1

DATE: January 31, 2014

SUBJECT: Final Economic and Small Business Impact Analysis for the Final PAI-PEPOP&R IV NESHAP

FROM: Larry Sorrels, EPA/OAQPS/HEID

TO: Nick Parsons, EPA/OAQPS/SPPD

This report by the U.S. Environmental Protection Agency (EPA) contains the economic 

impact and small business analysis for this rulemaking, which consists of three different rules, all 

of which are National Emissions Standards for Hazardous Air Pollutants (NESHAP). The three 

rules are the Group IV Polymers and Resins (P&R IV), Polyether Polyols (PEPO), and the 

Pesticide Active Ingredient (PAI) NESHAP. All of these rules are to be promulgated under 

court-order by January 31, 2014. This rulemaking contains final rules that consist of reviews of 

existing NESHAP for these chemical source categories. Table 1 lists the portions of the chemical 

manufacturing sector that are affected by each of these rules.

Below is a description of the types of sources affected by these rules. This description is 

followed by a detailed industry profile containing economic and financial data for the industry in 

which all of these sources is found, NAICS 325 (Chemical Manufacturing). Finally, the 

economic and small business analyses and results are presented at the end of the report. 
2

Table 1. NESHAP AND INDUSTRIAL SOURCE CATEGORIES AFFECTED BY THIS 

FINAL ACTION

NESHAP and Source Category NAICS code1

Group IV 

Polymers and 

Resins

Acrylic-Butadiene-Styrene Production 325211

Methyl Methacrylate-AcrylonitrileButadiene-Styrene Production3

325211

Methyl Methacrylate-Butadiene-Styrene 

Production 

325211

Nitrile Resins Production3325211

Polyethylene Terephthalate Production 325211

Polystyrene Production 325211

Styrene-Acrylonitrile Production 325211

Pesticide Active Ingredient Production

325199, 

325320

Polyether Polyols Production 325199

1

North American Industry Classification System.

2 Maximum Achievable Control Technology.

3 There are no longer any operating facilities in either the Methyl Methacrylate-Acrylonitrile-Butadiene-Styrene 

Production or Nitrile Resins Production source categories, and we do not anticipate that any will begin operation in 

the future. Therefore, this rulemaking does not address these source categories.
3

1.0 Background on each Rule and Chemical Source Categories Regulated by these 

Rules

The Group IV Polymers and Resins MACT standards regulate HAP emissions resulting 

from the production of thermoplastics. A thermoplastic is a resin that softens with heat and 

rehardens to a rigid material upon cooling, without generally showing any change in the physical 

properties of the thermoplastic, even with repeated heating and cooling. Thermoplastics are 

composed of high-molecular-weight polymers which are synthesized from monomers; the 

thermoplastics covered in these seven source categories, with one exception, use styrene 

monomer as the basic feedstock. Generally, the production of these polymers entails four 

processes: (1) Raw material (i.e., solvent) storage and refining; (2) polymer formation in a 

reactor (either via the solution process, where monomers are dissolved in an organic solvent, or 

the emulsion process, where monomers are dispersed in water using a soap solution); (3) 

material recovery; and (4) finishing (i.e., blending, aging, coagulation, washing, and drying). 

Sources of HAP emissions from thermoplastics production include raw material storage 

vessels, continuous and batch process vents, wastewater operations, heat exchangers and 

equipment leaks. The Group IV Polymers and Resins MACT standards include a combination of 

equipment standards and emission limits for the various emission sources, which vary in 

stringency in some cases between the source categories.

Each of the five Group IV Polymers and Resins source categories addressed in this 

rulemaking are discussed further below.1

1.1 Acrylonitrile butadiene styrene (ABS)

ABS resins consist of a terpolymer of acrylonitrile, butadiene, and styrene and can be 

synthesized by emulsion, suspension, and continuous mass polymerization. The majority of ABS 

resin production is by batch emulsion. Typical products made from ABS resins are piping, 

 

1 Two of the Group IV Polymers and Resins source categories no longer have any operating facilities in the U.S. and 

are not included in this action. Those source categories are MABS and nitrile resins.
4

refrigerator door liners and food compartments, automotive components, telephones, luggage 

and cases, toys, mobile homes, and margarine tubs. 

We identified six currently operating ABS facilities subject to the Group IV Polymers 

and Resins MACT standards. Styrene, acrylonitrile and 1,3-butadiene account for the majority of 

the HAP emissions from the ABS production processes at these facilities (approximately 189 

tons per year (TPY) and 69 percent of the total HAP emissions by mass). These facilities also 

reported relatively small emissions of 24 other HAP. We estimate that the MACT-allowable 

emissions (i.e., the maximum emission levels allowed if in compliance with the MACT standard) 

from this source category are approximately equal to the reported, actual emissions. 

1.2 Styrene acrylonitrile (SAN)

SAN resins are copolymers of styrene and acrylonitrile, and they may be synthesized by 

emulsion, suspension, and continuous mass polymerization; however, the majority of production 

is by batch emulsion. Typical uses include automobile instrument panels and interior trim and 

housewares. 

We identified three currently operating SAN facilities subject to the Group IV Polymers 

and Resins MACT standards. Ethyl benzene and styrene account for the majority of the HAP 

emissions from the SAN production processes at these facilities (approximately 3 TPY and 73 

percent of the total HAP emissions by mass). These facilities also reported relatively small 

emissions of methylene chloride and acrylonitrile. We estimate that the MACT-allowable 

emissions (i.e., the maximum emission levels allowed if in compliance with the MACT standard) 

from this source category are approximately equal to the reported, actual emissions. 

1.3 Methyl methacrylate butadiene styrene (MBS)

MBS resins are prepared by grafting methyl methacrylate and styrene onto a styrenebutadiene rubber in an emulsion process. The product is a two-phase polymer used as an impact 

modifier for rigid polyvinyl chloride products. These products are used for applications in 

packaging, building, and construction. 
5

We identified two currently operating MBS facilities subject to the Group IV Polymers 

and Resins MACT standards. Methyl methacrylate and 1,3-butadiene account for the majority of 

the HAP emissions from the MBS production processes at these facilities (approximately 4 TPY 

and 75 percent of the total HAP emissions by mass). These facilities also reported relatively 

small emissions of ethyl acrylate, methanol, styrene, and hydrochloric acid. We estimate that the 

MACT-allowable emissions (i.e., the maximum emission levels allowed if in compliance with 

the MACT standard) from this source category are approximately equal to the reported, actual 

emissions. 

1.4 Polystyrene

Polystyrene resins are those produced by the polymerization of styrene monomer. This 

type of resin can be produced by three methods: (1) Suspension polymerization (operated in 

batch mode); (2) mass (operated in a continuous mode); and (3) emulsion process (operated in a 

continuous mode). The mass and suspension methods are the most commercially significant, 

whereas use of the emulsion process has decreased significantly since the mid-1940s. The uses 

for polystyrene resin include packaging and one-time use, expandable polystyrene beads, 

electronics, resellers and compounding, consumer and institutional products, and furniture, 

building, or construction uses. A wide variety of consumer and construction products are made 

from polystyrene resins, including disposable dinnerware, shower doors, light diffusers, soap 

dishes, insulation board, food containers, drain pipes, audio and video tape, picnic coolers, loose 

fill packaging, and tubing.

We identified ten currently operating polystyrene resins facilities subject to the Group IV 

Polymers and Resins MACT standards. Styrene accounts for the majority of the HAP emissions 

from the polystyrene resin production processes at these facilities (approximately 76 TPY and 93 

percent of the total HAP emissions by mass). These facilities also reported relatively small 

emissions of eight other HAP. We estimate that the MACT-allowable emissions (i.e., the 

maximum emission levels allowed if in compliance with the MACT standard) from this source 

category are approximately equal to the reported, actual emissions.
6

1.5 Poly (ethylene terephthalate) (PET)

Three different types of resins are made by sources covered by the PET source category: 

Solid-state resins (PET bottle grade resins); polyester film; and engineering resins. They are all 

thermoplastic linear condensation polymers based on dimethyl terephthalate or terephthalic acid. 

PET meltphase polymer is used in the production of all three of these resins. PET production can 

occur via either a batch or continuous process. The most common use of PET solid-state resins is 

in soft drink bottles, and some industrial fiber-graded polyester (e.g., for tire cord) is also 

produced from PET solid-state resins. The most common uses of PET film are photographic film 

and magnetic media. PET is used extensively in the manufacture of synthetic fibers (i.e., 

polyester fibers), which compose the largest segment of the synthetic fiber industry. The most 

common uses of polyester fibers are apparel, home furnishings, carpets, fiberfill, and other 

industrial processes. 

We identified 13 currently operating PET facilities subject to the Group IV Polymers and 

Resins MACT standards. Ethylene glycol, acetaldehyde and methanol account for the majority of 

the HAP emissions from the PET production processes at these facilities (approximately 711 

TPY and 86 percent of the total HAP emissions by mass). These facilities also reported relatively 

small emissions of 18 other HAP. We estimate that the MACT-allowable emissions (i.e., the 

maximum emission levels allowed if in compliance with the MACT standard) from this source 

category are approximately equal to the reported, actual emissions. 

1.6 Pesticide Active Ingredients (PAI)

The PAI MACT standard applies to major sources and regulates HAP emissions resulting 

from the production of active ingredients in insecticides, herbicides, fungicides, and related 

products. Typically, the active ingredients subject to the PAI MACT standards are subsequently 

formulated with inert ingredients to create end-product pesticides for application. The MACT 

standards do not apply to the formulation of end-product pesticides or to other types of active 

ingredients such as biocides.

Pesticide active ingredients are made from a number of raw materials in a variety of 

processes. A process often consists of several steps, which may include reaction, crystallization, 
7

washing, solvent extraction, distillation, and/or drying.

The HAP emission sources at PAI production facilities include storage vessels, process 

vents, equipment leaks, wastewater systems, heat exchange systems, bag dumps, and product 

dryers. In the production of PAI, HAP are used primarily as reactants or extraction solvents; 

some of the PAI products are also HAP. The MACT standards for PAI production include a 

combination of equipment standards and emission limits for the various emission sources.

We identified 18 currently operating facilities subject to the PAI MACT standards. 

Toluene, methanol and methylene chloride account for the majority of the HAP emissions from 

the PAI production processes at these facilities (approximately 179 TPY and 59 percent of the 

total HAP emissions by mass). A variety of chemicals are used in the production of PAI, and

these facilities also reported emissions of 56 other HAP. 

1.7 Polyether Polyols (PEPO)

The PEPO MACT standard applies to major sources and regulates HAP emissions 

resulting from the production of chemical products with repeating ether linkages (i.e., -R-O-R-) 

formed by the reaction of ethylene oxide, propylene oxide, or other cyclic ethers with 

compounds having one or more reactive hydrogens. (This definition excludes materials regulated 

as glycols or glycol ethers under the HON.) Polyether polyols do not have significant uses of 

their own but are used to make a variety of other products. Urethane grade polyether polyols 

(i.e., those that are free of water) are used as raw material in the production of polyurethanes, 

including slabstock and molded flexible foams, rigid foams, and other polyurethanes including 

microcellular products, surface coatings, elastomers, fibers, adhesives, and sealants. Nonurethane 

polyether polyols are used as surfactants, lubricants, degreasing agents, hydraulic fluids, 

cosmetics, and pharmaceuticals.

Polyether polyols can be produced by either polymerization of epoxides (i.e., a threemembered cyclic ether, such as ethylene oxide or propylene oxide) or tetrahydrofuran (THF). 

The former process is usually conducted as a batch process, while production of polyols using 

THF is generally a continuous process. Ethylene oxide and propylene oxide are both HAP but 
8

THF is not. For the MACT regulation, two subcategories of polyether polyols were created based 

on the use of either epoxides or THF in polymerization.

We identified 23 currently operating facilities subject to the PEPO MACT standards. 

Ethylene glycol, ethylene oxide and propylene oxide account for the majority of the HAP 

emissions from the PEPO production processes at these facilities (approximately 234 TPY and 

59 percent of the total HAP emissions by mass). A variety of chemicals are used in the 

production of PEPO, and these facilities also reported emissions of 80 other HAP. We estimate 

that the MACT-allowable emissions (i.e., the maximum emission levels allowed if in compliance 

with the MACT standard) from this source category are approximately equal to the reported, 

actual emissions, with the exception of certain types of process vents, which may be up to 5 

times higher than the MACT-allowable emissions.
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2.0 Chemical Manufacturing

Below is a profile of the chemical manufacturing industry, various portions of which will 

be impacted by one of the three NESHAP. Economic data for this industry and portions thereof 

will be presented.

2.1 Introduction

The chemical manufacturing industry produces over 70,000 chemical substances, many 

of which are ubiquitous in American life. Broadly speaking, chemical manufacturing operates by 

converting feedstocks into chemical products that can serve as intermediate goods or final 

products such as medicine, soap, and printer ink. From 2002 to 2007, shipments in the industry 

grew 42%, while employment declined by 8% (Table 2). While total payroll dropped 0.6% over 

this time, annual payroll per employee rose 7.8% from 2002 to 2007 because of the decline in the 

number of employees (Table 3). Shipments per employee grew 54% from 1997 to 2007, with 

much of that growth taking place between 2002 and 2006 (Table 4).

Chemical manufacturing (NAICS 325) covers a diverse set of industry groups, which we 

have aggregated into the following three groups:

 Bulk Chemicals—Includes the most energy-intensive industry groups as 

aggregated by the Department of Energy (DOE). Basic Chemical Manufacturing 

(NAICS 3251); Resin, Rubber, and Artificial Fibers Manufacturing (NAICS 

3252); and Agricultural Chemical Manufacturing (NAICS 3253).

 Pharmaceutical and Medicine Manufacturing (NAICS 3254)—Consists primarily 

of pharmaceutical preparation manufacturing. This industry group is the largest 

importer of goods within chemical manufacturing.

 Other Chemical Manufacturing: Consists of Paint, Coating, and Adhesive 

Manufacturing (NAICS 3255); Soap, Cleaning Compound, and Toiletry 

Manufacturing (NAICS 3256); and Other Chemical Product and Preparation 

Manufacturing (NAICS 3259).
10

In 2007, each of these groups generated approximately one-third of the total employment in 

chemical manufacturing (Figure 1). The bulk chemicals group accounted for the biggest share of 

chemical manufacturing’s total value of shipments (Figure 2).

Table 2. Key Statistics: Chemical Manufacturing (NAICS 325)

2002 2006 2007

Shipments ($2007, millions) $531,173 $675,223 $738,303

Payroll ($2007, millions) $51,317 $46,981 $49,648

Employees 853,224 747,134 814,024

Establishments 13,475 NA 12,937

NA = Not available.

Sources: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 31: Annual 

Survey of Manufactures: General Statistics: Statistics for Industry Groups and Industries: 2006 and 2005.” 

http://factfinder.census.gov ; (July 8, 2008).

U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 00: All Sectors: 

Core Business Statistics Series: Comparative Statistics for the United States and the States (1997 NAICS 

Basis): 2002 and 1997.” http://factfinder.census.gov ; (July 8, 2008).

U.S. Census Bureau; generated by Kapur Energy and Environment; using American FactFinder; “Sector 

00: EC0700A1: All Sectors: Geographic Area Series: Economy-Wide Key Statistics: 2007.” 

http://factfinder.census.gov . Accessed on December 27, 2009. [Source for 2007 numbers]

Table 3. Industry Data: Chemical Manufacturing (NAICS 325)

Industry Data 2002 2006 2007

Total shipments ($2007, millions) $531,173 $675,223 $738,303

Shipments per establishment ($thousands) $39,419 NA $57,069

Shipments per employee ($2007) $622,548 $903,750 $906,979

Shipments per $ of payroll ($2007) $10.35 $14.37 $14.87

Annual payroll per employee ($2007) $60,145 $62,882 $60,991

Employees per establishment 63 NA 63

NA = Not available.

Sources: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 31: Annual 

Survey of Manufactures: General Statistics: Statistics for Industry Groups and Industries: 2006 and 2005.” 

http://factfinder.census.gov ; (July 8, 2008).

U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 00: All Sectors: 

Core Business Statistics Series: Comparative Statistics for the United States and the States (1997 NAICS 

Basis): 2002 and 1997.” http://factfinder.census.gov ; (July 8, 2008).

U.S. Census Bureau; generated by Kapur Energy and Environment; using American FactFinder; “Sector 

00: EC0700A1: All Sectors: Geographic Area Series: Economy-Wide Key Statistics: 2007.” 

http://factfinder.census.gov . Accessed on December 27, 2009. [Source for 2007 numbers]
11

Figure 1. Distribution of Employment within Chemical Manufacturing (NAICS 325): 

2007

Source: U.S. Census Bureau; generated by Kapur Energy and Environment; using American FactFinder; “Sector 

31: EC0731I1: Manufacturing: Industry Series: Detailed Statistics by Industry for the U.S.: 2007.” Release 

date: October 30, 2009. Accessed on December 27, 2009.

Figure 2. Distribution of Total Value of Shipments within Chemical Manufacturing 

(NAICS 325): 2007

Source: U.S. Census Bureau; generated by Kapur Energy and Environment; using American FactFinder; “Sector 

31:EC0731I1: Manufacturing Industry Series: Detailed Statistics by Industry for U.S.: 2007.” 

http://factfinder.census.gov . Accessed on December 27, 2009.

Bulk Chemicals, 

35%

Pharmaceuticals, 

31%

Other Chemicals, 

34%

Bulk Chemicals, 

50%

Pharmaceuticals, 

26%

Other Chemicals, 

24%
12

2.1.1 Supply and Demand Characteristics

Next, we provide a broad overview of the supply and demand side of the chemical 

manufacturing industry. We emphasize the economic interactions this industry has with other 

industries and people, including identifying the key goods and services used by the industry and 

the major uses and consumers of chemical manufacturing products.

The top 10 industry groups supplying inputs to the chemical manufacturing industry in 

2002 accounted for 71% of the total intermediate inputs (Table 4). Bulk chemicals’ production 

was the most energy intensive, using 79% of the chemical manufacturing inputs from petroleum 

and coal products, electric power generation, transmission and distribution, and natural gas 

distribution.

Table 4. Key Goods and Services Used in Chemical Manufacturing (NAICS 325) 

($2007, millions)

Good or Service BEA Code

Bulk 

Chemicals Pharmaceuticals

Other 

Chemicals Total

Basic chemicals 3251 $59,495 $4,772 $14,021 $78,288

Management of companies and enterprises 5500 $15,071 $19,380 $16,396 $50,846

Pharmaceuticals and medicines 3254 $0 $25,125 $0 $25,125

Wholesale trade 4200 $9,428 $8,367 $6,077 $23,872

Scientific research and development services 5417 $6,172 $6,139 $5,554 $17,865

Petroleum and coal products 3240 $10,066 $398 $3,432 $13,896

Plastics and rubber products 3260 $2,675 $1,132 $5,556 $9,363

Resins, rubber, and artificial fibers 3252 $4,048 $0 $4,949 $8,996

Electric power generation, transmission, and 

distribution

2211 $6,025 $716 $807 $7,548

Natural gas distribution 2212 $6,390 $154 $390 $6,934

Total intermediate use T005 $167,699 $82,403 $91,833 $341,935

Source: U.S. Bureau of Economic Analysis (BEA). 2008. “2002 Benchmark Input-Output Accounts: 2002 Standard 

Make and Use Tables at the Summary Level.” Table 2. Washington, DC: BEA.
13

2.1.1.1 Goods and Services Used in Chemical Manufacturing

In 2007, the cost of materials made up 49% of chemical manufacturing’s total shipment 

value (Table 5). Total compensation to employees represented 9% of total shipment value, down 

from 10% in 2005.

2.1.1.1.1 Energy

The Department of Energy (DOE) classifies bulk chemical manufacturing as an energyintensive industry. Pharmaceuticals and other chemical manufacturing are categorized as nonenergy-intensive industries, grouped together with other industry groups under the “Balance of 

Manufacturing” category (DOE, 2008).

Fuel used in chemical production can either facilitate chemical processes or provide the 

feedstock to derive value-added chemicals. In 2007, 70% of chemical manufacturing’s energy 

bill was spent on fuel used as feedstocks (O’Reilly, 2008). These fuel costs represented 2% of 

chemical manufacturing’s total value of shipments (Table 6).

As a whole, chemical manufacturing use less energy over the last 10 years. According to 

DOE, natural gas use by the chemical manufacturing industry dropped 30% from 1998 to 2006, 

and electricity use fell 10% (Table 6). From 1997 to 2005, when data ceased to be available, 

chemical manufacturing used less electricity relative to the manufacturing sector as a whole 

(Figure 3).

2.1.1.2 Uses and Consumers

Products manufactured in the groups bulk chemicals, pharmaceuticals, and other

chemicals have very different consumer profiles. Bulk chemicals is dominated by intermediate 

use, representing 93% of its total commodity output and 56% of the total intermediate use of 

chemical manufacturing products. Pharmaceuticals has both a high level of demand from 

personal consumption, accounting for 67% of the total personal consumption of chemical 

manufacturing products, and a large trade deficit (Table 7).
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Table 5. Costs of Goods and Services Used in Chemical Manufacturing (NAICS 325) 

($2007)

Variable 2005 Share 2006 Share 2007 Share

Total shipments $646,895 100% $675,223 100% $722,494 100%

Total compensation (millions) $62,669 10% $61,683 9% $63,591 9%

Annual payroll $48,159 7% $46,981 7% $48,780 7%

Fringe benefits $14,510 2% $14,702 2% $14,811 2%

Total employees 756,078 747,134 801,567

Average compensation per 

employee 

$82,887 $82,559 $79,333

Total production workers’ wages 

(millions)

$22,643 4% $22,231 3% $23,157 3%

Total production workers 431,502 430,880 463,802

Total production hours 

(thousands)

899,499 885,993 948,244

Average production wages per 

hour

$25 $25 $24

Total cost of materials 

($thousands)

$299,859 46% $318,945 47% $357,055 49%

Materials, parts, packaging $247,851 38% $260,934 39% $291,656 40%

Purchase electricity $8,291 1% $8,490 1% $8,936 1%

Purchased fuel $14,568 2% $13,667 2% $14,227 2%

Other $29,148 5% $35,855 5% $42,236 6%

Sources: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 31: Annual 

Survey of Manufactures: General Statistics: Statistics for Industry Groups and Industries: 2006 and 2005.” 

http://factfinder.census.gov ; (July 8, 2008).

U.S. Census Bureau; generated by Kapur Energy and Environment; using American FactFinder; “Sector 

31: EC0731I1: Manufacturing: Industry Series: Detailed Statistics by Industry for the United States: 

2007.” Accessed on December 27, 2009.
15

Table 6. Energy Used in Chemical Manufacturing (NAICS 325)

Fuel Type 2002 2006

Total (trillion BTU) 3,769 3,159

Net electricitya(million kWh) 153,104 151,646

Residual fuel oil (million bbl) 7 4

Distillate fuel oilb(million bbl) 2 2

Natural gasc(billion cu ft) 1,634 1,349

LPG and NGLd(million bbl) 9 2

Coal (million short tons) 14 8

Coke and breeze (million short tons) * *

Othere (trillion BTU) 1,158 1,045

Total (trillion BTU) 3,769 3,159

a Net electricity is obtained by summing purchases, transfers in, and generation from noncombustible renewable 

resources, minus quantities sold and transferred out. It does not include electricity inputs from on-site 

cogeneration or generation from combustible fuels because that energy has already been included as generating 

fuel (for example, coal).

b Distillate fuel oil includes Nos. 1, 2, and 4 fuel oils and Nos. 1, 2, and 4 diesel fuels.

c Natural gas includes natural gas obtained from utilities, local distribution companies, and any other supplier(s), 

such as independent gas producers, gas brokers, marketers, and any marketing subsidiaries of utilities.

d Examples of liquefied petroleum gases (LPGs) are ethane, ethylene, propane, propylene, normal butane, butylene, 

ethane-propane mixtures, propane-butane mixtures, and isobutene produced at refineries or natural gas processing 

plants, including plants that fractionate raw natural gas liquids (NGLs).

e Other includes net steam (the sum of purchases, generation from renewables, and net transfers), and other energy 

that respondents indicated was used to produce heat and power.

* Estimate less than 0.5.

Sources: U.S. Department of Energy, Energy Information Administration. 2007b. “2006 Energy Consumption by 

Manufacturers—Data Tables.” Table 3.1. Washington, DC: DOE. http://www.eia.doe.gov/emeu/mecs/

mecs2006/2006tables.html . [Source for 2006 numbers]

U.S. Department of Energy, Energy Information Administration. 2007a. “2002 Energy Consumption by 

Manufacturers—Data Tables.” Tables 3.2 and N3.2. Washington, DC: DOE. 

http://www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html .
16

Figure 3. Electric Power Use Trends in Chemical Manufacturing (NAICS 325): 

1997–2005

Source: Federal Reserve Board. 2009. “Industrial Production and Capacity Utilization: Electric Power Use: 

Manufacturing and Mining.” http://www.federalreserve.gov/datadownload/ .

2.1.2 Firm and Market Characteristics

This remaining subsection describes geographic, production, and market data. These data 

provide the basis for further analysis, including regulatory flexibility analyses, and give a 

complete picture of the recent historical trends of production and pricing.

2.1.2.1 Location

In 2002, California had the most chemical manufacturing establishments in the United 

States, followed by Texas and New Jersey (Figure 4). The composition of establishments in these 

states differs among the different industry groups. Despite the fact that each group employed an 

approximately equal share of people in 2002, 54% of the total establishments were other 

chemicals establishments, and only 13% were pharmaceutical establishments.

8 0

8 5

9 0

9 5

100

105

110

Jan-97

Jul-97

Jan-98

Jul-98

Jan-99

Jul-99

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Index Value (Jan-97=100)

Manufacturing Chemical Manufacturing
17

Table 7. Demand by Sector: Chemical Manufacturing (NAICS 325) ($2007 millions)

Sector

BEA 

Code

Bulk 

Chemicals Pharmaceuticals

Other 

Chemicals Total

Plastics and rubber products manufacturing 3260 $39,353 $0 $3,057 $42,410

Basic chemical manufacturing 3251 $33,972 $0 $1,675 $35,647

Pharmaceutical and medicine 

manufacturing

3254 $4,778 $25,125 $462 $30,365

Resin, rubber, and artificial fibers 

manufacturing

3252 $28,249 $0 $1,076 $29,325

Ambulatory health care services 6210 $2,716 $22,900 $934 $26,550

General state and local government 

services

S007 $7,150 $10,586 $8,807 $26,543

Hospitals 6220 $2,936 $15,390 $394 $18,720

Other chemical product and preparation 

manufacturing

3259 $8,021 $0 $2,680 $10,701

Textile mills 3130 $9,568 $0 $930 $10,498

Soap, cleaning compound, and toiletry 

manufacturing

3256 $3,886 $0 $6,289 $10,176

Total intermediate use T001 $212,996 $83,279 $82,107 $378,382

Personal consumption expenditures F010 $4,449 $123,746 $55,882 $184,077

Exports of goods and services F040 $47,121 $15,683 $13,136 $75,940

Imports of goods and services F050 −$38,732 −$67,950 −$10,906 −$117,588

Total final uses (GDP) T004 $15,733 $73,485 $58,023 $147,241

Total commodity output T007 $228,729 $156,765 $140,129 $525,623

Source: U.S. Bureau of Economic Analysis (BEA). 2008. “2002 Benchmark Input-Output Accounts: 2002 Standard 

Make and Use Tables at the Summary Level.” Table 2. Washington, DC: BEA.
18

Figure 4. Establishment Concentration in Chemical Manufacturing (NAICS 325): 

2002

Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 31: 

Manufacturing: Geographic Area Series: Industry Statistics for the States, Metropolitan and Micropolitan 

Statistical Areas, Counties, and Places: 2002.” http://factfinder.census.gov ; (July 23, 2008).

2.1.2.2 Production Capacity and Utilization

Capacity utilization of the chemical manufacturing industry has been broadly in line with 

the manufacturing sector (Figure 5). In the second half of 2005, the chemical manufacturing 

industry’s capacity utilization fell dramatically because of the multiple hurricanes affecting the 

Gulf Coast states. The impact of the economic downturn in 2001 can be seen in the capacity 

utilization of both manufacturing and chemical manufacturing.

2.1.2.3 Employment

The geographic distribution of employment in chemical manufacturing differs largely 

among the different groups. In California, 52% of the chemical manufacturing employment 

comes from the pharmaceutical industry, while 60% of the chemical manufacturing employment 

in the Gulf Coast states comes from bulk chemicals manufacturing (Figure 6).

2.1.2.4 Plants and Capacity

Production capacity in chemical manufacturing has grown 33% since 1997. This growth, 

however, is 9% less than the growth rate for the manufacturing industry as a whole (Figure 7).

Establishments

Fewer than 100

100 - 249

250 - 474

475 - 750

More than 750
19

Figure 5. Capacity Utilization Trends in Chemical Manufacturing (NAICS 325)

Source: Federal Reserve Board. 2009. “Industrial Production and Capacity Utilization: Capacity Utilization.” 

http://www.federalreserve.gov/datadownload/ .

Figure 6. Employment Concentration in Chemical Manufacturing (NAICS 325): 2002

Source: U.S. Census Bureau; generated by RTI International; using American FactFinder; “Sector 31: 

Manufacturing: Geographic Area Series: Industry Statistics for the States, Metropolitan and Micropolitan 

Statistical Areas, Counties, and Places: 2002.” http://factfinder.census.gov ; (July 23, 2008).

0

5

1 0

1 5

2 0

2 5

3 0

3 5

4 0

4 5

5 0

5 5

6 0

6 5

7 0

7 5

8 0

8 5

9 0

9 5

100 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Percentage Capacity Utilization

Manufacturing Chemical Manufacturing

Employment

Fewer than 5,000

5,000 - 13,999

14,000 - 29,999

30,000 - 40,000

More than 40,000
20

Figure 7. Capacity Trends in Chemical Manufacturing (NAICS 325)

Source: Federal Reserve Board. 2009. “Industrial Production and Capacity Utilization: Industrial Capacity.” 

http://www.federalreserve.gov/datadownload/ .

2.1.2.5 Firm Characteristics

In 2007, the top six companies by chemical sales had greater than $10 billion in sales. 

Together, their sales are greater than the next 44 highest chemical companies combined. These, 

however, are global companies, with a large portion of both sales and production coming from 

operations outside of the United States (Table 8). The largest chemical manufacturing company, 

Dow Chemicals, has 108 out of 150 manufacturing sites located outside of the United States 

(Dow Chemical Company, 2008).

In 2007, 58% of U.S. chemical manufacturing corporations generated net income. 

Including those with and without net income, chemical manufacturers had an average before-tax 

profit margin of 10.24%. Profitability is highest for pharmaceutical and medicine corporations 

(Table 9).

100

110

120

130

140

150 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Index Value (Jan-97=100)

Manufacturing Chemical Manufacturing
21

Table 8. Top Chemical Producers: 2007

Chemical Sales 

($millions) % of Total Sales % of Sales in United States

Dow Chemical 53,513 100% 35%

ExxonMobil 36,826 9% 38%

DuPont 29,218 100% 38%

Lyondella16,165 57% 80%

Chevron Phillips 12,534 100% 86%

PPG Industriesa10,025 90% 56%

Huntsman Chemical 9,651 100% 50%

Praxair 9,402 100% 43.5%

Air Productsa8,820 88% 51%

Rohm & Haasb7,837 88% 49%

a

Percentage of sales in the United States calculated from total sales, not chemical sales.

b

Percentage of sales in the United States is actually percentage of sales in North America.

Source: O’Reilly, R. 2008. “Chemicals.” Standard and Poor’s Industry Surveys. 176(28).

Table 9. 2007 Corporate Income and Profitability (NAICS 325)

Industry

Number of 

Corporations

Number of 

Corporations 

with Net 

Income

Total 

Receipts 

($thousands)

Business 

Receipts 

($thousands)

BeforeTax Profit 

Margin

After-Tax 

Profit 

Margin

Basic chemical 1,244 757 $195,022,700 $178,019,490 5.07% 4.10%

Resin, synthetic rubber, 

and artificial synthetic 

fibers and filaments

1,067 648 $44,692,366 $40,078,009 8.06% 6.33%

Pharmaceutical and 

medicine 

1,034 611 $381,339,258 $317,414,432 15.63% 11.66%

Paint, coating, and 

adhesive 

1,411 1,260 $51,778,868 $49,486,744 5.39% 4.02%

Soap, cleaning compound, 

and toilet preparation 

1,862 463 $150,506,485 $139,836,602 9.07% 7.51%

Other chemical product 

and preparation 

2,946 1,773 $89,014,032 $84,062,534 6.71% 5.27%

Chemical manufacturing 9,564 5,512 $912,353,710 $808,897,810 10.24% 7.89%

Source: Internal Revenue Service, U.S. Department of Treasury. 2008b. “Corporation Source Book: Data File 

2007.” http://www.irs.gov/taxstats/article/0,,id=167415,00.html ; (January, 15, 2010).
22

2.1.2.6 Size Distribution

The primary criterion for categorizing a business as small is number of employees, using 

definitions by the SBA for regulatory flexibility analyses. The data describing size standards are 

provided in Table 10. In 2002, enterprises with fewer than 500 employees accounted for 27% of 

employment and 15% of receipts within the chemical manufacturing industry) as noted in Table 

11.

2.1.2.7 Domestic Production

In the late 1990s, overall manufacturing production was growing much faster than the 

chemical manufacturing component (Figure 8). Following the recession of 2001, however, the 

components have moved broadly in line with one another, except for the drop in chemical 

manufacturing production caused by the hurricane season of 2005.

2.1.2.8 International Trade

In the year 2000, the United States moved from having a trade surplus to a trade deficit in 

chemical manufacturing products (Figure 9). This change occurred because the trade deficit in 

pharmaceutical manufacturing, at $35 billion in 2007, overwhelmed the trade surplus of bulk 

chemicals and other chemical manufacturing combined, which was at $22 billion in 2007.

2.1.2.9 Market Prices

Prices of goods in chemical manufacturing have accelerated rapidly in the last 2 years, 

having outpaced overall manufacturing since 2002 (Figure 10). Much of this recent acceleration 

seen in the industry PPI is due to the bulk chemicals segment, largely reflecting the rapid 

increase in fertilizer prices.
23

Table 10. Small Business Size Standards: Chemical Manufacturing (NAICS 325)

NAICS Description Employees

325110 Petrochemical Manufacturing 1,000

325120 Industrial Gas Manufacturing 1,000

325130 Synthetic Dye and Pigment Manufacturing 1,000

325193 Ethyl Alcohol Manufacturing 1,000

325194 Cyclic Crude, Intermediate, and Gum and Wood Chemical Manufacturing 750

325199 All Other Basic Organic Chemical Manufacturing 1,000

325211 Plastics Material and Resin Manufacturing 750

325212 Synthetic Rubber Manufacturing 1,000

325220 Artificial and Synthetic Fiber and Filaments Manufacturing 1,000

325311 Nitrogenous Fertilizer Manufacturing 1,000

325312 Phosphatic Fertilizer Manufacturing 500

325314 Fertilizer (Mixing Only) Manufacturing 500

325320 Pesticide and Other Agricultural Chemical Manufacturing 500

325411 Medicinal and Botanical Manufacturing 750

325412 Pharmaceutical Preparation Manufacturing 750

325413 In-Vitro Diagnostic Substance Manufacturing 500

325414 Biological Product (except Diagnostic) Manufacturing 500

325510 Paint and Coating Manufacturing 500

325520 Adhesive Manufacturing 500

325611 Soap and Other Detergent Manufacturing 750

325612 Polish and Other Sanitation Good Manufacturing 500

325613 Surface Active Agent Manufacturing 500

325620 Toilet Preparation Manufacturing 500

325910 Printing Ink Manufacturing 500

325920 Explosives Manufacturing 750

325991 Custom Compounding of Purchased Resins 500

325992 Photographic Film, Paper, Plate and Chemical Manufacturing 500

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 500

Source: U. S. Small Business Administration (SBA). 2013. “Table of Small Business Size Standards Matched to 

North American Industry Classification System Codes.” Effective July 22, 2013. Found on the Internet at 

http://www.sba.gov/sites/default/files/Size_Standards_Table.pdf.
24

Table 11. Distribution of Economic Data by Enterprise Size: Chemical Manufacturing 

(NAICS 325) 

Enterprises with

Variable Total

1 to 20 

Employeesa

20 to 99 

Employees

100 to 499 

Employees

500 to 749 

Employees

750 to 999 

Employees

1,000 to 1,499 

Employees

Firms 9,341 5,413 1,974 790 95 56 71

Establishments 13,096 5,433 2,208 1,352 250 185 276

Employment 827,430 34,838 78,090 113,326 28,025 18,119 28,338

Receipts ($millions) $468,211 $9,631 $21,394 $39,111 $12,217 $7,324 $14,762

Receipts/firm ($thousands) $50,124 $1,779 $10,838 $49,507 $128,603 $130,779 $207,913

Receipts/establishment 

($thousands)

$35,752 $1,773 $9,689 $28,928 $48,869 $39,587 $53,485

Receipts/employment ($) $565,862 $276,464 $273,971 $345,117 $435,942 $404,195 $520,920

a Excludes SUSB employment category for zero employees. These entities only operated for a fraction of the year.

Source: U.S. Census Bureau. 2008. “Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail 

Employment Sizes: 2002.” http://www.census.gov/csd/susb/download_susb02.htm .

Figure 8. Industrial Production Trends in Chemical Manufacturing (NAICS 325)

Source: Federal Reserve Board. 2009. “Industrial Production and Capacity Utilization: Industrial Production.” 

http://www.federalreserve.gov/datadownload/.

100

110

120

130

140 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Index Value (Jan-97=100)

Manufacturing Chemical Manufacturing
25

Figure 9. International Trade Trends in Chemical Manufacturing (NAICS 325)

Source: U.S. International Trade Commission. 2008. “U.S. Domestic Exports” & “U.S. Imports for Consumption.” 

http://dataweb.usitc.gov/scripts/user_set.asp .

Figure 10. Producer Price Trends in Chemical Manufacturing (NAICS 325)

Source: U.S. Bureau of Labor Statistics (BLS). 2009c. Producer Price Index. Series ID: PCU325—325—

&PCUOMFG—OMFG—. http://www.bls.gov/ppi/home.htm .

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

$1,000,000 (2007)

Imports Exports

9 0

100

110

120

130

140

150

160

170 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 PPI (Jan-98=100)

Manufacturing Chemical Manufacturing
26

3.0 Results of Economic and Small Business Analyses

For economic impact analyses of rules such as these that affect a single industry or a few 

directly affected industries, the EPA typically prepares a partial equilibrium analysis. In this type 

of analysis, the focus of the effort is on estimating impacts to the single affected industry or 

several affected industries, and all impacts of this rule to industries outside of those affected are 

assumed to be zero or so inconsequential to not be considered in the analysis. If the compliance 

costs, which are key inputs to an economic impact analysis, are quite insignificant, then the 

impact analysis could consist of a calculation of annual costs as a percent of sales for affected 

parent companies. This latter type of analysis is called a screening analysis, and is applied when 

a partial equilibrium or more complex economic impact analysis approach is deemed more than 

necessary given the expected size of the impacts. We apply a screening analysis to estimate the 

economic impacts for these rules given that the annual compliance costs for all 3 rules combined 

is approximately $1 million in 2012 dollars, a very small amount relative to the size of NAICS 

325 and any of the six digit NAICS that are part of this higher level NAICS as shown in the 

previous section of this report. The analysis employed here is a “sales test” that computes the 

annualized compliance costs as a share of sales for each company. The annualized cost per sales 

for a company represents the maximum price increase in affected product needed for the 

company to completely recover the annualized costs imposed by the regulation.

The “sales test” is the impact methodology EPA employs in economic impact analysis 

such as this one as opposed to a “profits test”, in which annualized compliance costs are 

calculated as a share of profits.2 This is because revenues or sales data are commonly available 

data for entities normally impacted by EPA regulations and profits data normally made available 

are often not the true profits earned by firms due to accounting and tax considerations. Firms and 

entities often have ways legally available in the tax code to minimize their reported profits; thus, 

using reported profits may lead to a less than accurate estimate of the economic impact of a 

regulation to an affected firm or entity and their consumers. While screening level analyses are 

often employed to estimate impacts to small businesses or entities as part an analysis in 

 

2 More information on sales and profit tests as used in analyses done by U.S. EPA can be found at 

http://www.epa.gov/sbrefa/documents/rfaguidance11-00-06.pdf, pp. 32-33.
27

compliance with the Regulatory Flexibility Act (RFA) as amended by the Small Business 

Regulatory Enforcement Fairness Act (SBREFA), a screening level analysis can also be 

employed in an economic impact analysis such as this one whose focus is on the regulated 

companies. In addition, we also include consideration of measures of producer and consumer 

demand’s responsiveness to price changes to help with examining the economic impacts of these 

rules. It should be noted that the compliance costs for the proposal were estimated in 2010 

dollars. For the final rules, the compliance costs are in 2012 dollars. Hence, we use 2012 

revenues for affected firms in this report instead of the 2010 revenues included in the economic 

impact analysis for the proposal in order to be consistent in estimating economic impacts. 

For the parts of NAICS 325 affected by these rules, we find that the great majority of the 

companies affected are large, US owned multinational companies with substantial revenues and 

extensive product mixes. Using the employee size for the parent companies as per SBA guidance 

on business definition, very few of these companies are small by the Small Business 

Administration’s (SBA) small business size standard.3 We generally find that the cost imposed 

on these companies is a very small fraction of the parent companies’ revenues, and should yield 

small economic impacts on these chemical producers. The revenue estimate for these companies 

reflects all product sales worldwide. In turn, such small economic impacts should yield small 

impacts on their customers (intermediate or end-use). 

 

3

SBA’s small business size standards can be found on the Internet at http://www.sba.gov/content/table-smallbusiness-size-standards. 
28

For the P&R IV final rule, there are 19 parent companies that are affected. Of the 19, 

none of them is a small business according to the SBA small business size standard (for NAICS 

325320, 750 employees or less). With no economic impact on small businesses, there is no 

significant economic impact on a substantial number of small entities (SISNOSE) for this final 

rule. Details on the impacts of this rule by parent company are below in Table 12.

Table 12. Economic Impacts to Parent Firms with Affected P&R IV Facilities

Parent Companies Affected 

by Final Rule

Total Annualized

Cost for Affected 

Parent Companies* 

(2012 dollars)

Revenues for 

Parent 

Companies* 

(billions in 2012)

Total Annualized 

Cost/Revenues for 

Affected Parent 

Companies (%)

3M $33,274 $29.90 0.00011

Alfa S.A.B. de C.V. 33,346 15.20 0.00023

Arkema 16,637 7.90** 0.00022

Chevron 16,637 241.90 0.0000068

Dart Container 33,274 1.3 0.003

Dow Corning 116,459 56.80 0.00014

DuPont 16,637 34.80 0.00004

Eastman 33,274 8.10 0.0004

Sun Capital Partners 

(owner of Emerald 

Polymer Additives, LLC) 

16,637 45.0 0.00004

GE 49,911 147.00 0.00003

Huntsman 16,637 11.20 0.0001

INEOS 33,274 43.00 0.00008

Koch Industries 16,673 115.0 0.00003

M&G Group 16,637 3.20 0.0006

Mitsubishi 16,637 67.88*** 0.00004

Nan Ya Technology Group 

(owner of Nan Ya Plastics) 16,637 1.37 0.0003

Rayonier (owner of 

Performance Fibers) 33,274 1.57 0.0024

Total S.A. (owner of 

Atofina Petrochemicals) 16,637 248.00 0.000007

Zeon Corporation (owner 

of Zeon Chemicals) 16,637 3.17 0.0005

* Parent company revenues and compliance costs can be found in the spreadsheet 

“Chemicalsectorrulefirmrevenuescostsfinal”, that is in the docket for this rulemaking.

**Based on 2012 annual average exchange rate of US dollars to Euros = 1.24, as found at 

http://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates.

***Based on 2012 conversion of 82 yen to the US dollars as used by Mitsubishi in their 2012 financial reporting.
29

For the PAI final rule, there are 12 parent companies affected. Of the 12, none of them is 

a small business according to the SBA small business size standard (for NAICS 325199, 500 

employees or less). With no economic impact on small businesses, there is no SISNOSE for this 

rule. Details on the impacts of this rule by parent company are below in Table 13.

Table 13. Economic Impacts to Parent Firms with Affected PAI Facilities

Parent Companies 

Affected by Final 

Rule

Total Annualized 

Cost for Affected 

Parent Companies* 

(2012 dollars)

Revenues for 

Parent 

Companies* 

(billions in 2012)

Total Annualized 

Cost/Revenues for 

Affected Parent 

Companies (%)

Arysta $12,339 $1.60 0.0005

BASF 12,339 63.47 0.00001

Bayer 12,339 32.06 0.00003

Chemtura 12,339 2.60 0.0004

Dow 49,356 56.80 0.00008

DuPont 37,017 34.80 0.0001

Eastman 12,339 8.10 0.0002

Sumitomo 

Chemical (owner of 

McLaughlin 

Gormley King)

12,339 23.00 0.00005

Monsanto 12,339 13.50 0.0001

Occidental 12,339 24.17 0.00005

Syngenta AG 12,339 14.20 0.0002

International 

Chemical Investors 

Group (owner of 

WeylChem)

12,339 0.99 0.0002

* Parent company revenues and compliance costs can be found in the spreadsheet 

“Chemicalsectorrulefirmrevenuescostsfinal”, that is in the docket for this rulemaking.
30

For the PEPO final rule, there are 14 parent companies affected. Of the 14, none of them 

is a small business according to the SBA small business size standard (for NAICS 325212, 1,000 

employees or less). With no economic impact on small businesses, there is no SISNOSE for this 

rule. Details on the impacts of this rule by parent company are below in Table 14.

Table 14. Economic Impacts to Parent Firms with Affected PEPO Facilities

Parent Companies 

Affected by Rule

Total Annualized 

Cost for Affected 

Parent Companies* 

(2012 dollars)

Revenues for 

Parent 

Companies* 

(billions in 2012)

Total Annualized 

Cost/Revenues for 

Affected Parent 

Companies (%)

AkzoNobel $10,538 $19.08 0.00005

BASF 21,076 63.47 0.00003

Bayer 21,076 32.06 0.00004

Carpenter Co. 10,538 2.0 0.001

Croda International 10,538 1.60 0.001

Dow (owner of Union 

Carbide) 63,228 56.80 0.0001

Eastman 10,538 8.10 0.0001

Huntsman 21,076 11.20 0.0002

Lonza 10,538 4.02 0.0004

LyondellBasell 10,538 45.35 0.00002

Milliken and Company 10,538 1.99 0.0004

Rubicon 10,538 13.8** 0.00008

Shell 10,538 467.20 0.000002

Stepan 10,538 1.80 0.0006

* Parent company revenues and compliance costs can be found in the spreadsheet 

“Chemicalsectorrulefirmrevenuescostsfinal”, that is in the docket for this rulemaking.

** Operates as a joint venture between Chemtura and Huntsman.
31

Impacts to large companies from each of these rules are annual compliance costs of less 

than 0.0001 percent of their sales based on 2012 revenues. Thus, the impacts of each of these 

rules should be quite minimal for these firms, most of which are multinational firms with 

revenues well over $1 billion based on 2012 financial data. It should be noted that available 

estimates of long-run responsiveness of price changes show that the price elasticity of demand 

for chemical manufacturing output is -1.04, and the price elasticity of supply for chemical 

manufacturing output is 0.8.5 Based on this information, one can conclude that demand will 

respond 1:1 with a change in output price, and that supply is inelastic (i.e., will respond less than 

1:1) with a change in output price. Thus, the direct impact of this rule appears quite minor, and 

thus it is reasonable to infer that the impact on consumers of chemical manufacturing output 

from this rule should also be minor. In addition, no small businesses are impacted by this final 

rule.

 

4 Ho, M. S, R. Morgenstern, and J. S. Shih. 2008. “Impact of Carbon Price Policies on US Industry.” RFF 

Discussion Paper 08-37). Available on the Internet at 

http://www.rff.org/Publications/Pages/Publicationdetails.Aspx?. Publicationid=20680. Table 8.A.6.

5 Broda, C., N. Limao, and D. Weinstein. 2008a. “Export Supply Elasticities.” Available on the Internet at 

http://faculty.chicagobooth.edu/christian.broda/website/research/unrestricted/TradeElasticities/TradeElastic

ities/html. Accessed September 2009.
32

4.0 References

Dow Chemical Company. 2008. “Transforming: The Dow Chemical Company 2007 10-K and 

Stockholder Summary.” http://www.dow.com/financial/2007ann-.

Federal Reserve Board. 2009. “Industrial Production and Capacity Utilization.” 

http://www.federalreserve.gov/datadownload/ .

Internal Revenue Service, U.S. Department of Treasury. 2008a. “Corporation Source Book: Data 

File 2005.” http://www.irs.gov/taxstats/article/0,,id=167415,00.html .

Internal Revenue Service, U.S. Department of Treasury. 2008b. “Corporation Source Book: Data 

File 2007.” http://www.irs.gov/taxstats/article/0,,id=167415,00.html .

Kraft Foods Inc. 2008. “Form 10-K, Period ending December 31, 2007.” 

http://www.kraft.com/Investor/sec-filings-annual-report/ .

O’Reilly, R. 2008. “Chemicals.” Standard and Poor’s Industry Surveys. 176(28).

Standard & Poors, 2008. Standard & Poor’s netAdvantage [electronic resource]. New York: 

Standard & Poors. 

U.S. Bureau of Economic Analysis (BEA). 2008. “2002 Benchmark Input-Output Accounts: 

2002 Standard Make and Use Tables at the Summary Level.” Table 2. Washington, DC: 

BEA. U.S. Bureau of Labor Statistics. 2009a. “Producer Price Index.” Series ID: 

PCU321—321—& PCUOMFG—OMFG—. http://www.bls.gov/ppi/home.htm .

U.S. Bureau of Labor Statistics. 2009b. “Producer Price Index.” Series ID: PCU322–322– & 

PCUOMFG–OMFG–. http://www.bls.gov/ppi/home.htm .

U.S. Bureau of Labor Statistics. 2009c. “Producer Price Index.” Series ID: PCU325—325—

&PCUOMFG—OMFG—. http://www.bls.gov/ppi/home.htm .

U.S. Census Bureau. 2001. “1997 Census NAICS Definitions.”

http://www.census.gov/epcd/ec97/industry/E322.HTM#def .

U.S. Census Bureau. 2008. “Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail 

Employment Sizes: 2002.”http://www.census.gov/csd/susb/download_susb02.htm.

U.S. Census Bureau. “Sector 00: All Sectors: Core Business Statistics Series: Comparative 

Statistics for the United States and the States (1997 NAICS Basis): 2002 and 1997” 

(generated by RTI International using American FactFinder). http://factfinder.census.gov

. Accessed July 8, 2008.

U.S. Census Bureau. “Sector 00: All Sectors: Core Business Statistics Series: Comparative 

Statistics for the United States and the States (2007 NAICS Basis): 2002 and 2007” 

(generated by RTI International using American FactFinder). http://factfinder.census.gov

. Accessed January 4, 2010.
33

U.S. Census Bureau. “Sector 00: EC0700A1: All Sectors: Geographic Area Series: EconomyWide Key Statistics: 2007” (generated by Kapur Energy and Environment using 

American FactFinder). http://factfinder.census.gov . Accessed December 27, 2009.

U.S. Census Bureau. “Sector 31: Annual Survey of Manufactures: General Statistics: Statistics 

for Industry Groups and Industries: 2006 and 2005” (generated by RTI International 

using American FactFinder). http://factfinder.census.gov . Accessed July 8, 2008.

U.S. Census Bureau. “Sector 31: EC0731I1: Manufacturing: Industry Series: Detailed Statistics 

by Industry for the United States: 2007” (generated by Kapur Energy and Environment 

using American FactFinder). http://factfinder.census.gov . Accessed December 27, 2009. 

U.S. Census Bureau. “Sector 31: Manufacturing: Geographic Area Series: Industry Statistics for 

the States, Metropolitan and Micropolitan Statistical Areas, Counties, and Places: 2002” 

(generated by RTI International using American FactFinder). http://factfinder.census.gov

. Accessed July 23, 2008.

U.S. Department of Energy, Energy Information Administration. 2007a. “2002 Energy 

Consumption by Manufacturers—Data Tables” (Tables 3.2 and N3.2). 

http://www.eia.doe.gov/emeu/mecs/mecs2002/data02/shelltables.html. .

U.S. Department of Energy, Energy Information Administration. 2007b. “2006 Energy 

Consumption by Manufacturers—Data Tables” (Table 3.1). 

http://www.eia.doe.gov/emeu/mecs/mecs2006/2006tables.html. U.S. Department of 

Energy, Energy Information Administration. 2008. “Assumptions to the Annual Energy 

Outlook 2008: With Projections for 2030.” http://www.eia.doe.gov/oiaf/aeo/assumption/ .

U.S. International Trade Commission. 2008. “U.S. Domestic Exports” and “U.S. Imports for 

Consumption.” http://dataweb.usitc.gov/scripts/user_set.asp .

U.S. Small Business Administration. 2013. “Table of Small Business Size Standards Matched to 

North American Industry Classification System Codes.” 

http://www.sba.gov/sites/default/files/Size_Standards_Table.pdf.