Revisions to the Economic Impacts and Burden Estimates for the Rule Titled: Review of New Sources and Modificati ons in Indian Country This addendum summarizes the revised quali tative assessment of the economic and burden impacts of the rule titled: Review of New Sour ces and Modifications in Indian Country. Burden and costs estimates have changed from those estimated under the previous versions of the Economic Impact Analysis (EIA) a nd the Supporting Statement (SS) for this rule due to a change in policy before the rule was finalized.
At the time the original EIA and SS were written, we planned to delay the applicability date of the rule for true minor sources that might be su bject to the minor NSR program for a period of 18 months from the rule’s effective date (60 days after the final rule is published). However, to address commenters concerns about EPA’s ability to implement this NSR permitting program in a timely manner and to provide additional time for EPA Regions to prepare for their duties as the Federal permitting authority, including the devel opment of additional permitting tools, we have extended the applicability date of the rule for tr ue minor sources for an additional 18 months for a total applicability delay of 36 months from the effective date of the final rule. In addition, sources eligible to seek coverage under a general permit will be subject to that general permit 4 months after the general permit is effective (6 months after the general permit is published) unless the source opts to apply fo r a site-specific permit at the time the source had to apply for that general permit.
Therefore and based on these revisions, we are reducing the permitting burden and cost for both the regulated community and the agency. Unde r the revised provisions, no permits will be required for new and modified true minor sources during the initia l 36 months after the effective date of the rule, unless a general permit is availa ble before the 36 month a pplicability date for the source category for which the source owner is se eking a permit. Sources will still be required to register, as in the previous version of the rule , within the first 18 months after the minor NSR rule effective date or 90 da ys after the source begins ope ration, whichever is later.
Reduction in Economic Impact s Based on Rule Revisions In the EIA, we present a range of estimated co sts and impacts for the first 3 years after the effective date of the rule. The “Lower Bound” costs in the EIA only include Monitoring, Recordkeeping and Reporting (MRR) costs, comput ed under the conservative assumption that all facilities choose source-specific permitting (cost and burden for the development and implementation of general permits is unknown at this time). Under the “Upper Bound” cost estimates some facilities are assumed to be subject to BACT.
Previously, Lower Bound costs, which are based onl y on MRR costs, were estimated for the first three years after the effective da te of the rule to total $22.9 m illion across all source categories. Under the revised provisions, costs for this in itial three-year period would total $2.7 million. The $20.2 million reduction in costs over the initial three- year period is wholly owed to reduction in permitting burden for new and modified true mi nor sources during the second18-month interval of the current 36-month applicability delay after the effective da te of the rule.
Furthermore, previous Upper Bound costs during the first 3 years after the effective date of the rule, which include compliance costs for BACT c ontrols for some facilities in addition to MRR costs, were estimated in the EIA to total $24.2 million. Under the revisions, the Upper Boundcost is $2.9 million. This reduction of $21.3 million is also wholly due to the reduction in permitting burden for new and modified true mi nor sources during the second 18-month interval of the current 36-month applicability dela y after the effective date of the rule.
Burden Estimates in Supporting Statement
Estimated Reduction in Burden for Affected Sources . As explained previously, no permits will be required for new and modified true minor sources during the initial 36 months after the effective date of the rule, unless a general permit is available before the 36 month applicability date for the source category for which the source owner is seeking a permit. Sources will still be required to register, as in the pr evious version of the rule, with in the first 18 months after the minor NSR rule effective date or 90 days after the source begins operation, whichever is later.

We estimate that the level of effort and cost to register under the rule a nd to apply for coverage under a general permit is similar. Therefore, th e overall burden for all affected true minor sources is projected to decrease from $22.8 million to $2.7 million, a reduction of $20.1 million and about 1.8 million hours. The burden associated with affected true minor sources is projected to decrease from $20.4 million to $0.3 million. Th e burden for new true minor sources is projected to decrease from $18.1 million to $0.2 million. The burden for modified true minor sources is projected to decrease fr om $2.3 million to about $30 thousand.

The overall hours burden for all affected true mi nor sources is projecte d to decrease from 2.1 million hours to 0.2 million hours, a reduction of 1.8 million hours. New true minor sources account for 1.6 million of the reduction and modi fied true minor sources account for the remaining 0.2 million hours.
Estimated Reduction in Agency Burden : Similarly, the administrative burden to the Agency is projected to be lower under the revised provisions. Assuming a ll new and modified true minor sources are required to either re gister or apply for coverage under a general permit during the first 36 months following the rule’s effective da te, the Agency overall burden is projected to decrease from $17.1 million to $6.9 million, a reducti on of $10.2 million. In terms of hours, the Agency burden falls from 162,470 hours to 76,5 50 hours, a reduction of approximately 85,900 hours. This decrease is wholly ow ed to not requiring sources to s eek site-specific permits for true minor sources during the second 18-month interval of the current 36-month applicability delay after the effective date of the rule. The burden asso ciated with true minor sources is projected to decrease from $11.0 million to $0.8 m illion, a reduction of $10.2 million.
These estimates, however, do not include the Agency cost burden for development and implementation of new general permits as those costs are unknown at this time.

# Economic Impact Analysis for the Review of New Sources and Modifications in Indian Country
Final ReportEPA-452/R-11-002 January 2011

Economic Impact Analysis for the Review of Ne w Sources and Modificati ons in Indian Country Final Report

By: Lillian Bradley U.S. Environmental Protection Agency Air Economics Group Research Triangle Park, North Carolina

Prepared for: U.S. Environmental Protection Agency Air Economics Group Research Triangle Park, North Carolina

Contract No. EP-D-06-003 Assignment No. 4-77

U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Health and Environmental Impacts Division Air Economics Group Research Triangle Park, North Carolinaiii ACRONYMS AND ABBREVIATIONS

Acronym or Abbreviation Definition AIAN American Indian or Alaska Native BACT Best Availabl e Control Technology CBP County Business Patterns CFR Code of Federal Regulations CO Carbon Monoxide CSR Cost-to-Sales Ratio ECHO EPA Enforcement and Complia nce History Online database EIA Economic Impact Analysis EPA Environmental Protection Agency HP Horsepower ICR Information Collection Request IRF Information Request Form Sent by OAQPS to EPA Regions MMBTU/hr Million British Thermal Units per hour MRR Monitoring, Recordkeeping, and Reporting NA NSR Non-Attainment New Source Review NAAQS National Ambient Air Quality Standards under the Clean Air Act NAICS North American Indus try Classification System NEI National Emissions Inventory NO x Nitrous Oxides NSR New Source Review OAQPS EPA Office of Air Qua lity Planning and Standards PM Particulate Matter PM 10 Particulate Matter, 10 microns or smaller PSD Prevention of Signi ficant Deterioration RFA Regulatory Flexibility Act SBA Small Business Administration SBREFA Small Business Regulatory Enforcement Fairness Act SISNOSE Significant Impact to a Substantial Number of Small Entities SO x Sulfur Oxides SUSB Statistics of United States Business (U.S. Census Bureau) TAC Total Annualized Costs TPY Tons per Year VOC Volatile Organic Compoundsv CONTENTS

Section Page
Executive Summary ............................................................................................................. ES-1

1 Introduction ................................................................................................................ ... 1-1 1.1 Definitions ........................................................................................................... 1-1 1.2 EPA Region Groups ............................................................................................ 1-4 1.3 Organization of the Economic Im pact Analysis Report ...................................... 1-5

2 Profile of Baseline Conditions ...................................................................................... 2-1 2.1 Data Availability and Uncertainties and Limitations .......................................... 2-1 2.2 Major and Synthetic Minor Sources .................................................................... 2-1 2.2.1 Data on Existing Major and Synthe tic Minor Sources (2009) ................. 2-1 2.2.2 Methodology for Projecting Major S ources Expected to Exist in 2010.......................................................................................................... 2-2 2.2.3 Methodology for Projecting New Ma jor Sources Expected During the First 6 Years after Promulgation ........................................................ 2-5 2.2.4 Methodology for Projecting Synthetic Minor Sources Expected to Exist in 2010 ............................................................................................ 2-7 2.2.5 Methodology for Projecting Ne w Synthetic Minor Sources Expected During the First 6 Years after Promulgation ............................ 2-8 2.3 Minor Stationary Sources, (o r True Minor Sources) ........................................... 2-9 2.3.1 Methodology for Estimating Existing Minor Sources (2009) ................. 2-9 2.3.2 Methodology for Projecting New Minor Sources .................................. 2-10
3 Cost Analysis ............................................................................................................... . 3-1 3.1 General Approach for Estimating Compliance Costs for New Minor Sources ................................................................................................................. 3-1 3.2 Costs for Major Sources ...................................................................................... 3-6 3.3 Agency Costs ....................................................................................................... 3-8
4 Economic Impact Analysis Methods and Results ......................................................... 4-1 4.1 Impacts on New Minor Sources, Minor Modifications, and New Synthetic Minor Sources ...................................................................................................... 4-1 4.2 Impacts on Major Sources ................................................................................... 4-5 4.3 Impacts on New Synthetic Minor Sources .......................................................... 4-6 4.4 Impacts on Existing True Minor and Ex isting Synthetic Minor Sources ............ 4-6 4.5 Small Entity Impact Analysis .............................................................................. 4-6

5 References .................................................................................................................. ...R-1vi Appendixes
A: Method for Estimating Existing True Minor Sources and Projecting New True Minor Sources .............................................................................................................. A- 1

B: Estimated Control Costs for Affected Major and Minor Sources in Indian Country ....................................................................................................................... ..B-1vii LIST OF TABLES

Number Page
2-1. Estimated Number of Existing Majo r Sources in Indian Country, by EPA Region Groups (2009) .................................................................................................. 2-3 2-2. Projected Number of Ex isting Major Sources in I ndian Country, by EPA Region Groups (2010) ............................................................................................................... 2 -4 2-3. Projected Number of New Major So urces in Indian Country, by EPA Region Groups, 6-Year Period (2011–2016) ............................................................................ 2-6 2-4. Number of Existing Sy nthetic Minor Sources in Indian Country, by Region Groups (2009) ............................................................................................................... 2 -7 2-5. Projected Number of Ex isting Synthetic Minor Sour ces in Indian Country, by Region Groups (2010) .................................................................................................. 2-8 2-6. Projected Number of New Synthetic Minor Sources in Indian Country, by Region Groups, First 6 Years (2011–2016) .................................................................. 2-9 2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009) .............. 2-12 2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010) .............. 2-14 2-9. Projected New Minor Sources in Indi an Country, First 6 Years (2011–2016) .......... 2-17

3-1. Estimated National Total Annualized Contro l Costs by Source Type, First Year ....... 3-3 3-2. Estimated National Total Annualized Control Costs by Source Type, Second Year .......................................................................................................................... ..... 3-3 3-3. Estimated National Total Annualized Control Costs by Source Type, Years 3 through 6 (10 3 $2008) ................................................................................................... 3-4 3-4. Estimated Lower-Bound National Total Annualized (MRR) Costs, First Year (10 3 $2008) ................................................................................................................... 3-4 3-5. Estimated Lower-Bound National Total A nnualized (MRR) Costs, Second Year (10 3 $2008) ................................................................................................................... 3-5 3-6. Estimated Lower-Bound National Tota l Annualized (MRR) Costs, Years 3 through 6 (10 3 $2008) ................................................................................................... 3-5 3-7. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, First Year (10 3 $2008) .................................................................................................. 3-6 3-8. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, Second Year (10 3 $2008) .............................................................................................. 3-7 3-9. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, Years 3 through 6 (10 3 $2008) ...................................................................................... 3-7 3-10. Costs for New Major Sources in Nonattainment Areas (10 3 $2008) ............................ 3-7 3-11. Summary of National Costs, Including Agency Costs (10 6 $2008) ............................. 3-9

4-1. Lower-Bound Cost-to-Sales Ratios (M RR Costs Only), for Minor Sources, Minor Modifications to Existing Major and Minor Sources, and New Synthetic Minor Sources, by Industry Sector ............................................................................... 4-3viii 4-2. Upper-Bound Cost-to-Sales Ratios, for Minor Sources, Minor Modifications to Existing Major and Minor Sources, and New Synthetic Minor Sources, BACT and MRR Costs, by Industry Sector ............................................................................. 4-4 4-3. Projected Numbers of New and Modi fied Sources Owned by Small Entities, 2011–2016, by Industry Sector ..................................................................................... 4-7 4-4. Lower-Bound Small Business Impacts for New Minor Sources, Minor Modifications at Existing Major and Mi nor Sources, and New Synthetic Minor Sources, MRR Costs Only, by Industry Sector ............................................................ 4-9 4-5. Upper-Bound Small Business Impacts for New Minor Sources, Minor Modifications at Existing Major and Mi nor Sources, and New Synthetic Minor Sources, BACT and MRR Costs, by Industry Sector ................................................. 4-10ES-1 EXECUTIVE SUMMARY

The Review of New Sources and Modifications in Indian Country (h ereafter referred to as the rule) establishes nationally applicable regulations to implement a permitting program to regulate the construction and modi fication of stationary sources of air pollution and to allow certain new and existing stationary sources to vo luntarily accept federally enforceable emission limits to avoid major source regulations. The rule establishes procedures and terms under which the Administrator will issue permits for new mino r source facilities (new plants that are minor sources, minor modifications to existing sources , and creation of synthetic minor sources by voluntarily accepting emissions limitations) as well as for minor modifications at major sources. In addition, the rule establishes procedures for permitting new major sources and major modifications in nonattainment areas in Indian Country. The U.S. Environmental Protection Agency (EPA) currently issues preconstruction permits in Indian Country for major sources and major modifications in attainment and unclassif iable areas under the Pr evention of Significant Deterioration (PSD) regulations at 40 CFR Part 52.21. EPA has also issued preconstruction permits in Indian Country for major sources and major modifications in nonattainment areas on a case-by-case basis. Thus, the rule establishes a regulatory mechanism for permitting new major sources (new facilities) and major modifications at existing facilities in nonattainment areas in Indian Country. Existing minor sour ce facilities in Indian Country at promulgation (an estimated 32,900 facilities) will be required to register but not to undertake any other compliance activities. Existing synthetic minor facilities (an estimated 79 facilities at promulgation) are expected to be required to acquire new permits.
EPA projected the number of new sources in Indian Country duri ng the 6-year period following rule promulgation, based on projecte d population growth rate s in Indian Country. These estimates were then revised based on in formation from EPA Regions. During the first 6 years following promulgation of the rule, EPA proj ects that there will be 110 new major sources in Indian Country, of which 5 will be in nona ttainment areas; 48 new s ynthetic minor sources; 7,606 new true minor sources; one major modifica tion to an existing major source; 12 minor modifications to existing major sources; and 984 minor modifications to minor sources.
EPA estimated a range of costs of complian ce for the rule, with a lower-bound estimate of only permitting, monitoring, recordkeeping, and reporting (MRR) costs and the upper-bound estimate including both emissions control costs and MRR costs.
All new sources will be required to undert ake permitting and MRR activities as a result of the rule. In addition, some f acilities will be required to install and operate emissions controlES-2 equipment, as determined based on a case-by- case review of contro l technologies. EPA has estimated upper-bound costs as the sum of MRR costs and Best Achievable Control Technology (BACT) control costs, recogni zing that this upper bound overstate s control costs because very few facilities will be required to install BACT.
Existing minor sources are projected to in cur a total of $2.04 million to complete registration during the first year after the effective date of the rule. Existing synthetic minors are estimated to incur a total of $48,800 to acquire new permits during the same time period. EPA has delayed implementation of the rule for new a nd modified minor sources until 18 months after the effective date of the rule. During the first 18 months following the rule’s effective date, these new sources will be required to register but not to be permitted. During this period, facilities will incur costs similar to existing minor sources ($62/source).
Table ES-1 presents national total annua lized costs for new minor sources, minor modifications, and new synthetic minor sour ces, including lower-bound estimates (MRR costs only) and upper-bound estimates (MRR costs plus BA CT emissions control costs) for the first year following rule promulgation, the second year following rule promulgation, and for years 3 through 6 following promulgation.
Table ES-1. Summary of National Total Annu alized Costs for Minor Sources and Minor Modifications, by Time Period (10 6 $2008)

Time Period Number of Affected Sources Lower-Bound Estimate (MRR Costs Only) Upper-Bound Estimate (MRR Costs Plus Emissions Control Costs) First-Year Costs 34,412 $2.3 $2.4 Second-Year Costs 1,442 $6.9 $7.4 Costs for Years 3 through 6 1,442 $13.7 $14.4

EPA estimates that new major sources in nona ttainment areas will incur total annualized costs of $40,000. However, EPA does not believe these costs are incremental, because new major sources in nonattainment areas would have in curred similar costs to comply with sourcespecific Federal Implementation Plans (FIPs) in th e absence of the rule. The rule represents an administrative change but no increase in costs. Thus, EPA does not estimate incremental impacts for new major sources due to the rule.

In addition to the total annua lized costs incurred by new sour ces, EPA estimates that the Agency will incur administrative costs of $17.1 million over the first 3 years following rule promulgation, an average of $5.7 million per year.ES-3 Thus, during the first year following promulga tion, industry is projected to incur between $2.3 and $2.4 million; including annual Agency burden, the national annualized cost is estimated to be between $8.0 and $8.1 million. Because implem entation of the rule was delayed 18 months from the rule’s effective date for new and m odified minor sources, Y ear 2 includes 6 months during which new and modified minor sources n eed only register and 6 months during which they will need to obtain a permit. Costs for the second year following rule promulgation total between $6.9 million and $7.4 million. Including a nnual Agency burden, the national annualized cost is estimated to be between $12.6 milli on and $13.1 million. During subsequent years, estimated total annualized incremental costs fo r new sources in the industry (excluding existing minor sources, existing synthetic minor sources, and new and modified major sources) range from $13.7 million to $14.4 million. Including a nnual average Agency burden, estimated total annualized costs for the rule range from $19.4 million to $20.1 million.
After estimating costs of compliance, EP A conducted a screening assessment that compared the total annualized costs (using the per-facility cost s for the period beginning 18 months following rule promulgation) for facilities in affected sectors to typical facility revenues in affected sectors. At the lower bound, MRR costs only, costs ar e below 1% of sales for all sectors except automobile body refinishers (whos e costs are less than 1.5% of sales). At the upper bound, BACT plus MRR costs, costs are proj ected to be less than 3% of sales for all sectors and less than 1% of sales for all sector s except auto body refinish ers, concrete batching plants, sand and gravel mines, sand and shot blasting operations, solid waste landfills, and wood kitchen cabinet manufacturers. EPA estimates ther e may be as many as 74 new minor sources or minor modifications at existing minor sources in these sectors in the first 6 years after rule promulgation but only a very small share of them would be required to inst all BACT controls, so very few affected new and modified minor sour ce facilities would incu r the upper-bound costs.
EPA estimated the number of new sources owned by small businesses in each sector, based on the share of existing sources in Indian Country owned by small businesses; in all, EPA estimates that 1,730 new minor sources, minor m odifications, and new synthetic minor sources will be owned by small businesses during the fi rst 6 years following rule promulgation. EPA’s screening assessment compared the costs of complia nce for these facilities to typical sales for firms with fewer than 500 employees. Table ES -2 shows EPA’s estimated number of new and modified sources owned by small businesses, dur ing the 6 years following rule promulgation.
At the lower bound, for MRR costs only, only small businesses in the automobile body refinishing sector are estimated to incur costs greater than 1% and less than 1.5%. EPA estimates that there may be 10 new or modified sources owned by small businesses in this sector during the 6 years following promulgation of the rule . At the upper bound, BACT plus MRR costs,ES-4 Table ES-2. Projected Number of New and Mo dified Sources Owned by Small Businesses

Source Type Projected Number of New and Modified Sources Owned by Small Businesses New Minor Sources 1,521
Modified Minor Sources 197 Synthetic Minor Sources 10 Minor Modifications to Major Sources 2 Total 1,730

several sectors (auto body refinishers, concrete batching plants, sand and gravel mining, sand and shot blasting, solid waste landfills, and sawmills) have costs between 1% and 3% of sales. EPA estimates that there will be at most 20 new mi nor sources or minor modi fications owned by small businesses in these categories in the period 2011 to 2016. In addition, EPA anticipates that only a very small share of new or modified minor sour ces will incur upper-bound costs as a result of the rule. Thus, EPA believes that the rule will not result in significant impacts to a substantial number of small entities.1-1 SECTION 1

INTRODUCTION

The Review of New Sources and Modifications in Indian Country (h ereafter referred to as the rule) establishes nationally applicable regulations to implement a permitting program to regulate the construction and modi fication of stationary sources of air pollution and to allow certain new and existing stationary sources to voluntarily accept federally enforceable emission limits to avoid major source regulations. The rule establishes procedures and terms under which the Administrator will issue permits for new mino r source facilities (new plants that are minor sources, minor modifications to existing sources , and creation of synthetic minor sources by voluntarily accepting emissions limitations). In addition, the rule establishes procedures for permitting new major sources and major modifications in nonattainment areas in Indian Country. The U.S. Environmental Protection Agency (EPA ) currently issues preconstruction permits in Indian Country for major sources and major modifi cations in attainment and unclassifiable areas under the Prevention of Significant Deterioratio n (PSD) regulations at 40 CFR Part 52.21. EPA has also issued preconstructi on permits in Indian Country for major sources and major modifications in nonattainment areas on a case-by- case basis. Thus, the rule does not impose any incremental emissions control requirements on exis ting major sources in nonattainment areas. It does, however, establish a regulatory mechan ism for permitting new major sources (new facilities and major modifications at existing facilities) in nonatta inment areas in Indian Country. Existing operations at existing mi nor and major source facilities in Indian Country will not be affected by the rule.

1.1 Definitions To clarify terms used in this report, EP A provides the following definitions, which are found in their entirety in Appendix S to 40 CF R Ch I, Part 51(pp. 494–516 of the 7-1-09 Edition of the CFR):
Major stationary source means: ( a ) Any stationary source of air pollutants which em its, or has the potential to emit, 100 tons per year or more of any pollutant subject to regul ation under the Act, excep t that lower emissions thresholds shall apply in areas subject to subpart 2, subpart 3, or subpart 4 of part D, title I of the Act, according to the thresholds list ed in Appendix S to Part 51, below.
(1) 50 tons per year of volatile organic compounds in any se rious ozone nonattainment

area. (2) 50 tons per year of volatile organic compounds in an area within an ozone transport region, except for any severe or extreme ozone nonattainment area.1-2 (3) 25 tons per year of volatile organic co mpounds in any severe ozone nonattainment

area. (4) 10 tons per year of volatile organic compounds in any ex treme ozone nonattainment

area. (5) 50 tons per year of carbon monoxide in any serious nonattainment area for carbon monoxide, where stationary sources c ontribute significantly to carbon monoxide levels in the area (as de termined under rules issued by the Administrator). (6) 70 tons per year of PM 10 in any serious nonattainment area for PM 10 ; ( b ) For the purposes of applying the requirements of paragraph IV. H of Appendix S of Part 51 to stationary sources of nitrogen oxides located in an ozone nonattainment area or in an ozone transport region, any stationary source which em its, or has the potential to emit, 100 tons per year or more of nitrogen oxides emissions, excep t that the emission thre sholds in paragraphs II.A.4(i)( b )( 1 ) through ( 6 ) of this Ruling apply in areas subject to subpart 2 of part D, title I of the Act.
(1) 100 tons per year or more of nitrogen oxides in any ozone nonattainment area classified as marginal or moderate. (2) 100 tons per year or more of nitrogen oxides in any ozone nonattainment area classified as a transitional, submarginal, or incomplete or no data area, when such area is located in an ozone transport region. (3) 100 tons per year or more of nitrogen oxi des in any area desi gnated under section 107(d) of the Act as attainment or unclassifiable for ozone th at is located in an ozone transport region. (4) 50 tons per year or more of nitrogen oxide s in any serious nonattainment area for

ozone. (5) 25 tons per year or more of nitrogen oxi des in any severe nonattainment area for

ozone. (6) 10 tons per year or more of nitrogen oxi des in any extreme nonattainment area for
ozone; or Any physical change that would occur at a st ationary source not qualifying under paragraph II.A.4(i)( a ) or ( b ) of this Ruling as a major stationary source, if the change would constitute a major stationary source by itself. A major statio nary source that is ma jor for volatile organic compounds or nitrogen oxides is major for ozone. Fugitive emissions are generally not included in determinations of whether a stationary source is a major source, alt hough Appendix S to Part 51 lists several categories of stationary sources for which the fugitive emissions of a stationary source shall be included in determining whether the source is major.
Major modification means any physical change in or chan ge in the method of operation of a major stationary source that would result in:1-3 1. A significant emissions increase of a regul ated New Source Review (NSR) pollutant (as defined in paragraph II.A.31 of Appendix S of Part 51); and
2. A significant net emissions increase of th at pollutant from the major stationary

source. Any significant emissions increa se (as defined in paragraph II .A.23 of this Ruling) from any emissions units or net emissions increase (as defi ned in paragraph II.A.6 of this Ruling) at a major stationary source that is significant for volatile organi c compounds shall be considered significant for ozone. Appendix S of Part 51 lists se veral activities that w ould not be considered a physical change or change in the method of operation of the facility; specifies that any significant net increase in nitrogen oxides is considered significant for ozone, and that any physical change in or change in the method of operation of, a majo r stationary source of volatile organic compounds (VOCs) that re sults in any increase in emissi ons of VOCs from any discrete operation, emissions unit, or other pollutant emitti ng activity at the source shall be considered a significant net emissions increase and a major m odification for ozone, if the major stationary source is located in an extreme ozone nonattainment area that is subject to subpart 2, part D, title I of the Act. Appendix S also notes that fugitiv e emissions are not included unless the source is in one of the specific categories listed in Appendix S’s definition of major source.
A minor stationary source ( often referred to simply as a minor source or true minor source ) generally means a source that emits or has th e potential to emit regulated NSR pollutants in amounts that are less than the major stationary so urce levels. However, for purposes of this rule, a minor source is a source that emits or has th e potential to emit regulated NSR pollutants in amounts that are less than the major stationary source levels but has potential emissions higher than the minor NSR thresholds. For the purposes of this definition, the potential to emit includes fugitive emissions, to the extent that they are qu antifiable, only if the source is in one of the source categories listed in 40 CF R 52.21(b)(1)(iii). The term “mi nor stationary source” applies independently to each regulated NSR pollutant that the source has the potential to emit and excludes any emissions units and activities that have been exempted from regulation according to final 40 CFR 49.153(c).
Synthetic minor source means a source that has the potenti al to emit regulated NSR pollutants in amounts that are at or above the major source thresholds in 40 CFR 49.167 or 52.21, as applicable, but that has taken an enforceable restri ction so that its potential to emit (PTE) is less than the major source thresholds and, for purposes of this rule, above the minor NSR thresholds as well.

Minor modification . For the purposes of the minor NS R program, a minor modification is defined at 40 CFR 49.152(d) as an y physical or operational change at a stationary source that would cause an increase in the allowable emissions of the affected emissions units above the minor NSR thresholds for any regulated NSR polluta nt or that would cause the emission of any regulated NSR pollutant not previously emitted. For the purposes of this definition, fugitive1-4 emissions, to the extent that they are quantifiable, are included only if the source is in one of the source categories listed in 40 CFR 52.21(b)(1 )(iii). The following exemptions apply:

• A physical or operational change does not in clude routine maintenance, repair, or replacement.

• An increase in the hours of operation or in the production rate is not considered an operational change unless such change is prohibited under any permit condition that is enforceable as a practical matter.

• A change in ownership at a stationary source is not considered a modification. Major source of hazardous air pollutants is any stationary sour ce or group of contiguous sources under common control that emits or has the potential to emit considering control, in the aggregate, 10 tons per year or more of any h azardous air pollutant (Sec. 112(b)(1) of the Clean Air Act [CAA]) or 25 tons per year or more of any combination of hazardous air pollutants.
Area source of hazardous air pollutants is any stationary sour ce or group of contiguous sources that is not a major source of hazardous ai r pollutants and emits or has the potential to emit any hazardous air pollutant or combination of hazardous air pollutants above the threshold level.
1.2 EPA Region Groups EPA conducted its analysis at the EPA Regi on level and then grouped the EPA Regions to reflect Regions with similar source types. EPA Region 3 contains no federally recognized Tribes, so it is omitted from the analysis. EPA grouped the Regions as follows: Regions 1, 2, and 4; Regions 5, 7, and 10; and Regions 6, 8, and 9. Because the analysis is conducted for the continental United States only, the EPA Regions in the analysis include the following states:
Region 1: Connecticut, Maine, Massachusetts , New Hampshire, Rhode Island, and Vermont Region 2: New Jersey and New York Region 4: Alabama, Florida, Georgia, Kentuc ky, Mississippi, North Carolina, South Carolina, and Tennessee Region 5: Illinois, Indiana, Michig an, Minnesota, Ohio, and Wisconsin Region 6: Arkansas, Louisiana, New Mexico, Oklahoma, and Texas Region 7: Iowa, Kansas, Missouri, and Nebraska Region 8: Colorado, Montana, North Dakot a, South Dakota, Utah, and Wyoming Region 9: Arizona, California, and Nevada Region 10: Idaho, Oregon, and Washington1-5 1.3 Organization of the Economic Impact Analysis Report The analysis is organized as follows. S ection 2 provides a profile of the baseline conditions for the analysis. In Section 3, the Agen cy estimates the costs and burdens that would typically result from implementing the rule. Se ction 4 describes the underlying assumptions and computations EPA made in estimating the economi c impacts of the rule, including estimating the number of affected small entities and examini ng the rule’s possible im pact on these entities.2-1 SECTION 2

PROFILE OF BASELINE CONDITIONS

Promulgation of the Review of New Sources and Modifications in Indian Country will result in regulation of air emissions from new and modified minor sour ces, minor modifications to existing major sources, and s ources accepting emissions limitations to become synthetic minor sources. In addition, the rule es tablishes the nonattainment NSR program for major sources and major modifications to sources in Indian Country. In addition, the minor NSR portion of the rule will require the registration of existing minor sources. This section provides a profile of the baseline conditions and describe s the underlying assumptions and computations that were made in support of the analysis.
2.1 Data Availability and Uncertainties and Limitations A first step in analyzing the impacts of the rule is characterizing the baseline conditions in the absence of the rule (y ear 2009). Characterizing the base line requires estimating the number of existing major and minor sources in Indian Country in 2009 and proj ecting the number of new sources that will be created in Indian Count ry during the period 2011 to 2016. Data on major sources in Indian Country are publicly availabl e because major sources are required to obtain Title V permits. However, data on minor sources are very limited because existing minor sources are not required to have permits.
The analysis presented here is for the contin ental United States; thus , it does not include data for Alaska Native Villages or Hawaii. Furt hermore, the nationwide results are presented geographically by groups of EPA Regions to refl ect those Regions that have similar source categories, as descri bed in Section 1.
2.2 Major and Synthetic Minor Sources

This section describes the data used to es timate the number and type of existing major and synthetic minor sources in Indian Country, and the methods and data used to project the number of new major and synthetic minor s ources over the first 6 years following rule promulgation (i.e., 6-year period, 2011 through 2016).
2.2.1 Data on Existing Major and Synthetic Minor Sources (2009)

We obtained data from EPA’s Enforcemen t and Compliance History Online (ECHO) database (http://www.epa-echo.gov/echo/ ) in May 2009, as well as data from various EPA Regions on existing major sources in Indian Country. However, the data from the ECHO2-2 database were reviewed and amended by Tribal experts in the EPA Regions based on the information gathered by them. For example, seve ral Regions identified so urces not listed in ECHO or identified sources that had shut down. Th e revised data for existing major sources are shown in Table 2-1, while the data for existing sy nthetic minor sources are shown later in this section in Table 2-4. These data reflect actual da ta for the year 2009; thus , these values are not estimates.
In summary, there were 157 existing majo r sources and 64 existing synthetic minor sources in Indian Country in 2009.
2.2.2 Methodology for Projecting Major Sources Expected to Exist in 2010 The number of existing sources in the previ ous section was used to estimate the number of major sources that would ex ist in late 2010. We present our projection methods for new major sources first; then we describe methods for pr ojecting new synthetic minor sources. Although the data sources and projection met hodologies are similar, major sour ce and synthetic minor sources are regulated differently under the rule.
1. We assumed that the number of major sources in Indian Country in each Region would grow at the same rate as the Am erican Indian and Alaska Native (AIAN) population in each Region.
2. Estimated AIAN growth rates for each state were calculated based on Census projections of the state-level AIAN popul ation for the period 2000 to 2015 (U.S. Census Bureau, 1996), and we assumed the a nnual growth rates remain valid through 2016. AIAN growth rates for each EPA Region were then computed as the population-weighted average of the state growth ra tes. This approach assumes that all sectors with major sources will grow at the same rate, and that all new major sources and major modifications will occur in the sa me sectors as the existing major sources.
3. This basic approach was augmented with information from EPA Regions about the expected number of new sources.

Table 2-2 shows the projected number of major sources in Indian Country in 2010, by EPA Region group. Overall, we estimate that ther e will be 179 existing major sources in Indian Country in 2010.2-3 Table 2-1. Estimated Number of Existing Major Sources in Indian Country, by EPA Region Groups (2009) a

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Wood Furniture Manufacturing 1 0 0 1

Crude Petroleum and Natural Gas Extraction 0 0 101 101 Natural Gas Liquid Extraction 0 0 6 6

Power Generation 0 0 0 0

Fossil Fuel Electric Power Generation 0 0 4 4

Natural Gas Distribution 0 0 1 1 Fabric Coating Mills 0 0 1 1

Sawmills 0 6 2 8 Hardwood Veneer and Plywood Manufacturing 0 1 0 1 Softwood Veneer and Plywood Manufacturing 0 1 0 1 Wood Window and Door Manufacturing 0 1 0 1 All Other Miscellaneous Wood Product Manufacturing 0 1 0 1 All Other Basic Inorganic Chemical Manufacturing 0 0 1 1 Plastics Plumbing Fixture Manufacturing 0 1 0 1 Pipeline Transportation of Natural Gas 0 3 5 8

Solid Waste Landfill 0 0 3 3

Aluminum Production 0 0 1 1

Non-fossil Fuel Power Generation 0 0 2 2 Coal Mining 0 0 2 2 Natural Gas Compressor Station 0 0 7 7

Casino/Hotel 0 3 1 4
Other (Boilers) 0 1 1 2
Total Existing Sou rces 1 18 138 157

a Estimates and projections are presented by EPA Region groupings, which are defined geographically. Note that

EPA Region 3 has no federally recognized Indian Tribes and is thus omitted from the tables.2-4 Table 2-2. Projected Number of Existing Major Sources in Indian Country, by EPA Region Groups (2010) a

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Wood Furniture Manufacturing 1 0 0 1

Crude Petroleum and Natural Gas Extraction 0 0 119 119 Natural Gas Liquid Extraction 0 0 6 6

Power Generation 0 0 2 2

Fossil Fuel Electric Power Generation 0 0 4 4

Natural Gas Distribution 0 0 1 1 Fabric Coating Mills 0 0 1 1

Sawmills 0 6 2 8 Hardwood Veneer and Plywood Manufacturing 0 1 0 1 Softwood Veneer and Plywood Manufacturing 0 1 0 1 Wood Window and Door Manufacturing 0 1 0 1 All Other Miscellaneous Wood Product Manufacturing 0 1 0 1 All Other Basic Inorganic Chemical Manufacturing 0 0 1 1 Plastics Plumbing Fixture Manufacturing 0 1 0 1 Pipeline Transportation of Natural Gas 0 3 5 8

Solid Waste Landfill 0 0 3 3

Aluminum Production 0 0 1 1

Non-fossil Fuel Power Generation 0 0 2 2 Coal Mining 0 0 2 2 Natural Gas Compressor Station 0 0 9 9

Casino/Hotel 0 3 1 4
Other (Boilers) 0 1 1 2
Total Existing Major Sources 1 18 160 179

Growth rate based on U.S. Census Bu reau. Projected State Populations, by Se x, Race, and Hispanic Origin, 1995–

2025. http://www. census.gov/population/projec tions/state/stpjrace.txt.2-5 2.2.3 Methodology for Projecting New Major Sour ces Expected During the First 6 Years after Promulgation The same method was used to project the num ber of major sources at the end of the 6-year period.
1. We assumed that the number of major sources in Indian Country in each Region would grow at the same rate as the AIAN population in each Region.
2. We estimated AIAN growth rates for each st ate based on Census projections of statelevel AIAN population for the period of 2000 to 2015 (U.S. Census Bureau, 1996). AIAN growth rates for each EPA Region we re then computed as the populationweighted average of the state growth ra tes. Major sources in each Region were projected by applying the Re gion-specific AIAN growth rate to the numbers of major sources estimated to exist in 2010. Then the number of new major sources was computed by subtracting the projected num ber of major sources at the beginning of the 6-year period from the estimated sources at the end of the period. This approach assumes that all sectors with major sources will grow at the same rate, and that all new major sources and major modifications will occur in the same sectors as the existing major sources. We pr oject that there will be 110 new major sources in Indian Country during the period 2011 to 2016, as shown in Table 2-3.
3. To identify the number of new major sources in nonattainment areas, we assumed that the same percentage of new sources would be in nonattainment areas (approximately 5%) as were reported in the ECHO database in 2009. Thus, we estimate that only 5 of the 110 new major sources in Indian Country would be in a nonattainment area.
4. Based on experience with other rulemakings, we estimated at most one of the major sources in nonattainment areas would choos e to make a major modification during the 6-year period.
5. Based on experience with other rulemakings , we assumed that two major sources per year will choose to make a minor modificat ion during the 6-year period, for a total of 12 minor modifications to major facilities.2-6 Table 2-3. Projected Number of New Major So urces in Indian Country, by EPA Region Groups, 6-Year Period (2011–2016)

EPA Region Groups
Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total
Wood Furniture Manufacturing 0 0 0 0

Crude Petroleum and Natural Gas Extraction 0 0 108 108 Natural Gas Liquid Extraction 0 0 1 1

Power Generation 0 0 0 0

Fossil Fuel Electric Power Generation 0 0 0 0

Natural Gas Distribution 0 0 0 0 Fabric Coating Mills 0 0 0 0

Sawmills 0 1 0 1 Hardwood Veneer and Plywood Manufacturing 0 0 0 0 Softwood Veneer and Plywood Manufacturing 0 0 0 0 Wood Window and Door Manufacturing 0 0 0 0 All Other Miscellaneous Wood Product Manufacturing 0 0 0 0 All Other Basic Inorganic Chemical Manufacturing 0 0 0 0 Plastics Plumbing Fixture Manufacturing 0 0 0 0 Pipeline Transportation of Natural Gas 0 0 0 0

Solid Waste Landfill 0 0 0 0

Aluminum Production 0 0 0 0

Non-fossil Fuel Power Generation 0 0 0 0 Coal Mining 0 0 0 0 Natural Gas Compressor Station 0 0 0 0

Casino/Hotel 0 0 0 0
Other (Boilers) 0 0 0 0
Total New Major So urces 0 1 109 110
Growth rate based on U.S. Census Bureau. Projected St ate Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www. census.gov/population/projec tions/state/stpjrace.txt.2-7 2.2.4 Methodology for Projecting Synthetic Mi nor Sources Expected to Exist in 2010 The data on existing synthetic minor sources in 2009 (Table 2-4) was used to estimate the number of synthetic minor sources that would exist in late 2010 as follows:
1. We assumed that the number of synthetic minor sources in Indian Country in each Region would grow at the same rate as the AIAN population in each Region.
2. We estimated AIAN growth rates for each state based on Census projections of the state-level AIAN population for the period 2000 to 2015, 1 and we assumed the annual AIAN growth rates remain valid thro ugh 2016. AIAN growth rates for each EPA Region were then computed as the populati on-weighted average of the state growth rates. This approach assumes that all sectors with synthetic minor sources will grow at the same rate, and that all new major m odifications will occur in the same sectors as the existing synthetic minor sources.
3. This basic approach was augmented with information from EPA Regions about the expected number of new sources.
Table 2-4. Number of Existing Synthetic Mino r Sources in Indian Country, by Region Groups (2009)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total
Crude Petroleum and Natural Gas Extraction 0 0 33 33 Sand and Gravel Mining 0 0 1 1 All Other Nonmetallic Mineral Mining 0 0 1 1 Hydroelectric Power Generation 0 2 0 2
Sawmills 0 5 1 6 Asphalt Paving Mixture and Block Manufacturing 0 2 0 2
Casino/Hotel 0 0 1 1 Softwood Veneer and Plywood Manufacturing 0 1 0 1 Fiberglass Manufacturing 0 1 0 1 Agricultural Post-harvest Chemicals 0 1 0 1 Slaughterhouse 0 0 0 0 Other (Boilers) 2 0 13 15
Total 2 12 50 64

Table 2-5 shows the projected number of synt hetic minor sources in Indian Country in 2010, by EPA Region group. Overall, we estimate that there will be 79 existing synthetic minor sources in Indian Country in 2010.

1 U.S. Census Bureau, Projected State Populations, by Sex, Race and Hispanic Or igin, 1995–2025. http://www.census.gov/population/pr ojections/state/stpjrace.txt.2-8 Table 2-5. Projected Number of Existing Synt hetic Minor Sources in Indian Country, by Region Groups (2010)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total
Crude Petroleum and Natural Gas Extraction 0 0 34 34 Sand and Gravel Mining 0 0 1 1 All Other Nonmetallic Mineral Mining 0 0 1 1 Hydroelectric Power Generation 0 2 0 2
Sawmills 0 5 1 6 Asphalt Paving Mixture and Block Manufacturing 0 4 0 4
Casino/Hotel 0 0 1 1 Softwood Veneer and Plywood Manufacturing 0 1 0 1 Fiberglass Manufacturing 0 1 0 1 Agricultural Post-harvest Chemicals 0 1 0 1 Slaughterhouse 0 1 0 1 Other (Boilers) 2 0 24 26
Total 2 15 62 79

Growth rate based on U.S. Census Bu reau. Projected State Populations, by Se x, Race, and Hispanic Origin, 1995–

2025. http://www. census.gov/population/projec tions/state/stpjrace.txt.

2.2.5 Methodology for Projecting New Synthetic Mi nor Sources Expected During the First 6 Years after Promulgation The same method was used to project the numbe r of synthetic minor sources at the end of the 6-year period.
1. EPA assumed that the number of synthetic minor sources in Indian Country in each Region would grow at the same rate as th e American Indian and AIAN population in each Region.
2. We estimated AIAN growth rates for each state based on Census projections of the state-level AIAN population for the period 2000 to 2015, and assumed the annual growth rate remains valid through 2016. AIAN growth rates for each EPA Region were then computed as the population-weight ed average of the state growth rates.Synthetic minor sources in each Region were projected by applying the Regionspecific AIAN growth rate to the numbers of major sources estimated to exist in 2010. Then the number of new synthetic minor sources was computed by subtracting the projected number of sources at the beginning of the 6-year period from the estimated sources at the end of the period. Th is approach assumes that all sectors with synthetic minor sources will grow at the same rate, and that all new sources will occur in the same sectors as the existing syntheti c minor sources. Our estimated numbers of synthetic minor sources were reviewed by the EPA Regions and revised according to their comments. We project that there w ill be 48 new synthetic minor sources during2-9 the 6-year period. Table 2-6 presents th e projected new synthetic minor sources during the period 2011 to 2016.
Table 2-6. Projected Number of New Syntheti c Minor Sources in Indian Country, by Region Groups, First 6 Years (2011–2016)

EPA Region Groups
Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total

Crude Petroleum and Natural Gas Extraction 0 0 12 12 Sand and Gravel Mining 0 0 0 0 All Other Nonmetallic Mineral Mining 0 0 0 0 Hydroelectric Power Generation 0 0 0 0

Sawmills 0 0 0 0 Asphalt Paving Mixture and Block Manufacturing 0 0 0 0

Casino/Hotel 0 0 0 0 Softwood Veneer and Plywood Manufacturing 0 0 0 0 Fiberglass Manufacturing 0 0 0 0 Agricultural Post-harvest Chemicals 0 0 0 0 Slaughterhouse 0 0 0 0
Other (Boilers) 0 0 36 36

Total 0 0 48 48
Growth rate based on U.S. Census Bureau. Projected St ate Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www. census.gov/population/projec tions/state/stpjrace.txt.

2.3 Minor Stationary Sources, (or True Minor Sources) The method for estimating the number of exis ting minor sources in Indian Country and projecting the number of new minor sources during the first 6 years after rule promulgation is more complex, because data on existing minor s ources in Indian Country are limited. Appendix A illustrates the process for estimating existi ng new minor sources and then projecting the number of new minor sources.
2.3.1 Methodology for Estimating Ex isting Minor Sources (2009) 2
EPA’s methodology for estimating existing mi nor sources in 2009 used data from a variety of sources.

2 Existing minor source estimates are assumed to be valid for 2009.2-10 1. EPA used all available information to identi fy the types of sources likely to be found in Indian Country, including

– regional reports to the Office of Air Quality Planning and Standards (OAQPS)

– National Emissions Inventor y (NEI) categories identifie d in the proposal (North American Industry Classificat ion System [NAICS] codes)

– additional categories listed in the NEI (NAICS codes)

– additional categories listed on the Informa tion Request Forms (IRFs) sent to the Regions
2. We estimated the share of income in each EPA Region that is associated with the AIAN geographical locations. EPA chose to use an income ratio to estimate the share of facilities in each NAICS on AIAN lands because income is a good proxy for economic activity. This is the same method that was used for the proposal economic impact analysis (EIA). The following relati onship was used to calculate this income ratio:

. ) located is AIAN where gion Re the of income Estimated ( ) area geographic AIAN each for Population ( * ) forAIAN capita per Income ( Ratio Income 

## ∑

=

3. We obtained data on the number of esta blishments for each affected NAICS from 2002 Statistics of U.S. Businesses 3 for each state. 4. We grouped the data into EPA Regions.
5. We estimated the number of sources in Indian Country in each Region and minor source NAICS code/source category using the following equation, based on each AIAN geographic area’s income ratio:

Number of Sources = (Income Ratio)*(Total Nu mber of Establishments in Each Region).

6. We then sent the estimated number of existing sources to the EPA Regions for review, and based on the information gather ed by them, several Regions amended the information.
2.3.2 Methodology for Projecting New Minor Sources The overall approach for projec ting new minor sources, as desc ribed below, is similar to that used for projecting new ma jor and synthetic minor sources.

1. We assumed that the number of minor sources in Indian Country in each Region would grow at the same rate as the AIAN population in each Region.

3 U.S. Census Bureau. Statistics of U.S. Businesses, 2002 . Data from all U.S. and Puerto Rico business establishments with paid employees (excludes certain source categories and most government employees). Data for establishments are presented by geographic area, 6-digit NAICS, and employment size class. http://www.census.gov/econ/susb/data/susb2002.html.2-11 2. We estimated AIAN growth rates for each st ate based on Census projections of statelevel AIAN populations for the period of 2005 to 2015; we assumed the annual AIAN growth rates remain valid through 2016. 4
3. We calculated AIAN growth rates for each EPA Region as the population-weighted average of the state growth rates. Minor sources in each Region were then projected by applying the Region-specific AIAN growth rate to the number of minor sources estimated/reported in 2010. Th is reflects the same assumptions underlying the major source and synthetic minor sources projecti ons, that all sectors with minor sources will grow at the same rate as the AIAN population, and that all new minor sources will be in the same sectors as the existing minor sources.
4. To project new minor sources during the first 6 years after ru le promulgation, the estimated number of existing minor sources in 2010 was projected to grow at AIAN population growth rates for 6 years. New minor sources were estimated by subtracting projected minor sources at th e beginning of the period from projected minor sources at the end of the period. Ov erall, we project that there will be 7,606 new true minor sources in Indian Country in the 6 years after rule promulgation.

5. To estimate the number of minor modificati ons to these sources subject to the rule, EPA assumed based on experience that 10% (3,289) of existing minor sources would choose to make changes to their facilities each year. However, it is anticipated that of these minor source process/operational modi fications, only 5% will result in emission increases greater than the minor NSR threshold. We estimate that 984 minor modifications to minor sources will requi re permits during the first 6 years after promulgation.

Table 2-7 presents the resulting estimated/re ported minor sources for 2009, and Table 2-8 presents the resulting estimated minor s ources for 2010. In 2010, Regions 1, 2, and 4 are estimated to have approximately 300 existing true minor source facilities. Regions 5, 7, and 10 are estimated to have approximately 800 true mi nors, and Regions 6, 8, and 9 are estimated to have approximately 31,800, for a total of approximately 32,900.

4 U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995–2025. http://www.census.gov/population/pr ojections/state/stpjrace.txt.2-12 Table 2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Logging 5 7 49 61 Forestry Support Activities 0 1 19 20 Oil and Natural Gas Wells 5 30 23,774 23,809 Rock Mining Gravel 3 12 83 98
Electric Power Generation 0 3 78 81
Natural Gas Distribution 1 3 77 81 Agricultural Irrigation 2 4 216 222 Sewage Treatment Facilities 0 15 19 34 Sand Blasting 12 25 178 215 Animal Food Manufacturing 1 1 15 17 Fruit Concentrate Processing 0 1 1 2 Canned Vegetable Plant 0 1 1 2 Meat Packing 1 5 45 51 Mint Distillery 0 2 0 2
Lumber Saw Mill 1 3 25 29 Softwood, Veneer and Plywood 0 0 4 4
Reconstituted Wood Products 0 1 1 2
Millwork 2 3 20 25
Wood Pellet Fuel Plant 1 2 8 11 Box Manufacturing 0 1 5 6 Printing Operations Lithographic 11 16 183 210 Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin) 0 2 9 11 Asphalt Hot Mix 0 6 42 48 Chemical Preparation 0 2 63 65 Liquid Fertilizer Storage Distribution 0 3 5 8 Explosives Manufacturing 0 0 0 0 Clay and Ceramics Operations 0 1 178 179 Concrete Batching Plant 2 11 68 81 Fiber Glass Operations 0 2 17 19 Mineral and Earth Manufacturing 0 0 1 1 Aluminum Manufacturing 0 0 2 2 Casting Foundry 1 2 13 16
Fabricated Structural Metal 5 10 102 117 Metal Can Manufacturing 0 1 1 2 Coating Painting Facilities 2 4 201 207 (continued)2-13 Table 2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009) (continued)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Surface Coating Operations 1 2 16 19
Fabricated Metal Products 3 8 62 73 Machinery Manufacturing 1 3 10 14 Communications Equipment Manufacturing 0 1 7 8 Transportation Equipment Manufacturing 0 0 6 6 Wood Kitchen Cabinet Manufacturing 4 6 39 49 Furniture Manufacturing 0 1 8 9
Grain Elevator 2 24 81 107
Gasoline Bulk Plant 1 5 37 43
Automobile Dealers 18 34 345 397 Gas Stations 40 157 1,016 1,213 Pipeline Transportation of Natural Gas 0 2 34 36 Airports and Services 0 3 25 28 Professional, Scientific, Technical Services 4 7 50 61
Solid Waste landfill 0 9 21 30
Other Solid Waste/Incineration 0 0 22 22 Hospitals 3 8 87 98
Social Assistance 11 18 170 199
Casino/Hotels 10 51 136 197 Restaurants 74 133 1,326 1,533 Automobile Light Duty Operation 31 57 538 626 Automobile Refinishing Shop 14 31 250 295 Welding Operations 9 22 260 291
Cremation 1 3 31 35 Dry Cleaner 6 13 173 192
Tribal Governments 0 0 145 145
Boilers 0 1 126 127
Feedlot 0 0 0 0 Surgical Instrument Manufacturing 0 0 0 0 Paper Manufacturing 0 0 0 0
Residential Construction General Contractor 0 0 0 0
Other 0 0 23 23 Grand Total 288 779 30,547 31,6142-14 Table 2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Logging 5 8 49 62 Forestry Support Activities 0 1 19 20 Oil and Natural Gas Wells 5 30 24,923 24,958 Rock Mining Gravel 3 12 85 100
Electric Power Generation 0 3 80 83
Natural Gas Distribution 1 3 78 82 Agricultural Irrigation 2 4 219 225 Sewage Treatment Facilities 0 16 19 35 Sand Blasting 13 25 180 218 Animal Food Manufacturing 1 1 15 17 Fruit Concentrate Processing 0 1 1 2 Canned Vegetable Plant 0 1 1 2 Meat Packing 1 5 45 51 Mint Distillery 0 2 1 3
Lumber Saw Mill 1 4 25 30 Softwood, Veneer and Plywood 0 0 4 4
Reconstituted Wood Products 0 1 1 2
Millwork 2 3 20 25
Wood Pellet Fuel Plant 1 2 8 11 Box Manufacturing 0 1 5 6 Printing Operations Lithographic 11 17 185 213 Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin) 0 2 9 11 Asphalt Hot Mix 0 6 44 50 Chemical Preparation 0 2 66 68 Liquid Fertilizer Storage Distribution 0 3 5 8 Explosives Manufacturing 0 0 0 0 Clay and Ceramics Operations 0 1 181 182 Concrete Batching Plant 3 11 69 83 Fiber Glass Operations 0 2 18 20 Mineral and Earth Manufacturing 0 0 1 1 Aluminum Manufacturing 0 0 2 2 Casting Foundry 1 3 13 17
Fabricated Structural Metal 5 11 103 119 Metal Can Manufacturing 0 1 1 2 Coating Painting Facilities 2 4 206 212 (continued)2-15 Table 2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010) (continued)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Surface Coating Operations 1 2 17 20
Fabricated Metal Products 3 9 63 75 Machinery Manufacturing 1 3 10 14 Communications Equipment Manufacturing 0 1 7 8 Transportation Equipment Manufacturing 0 0 6 6 Wood Kitchen Cabinet Manufacturing 4 6 39 49 Furniture Manufacturing 0 1 8 9
Grain Elevator 2 25 82 109
Gasoline Bulk Plant 1 5 37 43
Automobile Dealers 19 35 348 402 Gas Stations 42 158 1,031 1,231 Pipeline Transportation of Natural Gas 0 2 34 36 Airports and Services 0 3 26 29 Professional, Scientific, Technical Services 4 7 51 62
Solid Waste landfill 0 9 22 31
Other Solid Waste/Incineration 0 0 23 23 Hospitals 3 8 89 100
Social Assistance 11 19 172 202
Casino/Hotels 10 51 138 199 Restaurants 76 136 1,341 1,553 Automobile Light Duty Operation 33 58 546 637 Automobile Refinishing Shop 16 31 253 300 Welding Operations 9 22 264 295
Cremation 1 3 31 35 Dry Cleaner 6 14 176 196
Tribal Governments 0 0 147 147
Boilers 0 1 131 132
Feedlot 0 0 0 0 Surgical Instrument Manufacturing 0 0 0 0 Paper Manufacturing 0 0 0 0
Residential Construction General Contractor 0 0 0 0
Other 0 0 24 24 Grand Total 299 795 31,797 32,891
Sectors identified by EPA from various sources (see above) ; number of facilities estimated based on AIAN share of

total income in each EPA Region.2-16 Table 2-9 presents projected new minor source s for the first 6 years after the effective date of the rule. EPA projects that Regions 1, 2, and 4 will have 17 new sources during the first 6 years following the effective date of the rule. Regions 5, 7, and 10 are pr ojected to have 59 new minor sources, and Regions 6, 8, and 9 are projected to have 7,530 new minor sources. Therefore, EPA projects a total of 7,606 new minor sources in Indian Country during the 6-year period, 2011 through 2016.
In summary, EPA estimates that 32,900 ex isting minor source facilities would be required to register, and 79 exis ting synthetic minor sources woul d be required to obtain new permits. Over the first 6 years of the rule, EPA pr ojected that the rule wi ll affect 7,606 new true minor sources, 48 new synthetic minor sources, 12 minor modifications to existing major sources, and 984 minor modifications to existing minor sources. In addition, EPA believes the rule would provide a new regulat ory mechanism to permit an estim ated 5 new major sources in nonattainment areas and at most one major m odification to a major source over the 6-year period.2-17 Table 2-9. Projected New Minor Sources in Indian Country, First 6 Years (2011–2016)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Logging 0 1 3 4 Forestry Support Activities 0 0 1 1 Oil and Natural Gas Wells 0 2 7,006 7,008 Rock Mining Gravel 0 0 7 7
Electric Power Generation 0 0 7 7
Natural Gas Distribution 0 0 6 6 Agricultural Irrigation 0 0 21 21 Sewage Treatment Facilities 0 2 2 4 Sand Blasting 1 2 11 14 Animal Food Manufacturing 0 0 1 1 Fruit Concentrate Processing 0 0 0 0 Canned Vegetable Plant 0 0 0 0 Meat Packing 0 0 3 3 Mint Distillery 0 0 0 0
Lumber Saw Mill 0 0 3 3 Softwood, Veneer and Plywood 0 0 1 1
Reconstituted Wood Products 0 0 0 0
Millwork 0 0 1 1
Wood Pellet Fuel Plant 0 0 0 0 Box Manufacturing 0 0 0 0 Printing Operations Lithographic 0 1 13 14 Petroleum Refineries (Post-harvest Coatin g Manufacture for Fruit-Paraffin) 0 0 1 1 Asphalt Hot Mix 0 0 5 5 Chemical Preparation 0 0 7 7 Liquid Fertilizer Storage Distribution 0 0 0 0 Explosives Manufacturing 0 0 0 0 Clay and Ceramics Operations 0 0 18 18 Concrete Batching Plant 0 1 5 6 Fiber Glass Operations 0 0 1 1 Mineral and Earth Manufacturing 0 0 0 0 Aluminum Manufacturing 0 0 0 0 Casting Foundry 0 0 1 1
Fabricated Structural Metal 0 1 6 7 Metal Can Manufacturing 0 0 0 0 Coating Painting Facilities 0 0 24 24 (continued)2-18 Table 2-9. Projected New Minor Sources in Indian Country, First 6 Years (2011–2016) (continued)

EPA Region Groups Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total Surface Coating Operations 0 0 1 1
Fabricated Metal Products 0 0 4 4 Machinery Manufacturing 0 0 1 1 Communications Equipment Manufacturing 0 0 0 0 Transportation Equipment Manufacturing 0 0 0 0 Wood Kitchen Cabinet Manufacturing 0 0 2 2 Furniture Manufacturing 0 0 0 0
Grain Elevator 0 2 8 10
Gasoline Bulk Plant 0 0 2 2
Automobile Dealers 2 3 21 26
Gas Stations 3 15 77 95 Pipeline Transportation of Natural Gas 0 0 2 2 Airports and Services 0 0 3 3 Professional, Scientific, Technical Services 0 1 3 4
Solid Waste Landfill 0 1 2 3
Other Solid Waste/Incineration 0 0 3 3 Hospitals 0 0 7 7
Social Assistance 0 2 11 13
Casino/Hotels 1 4 15 20
Restaurants 6 11 90 107 Automobile Light Duty Operation 3 5 38 46 Automobile Refinishing Shop 1 2 16 19 Welding Operations 0 2 19 21
Cremation 0 0 3 3 Dry Cleaner 0 1 13 14
Tribal Governments 0 0 15 15
Boilers 0 0 17 17
Feedlot 0 0 0 0 Surgical Instrument Manufacturing 0 0 0 0 Paper Manufacturing 0 0 0 0
Residential Construction General Contractor 0 0 0 0
Other 0 0 3 3 Grand Total 17 59 7,530 7,606
Growth rate based on U.S. Census Bureau. Projected St ate Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www. census.gov/population/projec tions/state/stpjrace.txt.3-1 SECTION 3

COST ANALYSIS

All new sources in Indian Country will be required to obtain a permit and conduct compliance activities referred to broadly as monitoring, recordkeeping, and reporting (MRR) activities. In addition, new sources may be requ ired to install contro l equipment and undertake other compliance activities; these activities wi ll be different for ne w minor sources and new major sources. Thus, we discuss the development of cost estimates separately for minor sources and major sources.
3.1 General Approach for Estimating Compliance Costs for New Minor Sources EPA began by identifying the minor source categories listed in Table 2-9 having the largest numbers of projected new sources and gr ouped several similar source categories together. After identifying the most common types of minor sources likely to be a ffected by the rule, EPA developed an approach that estimates compliance co sts for a typical new fac ility for each source category. New minor sources will be subject to various requi rements during the permitting process under the rule, including

• case-by-case review of control technology by EPA or Tribal air agency,

• air quality impact analysis upon requ est by the reviewing authority,

• MRR activities, and

• public participation through public no tices and comment requirements and administrative and judicial review upon a permit appeal.
EPA estimated a range of costs of complian ce for the rule, with a lower-bound estimate of only permitting, MRR costs and an upper-bound estimate including both emissions control costs and MRR costs.
All new minor sources will be required to obtain a permit and conduct MRR activities. Thus, estimated costs of MRR activities represen t the minimum costs that will be incurred by affected new sources. A full description of the de velopment of these cost estimates, along with the assumptions used for labor rates and capital outlays, is presented in the Supporting Statement for the Information Collection Request (ICR).

In addition to MRR activities, some new sour ces will be required to install control equipment. The specific control technology requir ements are uncertain, because of the case-bycase control technology review process. EPA has thus estimated the costs of installing Best Available Control Technology (BACT) controls fo r each source category, recognizing that most3-2 new minor sources will not be re quired to install BACT controls . Thus, BACT control costs plus MRR costs represent the maximum costs likely to be incurred by a new minor source.

To estimate the costs of BACT controls, process throughput or ope rating capacities are needed to size and cost air polluti on controls and to estimate emi ssions. These values are selected to reflect typical minor source sizes for the source category. In some cases they are based on a national average value; others are based on exis ting size categories where the lower-end values are selected to characterize minor sources, a nd in some cases, the values were based on information contained in the available Tribal emission inventories. EPA used this information to develop estimates of compliance costs for typica l new facilities in each minor source category.
EPA then reviewed existing regulations to de termine controls required in the absence of the rule and estimated incremental control costs attributable to the rule. These costs included one-time costs, such as purchas ing and installing control equi pment and annual costs such as labor and materials. The one-time costs were annu alized over their expected service life at a 7% rate of interest, reflecting private cost of cap ital. The sum of the annualized one-time costs and the annual costs are the tota l annualized costs incurre d by each facility type.
EPA has adequate information to complete cost estimates for emission controls. However, because of a lack of data on existing sources in Indian Country and the uncertainties associated with projecting the number of new facilit ies and modifications to existing facilities in the future, the current data will provide na tional cost estimates th at are correspondingly uncertain. EPA estimated the costs of emissions controls based on the assumption that all affected new sources would be required to in stall BACT. Because requirements for each new source will be determined on a cas e-by-case basis, this will likely overstate the costs for some facilities.
Appendix B presents the estimated compliance costs for typical new sources in Indian Country. For each source category, the table in A ppendix B shows the estimated capital cost per source of BACT and the total annualized BACT cost, including annualized capital costs and annual costs such as labor and materials.
Because EPA is delaying implementation of the rule for new minor sources and minor modifications of minor sources for 18 months , and because existing true minor sources and existing synthetic minor sources experience one- time costs during the first year following the effective date of the rule, we are presenting the costs broken out according to time period. We present the costs for the first year (including annualized costs for ne w and modified minor sources and one-time costs for ex isting sources), for th e second year (showing registration costs for new and modified sources during the first 6 months and permitting costs during the second 6 months), and for years 3 through 6 (permitting cost s for new and modified sources). First-year3-3 costs affect many more facilities, but the cost per facility is ge nerally low, approximately $62 per source. In subsequent years, the 32,891 existi ng minor sources and the 79 existing synthetic minor sources no longer incur costs, so the number of affected facilities is much lower; however, the cost per facility increases. National BACT control costs for the first year are shown in Table 3-1, for the second year in Table 3-2, and for subsequent years in Table 3-3. They were computed by multiplying the number of projected affected sources in each category by the estimated control costs per source. This is certai nly an overestimate of the control costs that will be incurred by affected new and modified minor sources under the rule’s case-by-case control technology review. EPA recognizes that not all ne w sources will be required to install BACT controls; however, these represen t upper-bound national control cost estimates that are needed to compute the maximum national costs, whic h are reported later in this section.

Table 3-1. Estimated National Total Annualize d Control Costs by Source Type, First Year

Affected Source Type Number of Affected Sources, First Year National Total Annualized Control Costs (10 3 $2008) New Minor Sources 1,268 $0 Modifications to Minor Sources 164 $0 Existing Synthetic Minor Sources 79 $0 Existing True Minor Sources 32,891 $0 Minor Modifications to Major Sources 2 $0 New Synthetic Minor Sources 8 $80 Totals 34,412 $80

Table 3-2. Estimated National Total Annualized Control Costs by Source Type, Second Year

Affected Source Type Number of Affected Sources, Second Year National Total Annualized Control Costs (10 3 $2008) New Minor Sources (Costs Applicable for the First 6

Months of the Second Year) 634 $0

New Minor Sources (Costs Applicable for the Second 6

Months of the Second Year) 634 $270

Modifications to Minor Sources (Costs Applicable for

the First 6 Months of the Second Year) 82 $0

Modifications to Minor Sources (Costs Applicable for

Second 6 Months of the Second Year) 82 $80

Minor Modifications to Major Sources 2 $0 New Synthetic Minor Sources 8 $80 Totals 1,442 $4303-4 Table 3-3. Estimated National Total Annualize d Control Costs by Source Type, Years 3 through 6 (10 3 $2008)

Affected Source Type Number of Affected Sources per Year National Total Annualized Control Costs (10 3 $2008) New Minor Sources 1,268 $540 Modifications to Minor Sources 164 $160 Minor Modifications to Major Sources 2 $0 New Synthetic Minor Sources 8 $80 Totals 1,442 $780

In addition to control costs, affected sources are expected to incur MRR costs associated with the NSR permit program. Some of the MRR co sts are one-time costs, and others are annual costs. The detailed explanation for the rule’s MRR costs is presented in the Supporting Statement (EPA, 2011). Table 3-4 shows the estimated MRR costs for the first year, Table 3-5 shows estimated MRR costs for the second year, and Table 3-6 presents estimated MRR costs for subsequent years. As explained above, these are broken out according to time period because the rule’s requirements for several source types vary over time. MRR cost s are the minimum or lower-bound costs that could be incurred by affected sources.

Table 3-4. Estimated Lower-Bound National Total Annualized (MRR) Costs, First Year (10 3 $2008)

Affected Source Type Number of Affected Sources, First Year Total Annual Cost per Source (10 3 $2008) National Total Annualized MRR Costs,

First Year (10 3 $2008)
New Minor Sources 1,268 $0.062 $79
Modifications to Minor Sources 164 $0.062 $10
Existing Synthetic Minor Sources (One

Time Cost, First Year) 79 $0.62 $50

Existing True Minor Sources (One Time

Cost, First Year) 32,891 $0.062 $2,040

Minor Modifications to Major Sources 2 $9.435 $20 New Synthetic Minor Sources 8 $9.435 $80
Totals 34,412 $2,279

a For details, see the Supporting Statement for the Review of New Sources and Modifications in Indian Country

Rule.3-5 Table 3-5. Estimated Lower-Bound National Total Annualized (MRR) Costs, Second Year (10 3 $2008)

Affected Source Type Number of Affected Sources, Second Year Total Annual Cost per Source (10 3 $2008) National Total Annualized MRR Costs (10 3 $2008) New Minor Sources (Costs Applicable for First

6 Months of the Second Year) 634 $0.062 $79

New Minor Sources (Costs Applicable for

Second 6 Months of the Second Year) 634 $9.435 $5,982

Modifications to Minor Sources (Costs

Applicable for First 6 Months of the Second Year) 82 $0.062 $10

Modifications to Minor Sources (Costs

Applicable for Second 6 Months of the Second Year) 82 $9.435 $774

Minor Modifications to Major Sources 2 $9.435 $20 New Synthetic Minor Sources 8 $9.435 $80 Totals 1,442 $6,945

Table 3-6. Estimated Lower-Bound National Total Annualized (MRR) Costs, Years 3 through 6 (10 3 $2008)

Affected Source Type Number of Affected Sources per Year, Years 3 through 6 Total Annual Cost per Source National Total Annualized MRR Costs, Subsequent Years a (10 3 $2008) New Minor Sources 1,268 $9.435 $12,000 Modifications to Minor Sources 164 $9.435 $1,550 Minor Modifications to Major Sources 2 $9.435 $20 New Synthetic Minor Sources 8 $9.435 $80 Totals 1,442 $13,650

a For details, see the Supporting Statement for the Review of New Sources and Modifications in Indian Country

Rule.
For the first year following promulgation, ex isting, new, and modified minor sources incur costs to comply with the rule’s registra tion requirements. Existing synthetic minor sources incur costs to obtain new permits. After the first year, existing sources in cur no costs unless they choose to modify their facilities. During the fi rst half of the second year, new and modified minor sources are required to register; during th e second half of the second year, they are required to obtain a permit. The estimated MRR costs for the second year reflect these3-6 requirements. During years 3 through 6, all new s ources are required to obtain permits and incur the estimated MRR costs associ ated with those activities.
Table 3-7 shows estimated upper-bound tota l national costs, including both BACT control costs and MRR costs by source category fo r the first year following rule promulgation. Table 3-8 shows estimated upper-bound costs for the second year, including both MRR costs and BACT costs where applicable. Table 3-9 show s estimated total national costs, including estimated BACT and MRR costs for years 3 through 6. Estimated upper-bound costs increase from $2.4 million to $7.4 million from the first to the second year following promulgation. For subsequent years, the estimated upper-bound nationa l total annualized costs equal approximately $14.4 million.
Table 3-7. Estimated Upper-Bound National To tal Annualized (Control and MRR) Costs, First Year (10 3 $2008)

Affected Source Type Number of Affected Sources per Year National Total Annualized Costs (First Year) New Minor Sources 1,268 $79 Modifications to Minor Sources 164 $10 Existing Synthetic Minor Sources (One Time, First Year) 79 $50 Existing True Minor Sources (One Time, First Year) 32,891 $2,040 Minor Modifications to Major Sources 2 $20 New Synthetic Minor Sources 8 $160 Totals 34,412 $2,359

3.2 Costs for Major Sources EPA estimates that there will be approximately one new major source per year in the oil and gas extraction sector, with a total a nnualized cost of approximately $40,000, including control costs and MRR costs, during the 6 years following promulgation. However, EPA believes that new major sources would have incu rred these costs in the absence of the rule, because EPA would have been required to implem ent a source-specific FIP. Therefore, the final rule just provides a regulatory mechanism for permitting such sources; it does not change any of the compliance requirements. In addition, since the permitting process may be less uncertain under the final rule, new and modifying major sour ces could potentially e xperience cost savings compared to baseline conditions. Thus, the cost s in Table 3-10 are not considered to be incremental because of the rule. Because EPA exp ects at most one major modification in Indian Country during the 6-year period, annual costs fo r major modifications are assumed to be $0.3-7 Table 3-8. Estimated Upper-Bound National To tal Annualized (Control and MRR) Costs, Second Year (10 3 $2008)

Affected Source Type Number of Affected Sources per Year National Total Annualized Costs

(Second Year) New Minor Sources (Costs Applicable for First 6 Months of Second

Year) 634 $79

New Minor Sources (Costs Applicable for Second 6 Months of Second

Year) 634 $6,252

Modifications to Minor Sources (Costs Applicable for First 6 Months

of Second Year) 82 $10

Modifications to Minor Sources (Costs Applicable for Second 6

Months of Second Year) 82 $854

Minor Modifications to Major Sources 2 $20 New Synthetic Minor Sources 8 $160 Totals 1,442 $7,375

Table 3-9. Estimated Upper-Bound National To tal Annualized (Control and MRR) Costs, Years 3 through 6 (10 3 $2008)

Affected Source Type Number of Affected Sources per Year National Total Annualized Costs (Subsequent Years)
New Minor Sources 1,268 $12,540 Modifications to Minor Sources 164 $1,710 Minor Modifications to Major Sources 2 $20 New Synthetic Minor Sources 8 $160 Totals 1,442 $14,430

Table 3-10. Costs for New Major Sources in Nonattainment Areas (10 3 $2008)

Costs Number of Affected Sources per Year Total Annualized Costs (10 3 $2008)
Control Costs 1 $30
MRR Costs 1 $10

Totals 1 $403-8 3.3 Agency Costs

In addition to costs incurred by regulated facilities, EPA examin ed the costs to the Agency resulting from the rule. These costs are discussed in detail in the Supporting Statement for the Review of New Sources and Modifications in Indian C ountry (EPA, 2011). The costs are estimated by examining the Agency activities asso ciated with administering the rule for each type of affected facility, estimating the number of hours required for each activity, and multiplying these hours by appropriate hourly salary rates to compute the total labor cost per affected source.
The average total annual cost to the Agen cy per affected source is calculated by determining the total labor cost for all the various respondent activities. The costs for those activities are then added to any associated co sts (e.g., total travel e xpenses for inspections attended) to get the average Agency burden per fa cility per year. Because the Agency activities are similar for processing a permit for a major or minor source, and because we anticipate only one new major source in a nonattainment area per year for the first 3 years following promulgation, the cost to the Agency for each affected source is assumed to be the same. The average total annual cost to th e Agency per affected source (new majors, new minors, and modifications) given in Attachment 2 of the I CR, including the cost of labor, materials, operation, and maintenance, is $3,037 per year. The av erage total cost to the Agency per affected existing synthetic minor source is $693 and per true existing minor source is $180. (A detailed description of the estimation of Agency costs is provided in the Supporting Statement for the Review of New Sources and Modificati ons in Indian Country.) (EPA, 2011)
The bottomline Agency total annual burden co sts are calculated by taking the average cost to the Agency per facility ($4,932) and multiplying by the number of affected sources in Indian Country during the first 3 years following promulgation. Th e nationwide total annual cost to EPA or Tribal agencies as shown in Tabl e 3 of the ICR Supporting Statement is $17.1 million for the first 3 years (an average of $5.7 million per year). Total national costs, including costs for affected sources and costs to the Agency, are sh own in Table 3-11. First-year costs range from $8.0 to $8.1 million, second-year costs range from $12.6 to $13.1 million, and subsequent-year costs range from $19.4 to $20.1 million.3-9 Table 3-11. Summary of National Costs, Including Agency Costs a (10 6 $2008)

Time Period Number of Affected Sources Lower-Bound Estimate (MRR

Costs Only) National Lower-Bound Costs, Including Agency Costs Upper-Bound Estimate (MRR Costs Plus Emissions Control Costs) National Upper-Bound Costs, Including Agency Costs First-Year Costs 34,412 $2.3 $8.0 $2.4 $8.1 Second-Year Costs 1,442 $6.9 $12.6 $7.4 $13.1

Costs for Years 3 through 6 1,442 $13.7 $19.4 $14.4 $20.1

a Agency costs are estimated to average $5.7 million per year.4-1 SECTION 4

ECONOMIC IMPACT ANALYSIS METHODS AND RESULTS

The purpose of the EIA is to evaluate the eff ect of the rule on the welfare of affected stakeholders and society as a whole. To inform its assessment of economic impacts, the Agency developed a qualitative assessment of potential economic impacts of the rule on facility construction and market prices. In addition, EPA conducted a simple screening analysis, described in more detail below, to develop quantitative measures of the potential impacts of the rule. As described in Section 3 above, EPA exp ects new minor source facilities to incur some incremental costs as a result of the rule. In th is analysis, EPA presents a range of economic impacts corresponding to the range of potential costs of compliance described in Section 3. At a minimum, facilities are expected to incur MRR co sts; at a maximum, new sources will also incur the costs of installing BACT controls. This is a maximum cost assumption, because most new sources will not be required to install BACT controls. Existi ng minor and major sources may incur compliance costs associated with permitting and emission controls for modifications to their facilities. Because the cost s and impacts are expected to be different for minor sources and major sources, we analyze them separately.
4.1 Impacts on New Minor Sources, Minor Mo difications, and New Synthetic Minor Sources In this section, EPA presents its analysis of economic impacts on minor source facilities. Because minor source facilities are largely un regulated at baseline, EPA estimates that companies wishing to site new minor source fa cilities in Indian C ountry will incur some incremental costs. The incremental costs incl ude costs associated with permitting, MRR, and emission control costs for companies choosing to invest in a new minor source facility or to make minor modifications to existing minor sources.

The rule could alter firms’ economic choices because it would increase the costs of production for siting new minor source facilities in Indian Country. Firms considering building new facilities are faced with a de cision on location and size of the new facility. In its analysis, EPA assumes that, without the rule, new minor source facilities in I ndian Country are not regulated; thus, the rule will increase the cost of siting such a facility. Because the rule affects only new and modified sources in Indian Count ry, it will increase the costs of siting these sources in Indian Country, relativ e to other locations. The rule in corporates case-by-case review of control technologies, in an effort to protec t air quality in Indian Country while allowing economic growth.4-2 The economic sectors expected to invest in new minor source facilities or minor modifications in Indian Country produce a vari ety of goods and face demand curves of varying elasticities. Similarly, different t ypes of facilities will face different estimated incremental costs. EPA does not have sufficient data to estimate the market impacts (changes in prices and market quantities) or the impacts on inve stment decisions (changes in rate s of return and in numbers of projects undertaken) in each a ffected sector. However, EPA has undertaken a screening analysis to assess the relative magnitude of the costs of compliance for each affected economic sector.
As discussed in Section 3, EPA has delayed implementation of the rule for new minor sources and minor modifications at minor sources ; these source types w ould only incur the costs of registration during the first 18 months follo wing promulgation. Because costs for new minor sources and minor modifications would increas e after the first 18 months following rule promulgation, EPA’s screening assessment compares the total annualized co st of complying with the rule for typical facilities in each sector after the first 18 months (for lower-bound MRR costs only, and upper-bound MRR plus BACT costs) with f acility sales for typical facilities in each sector. Table 4-1 shows the establishment sales test (estimated total annualized cost for a typical affected facility)/(sales receipts for a typical establishment) for MRR costs only. Data on the sales receipts, number of enterprise s (firms), and number of establ ishments for these sectors were obtained from the Census Bureau’s Statisti cs of U.S. Businesses, 2002 (SUSB, 2002) and County Business Patterns, 2002 (CBP, 2002).
Overall, the MRR costs of complying with th e rule for minor sour ces are generally low and unlikely to cause significant reductions in the rate of investment in new minor source facilities in Indian Country. In Table 4-1, costs are shown to be less than 1% of sales and, thus, are not likely to result in significant impacts to the firms owning these facilities. For facilities in the auto body refinishing sector, costs are estimated to fall between 1% and 1.5% of sales. This ratio is also low enough that it is not expected to have an ad verse impact on the facilities.
Some facilities will be required to install control equipment and will incur not only the costs of MRR activities, but al so the costs of purchasing, inst alling, and operating required controls. The maximum level of control such affected facilitie s would be required to achieve would be BACT. Thus, the upper-bound impact s are computed by summing estimated MRR costs and BACT control costs for each sector. Tabl e 4-2 presents establishment sales test results (cost-to-sales ratios) for typica l facilities in each sector under the maximum cost assumptions. Across all source categori es, cost-to-sales ratios range fr om 0.02% to 2.87%. Examining the upper-bound costs, we see that six sectors have costs between 1% and 3% of sales. No sectors have costs exceeding 3% of sales.4-3 Table 4-1. Lower-Bound Cost-to-Sales Rati os (MRR Costs Only), for Minor Sources, Minor Modifications to Existing Major a nd Minor Sources, and New Synthetic Minor Sources, by Industry Sector

Source Category NAICS Code Estimated Number of

Sources a Average Total Annualized Cost Per Entity ($1,000) Costs as Percentage of Sales Animal Food Manufacturing 311119 1 $9.44 0.06% Asphalt Hot Mix 324121 7 $9.44 0.14% Auto Body Refinishing 811121 27 $9.44 1.25% Beef Cattle Complex, Slaughter House and

Meat Packing Plant 3116 5 $9.44 0.02%

Casting Foundry (Iron) 331511 2 $9.44 0.05% Chemical Preparation 3251 9 $9.44 0.02% Clay and Ceramics Operations (Kilns) 32711 23 $9.44 0.22% Concrete Batching Plant 327320 8 $9.44 0.20% Crude Petroleum and Natural Gas Extraction 21111 7,781 $9.44 0.04%
Electric Power Genera tion 22111 9 $9.44 0.02% Fabricated Metal Products 3329 77 $9.44 0.12%
Fabricated Structural Metal 3323 123 $9.44 0.21% Fiber Glass Operati ons 3279 2 $9.44 0.16% Gasoline Bulk Plant 424710 4 $9.44 0.01% Gasoline Station (Storage Tanks , Refueling) 4471 160 $9.44 0.39%
Grain Elevator 424510 13 0.04% Machinery Manufacturing 33311 14 $9.44 0.05% Millwork (Wood Products Mfg) 32191 2 $9.44 0.17% Natural Gas Distribution 221210 8 $9.44 0.04% Oil and Gas Production/Operations 211112 6 $9.44 0.04% Other (Natural Gas-Fired Boilers)-Used

Casino/Hotels 72112 105 $9.44 0.00%

Printing Operations (Lithographic) 323110 20 $9.44 0.30% Professional, Scientific, and Tech nical Services 54171 19 $9.44 0.16% Sand and Gravel Mining 212321 10 $9.44 0.41% Sand and Shot Blasting Operations 238990 21 $9.44 0.85% Sawmills 32113 4 $9.44 0.14% Sewage Treatment Facilities 221320 5 $9.44 0.65% Softwood Veneer and Plywood Manufacturing 321212 1 $9.44 0.02% Solid Waste Landfill 562212 5 $9.44 0.19% Surface Coating Operations 332812 32 $9.44 0.19% Wood Kitchen Cabinet Manufacturing 337110 3 $9.44 0.52% Other (No Costs Estimated) 158 Total 8,664

a Sources include new minor sources, minor modifications to existing major or minor sources, and new synthetic

minor sources.4-4 Table 4-2. Upper-Bound Cost-to-Sales Ratios, for Minor Sources, Minor Modifications to Existing Major and Minor Sources, and Ne w Synthetic Minor Sources, BACT and MRR Costs, by Industry Sector

Source Category NAICS Code Estimated Number of

Sources a Average Total Annualized Cost Per Entity ($1,000) Costs as Percentage of Sales Animal Food Manufacturing 311119 1 $15.00 0.10% Asphalt Hot Mix 324121 7 $9.44 0.14% Auto Body Refinishing 811121 27 $9.44 1.25% Beef Cattle Complex, Slaughter House and

Meat Packing Plant 3116 5 $18.47 0.05%

Casting Foundry (Iron) 331511 2 $10.68 0.06% Chemical Preparation 3251 9 $9.44 0.02% Clay and Ceramics Operations (Kilns) 32711 23 $9.44 0.22% Concrete Batching Plant 327320 8 $135.13 2.87% Crude Petroleum and Natural Gas Extraction 21111 7,781 $9.44 0.04%
Electric Power Genera tion 22111 9 $9.44 0.02% Fabricated Metal Products 3329 77 $9.44 0.12%
Fabricated Structural Metal 3323 123 $9.44 0.21% Fiber Glass Operati ons 3279 2 $9.44 0.16% Gasoline Bulk Plant 424710 4 $15.93 0.01% Gasoline Station (Storage Tanks , Refueling) 4471 160 $9.99 0.41% Grain Elevator 424510 13 $69.36 0.27% Machinery Manufacturing 33311 14 $9.44 0.05% Millwork (Wood Products Mfg) 32191 2 $45.46 0.82% Natural Gas Distribution 22121 8 $9.44 0.05% Oil and Gas Production/Operations 211112 6 $9.44 0.04% Other (Natural Gas-Fired Boilers)-Used

Casino/Hotels 72112 105 $18.47 0.03%

Printing Operations (Lithographic) 323110 20 $11.64 0.37% Professional, Scientific, and Tech nical Services 54171 19 $18.47 0.32% Sand and Gravel Mining 212321 10 $49.35 2.16% Sand and Shot Blasting Operations 238990 21 $19.77 1.77% Sawmills 32113 4 $49.35 0.73% Sewage Treatment Facilities 221320 5 $9.44 0.65% Softwood Veneer and Plywood Manufacturing 321212 1 $45.46 0.11% Solid Waste Landfill 562212 5 $49.58 1.01% Surface Coating Operations 332812 32 $9.44 0.19% Wood Kitchen Cabinet Manufacturing 337110 3 $45.46 2.51% Other (No Costs Estimated) 158 Total 8,664

a Sources include new minor sources, minor modifications to existing major or minor sources, and new synthetic

minor sources.4-5 The analysis described above is based on a range of estimated costs of compliance for typical minor source facilities compared to estimat ed sales for typical f acilities. Generally, EPA believes that the costs will be substantially lower than the uppe r-bound estimates and would thus not impose significant impacts on typical firms c onsidering construction or modification of a minor source. Within each sector there is likely to be substantial variation in costs, facility sales, and company sales and profits. Thus, it is possibl e that individual companies might find that the costs for a specific project would be suffici ent to discourage them from investing.
4.2 Impacts on Major Sources EPA projects new major sources in nonattainme nt areas in only one sector: oil and gas extraction. EPA estimates that there will be at most one new major source per year in nonattainment areas in Indian Country. EPA esti mated compliance costs for new major sources in nonattainment areas in Indian Country; how ever, EPA believes that these costs would generally have been incurred w ithout the rule and, thus, will have no incremental adverse economic impact on new major sources.

In the absence of the final rule, EPA woul d be required to impl ement a source-specific FIP. Therefore, the final rule just provides a regulatory mechanism for permitting such sources; it does not change any of the compliance requirements. In addition, since the permitting process may be less uncertain under the final rule, new and modifying major sour ces could potentially experience cost savings compared to baseline conditions. Redu cing the uncertainty about the timing and cost of permitting new major source facilities in nonattainment areas in Indian Country will reduce the need to wait for more info rmation and will make investors more likely to invest.
Existing major sources in nonattainment areas that choose to make a major modification to their facilities are also subj ect to the rule. EPA projects at most one major modification to a major source over the first 6 years after rule pr omulgation. Costs and impact s are estimated to be similar to, or lower than, those for a new major source and would be incurred in the absence of the rule.
Existing major source facilities that elect to make minor modifications are also expected to incur compliance costs under the rule. EPA es timates that 12 facilities will make minor modifications over the entire st udy period. Although there are comp any-specific data on existing major sources in nonattainment areas, EPA is not able to identify which of the major source facilities may decide to make minor modifications. Costs in curred by major sources making minor modifications are estimated to be simila r to, or lower than, co sts incurred by new minor source facilities. To assess the relative magnitude of the costs of compliance for each of the affected economic sectors, EPA conducted a scr eening analysis. Comparing the costs of minor4-6 modifications (assumed to be equivalent to the co sts for a new minor facility) to typical sales for facilities in affected sectors, EPA projected costs to be less than 1% of sales for facilities in all major source sectors.
4.3 Impacts on New Synthetic Minor Sources For those sources that choose to accept enforceable emission limitations to become a synthetic minor source, no resul ting adverse economic impacts are expected for any businesses, including small businesses. No impacts are antici pated because this opti on is entirely optional and rational firms would only make this choice if it resulted in a cost savings. Thus, although projected new synthetic minor sour ces are included in the facili ty counts in this section, EPA does not project that such sources will in cur incremental costs due to the rule.
4.4 Impacts on Existing True Minor a nd Existing Synthetic Minor Sources Existing true minor sources and existing synt hetic minor sources will be required to undertake some MRR activities and, thus, will incu r some incremental costs due to the rule. During the first year following the effective date of the rule, existing true minor sources will be required to register at an estimated cost of $62 per facility. These costs are very low and will impose no appreciable burden on existing minor sources. During the first year following the effective date of the rule, existing syntheti c minor sources are required to submit a permit application at an estimated cost of $618 per facility. Again, these costs are sufficiently low that they are not expected to im pose an appreciable impact on affected existing sources.
4.5 Small Entity Impact Analysis Although all entities owning affected sources ar e subject to the rule , small entities (small businesses, governments, or nonprofit organizations ) may have special problems complying with regulations because they have fewer financial resources, fewer workers to implement changes, and less engineering and legal expertise, for ex ample. The Regulatory Flexibility Act (RFA) of 1980 as amended in 1996 by the Small Busi ness Regulatory Enforcement Fairness Act (SBREFA) generally requires an ag ency to prepare a regulatory flexibility analysis of a rule unless the agency certifies that the rule will not have a significan t economic impact on a substantial number of small entities (no SISNOSE).
This document describes the underlying assu mptions and computations EPA made in estimating the number of affected small entities (in this case, small businesses) and examines the rule’s possible impact on these entities. Table 4-3 presents the projec ted number of new and modified sources owned by small entities during the first 6 years following the effective date of the rule, together with the Small Business Admi nistration’s Size Standard criteria (SBA, 2010) for small businesses under each NAICS code. EPA’s screening assessment used the costs4-7 Table 4-3. Projected Numbers of New and Mo dified Sources Owned by Small Entities, 2011–2016, by Industry Sector

NAICS Sector Description New Minor Sources Modified Minor Sources Synthetic Minor Sources Minor Modifications

to Major Sources Total Projected Sources Owned by Small Entities by

Sector 324121 Asphalt Hot Mix 1 1 811121 Auto Body Refinishing 4 6 10
3116 Beef Cattle Comple x, Slaughter House and Meat Packing Plant 1 1

3251 Chemical Preparation 1 1 32711 Clay and Ceramics Operations (Kilns) 4 1 5 327320 Concrete Batching Plant 1 1
211111 Crude Petroleum and Natural Gas Extraction 1,402 150 3 2 1,557

22111 Electric Power Generation 1 1
3329 Fabricated Metal Products 1 1
3323 Fabricated Structural Metal 1 1
4471 Gasoline Station (Storage Tanks, Refueling) 19 7 26

424510 Grain Elevator 3 33311 Machinery Manufacturing 3 3
221210 Natural Gas Distribution 1 1 2
21111 Oil and Gas Production/Operations (Minor O&G) 1 1

72112 Other (Natural Gas-Fired Boilers) a 11 10 7 28 323110 Printing Operations (Lithographic) 3 1 4
54171 Professional, Scientific, and Technical Services 3 1 4

212321 Sand and Gravel Mining 1 1 2 238990 Sand and Shot Blasting Operations 3 1 4 321113 Sawmills (Minor Source) 1 1 2 221320 Sewage Treatment Facilities 1 1
562212 Solid Waste Landfill 1 1 332812 Surface Coating Operations 5 3 8 Other (Costs Not Estimated) b 54 8 62
Total 1,521 197 10 2 1,730

a Used NAICS for casino/hotels but in cludes Tribal governments also.

b Includes crematories, restaurants, car deal ers, social assistan ce, other unspecified.4-8 applicable beginning 18 months following the e ffective date of the rule. The screening assessment is presented in Tables 4-4 and 4-5. EPA’s screening assessment compares estimated lower-bound and upper-bound total annua lized costs to facility sales for facilities owned by companies with fewer than 500 employees (U.S. Census Bureau, 2002). Table 4-4 presents MRR costs as a percentage of sales, which repres ents the lower-bound cost s incurred by new minor sources. Table 4-5 presents cost-to-sales rati os for BACT costs plus MRR costs, which represents the upper-bound costs that would be incurred by aff ected new minor sources, and likely overstates the costs incurred by most facilities.
EPA employed criteria (EPA, 2006) widely us ed in conducting such screening analyses to assess the severity of potential impacts. Comp anies incurring costs less than 1% of sales are not expected to incur substantial impacts due to the rule. Companies incurring costs exceeding 3% of sales are estimated to in cur potentially significant impact s. Companies with costs between 1% and 3% may or may not incur substantial impacts.
Because EPA does not expect new or major sources or major modifications to major sources to experience incremen tal impacts under the rule, EPA’s analysis of small business impacts focuses on impacts associated with new mi nor source facilities and minor modifications to existing minor and major sources. EPA estimates that small businesses investing in new minor source facilities, minor modifications to exis ting minor sources, and minor modifications to existing major sources over the period 2011 throu gh 2016 will incur costs that are less than 3% of sales in all sectors, even when BACT c ontrol costs are included. Under lower-bound costs, only new auto body refinishers owned by small bus inesses are projected to experience costs exceeding 1% of sales (1.3%). Under upper-bound co sts, most sectors are estimated to incur costs less than 1% of average small company sales revenues; however, small companies choosing to invest in new minor sources in six sectors—auto body refinishers, concrete batching plants, sand and gravel mining, sand and shot bl asting, solid waste landfills, and sawmills—are estimated to incur costs between 1% and 3% of sales. Whether costs of this magnitude are significant is uncertain; however, EPA believes the upper-bound costs are overstated for most minor sources.
Assuming that the share of new sources owne d by small businesses is comparable to the share of existing sources owned by small businesses (less than 20 %), EPA projects that at most 20 new minor sources or minor modifications would be owned by small businesses in these sectors over the 6 years following rule promulga tion. Only a very small share of new minor sources is projected to incur BACT control costs, so the co sts of controls are likely overestimated. Thus, EPA does not believe that the rule will impose significant economic impacts on a substantial number of small entities (no SISNOSE).4-9 Table 4-4. Lower-Bound Small Business Impacts for New Minor Sources, Minor Modifications at Existing Major and Mino r Sources, and New Synthetic Minor Sources, MRR Costs Only, by Industry Sector

Source Category SBA Size Standard in Millions of Dollars or Employees Estimated Number of

Affected Sources Owned by

Small Businesses Average Total Annualized Cost Per Entity ($10 3 2008) Costs as Percentage of Sales for Facilities Owned

by Firms with <500 Employees Asphalt Hot Mix 500 1 $9.44 0.15% Auto Body Refinishing $7 10 $9.44 1.30% Beef Cattle Complex, Slaughter House and

Meat Packing Plant 500 1 $9.44 0.12%
Chemical Preparation 1,000 1 $9.44 0.07% Clay and Ceramics Operations (Kilns) 750 5 $9.44 0.55% Concrete Batching Plant 500 1 $9.44 0.23% Crude Petroleum and Natural Gas Extraction 500 1,557 $9.44 0.22% Electric Power Generation — 1 $9.44 0.04% Fabricated Metal Products 500 1 $9.44 0.26% Fabricated Structural Metal 500 1 $9.44 0.27% Gasoline station (Storage Tanks, Refueling) $27 26 $9.44 0.49% Grain Elevator 100 3 $9.44 0.04% Machinery Manufacturing 500 3 $9.44 0.22% Natural Gas Distribution 500 2 $9.44 0.04% Oil and Gas Production/Operations 500 1 $9.44 0.22% Other (Natural Gas-Fired Boilers)-Used

Casino/Hotels $30 28 $9.44 0.16%
Printing Operations (Lithographic) 500 4 $9.44 0.51% Professional, Scientific, and Technical

Services 500 4 $9.44 0.31%
Sand and Gravel Mining 500 2 $9.44 0.51% Sand and Shot Blasting Operations $14 4 $9.44 0.85% Sawmills 500 2 $9.44 0.22% Sewage Treatment Facilities $7 1 $9.44 0.93% Solid Waste Landfill $12.5 1 $9.44 0.46% Surface Coating Operations 500 8 $9.44 0.30% Other (Costs Not Estimated) 62 Total 1,7304-10 Table 4-5. Upper-Bound Small Business Impacts for New Minor Sources, Minor Modifications at Existing Major and Mino r Sources, and New Synthetic Minor Sources, BACT and MRR Costs, by Industry Sector

Source Category SBA Size Standard in Millions of Dollars or Employees Estimated Number of Affected Sources Owned by Small Businesses Average Total Annualized Cost Per Entity

($10 3 2008) Costs as Percentage of Sales for Facilities Owned

by Firms with <500 Employees Asphalt Hot Mix 500 1 $9.44 0.15% Auto Body Refinishing $7 10 $9.44 1.30% Beef Cattle Complex, Slaughter House and

Meat Packing Plant 500 1 $18.47 0.24%

Chemical Preparation 1,000 1 $9.44 0.07% Clay and Ceramics Operations (Kilns) 750 5 $9.44 0.55% Concrete Batching Plant 500 1 $135.13 2.94% Crude Petroleum and Natural Gas Extraction 500 1,557 $9.44 0.22% Electric Power Generation — 1 $9.44 0.04% Fabricated Metal Products 500 1 $9.44 0.26% Fabricated Structural Metal 500 1 $9.44 0.27% Gasoline Station (Storage Tanks, Refueling) $27 26 $9.99 0.51% Grain Elevator 100 3 $69.36 NA Machinery Manufacturing 500 3 $9.44 0.22% Natural Gas Distribution 500 2 $9.44 0.04% Oil and Gas Production/Operations 500 1 $9.44 0.22% Other (Natural Gas-Fired Boilers)-Used

Casino/Hotels $30 28 $18.47 0.30%

Printing Operations (Lithographic) 500 4 $11.64 0.63% Professional, Scientific, and Technical

Services 500 4 $18.47 0.60%

Sand and Gravel Mining 500 2 $49.35 2.65% Sand and Shot Blasting Operations $14 4 $19.77 1.77% Sawmills 500 2 $49.35 1.13% Sewage Treatment Facilities $7 1 $9.44 0.93% Solid Waste Landfill $12.5 1 $49.58 2.40% Surface Coating Operations 500 8 $9.44 0.30% Other (Costs Not Estimated) 62 Total 1,7304-11 Based on its analysis, EPA concludes that the ru le is not expected to result in significant economic impacts for a substantial number of sm all companies (no SISNOSE). This conclusion is reached because the number of small companies affected in most industries is expected to be small and because the costs for most industrie s are expected to be low. Small businesses investing in new minor sources in six industries (auto body refinishers, concrete batching plants, sand and gravel mining, sand and shot blasting, solid waste landfills, and sawmills) may incur costs between 1% and 3% of th eir sales to comply with the rule. Because at most 20 small companies may experience costs exceeding 1% of sales (when upper-bound costs are considered) and no small company is projected to experience costs exceeding 3% of sales, and because the upper-bound costs overestimate cost s for most minor sources, EPA does not believe that a substantial number of small companies w ill experience significant economic impacts.R-1 SECTION 5

REFERENCES
U.S. Census Bureau. 1996. Projected State P opulations, by Sex, Race and Hispanic Origin, 1995–2025. http://www.census.gov/population/pr ojections/state/stpjrace.txt.
U.S. Census Bureau. County Business Pa tterns, 2007. http://www.census.gov/econ/cbp/ index.html.

U.S. Census Bureau. Statistics of U.S. Businesses, 2002 . http://www.census.gov/econ/susb/ introduction.html.
U.S. Department of Labor. Bureau of Labor Statistics (BLS). 2002. March 2002 Employment Cost Trends. http://stats.bls .gov/news.release/ecec.t02.htm.
U.S. Department of Labor. Bureau of Labor Statistics (BLS). 2009. Producer Price Index. http://www.bls.gov/ppi/.
U.S. Environmental Protection Agency (EPA). November 2006. Final Guidance for EPA Rulewriters: Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act. http://www.ep a.gov/sbrefa/documents/rfaguidance11-00- 06.pdf.
U.S. Environmental Protection Agency (EPA). 2001. EPA Air Pollution Control Cost Manual

. http://www.epa.gov/ttn/catc/products.html.
U.S. Environmental Protection Agency (EPA). 2011. Supporting Statement for the Review of New Sources and Modifications in Indian Country Rule.

U.S. Small Business Administration. November 5, 2010. Table of Small Business Size Standards Matched to North American I ndustry Classification Codes. http://www.sba.gov/idc/groups/public/documen ts/sba_homepage/serv_sstd_tablepdf.pdf.APPENDIX A:

METHOD FOR ESTIMATING EXISTI NG TRUE MINOR SOURCES AND

PROJECTING NEW TRUE MINOR SOURCESA-1 The figure below depicts a schematic presenta tion of the methods EPA used to first estimate the number of existing minor sources in Indian Country and then to project the number of new minor sources in Indian Country during the firs t 6 years following the effective date of the rule. EPA’s methods combined information fr om existing Tribal emissions inventories to identify typical minor source types, then used Economic Census data to estimate the number of such sources nationwide, and then allocated a share to Indian Country based on Census demographic data. EPA then requested review fr om Tribal experts in EPA Regions and revised the estimated number of existing sources of each type based on this feedback. Finally, EPA projected the number of new minor sources during the first 6 year s following the effective date of the rule based on projected annual growth rates for the AIAN population. This process is discussed in greater detail in Section 2.A-2Methodology for Estimating Existing Minor Sources and Projecting New Minor SourcesAPPENDIX B:

ESTIMATED CONTROL COSTS FOR AFFE CTED MAJOR AND MINOR SOURCES

IN INDIAN COUNTRYB-1Table B-1. Estimated Control Costs for AffectedMajor and Minor Sources in Indian CountrySource CategoryNAICSProcess ThroughputCapacityBaseline ControlTechnologyBaselineEmissionsBACTBACTEmissionsBACTCapitalCost (2008Dollars)BACT TotalAnnualizedCost (2008Dollars)Animal FoodManufacturing3111193,650 tpyNo control16.9 tpy PMFabric filter orcyclone0.84 tpy PM $32,188$5,565Asphalt Hot Mix324121100,000 tpyFabric filter1.3 tpy PM0.2 tpy VOCSame as baseline1.3 tpy PM0.2 tpy VOC$0$0Auto BodyRefinishing81112Filter technology,ventilated spraybooth enclosures, useof low-VOCcoatings, workpractices3 tpy VOCSame as baseline3 tpy$0$0Beef Cattle Complex,Slaughter House andMeat Packing Plant3116<10 MMBtu/hrNo control6.7 tpy NOx3.0tpy COFGR or low NOxburners3.5 tpy NOx3.0 tpy CO$37,435$9,040Casting Foundry(Iron)33151116,606 tpyFabric filter, wetscrubber,triethylamine (TEA)scrubber4.6 tpy PM, .014tpy SO2, 11.19tpy VOCBaseline controlsplus bindersubstitution andcarbonadsorption4.6 tpy PM,.014 tpy SO2,4.5 tpy VOC$2,448 $1,247Chemical Preparation325130,000 (tons/year)Wet scrubber1.2 tpy CO, 0.73tpy NOx, 0.27tpy PM, 1.27 tpySOx, 0.37 tpyVOCSame as baseline1.2 tpy CO,0.73 tpyNOx, 0.27tpy PM, 1.27tpy SOx, 0.37tpy VOC$0 $0(continued)B-2Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)Source CategoryNAICSProcessThroughputCapacityBaseline ControlTechnologyBaselineEmissionsBACTBACTEmissionsBACTCapitalCost (2008Dollars)BACT TotalAnnualizedCost (2008Dollars)Clay and CeramicsOperations (Kilns)32711NANoneNoneNoneNone NA $0Concrete BatchingPlant327320120,780 tpyBin vent filter7.3 tpy PM10,14.6 tpy PMBaseline controlsplus fabric filter5.1 tpy PM,1.6 tpy PM10$143,000$125,700Crude Petroleum andNatural GasExtraction2111250 hpBest managementpractices4.8 tpy NOx, 9.7tpy CO, 3.4 tpyVOCSame as baseline4.8 tpy NOx,9.7 tpy CO,3.4 tpy VOC$0 $0Electric PowerGeneration221114,000 MMBtu/hrFabric filter, SCR,sorbent injection, fluegas desulfurization(FGD)179 tpy PM,2,234 tpy CO,968 tpy NOx,1,191 tpy SO2,54 tpy VOCSame as baseline179 tpy PM,2,234 tpyCO, 968 tpyNOx, 1,191tpy SO2, 54tpy VOC$0$0Fabricated MetalProducts3329NANo controlNAComply withequipmentstandards2 tpy PM NA NAFabricated StructuralMetal3323NANo controlNAComply withequipmentstandards, use lowemitting andpollutionpreventing spraygun technology2 tpy PM NA NA(continued)B-3Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)Source CategoryNAICSProcessThroughputCapacityBaseline ControlTechnologyBaselineEmissionsBACTBACTEmissionsBACTCapitalCost (2008Dollars)BACT TotalAnnualizedCost (2008Dollars)Fiber GlassOperations327925,000 tpyBaghouse,incinerator, and wetscrubber6.9 tpy PM, 68.8NOx, 1.7 tpy COSame as baseline6.9 tpy PM,68.8 NOx,1.7 tpy CO$0 $0Gasoline Bulk Plant 2427106,500 gallons/daySubmergedloadingcontrols18.5 tpy VOCVapor balancingsystems1.9 tpy VOC$38,426$6,495Gasoline Station(Storage Tanks,Refueling)44711,200 gal/dayNo control2.2 tpy VOCStage I vaporbalance0.1 tpy VOC$2,288$558Grain Elevator42451010,000 tpy (4MMBu/yr)Work practices 5 tpy PM10Baghouse .05 tpy PM10$166,310$59,929MachineryManufacturing33311Need moreinformation toestimate costs (e.g.,what type ofmachinery?)Millwork (WoodProducts Mfg)3219166,000 m3per yearWet electrostaticprecipitator (WESP)13.1 tpy CO,44.3 tpy VOC,3.31 tpy NOx,5.78 tpy PMRegenerativethermal oxidizer/regenerativecatalytic oxidizer(RTO/RCO)1.91 tpy CO,10.5 tpyVOC$138,096 $36,026Oil and Natural GasExtraction (MajorSource)21114000 hpNo control557.3 tpy NOxNonselectivecatalytic reduction11.1 tpy NOx$189,617$29,029(continued)B-4Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)Source CategoryNAICSProcessThroughputCapacityBaseline ControlTechnologyBaselineEmissionsBACTBACTEmissionsBACTCapitalCost (2008dollars)BACT TotalAnnualizedCost (2008dollars)Oil and GasProduction/Operations (MinorO&G)2111500Best managementpractices4.8 tpy NOx, 9.7tpy CO, 3.4 tpyVOCSame as baseline4.8 tpy NOx,9.7 tpy CO,3.4 tpy VOC$0 $0Other (Natural GasFired Boilers)921150<10 MMBtu/hrNo control6.7 tpy NOx3.0tpy COFGR or low NOxburners3.5 tpy NOx3.0 tpy CO$37,435$9,040PipelineTransportation ofNatural Gas4862101,500 hp Best managementpractices5.9 tpy NOx,SO2, 4.5 tpySame as baseline 5.9 tpy NOx,SO2, 4.5 tpy$0 $0Printing Operations(Lithographic)3231148 tpy (ink use)No control6 tpy VOCAdd-on controldevices andpollutionpreventionmeasures (lowVOC inks andcleaning solutions)3.5 tpy VOCNA$2,201Professional,Scientific, andTechnical Services54171<10 MMBtu/hrNo control6.7 tpy NOx, 3.0tpy COFGR or low NOxburners3.5 tpy NOx3.0 tpy CO$37,435$9,040Sand and GravelMining212321140,000 tpyNo control12.6 tpy PM10Fugitive dustsuppressioncontrols2.5 tpy PM10$30,714$39,917Sand and ShotBlasting Operations23899010 tpyNo control0.13 tpy PM10Fabric filter0.007 tpyPM10$6,646 $10,338Sawmills (MinorSource)321113100,000 tpy logsNo control or lowefficiency cyclones31 tpy PMFugitive dustsuppressioncontrols1.5 tpy PM$30,714$39,917(continued)B-5Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued)Source CategoryNAICSProcessThroughputCapacityBaseline ControlTechnologyBaselineEmissionsBACTBACTEmissionsBACTCapitalCost (2008dollars)BACT TotalAnnualizedCost (2008dollars)Sawmills (MajorSource)321113300,000 tpy logsNo control or lowefficiency cyclones93 tpy PMFugitive dustsuppressioncontrols and fabricfilter4.5 tpy PM$176,222$61,693Sewage TreatmentFacilities221320NANo controlNANo controlNA$0$0Softwood Veneer andPlywoodManufacturing32121266,000 m3per yearWESP13.1 tpy CO,44.3 tpy VOC,3.31 tpy NOx,5.78 tpy PMRTO/RCO1.91 tpy CO,10.5 tpyVOC$138,096 $36,026Solid Waste Landfill562212< 0.5 million tons(capacity)[3,000 tpyloading](c3)No control25 tpy VOCGas collectionsystem and controldevice6.3 tpy VOC$177,446$40,148Surface CoatingOperations332812General coatingoperation (e.g., cancoating)Filter technology,ventilated spraybooth enclosures, useof low-VOCcoatings, workpractices3 tpy VOCSame as baseline3 tpy$0$0Wood KitchenCabinetManufacturing33711066,000 m3per yearWESP13.1 tpy CO,44.3 tpy VOC,3.31 tpy NOx,5.78 tpy PMRTO, RCO1.91 tpy CO,10.5 tpyVOC$138,096 $36,026United StatesEnvironmental ProtectionAgencyOffice of Air Quality Planning and StandardsAir Quality Strategiesand Standards DivisionResearch Triangle Park, NCPublication No. EPA-452/R-11-002January 2011