultrusion. Th e pultrusio n process , show n i n Figur e 2-5 , create s profil e shape s lik e rods , plates , beams , an dchannel s by pullin g continuou s strand s o f reinforcement s throug h aresi n batii , on e o r more pre-shapin g guides , an dultimatel y throug h aheate dshapin g di e where th e pultrude d RP C i s cure dint o it s permanent cross-sectional shape
. Th e las t stag e i n di e proces s i s th e cutof f where equipmen t

i s use dt o cu t

di e pultrude dprofil e t o it s intende dlength
. Pullin g i s achieve d usin g eithe r

intermitten t

or continuou s pullin g devices
. Whil e developmen t i s underwa

y t o incorporate di e us e o

f thermoplasti c resin s i n pultrusio n processes , a t presen t mos t application s ar e limite dt o th e us e o

f thermose t resins , primaril y polyester , bu t phenolics , epoxies , an dester s ar e als o used
. Commonly use dreinforcemen t material s includ e continuou s fiber glas s rovings , surfacin g mats , graphite fibers , choppe dan dcontinuou s stran dmats , an dwove n tape s (SP I Composite s Institute , 1995)
. Advantage s of pultrusio n includ e greater reinforcemen t

orientation , anecessar y attribute fo

r some RP C applications , an dlowe r capita l equipmen t

cost s than mos t other high-volum e RP C productio n processes . Th e primar y limitation s o f

th e proces s are a

n inabilit y t o var y di e cross-sectional characteristic s alon g th e lengt h o f th e pultrude dcomposit e andstres s resistanc e dia

t i s limite dt o th e directio n o f th e reinforcement

material (SP I Composite s Institute , 1995)
. 2.1.2.2 Closed

Molding Processes Close dmoldin g processes , suc h a s di e man y variant s of compressio n molding , us e pre prepare dmoldin g compound s like shee t moldin g compound s (SMC) , bul k moldin g compound s (BMC) , andreinforce dthermoplasti c sheet s a s feedstock s t o thei r productio n processes . Thes e moldin g compound s ar

e prepare dt o facilitate mas s productio n of awid e variet

y o f composites , eac h wit h it s own specia

l physica l attributes
. Thes e compound s hav e th e advantag e o f a n extende dshelf-life
. Each compoun di s produce dusin g fixedproportion s o f di e appropriat e
2-1 4P.2 6

Hea t Sourc e Continuou s Stran d Rovin g ,— , -. < Ma t o rClot h [ J J

Resi n Applicato r 

# Q



# LTW ?

Pullin g Devic e Figur e 2-5 . Pultrusio n Source : SP

I Composite s Institute
. Introduction to Composites. Societ y of th e Plastic s Industry , Inc
. Washington , DC : 1995
. polymers , reinforcements , fillers, an dother additive s neede dt o impar t di e specifi c physical propertie s an

dappearanc e t o th e composite produce d(SPI Composite s Institute , 1995)
. Thi s sectio n provide s mor

e detaile ddescription s of

di 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
. Compression Molding. There are fou r primar y high-volum e RP C productio n processe s commonly calle dcompressio n moldin g processe s (an dmany variation s o f dies e processes) :

• Sheet Moldin g Compoun d(SMC) ,

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

• Wet SystemCompressio n Molding , and

• Reinforce dThermoplasti c Shee t Compressio n Molding
. For eac h o f tiiese processes , th e chose n composite materials , includin g all resins , reinforcements , filler , an dadditives , are compresse dint o adesire dshap e i n amatche ddi e hydrauli c pres s unde

r pressur e rangin g from25 0 t o 3,00 0 ps i (SP I Composite s Institute , 1995)
. Th e composit

e feedstoc k

i s then hel di n plac e whil e th e resi n matri x quickl y cure s int o it s permanent hardene dshape
. Significant difference s amon g thes e processe s determin e thei r suitabilit y fo r agiven application
. Th e followin g section s offe r brie f description s o f

eac h of di e main high-volum

e moldin g processes . 2-1 5P.2 7

Sheet Molding Compound. SM C i s produce db y mixin g all of th e composit e materials , excep t for di e reinforcin g fibers, int o apaste . Th e past e i s the n uniformly sprea dont o tw o separate "carrie r

films" tiiat

are fe ddiroug h a

n SM C machin e where di e past e i s compounde d wit h th e reinforcements
. Th e carrie r films are hel dapart , on e abov e th e other , whil e reinforcements , cu t

fro mcontinuou s stran drovings , are uniformly distribute do n th e lower'carrie r filmandthe n force dtogethe r lik e afiber

reinforcement

sandwic h a s the y ar e fe dthroug h a syste mof roller s tiiat

compac t andconsolidat e di e SMC
. Th e SMC , wit h th e carrie r

filmstil l i n place , i s the n rolle du p an dencase di n anylo n sleev e that prevent s evaporatio n o f

volatile s from th e resi n matri x that

woul dallo w di e compoun dt o finis h curing
. Afte r aperio do f

storag e i n a climat e controlle darea , th e SM C i s thickene dt o di e desire dviscosit y for it s intende dapplicatio n andthe n take n t o amoldin g pres s where i t i s cu t t o it s desire dshape
. Th e carrie r films ar e me n remove dan dth e SM C permanentl y compresse dint o it s ultimat e shap e i n aheate dmatche ddi e mol d(SP I Composite s Institute , 1995)
. SM C moldin g ha s hig h start-u p capita l cost s associate dwiti i it
. However , whil e th e toolin g cost s o f

SM C compressio n moldin g are muc h higher tha n fo r mos t othe r RP C productio n processes , die y are stil l generall y lower tha n woul db e require dt o produc e equall y stron g shape s fro mmeta l inputs
. Retoolin g a

n SM C proces s t o modif

y th e desig n of

acomposit e i s muc h quicker tha n i n metal stam

p moldin g operation
. Other advantage s includ e th e abilit y t o < consolidate many part s int o asingl e RPC
. Thes e attribute s make SM C moldin g ver y attractiv e t o suc h high-volum e en duser s a s producer s of automobiles , appliances , construction, , an delectrical produc t industries
. SM C compressio n moldin g i s use dt o produc e more composite s o f greater valu e tha n an y other RP C productio n proces s (SP l Composite s Institute , 1995)
. Bulk Molding Compound. Bul k moldin g compound , lik e SMC , i s mor e amateria l man a process . BM C generall y consist s o f approximatel y 2 0 percen t reinforcement , 5 0 percen t filler s an dadditives , an d3 0 percen t resi n matrix
. Th e compoun dca n b e tinte dt o adesire dcolo r and , throug h strategi c selectio n of inpu t materials , can b e prepare dt o affor dexceptiona l mechanical andfire retardan t

properties
. Th e basi c proces s entail s combinin g th e desire dcomposit e material s int o amoldin g compoun dtha t resemble s putt

y an dthe n placin g di e compoun dinto a compressio n mold
. Moldin g typicall y take s plac e at temperature s betwee n 25 0 an d35 0 ° F an da t pressure s rangin g from35 0 to 2,00 0 ps i (SPI Composite s Institute , 1995)
. BM C i s als o use di n transfer moldin g an dinjectio n moldin g processe s t o produc e mor e comple x shape s witi i close r mol dtolerance s than ca

n b e achieve dusin g matche ddi e compressio n molds
. Th e advantage s of

BM C includ e reduce dcost s an dimprove dstiffnes s an dfire retardanc e du e to lower

reinforcement

loading s an dincrease dfiller 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 .
2-1 6P.2 8

Wet System Compression Molding. Wet systemcompressio n moldin g differ s fro mSM C an dBM C compressio n moldin g in diat amatri x of

liqui dresi n mixe dwit

h fillers andadditive s i s pumpe dor

poure donto dr

y reinforcement

mat s tha t hav e bee n place dinsid e of th e matche ddi e mold
. Thus , unlike 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 pressure i s exerte don th e mold , forcin g th e resi n t o permeate th e reinforcement

material s andfixing, andth e composite remain s under pressur e unti l i t

ha s full y cured
. Typical curin g temperature s are 25 0 t o 35 0 °F , muc h like SM C andBM C molding , bu t di e pressure requirement s ar e much lower , i n th e rang e of 25 0 it o 1,00 0 ps i (SP I Composite s Institute , 1995)
. Like SM C andBMC , we

t systemmoldin g ca

n produc e RPC s wit

h tw o finishedsurfaces
. Other advantage s o

f dii s proces s includ e equipment andtoolin g savings , du e t o th e reduce d pressure requirements , an

dhigher reinforcement

loading , whic h afford s superio r mechanica

l properties
. Th e disadvantage s of 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 addstrengt h t o th e composite , higher

labo r costs , an dmore proces s waste tiian i s typica l wid i 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 composite 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 widi tiiermoplastic resins
. Anothe r

differenc e i s dia

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

i n th e mold
. When di e mol di s close dandpressur e i s applied , di e tiiermoplastic resin s star

t to flow andconfor

mto th e shap e of

th e mold
. Th e temperature o f di 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 dpermi t remova l of th e RP C fro

mth e mol d(SPI Composite s Institute , 1995)
. Thi s proces s i s sometime s calle dstamping , becaus e di e mol duse di s simila r t o astee l stampin g press . Advantage s of

dii s proces s includ e unlimite dshel f lif e fo r di e inpu t sheets , fas t

moldin g cycles , recyclabl e scrap , an dpotential fo

r part s consolidatio n relativ e t o metals
. Capita l cost s ar e comparabl e t o SM C molding
. There are , a s yet , fe w supplier s of

th e inpu t sheet s becaus e dii s proces s i s new . Injection Molding. Injectio n moldin g i s perhap s di e mos t versatil e an dwidely applie d proces s fo r mas s producin g fairl

y comple x composite s of

absolute dimensional accuracy . I t ca n b e use dfor

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

n b e buil t an di s ideall y suite dt o high-volume applications
. Eac h compressio n moldin g machin e i s capabl e of producin g diousand s of

detaile d RPC s pe r hour
. A s illustrate di n Figure 2-6 , di e same equipmen t ca n b e use dt o mol dbot

h thermoplasti c resin s andthermose t resin s int o RPCs
. Th e only differenc e i s th e temperature a t 2-1 7P.2 9

f Injectio n Chambe r(Hot )

|— • Hoppe r

Mol d (Cool ) '

—Scre w o rPlunge r

Thermoplasti c Injectio n Machin e f —Injectio n Chambe r(Cool ) Hoppe r

Mol d (Hot ) • Scre w o rPlunge r

Thermose t Injectio n Machin e Figur e 2-6 . Injectio n Moldin g
Source : SPI Composite s Institute
. Introduction to Composites. Societ y o f th e Plastic s Industry , Inc
. Washington , DC : 1995
. whic h th e resi n i s kep t

durin g th e curin g stag e of th e proces s widii n th e mold
. Thi s proces s i s mos t commonly use dt o shap e RPC s fromthermoplasti c resin s (e.g. , nylon , acetal , PVC , polyethylene , SAN , polycarbonate , andABS) , whic h requir e coole r curin g temperatures , bu t compressio n moldin g of

thermose t resin s (e.g. , polyester , phenolic , epox y an durethane ) i s gainin g popularit

y (SPI Composite s Institute , 1995)
. Th e basi c step s i n di e standardinjectio n moldin g proces s consis t o f conveyin g granula

r o r pelletize dtiiermoplastic resi n fro masupply hoppe r

t o a n openin g a

t th e opposite en dof

aheate d meta l chamber , usin g a

n auge r t o contro l th e rat e tha t

th e resi n advance s t o di e tip. Th e resi n i s thu s heate dto asemi-flui dstate meltin g o r plasticizin g th e resi n an dca n b e injecte dint o th e mol dat th e tip o f th e chamber

wit h atwis t o f th e auger . Th e mol di s kep t a t acoo l temperatur e andhel dclose dwhil e di e resi n cool s dow n an dsolidifies
. Onc e th e resi n ha s solidified , th e mol d i s opene dt o ejec t

th e composite fro

mth e mol dan dth e whol e proces s ca n b e restarted
.

2-1 8P.3 0

2. 2 Product s There i s grea

t diversit y in th e type s of

product s mad e usin g mos t o f thes e processes . Amon g th e ope n moldin g processes , produc t diversit y i s especiall y extensiv e in th e han dlay-up , spray-up , an dfilament

windin g processes . Amon g close dmoldin g processes , produc t diversit y i s greates t for th e compressio n an

dinjectio 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 db y eac h RP C productio n proces s an dlist s example s of composite product s tha

t resul t fro meac h process . , 2. 3 Costs o f

Productio n Ther e are dire e variabl e input s i n reinforce dplasti c production : ra w materials , labor , an d energy . Ra

w material s includ e plasti c resins , reinforcin g materials , an dfillers. Labo r

andenerg y ar e use dthroughou t

productio n a s wel l a s for

final produc t

transport . Price s for thermose t

resin s hav e increase dsinc e 1996 , whil e mos t thermoplasti c price s hav e fallen over

th e sam e period , a s Tabl e 2- 8 shows
. Amon g thermose t resins , unsaturate d polyeste r an dphenolic s are clos e in price , whil e epox y ha s ahigher pric e than both
. PV C an d polypropylen e ar

e th e leas t expensiv e thermoplastics , whil e th e pric e of nylo n i s more ma

n four times greater

tha n thes e two . Tabl e 2- 9 provide s price s for fibrou s reinforcin g materials
. Fo r 1997 , di e pric e o f

fiberglass , th e mos t

commo n reinforcement , i s approximatel y $1.1 1 pe r pound
. Th e pric e o f

carbo n i s th e mos t

expensiv e an di s primaril y use di n hig h performanc e application s ($1 0 to $3 0 pe r

pound)
. Many producer s us e filler s in order t o minimiz e th e amount

o f higher-cos t

resin s neede d per uni t outpu t (se e Tabl e 2-9)
. RP C manufacturer s frequently selec t calciu mcarbonate becaus e of it s relativ e lo w cos t

($0.0 8 per

pound)
. Othe r

popula r lo w cos t fillers includ e kaolin e and alumin atrihydrate ($0.0 5 an d$0.1 3 pe r

poun drespectively)
. A s note din 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 of

RPC s . Th e Agenc y compute daweighte daverag e pric e for additive s i n 199 7 o f

$0.8 8 pe r pound
. 2. 4 Use s an d Consumers of Reinforce d Plastic s RPC s ar e a n inpu t into th e productio n o f

avariet y of product s rangin g fromchildren' s toy s t o aerospac e component s an dbathtub s t o boat

hulls
. Therefore , di e deman dfo r RPC s i s derive dfro

mth e deman dfo

r thes e products , whic h ca

n b e foundwithi n on e of

th e followin g majo r segment s o f

th e marke t

fo r RPCs :

2-1 9P.3 1



### Tabl e 2-7
. Compatibilit

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

Proces s Shap e Characteristi c Produc tExample s Ope n moldin g processe s Handlay-up an dspray-u p

Filament 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 Large , comple x

Round , rigid

Unifor mcross-sectio n Thin , flat , o r

curve dprofile s

Unifor mwal l thicknes s

Larg e o r smal l shape s ca

n b e smoothly ribbed , embossed , o r hig h comple x BM C compressio n moldin g Smalle r comple x

Reinforce dthermoplasti c shee t moldin g Simple , thinwal l Boa t hulls , auto an dtruc k

body parts , swimmin g pools , tanks , corrosio n resistan t equipment , furniture , duc t work ,

. andequipment

housing s Pressure bottles , airplan e bodies , undergroun dstorag e tanks , driv e shaft s for car s an dtrucks , sailboat

masts , an d gun barrel s Corrosio n resistan t

rods , beams , channels , andplate s Flat an dcorrugate dpaneling , panel s for truc k trailers , roa d signs , andrefrigerato r liner s Large r pipes , tank s

Automotiv e bod y panel s an dfron t en d assemblies , appliances , ai r conditione r base , offic e equipmen t

housin g Ai r conditione r

components , pum

p housings , compute r

components , power tools , moto r

parts , gea r cases , circui t boar dcovers , garbag e disposa l housing s Materia l handlin g pellets , tray , and shelving ; automotiv e bumpe r beams , floo r pans , batter y trays , radiato r supports ; helmets ; flooring ; concret e pourin g forms ; arid chai r

shell s (continued )

2-2 0P.3 2

Tabl e 2-7 . Compatibilit

y of RP C Productio n Processe s wit h Shap e Characteristic s an d Specifi c Products (Continued )

Proces s Shap e Characteristi c Produc t Example s Close dmoldin g processe s (continued ) We t systemcompressio n moldin g Contoured , medium-wal l 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 , comple x Trays , outboardmoto r shrouds , appliances , automotiv e applications , and sink s Bod y component s fo

r trucks , sport s ca

r bodies , automotiv e bod y panels , marin e parts , smal l boats , plumbing ' components , equipmen t

housings , and electrical component s Hig h performanc e aircraf

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

body panels , bumper beam s fo r car s an dtrucks , floor pan s fo r car s andtrucks , andpick-up truc k bed s Wate r pressure tanks , water

softene r tanks , andfilter s > Sources : Rauc h 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 of th e Plastic s Industry , Inc
. Washington , DC : 1995
. Aircraft/Military : fligh

t 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 , smal l appliances , computer housings , calculators
. Construction : swimmin g pools , rai n gutters , mold s fo r concrete , batiitubs , shower stalls , whirlpools , spas , highwa y signs , coolin g tower

components , panelin g for greenhouses , patios , railing s andother architectural components . Consumer Products : fishin g rods , golf clubs , skis , tenni s rackets , furniture , campers , snowmobiles , exercis e equipment , seating , counter tops , servin g trays , boxe s an d containers , microwav e cookware
.

2-2 1P.3 3

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

Resi n Thermoset s Epoxy " Unsaturate dPolyester * Phenolic " Thermoplastic s ABS " Polypropylene * Polystyrene " PVC " Nylon '

* Genera l purpose . b Medium-impact
. c Typ e 6
. 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 )

199 7

' , 1.30-1.4 2 .75-.8 6 .74-.8 4 , .88-.9 1 .39-.4 1 .38-.4 0 .38-.4 1 1 1 1.28-1.3 8 199 8

1.30-1.4 2 .75-.8 6 .74-.8 4
.68-.7 1 .29-.3 1 .38-.4 0 .27-.3 0 1.39-1.4 9 199 9

1.30-1.4 2 .75-.8 6 > .74-.8 4
.64-.6 7 .28-3 0 .41-.4 3 .29-.3 2 1.29-1.3 9

• Source : Plastics News. "Resi n Pricing. " Update dMa y 13,1999
. A s obtaine do n Ma y 17,1999
. <http://www.plasticsnews.com>
.
Corrosio n Resistan t

Products : pip e fittings , ducts , hoods , tanks , pumps , filtratio n equipment , an dawid e variet y o f othe r chemical resistan t

product s for

us e i n di e waste/wastewater

treatment , chemical processing , semiconductor , andpetrochemical industries
. 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 dmany other

electrical an delectroni c applications
. Marine : boat

hulls , motor

covers , marin e docks , moorings , floats , buoys , canoes , kayaks , an dotiier

component s an dhardware for naval , pleasure , an dcommercia l water craft
. Transportation : bod

y panel s fo

r cars , buses , an dtracto r

trailers , truc k

cabs , boxca

r doors , subwa

y seating , heater

housings , fron

t en dassemblies , driv e shafts , win d deflectors , gril l openin g panels , tai l ligh t housings , fender

liners , instrumen t

panels , andothe r divers e part s an

daccessorie s for

lan dtransportatio n an dutility vehicles
.

2-2 2P.3 4

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

Inpu tPric e ($/lb ) Reinforcement s i Fiberglas s $1.1 1 Cellulos e $0.52 * Carbo n $10-3 0 Averag e , $1.2 5 Filler s Calciu mcarbonate $0.08 * , Kaoli n $0.05" , Alumin atrihydrat e $0,1 3 Tal c $0.3 0 Mic a$0.21 " Othe r mineral s $0.08 " Glas s sphere s , $0.78 ' Natural $0.05 " Averag e $0.0 9 Additive s

• Averag e $0.8 8

* Pric e compute dby dividin g valu e b y quantit y an dadjustin g b y aproduce r

pric e index (PPI ) where 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
. Rauc h Associates
. 1991
. The Rauch Guide to the U.S. Plastics Industry. Bridgewater , NJ : Rauc h Associates , Inc
. Murphy , John
. 1994
. The Reinforced Plastics Handbook. Oxford , UK : Elsevie r Advance dTechnology.
. U.S
. Burea

u of Labo r Statistics
. 2000
. Producer Pric e Index—Commodities : WPUSOP9200 , Intermediat e Material s Les s Foo dandEnergy , 1990-2000
. [online ] <http://www.bls.gov>
. Obtaine dJanuar y 20 , 2000
. Shearer , Brent
. Apri l 15 , 1996
. "Carbo n Fiber s Adjustin g t o Changes. " Chemical Marketing Reporter.

2-2 3P.3 5

• Other : all other

composite s applications
. On e significan t new categor

y o f application s th e repair/replacemen t of component s of

th e civi l infrastructure
. Produc t example s include : guardrails , sig n posts , an dstructura l support s for

highway s an d bridges
. Ove r time, th e nee dfo

r lightweigh t

structural material s tha

t mee t strength , stiffness , an d other mechanica

l propert y requirement s for

hig h performanc e application s ha s prompte dmajor development s i n productio n practice s i n th e end-us e markets
. Th e characteristic s demande dvar y by th e marke t

(e.g. , construction , transportation , consumer goods , o r other produc t manufacturer)
. Fo r

example , th e abilit

y t o replac e a

n assembl y of

several metal part s with a singl e molde dcomposite i s ver y appealin g t o manufacturer s of appliance s an dtransportatio n equipment
. Th e chemica

l resistanc e propertie s o

f RPC s allo w user s i n th e constructio n an d marin e marke t

segment s t o avoi ddi e highe r maintenanc e cost s associate d wit h th e meta l an d woo dmaterial s that

they traditionall y used
. Th e strength-to-weight

ratio s for composite s are typically greater than thos e o f

metals
. A s a n example , phenoli c composite s hav e greater yiel dstrength s than stee l o r aluminum , althoug h resistanc e t o bendin g anddi e resistanc e to elongatio n ma y b e superio r

i n metal s dependin g o

n th e typ e of

reinforcement

i n th e plasti c (Murphy , 1994)
. Composite s hav e lo w flammabilit

y properties , whic h make composite s superio r t o woo dfo

r application s susceptibl e t o fire. Tabl e 2-1 0 provide s some example s of thes e desire ddeman dcharacteristic s for selecte den d use s an dassociate dproducts
. Lan dtransportatio n product s consume dth e mos t reinforce dplastic s i n 1997 , followe db y construction , a s Figure 2- 7 illustrates
. Th e lan dtransportatio n segmen t alon e use d1,09 5 millio n pounds , whic h account s for 3 2 percen t

o f tiie 3. 4 billio n pound s o f

RPC s consume di n 1997
. Constructio n appUcations , th e secon dlarges t end-us e category , consume d70 0 millio n pound s o f composite s durin g 1997
. Other significant

marke t segment s are marin e an delectrica l products
. Producer s servin g th e marin e segment wil l no t b e subjec t

t o th e propose dcontrols ; the y wil l b e separatel y addresse db y th e Agency
. Tabl e 2-1 1 indicate s tha

t consumptio n ha s risen fro m198 9 level s i n al l end-us e categorie s excep t

fo r aviation/aerospace/military , whic h ha s decline dbecaus e o f th e recen t 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 rat e for consumptio n b y lan dtransportatio n wa s highes t fo r th e perio d 1984-1997 , followe db y electrical applications
. Cause s fo r aggregate growt

h var y acros s individua l market segments . Growt

h ma y b e drive n b y advance s i n RP C productio n processe s o r increase ddemandfo

r specifi c final products
. Deman di n som e end-us e categorie s i s strongl y
2-2 4P.3 6

Tabl e 2-10 . Deman d fo r Reinforce d Plasti c Composites : Som e Example s End-Use r Industrie s an d Produc t

Market s Deman d Characteristic s Produc tExample s Aircraft/aerospace/militar

y Appliances/busines s equipment

Constructio n

Marin e Transportatio n Lightweight , moldability , an d versatil e nature Part s consolidation , desig n flexibility , an

dhig h strengt

h to , weight ratio s Corrosio n resistance , high strengt h t o weight ratio , custo mfinishing , longer life-cycl e and/o r

fewe r maintenanc e requirement s Large , rigid, continuou s shape s wit h smooth , corrosion-resistan t finishe s andhig h strengt

h t o weigh

t ratio s Part s consolidation , ligh

t weight , continuou s shape s wit

h smoot h corrosion-resistan t

finishe s Structure s andinterior s o f bot h militar y andcommercia

l plane s Dishwasher

panels , freezers , smal l appliances , computer

housings , an d radio s Beams , columns , roo f

trusses , soffit , siding , flooring , bathtubs , sinks , showe r stalls , whirlpool s an dspa s Boat hulls , je t skis , andothe r

marin e craf t Bod y panels , fron

t ends , bumpers , andinterio r

dashboard s fo

r automobiles , mobil e homes , buses , andtrucks
. Source : Societ

y of th e Plastic s Industry , Inc
. Introduction to Composites. 2nded
. Washington , DC
. Th e Composite s Institute
. 1992
.
influence dby fluctuation s in consumer confidenc e or

by change s i n governmen t spendin g priorities
. Th e growt h fo r particula r RP C processe s andresin s ma y diffe r fromth e observe d aggregat e rate s of growt h fo r th e market s they serve , which i s significant becaus e di e RP C sourc e categor y to b e regulate dinclude s only thermosettin g resins—mainl y unsaturate dpolyesters
. Tabl e 2-1 2 present s informatio n o n consumptio n o f reinforce dunsaturate dpolyester s base do n consumptio n databy en dus e for 198 4 throug h 199 3 fro

mPredicasts Basebook

an dModern Plastics. I

n contras t t o th e aggregate growti i rate s acros s end-us e markets , Tabl e 2-1 2 show s that 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 dconosio n resistan t

equipmen t

(0. 2 percent)
. It

appear s tha

t reinforce dunsaturate dpolyester s are losin g market

share i n man y en duse s a s technological advance s allo w thermoplasti c resin s t o b e use din awide

r rang e o f processe s andapplications
.

2-2 5P.3 7

Reinforce d Plastic s Shipment

s = 3,422 millio n lbs . Aircraft / Aerospace / Militar y Appliances

/ Miscellaneou s 3 0.7

%

Lan d Transportatio n 32.0 %

Marin

e 10.3 % Busines s Equipmen t 5 , Constructio n

20.5 %

Consume r Product s 6.1 %

Electrical / Electroni c 10.2 % Corrosion

Resistan t Equipmen t 11.6 %

Figur e 2-7 . Consumptio n o f Reinforce d Plasti c Composite s b y Marke tSegment : 199 7 Include s reinforce

dthermose t an dthermoplasti

c resins , reinforcements , an

dfillers
. Source : Societ

y o f th e Plastic s Industry , Inc
. 1998
. Facts and Figures of the U.S. Plastics Industry. Washington , DC : SPI
. Some 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 state tiiat 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 d

2-2 6Tabl e 2-11 . Consumptio n o f Reinforce d Plasti c Composite s b y En d Use : 1984-199 7 (10 * lbs) "

En d Us e 198 4 198 5 198 6 198 7 198 8 198 9 199 0 199 1 199 2 199 3 199 4 199 5 199 6 199 7 Averag e Annua l Growt h Rat e (1984-1997 )

t o t o Aircraft

/ aerospace/ military Appliances / busines s equipmen t Constructio n Consume r product s Corrosion

resistan t equipmen t Electrical/ electroni c Marin e Lan d transportatio n 2 9 3 2 3 7 3 6 3 9 4 1 3 9 3 9 3 2 2 5 2 4 2 4 2 4 2 4 -3.4 %

12 3 13 3 13 7 14 1 15 0 15 1 15 3 13 5 14 3 14 8 16 1 16 7 17 0 18 5 2.3 %

43 0 44 5 45 6 50 6 49 5 47 0 46 8 42 0 48 3 53 0 59 7 62 7 64 3 70 0 3.2 % 14 3 14 2 14 9 167 16 9 15 8 16 5 14 9 16 2 16 6 17 5 18 4 19 2 21 0 2.3 % 31 0 29 5 29 1 32 9 34 9 33 5 35 0 35 5 33 2 35 2 37 6 39 5 40 5 39 6 2.3 %

18 9 19 1 20 1 21 4 23 0 22 9 24 1 23 1 26 0 27 5 29 9 31 5 32 8 34 8 4.7. % 30 9 33 5 34 0 41 3 45 2 40 5 37 5 27 5 30 4 31 9 36 4 37 5 38 3 35 3 0.1. % 54 0 56 3 58 5 65 6 69 5 67 7 70 5 68 2 75 0 82 2 94 6 98 4 1,00 9 1,09 5 5.3 % Miscellaneou s Total b 8 0

2,15 3 8 2 2,21 8 8 3 2,27 9 7 5 2,53 6 8 0 2,65 8 7 6 2,54 2 7 9 2,57 5 7 4 2,36 0 8 3 2,54 9 8 9 2,72 6 10 2 3,043 10

7 3,17 6 11 1 3,263 11 1 3,42 2 2.8 %

3.2 %
* Include 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 independen t rounding
. Sources : Lindsay , Kare n 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 : Rauc h Associates , Inc
. Society o f th e Plastic s Industry , Inc
. 1994
. Facts and Figures ofthe U.S. Plastics Industry. Washington , DC : SPI
. Society o f th e Plastic s Industry , Inc
. (SPI)
. 1998
. Facts and Figures ofthe U.S. Plastics Industry. Washington , DC : SPI
.Tabl e 2-12 . Consumptio n o f Reinforce d Unsaturate d Polyeste r b y En d Use : 1984-199 3 (10 * lbs) 8

t t o O O En d Us e Aircraft/aerospace/ military Appliances/busines s equipmen t Constructio n Plumbin g fixture s Panel s an dsidin g Glazin g an dskylight s Pipe , fittings , condui t Consume r

product s Corrosion-resistan t

equipmen t Electrical/electroni c Marin e Lan dtransportatio n Miscellaneou s Total c 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 NA 30755-0 0 30752-4 0 30752-0 0 NA 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 NA 1,59 2 198 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 12 3 4 0 13 7 13 0 32 2 5 2 32 4 20 0 5 0 1,59 9 198 7

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 1,700 198 9

3 5 9 3 42 6 11 5 12 5 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 10 6 10 9 3 6 13 9 127 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 2 4 12 6 12 0 32 9 5 0 22 1 18 5 4 5 1,40 7 199 2 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 N A 1,61 3 Averag e Annua ]

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 , an dfillers
. b O r wides t rang e o f availabl e years . c Part s ma

y no t su mt o total s du e t o independen t rounding. Sources : Modern Plastics. "Resi n Supply : Plottin g aCours e fo r Globa l Supply. " Januar

y 1994
. Predicasts Basebook. Novembe r 1992
. Foste r

City , CA : Infonnatio n Acces s Corporation
.P.4 0

fabricatio n proces s wit

h lo w toolin g an

dlabo r cost s tha t produce s continuous , cross-sectional composite profiles , all of

whic h ar e expecte dt o allo w i t

t o continu e it s stron g growt h and penetratio n o f

traditional materia

l profil e market s i n th e 1990s
. Growt h i s expecte dt o b e particularl y significant

i n th e electrical andcorrosion-resistan t markets , with opportunitie s increasin g i n th e constructio n andaerospac 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 don EPA' s 199 3 surve y ofth e reinforce d plastic s industr

y (EPA , 1993)
. Althoug h roughl y 70 0 facilitie s participate di n di e survey , only 43 8 facilitie s wer e determine dt o b e potential major source s o f HAP emission s fromth e productio n o f

reinforce dplastics
. Thus , thi s sectio n focuse s on dios e 43 8 facilitie s likel y t o b e subjec t to th e propose dai r

regulations
. 2.5.1 Location Base do n th e 199 3 update dindustr y screenin g survey , Figure 2- 8 identifie s di e locatio n o f di e 43 8 major

sourc e facilitie s producin g reinforce dplastic s i n 1993. 1 Ohio , Indiana , California , Texas , an dPennsylvani aare th e to p five state s i n order o f number of major sourc e facilities
. 2.5.2 Employment Th e 199 3 survey dat aindicate tha t employment

a t thes e majo

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

facilit y wit h a n averag e of

8 4 employee s fo

r thos e facilitie s reportin g thei r employmen

t level
. Tabl e 2-1 3 provide s di e distributio n of major sourc e facilitie s reportin g employmen

t data
. Over

8 0 percent

o f th e 38 9 facilitie s reportin g employmen t dat ahad 10 0 employee s o r

fewer
. Th e vas t

majorit y o f th e remainin g facilitie s reporte demployment level s betwee n 10 1 and500
. Les s tiian 3 percen t of facilitie s reportin g employmen t reporte d hav e mor e tha n 50 0 employees
. 2. 6 Facilit

y Ownershi p Facilitie s compris e asite o f lan dwit h plan t andequipmen t

tha t combin e input s (ra

w materials , fuel , energy , andlabor ) t o produc e output s (reinforce dplastics)
. Companie s that ow n thes e facilitie s ar

e legal busines s entitie s that 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 term s facility , establishment , plant , and mill ar e use dsynonymously i n thi s analysi s an drefer t o th e physica

l locatio n wher

e product s are

'Thre e facilitie s hav e close dsinc e 1997 , th e basehn e yea r o f th e economi c analysis
. 2-2 9P.4 1

Figur e 2-8 . Geographi c Distributio n of Majo r Sourc e Facilitie s 2-3 0P.4 2

Tabl e 2-13 . Distributio n of Majo r Sourc e Facilitie s b y Employment Employmen

t Rang e Numbe

r o f Facilitie s Share o

f Reportin g Facilities (% ) 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 repoiting 38 9 100. 0 No t Availabl e 4 9

manufactured
. Likewise , th e term s company an dfirmar e use dsynonymously andrefer t o di e lega l busines s entitie s tha

t own th e facilities
. A s see n i n Figur e 2-9 , th e chai n of

ownershi p ma

y b e a s simpl e a s on e facilit

y owne dby on e company o r a s comple x a s multipl e facilitie s owne dby subsidiar y companies
. Potentiall y affectedfirms includ e entitie s that own facilitie s manufacturin g reinforce d plastics
. 35 7 companie s ow n th e 43 8 major sourc e facilitie s andannua l sale s dat awere availabl e fo r 31 5 ofth e firms. 2 Base don th e availabl e smal l company sale s an demployment

observations , th e Agency als o estimate dsale s fo r 3 9 of th e 4 2 remainin g companie s by calculatin g th e ratio of sale s t o employmen

t fo r eac h SI C cod e andapplyin g di e appropriate rati o t o th e number of employee s fo

r eac h company without

sale s data
. Appendi x A list s tiiese companie s andthei r sale s andemploymen

t figure s where available
. 2.6.1 Size Distribution Fir msiz e i s likel y t o b e afactor i n th e distributio n of

th e regulator

y action' s financia

l impacts
. Th e 35 7 firms ownin g th e 43 8 manufacturin g facilitie s rang e i n siz e from3 t o 647,00 0 employees
. Tabl e 2-1 4 show s th e siz e distributio n of potentiall y affecte dfirms by total employment
. Th e majorit

y of firms (7 8 percen t

of thos e wit h employment

data ) hav e 50 0 employee s or

fewer
. Only 5 percen t

repor t employmen t

betwee n 50 0 and1,000 , whil e

2Thre e facilitie s (firms ) hav e close dsinc e 1997 , th e baselin e yea r o f th e economi c analysis
. 2-3 1P.4 3

Tabl e 2-15 . Distributio n of Potentiall y Affecte d Firm s B y Sale s Compan y Sale s Les s tha n $5 M $5Mto$10 M $10Mto$25 M $25Mto$50 M $50Mto$100 M $100Mto$250 M $250Mto$500 M $500Mto$l B $1 B o r greate r Tota l No t Availabl e Numbe r o f Firm s 12 7 6 5 5 2 28 2 0 1 2 1 3 6 3 1 354 3 Shar

e o f Tota l (% ) 36. 0 18. 4 14. 7 7: 9 5. 6 3. 4 3. 7 1. 7 8. 8 100. 0

, subsidiarie s an ddivision s listed
. Mos t ar e par t o f larger firms o r holdin g companie s that

ar e involve di n several 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 dby th e Smal l Busines s Regulator y Enforcement

Fairnes s Ac t

(SBREFA ) o f

199 6 require s tha

t th e Agenc y giv e special 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 small businesse s affectedb 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 afo r th e 43 8 affecte d manufacturer s identifie di n th e industr y screenin g surve y (EPA , 1993) :

• Busines s andCompan

y ProFil e (Informatio n Acces s Corporation , 1998 )

• Dun andBradstree 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 )
2-34P.4 4

• Worldscop e (Disclosur e Inc. , 1998 )

• Standard& Poor' s Corporation s (Dialo g Informatio n Service , 1997 )

• Manufacturin g US A (Gal e Research , 1996 )

• Compan

y 10- K Report s We identifie dth e ultimat

e parent company andobtaine dsale s an demployment

dat afor companie s fo

r whic h dataar

e available
. Base don availabl e secondar y data , th e Agenc y ha s determine dtha

t 35 7 parent

companie s ar e affecte dby th e regulation
. Employmen t dat acoul db e obtaine dfro

mth e abov e source s fo

r 35 0 of thes e paren t

compame s (9 8 percent)
. Th e Smal l Busines s Administratio n (SBA ) define s small businesse s base do n 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 db y di e industr y survey . A s shown , th e smal l busines s definitio n fo r th e RP C industr

y range s from 50 0 to 1,00

0 employees
. We develope dacompany' s siz e standar dbase do n th e reporte dSI C cod e for it s facilities
. I

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

• In case s wher

e companie s ow n facilitie s wit h multipl e SICs , th e mos t

conservativ e SB A definitio n wa s used
. Fo r example , if

acompany owne dfacilitie s withi n SIC s 371 4 (siz e standar

d= 75 0 employees ) and308 9 (siz e standard= 50 0 employees) , w e assume ddi e siz e standardt o b e 75 0 employees
.
• Thirty-eight

facilitie s repor

t a n SI C cod e o f

3079
. T o ou

r knowledge , thi s SIC cod e i s no t currentl y used
. Therefore , w e assigne dSI C 308 9 to thes e facilities
.
• Twenty-fou

r facilitie s repor

t n o SI C code
. W e assigne dthes e facilitie s di e mos t conservativ e siz e standar

dof 1,00 0 employees
. Base don di e SBA' s definitions , 27 9 companie s ou t of 35 7 (7 8 percent ) wer e identifie da s small , a s Figure 2-1 0 shows
. Thes e companie s ow n 30 5 facilitie s (7 0 percen t o f al l RP C facilities)
. Appendi x A list s th e companie s identifie da s smal l for thi s analysis
.

2-3 5P.4 5

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 0 750 , 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 6P.4 6

Smal l Busines s 78 % Large . Busines s 22 %

Figur e 2-10 . RP C Firm s b y Siz e

2-37P.4 7

Th e engineerin g analysi s provide destimate s of total annua

l complianc e cost s associate d wit h th e require dpollutio n contro l equipment o r les s pollutio n intensiv e metho dthat bring s eac h facilit y into complianc e wit

h th e final standards
. Note , however , that thi s cos t estimat e doe s no t account fo r behavioral response s (i.e. , change s i n pric e an doutpu t rates)
. Instea dthes e estimate s ar e input s t o th e economi c mode l a s describe di n Sectio n 4 an dinclud e th e following :

• th e capita

l cost s associate dwit

h ne w contro l equipmen t

a s appropriatel y annualize d ove r th e equipmen t

lifetime a t a7 percen t

discoun t rate , an d

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

of energ y require dt o operate contro l equipment , material s replacemen t

cost s (replacemen t

of existin g resins/gelcoat s wit h alo w HA P resin/ge l coat) , andotiier

administrativ e cost s associate dwit h monitoring , recordkeeping , an d reporting
. Th e nationwid e complianc e cos t estimate s fo

r th e require dcontrol s unde r eac h regulator

y alternativ e are a s follows: 1

• recommende dalternative—$21. 5 million ;

• MAC T floor—$20. 8 million ; an d

• above-the-MAC T floor—$216. 8 million
.

'Al l dolla ramount

s are expresse d i n $1997 . 3- 2P.4 8

SECTIO N 4 ECONOMI C IMPAC T ANALYSI S

Th e propose dNESHAP require s producer s of RPC s tha t us e selecte dthermosettin g resin s t o mee t

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 captur e pollutant s now 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 financia

l implication s fo

r th e affectedproducers
. They wil l hav e broader societa l implication s becaus e thes e effect s are transmitte dthroug h marke t relationship s to other producer s an dconsumers . Thes e potential economi c impact s ar e th e subjec t

o f thi s section
. EP A examine dthre e regulator y alternative s fo

r addressin g di e proble mo f HA P release s fro mtiiese sources : 1 ) th e MAC T floo

r applie dt o al l sources , , 2 ) above-the-floor

control s applie dt o all sources , an d 3 ) th e recommende dalternativ e tha t applie s contro l cost s a s follows : In th e propose drul e there wer e differen t emissio n threshold s abov e whic h a n existin g facilit y hadt o comply wit

h mor e stringent above-the-floo r

requirement s o f

9 5 percen t

capture andcontrol
. Thi s threshol dwa s 25 0 tp y of HA P emission s fo

r smal l businesse s an donly 100 tp y fo r larg e businesses
. I

n thi s final rule , w e hav e remove ddi e above-the-floo r captur e andcontro l requirement s fo

r existin g facilitie s excep t

for centrifuga

l castin g an dcontinuou s lamination/castin g an

dw e hav e establishe dathreshol dof 100 tp y for

al l facilities
. Thi s sectio n provide s result s fo

r eac h alternative
. T o measur

e di e siz e an

ddistributio n o f

th e economi c impact s o f

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

h thos e for

th e counterfactual or with-regulatio n condition s expecte dt o resul t fromimplementin g eac h alternative
. Th e mai n element s of

thi s analysi s ar e

• identificatio n of

market s fo

r RP C product s an ddescriptio n o f firmbehavio r

withi n thes e markets ;

• economi c characterizatio n o f th e regulate dfacilitie s i n term s o f whether they ar e a commercia

l o r captiv e producer , commodit y produced , andcos t

of production ; 4- 1P.4 9

• characterizatio n of

baselin e deman dfo r

eac h product ;

• developmen t

o f a n economi c mode l that

evaluate s behavioral response s t o additional cost s o f regulatio n i n amarke t

context ; an d

• presentatio n an

dinterpretatio n of

economi c impac t

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

y of product s tha t

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

• Aircraft/Military : flight 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 , computer housings , calculators , etc .

• Construction : swimmin g pools , rai n gutters , mold s for concrete , bathtubs , showe r stalls , whirlpools , spas , highwa y signs , coolin g towe r

components , panelin g for greenhouses , patios , railing s andother architectural component s

• Consumer

Products : fishin g rods , gol f clubs , skis , tenni s rackets , furniture , campers , snowmobiles , exercis e equipment , seating , counte r tops , servin g trays , boxe s an d containers , 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 other chemical resistan t

product s for

us e i n th e waste/wastewater

treatment , chemical processing , semiconductor , an dpetrochemical 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 , andmany other

electrical an delectroni c application s

• Lan dTransportation : bod y panel s for

cars , buses , an dtracto r

trailers , truc k

cabs , boxca r doors , subwa

y seating , heate r

housings , front

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

liners , instrumen t panels , an dother divers e part s an daccessorie s for lan dtransportatio n an dutilit y vehicle s

• Other : al l otiie

r composite s applications , includin g th e repair/replacemen t o f component s of

th e civi l infrastructure suc h a s guardrails , sig n posts , an dstructural support s fo

r highway s an dbridge s

4- 2P.5 0

Some of th e directl y affectedoperation s ar e performe da s par

t of larger integrate d process . Thes e captiv e producer s do no t engag e i n commercial transaction s involvin g th e RP C product
. They produc e andsel l aproduc t (e.g. , appliances ) tiiat

incorporate s th e RP C produc t tha t they als o produce
. Other

RP C producer s d o sel l thei r product s in th e marke t

where th e RP C produc t i s use da s a

n inpu t t o anothe r product , whic h als o coul db e applianc e manufacture
. Presumably , eac h producer ha s conducte da"make o r buy " decision , som

e decidin g to buy th e RP C commodity , other s t o self-produc e it
. Eac h o f th e produc t

group s abov e i s take n a s aseparat e composite commodit y wit h a singl e pric e an duniqu e supply an ddemandcharacterization
. In additio n t o thes e segments , sufficien t marke t informatio n i s availabl e t o separate th e constructio n segment int o thre e distinc t end-us e markets—general construction , plumbin g fixtures , andpanels
. Operatin g a t thi s broa d leve l of produc t aggregatio n whe n there are literall y thousand s o f specifi c product s obviousl y mask s baselin e pric e difference s an dmarket shift s withi n eac h segment . However , withou t substantia l additional 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

RP C product s wer e shippe di n 1997 to domesti c andforeig n consumer s in thes e markets
. Base do n industr y surve y response s an dhistorical averag e growti i rates , EP A estimate dthat

1. 4 billio n pound s of

RPCs , o r 4 5 percent of th e tota l shipments , wer

e manufacture db y facilitie s directi y affectedb y th e regulation
. Facilitie s usin g unaffecte dresin s (i.e. , thermoplastic s o r unaffecte dthermosets ) produce d1.

7 bilUo n pound s of

RPCs
. Bot h segment s includ e "in-house " productio n o f RPC s b y captiv e facilitie s andmerchan t productio n by commercia

l RP C suppliers
. Th e captiv e facilitie s ar e likel y t o b e owne db y large r integrate dfirms manufacturin g durabl e products , whil e th e commercial facilitie s are typicall y smalle r specialt y firms
. Given limite ddat aon th e typ e of facility , di e Agenc y approximate dthi s distributio n by usin g th e SB A criteri afo r larg e an dsmal l businesses
. In th e directl y affecte d segment , facilitie s owne db y larg e businesse s are assume dt o b e captivel y owne dan doperated
. Facilitie s owne dby smal l businesse s ar e assume dt o b e merchan t

producers
. Fo r

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

559. 9 millio n pound s o f

regulate d thermose t RPC s were exchange din market s durin g 1997 , o r 3 9 percen t

ofth e directl y affecte d segment . Captively produce dresin s tha t ar e directi y affecte db y th e regulatio n accounte dfo r di e remainin g 859. 8 milho n pounds
. A s show n i n Tabl e 4-1 , th e sam e merchant/captiv e proportion s

4- 3P.5 1

Tabl e 4-1 . Reinforce d Plastic s Composite s Shipment s b y End-Us e Market : 199 7 (10 * lbs) a

End-Us e Marke t Aircraft/aerospac e Appliances/busines s equip
. General constructio n Plumbin g fixture s Panel s Consumer

product s Corrosion-resistan t

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

Merchan t 0. 5 12. 0 44. 6 172. 7 22. 7 31. 0 120. 6 18. 0 116. 6 21. 3 559. 9 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 0

Merchan t 1. 6 96. 1 18. 0 0. 0 14. 5 43. 8 194. 6 45. 2 226. 8 36. 9 677. 6 Captiv e

16. 6 ' 68. 4 29. 0 0. 0 64. 6 79. 2 49 r 9 203. 6 496. 4 33. 4 1,041. 1

* Include s weight

o f resin , reinforcements , an

dfillers
. Total s ma

y no t su mdu e t o independen t

rounding
. b Estimate s base do n projecte dfaciht y dat adevelope dfro

mIC Rsurvey response s an dhistorica l averag e annual outpu t rates . Th e merchant/captiv e distributio n wa s determine db y th e siz e o f th e ownin g compan y (i.e. , larg e = captiv e an dsmal l = merchant)
. , c Compute da s th e differenc e betwee n total shipment s an ddirectl y affectedshipments
. Merchant/captiv e quantitie s > were calculate dusin g th e sam e merchant

/ captiv e rati o observe dfo

r th e affecte dsegment . ' 6 EP A estimate
. Source : Societ

y o f Plastic s Industry , Inc
. 1998
. Facts and Figures ofthe U.S. Plastic Industry. 1998Edition. SPI , Washington , DC : Septembe r 1998
.

ar e applie d t o th e indirectl y affecte d segment . Th e directl y an d indirectl y affecte d merchan t suppl y the n constitute s th e marke t quantit y for eac h RP C produc t

a s show n i n Tabl e 4-2
. Publicl y availabl e dat ao n marke t price s fo

r RPC s a t thi s leve l of

aggregatio n doe s no t exist
. Absent

thes e data , EPA compute d marke t price s for

eac h marke t

segmen t

b y takin g th e highes t value s tha

t resul t fromth e multiplicatio n of th e facility-specifi c cost s o f material s (i.e. , resins , fillers , and reinforcements) 1 b y th e U.S
. Censu s Burea u estimat e o f

th e averag e rati o o f sale s t o costs-of-material s fo r NAIC S cod e 326199 A (reinforce d an d fiberglas s plastic s products ,

1 Given th e Umite

ddat ao n us e of

thes e material s b y market , th e Agenc y compute daweighte daverag e pric e ($1.0 0 per poun dresin , $1.2 5 pe r

poun dreinforcement , an d$0.0 9 pe r poun dfo r filler ) an dapplie di t

t o estimat e materia l cost s fo r eac h producer

wit h th e exceptio n of

aerospace/military
. I n that case , EPA use d dat ao n carbo n reinforcement price s only
. 4-

4P.5 2

Tabl e 4-2 . Estimate d Marke tQuantitie s and Price s fo r Reinforce d Plastic s Composite s b y Produc tGroup : 199 7

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 Landtransportatio 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 18.04 112.2 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 7 194.4 7 45.2 3 222.2 2 36.9 5 672.8 6 Total

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 th e per-uni t estimate s of

th e facility-specifi c cost s o f material s (i.e. , resins , fillers , an dreinforcements ) by th e U.S
. Censu s estimat e 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
. Th e uni t cos t bf th e highes t cos t supplier i n eac h market

wa s assume dt o b e equa

l t o th e commodit

y pric e fo r tha t market segment . nee) , whic h wa s 2.28
. Assumin g perfec t competitio n for

thi s analysis , th e resultin g sale s estimate i s deeme da s th e bes t approximatio n o

f facility-specifi c pricin g witi i th e highes t (o r marginal ) supplier

i n eac h market

determinin g marke t

price
. Tabl e 4- 2 present s th e estimate d price s fo r RPC s in 199 7 fo

r eac h RP C produc t

groupin g a s wel l a s di e directi y an dindirectl y affectedmarke t

quantities
. Th e Agenc y acknowledge s th e limitation s of thi s metho dan dit s potential t o under o r ove r state industry-leve l revenues . Therefore , w e performe daconsistenc y chec k usin g Censu s ' datat o determin e whetiie

r thes e price s provid e areasonabl e first approximatio n o

f industr y revenues . Usin g th e price s andshipment dat aprovide di n Table s 4- 1 an d4-2 , th e implie d industr y revenu e i s approximatel y $11. 4 billio n dollars
. Unfortunately , there i s n o directi y comparabl e Censu s industr y cod e that

provide s simila

r revenu e data
. Instead , w e generate a proxy Censu s revenu e estimate usin g averag e shipment s pe r employe e ($164,000 ) fo

r NAIC S code 326199 A (reinforce dandfiberglass products , nee ) andEPA estimate s of total industr

y employmen

t base do n IC Rsurvey response s (69,00 0 employees)
. Thi s prox y i s approximatel y

4- 5P.5 3

$11. 2 billio n dollars , whic h i s th e same orde r o f magnitud e a s our

revenu e estimat e generate d fromth e compute dmarke t prices
. Marke t impact s of

th e regulatio n are conditional o n th e behavio r o f firms
. Fo r

thi s analysis , firms ar

e viewe da s aprice-takers ; tha t is , eac h firmtake s th e marke t pric e a s given
. Thi s assumptio n of

"perfec t competition " seem s appropriat e give n th e numbe r an ddistributio n o f buyer s an dseller s o

f RPC s acros s th e Unite dState s an dth e reasonabl y homogeneou s natur e of RP C products
. Therefore , th e Agenc y modele dte n national , perfectl y competitiv e market s base do n th e produc t

group s identifie dabove
. ' 4. 2 Producers , Costs , an d Suppl y A s describe dabove , RP C facilitie s are classifie dint o tw o type s of producers : captiv e o r merchant
. Several factor s woul dsugges t that th e impac t

o f th e regulatio n o n th e choice s o f captiv e producer s (i.e. , th e us e of "in-house " RPC s productio n methods , substitut e materials , an d
1 i RP C outpu t

levels ) i s smal l becaus e RPC s typicall y represen t asmal l cos t

share of thei r final products
. I n addition , qualit y an dcontro l issue s ma

y preclud e thes e operation s fro mobtainin g RPC s fro moutsid e suppliers
. Therefore , th e marke t analysi s focuse s onl y o n th e merchan t segment of RP C production
. Tw o type s of

merchant supplier s operat e i n thes e markets :

• facilitie s directi y affectedby th e regulatio n becaus e they fac e additional.cost s witi i th e implementatio n of

th e NESHA P an d

• facilitie s indirecti y affectedby th e regulatio n becaus e the y produc e aclos e substitut e fo r th e product s produce dby th e regulate dentities
. Althoug h thi s secon dtyp e o f supplier doe s no t incu r additional contro l costs , i t wil l b e affecte d by an y change s i n marke t

price s tiiat

occur wit h th e regulation
. Th e engineerin g analysi s projecte deac h directi y affectedfacihty' s 199 7 product-lin e quantitie s base do n th e Informatio n Collectio n Reques t

(ICR ) survey dat aandhistorical industr y averag e annual outpu t

growt h rates . Eac h individual merchant

facilit y i s include di n th e economi c model
. Th e outpu t fromindirecti y affecte dproducer s i s th e differenc e betwee n tota l merchan t shipment s produce dan dthat fro m affectedproducer s (se e Tabl e 4-1)
. Absent adetaile dcharacterizatio n o f thes e producer s an d becaus e they ar

e no t subjec t t o th e regulation , thi s componen t o f suppl y wa s include di n th e economi c model a s asingl e representativ e supplie r wit h ageneral functiona

l for mtha t allow s fo r increase s i n thei r

productio n i n respons e t o pric e increase s (se e Appendi x B for details)
. Fo r affectedfacilities , th e Agenc y develope duni t cos t curve s for

eac h RP C produc t

lin e base do n th e reporte dproductio n an dth e associate dmarke t

pric e fromTabl e 4- 2 (se e
4- 6P.5 4

Appendi x B fo

r details)
. Given fixedfactor s of 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 suppl y function , a s show n i n Figur e 4-1
. I

n thi s case , th e supply functio n i s tha t portio n o f th e marginal cos t curv e bounde dby zero an

dth e technical 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 u p t o thei r

outpu t level
. Supplier s selec t

thei r outpu t 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 hig h t o cove r

averag e variabl e cost s (i.e. , greater tha n C 0 in Figure 4-1 ) an dth e resultin g revenu e surplu s i s larg e enoug h t o cover

an y fixedcosts . I

f th e marke t

pric e fall s belo w th e minimu maverag e variabl e costs , the n th e firm's bes t

respons e i s t o ceas e productio n becaus e tota l revenu e doe s no t

cover th e total variabl e cost s of

production
. Thes e individual supply decision s are the n aggregate d (i.e. , horizontall y summed ) to develo p th e marke t supply curve . Onc e w e appl y thi s characterizatio n o

f th e supply functio n t o eac h affectedproducer , w e deriv e thei r productio n cost s by takin g th e integra

l of th e are aunder

th e curv e correspondin g t o thei r productio n rat e an d market price
. 

### $/l b

lbs/yea r Figure 4-1 . Supply Curv e fo r a Representativ e Directl y Affecte d Merchan tFacility

4-7P.5 5

A s detaile di

n Appendi x B , thi s analysi s employ s a n "intermediate " ru n analysi s i n whic h some 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 of assumin g th e ver

y shor t ru n o r th e lon g run . Th e ver

y shor t ru n i s a cas e in whic h al l factor s o f productio n ar e fixedan

dproducer s are unabl e t o respon dand , thus , incu r aone-to-on e reductio n i n profit s du e t o regulation , whil e th e lon g ru n i s acas e i n whic h all factor s ar e variabl e an dal l regulator y cost s ar e passe don t o consumers . Therefore , our modelin g approac h addresse s economi c viabilit y fo r bot h th e short-ru n criteri a(i.e. , product-lin e revenue s cove r

al l variabl e costs ) an dth e long-ru n criteri a(i.e. , facilit y revenue s cove r

tota l costs)
. 4. 3 Consumers , Value , an d Deman d Tw o type s of

consumer s us e RP C products :

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

• othe r firm s that purchas e RPC s frommerchan t producers
. Larg e integrate dfirms consume RPC s manufacture dwithi n th e firm, an dn o explici t RP C deman di s reveale dthroug h amarke t transaction
. Rather , th e decisio n t o consum e RPC s produce d"in-house " i s th e resul t o f a"make or

buy " decisio n that

consider s th e valu e t o th e firm o f manufacturin g thes e input s a s oppose dt o purchasin g the moffsite
. Althoug h thes e choice s are no t explicitl y addresse di n th e economi c model , i t i s likel y tha t

thes e consumer s ar e les s responsiv e t o change s i n RP C cost s becaus e th e cos t share o f tota l productio n i s smal l an dthei r supply option s ma

y b e limite dfor

corporate or

technical reasons . A s aresult , th e impact s o n thes e producer s ar

e determine dusin g afull-cos t absorptio n approac h with th e estimate d regulator y cost s causin g adolla

r fo r dolla r reductio n i n thei r

profits
. A variet y of consumer s purchas e RP C product s commerciall y an dincorporat e the minto other higher-order

products
. Fo r

example , automobil e manufacturer s us e RP C bumper s an d interio r components ; electrical appliance s andelectroni c product s us e RPC s a s internal component s an dexternal housings
. Th e valu e of thes e product s depend s o n th e availabilit y and cos t of substitutio n fo

r th e produc t

(i.e. , meta

l instea dof

plastic) , th e feature s of

th e alternativ e produc t tha t affect it s degre e o f

substitutabilit

y i n higher-orde r

products , an dth e pric e o f di e higher-order

product
. Fo r th e economi c analysis , eac h commodit y marke t wa s modele da s havin g asingl e aggregat e consume r wit h adownward-slopin g marke t deman dcurv e (se e Figur e 4-2)
. Th e Agenc y constructe dthi s curv e for eac h RP C commodit

y usin g baselin e quantity , pric e data , an d

4- 8P.5 6

$A b

D
lbs/year Figur e 4-2 . Deman d Curve fo r RPC s
assumption 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 magnitud e o f thi s pric e responsivenes s includ e th e

• price-responsivenes s of th e en dproduc t

mad e wit h RPCs ,

• cos t share o f th e RP C inpu t

in tota l productio n o f

th e en dproduct , an

d

• eas e of

substitutio n betwee n thi s inpu t an dother input s in production
. Althoug h dat alimitation s prevent estimatio n of

thes e parameters , knowledg e about 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 consumer responsivenes s t o pric e change s in commercial markets
. I f w e assume or

expec t that th e

• deman delasticit y o f th e fina l commodit

y i s on e (i.e. , a1 percent

increas e in pric e result s i n a1 percen t

decreas e i n quantity demanded) ,

• cos t share of RPC s in tota

l productio n cos t

i s small , an d

• eas e of

substitutio n between input s difficult , the n th e elasticit

y of 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 dademan delasticit y of-0. 5 (i.e. , a1 percen t increase/decreas e in th e pric e o f RPC s
4- 9P.5 7

woul dresul t

i n a0. 5 percen t

decrease/increas e in th e quantit y o f RP C product s demanded)
. Appendi x B provide s adetaile ddescriptio n of th e equation s tha

t characteriz e th e marke t

deman d curves . 4. 4 Baselin e and With-Regulatio n Equilibriu m Th e competitiv e mode l of

pric e formation , a s show n in Figure 4- 3 (a) , posit s tha t marke t price s an dquantitie s ar

e determine db y th e intersectio n of th e marke t

suppl y an ddeman dcurves . Under th e baselin e scenario , amarke t pric e an dquantit

y (P,Q ) ar e determine dby th e downward-slopin g market deman dcurv e (D M ) andth e upward-slopin g marke t suppl y curv e (S M ) that reflect s th e sumo

f th e individual suppl y curve s o f directl y affectedan dindirectl y affecte d facilitie s that

produc e agive n 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 additional cost s includ e avariabl e component consistin g ofth e operatin g an

dmaintenanc e cost s an dafixedcomponent that doe s no t var y wit h outpu t (i.e. , expenditure s for

control-relate dcapita

l equipmen t

t o compl y wit

h th e regulatory alternative)
. Th e impositio n of

di e regulator

y contro l cost s i s represente da s a n upwardshif

t i n th e suppl y curv e fo r eac h directi y affecte dfacility
. A s aresul t of th e upwardshif

t i n thes e individua l supply curves , th e marke t

suppl y curv e fo

r RP C product s wil l shif

t upwar da s show n i n Figure 4-3(b ) t o reflec t

th e increase dcost s o f

productio n a

t facilitie s usin g thermose t

resins
. In baselin e withou t

th e propose dstandards , th e industr y produce s tota l output , Q , at price , P , wit

h directi y affecte dfacilitie s producin g th e amount q dandindirectl y affecte dfacilitie s accountin g fo

r Q minu s qd , o r

cjj
. Wit h th e regulation , th e marke t pric e increase s fromP t o P ' andmarke t

outpu t (a s determine dfromth e marke t deman dcurve , DM) decline s fromQ t o Q'
. Thi s reductio n i n market

outpu t i s th e ne t resul t o f reduction s a

t directl y affecte dfacilitie s an d increase s a

t indirecti y affecte dfacilities
. 4. 5 Result s Th e simpl e analytic s presente dabov e sugges t that , whe n face dwit

h highe r cost s o f RP C produc t production , producer s wil l attemp t t o mitigate thei r

impact s b y makin g adjustment s t o shif t a s much of

th e burde n o n other

economi c agent s a s marke t condition s allow
. Th e adjustment s availabl e t o facilit y operator s includ e changin g productio n processes , changin g inputs , changin g outpu t

rates , o r eve n closin g th e facility
. Thi s analysi s focuse s on th e las t tw o option s becaus e the

y appea r t o b e th e mos t

viabl e fo r RP C facilities , at

leas t i n th e near-term . A larg e segmen

t of th e RP C industr

y i s affecte db y th e regulation , an dw e woul dexpec t upwar d pressure o n price s a s producer s facin g highe r cost s reduc e outpu t

rate s i n respons e t o thes e costs . Change s i n market

price s and , throug h th e impac t of pric e on quantit

y demanded , outpu t

for eac h 4-1 0P.5 8



## + 

## P. "

I d Facilitie s Directl y Affecte d = P -

l i Facilitie s Indirectl y Affecte d Marke t

a ) Baselin e Equilibriu m

P ' P a d /

a d J



# ____/ / Y 

# y\y\ + p

i i / ^ 

## s\ "l? i i

q ' q q q ' Facilitie s Facilitie s Directl y Affecte d Indirectly Affecte d P '

= P 

# r _ . S

M V SM /

—y C /

~*^ 1 i D w 1-4- 1 i ' i Q ' Q Marke t

b ) With-Regulatio n Equilibriu m Figur e 4-3 . MarketEquilibriu m Withou tan d Wit h Regulatio n

4-1 1P.5 9

produc t wil l lea dt o change s in th e profitabilit y of produc t lines , facilities , an dfirms. Thes e marke t andindustr

y adjustment s wil l als o determin e th e social cost s o f th e regulation
. T o estimat e thes e economi c impacts , th e conceptual mode l describe dabov e wa s operationalize di n amultipl e spreadshee t model , a s detaile di n Appendi x B
. In summary , thi s mode l characterize s producer s andconsumer s o f eac h RP C produc t

an ddiei r behavioral response s t o th e impositio n of th e regulator

y complianc e costs . Thes e cost s are expresse dpe r poun dof RP C produc t

fo r eac h facilit

y andserv e a s th e inpu t

t o th e marke t

model , o r

"cost

shifters " of

th e baselin e supply curve s a t th e facility
. Give n thes e cost s for directl y affecte d facilities , th e mode l determine s anew equilibriu msolutio n i n acomparativ e stati c approac h wit h higher marke t price s andreduction s i n outpu t for eac h RP C 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 an dcontras t

thes e result s wit

h th e projecte dimpact s under th e MAC T floor

an dabove-the-MAC T floor alternatives
. 4.5.1 Market-Level

Impacts Th e increase dcos t

o f productio n du e t o th e regulatio n i s expecte dt o slightl y increas e th e pric e o f composite s an dmarginall y reduc e thei r production/consumptio n fro mbaselin e levels
. A s show n i n Tabl e 4-3 , di e recommende dalternativ e i s projecte dt o increas e th e averag e pric e o f RP C product s b y 0. 7 percent , o r $0.0 3 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 dRP C products
. Thi s substitut e i s RP C product s made fromthermoplasti c resins , whic h ar e no t subjec t t o th e regulation
. Wit h highe r RP C produc t prices , they are expecte dt o increas e productio n b y 0. 7 percent . Th e combine deffec t o f higher cost s du e t o regulatio n an dsubstitutio n t o unaffecte dRP C product s i s expecte dt o caus e a 1. 7 percen t reductio n i n productio n a

t regulate dfacilities
. Th e ne t resul t o f thes e reduction s a

t affectedfacilitie s andth e increase s a t unaffecte dfacilitie s i s amarke t declin e i n outpu t

of 0. 4 percent . Th e siz e of

th e projecte dpric e increas e fo r eac h commodit

y i s primaril y determine dby th e leve l an ddistributio n o f complianc e cost s incurre db y th e facilitie s manufacturin g thes e commodities
. I

n general , w e woul dexpec t market s wit

h highe r per-uni t variabl e complianc e cost s t o experienc e th e mos t significant

pric e changes
. A s show n i n Tabl e 4-4 , th e tw o market s wit h th e highes t

averag e per-uni t

complianc e cost s (corrosion-resistant , general construction ) als o se e th e mos t

significant

pric e change s (1. 6 and0. 6 percent , respectively)
. A n additional factor i n determinin g th e change s in marke t pric e i s th e marke t

shar e o f substitut e product s (i.e. , thermoplasti c RPCs)
. A s discusse dabove , thes e unaffecte dsupplier s ar e expecte dt o limi t th e
• abilit y of affecte dproducer s to pas s alon g cost s t o consumer s an dthereb y increas e marke t price
. 4-1 2Tabl e 4-3 . Market-Leve l Impact s o f th e Reinforce d Plasti c Composite s NESHA P Regulator y Alternatives : 199 7

Aircraft/Aerospac e Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected) Thermosets/Thermoplastic s (Indirectl y Affected ) Appliances/Busines s Equipmen t Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected) Thermosets/Thermoplastic s (Indirectl y Affected ) Genera l Constructio n Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected ) •** • Thermosets/Thermoplastic s (Indirecti y Affected ) 5^ J Plumbin g Fixture s Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Panel s Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected) Thermosets/Thermoplastic s (Indirectl y Affected ) Consume r Product s Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected) Thermosets/Thermoplastic s (Indirectl y Affected ) Baselin e $38.3 5 2. 1 0. 5 1. 6 $2.3 7 108. 1 1 2 96. 1 $3.4 6 62. 6 44. 6 1 8 $3.4 8 172. 7 172. 7

— $3.2 4 37. 2 22. 7 14. 6 $3.4 1 74. 7 3 1 43. 8 MAC T Floo r

Absolut e Chang e $0,00 3 0 0 0 $0,00 1 -0.0 2 -0.0 7 0.0 4 $0,02 0 -0.3 1 -0.4 1 0.1 1 $0,01 5 -0.3 7 -0.3 7

— $0,00 7 -0.0 4 -0.0 8 0.0 3 $0,01 7 -0.1 9 -0.4 1 0.2 2 Relativ e

Chang e 0.01 % 0.01 % -0.04 % 0.01 % 0.04 % -0.02 % -0.57 % 0.04 % 0.59 % -0.49 % -0.93 % 0.59 % 0.42 % -0.21 % -0.21 % NA 0.23 % -0.12 % -0.34 % 0.23 % 0.51 % -0.25 % -1.32 % 0.51 % Recommende d Alternativ e

Absolut e Chang e $0,003 0 0 0 $0,00 1 -0.0 2 -0.0 7 0.0 4 $0,02 0 -0.3 1 -0.4 1 0.1 1 $0,01 5 -0.3 7 -0.3 7

— $0,00 7 -0.0 4 -0.0 8 0.0 3 $0,01 7 -0.1 9 -0.4 1 0.2 2 Relativ e

Chang e 0.01 % 0.00 % -0.04 % 0.01 % 0.04 % -0.02 % -0.57 % 0.04 % 0.59 % -0.49 % -0.93 % 0.59 % 0.42 % -0.21 % -0.21 % N A 0.23 % -0.12 % -0.34 5 0.23 % 0.51 % -0.25 % -1.32 % 0.51 % Above-the-MACT-Floo r

Absolut e Chang e $0,03 3 0 0 0 $0,00 5 -0.1 2 -0.3 3 0.2 1 $0,40 4 -2.6 1 ^t.7 1 2. 1 $0,31 3 -7.2 7 -7.2 7

— $0.018 2 -1.0 0 -1.8 2 0.8 2 $0,26 3 -2.7 3 -6.1 1 3.3 8 Relativ e

Chang e 0.09 % -0.04 % -0.44 % 0.09 % 0.22 % -0.11 % -2.74 % 0.22 % 11.66 % -4.1 7 -10.56 % 11.66 % 8.99 % -4.21 % —4.21 % N A 5.60 % -2.69 % -8.01 % 5.60 % 7.72 % -3.65 % -19.73 % 7.72 % (continued )

### Table 4-3 . Market-Leve l Impact s ofth e Reinforce

d Plasti c Composite

s NESHA P Regulator

y Alternatives : 1997 (continued )

r—a Corrosion-Resistan t

Marke t Pric e (pe r

lb ) Marke t Quantit y (Million s lbs/yr ) Thermoset s (Directi y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Electrical/Electri c Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected ) Thermosets/Thennoplastic s (Indirectl y Affected ) Lan d Transportatio n Marke t Pric e (pe r

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

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Tota l Marke t Pric e (pe r

lb ) Marke t Quantity (Million s lbs/yr ) Thermoset s (Directl y Affected ) Thermosets/Thermoplastic s (Indirectl y Affected ) Baselin e $3.7 7 315. 2 120. 6 194. 6 $3.2 9 63. 3 1 8 45. 2 $3.4 4 343. 4 116. 6 226. 8 $3.4 1 58. 3 21. 3 36. 9 $3.4 8 1237. 5 559. 9 677. 6 MAC T Floo r

Absolut e Chang e $0,06 1 -2.6 1 -5.7 8 3.1 7 $0,00 5 -0.0 5 -0.1 3 0.0 7 $0,01 7 -0.8 8 -2.0 3 1.1 4 $0,01 2 -0.1 0 -0.2 3 0.1 3 $0,02 5 -4.5 9 -9.5 1 4.9 2 Relativ e

Chang e 1.63 % -0.83 % -4.79 % 1.63 % 0.16 % -0.08 % -0.71 % 0.16 % 0.50 % -0.26 % -1.74 % 0.50 % 0.34 % -0.18 %

- -1.07 % 0.34 % 0.72 % -0.37 % -1.70 % 0.73 % Recommende d Alternativ e

Absolut e Chang e $0,06 1 -2.6 1 -5.7 8 3.1 7 $0,00 5 -0.0 5 -0.1 3 0.0 7 $0,01 7 -0.8 8 -2.0 3 1.1 4 $0,01 2 -O.1 0 -0.2 3 0.1 3 $0,02 5 ^1.5 9 -9.5 1 4.9 2 Relativ e

Chang e 1.63 % -0.83 % -4.79 % 1.63 % 0.16 % -0.08 % -0.71 % 0.16 %

. 0.50 % -0.26 % -1.74 % 0.50 % 0.34 % -0.18 % -1.07 % 0.34 % 0.72 % -0.37 % -1.70 % 0.73 % Above-the-MACT-Floo r

Absolut e Chang e $0,21 3 -8.4 2 -19.4 0 10.9 8 $0,16 6 -1.9 4 -4.2 2 2.2 9 $0,23 1 -11.2 7 -26.4 8 15.2 1 $0,19 6 -4.9 0 -7.0 2 2.1 2 $0,22 0 -40.2 5 -77.3 6 37. 1 Relativ e

Chang e 5.64 % -2.67 % -16.08 % 5.64 % 5.06 % -3.06 % -23.42 % 5.06 % 6.71 % -3.28 % -22.72 % 6.71 % 5.74 % -8.41 % -32.89 % 5.74 % 6.34 % -3.25 % -13.82 % 5.48 %

### Table 4-4 . Summar y of Complianc

e Cost s an d Marke tPrice Changes : 199

7 ($/lb )

Aircraft / Aerospac e Appliances / Busines s Equipmen t Genera l Constructio n Plumbin g Fixture s Panel s [ ^ Consume r ± Product s Corrosion

Resistan t Electrical/ Electri c Lan d Transportatio n MisceUaneou s Tota l Directl y

Affecte d Shar e 24 % 11 %

71 % 100 % 61 % 41 % 38 % 29 % 34 % 37 % 45 % MAC T Floo r

Incrementa l Variabl e Complianc e Cos t Mea n $0.0 2 $0.0 1
$0.0 6 $0.0 2 $0.0 1 $0.0 4 $0.1 3 $0.0 2 $0.0 5 $0.0 4 $0.0 6 Ma x $0.0 2 $0.0 4
$0.4 8 $0.4 6 $0.0 5 $0.1 5 $1.0 8 $0.0 7 $0.2 0 $0.0 7 $1.0 8 Standar d Deviatio n N A $0.0 2
$0.1 0 $0.0 5 $0.0 1 $0.0 4 $0.2 0 $0.0 2 $0.0 4 $0.0 2 $0.1 2 Marke tPric e

Chang e Absolut e <$0.0 1 <$0.0 1
$0.0 2 $0.0 2 <$0.0 1 $0.0 2 $0.0 6 <$0.0 1 $0.0 2 $0.0 1 $0.0 3 Relativ e

<0.1 % <0.1 %

0.6 % 0.4 % 0.2 % 0.5 % 1.6 % 0.2 % 0.5 % 0.3 % Recommende d Alternativ e

Incrementa l Variabl e CompUance Cos t Mea n $0.0 2 $0.0 1
$0.0 6 $0.0 2 $0.0 1 $0.0 4 $0.1 3 $0.0 2 $0.0 5 $0.0 4 0.7 % | $0.0 6 Ma x

$0.0 2 $0.0 4
$0.4 8 $0.4 6 $0.0 5 $0.1 5 $1.0 8 $0.0 7 $0.2 0 $0.0 7 $1.0 8 Standar d Deviatio n NA $0.0 2
$0.0 0 $0.0 5 $0.0 1 $0.0 4 $0.2 0 $0.0 2 $0.0 4 $0.0 2 $0.1 2 Marke tPric e

Chang e Absolut e <$0.0 1 <$0.0 1
$0.0 2 $0.0 2 <$0.0 1 $0.0 2 $0.0 6 <$0.0 1 $0.0 2 $0.0 1 $0.0 3 Relativ e

<0.1 % <0.1 %

0.6 % 0.4 % 0.2 % 0.5 % 1.6 % 0.2 % 0.5 % 0.3 % 0.7 % Above-the-MACT-Floo r

Incrementa l Variabl e CompUance Cos t Mea n $0.2 0 $0.0 9
$0.2 7 $0.6 8 $0.1 6 $0.3 5 $0.4 7 $0.1 3 $0.2 5 $0.2 5 $0.4 0 Ma x $0.2 0 $0.2 6
$0.9 6 $51.8 5 $1.2 0 $2.0 4 $2.2 0 $0.4 9 $1.0 8 $0.7 6 $51.8 5 Standar d Deviatio n N A $0.1 5
$0.2 5 $5.4 0 $0.3 1 $0.4 6 $0.4 2 $0.1 2 $0.2 2 $0.2 2 $2.4 2 Marke tPric e

Chang e Absolut e $0.0 3 $0.0 1
$0.4 0 $0.3 1 $0.18

. $0.2 6 $0.2 1 $0.1 7 $0.2 3 $0.2 0 $0.2 2 Relativ e

<0.1 % 0.2 %

11.7 % 9.0 % 5.6 % 7.7 % 5.6 % 5.0 % 6.7 % 5.7 % 6.3 % NA : Notapplicable . Onl y on e facilit

y i s affecte

d in this marke

tP.6 3

A s show n i n Tabl e 4-4 , th e smalle r pric e change s occur

i n market s where th e shar e of affected supply i s smal l (i.e. , les s tha n 2 5 percent)
. Finally , th e numbe r an ddistributio n o f

projecte d closure s als o influence s th e siz e o f th e marke t

pric e increases
. I

f facilitie s tha t

ar e projecte dt o clos e accoun t

for significant

share s of baselin e marke t

production , w e woul dexpec t t o se e higher pric e increase s (al l els e equal)
. A revie w o f

th e result s under

th e recommende dalternativ e show s th e projecte dmarke t impact s i n th e corrosio n resistan t marke t ar e consisten t

wit h our expectations
. First , th e facilitie s i n thi s marke t

hav e highe r

averag e per-uni t

variabl e complianc e costs , i.e. , $0.1 3 pe r poun d compare dt o industr

y averag e o f

$0.0 6 pe r pound
. Second , th e marke t shar e o f affecte dproduct s i s lo w (3 8 percen t

compare dto a

n industr y averag e o

f 4 5 percent)
. A s aresult , affecte d producer s i n thi s marke t

fac e more competitio n fromunaffecte dsource s whic h limit s thei r abilit y t o pas s o n cost s t o consumers . It follow s tha t

th e mode l project s 4 8 potentia l produc t lin e closure s i n th e corrosio n resistan t marke t (54 % of total projectio n of

89)
. Thes e line s accounte d fo r approximatel y 2 percen t

o f total baselin e marke t

outpu t arid are produce dat

3 3 facilitie s nationwide
. Th e other regulator y alternative s hav e simila

r directional effect s o n pric e an dquantit y (i.e. , higher

price , decline s in output)
. Th e expecte dpric e andquantit y adjustment s under

th e recommende dan dMAC T floor alternative s ar e ver

y simila r becaus e mos t

o f thes e facilitie s d o no t require th e above-the-floo r control s under

th e recommende dalternative
. However , subjectin g al l facilitie s t o th e above-the-MAC T floor alternativ e i s projecte dt o heighte n th e increas e i n RP C marke t

price s (i.e. , 6. 3 percen t

increas e vs . 0. 7 percen t

unde r th e recommende d alternative ) an

dth e declin e in marke t

quantit y (i.e. , 3. 3 percen t

declin e vs . 0. 4 percen t

under th e recommende dalternative)
. Furthermore , th e above-the-MAC T floor alternativ e show s greater displacement

of marke t productio n wit

h affectedproducer s reducin g outpu t b y 13. 8 percen t

a s oppose dt o th e 1.

7 percen t declin e projecte dunder

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 o f

th e regulation
. A s aresul t o f thes e changes , w e projec t anet increas e in RP C industr

y pre-tax earning s by $1 2 millio n (se e Tabl e 4-5 ) unde r th e recommende d alternativ e becaus e th e gain s of th e unregulate dresi n producer s (totalin g $1 8 million ) outweig h th e losse s of

th e regulate dproducer s (totallin g $ 6 million)
. I n addition , 3 6 facilitie s an d89 ' produc t line s ar e projecte dto prematurel y clos e du e t o th e rul e wit h losse s i n employmen t totalin g 1,29

7 employees
. Th e ne t

los s in employmen t

woul db e 1,07 5 a s unaffecte dproducer s hir e additional workers
. 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 of

th e more stringen t

alternativ e ar

e significantl y higher
. Th e followin g 4-1 6

### Table 4-5 . Industry-Leve l Impact s of Reinforce d Plasti c Composite

s NESHA P Regulator

y Alternatives : 1997

4*
. i O Merchan tThermose tProducer s (Directl y Affected )

Revenue s ($10 6/yr ) Cost s ($10 6/yr ) Complianc e Productio n Pre-tax earning s ($10 6/yr ) Operatin g Entitie s Produc t Line s Facilities * Employmen t Captiv e Thermose tProducer s Pre-tax earning s ($10 6/yr) b Operatin g Entitie s Facilitie s Employment ' Thermoset/Thermoplasti c Producer s (Indirectl y Affected ) Pre-tax earning s ($10 6/yr ) Employmen t Al l Producer s Pre-tax earning s ($10°/yr ) Employmen t

1 Baselin e

- $1,97 0 $1,88 3

— $1,88 3 $8 6
46 6 30 1 18,42 0
N A
13 3 20,26 3

NA 30,66 8
NA 69.35 1 MAC T Floo r

Absolut e Chang e -$2 1 -$2 5 $8. 1 -$3 3 -$ 4
-8 9 -3 6 -1,29 7 -$1 0
-1 0 N A

N A 22 2 $1 2 -1.07 5 Percentag e

Chang e -1.07 % -1.33 % NA -1.76 % -4.6 %
-19.10 % -11.96 % -7.04 %

- N A
-7.5 % N A

NA 0.73 %
N A -1.55 % Recommende d Alternativ e

Absolut e Chang e -$2 1 -$2 5 $8. 1 -$3 3 -$ 4

-« 9 -3 6 -1,29 7 -$1 0
-1 0 N A
$1 8 22 2 -$1 2 -1.07 5 Percentag e

Chang e -1.07 % -1.33 % N A -1.76 % -4.62 %
19.10 % -11.96 % -7.04 %

. NA
-7.5 % "NA

N A 0.73 %
N A -1.55 % Above-the-MACT-Floor

Absolut e Chang e -$14 6 -$20 7 $49. 4 -$25 6 $6 1
-31 5 -17 9 -5,97 5 -$8 3
-6 3 NA
$13 5 1,67 9 $11 3 -4,29 6 Percentag e

Chang e -7.39 % -10.96 % N A -13.59 % -70.59 %
-«7.60 % -59.47 % -32.44 %
N A
-47.0 % N A

N A NA
N A 5.48 %

' Fou r o f th e 30 5 facihtie s owne db y smal l companie s are exclude dfromth e marke t analysis
. The y ar e eithe r treate da s captiv e producer s becaus e the y performonl y intermediat e operation s suc h a s compoundin g o r the y hav e insufficient

dat at o includ e i n th e marke t model
. b Chang e i n profi t

i s equal t o th e engineerin g cos t estimate
. c Althoug h thes e producer s incu r complianc e costs , EPA di dno t projec t change s i n employmen tP.6 5

section s discus s thes e industry-leve l impact s i n detai l wit h additional emphasi s o n th e rule's , distributional impacts
. 4.5.2.1 Changes in Pre-Tax Earnings Th e projecte dchang e i n pre-tax earning s i s th e ne t resul t of change s for

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 fo

r marke t adjustments , th e directl y affectedmerchant producer s are expecte dt o incur $8: 1 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 dindividual an dmarke t responses , th e economi c analysi s estimate s th e ne t effec t o f revenu e andcos t

change s for

thes e producer s t o resul t

i n aincreas e i n pre-ta x earning s o f $ 4 millio n pe r

year . Thi s ne t

gai n result s fro

mincrease drevenue s associate dwit h thei r gaj n i n market shar e andth e highe r

price s associate dwit

h th e regulation
. Indirectl y affecte dproducer s als o se e increase s in pre-ta x earnin g o f $1 8 millio n pe r

year . Give n th e Agency' s inabilit y t o predic t higher price s for captiv e produce r

en dproduct s and , thus , shif t cost s t o thei r

ultimat e consumers , w e assume captiv e produce r profit s dechn e b y th e aggregate engineerin g estimat e o f complianc e cost s ($1 0 million)
. W e emphasi2£ th e projecte d$ 4 millio n increas e in'fo r directl y affecte dmerchan t producer s doe s no t

sugges t all of thes e thermose t

producer s wil l benefi t

wit h th e regulation
. T o ' th e contrary , th e economi c analysi s show s th e regulatio n create s bot h gainer s an dloser s within th e directl y affectedmerchan t segment . A s show n i n Tabl e 4-6 , asubstantial subse t o f th e merchant facilitie s are projecte dt o experienc e profi t increase s under

th e recommende d alternativ e (i.e. , Il l facilitie s representin g 3 7 percen t o f th e secto r tota l o f 30 1 facilities)
. Thei r gai n in pre-tax earning s i s projecte dt o b e $1 0 millio n annually
. However , th e majorit y o f directly affectedmerchan t

facilitie s (i.e. , 15 4 facilities , o r 5 1 percen t

o f th e secto r

total ) are projecte dt o experienc e pre-tax earning s losse s of $ 5 millio n pe r

year . Th e remainin g 3 6 facilitie s ar

e projecte dt o ceas e operation s and , thus , foreg o $ 1 millio n i n baselin e pre-tax earnings
. Base do n thi s distributiona l analysis , EP A conclude s th e directl y affecte dmerchan t facilitie s wit

h profit gain s wil l ten dt o hav e higher outpu t rate s (averag e o f

3. 6 millio n pound s pe r facility ) andlower

per-uni t complianc e cost s (<$0.0 1 pe r pound ) than th e negativel y affecte d facilities
. Facilitie s that

experienc e profi t

losse s or shutdow n ar e generall y lower-volum e facilitie s (averag e of

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 from$0.0 5 t o $0.3 3 pe r pound)
.

4-1 8Tabl e 4-6 . Distributiona l Impact s o n Merchan tThermose tProducer s Associate d with Reinforce d Plasti c

Composite s NESHA P Regulatory Alternatives : 199 7
MAC T Floo r Mor e Les s Profitabl e Profitabl e Closur e Tota l Recommende d Alternativ e Mor e Les s Profitabl e Profitabl e Closur e Tota l Above-the-MACT-Floo r Mor e Les s Profitabl e Profitabl e Closur e Tota l Facilities ' Productio n Tota l (IO 6 lbs/yr ) Averag e (lbs/facility ) 11 1
402. 8 3. 6 15 4

15 2 3 6 30 1

5. 1 56 0
0. 1 1. 9 U l

402. 8 3. 6 15 4

15 2 3 6 30 1

5. 1 56 0 0. 1 1. 9 8 8 3 4

409. 3 71. 2
4. 7 2. 1 17 9

79. 4
0. 4 30 1

56 0 1. 9 Complianc e Cost s Tota l ($10 6 /yr ) Averag e ($/lb ) Chang e in Pre-tax earning s ($10 6 /yr ) Chang e in Employmen t $1.5 2

$0,00 4
$1 0

3 9 $8.1 2 $0,05 3
-$ 5

-33 8 $1.6 7

$0,32 7
-$ 1

-99 9 $11. 3 $0,02 0
$ 4

-1,29 7 $1.5 2

$0,00 4
$1 0

3 9 $8.1 2 $0,053
-$ 5

-33 8 $1.6 7 $0,32 7

- -$ 1

-99 9 $11. 3 $0,02 0
$ 4

-1,29 7 $31.1 4

$0,07 6
$7 9

18 7 $23.9 9 $0,33 7
-$ 6

-15 6 $79.1 1

$0,99 6
-$1 2

-6,00 6 $134. 2

$0,24 0
$6 1

. -5.97 5

' Fou r o f th e 30 5 facilitie s owne db y smal l companie s are exclude dfro mth e marke t analysis
. The y ar e eithe r treate da s captiv e producer s becaus e the y perfor m onl y intermediat e operation s suc h a s compoundin g o r the y hav e insufficient

dat at o includ e i n th e marke t model
. Notes : More profitable—include s facilitie s wit h highe r pre-tax earning s wit

h th e regulatory alternatives
. Les s profitable—include s facilitie s wit h lowe r pre-tax earning s wit

h th e regulatory alternatives
. Closure—include s facilitie s tha t woul dceas e productio n wit h th e regulatory alternatives
.Th e other important distributional impac t

o f th e rul e that

merit s discussio n i s th e unambiguou s benefit s unregulate dresi n producer s experienc e at th e expens e o f

affecte d merchan t producer s andconsumer s of RP C products
. A s show n i n Tabl e 4-5 , thes e unaffecte d merchan t producers , mainl y thermoplasti c producers , 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-tax earning s of $1 8 millio n pe r

year . 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 of

profi t change s betwee n th e recommende dan dles s stringen t MAC T floor

alternative
. However , th e sam e conclusio n canno t b e draw n whe n examinin g th e above-the-MAC T floor

alternative
. Seventy-on e percen t o f th e affecte dmerchan t

producer s becom e les s profitabl e o r

clos e (profit

losse s o f $1 8 million) , an destimate s o f captiv e produce r profi t losse s increas e t o $8 3 million
. Only 2 9 percen t o f th e affecte dmerchan t

producer s becom e more profitabl e ($7 9 million) , whil e supplier s o f thermoplasti c RPC s experienc e alarg e increas e i n profit s ($13 5 million ) becaus e the y benefi t fromhighe r

price s an dincrease doutput . 4.5.2.2 Product-Line and Facility-Level

Impacts I n th e fac e o

f higher productio n costs , some facilitie s ma y findthat thei r bes 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 faciht

y wil l eventuall y clos e a s new technologie s replac e ol dandcurren t method s becom e economicall y unviable)
. Suc h achoic e i s optimal wit h regulatio n condition s whe n th e facilities ' projecte d revenue s fal l shor

t of thei r variabl e cost s (productio n an dcompliance)
. Usin g th e approache s describe di n detai l below , th e recommende dan dMAC T floor ma y resul t i n 8 9 merchan t

produc t lin e closures , 3 6 merchant facilit y closures , and1 0 captiv e facilit y closures
. Thi s number increase s dramaticall y wit

h th e Above-the-MAC T floor—31 5 merchan t produc t lines , 17 9 merchant facilities , an d6 3 captiv e facilitie s ma y ceas e operation s unde r

thi s alternative
. It i s important

t o poin t ou t tha t thes e estimate s of

facilit y an dproduct-lin e closure s ar e sensitiv e t o th e accurac y of th e baselin e characterizatio n o f thes e entities
. Thes e impac t estimate s shoul db e considere dandupper-boun destimat e becaus e th e facilitie s ma y no t ceas e operation s for

variou s reasons . Fo r

example , facilit

y operator s ma

y believ e tha t

marke t deman d condition s ma

y chang e andallo w th e facilit y t o becom e profitabl e i n th e future
. In addition , th e term s o f contractual agreement s for independen t

supplier s ma

y requir e the mt o continu e operation s or

ma y allo w th e supplier

t o pas s on agreate r

portio n o f

thes e additional cost s tha

n th e marke t

model projects
. Ou

r mode l doe s no t

explicitl y accoun t

for thes e factors
. Merchant Producer Analysis. I

n th e economi c model , w e limi t th e assessmen t

of potential fo

r closure s t o smal l merchan t producer s afte

r accountin g for

th e behavioral response s o f producer s an

dconsumer s t o changin g equilibriu mconditions
. Unde r th e recommende d
4-2 0P.6 8

alternative , 3 6 merchant

facilitie s ar

e projecte dt o close , or

1 2 percent

o f th e total directl y affectedmerchant

facilities
. A s show n i n Tabl e 4-6 , facilitie s expecte dto clos e hav e extremel y lo w baselin e outpu t

rate s (averag e o

f 0. 1 millio n pound s per

facility ) andsignificantl y highe r per-uni t complianc e cost s ($0.3 3 pe r pound)
. A s note dabove , 3 6 facilitie s ceas e al l of thei r produc t lin e operation s i n respons e t o th e regulation
. Thes e facilitie s account for 6 2 of th e 8 9 produc t

lin e closure s projecte db y th e economi c mode l (7 0 percent)
. However , ales s severe respons e i s als o availabl e t o producer s , wit h multipl e productio n lines : clos e line s tha t are expecte dt o b e unprofitabl e wit h th e regulation
. W e projec t

2 3 facilitie s choos e thi s optio n andclos e 27 unprofitabl e line s (3 0 percent)
. Th e produc t

line s mos t

affectedby th e regulatio n ar e th e manua

l an dmechanical resi n application s becaus e thes e processe s typicall y hav e higher complianc e costs . Ove r

ninet y percen t of th e produc t

lin e closure s emplo y thes e processes . Th e numbe

r of projecte dclosure s doe s no t decreas e under

th e les s stringent

MAC T floo r alternative
. However , th e projecte dclosure s increas e significantly under th e above-th e floo r alternative
. Th e numbe

r of facilit y closure s i s nearl y 5 time s higher (17 9 facilitie s o r

6 0 percen t of th e total , andth e number

of produc t lin e closure s more tha

n triple s t o 31 5 (6 8 percen t of th e total)
. Captive Producer Analysis. Th e Agenc y als o develope dametho dof identifyin g captiv e plan t closure decision s usin g industr y measure s o f

profitability
. Th e approac h assume s affecte d captiv e producer s hav e ver y limite dchoice s andcanno t adjus t productio n rate s in respons e t o higher production'costs
. They full y absor b thes e cost s resultin g i n aone-to-on e reductio n i n profits. 2 I f th e additiona

l complianc e cost s associate dwit h th e rul e excee dth e plant s pre-tax earnings , th e captiv e producer i s expecte dt o ceas e thei r

operations
. I

f producer s wer e unabl e t o pas s forwar

dincrease dcost s to final produc t producer s (an dtherefor

e thei r customers) , the n thi s approac h offers atractabl e wa y to provid e closure estimate s fo r th e 3 0 percent

o f th e affecte d RP C facilitie s considere dcaptiv e in ou r analysis
. Usin g thi s method , w e conclud e that 1 0 captiv e facihtie s woul db e potentiall y a t ris k of closur e under

th e recommende dan dMAC T floor alternatives
. Thi s number increase s t o 6 3 facilitie s under th e Above-the-MAC T floo r alternative
.

Th e Agency als o consider

ales s restrictiv e assumptio n b y allowin g total revenu e t o var y base do n partial

cos t pas s throug h andth e associate ddeman dresponse . Thes e analyse s di dno t significantly var

y fro mth e ful l cos t absorptio n conclusions
. 4-2 1_P_.69

4.5.2.3 Changes in Employment In respons e t o th e decrease dlevel s o f output , aggregat

e employment

i n th e merchan t segment o f th e RP C industr

y i s projecte dt o decreas e by 1. 6 percent , or 1,07 5 employees , under th e recommende dalternative
. Thi s i s th e ne t resul t of employment

losse s fo r merchan t thermose t producer s (1,29 7 employees ) andemploymen t gain s for unaffecte d(i.e. , thermoplastic ) producer s (22 2 employees)
. Althoug h captiv e producer s incu r complianc e cost s that wil l likel y influenc e level s of employment , EP A di dno t attemp t t o projec t change s i n employment

fo r thes e facilities
. Employment change s fo

r th e MAC T floor

alternativ e are identical (1,07 5 employees , o r 1. 6 percent) bu t

ar e fou r time s higher

under th e mor e stringen t above-the-floo r

alternativ e (4,29 6 employees , o r 6. 0 percent)
. 4. 6 Socia l Cost s Th e valu e of

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 many . consumer s an dproducer s o f RP C products
. Consumer s wil l experienc e welfare impact s du e t o change s in marke t

price s an dconsumptio n level s associate dwit h impositio n o f

th e regulation
. Producer s wil l experienc e welfar e impact s resultin g fro

mchange s i n thei r

revenue s associate d wit h impositio n o f

th e regulatio n an dth e correspondin g change s i n productio n an dmarke t prices
. However , i t

i s important

t o emphasiz e tha t

thi s measure doe s no t

includ e benefit s tha t occur outsid e th e market , that

is , th e valu e o f

reduce dlevel s o f

ai r pollutio n with th e regulation
. Fo r thi s analysis , base don appUe d welfare economic s principles , social cost s a s describe dabov e ar

e measure da s th e sumo f

th e expecte dchange s i n consume r an dproduce r surplu s (se e Appendi x B fo r amor e complete discussion)
. Consumer s experienc e reduction s i n consume r surplu s becaus e of

increase dmarke t

prices
. Producer s ma

y experienc e either increase s o r

decrease s i n producer

surplu s (i.e. , profits ) a s aresul t o f increase dmarke t

price s and change s in productio n andcomplianc e costs . Th e national estimat e o f

complianc e cost s i s ofte

n use da s a

n approximatio n o f

th e social cos t o f th e rule
. Under

th e recommende dalternative , th e engineerin g analysi s estimate dannua l cost s o f $21. 5 million
. However , thi s estimat e doe s no t accoun t for behaviora l response s b y producer s o

r consumer s t o impositio n ofth e regulatio n (e.g. , shiftin g cost s t o othe r economi c agents , shuttin g dow n produc t line s o r facilities)
. Accountin g for thes e response s result s i n a socia l cos t estimate that

differ s fro

mth e engineerin g estimat e a s wel l a s provide s insight s o n ho w th e regulator

y burde n i s distribute dacros s societ y (i.e. , th e many consumer s an dproducer s o f RP C products)
. Therefore , base do n th e marke t analysi s describe dabove , th e annua l social
4-2 2P.7 0

cost s of th e recommende dalternativ e are projecte dt o b e $19. 9 million
. Th e slight differenc e betwee n th e tw o estimate s i s du e t o th e reduction s i n RP C produc t outpu t triggere db y th e rule
. Fo r th e nationa

l complianc e cos t

estimate , th e regulator

y burde n fall s solel y o n affected facilities , whos e owner s experienc e aprofi t los s exactl y equa

l to that amount . I

n thi s case , thi s i s entirel y alos s in producer

surplu s wit

h n o chang e (by assumption ) i n consumer 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 andproducer s base do n th e marke t

position s of

each. 3 Tabl e 4- 7 provide s th e socia l cost s andthei r

distributio n acros s stakeholder s fo r eac h regulator

y alternative
. O n th e producer

side , supplier s usin g regulate dthermosettin g resin s incur complianc e costs . Some o

f thes e cost s ar

e passe do n t o consumer s throug h higher prices , wit

h th e remainder absorbe db y th e owner s of

th e directly affecte dfacilities
. A s shown , for th e recommende d alternative , th e los s in producer surplu s for

thes e supplier s i s $6. 2 millio n annually
. However , producer s usin g unregulate dresin s wil l als o sel l thei r RP C product s a

t th e same (higher ) pric e becaus e thes e product s ar

e assume dt o b e perfec t

substitute s fo

r thos e produce dusin g thermosets
. Becaus e the y d o n o incu r any complianc e costs , th e owner s o f thes e facilitie s wil l hav e profit

increase s o

f $18. 0 millio n annually
. O n net , RP C suppliers ' profit s ar e expecte dt o increas e b y $1 2 millio n becaus e th e gain s ofth e unregulate dresi n producer s outweig h th e losse s of th e regulate dresi n producers
. I t i s important

to poin t out tha t b y modelin g thes e product s a s perfec t substitutes , th e Agenc y ha s unambiguously overstate dbot h th e profi t

los s by affecte dproducer s an dprofi t gai n b y unaffecte dproducers
. I f modele dseparatel y wit

h interactio n measure dthroug h across-pric e deman delasticit

y (inelasti c or

moderatel y elastic) , the n th e projecte dpric e increas e woul db e higher fo r affectedproduct s an

dlower for unaffecte dproducts
. I n addition , thes e differentiate d pric e change s woul dcaus e th e consumer surplu s change s describe dbelo w t o understat e impact s o n th e consumer s of

directl y affectedRP C product s andoverstate impact s on consumer s of unaffecte dproducts
.

I n th e long run , we woul dexpec t tha t al l cost s o f

th e rul e woul db e passe do n t o consumer s i n th e for mof higher produc t prices
. Thi s i s becaus e investor s wil l no t inves t i n ne w plant s an

dequipment

unles s they expec t to cover al l thei r cost s of productio n andear

n aretur n o n investment

appropriate fo

r th e risk they are incurring
. However , currentl y fixedasset s specifi c t o RP C produc t productio n are th e resul t

o f pas t investmen t decision s tha

t canno t b e reverse dtoday
. Thus , ove r th e nex t 1 0 t o 2 0 year s owner s o f

thes e facihtie s will hav e t o decid e how bes t t o us e thes e resources . Th e economi c model develope dfo r thi s analysi s ha s attempte dt o captur e thes e decisions
.

4-2 3Tabl e 4-7 . Socia l Cost s with Reinforce d Plasti c Composite s NESHA P Regulator y Alternatives : 199 7
Socia l Cos tComponen t Consume r

Surplu s Loss/Gai n ($10 6/yr ) Aircraft/Aerospac e Appliances/Busines s Equipmen t Genera l Constructio n Plumbin g Fixture s Panel s Consume r

Products Corrosion-Resistan t Electrical/Electri c Lan dTransportatio n Miscellaneou s Produce r Surplu s Loss/Gai n ($10 6/yr ) Thermoset s (Directl y Affected ) Merchan t Captiv e Thermosets/Thennoplastic s (Indirectl y Affected) Social Cost s o f

Regulatio n ($10*/yr

) MAC T Floo r -$31. 7 $0. 0 -$0. 1 -$1. 3 -$2. 5 -$0. 3 -$1. 3 -$19. 3 -$0. 3 -$5. 9 -$0. 7 $12. 5 -$5. 5 $4. 0 -$9. 5 $18. 0 -$19. 2 Recommende d -$31. 7 $0. 0 -$0. 1 -$1. 3 -$2. 5 -$0. 3 -$1. 3 -$19. 3 -$0. 3 -$5, 9 -$0. 7 $11. 8 -$6. 2 $4. 0 -$10. 1 $18. 0 -$19. 9 Above-the-MACT-Floo r



## S -$269. 6 -$0. 1 -40. 6 -$24. 7 -$52. 9 -$6. 7 -$19. 3 -$66. 1 -$10. 4 -$77. 9 -$10. 9 $113. 1 -$21. 6 $61. 0 -$82. 6 $134. 7 -$156. 5P.7 2

On th e consumer

side , welfar

e losse s ar

e criticall y dependant

on consumers ' abilit

y t o findsubstitute s fo

r RP C product s an

do n th e term s the y ca

n purchas e thos e products
. Becaus e RP C product s mad e fromthermoplastic s are assume dhere t o b e perfec t substitute s fo

r thos e produce dby th e regulate dentities , consumer s ar e indifferen

t in their sourc e o f suppl y for

thes e products , an

dthere i s asingl e marke t

pric e fo r eac h RP C produc t

regardles s of

th e inpu t use di n it s production
. Thus , jus t

a s producer s of

di e indirecd y affectedsecto r ca n b e expecte dt o gai n wit h th e rule , thei r

customer s wil l experienc e losse s i n economi c welfar e du e t o th e higher

price s fo r RP C products
. Under

th e recommende dalternative , th e los s in consumer welfare i s $31. 7 millio n annually
. Consumer s o f corrosion-resistan t

an dlan dtransportatio n are expecte dt o experienc e th e larges t

consumer surplu s losse s (se e Tabl e 4-7)
. A n important

mode l parameter

affectin g th e estimate dconsumer surplu s losse s i s th e elasticit y of deman dfo

r th e RP C products
. A s discusse dabove , th e Agenc y believe s tha t avalu e of -0. 5 i s warrante dbase don arevie w of th e impacte dfactor

deman delasticities
. However , a s show n i n Figure 4-4 , if

deman di s les s (more ) elastic , th e consume r surplu s losse s estimat e woul db e more (less)
.

Los s i n Consume r Surplu s 50

_ . ($10 6 /yr) 

### 40 i 3 0 2 0 10 - 0 —f—

-0. 1 -0. 5 -1. 0 Elasticit y o f Demand •1. 5 Figur e 4-4 . Sensitivity o f Change s i n Consume r

Surplu s t o th e Elasticity o f Deman d (Elasticit y of Suppl y = 1.0 )

4-2 5P.7 3

Thus , i n returnin g t o th e socia l cost s of th e recommende dalternative , i t i s simpl y Directl y affecte dproducer s -$6. 2 millio n Indirectl y affecte dproducer s +$18. 0 millio n Consumer s -$31. 7 millio n Social cos t

$19. 9 millio n I n comparison , th e socia

l cost s of th e MAC T floor

alternativ e ar e abou t

$19. 2 million , thos e o f th e abov e MAC T floor

alternative , $156. 5 million
.

. ' i 4. 7 Sensitivity Analysi s fo r Profi tRate Th e baselin e profitabilit

y of producer s i s akey parameter i n th e Agency' s economi c modeling
. However , obtainin g profi t dat afo r firms that

produc e reinforce dplasti c composite s i s difficult 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 financia

l information
. I

n lieu of firm-specific profi t

rates , th e Agenc y appUed a n industr y averag e profi t

rat e of 4. 4 percen t

fo r eac h facility
. A s applie dfor thi s analysis , thi s rat e reflect s th e maximu mprofi t rat e fo r a n individual facility , i.e. , athreshol dleve l o f profitability
. Thos e facilitie s whos e tota l revenu e minu s productio n cost s resulte di n areturn o f les s than 4. 4 percen t o f revenue s use dth e lower

rat e fo r determinatio n o

f economi c viability o r

regulatio n induce dclosure
. I n 1997 , th e baselin e yea

r ofth e economi c analysis , th e industry averag e profi t rat e wa s 6. 5 percen t

a s reporte dfor

SI C 3 0 by th e Censu s Bureau' s Quarterl y Financia l Report (QFR)
. Thi s profi t rat e reflect s incom e befor e income taxe s a s ashare o f sale s for firms with les s tha

n $2 5 millio n i n assets . However , thi s analysi s mus t addres s th e impact s o n man y firm s that hav e les s tha n $2 5 millio n i n asset s whic h ofte n hav e lower

profi t rates . Th e pre-ta x earning s for plasti c companie s wit

h les s tha n $ 5 millio n in sale s wa s on averag e two-third s o f tha t for plasti c companie s wit

h betwee n $1 0 and$2 5 millio n i n sale s (SPI , 1998)
. Thus , t o bette r reflec t th e profi t rate s for smalle r companie s fo

r ou r analysis , th e Agenc y use dthi s two-third s rati o t o adjus t th e QF Rreporte dindustr

y averag e profi t

rate s fo r firms les s than $2 5 millio n i n assets , i.e. , Yea

r 199 9 199 8 199 7 199 6 199 5 A s shown , th e profitabilit

y measure s rang e over

thi s tim e perio dfro m3 t o 6. 5 percen t of sales
. Therefore , a s asensitivity , th e Agenc y evaluate dth e economi c impact s for th e 4-2 6 Industr y Averag e 4.7 % 6.0 % 6.5 % 5.5 % 5.2 % Adjuste dAverag e 3.0 % 4.0 % 4.4 % 3.7 % 3.5 %P.7 4

recommende dalternativ e fo r thi s broader

rang e of baselin e profitabilit

y scenarios
. A s show n i n Tabl e 4-8 , th e marke t

impact s ar

e slightl y greater

(lower) under

th e lower (higher) profit

rat e scenari o wit

h ver y slight difference s i n socia

l costs . However , th e estimate dnumbe r o f product

lin e an dfacilit

y closure s i s affecte

dby th e chang e in profit

rat e scenario s wit

h more (less ) product-line s an dfacilitie s closin g under th e lower (higher) profi t

rat e scenario
. Interestingly , th e closin g of

les s profitabl e product-line s an dfacilitie s under

lower profi t scenari o result s i n higher aggregate profi t

gain s by merchant

facilitie s tha

t continu e t o operat e wit

h regulation. 4 Thi s ne t gain result s fro

mtheir increase drevenue s associate dwit h thei r gai n i n market

share an d th e higher price s wit h regulation
. Tabl e 4-8 . Summar

y o f Economi c Impacts Unde r Rang e o f Industr y Profi tRates : Recommende d Alternativ e

Economi c ImpactMeasur e Al l Composite s Marke t pric e (percent

change ) Marke t outpu t (percent change ) Directl y affectedproducer s Indirectl y affectedproducer s Chang e i n Pre-ta

x earning s ($10 6

/yr) Merchant facihtie s Captiv e facihtie s Closure s Merchant produc t line s Merchant facihtie s Captiv e facihtie s Socia l cost s ($10 6

/yr) , 3.0 % 1 0.8 % -0.4 % -1.8 % 0.8 % $6. 0 -$10. 0
9 6 4 4 1 7 $19. 5 Industry Profi tRat e

4.4 %
0.7 % -0.4 % -1.7 % 0.7 % $4. 0 -$10. 0 8 9 3 6 1 0 $19. 8 6.5 % •

0.6 % 1 -0.3 % -1.4 % 0.6 % $2. 0 -$10. 0 8 1 3 5 6 $20. 2

4. 8 New Sourc e Analysi s Ne w suppUers of

RPC s hav e a

n investmen t

decision : whethe r

to commi t

t o anew facilit y o f agiven scale
. They hav e n o fixedfactor s an dthu 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 to mak e a n investmen t

i n thi s industry
. Economi c theor

y suggest s investor s are expecte dt o inves t i n aprojec t

when th e discounte d Again , we emphasiz e thi s increas e doe s no t sugges t al l o f thes e producer s gain
. T o th e contrary , th e regulatio n create s winner s and loser s (se e Sectio n 4.5.2.1)
.

4-2 7P.7 5

valu e ofth e expecte dstrea mof profit s ove r

th e lifetime ofth e investment exceed s th e cost s of th e investment , o r

alternativel y when th e interna l rat e of retur n (IRR) i s greater

than th e opportunit y cos t o f capital
. Commodit

y price s an dproductio n cost s are central t o thi s decision
. Th e competitiv e mode l of

pric e formatio n i s provide di n Figure 4-5
. In th e figure, th e willingnes s o f

existin g supplier s t o produc e alternativ e rate s of RPC s i s represente db y S E an d th e deman dfor

RPC s i s show n a s D 0 . Th e 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 th e annualize dcapital cost s discounte dat th e opportunit y cos t o f capital fo r a n investmen t

in thi s risk

clas s divide db y th e profit-maximizin g outpu t rat e plu s th e uni t

cos t o f other inputs , th e producer

commit s t o ane w facility ; otherwis e n o investment

occurs . Figur e 4- 5 show s aconstan t cos t industr y where marke t

pric e i s exactl y equal t o th e uni t

cos t o f ne w facilities , S N . 

### $/lb

P = P r o r l \ s \ o

\ D 

### D 0 Q o Q , Figure 4-5 . Baselin e Equilibriu m withou tRegulatio n lbs/yea r

In agrowin g industry , th e deman dfor th e commodit

y i s shiftin g outward(e.g. , t o D,) , placin g upwar

dpressure o n price s andprovidin g th e incentiv e for investor s t o ad dne w productiv e capacity. 5 A s ne w capacit y enter s th e market , th e new equilibriu mpric e i s P „ whic h i s exacdy equa

l t o th e uni t cos t of suppl y fromne w facilities
. I n thi s example , i t i s th e sam e

5 Fo r simplicity , impact s ar e considere dfo r on e futur e tim e period
. 4-2 8P.7 6

valu e a s th e ol dprice , P 0 . Th e new equilibriu mquantity , Q, , include s th e additional outpu t supplie db y ne w sources : (Qi~Q0 )

- Th e NESHAP wil l increas e existin g suppliers ' cost s o f producin g RPC s i

f they us e thermosettin g resin s by shiftin g existin g supply , S e , up . It wil l als o increas e th e cost s o f suppl y fromnew facilitie s usin g thes e resins
. Thes e increase s in cost s will plac e upwardpressur e o n prices
. A s show n i n Figure 4-6 , widi deman dcurve , D, , price s woul db e expecte dt o increas e wit h shift s in supply unti l th e pric e o f RPCs , P,' , i s equal t o th e uni t cos t of supply fromne w facilitie s includin g th e cos t of th e NESHAP
. However , a s show n i n Figure 4-7 , n o new capacit y expansio n wil l take plac e i n th e futur e tim e perio d(1 ) i f

th e per-uni t

complianc e cost s a

t ne w facilitie s exceeded , P,'
. Thus , th e simpl e analytic s presente dsugges t tha t th e rul e wil l likel y caus e investor s t o dela

y constructio n of

new facilitie s until

the price increases just

enough t o cover all th e cost s of

production
. Give n th e uncertaint

y about new facilit

y uni t cost s (productio n andcompliance ) an d futur e marke t conditions , th e Agency i s limite dt o general assessment s ofth e rule' s impac t o n th e rat e of new facilit

y construction
. T o infor

mthes e assessments , th e Agenc y peiforme 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 estimate of th e uni t cost s of complianc e fo

r new source s ($0.04 per poun dfor ane w facilit y subjec t t o th e MAC T floo

r standardan d$0.2 2 fo

r afacilit y 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 o f anew supplier , whic h i s assume dto b e equal t o th e baselin e market price
. A s show n in Tabl e 4-9 , th e averag e rati o i s 1. 1 percen t under th e MAC T floo

r standar dandincrease s t o approximatel y 6. 2 percen t under th e above

the-floor standard
.

• projected

percentage changes infacility construction with regulationfor a future time period

(2005). Usin g th e conceptual approac h presente di n Figure s 4- 5 an d4-6 , th e Agency estimate dth e chang e i n facilit y constructio n fo

r th e perio d200 0 t o 200 5 a s follows :
/SFacilities==¥m-= E- (4.1 )

4-2 9P.7 7

Q' , Q , lbs/yea

r Figur e 4-6 . With-Regulatio n Equilibriu m Cas e 1 : Ne w Source s Adde d

Q' j Q

j lbs/yea

r Figure 4-7 . With-Regulatio n Equilibriu m Cas e 2 : N o Ne w Source s Adde d

4-3 0Tabl e 4-9 . Ne w Sourc e Analysi s o f Uni tProductio n an d Complianc e Cost s ($1997 )

u > Marke t Aircraft/aerospac e Appliances/busines s equipmen t General constructio n Plumbin g fixture s Panel s Consume r product s Corrosion-resistan t Electrical/electri c Lan dtransportatio n Miscellaneou s Total Ne w Sourc e Uni t Cost s ($/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 MAC T Floo r

Ne w Sourc e Uni t Complianc e Cost s ($/lb ) $0.0 4 $0.0 4 $0.0 4 $0.0 4 $0.0 4 $0.0 4 $0.0 4 $0.0 4 $0.0 4 $0.0 4 $0.0 4 Cos tShar e

(% ) 0.10 % 1.68 % 1.15 % 1.14 % 1.23 % 1.17 % 1.05 % 1.21 % 1.16 % 1.17 % 1.14 % Above-the-MAC T Floo r

New Sourc e Uni t Complianc e Cost s ($/lb ) $0,21 5 $0,21 5 $0,21 5 $0,21 5 $0,21 5 $0,21 5 $0,21 5 $0,21 5 $0,21 5 $0,21 5 $0,21 5 Cos tShar e

(% ) 0.56 % 9.07 % 6.22 % 6.17 % 6.63 % 6.31 % 5.70 % 6.54 % 6.25 % 6.31 % 6.17 %

* Equa l t o th e baselin e marke t pric e b y assumption
.P.7 9

where T)

d= Elasticit

y o f deman d(-0.5 ) Z = Averag e siz e o

f anew facilit

y (2. 4 millio n lbs/yr ) QJOO J = Fo r 2000 , th e Composite Fabricator s Associatio n (CFA , 2000 ) estimate da n RP C composite deman do

f 3. 5 billio n pounds. 6 Fo r

th e perio d200 0 t o 2005 , th e engineerin g analysi s independentl y projecte dresi n growt h of 123. 9 millio n pounds
. Usin g acomposite-to-resi n weight rati o of 1.6 , th e Agenc y estimate da RP C composite growt

h of 198. 3 millio n pounds
. Thus , th e quantit y for th e baseUn e yea r o f 200 5 wa s estimate dt o b e approximatel y 3. 7 billio n pounds
. AP

—= Calculate dusin g th e rati o of averag e ne w sourc e per-uni t contro l cost s t o baselin e pric e fo

r eac h alternativ e (1. 1 percen t for th e MAC T floor

alternativ e and6. 2 percen t

fo r th e above-the-floo r

alternative ) Usin g thi s approach , th e Agenc y estimate da n 1 1 percen t

reductio n i n facilit

y constructio n under m e MAC T floor

alternativ e an da6 0 percen t reductio n under

th e above-the-floo r

alternative , over th e 200 0 to 200 5 tim e perio d(se e Tabl e 4-10)
. 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 8 4 MAC T Floo r Chang e Absolute Relativ e

- 9 -10.7 % Above-the-MAC T Floo r Chang e Absolut e Relativ e -4 8 -57.1 %

Thes e result s sugges t

facilit y constructio n impact s woul dincreas e significantl y if al l new 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 appropriate contro l standardunder th e recommende dalternativ e i s determine dby th e siz e an d typ e of 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 smaller

fo r facilitie s wit

h lo w outpu t

rates , i t i s possibl e that

th e averag e siz e o f

ne w facilitie s ma

y ten dt o b e smaller t o b e subjec t

t o th e MAC T floor

rathe r than above-the-MAC T floor standards
. I n addition , th e rul e ma

y influenc e th e producer' s choic e o f processin g method
.

Exclude s marin e uses . 4-3 2P.8 0

SECTIO N 5 FINA L REGULATOR

Y FLEXIBILIT Y ANALYSI S

Thi s regulator

y actio n wil l potentiall y affect 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 who directl y conduc t th e busines s of th e firm(i.e. , "mo man dpo p shops " o r partnerships ) or , more commonly , investor s o r stockholder s who emplo y other s t o conduc t th e busines s of

th e firmo n thei r

behal f (i.e. , privatel y hel dor

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 to conduc t

busines s transaction s an

dmake busines s decision s that affec t th e facility
. Th e lega

l an dfinancia

l 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 ui e financial consequence s o

f th e decisions
. Environmenta l regulation s like thi s rul 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 ) of 198 0 require s that

special consideratio n b e given t o small entitie s affectedby federa l regulation
. Th e RFA wa s amende di h 199 6 b y th e Small Busines s Regulator

y Enforcemen

t Fairnes s Ac t

(SBREFA ) t o strengthe n th e RFA' s analytica l andprocedural requirements
. Under SBREFA , th e Agenc y mus t perfor ma regulator y flexibilit y analysi s require dfo

r rule s that wil l hav e asignificant

impac t o n a substantial

numbe r o f smal l entities
. I n accordanc e widi Sectio n 60 3 of th e RFA , th e Agenc y prepare da n initial regulator

y flexibilit y analysi s (IRFA ) tha

t examine dme impac t

of th e propose drul e o n smal l entitie s withi n thi s sourc e categor

y alon g wid

i regulator y alternative s ma

t coul dreduc e thes e impacts
. A s require db y Sectio n 609(b ) of th e RFA , a s amende db y SBREFA , th e Agenc y als o convene daSmal l Busines s Advocac y Revie w (SBAR ) pane l t o obtai n advice , an d recommendation s o f

representative s of

th e smal l entitie s that

potentiall y woul db e subjec t t o di e rule' s requirements
. A s discusse di n 6 6 F

R40341 , th e propose drul e containe dasignificant number o f accommodation s for

smal l business
. Thes e accommodation s hav e bee n retaine di n thi s final rul e wid i one exception
. I

n th e propose drul e ther e wer e differen t emissio n threshold s abov e which a n existin g facilit

y ha dt o comply wit

h mor e stringent

above-the-floo r

requirement s of 5- 1P.8 1

9 5 percen t captur e an dcontrol
. Thi s threshol dwa s 25 0 tp y o f HA P emission s fo

r smal l businesse s an donl y 100 tp y fo r larg e businesses
. In thi s final rule , w e hav e remove dth e above-the-floo r

capture an dcontro l requirement s fo r existin g facilitie s excep t

fo r centrifuga

l castin g an dcontinuou s lamination/castin g andw e hav e establishe dadireshol dof 100 tp y fo

r al l facilities
. Base don ou

r analysis , settin g th e direshol da t 10 0 tp y for

al l facilities , ratiier ma n 100 tp y fo

r larg e businesse s and25 0 tp y fo r smal l businesses , fo

r thes e tw o process/produc t

grouping s doe s no t

resul t i n an y additional impact s o n smal l business
. However , i t

doe s simplif

y th e rule
. A s require dby sectio n 604 of th e RFA , w e prepare dafinal regulator y flexibilit

y analysi s (FRFA ) fo

r th e final rule
. Th e analysi s includes :

• astatemen t

o f nee dandobjective s of

m e rule ,

• adescriptio n an

destimate o

f di e number

o f smal l businesse s t o whic h m e rul e wil l apply , ' ' >

• a n economi c analysi s t o determin e whether thi s rul e i s Ukel

y t o impos e a significant impac t on asubstantial number

of th e smal l businesse s withi n dii s industry
. Th e analysi s employe di s a"sale s test, " whic h compute s th e annuaUzed complianc e cost s a s ashar e o f sale s for eac h company . I n addition , w e provid e informatio n about

di 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 descriptio n of

th e projecte dreporting , recordkeepin g requirement s an dodier federa l rule s tha t ma y apply t o affecte dentities , an d

• A summar

y o f significant

issue s raise db y m e SBA Rpanel , m e Agency' s responses , an dchange s mad e t o minimiz e th e impact s o f th e final rule
. 5. 1 Statemen t

o f Nee dan d Objective s o f

th e Rul e Sectio n 11 2 o f

di e CA A require s di e Agenc y t o lis t categorie s an dsubcategorie s of majo r source s and , i n some cases , are asource s of HA P an dt o tiien establis h national emissio n standards
. Reinforce dPlasti c Composite s (RPC ) productio n facilitie s that were majo r source s wer e include don th e initial lis t o f sourc e categories
. Major source s o f

HA P ar e dios e tha

t hav e di e potential t o emi t 1 0 ton s pe r

yea r (tpy ) o r mor e of any on e HA P o r

2 5 tp y or mor e of an y combinatio n of

HAP
. Th e HA P emitte db y source s i n dii s sourc e categor y includ e styrene , metiiy l methacrylate , an dmethylen e chloride
. Thes e HA P hav e

5- 2P.8 2

bee n demonstrate dto caus e advers e healdi effects
. Therefore , di e propose drul e protect s ai r qualit y an dpromote s publi c healt h b y reducin g th e current

emissio n level s o f

thes e HAP
. Th e objectiv e o

f tius propose drul e i s t o apply standard s base don maximu m achievabl e contro l technolog y t o al l major source s in thi s sourc e category . Th e criteri ause d t o establis h MAC T ar

e containe di n Section
. 11 2 (d ) o f th e CAA
. 5. 2 Identifyin g Small Businesse s A s describe di n Sectio n 2 o f thi s report , th e Agenc y identifie dasubstantial number o f smal l businesse s potentiall y affectedb y di e propose dNESHAP
. Base do n SB A definitions , 27 9 companie s are classifie da s small , o r 7 8 percen t

of di e total
. Thes e companie s ow n 30 5 facilities , o r

7 0 percent , of

al l RP C facilities 1 i n 1997
. S3 Screening-Leve l Analysi s Fo r me purpose s of

assessin g di e potential impac t o f thi s rul e o n thes e smal l businesses , th e Agenc y considere ddi e recommende dalternative , di e MAC T floor, an da n above-die-MACT-floo r

alternativ e andcalculate ddi e share of annua l complianc e cos t relativ e t o baselin e sale s fo r eac h company . Whe n acompany own s more ma 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 di e numerato r o f di e tes t ratio
. Fo r dii s screening-leve l analysis , annua l complianc e cost s were define da s di e engineerin g contro l cost s impose do n dies e companies ; dius , diey d o no t reflec t di e change s in productio n expecte dto occur in respons e t o imposin g thes e cost s an ddi e resultin g marke t adjustments
. Th e result s o f du s initial screenin g analysi s ar e discusse dbelow
. 5.3.1 Recommended

Alternative A s show n i n Tabl e 5-1 , th e aggregate complianc e cost s of di e recommende d alternativ e fo

r smal l businesse s total $11. 4 million , o r 5 3 percen t

ofth e total industr

y cost s o f $21. 5 million
. Th e averag e total annua l complianc e cos t

wa s projecte da

t roughl y $40,00 0 per smal l company a s compare dt o di e averag e o f 130,00 0 per

larg e company . Th e annua l complianc e cost s for

small businesse s rang e from0.0 1 t o 9.6 0 percen t of sales
. Th e averag e (median ) complianc e cost-to-sale s rati o (CSR ) i s 0.8 3 (0.47 ) percen t fo r th e identifie dsmal l

1 On e facilit

y owne dby asmall fir

mha s close dsinc e 1997
. Thi s fir mha s bee n exclude dfro

mth e sale s tes t analysis
. 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 9 $11. 4 $0.0 4 7 8 $10. 1 $0.1 3 35 7 $21. 5 $0.0 6 Number Shar e Numbe r Shar e Numbe r Shar e Companie s wit

h Sale s Data " 27 6 Complianc e cost s ar e < 1 % o f sale s 20 8 Complianc e cost s ar e * 1 t o 3 % o f sale s 5 3 Complianc e cost s are *3 % of sale s 1 4 76 % 19 % 5 % 7 8

7 5 1 0 100 %

96 % 1 % 35 4

28 3 5 4 1 4 100 %

80 % 15 % 4 % Complianc e Cost-to-Sale s Ratio s Averag e Media n Maximu m Minimu m 0.83 % 0.47 % 9.60 % 0.01 % 0.05 % 0.01 % 1.59 % <0.01 % 0.66 % 0.31 % 9.60 % <0.01 %

* Annua l sale s dat awer e unavailabl

e fo r three ultimat

e paren t companies
. CSR

s canno t b e compute

dfo r thes e companies
. Thre e o

f thes e firms have als o closedsinc e 1997
. Al l si x firm s have bee n exclude dfro mthi s sale s tes t

analysis
. Note : Assume s no marke

t response s (i.e. , pric e an

doutpu t adjustments ) b

y regulate dentities
.P.8 4

businesse s wit

h sale s dat aand0.0 5 (<0.01 ) percent fo r di e larg e businesse s wit

h sale s data
. A s shown , 5 3 small companie s (1 9 percent ) are affecteda t th e 1 percent

t o 3 percen t

leve l an d1 4 ( 5 percent ) companie s are affecte dat or abov e di e 3 percent

level
. Thus , atota l of

6 7 small compames , or

2 4 percent , are expecte dto incur cost s greate

r tha n 1 percen t

o f thei r sales
. Furthermore , di e distributio n o f di e CSRs , a s show n i n Figure s 5-1(a ) an d(b) , demonstrate dia

t smal l companie s are disproportionall y affecte drelativ e t o larg e companies
. 5.3.2 MACT

Floor Alternative A s show n i n Tabl e 5-2 , th e aggregate complianc e cost s of di e MAC T floor

alternativ e fo r small businesse s tota l $11. 4 million , whic h i s (5 5 percent) of di e total industr

y cost s o f $20. 8 million
. Th e annual complianc e cost s fo r smal l businesse s rang e fro m0.0 1 td 9. 6 percent of sales
. Th e averag e (median ) complianc e CS Ri s 0.8 3 (6.47 ) percen t for th e identifie dsmal l businesse s widi sale s dat aan d0.0 5 (<0.01 ) percent fo r di e larg e businesse s wid i sale s data
. A s shown , 5 3 smal l companie s (1 9 percent) ar e affecteda

t th e 1 percen t

t o 3 percent leve l and1 4 companie s ( 5 percent ) ar e affecteda

t or abov e th e 3 percen t

level
. A tota l of 6 7 smal l companies , or

2 4 percent , ar

e affectedabov e di e 1 percen t tes t ratio
. A s shown i n Figure s 5-2(a) and(b) , th e relativ e impact s between smal l andlarg e companie s ar e simila r to th e recommende dalternative
. ' 5.3.3 Above-the-MACT

Floor Alternative A s show n i n Tabl e 5-3 , di e aggregate complianc e cost s of th e above-die-MAC T floor alternativ e fo

r smal l businesse s total $135. 8 million , o r 6 3 percent

of th e tota l industr

y cost s o f $216. 8 million
. Th e annua l complianc e cost s fo

r smal l businesse s rang e from0.0 1 t p 79.1 8 percent

of sales
. Th e averag e (median ) complianc e CS Ri s 12.0 3 (8.73 ) percen t for di e identifie dsmall businesse s wit h sale s dat aan d0.5 8 (0.07 ) percent for th e larg e businesse s wid i sale s data
. A s shown , 3 4 smal l companie s (1 2 percent) ar e affecte da

t th e 1 percen t

t o 3 percent leve l and21 6 companie s (7 8 percent ) ar e affecteda

t or abov e di e 3 percen t

level
. , Thus , atota

l of 25 0 smal l companie s incu r cost s greater

ma n 1 percen t

of diei r sales , whic h i s fou r times th e number

affecte dunder

th e recommende dalternative
. Figure s 5- 3 (a ) an d(b ) show tha t di e disproportionate relativ e impac t betwee n small andlarg e companie s i s eve n mor e pronounce dtiian under

di e recommende dalternative
.

5- 5P.8 5

100 %

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

>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 Figur e 5-l(b) . Distributio n o f Cost-to-Sale s Ratio s fo r Larg e Companies : Recommende d Alternativ e


### 5- 6

### Table 5-2 . Summar y Statistics for SBREF

A Screening Analysis : MAC T Floor 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

company ($10 6 ) 27 9 $11. 4 $0.0 4 7 8 $9. 4 $0.1 2 35 7 $20. 8 $0.0 6 Numbe r Shar e Numbe r Share Numbe r Shar e Companie s wit

h Sale s Data 8 Complianc e cost s are <1 % o f sale s Complianc e cost s ar

e z 1 t o 3 % o f

sale s Complianc e cost s are z 3 % of sale s 27 6

20 8 5 3 1 4 100 %

75 % 19 % 5 % 7 8

7 5 1 0 100 %

96 % 1 % 0 % 35 4

28 3 5 4 1 4 100 %

80 % 15 % 4 %

<- ^ Complianc e Cost-to-Sale s Ratio s Averag e Median Maximu m Minimu m 0.83 % 0.47 % 9.60 % 0.01 % 0.05 % 0.01 % 1.59 % <0.01 % 0.66 % 0.31 % 9.60 % <0.01 %

" Annua l sale s dat awer e unavailabl

e fo r three ultimat

e paren t companies
. CSR

s canno t b e compute

dfo r thes e companies
. Three o

f thes e firms have als o close

dsinc e 1997
. Al

l si x firms have bee

n exclude dfro mthi s sale s tes t

analysis
. Note : Assume s n

o marke t response s (i.e. , pric e an

doutpu t adjustments ) b

y regulatedentities
.P.8 7

>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 Figur e 5-2(a) . Distributio n of Cost-to-Sale s Ratio s fo r Smal l Companies : MAC T Floo r Alternativ e

>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 Figur e 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- 8Tabl e 5-3 . Summary Statistic s fo r SBREF A Screenin g Analysis : Above-the-MACT-Floo r Alternativ e Smal l Larg e Al l Companie s Tota l Numbe r

of Companie s Tota l Annual Complianc e Cost s (TACC ) ($10 6 ) Averag e TAC C pe r

company ($10 6 ) 27 9 $135. 8 $0. 5 7 8 $81. 0 $1. 0 35 7

$216. 8 $0. 6

i V O Numbe r Shar e Numbe r Share Numbe r Shar e Companie s wit

h Sale s Data 8 27 6 100 % 7 8 100 % 35 4 100 % Complianc e cost s are <1 % o f sale s 2 5 9 % 6 8 87 % 9 3 26 % Complianc e cost s are ;> 1 t o 3 % o f sale s 3 4 12 % 4 5 % 3 8 11 % Complianc e cost s are *3 % of sale s 21 6 78 % 4 5 % 22 0
. 62 % Complianc e Cost-to-Sale s Ratio s Averag e Median Maximu m Minimu m 12.03 % 8.73 % 79.18 % 0.01 % 0.58 % 0.07 % 15.57 % <0.01 % 9.55 % 5.45 % 79.18 % <0.01 %
8 Annua l sale s dat awer e unavailable fo

r three ultimat

e paren t companies
. CSR

s canno t b e compute

dfo r thes e companies
. Three o

f thes e firms hav e als o close

dsinc e 1997
. Al

l si x firms have bee

n exclude dfro mthi s sale s tes t

analysis
. Note : Assume s n

o marke t response s (i.e. , pric e an

doutpu t adjustments ) b

y regulate dentities
.P.8 9

100 % 90 % 80 %
^ 70 % 60 %•equency

U L 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 Figur e 5-3(a) . Distributio n o f Cost-to-Sale s Ratio s fo r Smal l Companies : Above-the MACT-Floo r Alternativ e

>0-0.5 % >0.5-1 % >1-3 % >3-5 % >5-7 % >7-10 % >10-15 % >15-20 % Cost-to-Sale s Ratio s Rang e >20 % Figur e 5-3(b) . Distributio n o f Cost-to-Sale s Ratio s fo r Larg e Companies : Above-the MACT-Floo r Alternativ e

5-1 0P.9 0

5. 4 Economi c Analysi s Th e Agenc y als o analyze ddi e economi c impact s on smal l businesse s under witii

regulatio n condition s expecte dt o resul t fro mimplementin g th e propose dNESHAP
. Unlik e di e screening-leve l analysi s describe dabove , dii s approac h examine s smal l busines s impact s i n light o f th e expecte dbehavioral response s o f producer s an

dconsumer s t o th e regulation
. A s show n i n Tabl e 5-4 , ne t operatin g profit s increas e by $ 4 million
. Thi s i s aresul t o f tw o effects : 11 1 small facilitie s wit h lowe r pe r uni t cost s experienc e increas e i n profit s ($1 0 milUon ) du e t o pric e increases
. Th e remainin g 19 0 facilitie s experienc e profi t losse s o f $ 6 million
. Eighty-nin e produc t line s an d3 6 facilitie s ar

e projecte dt o clos e under

th e MAC T floor alternativ e an ddi e recommende dalternative , whil e 31 5 produc t line s an d179ifacilitie s ar e projecte dto clos e under

di e above-tiie-MACT-floo r alternative
. 5. 5 Assessmen t Althoug h an

y facilit y closure s ar e caus e fo

r concern , th e number

o f facilitie s a t

ris k fo r closure woul db e di e same if thi s propose drul e require donly th e MAC T floor leve l o f contro l for

al l facilities
. Th e MAC T floor i s di e leas t

stringent leve l allowe db y statute . A s a resul t o f th e SBA Rpanel , dii s rul e contain s asignificant number o f accommodation s for smal l business
. Th e result s presente dher e confir mma t th e mitigatin g measure s employe d by di e Agenc y hav e minimize dth e potential negativ e impact s of th e propose drul e on smal l businesse s whil e stil l satisfyin g th e objective s o f th e CAA
. Th e share o f

smal l companie s affecteda t les s tha n 1 percen t

exceed s 7 5 percen t

under bot h th e recommende dalternativ e anddi e MAC T floor

alternative
. Furthermore , only 5 percen t o f smal l companie s ar e projecte dto b e affecteda

t or abov e th e 3 percen t

leve l fo r bodi di e recommende dan dMAC T floo r alternative , whil e 7 8 percen t o f di e smal l companie s excee ddii s leve l under di e above

the-MACT-floor

alternative
. Th e economi c analysis , whic h include s marke t response s t o th e regulation , provide s di e followin g results : 3 6 facihtie s (1 2 percent ) owne dby smal l businesse s ar e projecte dt o clos e under

di e recommende dalternativ e an ddi e MAC T floor alternative
. Th e number

o f facihtie s increase s t o 17 9 (6 0 percent ) unde r th e mor e stringen t above-the-floo r

MAC T alternative
. Thes e result s are consisten t wit h th e industry' s profitabiUt y andcharacterizatio n of cos t curve s andengineerin g cost s provide din earlier sections
. Thi s industr

y i s characterize dby averag e profi t margin s o f

3 t o 4 percent

(Du n andBradstreet , 1997)
. Under baselin e conditions , smal l facilitie s hav e highe r per-uni t cost s of production , reflectin g economie s o

f scal e in di e productio n of

RPC
. I n addition , analysi s of

di e engineerin g cost s

5-1 1

### Tabl e 5-4 . Summar y o f Sma U Busines s Impact

s of Reinforce d Plasti c Composite

s NESHAP

U\ t o Thermose tProducer s (Directl y Affected ) Revenue s ($10 6

/yr ) Cost s ($10 6

/yr ) Complianc e Productio n Operatin g Profi t

($10 6 /yr ) Operatin g Entitie s Produc t Line s Facilitie s Employmen t Baselin e
$1,97 0 $1,88 3 $ 0 $1,88 3 $8 6 46 6 301 ' 18,42 0 MAC T Floo r

Alternativ e Absolut e Chang e
-$2 1 -$2 5 $8. 1 -$3 3 -$ 4 -8 9 -3 6 -1,29 7 Relativ e

Chang e

-1.07 % -1.33 % N A -1.76 % 4.62 % 19.10 % -11.96 % -7.04 % Recommende d

Alternativ e Absolut e Chang e
-$2 1 -$2 5 $8. 1 -$3 3 -$ 4

- -8 9

-3 6 -1,29 7 Relativ e Chang e

-1.07 % -1.33 % N A -1.76 % 4.62 % 19.10 % -11.96 % -7.04 % Above-the-MACT - Floo r

Alternativ e Absolut e Chang e
-$14 6 -$20 7 $49. 4 -$25 6 -$6 1 -31 5 -17 9 -5,97 5 Relativ e

Chang e

-7.39 % -10.96 % N A -13.59 % 70.59 % 67.60 % -59.47 % -32.44 % Note : Thes e estimate s incorporat e th e expecte dmarke t (i.e. , pric e an doutput ) adjustment s o f th e regulate dentities
. 'Fou r o f th e 30 5 facihtie s owne db y smal l companie s ar e exclude dfro mth e marke t analysis
. The y ar e eithe r treate da s captiv e producer s becaus e the y perfor

monl y intermediat e operation s suc h a s compoundin g o r the y hav e insufficient

dat at o includ e i n th e marke t model.
.P.9 2

show s that thes e facilitie s als o hav e higher per-uni t complianc e cost s unde r

with-regulatio n alternatives
. Therefore , th e economi c impact s ar e likel y t o fall disproportionatel y on small facilities
. However , a s note di n Sectio n 4 , thes e entitie s ma y hav e contractual obligation s tha t allo w the mt o continu e operatio n an dpotentiall y mitigate thes e impact s throug h term s tha t dea l with contingencies
. > Th e economi c analysi s als o show s tha t producer s usin g resin s no t directl y affecte dby di e regulatio n experienc e profi t gain s (e.g. , $18. 0 millio n gai n unde r th e recommende d alternative)
. Thi s occur s becaus e th e price s o f di e commoditie s the y produc e wil l increase , but diey d o no t

incur complianc e costs . Given th e distributio n o f smal l an dlarg e entitie s identifie di n th e regulate dsegment , i t i s likel y tha

t asignificant

number o f tiiese producer s ma y b e small
. Thus , acomplete analysi s of th e smal l busines s impact s o f th e propose drul e woul dcomput e ane t

effec t usin g th e projecte dimpact s o n bod i directl y (diermoset ) and indirectly affecte d(tiiermoplastic ) producers
. Dat alimitation s on th e distributio n o f smal l businesse s acros s th e indirecti y affectedsegment d o 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 smal l businesse s usin g resin s no t directi y affecte db

y di e rul e wil l experienc e offsettin g gain s unde r with-regulatio n conditions
. , • • W e d o no t

anticipate an

y impact s of

di e propose dNESHAP o n smal l government s o r small nonprofi t

organizations
. W e hav e n o evidenc e diat eidie r smal l government s or nonprofit organization s ow n or

operate source s tha

t wil l b e impacte db y dii s propose d NESHAP
. 5. 6 Projecte d Reportin g and Recordkeepin g Requirement s Th e propose dreportin g an drecordkeepin g requirement s fo r tiiese smal l businesse s include initial notifications , startup notification s andcomplianc e reports . Thes e requirement s were discusse di n more detai l under th e discussio n of

di e Paperwor

k Reductio n Ac t above
. W e estimate that

304 existin g facilitie s owne dby smal l businesse s wil l b e impacte db y thes e requirements , and5 3 ne w facilitie s wil l b e impacte di n di e first thre e years . Th e professiona

l skill s require dt o complete thes e report s includ e di e abilit y t o calculate emission s an

dresi n us e andreadandfollo w report forma t guidance
. Al l facilitie s impacte dby thi s final rul e shoul dhav e personne l wit h th e necessar

y skill s becaus e the y woul dnee dthes e skill s t o comply wit h odier regulator y requirements , suc h a s Toxi c Releas e Inventor y (TRI ) reporting
.

5-1 3P.9 3

Provision s t o minimiz e th e reportin g an drecordkeepin g requirement s o n smal l busines s hav e been incorporate dint o thi s final rule
. Thes e provision s includ e allowing : di e facilit y t o substantiate resi n andgel coa t HA P content s widi Material Safet y Dat aSheet s rather the n requirin g testin g of

eac h resi n andge l coat ; us e of resi n purchas e record s t o determin e resi n use ; andexemptio n o f facilitie s tha

t ca n demonstrate tha

t al l thei r resi n an d ge l coat s comply wit

h th e require dHA P conten t limit s fromth e requiremen t t o kee p record s o f resi n us e andcalculate emissio n facto r averages . Thes e provision s hav e als o bee n extende dt o al l companie s subjec t t o today' s propose dNESHAP
. 5. 7 Othe r Federal Rule s Tha tMay Impac tReinforce d Plasti c Composite Productio n Facilitie s i i Thes e facilitie s ma

y als o b e subjec t

t o th e NESHA P bein g develope dfor plasti c part s an dproducts
. There shoul db e n o duplicatio n of effor t a s aresul t

o f thi s propose drul 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 cover differen t operations
. Facilitie s subjec t t o thi s final rul e are als o subjec t to emission s estimat e reportin g under

di e TR I requirements
. In thi s final rule , w e coul ddetermin e n o way s t o combin e TRI andth e reportin g requirement s of th e propose dNESHA P becaus e di e objective s andstatutor

y autiioritie s o f

thes e requirement s ar

e different
. 5. 8 Alternative s to th e Propose d Rul e W e hav e incorporate dsignificant alternative s int o di e propose drul 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 o f

th e CAA
. A s require dby sectio n 609(b ) o f di 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 fromrepresentative s o f th e smal l entitie s tiiat

potentiall y woul db e subjec t t o th e propose drul e requirements
. Consistent wit h RFA/SBREFA requirements , th e pane l evaluate ddi e assemble d material s an

dsmall-entit

y comment s o n issue s relate dt o th e element s of th e IRFA
. A cop y of th e pane l repor

t i s include di n th e docke t

a s ite mH-J-27
. Th e pane l considere dnumerou s regulator y flexibilit y option s i n respons e t o concern s raise dby di e SER
. Th e major concern s include dth e affordabilit y an dtechnical feasibilit

y o f add-o n controls , th e resi n andge l coat HA P content s require dt o mee t some o f th e MAC T floors, an dth e regulator

y treatmen t

o f specialit y products
.

5-1 4P.9 4

Thes e ar e th e majo r pane l recommendation s ari dEPA' s respons e i n th e final rule :

• Recommendsettin g higher threshold s tha

n EP A ha dinitiall y considere dfo

r requirement s t o us e add-o n controls
. Response : EP

A ha s remove dth e requirement s fo r add-o n control s for

existin g open molding , pultrusion , SM C an dBM C manufacturing , an dmixin g operations
. We ar e retainin g th e requiremen t for centrifuga

l castin g andcontinuou s lamination/castin g operation s an dsettin g athreshol do f 10 0 tp y for

al l facilities
. Settin g acommo n threshol da t 100 tp y doe s no t

increas e di e impact s on any smal l business
. Also , th e origina l reaso n fo

r settin g differen

t threshold s wer e di e impact s of th e capital cos t

of add-o n control s fo

r open molding , pultrusion , SM C an dBM C manufacturing , andmixing
. Becaus e existin g facilitie s that hav e dies e operation s ar

e n o longer

subjec t t o an y add-o n contro l requirement s a t an y threshold , th e original reaso n fo r th e differen

t threshold s n o longer

exists
.
• Recommendsettin g th e ne w sourc e floor fo r small-owne dsource s at

th e leve l o f th e existin g sourc e floor. Response : Th e final rul e include s thi s provision
.
• Recommen destablishin g separate floors fo r specialit y products
. . Response : Th e final rul e include s provision s fo r specia l products
.
• Explore pollution-preventio n alternative s t o add-o n controls
. -Response : Th e EP A di dexplor e thi s possibilit y wid i industr y sources . W e coul d no t devis e aworkabl e pollution-preventio n alternativ e t o includ e i n th e propose d rul e an drequeste dcomment . Th e onl y comment s receive don apollution

preventio n alternativ e were fo r th e pultrusio n process/produc t grouping
. In thi s final rule , w e hav e incorporate danew pollution-preventio n technolog y , recommende di n th e comment s a s acomplianc e alternativ e fo r pultrusio n operations
.
• Recommendallowin g individual facilitie s t o us e th e same resi n i n al l resi n applicatio n processes . Response : Th e final rul e include s thi s provision
.
• Reconsider

th e resi n HA P conten t

requiremen t

for toolin g resins
. Response : W e requeste dadditional informatio n on toolin g resin s subsequen t t o proposal
. Base do n informatio n w e received , di e floor for manua l applicatio n of toolin g resin s wa s mad e les s stringent
. Th e availabl e dat astil l indicat e that th e floo r fo r mechanical toolin g resin s i n th e propose drul e wa s appropriate
.

5-1 5P.9 5

• Recommen dseparate floor s fo r whit e andnon-whit e gel coats . Response : Th e fina

l rul e include s thi s provision
.
• Reconside r

th e Agency' s estimate s o f th e cos t of add-o n controls
. Response : W e conducte dathoroug h revie w o f the , Agency' s cost s fo

r add-o n control s an

dmad e significant

revision s t o th e cos t

estimates
. A s aresult , th e add

o n contro l requirement s hav e bee n remove dfor existin g ope n molding , pultrusion , SM C andBM C manufacturin g an dmixin g operations
.

, ' i • Recommen dgroupin g high-strengt h application s wit

h corrosion-resistan t operations
. Response : Th e final rul e include s dii s provision
. Detaile dinformatio n on al l thes e recommendation s i s containe din th e pane l report i n th e docket for thi s propose drule
.

5-1 6P.9 6

REFERENCE S

America n Busines s Informatio n (ABT). 1999
. America n Busines s Dis c [computer file]. Bergiund , Lars
. 1998
. "Thermoplasti c Resins. " Handbook of Composites, S.T
. Peters , ed : Ne w York : Chapma

n an dHall
. Composite Fabricator s Associatio n (CFA)
. 2000
. "Industr y Composite s Deman dfp

r 1999-2000. " <http://www.cfa-hq.org>
. A s obtaine don Jul y 29 , 2000
. Dialo g Informatio n Service
. 1997
. StandardandPoor' s Corporation s [computer file]. Pal o Alto , CA : Dialo g Informatio n Service
. Disclosure Incorporated
. 1998
. Worldscop e [compute r file]. Bethesda , MD : Disclosure Inc
. Du n & Bradstreet
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. Industry Norms & Key Business Ratios, Desk-Top Edition 1996- 97. Murra

y Hill , NJ : Dun & Bradstreet
. Du n & Bradstreet
. 1998
. Dun' s Marke t Identifier s [computer

file]. New York , NY : Dialo g Corporation
. Dun & Bradstreet
. 1999
. 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
. 1998
. Ward's Business Directory of U.S. Private and

Public Companies. Detroit , MI : Gal e Research , Inc
. Informatio n Acces s Corporation
. 1998
. Busines s & Company ProFil e [computer file]. Foster City , CA : Informatio n Acces s Corporation
. LeFlam , Greg , an

dMelani e Proctor , PE S Inc. , memorandu mto Madelein e Strum , U.S
. Environmenta

l Protectio n Agency
. Industr y Descriptio n Memorandum
. October 17 , 1995
. Lindsay , Karen F
. 1996
. "State o f th e Industry : 1995-96. " Composites Design and Application February
. R- lP.9 7

Modern Plastics. "Resi n Supply : What' s i n th e Pipelin e for '93? " Januar

y 1993
. Modern Plastics. "Resi n Supply : Plottin g aCours e for Global 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>
. A s obtaine don Ma

y 17,1999
. 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 o f th e Plastic s Industry , Inc
. (SPI)
. 1994
. Facts and Figures ofthe U.S. Plastics Industry. Washington , DC : SPI
. Societ y of th e Plastic s Industry , Inc
. (SPI)
. 1998
. Facts and Figures ofthe U.S. Plastics Industry. Washington , DC : SPI
. Societ y of th e Plastic s Industr

y (SPI ) Composite s Institute
. 1992
. Introduction to Composites. Secon dEdition
. Washington , DC : Societ y of th e Plastic s Industry , Inc
. Societ y of th e Plastic s Industr

y (SPI ) Composite s Institute
. 1995
. Introduction to Composites. ThirdEdition
. Washington , DC : Societ y of di e Plastic s Industry , Inc
. U.S
. Burea

u of Labor Statistics
. 2000
. Produce r Pric e Index—Commodities : WPUSOP9200 , Intermediate Material s les s foo dan denergy . 1990-2000
. [online ] <http://www.bls.gov>
. Obtaine dJanuar y 20,2000
. U.S
. Environmental Protectio n Agenc y (EPA)
. 1993
. "Surve y o f Reinforce dPlastic s Industry. " Washington , DC : U.S
. Environmenta l Protectio n Agency
. U.S
. Environmental Protectio n Agency , Offic e of Enforcemen t

an dComplianc e Assurance
. 1995
. EPA Office of

Compliance Sector

Notebook Project: Profile ofthe Rubber and Plastics Industry. Washington , DC : U.S
. Environmenta l Protectio n Agency
. R- 2P.9 8

U.S
. Geologica

l Survey
. 1997
. Mineral s Yearbook : Clays , [online ] <htto://minerals.usgs.gov/minerals/pubs/commodity/myb>
. Obtaine dJanuar y 21 , 2000
. U.S
. Geological Survey
. 1997
. Mineral s Yearbook : Mica , [online ] <±tto://nu^erals.usgs.gov/minerals/pubs/commodity/myb>
. Obtaine dJanuar y 21 , 2000
. U.S
. Smal l Busines s Administration
. 1996
. Siz e Standard s by SI C Industry
. > <http://www.sba.govgopher/Government-Contracting/Size/sizeall.txt>
.

R- 3P.9 9



## Appendi x A

Summar y Dat a fo r Companie s Ownin g Reinforce d Plasti c Composit e Facilitie sP. 1



### Tabl e A-1
. Summar

y Datafor Companie s ReinforcedPlasti c Composit e Facilitie s Company Nam e 20t h Centur y Fiberglas s Inc
. A
. R
. E. , Inc
. A.F.P
. Imagin g

i A.O
. Smit

h Corporatio n A- 1 Fiberglas s Inc
. AB C Industries , Inc.
. Abl e Body Corporatio n Accen t Maibl e Compan

y Inc
. AccraIndustrie s Inc
. Accurat e Glas s Inc
. Acm e Fiberglas s Inc
. Acm e Reinforce dPlastic s Inc
. Aer o Transportatio n Corporatio n Aeroquip Inoa c Compan

y Agc o Inc
. Ake r Plastic s Compan

y Inc
. Alc o Industries , Inc
. Allen Grou p (The ) Allianc e Equipment

Company 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 Slate & Marbl e o f

Hickory , Inc
. America n Standar dCompanie s Americh Corporatio n Ameron International Corporatio n Facilitie s (# ) 1 2 1 2 1 3 2 1 1 1 1 1 1 1 1 3 1 1 1 1 1 1 1 1 1 1 1 2 1 Sale s ($10 6 ) $95. 0 $19. 1 $37. 0 $1,645. 7 $5. 1 $8. 0 $35. 0 $5. 0 $1. 9 $3. 0 $2. 5 $3. 1 $5. 8 $65. 0 $2,317. 5 $36. 0 $225. 0 $369. 5 $1. 2 $17. 7 $250. 0 $3. 5 $2. 9 $0. 9 $1. 2 $1. 7 $5,805. 0 $10. 0 $533. 5 Employmen t

80 0 17 5 19 0 13,00 0 1 5 0 7 5 47 5 100 1 5 3 5 2 5 1 5 7 6 56 0 7,80 0 400 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 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 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 N o Ye s N o (continued )



### A- 1P. 2



### Tabl e A-1
. Summar

y Dat afor Companie s Reinforce dPlasti c Composit e Facilitie s (continued )
Facilitie s Sale s

Compan y Nam e (# ) Amste d Industrie s 1 An-Co r Indl
. Plastic s Inc
. 1 Appalachian Plastic s Inc
. 1 Applie dComposites , Corporatio n 1 Aqu aBat h 1 Aqua-Ai r Manufacturers , Inc
. 1 Arj o Holdin g Company 1 Armorcas t

Prods
. Company 1 Arro w Dynamics , Inc
. ArrowheadPlasti c Eng
. Inc
. Ashwort h Bros
. Inc
. ] Athen aMarbl e Inc
. 1 Attba r Plastic s Inc
. Austi n Countertop s Inc
. Avne t Baile y Corporatio n Baj aProduct s Ltd
. ; Balte k Corporatio n Bathcraf t Inc
. Beden-Baug h Product s Inc
. BedfordReinforce dPlastic s Beetl e Plastic s Inc
. Beldin g Tank

Technolog y Bertc h Cabine t

Manufacturin g Inc
. Bittne r Industrie s Inc
. Blu e Dolphi n Fiberglas s Pool s Bolfin g Brother s Marbl e Inc
. Bowi e Mfg
. Inc
. Bradle y Specialt

y Corporatio n ($10' ) $1,200. 0 $7. 5 $2. 5 $10. 0 $15. 0 $0. 5 $16. 0 $2. 8 $18. 0 $10. 0 $64. 3 $2. 0

, $8. 0 I $4. 9 $5,390. 6 I $79. 0 I $4. 5 I $48. 6 I $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 1 $3. 9 1 $1. 1 Employmen t 9,00 0 15 0 3 9 200 3 5 1 5 15 0 4 0 5 0

. , 19 9 60 0 2 6 15 0 5 0 N A 1,245 4 2 1,13 1 17 0 2 0 8 0 4 4 5 0 37 5 1 5 5 0 5 5 4 4 1 8 Smal l 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 N o N o 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 (continued) 

### A- 2P. 3

Tabl e A-1 . Summar

y Dat a fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued ) Facili t

Compan y Nam e , (# ) Breme n Gla s Inc
. 2 Bristo l Fiberligh t

Industrie s 1 builder s Marbl e Inc
. Bulk 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 Valle y Marbl e Inc
. Carolin aCounter s Carsonite Intl
. Corporatio n CD RSystem s Corporatio n Centra l Marbl e Product s Inc
. Centur y Marbl e Compan

y Inc
. Chanc e Industries , Inc
. Charlom aFiberglas s Inc
. Clar k Mfg
. Coasta l Engineere dProducts , Inc
. Compagni e D e Saint-Gobai n S.A
. Composites , USA , Inc
. Comtec h Telecommunication s Corporatio n Concep t Plastic s Inc
. Conley Corporatio n Contemporar

y Product s Inc
. Continenta

l Campe r Compan y Inc
. Core Material s Corporatio n Covermaster

Inc
. CR/L P Limite dPartnershi p Cran e Corporatio n ie s Sale s ($10' ) $16. 0 $16. 0 $1. 0 $15. 0 $1. 5 $346. 0 I $9,560. 0 1 $1. 7 I
. • . $5. 2 1 $0. 8 1 $17. 0 3 $38. 0 1 $0. 5 1 $1. 7 1 $50. 0 1 $5. 1 1 $63. 0 1 N

A 1 $91,384. 0 1 $3. 0 1 $20. 9 1 $12. 0 1 $12. 3 1 $6. 1 1 $10. 9 1 $52. 5 1 $2. 8 4 $86. 0 4 $1,847. 7 Employment 145 16 0 3 5 4 5 2 0 3,83 1 33,60 0 4 0 5 0 1 2 120 20 0 1 2 4 0 40 5 5 0 300 N A 101,09 4 4 0 19 2 250 120 9 0 9 5 41 9 2 6 1,18 2 10,00 0 Sma

U Busines s Ye s Ye s Ye s Ye s Ye s N o N o 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 Ye s Ye s Ye s N o N o (continued ) 

### A- 3P. 4



### Tabl e A-1
. Summar

y Datafo r Companie s Reinforce dPlasti c Composit e Facilitie s (continued )
Facilitie s Sale s

Compan y Nam e (# ) Creativ e Pultrusions , Inc
. 2 Culture dMarbl e Product s Ltd
. 1 Custo mFibreglas s Mfg
. Compan y 1 Custo mFiberglas s Moldings , Inc
. 1 Custo mMarbl e Inc
. ] Cyte c Industrie s ] Dasc o Pro , Inc
. 1 Delt aFiberglas s & Environmenta l Product s ] Delt aFiberglas s Structure s 1 Denal i Inc
. 2 Diamon dCoac h Corporatio n 1 Diamon dFiberglas s Fabricators , Inc
. Dixie-Pacifi c Manufacturin g Company Dom-Fab , Inc
. Do w Chemical Dyson-Kissner-Mora

n Corporatio n Eagl e Craf

t Inc
. Eagle-Piche r

Industrie s Inc
. : Ebonit e International Eckle r Industrie s E dIndustries , Inc
. Electric-Glas s Inc
. Eljer Industrie s Elmore Industrie s Emsi g Mfg
. Corporatio n Enur o Fiberglas s Systems , Inc
. Epoc h Industrie s Escalad e Inc
. ($10' ) $1. 8 $1. 0 $18. 0 $0. 8 $1. 0 $1,290. 6 $7. 9 $71 5

' $9. 3 $71. 1 $10. 0 $12. 0 $27. 0 $6. 4 I $20,018. 0 I $500. 0 1 $1. 8 3 $848. 5 1 $16. 0 1 $12. 0 1 $5. 6 1 $2. 7 2 $397. 4 1 $1. 2 1 $25. 0 3 $35. 0 1 $6. 4 1 $93. 2 Employmen t 27 0 1 3 15 0 2 6 2 9 5,20 0 7 0 50 , 9 0 74 3 10 0 8 5 25 0 5 0 40,28 9 4,500 2 6 7,50 0 25 0 11 0 6 0 2 7 3,70 0 1 2 300 1,500 5 0 70 0 Smal l Busines s
' Ye s Ye s Ye s Ye s Ye s N o Ye s Ye s Ye s N o Ye s Ye s Ye s Ye s ' 1 N o N o Ye s N o Ye s Ye s Ye s Ye s N o Ye s Ye s N o Ye s N o (continued )



### A- 4P. 5



### Tabl e A-1
. Summar

y Datafo r Companie s Reinforce dPlasti c Composit e Facilitie s (continued ) Facilitie s Sale s

Compan y Nam e (•# ) Essef Corporatio n 1 Esterlin e Technologiie s Corporatio n 1 E-T- M Ents
. Inc
. 1 Evan s Industrie s 1 Eveland s Inc
. 1 Fabal l USA , Li e 1 Falco n Buildin g Product s 1 Fedder s Corporatio n 1 F G Products , Inc
. 1 Fiber Pad , Inc
. 1 Fibe r Pr o Fibercas t Company ] Fiberdome Inc
. Fiberflex Inc
. 1 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 Recreational Fiberglas s Products , Inc
. Fiberglas s Specialtie s Inc
. Fiberglas s System s Celsta r Group , Th e Fibre Bod y Industries , Inc
. Fibrenetic s Inc
. Fibre x Corporatio n Fleetwoo dEnterprises , Inc
. Florid aLin e of

Astatul aInc
. Fo r Bette r Living , Inc
. ($10« ) $306. 1 $391. 0 $24. 0 i $42. 0 $2. 4 $7. 3 $633. 2 $314. 1 $7. 0 $2. 9 $2. 0 $22. 7 $3. 2 $6. 2 I $1. 0 I $42. 0 1 $1. 5 1 $5. 1 1 $0. 7 1 $2. 8 1 $4. 6 1 $5. 0 1 $20. 0 1 $12. 7 1 $1. 0 1 $30. 0 2 $2,874. 4 1 $1. 9 1 $81. 5 ,

Employmen t 2,10 0 3,36 0 40 0 40 0 1 5 5 0 4,100 2,70 0 5 5 4 9 1 5 200 6 0 8 0 2 0 42 0 2 5 5 0 1 0 3 5 8 0 8 0 18 0 12 0 1 4 250 18,00 0 2 4 52 2 Sma

U Busines s N o N o Ye s Ye s Ye s

, . Ye s N o 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 Ye s Ye s Ye s N o Ye s N o (continued ) 

### A- 5P. 6



### Tabl e A-1
. Summar

y Dat afor Companie s Reinforce dPlasti c Composit e Facilitie s (continued )
Facilitie s Sale s

Compan y Nam e (# ) Foremas t Interior s Inc
. 1 Formic aCorporatio n 1 Fowle r Mfg
. Inc
. 1 G
. W
. Fiberglas s Inc
. 1 Gencor p Inc
. 2 General Electri c Company 1 Genera l Motor s Corporatio n 1 Gesma r Corporatio n 1 GHMInc
. 1 Gibbo n Fiberglas s 1 Gla s Maste r

Inc
. 2 Glasform s Inc
. 2 Glasg o Plastic s Inc
. 1 Global Glas s Inc
. 1 Goodyea r Tir e & Rubbe r

Compan y 1 Gorman-Rup p Company 1 Goul dInc
. 1 GP I Corporatio n ] Gp mIndustries , Inc
. Grayso n Too l Compan y Grube r Sys
. Inc
. H & Rind
. Inc
. Harsc o Corporatio n Hartzel l Fa

n Inc
. Hasbrouc k

Plastic s Inc
. Hell aNort

h Americ aLtd Hemc o Corporatio n Henderson , Blac k

an dGreen , Inc
. Heritag e Marbl e o

f Ohi o Inc
. ($10* ) $1.4 , $338. 0 $6. 1

, $38. 1 $1,568. 0 $90,840. 0 $164,000. 0 $4. 1

i $ L 0 $1. 2 $5. 5 $11. 0 $15. 0 $8. 2 $13,155. 0 $150. 8 $157. 4 N A $6. 3 $2. 5 1 $20. 0 I $5. 7 1 $1,629. 0 I $38. 0 I $1. 3 1 $68. 7 1 $3. 0 1 $17.5 1 $2. 4 Employmen t 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 4 5 14,20 0 250 1 0 55 0 3 0 N A 2 5 Sma

U Busines s 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 N o N o N o Ye s Ye s Ye s Ye s Ye s N o Ye s Ye s N o Ye s Ye s Ye s (continued ) 

### A- 6P. 7



### Tabl e A-1
. Summar

y Dat afor Companie s Reinforce dPlasti c Composit e Facilitie s (continued ) Facilitie s Sale s

Compan y Nam e (#) Hes s Compan y Ind
. Inc
. ] Hoo dManufacturin g 1 Hydro Systems , Inc
. 1 Hy-Te c Fiberglas s Inc
. 1 I
. M
. Pena , Inc
. ] Image s Product s Cor

p 1 Imc o Reinforce dPlastic s Inc
. E Industrial Dielectric s Inc
. Industrial Fiberglas s Specialtie s 1 Industrial Lining s Inc
. International Gratin g Inc
. 1 International Marbl e An dGranite Supply International Pape r

T\ Nort h America

n Filtratio n Inc
. Ite n Ind
. Jaso n Ind
. Inc
. Jaso n International Johnso n Truc k

Bodie s Jone s Plasti c An dEngineerin g Corporatio n K2Inc
. Keller Products , Inc
. Kerric o Corporatio n Kivett' s Inc
. Kob e Stee l Ltd
. Kohler Company Kreider Mfg
. Inc
. Krueger International Inc
. ($10« ) $18. 4 $2. 5 $8. 0 $1. 0 $1. 4 $5. 7 $4. 6

, $50. 0 $7. 0 $1. 7 $4. 5 $8. 0 > $20,143. 0 1 $3. 0 I $27. 2 I $9. 0 1 $5. 7 1 $31. 0 1 $98. 6 1 $302. 7 1 $37. 0 1 $2. 0 1 $6. 2 2 $1,533. 5 3 $155. 6 1 $2. 6 1 $345. 0 Employment 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 4,60 0 35 0 1 0 100 13,43 7 1,80 0 4 0 3,00 0 Small Busines 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 N o N o Ye s Ye s Ye s N o N o Ye s N o (continued )



### A- 7P. 8

Tabl e A-1 . Summar

y Data fo r Companie s Reinforce d Plasti c Composite Facilitie s (continued ) Facilitie s Sale s

Compan y Nam e (#) Laminate dProducts , Inc
. 1 Larso n Company 1 GLN V Holding s 1 Lawrenc e Wittman & Company , Inc
. ] Lee r Inc
. 2 Lehig h Culture dMarbl e Inc
. 1 Leucadi aNational Corporatio n 3 Libert y Polygla s Inc
. ] Lipper t Corporatio n L l Culture dMarbl e 1 Louisvill e Til e Distributor s 1 Lun dInternational Holdin g Inc
. M
. C
. Gil l Corporatio n Ma c Moldin g Company Inc
. Magnu mMolding s Marbelit e Corporatio n Marbl e Creation s Marbl e Design s Inc
. Marbl e Work s Marblecas t

Product s Inc
. Marmo n Group Masc o Corporatio n McClari n Plastic s Inc
. McClur e Ind
. Inc
. Melche r Mfg
. Compan

y Inc
. Menash aCorporatio n Mes aFiberglass , Inc
. Mes aFully Forme dInc
. Michian aFiberglas s Inc
. ($10' ) $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 I $39. 0

$4. 3 I $0. 5 I $3. 4 I $2. 0 I $1. 3 1 $1. 0 1 $2. 1 1 $6,100. 0 3 $2,927. 0 1 $13. 5 1 $1. 0 1 $1. 7 2 $915. 0 1 $3. 0 1 $13. 5 1 $4. 9 Employmen t 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 19 5 7 5 9 4 0 3 5 1 9 , 1 6 3 5 30,00 0 20,50 0 9 8 1 1 1 7 5,50 0 3 2 22 0 5 0 Sma

U Busines s Ye s Ye s Ye s Ye s Ye s Ye s l 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 N o No , Ye s Ye s Ye s N o Ye s Ye s Ye s (continued ) 

### A- 8P. 9

Tabl e A-1 . Summar

y Data fo r Companie s Reinforce d Plasti c Composite Facilitie s (continued ) FacUitie s Sale s

Compan y Nam e (# ) Micro-Fa b Inc
. ] Mile s Fiberglas s & Plastic s 1 Millenniu mProduct s Inc
. 1 Mince y Marbl e Mfg
. Inc
. ] Miracl e Recreatio n Equipment Compan y 1 Molde dFibe r

Glas s Compan

y 6 Monac o Coac h Corporatio n 1 Monarc h Lt d Morriso n Molde dFibe r

Glas s 2 Mr
. Tub s Inc
. Murph y Bod y Compan y ] National Fibe r

Glas s Product s 1 Ne w Englan dPlasti c Coate dProduct s New Yor k Blower Company (The ) Newpor t Laminate s Niagar aFiberglas s Inc
. 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 OdomFiberglas s Inc
. Olympi c Fiberglas s Ind
. Inc
. Omeg aPolyme

r Technologie s Osborn e Ind
. Inc
. Owens-Comin g Oxfor dCmp , Inc
. ($10' ) $2. 0 $6. 0 $19. 1

' $4. 8 $50. 0 $60. 0 $441. 9 $9. 0 1 $100. 0

$9. 9 $24. 0 $9. 3 $7. 5 1 $82. 0 I $2. 0 1 $2. 4 1 $4. 7 2 $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 Employmen t 3 0 7 0 17 5 10 5 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 4 0 11 1 7 5 5 0 4 0 7 5 2 0 N A 38 0 140 18,10 0 5 5 Sma

U Busines s Ye s Ye s Yes , Ye s Ye s

, ' N o N o Ye s N o Ye s Ye s Ye s Ye s ,
, Ye s Ye s Ye s Ye s Ye s Ye s Yd s Ye s Ye s Ye s Ye s Ye s Ye s N o Ye s (continued)

A- 9P.1 0



### Tabl e A-1
. Summar

y Datafo r Companie s Reinforce dPlasti c Composit e Facilitie s (continued )
FacUi l

Compan y Nam e (#) P & J Partnershi p ] Pacifi c Tank

Limite d Parkso n Corporatio n Partheno n Marbl e Products , Inc
. Pearl Bath s Inc
. 1 Perm aGrai n Products , Inc
. ] Peterso n Prods
. Phi l Carte r

System , Inc
. (The ) Phillip s Electronic s Nort

h Americ aCorporatio n P I U S Holding s In c Picken' s Plastic s Inc
. Piedmon t Composite s Piedmon t Fiberglas s , Pilling s F.R,P
. Pinta' s Culture dMarbl e Inc
. Plas/Stee l Prods
. Plas-Tech , Ltd
. Plasti c Composite s Corporatio n Plasti c Development

Compan y Plasti-Fa b Pol y Foa mInternational Polymer 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
. tie s Sale s ($10' )

, $4. 5 $0. 9 $50. 0 $1. 7 $15. 0 $22. 0 I $6. 0 I $5. 1 I $7,000. 0 1 $6. 6 1 $5. 5 1 $22. 2 1
. $0. 7 1 $3. 7 1 $1. 3 1 $17. 5 1 $12. 7 1 $2. 8 1 $5. 0 1 $3. 3 1 $37. 4 1 $1. 4 1 $2. 0 2 $124. 0 1 $11. 1 1 $1. 3 1 $50. 0 1 $2. 7 1 $2. 5 Employmen t 9 2 1 5 16 0 3 0 9 0 200 4 9 5 0 30,00 0 5 0 6 8 17 5 1 5 N A 2 5 30 0 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 Sma U Busines 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 Ye s Ye s N o Ye s Ye s N o Ye s Ye s Ye s

• Ye s Ye s (continued ) 

### A-1 0P.1 1



### Tabl e A-1
. Summar

y Datafo r Companie s Reinforce dPlasti c Composit e Facilitie s (continued ) Facilitie s Sale s

Company Name (# ) RV Nationa l Holding s 1 Radiant Marbl e Compan

y 1 Rave n Industries , Inc
. 3 Re dEwal d Inc
. 1 Retterbus h Injectio n Molde d1 Robro y Industries , Inc
. 2 Rockwel l International Corporatio n 2 Roco r Transportatio n Cos
. Rom aMarbl e Inc
. ] RPM In c 1 Rubber & Plasti c Applicator s Rynon e Mfg
. Corporatio n 1 Ryob i Nort

h Americ a S
. R
. Smith , Inc
. Schmit t Marbl e Prods
. Inc
. Se 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
. SM C 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
. Square D Compan

y St
. Croi x of

Par k Fall s Ltd
. St
. Mary' s Marble , L.L.C
. ($10' ) $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 I $14. 9 I $2. 5 1 $208,152. 0 1 $1. 6 I $22. 0 I $2. 0 1 $110. 9 1 $200. 8 1 $2. 2 1 $2. 5 1 $89. 0 1 $3. 9 1 $3. 0 2 $1,856. 0 1 $12. 0 1 $4. 3 Employmen t 1,387 5 0 1,36 8 100 2 0 1,00 0 45,00 0 65 0 2 7 6,65 1 3 0 20 0 3,80 0 120 50
. 2,39 9 1 9 16 0 2 6 87 5 1,40 0 3 5 1 2 87 5 5 3 6 5 16,00 0 13 0 6 5 Sma

U Busines s N o Ye s No , Ye s Ye s

, ' N o N o N o Ye s N o Ye s Ye s N o ,
, Ye 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 N o Ye s Ye s (continued ) 

### A-l lP.1 2

Tabl e A-1 . Summar

y Data fo r Companie s Reinforce d Plasti c Composit e Facilitie s (continued )

1 Company Nam e Standar d Glas , Inc . Sunrise Fiberglas s Corporatio n Sunse tPlastic s Inc . Superio r Home Prods . Inc . Syn-Mar , Inc . Takar a BelmontUs a Taylor Ind . Inc . Tec o Inc . Tecto n Product

s Th e Alph a Corporatio

n Thysse n A g Tiffan y Marbl e Mfg . Inc . To m Smit h Fiberglas s Inc . Tompkin s Ind . Inc . Trai l Wagons Inc . Tr i Cit y Marbl e Trinit y Industrie

s TR W Inc . U.S . Fiberglass Prods . Inc . Ultra/Gla s o f Lakevill e Inc . United State

s Marbl e Inc . United Technologie s Corporatio n Universa l Plastics Inc . Vendur a Industries , Inc . Venetia n Marbl e Verte x Plastics Inc . Viatec , Inc . VM C Fiberglass Products , Inc . W . H . Brad

y Compan y Faciliti (# )

, e s Sale s

($10« ) $1. 8 $2. 5 $3. 0 * $35. 0 $0. 7 $42. 0 $1. 8 $22. 0

, , $2. 0 $150. 0 1 $40,753. 4

$1. 0 $0. 7 ) $1,400. 0

$3. 8 I $5. 0 I $2,234. 7 I $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 Employmen t 15 3 0 3 5 17 5 1 2 9 8 17 18 0 2 0 32 5 127,87 3 2 1 9 14,00 0 5 0 1 5 16,30 0 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 Sma

U 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 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 (continued )
A-1 2P.1 3



### Tabl e A-1
. Summar

y Dat afo r Companie s ReinforcedPlasti c Composit e Facilitie s (continued )
Compan

y Nam e Walnut'Investigatio n Compan y Warminster

Fiberglas s Compan

y Wayn e Mf

g Company Werne r Ladde r Compan y Wester n Recreational
. Vehicles , Inc
. Wexco , Inc
. Willia mKreysle r

& Associates , Inc
. Wilso n Marbl e Compan

y Xeno n Company , Inc
. Xerxe s Yanke e Plasti c Compan

y Zane' s Fiberglas s Shop , Inc
. Zehrc o Plastics , Inc
. Facilitie s (# ) 1 2 1

,

, 7

2 43 8 Sale s

($10' ) $6. 3 $7. 0 $6. 0 1 $253. 1 $20. 0 $46. 1 $2. 0 $0. 8 * • $1. 0 $54. 0 $0. 8 $5. 7 $20. 1 $763,429. 6 Employmen t 5 0 100 15 0 2,70 0 40 0 27 5 2 0 2 0 9 49 3 8 50 , 19 0 2,126,58 6 Sma

U Busines 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 27 9 N A = no t availabl e Sources : America

n Busines s Informatio n (ABI)
. 1999
. America n Busines s Dis c [computer file]. Disclosure Inc
. 1998
. Worldscop e [computer file]
. Bethesda , MD : Disclosur e 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 Compames. Bethlehem , PA : Dun & 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
. Infonnatio n Acces s Corporation
. 1998
. Busines s & Company ProFil e [computer file]. Foster

City , CA : Infonnatio n Acces s Corporation
. Selecte dCompan

y 10- K Reports
.



### A-1 3P. M



# Appendi x B
Economi c Mode l o

f th e Merchan t Secto r o f th e U.S . Reinforced Plasti c Composites Industr yP.1 5

Implementatio n ofth e propose dNESHAP wil l affect th e cost s o f

productio n i n th e U.S
. RPC industr

y fo r producer s tha

t us e thermose t

resins
. Response s a

t th e facilit y leve l t o thes e additiona

l cost s collectivel y determin e th e marke t impact s of

th e regulation
. Specifically , th e cos t

of th e regulatio n ma

y induc e some facilitie s t o alter thei r curren t leve l of productio n o r

eve n t o close
. Thes e choice s affect , andi n tur n ar e affecte dby , th e marke t pric e fo r eac h product
. Th e economi c impac t analysi s employ s standardconcept s i n microeconomic s t o mode l th e supply of eac h produc t

andth e impact s of

th e regulatio n o n productio n cost s an dth e outpu t decision s of

merchan t facilities. 1 Th e mai n element s o f th e analysi s ar e a s follows :

• characteriz e productio n of eac h produc t

a t th e individual facilit

y an dmarke t levels ,
• characteriz e deman dfor eac h product , an d

• develo p th e solutio n algorithmt o determin e th e with-regulatio n equilibrium
. Th e followin g section s provid e th e supply an ddeman dspecification s for eac h produc t marke t a s implemente di n th e EIA mode l an dsummariz e th e model' s solutio n algorithm
. B. l Suppl y o f

Reinforce d Plastic s Products Cos t curve s wer

e constructe dfor

eac h produc t

lin e a t existin g RP C facilitie s usin g thermosettin g resins
. Facilitie s usin g thermoplasti c resin s are no t subjec t t o th e propose d regulation s an

dar e treate da s a

n aggregate producer
. Therefore , fo r aparticula

r end-us e market , th e marke t

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 suppl y fromdirectl y affecte dthermosettin g facilitie s andq 1 i s di e supply fromindirectl y affecte dthermosettin g anddiermoplasti c facilities
. B.l.l Thermosetting Facilities (q°) (Directly Affected) Existin g merchan t

producer s of

RPC s hav e th e abilit

y to var y outpu t i n th e fac e o f productio n cos t

changes
. Economi c theor y provide s th e rational e fo r believin g tha

t suppl y function s for

existin g supplier s ar e upwardsloping
. Fo r thi s analysis , th e generalize d Leontie f technolog y i s assume dt o characteriz e th e productio n of RPC s a t eac h facility
. Thi s technolog y i s appropriate given th e fixed-proportion material input s (resins , filler, an d reinforcements ) an dth e primar y variable-proportio n input s of labo r an denergy . Applyin g

1 A s note di

n Sectio n 4 , th e impac t

of th e regulatio n o n captiv e producer s i s determine dthroug h afull-cos t absorptio n approac h tha

t doe s no t incorporate marke t

change s andresult s i n profit s bein g reduce db y th e estimate dcomplianc e cost s fo r thes e producers
. B- lP.1 6

Hotelling' s lemm ato th e generalize dLeontie f profi t functio n produce dth e followin g general ' for mof th e supply functio n fo

r eac h RP C produc t

line :

* " Y, • | (B.2 )
wher e p i s th e marke t

pric e for th e reinforce dplasti c product , Y j an dP ar e mode l parameters , andj indexe s producer s (i.e. , individual existin g facilities)
. Th e theoretical restriction s o n th e mode l parameter s that ensur e upward-slopin g supply curve s are Y j > 0 ar » d p < 0
. 1 i Figur e B- l illustrate s th e theoretical supply functio n o f Eq
. (B.2)
. A s shown , th e upward-slopin g supply curv e i s specifie dover aproductiv e rang e wit

h alowe r boun dof zer o 

# J L that correspond s widi ashutdow n pric e equal t o ? an d a n uppe r boun dgive n b y di e productiv e capacit

y o f <^f that i s approximate db y th e paramete r Yj
. Th e curvature of

m e supply functio n i s determine db y m e p parameter .

q f Figur e B-l . Theoretical Suppl y Functio n fo r Existin g Facilitie s

T o specif y th e supply functio n o f

Eq
. (B.2 ) for

thi s analysis , th e P parameter i s compute db y substitutin g a n assume dmarke t

suppl y elasticity , (5) , fo r

aparticula

r reinforce d

B- 2P.1 7

plasti c product , themarke t pric e o f th e produc t

(p) , an ddi e production-weighte daverag e annua l productio n leve l of

existin g facilitie s (q ) into th e followin g equation: 2



### P ="54 q (B.3 )
Absent literatur e estimates , th e market-leve l supply elasticitie s wer e assume dt o b e 1 (unitar

y elasticity ) (i.e. , a1 percen t chang e i n pric e lead s t o a1 percen t chang e i n output)
. Th e 199 7 marke t price s o f eac h produc t

wer e derive da s describe di n Sectio n 4 , an dth e averag e annua l productio n leve l of

eac h produc t

fo r eac h facilit

y wa s derive dfromth e facilit y database
. Th e P parameter

fo r eac h produc t

wa s calculate db y incorporatin g thes e value s int o Eq
. (B.3)
. Th e parameter , Yj
. approximate s th e productiv e capacit y andvarie s acros s produc t line s a t eac h facility
. Thi s parameter doe s no t influenc e di e facility' s productio n responsivenes s to pric e change s a s doe s th e p parameter . Thus , th e paramete r Y j wa s use dt

d calibrate th e model s o ma

t eac h existin g facility' s supply equatio n i s consisten t wit h th e baselin e productio n data
. Productio n decision s a

t di e individual facilitie s ar e affecte dby th e total annua l variabl e complianc e costs , Cj , whic h are expresse dper poun dof reinforce d plastic s product
. Eac h suppl y equatio n will b e directl y affecte db y dies 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 di e supply functio n fo r eac h existin g facilit

y fromEq
. (B.2 ) abov e becomes : 

# v-*- i 1



### Pr S (B.4 ) Th e total annua

l variabl e complianc e cost s pe r poun dare projecte dgive n th e 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
.
I n evaluatin g di e impact s of th e propose drule , w e shif t th e individua l suppl y curve s by th e variabl e portio n o

f di e complianc e cost s an dme n evaluat e th e closur e decisio n wit h

2 Equatio n B. 3 i s determine dby 1 ) takin g th e derivativ e ofth e suppl y functio n (B.2 ) wit h respec t t o price , 2 ) multiplyin g th e expressio n by p/ q to 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.1 8

di e total complianc e cost s (fixed , o r annua l capital , cost s plu s variabl e cost s associate dwid i • ne w productio n level)
. Therefore , ou r modelin g approac h addresse s di e economi c viabilit y ofth e product-lin e an devaluate s whedie r i t continue s t o cove r

variabl e cost s wid i regulatio n a s wel l a s th e economi c viabilit y o f th e plan t an devaluate s whedie r

i t continue s t o cove

r total cost s (variabl e plu s fixed) wit h regulation
. I n orde r t o evaluat e di e economi c viabilit y of th e plant , th e Agenc y determined , baselin e estimate s o f

variabl e andfixedproductio n costs . A s note dabove , applyin g di e supply functio n specificatio n t o eac h directl y affecte dproduce r generate s a

n 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

di e curv e correspondin g t o diei r productio n rat e an dmarke t price
. Lackin g direc t

informatio n fromeac h facility , t o approximat e plant-leve l fixedcosts , th e Agenc y applie da n industry averag e profi t

rat e o f 4. 4 percen t for eac h facility. 3 Thus , fixedcost s a t eac h facilit

y i wer e the n derive das : , Fixe dCosts , = Sales- , - Variabl e Costs- , - PfofitS j where Profits- , = 4.4 % * Sales-,
. Given thi s baselin e characterizatio n of eac h facility , th e Agenc y evaluate ddiei r

economi c viabilit

y wit h regulatio n an dpredicte dafacilit y closure s if profit s wer e no t

positive , i.e. , total revenue s di dno t excee dtota l productio n cost s an dtota l regulator y costs . * i B.1.2 Thermosetting and Thermoplastic Facilities (q 1 ) (Indirectly Affected) Becaus e thi s industr

y segment i s no t direcd y affecte db y di e regulatio n i t wa s ho t necessar y t o mode l thei r

suppl y a t a n individual facilit

y leve l a s was necessar

y fo r direcdy affecte dthermosettin g facilities
. EPA specifie dasingl e representativ e functio n t o expres s th e suppl y of

RPC s fromindirecti y affecte dfacilities , whic h allow s the mt o increas e diei r productio n i n respons e t o highe r prices , i.e. , 

### q 1 

### = A 1 

### p f



### (B.5)
where q 1 i s th e quantit

y supplie dfromindirecd y unaffecte dfacihties , A 1 i s apositiv e constant , and-S

1 i s th e suppl y elasticity
. Absent literatur e o r

econometri c estimates , di e suppl y elasticit

y wa s assume dt o hav e avalu e o f one . Th e multiplicativ e suppl y parameter ,

3 A s applie dfo

r thi s analysis , thi s rat e reflect s th e maximumprofi t rat e fo r an individua l facility , i.e. , a threshol dleve l o f

profitability
. Thos e facilitie s whos e tota l revenu e minu s productio n cost s resulte din a retur n o f les s tha n 4. 4 percen t

o f revenue s use dth e lower

rat e for determinatio n o f

economi c viabilit

y o r regulatio n induce dclosure
. B- 4P.1 9

A 1 , i s determine dfo

r eac h produc t

by bac k solvin g Eq
. (B.5 ) give n di e suppl y elasticit y and baselin e value s fo

r th e market

pric e andquantit

y supplie di n eac h market

segment . Th e resultin g RP C product s fromthes e facilitie s ar e modele da s perfec t

substitute s fo r RP C product s fromtiiermosetting facilities
. Therefore , they supply a t di e same pric e fo

r eac h end-us e marke t

whic h serve s t o dampen di e abilit y of th e direcdy affecte dproducer s t o increas e price s in respons e to regulation
. Althoug h i t ma y b e more appropriate t o mode l a s imperfec t substitute s widi cross-pric e elasticities , th e Agenc y di dno t hav e sufficien

t informatio n t o provid e dios e mode l parameter s andchos e a n optio n dia

t woul db e aworst
cas e scenari o fo

r affectedindustr

y segment (i.e. , conservativ e modelin g approach)
. B. 2 Deman d fo r Reinforce d Plastic s Products A singl e equatio n expresse s th e deman dfo r eac h reinforce dplasti c composite s product , Q D = B D ^ (B.6 )
where Q D i s th e quantit

y demanded , B D i s apositiv e constant , an dn D i s th e deman delasticity
. Absent literatur e or

econometri c estimates , th e deman delasticit y wa s assume dt o hav e a valu e of-0.5
. Th e multiplicativ e deman dparameter , B D , wa s determine dfo r eac h produc t b y bac k solvin g Eq
. (B.6 ) given th e deman delasticit y an dbaselin e value s fo

r th e marke t

. pric e an dquantit

y demande di n eac h marke t segment . B. 3 With-Regulatio n Marke tEquilibriu m Determinatio n Facilit y response s an

dmarke t 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 t o compliance , whic h cause s facility

specifi c productio n response s (i.e. , outpu t reduction)
. Th e cumulativ e effec t of thes e response s lead s t o a

n increas e i n di e market

pric e ma t al l producer s (direcdy andindirecd y affected) an

dconsumer s face , whic h lead s t o furthe r response s b y producer s (direcd y an d indirecd y affected) a s wel l a s consumer s anddiu s ne w marke t prices , an ds o oh
. Th e new ' equilibriu mafte

r imposin g th e regulatio n i s di e resul t o f aserie s of

iteration s betwee n producer andconsumer

response s andmarke t

adjustment s unti l astabl e marke t pric e arise s where total marke t

suppl y equal s tota

l marke t demand , diat

i s Q s = Q D

. Th e algorithmfo

r derivin g di e post-complianc e equilibri ai n al l market s ca n b e generalize dt o five recursiv e steps :

B- 5P.2 0

1 ) Impos e me contro l cost s on eac h affecte dfacility , thereb y shiftin g inwar dthei r suppl y curv e an dreducin g thei r productio n leve l at

th e give n marke t

price
. 2 ) Recalculat e th e marke t suppl y of eac h reinforce dplasti c produc t b y horizonta l summatio n acros s al l suppliers
. 3 ) Determin e th e new price s for all produc t

markets
. 4 ) Recalculat e di e supply function s o f al l facilitie s widi th e ne w prices , resultin g i n a ne w marke t

suppl y of eac h product
. Evaluat e marke t deman da

t di e new prices
. 5 ) G o t o Step 3 , resultin g i n ne w price s fo r eac h product
. Repeat

unti l equilibriu m condition s are satisfie di n al l markets
. B. 4 Economi c Welfar e Impacts Th e economi c welfar

e implication s o f

th e marke t

pric e an doutpu t

change s with th e regulatio n ca n b e examine dusin g tw o slightl y different tactics , eac h givin g asomewhat differen t insigh t bu t th e same implications : change s i n di e ne t benefit s of

consumer s an d producer s base do n th e pric e change s an dchange s i n di e tota l benefit s an dcost s o f these , product s base do n di e quantit y changes
. Thi s analysi s focuse s on th e first measure—th e change s i n di e ne t

benefit s of

consumer s an dproducers
. Figur e B- 2 depict s di e chang e i n economi c welfare b y first

measurin g th e chang e i n consume r surplu s an ddie n th e chang e i n producer surplus
. In essence , th e deman dan dsupply 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 dof

estimatin g di e chang e i n economi c welfare wit h di e regulatio n divide s societ

y int o consumer s an

dproducers
. In amarke t

environment , consumer s an d producer s o f

th e goo dor

servic e deriv e welfar

e from amarke t

transaction
. Th e differenc e betwee n di e maximu mpric e consumer s are willin g t o pa y for agoo dan ddi e pric e die y actually pa

y i s referre dt o a s "consumer surplus. " Consume r

surplu s i s measure da s di e are a under di e deman dcurv e an dabov e di e pric e o f th e product
. Similarly , th e differenc e betwee n th e minimu mpric e producer s are willin g to accep t fo r agoo dan ddi e pric e die y actuall y receiv e i s referre dt o a s "producer surplus " o r

profits
. Produce r

surplu s i s measure d a s th e are aabov e th e suppl y curv e an dbelo w di e pric e o f

B- 6P.2 1

$/ Q

P n P i S "

^ \ ^ \A yS

^"V ^ ^r . ^r Js^ jy\^^m

' ^^y^ ^

i i ^^ D

CL, Q , Q A (a ) Chang e i n Consume r Surplu s wit h Regulatio n $/ Q

Q , Q , Q/ t (b ) Chang e i n Produce r Surplu s wit h Regulatio n $/ Q

P n P i S '

\ v / sS

^^•^^ ^

I I ^^ D

Q j Q , Q A (c ) Ne t Chang e i n Economi c Welfar e wit h Regulatio n Figure B-2 . Economi c Welfar e Change s with Regulation : Consume r an d Produce r Surplu s B- 7P.2 2

di e product
. Thes e area s ca n b e thought

of a s consumers ' ne t

benefit s o f

consumptio n an d producers ' ne t

benefit s o f

production , respectively
. In Figur e B-2 , baselin e equilibriu moccur s a t di e intersectio n o f

th e deman dcurve , D , andsupply curve , S
. Pric e i s P , wit h quantit y Q,
. Th e increase dcos t

o f productio n widi di e regulatio n wil l caus e th e marke t supply curv e to shif

t upwar dt o S'
. Th e ne w equilibriu m pric e o f th e produc t

i s P 2 . Wit

h ahigher pric e fo r th e product , ther e i s les s consumer welfare , al l els e bein g unchange da s real income s ar e reduced
. I

n Figur e B-2(a) , are aA represent s th e dolla r valu e o f th e annual ne t

los s i n consumers ' benefit s wit h th e increase dprice
. Th e rectangula r portio n represent s di e los s i n consumer surplu s o n th e quantity stil l consumed, , Qj , whil e th e triangula

r are arepresent s th e foregon e surplu s resultin g fromth e reduce d quantit y consumed , Q1-Q2
. I n additio n t o di e change s i n consumer welfare , produce r

welfare als o change s wid i di e regulation
. Wit

h di e increas e in marke t

price , producer s receiv e highe r revenue s o n di e quantit y stil l purchased , Q2
. In Figure 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 di e are aunder di e suppl y curv e u p t o th e original marke t price , are aC , measure s th e los s i n producer surplus , whic h include s di e los s associate dwit

h th e quantit

y n o longer

produced
. Th e ne t

chang e i n produce r

welfare i s represente db y are aB-C
. Th e chang e i n economi c welfar e attributabl e t o th e complianc e cost s o f th e regulatio n i s th e su mo f

consume r

an dproduce r

surplu s changes , tha t

is , - (A ) + (B-C)
. Figur e B-2(c ) show s th e ne t

(negative ) chang e i n economi c welfar e associate dwid i th e regulatio n a s are a D
. However , thi s analysi s doe s no t includ e di e benefit s that

occu r outsid e di e marke t

(i.e. , di e valu e of

th e reduce dlevel s of

ai r pollutio n wit

h di e regulation)
. Includin g dii s benefi t ma y reduc e di e ne t

cos t of di e regulatio n o r

eve n make i t

positive
.

B- 8P.2 3

TECHNICA L REPORT DAT A (Please read

Instructions on reverse before completing) 1 . REPOR

T NO . EPA-452/R-02-00 7 3 . RECIPIENT S ACCESSION NO .

4 . TITL E AN D SUBTITL

E Economi c Impac t

Analysi s of

Final Reinforce dPlastic s NESHA P 5 . REPOR T DAT E Augus t 200 2 6 . PERFORMIN

G ORGANIZATIO

N COD E

7 . AUTHOR(S ) Brook s M
. Depro , Mar

k C
. Buckley , an

dTayler H
. Bingha

mRT I International 8 . PERFORMIN G ORGANIZATIO

N REPOR

T NO . RT I Projec t

Number 7647.003.27 1

9 . PERFORMIN

G ORGANIZATION NAM E AN D ADDRES S Researc h Triangl e Institut e (RTI ) Center fo r Economic s Research , Hobb s Bldg
. Researc h Triangl e Park , N C 2770 9 10 . PROGRA M ELEMEN

T NO .

11 . CONTRACT/GRAN T NO. , 68-D-99-02 4

12 . SPONSORING AGENC Y NAM E AN D ADDRES S Tom
. Curran , Directo r Offic e o f Air Qualit y Plannin g andStandard s Offic e o f Ai r andRadiatio n U.S
. Environmental Protectio n Agenc y Researc h Triangl e Park , N C 2771 1 13 . TYPE O F REPOR T AN D PERIO

D COVERE

D Fina l

14 . SPONSORIN G AGENC Y CQDE EPA/200/0 4

15 . SUPPLEMENTAR

Y NOTE S

16 . ABSTRAC T Thi s repor t evaluate s th e economi c impact s of th e fina l NESHA P for

reinforce dplastic s manufacturing
. Th e industr y impact s 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 apartial equilibriu mmode l o f th 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 final regulator y flexibilit y analysi s (FRFA ) that

evaluate s small busines s impacts
.

17 . KE Y WORD S AND DOCUMEN T ANALYSI S DESCRIPTOR

S b . IDENTIFIERS/OPE N ENDE D TERM S c . COSAT 1 Field/Grou p economi c impact s small busines s impact s socia l cost s Ai r Pollutio n contro l Economi c Impac t

Analysi s Regulator y Flexibility Analysi s

18 . DISTRIBUTION STATEMENT Releas e Unlimite d 19 . SECURITY CLAS S (Report) Unclassifie d 21 . NO . O F PAGES

20 . SECURIT Y CLAS S (Page) Unclassifie d 22 . PRIC E

EPA Form 2220- 1 (Rev . 4-77 ) PREVIOUS EDITIO N I S OBSOLET

EC M

Unite dState s

Environmenta l Protectio n Agenc y Offic e o f Ai r Quality Plannin g an dStandard s Ai r Quality Strategie s an dStandard s Divisio n Researc h Triangl e Park , N C Publicatio n No
. EP A 452/R-02-00 7 Augus t 200 2