E.O. 12866 Ferroalloys RIA 2060-AQ11 Proposal 20111006

Regulatory Impact Analysis (RIA) for the 

Proposed Manganese Ferroalloys RTR 

Draft Report
September 2011

Regulatory Impact Analysis (RIA) for the Proposed Manganese Ferroalloys RTR 

By:

Larry Sorrels and Souad Benromdane

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards (OAQPS)

Air Economics Group (AEG) and Risk and Benefits Group (RBG)

Research Triangle Park, NC 27711

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Health and Environmental Impacts Division

Research Triangle Park, North Carolina
iii

CONTENTS

Section Page

Table of Contents

Contents................................................................................................................................... iii

Section 1 Executive Summary............................................................................................... 1-1

1.1 Analysis Summary............................................................................................... 1-1

1.2 Organization of this Report.................................................................................. 1-2

Section 2 Introduction............................................................................................................ 2-1

2.1 Background for Proposed Rule............................................................................ 2-1

2.1.1 What is this source category and how did the MACT regulate its 

HAP emissions? ....................................................................................... 2-1

Section 3 Industry Profile ...................................................................................................... 3-1

Section 4 Baseline Emissions, Emission Reductions, And Costs.......................................... 4-1

4.1 Introduction.......................................................................................................... 4-1

Section 5 Economic Impact Analysis and Statutory and Executive Order Analyses............ 5-1

5.1 Background.......................................................................................................... 5-1

5.2 Regulatory Flexibility Act ................................................................................... 5-1

5.3 Energy Impacts .................................................................................................... 5-2

5.4 Unfunded Mandates Reform Act......................................................................... 5-3

5.4.1 Future and Disproportionate Costs ............................................................ 5-3

5.4.2 Effects on the National Economy ............................................................ 5-3
iv

5.5 Executive Order 13045: Protection of Children from Environmental 

Health Risks and Safety Risks............................................................................. 5-3

5.6 Executive Order 12898: Federal Actions to Address Environmental Justice 

in Minority Populations and Low-Income Populations....................................... 5-4

Section 6 Human Health Benefits of Emissions Reductions................................................. 6-1

6.1 Synopsis............................................................................................................... 6-1

6.2 Calculation of PM2.5 Human Health Benefits...................................................... 6-1

6.3 Unquantified Benefits........................................................................................ 6-12

6.3.1 HAP Benefits......................................................................................... 6-13

6.4 Characterization of Uncertainty in the Monetized PM2.5 Benefits..................... 6-26

Section 7 Comparison of Monetized Benefits and Costs....................................................... 7-1

7.1 Summary.............................................................................................................. 7-1

Section 8 References For RIA ............................................................................................... 8-1
1-1

SECTION 1

EXECUTIVE SUMMARY

The U.S. Environmental Protection Agency (EPA) is proposing amendments to the 

national emissions standards for hazardous air pollutants (NESHAP) for Ferroalloys Production 

to address the results of the residual risk and technology review that EPA is required to conduct 

by the Clean Air Act. These proposed amendments include revisions to particulate matter 

standards for electric arc furnaces, metal oxygen refining process, and crushing and screening 

operations. The amendments add hydrochloric acid, mercury, polycyclic aromatic hydrocarbons, 

and formaldehyde emission limits to electric arc furnaces. The amendments also expand and 

revise the requirements to control fugitive emissions from furnace operations and casting. Other 

requirements related to testing, monitoring, notification, recordkeeping, and reporting 

requirements are included. We are also proposing to revise provisions addressing periods of 

startup, shutdown, and malfunction to ensure that the rules are consistent with a recent court 

decision. 

This is an economically significant rule as defined by Executive Order 12866 since the 

annual effects (in this case, benefits) are estimated to exceed $100 million. Therefore, EPA is 

required to develop a regulatory impact analysis (RIA) as part of the regulatory process. The RIA 

includes an economic impact analysis (EIA), and a benefits analysis along with documentation 

for the methods and results.

1.1 Analysis Summary

The key results of the RIA are as follows:

Engineering Cost Analysis: EPA estimates the revised NSPS’s total annualized

costs will be $4.1 million ($2010). This estimate includes all of the compliance 

costs, with both control and administrative (monitoring, testing) costs included. 

Economic Impact Analysis: The economic impacts for the firms affected by this 

proposed rule range are annual compliance costs of less than 0.01 percent of sales. 

Thus, consumers will also experience minimal changes in the price of ferroalloy 

output. 

Social Cost Analysis: The estimated social cost of the major source rule will be

$4.1 million, which is also the total annualized cost of compliance, ($2010).

Small Entity Analyses: Neither of the two affected firms are small businesses 

according to the Small Business Administration’s (SBA’s) small business size 

standard for this industry. Thus, there are no small business or entity impacts 

associated with this proposed rule. 
1-2

 Benefits Analysis:

– The benefits from reducing some air pollutants have not been monetized in 

this analysis, including black carbon and HAPs emissions. We assessed the 

benefits of these emission reductions qualitatively later in this analysis.

– We monetized the benefits from reducing particulate matter (PM). Thus all 

monetized benefits reported reflect decreases in ambient PM2.5 concentrations

due to reduction of close to 257 tons of PM2.5. Although the monetized 

benefits likely underestimate the total benefits, the extent of the underestimate 

is unclear. 

– Using a 3% discount rate, we estimated the total monetized benefits of the 

proposed rule to be $70 million to $180 million (2010 dollars) in the year of 

analysis (2015). Using a 7% discount rate, we estimate the total monetized 

benefits of the proposed rule to be $60 billion to $160 billion (2010 dollars) in 

2015. Using alternative relationships between PM2.5 and premature mortality 

supplied by experts, higher and lower benefits estimates are plausible, but 

most of the expert-based estimates fall between these estimates. 

Net Benefits: For the ferroalloys proposal, the net benefits are $66 million to $176

million in 2015 at a 3% discount rate for the benefits and $56 million to $156 million in 2017 at 

a 7% discount rate for the benefits. These results are shown in Table 1-1.

1.2 Organization of this Report

The remainder of this report supports and details the methodology and the results of the 

RIA:

 Section 2 describes the proposed regulation.

 Section 3 presents the profile of the affected industry.

 Section 4 describes the baseline emissions and emission reductions for the proposed 

regulation.

 Section 5 describes the economic impacts and analyses to comply with Executive 

Orders.

 Section 6 presents the benefits estimates.

 Section 7 presents the net benefits of the proposed rule.

 Section 8 contains the references for the RIA. 
1-3

Table 1-1. Summary of the Annual Monetized Benefits, Social Costs, and Net Benefits for 

the Proposed Ferroalloys RTR in 2015 ($2010 millions)

a

3% Discount Rate 7% Discount Rate

Proposed Standard 

Total Monetized Benefitsb$70 to $180 $60 to $160

Total Social Costs $4 $4

Net Benefits $70 to $180 $60 to $160

Nonmonetized Benefits Reduced exposure to HAPs, including mercury, nickel, cadmium, and 

formaldehyde 

Reduced Climate effects due to reduced black carbon emissions

Ecosystem effects 

Visibility impairment 

a All estimates are for the year of implementation (2015) and are rounded to two significant figures. These results 

include units anticipated to come online and the lowest cost disposal assumption. 

b The total monetized benefits reflect the human health benefits associated with reducing exposure to PM2.5 through 

reductions of directly emitted PM2.5 .It is important to note that the monetized benefits include many but not all 

health effects associated with PM2.5 exposure. Benefits are shown as a range from Pope et al. (2002) to Laden et 

al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally 

potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation 

of effect estimates by particle type. 
SECTION 2

INTRODUCTION

2.1 Background for Proposed Rule

2.1.1 What is this source category and how did the MACT regulate its HAP 

emissions?

The NESHAP (or MACT rule) for Ferroalloys Production: Ferromanganese and 

Silicomanganese was promulgated on May 20, 1999 (64 FR 27450) and codified at 40 

CFR part 63, subpart XXX.1The 1999 NESHAP (40 CFR 63.1650(a)) applies to all new 

and existing ferroalloys production facilities that manufacture ferromanganese or 

silicomanganese and are major sources or are co-located at major sources of HAP 

emissions. The rule’s product-specific applicability reflected the only known major 

source at the time of promulgation. Since then, one other producer of silicomanganese 

has started production.

Today, there are two ferroalloys production facilities that are subject to the 

MACT rule. No new ferroalloys production facilities have been built in over 20 years, 

and we anticipate no new ferroalloys production facilities in the foreseeable future, 

although one facility is currently exploring expanding operations. 

Ferroalloys are alloys of iron in which one or more chemical elements (such as 

chromium, manganese, and silicon) are added into molten metal. Ferroalloys are 

consumed primarily in iron and steel making and are used to produce steel and cast iron 

products with enhanced or special properties. 

Ferroalloys within the scope of this source category are produced using 

submerged electric arc furnaces, which are furnaces in which the electrodes are 

submerged into the charge. The submerged arc process is a reduction smelting operation. 

The reactants consist of metallic ores (ferrous oxides, silicon oxides, manganese oxides, 

etc.) and a carbon-source reducing agent, usually in the form of coke, charcoal, high- and 

low-volatility coal, or wood chips. Raw materials are crushed and sized and then 

conveyed to a mix house for weighing and blending. Conveyors, buckets, skip hoists, or 

cars transport the processed material to hoppers above the furnace. The mix is gravity-fed 

 

1 The emission limits were revised on March 22, 2001 (66 FR 16024) in response to a petition for 

reconsideration submitted to EPA following promulgation of the final rule, and a petition for review 

filed in the U.S. Court of Appeals for the District of Columbia Circuit.
through a feed chute either continuously or intermittently, as needed. At high 

temperatures in the reaction zone, the carbon source reacts with metal oxides to form 

carbon monoxide and to reduce the ores to base metal.2The molten material (product and 

slag) is tapped from the furnace, sometimes subject to post-furnace refining, and poured 

into casting beds on the furnace room floor. Once the material hardens, it is transported to 

product crushing and sizing systems and packaged for transport to the customer.

HAP generating processes include electrometallurgical (furnace) operations 

(primary and tapping), other furnace room operations (ladle treatment and casting), 

building fugitives, raw material handling and product handling. HAP are emitted from 

ferroalloys production as process emissions, process fugitive emissions, and outdoor 

fugitive dust emissions. 

Process emissions are the exhaust gases from the control devices, primarily the 

furnace control device, metal oxygen refining control device and crushing operations 

control device. The HAP in process emissions are primarily composed of metals (mostly 

manganese, arsenic, nickel, lead and chromium) and also may include organic 

compounds that result from incomplete combustion of coal or coke that is charged to the 

furnaces as a reducing agent. There is also evidence of mercury emissions. There are 

process metal HAP emissions from the product crushing control devices. Process fugitive 

emissions occur at various points during the smelting process (such as during charging 

and tapping of furnaces and casting) and are assumed to be similar in composition to the 

process emissions. Outdoor fugitive dust emissions result from the entrainment of HAP 

in ambient air due to material handling, vehicle traffic, wind erosion from storage piles, 

and other various activities. Outdoor fugitive dust emissions are composed of metal HAP 

only.

The MACT rule applies to process emissions and process fugitive emissions from 

the submerged arc furnaces, the metal oxygen refining process, and the product crushing 

equipment and outdoor fugitive dust emissions sources such as roadways, yard areas, and 

outdoor material storage and transfer operations. For process sources, the NESHAP 

specifies numerical emissions limits for particulate matter (as a surrogate for metal HAP) 

from the electric (submerged) arc furnaces (including primary and tapping emissions), 

depending on furnace type, size, and product being made. Particulate matter emission 

 

2 U.S. Environmental Protection Agency. AP-42, 12.4. Ferroalloy Production. October 1986. 
limits (again as a surrogate for metal HAP) are also in place for the metal oxygen refining 

process and product crushing and screening equipment. Table 2-1 contains a summary of 

the applicable limits.
Table 2-1. Emission Limits in Subpart XXX

New or Reconstructed 

or Existing Source

Affected Source Applicable PM Emission 

Standards

Subpart XXX 

Reference

New or reconstructed Submerged arc furnace 0.23 kilograms per hour per 

megawatt (kb/hr/MW) (0.51 

pounds per hour per 

megawatt (lb/hr/MW) or 35 

milligrams per dry standard 

cubic meter (mg/dscm) (0.015 

grains per dry standard cubic 

foot (gr/dscf)

40 CFR 

63.1652(a)(1) and 

(a)(2)

Existing Open submerged arc furnace producing 

ferromanganese and operating at a furnace 

power input of 22 MW or less

9.8 kg/hr (21.7 lb/hr) 40 CFR 

63.1652(b)(1)

Existing Open submerged arc furnace producing 

ferromanganese and operating at a furnace 

power input greater than 22 MW

13.5 kg/hr (29.8 lb/hr) 40 CFR 

63.1652(b)(2)
New or Reconstructed 

or Existing Source

Affected Source Applicable PM Emission 

Standards

Subpart XXX 

Reference

Existing Open submerged arc furnace producing 

silicomanganese and operating at a furnace 

power input greater than 25 MW

16.3 kg/hr (35.9 lb/hr) 40 CFR 

63.1652(b)(3)

Existing Open submerged arc furnace producing 

silicomanganese and operating at a furnace 

power input of 25 MW or less

12.3 kg/hr (27.2 lb/hr) 40 CFR 

63.1652(b)(4)

Existing Semi-sealed submerged arc furnace 

(primary, tapping, and vent stacks) 

producing ferromanganese

11.2 kg/hr (24.7 lb/hr) 40 CFR 63.1652(c)

New, reconstructed, or 

existing

Metal oxygen refining process 69 mg/dscm (0.03 gr/dscf) 40 CFR 63.1652(d)

New or reconstructed Individual equipment associated with the 

product crushing and screening operation

50 mg/dscm (0.022 gr/dscf) 40 CFR 

63.1652(e)(1)

Existing Individual equipment associated with the 

product crushing and screening operation

69 mg/dscm (0.03 gr/dscf) 40 CFR 

63.1652(e)(2)
The 1999 NESHAP established a building opacity limit of 20 percent that is measured 

during the required furnace control device performance test. The rule provides an excursion limit 

of 60 percent opacity for one 6-munute period during the performance test. The opacity 

observation is focused only on emissions exiting the shop due solely to operations of any 

affected submerged arc furnace. In addition, blowing taps, poling and oxygen lancing of the tap 

hole; burndowns associated with electrode measurements; and maintenance activities associated 

with submerged arc furnaces and casting operations are exempt from the opacity standards 

specified in §63.1653.

For outdoor fugitive dust sources, as defined in §63.1651, the 1999 NESHAP requires 

that plants prepare and operate according to an outdoor fugitive dust control plan that describes 

in detail the measures that will be put in place to control outdoor fugitive dust emissions from the 

individual outdoor fugitive dust sources at the facility. The owner or operator must submit a copy 

of the outdoor fugitive dust control plan to the designated permitting authority on or before the 

applicable compliance date. 

2.1.2 What data collection activities were conducted to support this action?

In April 2010, we issued an information collection request (ICR), pursuant to CAA 

section 114, to the two companies that own and operate the two ferroalloys production facilities 

producing ferromanganese and silicomanganese. The ICR requested available information 

regarding process equipment, control devices, point and fugitive emissions, practices used to 

control fugitive emissions, and other aspects of facility operations. The two companies 

completed the surveys for their facilities and submitted the responses to us in the fall of 2010. 

We also requested that the two facilities conduct additional emissions tests in 2010 for certain 

HAP from specific processes that were considered representative of the industry. Pollutants 

tested included most HAP metals, hydrochloric acid, hydrofluoric acid, formaldehyde, mercury, 

polycyclic aromatic hydrocarbons and dioxins and furans. The results of these tests were 

submitted to the EPA in the fall of 2010 and are available in the docket for this action.

The proposed rule is economically significant according to Executive Order 12866. As 

part of the regulatory process of preparing these standards, EPA has prepared a regulatory impact 

analysis (RIA). This analysis includes an analysis of impacts to small entities as part of 

compliance with the Small Business Regulatory Enforcement Fairness Act (SBREFA) and 

analyses to comply with other Executive Orders.
3-1

SECTION 3

INDUSTRY PROFILE

EPA has developed this industry profile to provide the reader with a general 

understanding of the technical and economic aspects of the industry that would be directly 

affected by this proposal.

Ferroalloys are alloys of iron in which one or more chemical elements (such as 

chromium, manganese, and silicon) are added into molten metal. Ferroalloys are consumed 

primarily in iron and steel making and are used to produce steel and cast iron products with 

enhanced or special properties. 

Ferroalloys within the scope of this source category are produced using submerged 

electric arc furnaces, which are furnaces in which the electrodes are submerged into the charge. 

The submerged arc process is a reduction smelting operation. The reactants consist of metallic 

ores (ferrous oxides, silicon oxides, manganese oxides, etc.) and a carbon-source reducing agent, 

usually in the form of coke, charcoal, high- and low-volatility coal, or wood chips. Raw 

materials are crushed and sized and then conveyed to a mix house for weighing and blending. 

Conveyors, buckets, skip hoists, or cars transport the processed material to hoppers above the 

furnace. The mix is gravity-fed through a feed chute either continuously or intermittently, as 

needed. At high temperatures in the reaction zone, the carbon source reacts with metal oxides to 

form carbon monoxide and to reduce the ores to base metal.1The molten material (product and 

slag) is tapped from the furnace, sometimes subject to post-furnace refining, and poured into 

casting beds on the furnace room floor. Once the material hardens, it is transported to product 

crushing and sizing systems and packaged for transport to the customer.

Ferroalloys are master alloys containing iron and one or more non-ferrous metals as 

alloying elements. The ferroalloys are usually classified in two groups: bulk ferroalloys 

(produced in large quantities in electric arc furnaces), and special ferroalloys (produced in 

smaller quantities, but with growing importance). Bulk ferroalloys are used in steel making and 

 

1 U.S. Environmental Protection Agency. AP-42, 12.4. Ferroalloy Production. October 1986. 
3-2

steel or iron foundries exclusively, while the use of special ferroalloys is far more varied (used in 

batteries, animal feed). The U.S. military is a particularly notable consumer of manganese: In 

its weapons systems and munitions, the Department of Defense uses approximately 25,000 short 

tons of manganese ore chemical/metal grade, 7,900 short tons of ferro-manganese (either carbon 

or silicon) and 1,370 short tons of electrolytic manganese metal (EMM) each year. Manganese 

is a key ingredient in the production of ferroalloys for use in the steel and other industries. 

According the U.S. Geological Survey, ―there are no substitutes for manganese in its major 

applications - the manufacture of steel, steel alloys, non-steel alloys, batteries, and fertilizers and 

animal feed.‖ (USGS, 2008). In total, about 87 % of the ferroalloys produced are used in the 

steel industry (European Commission, 2001).

Very little ferroalloy production takes place in the U.S. and Canada. Less than 1 percent 

of worldwide ferroalloy production takes place in the United States (SFSA, 2008). The amount 

of worldwide ferroalloy production occurs in North America has declined over time. As of 

2008, more than 56 percent of ferroalloy production took place in Asia (SFSA, 2008). The 

largest producer of ferroalloys is China, with more than 18 million tons produced in 2008. South 

Africa is second highest production, but is well behind China at around 4 million tons produced 

that same year. More than 80 percent of the ferroalloys consumed in the U.S. are imported. 

Worldwide, the top four ferroalloys produced are: ferrochromium (7.84 million metric 

tons), silicomanganese (7.46 million metric tons), ferrosilicon (7.32 million metric tons), and 

ferromanganese (5.7 million metric tons) (SFSA, 2008). 

Today, there are two ferroalloys production facilities that are subject to the MACT rule. 

No new ferroalloys production facilities have been built in over 20 years, and we anticipate no 

new ferroalloys production facilities in the foreseeable future, although one facility is currently 

exploring expanding operations. 

The affected facilities are owned by the Eramet Group and Group Privat. The Eramet 

Group is a French-owned conglomerate with more than 16,000 employees worldwide and 

revenues in 2010 of around $5 billion. Group Privat is a loose conglomerate of several large 

Ukrainian firms that have interests in metals, chemicals, banking, and other industries in that 
3-3

country and worldwide. There are at least 20,000 employees in this conglomerate and at least 

$10 billion in revenues generated in 2008. The ferroalloys produced by these firm’s U.S. 

facilities use manganese as an input, and the mines for this manganese are owned by these firms. 
4-1

SECTION 4

BASELINE EMISSIONS, EMISSION REDUCTIONS, AND COSTS

4.1 Introduction

This section presents the baseline emissions for the pollutants emitted by affected units and also 

the resulting emissions in 2015 after imposition of the proposed RTR rule. We present the baseline 

emissions and emission reductions for HAP and other emissions such as PM2.5. Emission reductions 

were calculated from the baseline emissions based on the proposed emissions limits, and the emission 

reductions were used as inputs to the benefits analysis presented in Section 7.

4.2 Summary Of Cost Estimates And Emissions Reductions For The Regulatory Options 

Considered For Proposal

Regulatory options were considered for control of emissions of particulate metal hazardous air 

pollutants (HAP), Mercury (Hg), organic HAP, and Polycyclic Aromatic Hydrocarbons (PAH) from 

furnace stacks, and metal HAP from product sizing stacks and fugitive sources. 

Emissions of each pollutant vary considerably among facilities, and multiple control options are 

available for different groups of pollutants. Because of this, and the limited number of facilities in the 

source category (two), specific regulatory options were assessed for each facility based on both 

technology review and modeled risk. Because of differences in modeled risk and existing controls, some 

options were not considered for all process lines at all facilities. Emissions reductions were estimated 

for each facility based on emissions data received in an information collection request (ICR) sent to the 

industry. 

A brief description of the options selected for the proposed revisions to the NESHAP and the 

associated costs and emissions reductions for each facility in the source category are summarized in 

Table 4-1. All the options considered in this analysis are summarized in Table 4-2, along with the total 

estimated cost for implementing each option. A more detailed description of all the regulatory options 

considered for proposal and their associated cost and emissions reductions estimates are presented in 

section 2.0 of the cost memorandum for this proposal. 
4-2

The emissions reductions associated with the control options are calculated as the difference 

between baseline emissions and the estimated emissions for each control scenario. Details of the 

methodology employed to calculate these emissions are included in a separate memorandum. All costs 

are estimated in 2010 dollars. The HAP emission reductions estimated for this proposal are 83.6. tons. 

PM emissions in this memo refer to total PM. Of the total PM, approximately 41 percent of the 

emissions are fine particulate (PM2.5). Thus, of the 626 tons of total PM reduced, 257 tons are PM2.5. 
2

Table 4-1: Summary of the Estimated Costs and Emissions Reductions of Regulatory Options Selected for Proposal

Furnace Fabric 

FIlter Upgrade

Carbon 

Injection

Tap Hood 

Upgrade

Casting 

Capture & 

Control

Building 

Ventilation

Product Sizing 

Fabric Filter 

Upgrade

Facility Pollutant

PM, Metal 

HAP

Hg, PAH, 

HCHO

PM, Metal 

HAP

PM, Metal 

HAP

PM, Metal 

HAP

PM, Metal 

HAP

$1,413,952 $1,512,930 $2,926,882 63.8 $23

$756,465 $756,465 19.8 $19

Note: Shaded options were not selected for proposal.

Felman

Annual Cost of Control Technology ($) Cost Effectiveness

Total Cost/Yr 

($)

HAP 

Reduction 

(Tons)

Cost 

Effectiveness 

($/lb HAP)

Eramet

Table 4-2: Summary of the Estimated Costs and Reductions for All Considered Options 

Control Option

PM Emission 

Reduction 

(TPY)

PM2.5 

Emission 

Reduction1 

(TPY)

HAP 

Emission 

Reduction 

(TPY)

Capital Cost 

($)

Annual Cost 

($/Yr)

PM Cost 

Effectiveness 

($/Ton)

PM2.5 Cost 

Effectiveness 

($/Ton)

HAP Cost 

Effectiveness 

($/lb) Affected Facilities

Replace Furnace Fabric Filter224.6 10.1 2.95 $13,237,000 $1,543,603 $62,761 $153,075 $261 Eramet

Install ACI for Hg and PAH N/A N/A 3.55 $1,673,836 $1,413,952 N/A N/A $199 Eramet

Improve Tapping Capture 63.2 25.9 6.86 $314,922 $81,792 $1,294 $3,155 $6 Eramet, Felman

Casting Capture & Control 100 40.9 22.9 $4,979,039 $1,592,762 $15,949 $38,900 $35 Eramet, Felman

Install Building Ventilation 626 257 80.4 $9,439,500 $2,269,394 $3,623 $8,838 $14 Eramet, Felman

Improve Product Sizing Baghouse 11.4 4.65 4.66 $59,017 $14,394 $1,268 $3,092 $2 Eramet

1

 PM2.5 estimated to be approximately 41% of total PM.

2

 The emission reductions and annual cost for fabric filter replacement are based on the incremental difference between operation of a scrubber and a fabric filter. The 

cost effectiveness values were calculated using the incremental annual cost and the incremental emission reductions between the scrubber and the fabric filter.
4-1

4.3 Regulatory Options Considered For Proposal

This section provides a detailed description of all regulatory options that were considered 

for the proposed revisions to the Ferroalloys NESHAP and their associated costs and emissions 

reductions.

4.3.1 Furnace Stack Emissions – Metal HAP

The selected standard for furnace stack emissions of PM (as a surrogate for metal HAP) is 

based on a technology review, and is designed to ensure that the standard in place will reflect

actual current performance of existing sources. The selected option is a numeric emission 

standard with which both facilities are already in compliance through current controls. Although 

it was not selected for proposal, costs for a beyond-the-floor regulatory option were estimated, 

and are presented here.

4.3.1.1Replacement of Existing control device with a new negative-pressure fabric filter

This option was considered for a single furnace at one of the facilities, and represents a 

scenario of reducing fugitive PM emissions from the facility by 25 tons per year (and HAP 

emissions by 3 tons per year) by replacing a wet scrubber with a large negative pressure fabric 

filter. The total estimated capital cost for the replacement fabric filter is $13.2 million. 

Annualized capital cost and operational and maintenance costs are estimated at $2.5 million or 

$1.5 million above the current annual cost for the existing scrubber, according to the facility ICR 

response. 

4.3.2 Furnace Stack Emissions – Hg, PAH, Formaldehyde1

The selected standards for Hg and PAH are numeric emission standards that represent a 

beyond-the-floor option considered under section 112(d) of the Clean Air Act (the Act). We 

selected this option largely based on the potential risk impacts based on multi-pathway screening 

and because of the potential to reduce the global pool of mercury. We determined that only one 

 

1 The Hg and PAH controls will also achieve co-control of formaldehyde. We propose to set a MACT floor limit for 

this pollutant because there are no compelling risk or environmental reasons to control the relatively low levels 

of formaldehyde emitted at a beyond-the-floor level.
4-2

of the facilities would be required to implement controls for these pollutants.2 Estimated costs 

associated with these controls are presented here.

4.3.2.1Addition of Activated Carbon Injection for Fabric Filters and Scrubbers

This option was selected for two furnaces at one facility, and it represents a scenario of 

reducing emissions of Hg, PAH, and Formaldehyde from the facility by 3.2 tpy by installation of 

activated carbon injection (ACI). The total estimated capital cost for the retrofit of ACI is $1.7

million. Annualized capital cost and operational and maintenance costs are estimated at $1.4

million. 

 

2 Memorandum from Bradley Nelson, Ec/R to Conrad Chin, US EPA/OAQPS/SPPD/MMG, Methodology Used to 

Estimate Mercury Control Costs for the Ferroalloys Production Industry, September 8, 2011.
4-3

4.3.3 Process Fugitive Emissions – Metal HAP

Several regulatory options were considered for control of fugitive metal HAP emissions, 

based on modeled risk. We focused the options on the individual emissions sources at each plant 

that appeared to be risk drivers. We looked at several options to capture and control these 

process fugitives ranging from local ventilation and control, building ventilation and control, and 

fenceline monitoring. The regulatory options considered for control of process fugitive metal 

HAP emissions are presented in the following section.

4.3.3.1Improvements to Capture Hoods for Tapping Operations

This option was considered for tapping operations at two furnaces each for both of the 

facilities, not including some hoods which were recently upgraded. This option represents a 

scenario of reducing fugitive PM emissions from the facilities by 63 tpy (and HAP emissions by 

6.9 tpy) by upgrading the capture efficiency of capture hoods for tapping operations. The total 

estimated capital cost for the hood upgrades is approximately $315,000. Annualized capital cost 

and operational and maintenance costs are estimated at approximately $82,000. 

4.3.3.2Addition of Capture and Control for Casting Operations

Some casting operations are already controlled at each facility. We developed costs to 

capture and control casting emissions the remaining uncontrolled casting operations. The 

estimated costs were based on the assumption that one of the two facilities would require 

addition of capture and control for two of their three casting operations and the second facility 

would require addition of capture and control for one of their three casting operations. This 

scenario would reduce fugitive PM emissions from the facilities by 100 tpy (and HAP emissions 

by 23 tpy) by adding hoods, ductwork, and fabric filters to capture and control emissions from 

currently uncontrolled casting operations. The total estimated capital cost for the hoods, 

ductwork, and fabric filters is approximately $5 million. Annualized capital cost and operational 

and maintenance costs are estimated at approximately $1.6 million. 
4-4

4.3.3.3Building Ventilation

The selected control option involves installation of building ventilation for furnace buildings 

instead of installing fugitive controls on individual tapping and casting operations. This option 

would require installation of ductwork from the roof vents of furnace buildings and a new fabric 

filter for each building. We assumed that one of the two facilities would require building 

ventilation for two buildings and the second facility would require it for a single building. This 

option would reduce fugitive PM emissions from the facilities by 626 tpy (and HAP emissions 

by 80.4 tpy) by adding ductwork and fabric filters to capture and control all fugitive emissions 

from furnace buildings. The total estimated capital cost for the ductwork, and fabric filters is 

approximately $9.4 million. Annualized capital cost and operational and maintenance costs are 

estimated at approximately $2.3 million. 

4.3.3.4Tapping and Casting Control with Fence line Monitoring

This is an alternative regulatory option selected by EPA for proposal in the revised 

NESHAP for the Ferroalloys Production source category. This option allows facilities who may 

have already implemented improved capture and control of tapping and casting emissions to 

avoid installation of building ventilation by performing ambient monitoring for manganese at or 

near the boundaries of the facilities. Estimated emissions reductions would be the same as for the 

tapping and casting capture/control options described previously. Cost estimates were not 

prepared for this option.

4.3.5 Product Sizing Operations– Metal HAP – Improvements to Fabric Filters 

The selected standard for product sizing stack emissions of PM (as a surrogate for metal 

HAP) is based on a technology review, and is designed to ensure that the standard in place will 

reflect actual current performance of existing sources. The selected option is a numeric emission 

standard with which both facilities are already in compliance through current controls (fabric 

filters). Although it was not selected for proposal, costs for a beyond-the-floor regulatory option

were estimated, and are presented here.
4-5

4.3.5.1Upgrade fabric filter

For one facility, improvements to product sizing fabric filters were considered, and 

represent a scenario of reducing fugitive PM emissions from the facility by 11 tpy (and HAP 

emissions by 4.6 tpy) by upgrading the bag material of fabric filters and conversion to reverse-air 

cleaning. The total estimated capital cost for the fabric filter upgrades is approximately $59,000. 

Annualized capital cost and operational and maintenance costs are estimated at approximately 

$14,400.

4.3.6 Metal Oxygen Refining (MOR) Operations– Metal HAP

Metal Oxygen Refining (MOR) is a post-tapping process applied to the molten metal at 

one of the facilities. The selected standard for MOR stack emissions of PM (as a surrogate for 

metal HAP) is based on a technology review, and is designed to ensure that the standard in place 

will reflect actual current performance of existing sources. The selected option is a numeric 

emission standard with which the facility is already in compliance through current controls (a 

fabric filter). Modeled risk did not indicate any need for consideration of a beyond-the-floor 

control option, so no costs were estimated for this emission source.

4.4 Methodology For Estimating Control Costs

The following sections present the methodologies used to estimate the costs associated 

with the regulatory options considered for proposal in the revised NESHAP for the Ferroalloys 

Production source category.

4.4.1 Furnace Stack Emissions – Metal HAP

The primary technologies used to control furnace stack emissions of metal HAP in the 

Ferroalloys source category are fabric filters (also known as baghouses). One facility uses a wet 

scrubber to control emissions from one of their furnaces. Data from emission tests performed in 

conjunction with the ICR indicate that baghouses that are properly designed, installed, 

maintained and operated can meet all of the metal HAP stack emissions limits selected for 

proposal in the revised NESHAP. 
4-6

In order to estimate the capital cost associated with a particular option, we first 

determined which stacks would be required to reduce emissions. Only one stack was considered 

for any emission reductions, the one with a wet scrubber, for which an above-the-floor option 

was considered – replacing the stack with a large negative pressure fabric filter. Because the 

required fabric filter would be a large, custom model, we contacted a vendor who had recently 

supplied a similar model for installation at a ferroalloys facility to obtain assistance in 

developing a cost estimate. The equipment-only cost supplied by the vendor was used in 

conjunction with techniques described in the sixth edition of the EPA Air Pollution Control Cost 

Manual3to estimate total installed capital cost and annual costs. 

Our cost model included installation of the fabric filter and any necessary fans, ductwork, 

and site work. The total installed capital cost of a fabric filter designed for a flow-rate of 180,000 

actual cubic feet per minute (acfm) was estimated at $13.2 million. The annualized capital cost 

and operational and maintenance costs are estimated at $2.5 million, via techniques described in 

the sixth edition of the EPA Air Pollution Control Cost Manual. The annualized cost assumes a 

20 year life expectancy for the unit and, to be consistent with OMB Guidance in Circular A-4, a 

7 percent cost of capital as an estimate of the annualized capital cost as is commonly done for 

EPA standards such as this one. All costs for this estimate were based on 2010 dollars from a 

current vendor estimate. The annual cost for operation of the scrubber was estimated to be $1.0 

million based on information obtained from the ICR submitted by the facility. Therefore, the 

incremental annual cost of replacing the current operating scrubber with a new negative pressure 

fabric filter was estimated to be $1.5 million. The incremental cost was used to calculate the cost 

effectiveness of this control option. 

4.4.2 Furnace Stack Emissions – Hg, PAH, Formaldehyde

EPA believes that the most appropriate technology for control of exhaust emissions of 

Hg, PAH, and formaldehyde for the Ferroalloys Production source category is Activated Carbon 

Injection (ACI). Based on the proposed emission limit, we believe one facility would require 

installation of controls for Hg and PAH on two furnaces. To minimize generation of potentially 

 

3 U.S. Environmental Protection Agency, EPA Air Pollution Control Cost Manual. October 2002, Sixth Edition, 

Found on the Internet at http://epa.gov/ttn/catc/products.html#cccinfo
4-7

hazardous waste (from contaminated carbon media) and avoid contamination of the saleable 

byproduct baghouse dust, it was assumed that the carbon injection would be performed at the 

outlet of the negative pressure fabric filter, with the carbon media collected by a second, small 

polishing baghouse. Activated carbon for the furnace equipped with a scrubber would be injected 

prior to the scrubber with no additional particulate control required.

Costs for ACI were estimated using cost equations developed for the Utility NESHAP4

and information provided by activated carbon vendors.5 The calculated equipment costs for ACI 

and fabric filters were used in conjunction with techniques described in the sixth edition of the 

EPA Air Pollution Control Cost Manual to estimate total installed capital cost and annual costs. 

It was estimated that one facility would require installation of ACI on two furnaces, one 

exhausting to a fabric filter with an outlet flow rate of 245,000 acfm, and a second exhausting to 

a scrubber with an outlet flow rate of 184,000 acfm. 

Our cost model included installation of the two activated carbon injection systems, one 

polishing fabric filter, and associated fans, ductwork, and site work. The total installed capital 

cost was estimated at $1.7 million. The annualized capital cost and operational and maintenance 

costs were estimated at $1.4 million. Annualized costs assume a 20 year life expectancy for the 

units and, to be consistent with OMB Guidance in Circular A-4, a 7 percent cost of capital as an 

estimate of the annualized capital cost as is commonly done for EPA standards such as this one.6

All costs for this estimate were adjusted to 2010 dollars using Chemical Engineering Plant Cost 

Indices (CEPCI). 7 We did not consider the downtime associated with installation for the unit in 

our costs.

4.4.3 Process Fugitive Emissions – Metal HAP

 

4

Sargent & Lundy, IPM Model - Revisions to Cost and Performance for APC Technologies, Mercury Control Cost 

Development Methodology Final, March, 2011. http://www.epa.gov/airmarkt/progsregs/epaipm/docs/append5_3.pdf

5 Contact Report, Daryl Lipscomb, Albemarle, August 22, 2011.

6 U.S. Office of Management and Budget. Circular A-4, September 17, 2003. Found on the Internet at 

http://www.whitehouse.gov/omb/circulars_a004_a-4/#e. 

7 Estimates of the Chemical Engineering Plant Cost Index can be found at http://www.che.com. CEPCI values 

employed were: 539.1 for 2010, 575.4 for 2008, and 361.3 for 1991. 
4-8

Fugitive emissions of metal HAP at Ferroalloys Production facilities result from several 

areas of the process. Process fugitive emissions primarily result from furnace leaks and 

incomplete capture of emissions during tapping and casting of product. Furnace upsets can result 

in release of emissions that would normally be contained by negative pressure occurring inside 

furnace hood. Process fugitive emissions can also result from incomplete capture of emissions by 

tapping hoods, or from casting operations, some of which are uncontrolled at both facilities. 

The 1999 NESHAP established a building opacity limit of 20 percent that is measured 

during the required furnace control device performance test. The rule provides an excursion limit 

of 60 percent opacity for one 6-minute period during the performance test. The opacity 

observation is focused only on emissions exiting the shop due solely to operations of any 

affected submerged arc furnace. In addition, blowing taps, poling and oxygen lancing of the tap 

hole; burndowns associated with electrode measurements; and maintenance activities associated 

with submerged arc furnaces and casting operations are exempt from the opacity standards 

specified in §63.1653.

Both facilities employ negative-pressure hoods to collect emissions from tapping 

operations and direct them to a control device. Some casting operations at both facilities capture 

emissions and direct them to a fabric filter, while some casting operations are currently 

uncontrolled.

Costs were estimated for several options for process fugitive control:

Improvements to Capture Hoods for Tapping Operations

Addition of Capture and Control for Casting Operations

Building Ventilation

Building ventilation was the option selected for proposal, because it was associated with the 

lowest levels of modeled risk, and would capture any emissions that would have been collected 

by improved tapping capture and capture control of casting emissions, in addition to any furnace 

fugitives which escape current controls. 
4-9

a) Improvements to Capture Hoods for Tapping Operations

Estimated costs for tap hood improvements were assumed to cover only the cost 

of an improved replacement tapping hood on the assumption that sufficient control device 

capacity is already in place, since both facilities already have tapping capture and control 

in place. Because the capture hood equations in EPA’s cost manual were insufficient for 

large, metal hoods of the type required, an equation from a book by Bill Vatavuk (the 

author of EPA’s Air Pollution Control Cost Manual) was used8, in conjunction with 

techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual9

to estimate total installed capital cost and annual costs. 

Our cost model included installation of the replacement tap hood. The total 

installed capital cost of four replacement tapping hoods (two at each facility) was 

estimated at $315,000. The annualized capital cost and operational and maintenance costs 

are estimated at $81,000 via techniques described in the sixth edition of the EPA Air 

Pollution Control Cost Manual. The annualized cost assumes a 20 year life expectancy 

for the equipment and, to be consistent with OMB Guidance in Circular A-4, a 7 percent 

cost of capital as an estimate of the annualized capital cost as is commonly done for EPA 

standards such as this one. All costs for this estimate were adjusted to 2010 dollars using 

Chemical Engineering Plant Cost Indices (CEPCI). We did not consider the downtime 

associated with installation for the unit in our costs.

b) Addition of Capture and Control for Casting Operations

Estimated costs for addition of capture and control of casting emissions were 

assumed to cover the cost of hoods and ductwork for capture, plus a fabric filter for 

control of particulate emissions. Because each facility already has installed capture and 

control for some of their casting operations, we estimated that additional capture and 

control for two casting operations would be required at one facility and for one casting 

operation at the second. Equipment costs for the hoods and ductwork, plus a fabric filter a 

 

8 Vatavuk, W.M., Estimating Costs of Air Pollution Control. Chelsea, Michigan, Lewis Book Publishers. 1990. Pp. 

92

9

http://epa.gov/ttn/catc/products.html#cccinfo
4-10

fabric filter designed for a flow-rate of 60,000 actual cubic feet per minute (acfm) were 

estimated via techniques described in the sixth edition of the EPA Air Pollution Control 

Cost Manual10 to estimate total installed capital cost and annual costs. 

Our cost model included installation of casting hoods, ductwork, and a fabric 

filter. The total installed capital cost to add capture and control for three casting 

operations was estimated at $5.0 million. The annualized capital cost and operational and 

maintenance costs are estimated at $1.6 millionvia techniques described in the sixth 

edition of the EPA Air Pollution Control Cost Manual. The annualized cost assumes a 20 

year life expectancy for the equipment and, to be consistent with OMB Guidance in 

Circular A-4, a 7 percent cost of capital as an estimate of the annualized capital cost as is 

commonly done for EPA standards such as this one. All costs for this estimate were 

adjusted to 2010 dollars using Chemical Engineering Plant Cost Indices (CEPCI). We did 

not consider the downtime associated with installation for the unit in our costs.

c) Building Ventilation

To estimate the cost for the building ventilation fabric filter, EPA contacted a 

vendor who had recently supplied a fabric filter to one of the facilities to obtain 

assistance in developing a cost estimate for the installation. The equipment-only cost 

supplied by the vendor was used in conjunction with techniques described in the sixth 

edition of the EPA Air Pollution Control Cost Manual11 to estimate total installed capital 

cost and annual costs. 

Our cost model included installation of the baghouse and any necessary fans, 

ductwork, and site work, including extra ductwork for connection to the building roof 

monitors. The total installed capital cost of three fabric filters (two at one facility, one at 

the second facility) designed for a flow-rate of 150,000 actual cubic feet per minute 

(acfm) was estimated at $9.4 million. The annualized capital cost and operational and 

maintenance costs are estimated at $2.3 million, via techniques described in the sixth 

edition of the EPA Air Pollution Control Cost Manual. The annualized cost assumes a 20 

 

10 http://epa.gov/ttn/catc/products.html#cccinfo

11 http://epa.gov/ttn/catc/products.html#cccinfo
4-11

year life expectancy for the unit and, to be consistent with OMB Guidance in Circular A4, a 7 percent cost of capital as an estimate of the annualized capital cost as is commonly 

done for EPA standards such as this one. All costs for this estimate were based on 2010 

dollars from a current vendor estimate. We did not consider the downtime associated with 

installation for the unit in our costs.
4-12

4.4.4 Product Sizing Operations– Metal HAP – Improvements to Fabric Filters

The primary technology used to control emissions of particulate metal HAP from product 

sizing operations in the Ferroalloys Production source category are fabric filters. The fabric 

filters currently in use at the facilities are capable of meeting the proposed standard. Although it 

was not selected for proposal, costs for a beyond-the-floor regulatory option were estimated, and 

are presented here. The beyond-the-floor option was based on modeled risk, and only one 

product sizing line at one facility was determined to pose any exiting risk. The option considered 

was an upgrade to the fabric filter via improved bag materials and conversion to reverse-air 

cleaning. The costs associated with this upgrade were calculated via techniques described in the 

sixth edition of the EPA Air Pollution Control Cost Manual12 to estimate total installed capital 

cost and annual costs. At the end, we concluded that the potential risk reduction was not 

meaningful compared to the risk reduction achieved by the building ventilation option.

The total installed capital cost of the fabric filter upgrade was estimated at $59,000. The 

Annualized capital cost and operational and maintenance costs are estimated at $14,000, via 

techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual. The 

annualized cost assumes a 5 year life expectancy for the equipment (fabric filter bags) and, to be 

consistent with OMB Guidance in Circular A-4, a 7 percent cost of capital as an estimate of the 

annualized capital cost as is commonly done for EPA standards such as this one. All costs for 

this estimate were adjusted to 2010 dollars using Chemical Engineering Plant Cost Indices 

(CEPCI). We did not consider the downtime associated with installation for the unit in our costs.

4.4 Summary of Cost By Facility 

Table 4-3 summarizes estimated costs for each facility in the Ferroalloys source category, 

assuming implementation of the emission reduction options selected for proposal.

 

12 http://epa.gov/ttn/catc/products.html#cccinfo
4-13

Table 4-3: Summary Cost Estimates by Facility*

Facility Total Capital Cost Total Annual Cost

Eramet $7,966,836 $2,926,882

Felman $3,146,500 $756,465

Total $11,113,336 $3,683,347

*Overall cost estimates may be overstated since some facilities may be able to comply with the rule under the 

alternative compliance option (i.e., monitoring at facility boundary and improved casting/tapping capture & control) 

and may not need to install building ventilation. If so, actual costs would be significantly lower than shown here.
5-1

SECTION 5

ECONOMIC IMPACT ANALYSIS AND STATUTORY AND EXECUTIVE ORDER 

ANALYSES

5.1 Background

In this chapter, we present the results of the economic impact analysis and analyses 

prepared in adherence to statutory and Executive Order requirements. 

5.2 Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a 

regulatory flexibility analysis of any rule subject to notice and comment rulemaking 

requirements under the Administrative Procedure Act or any other statute unless the agency 

certifies that the rule will not have a significant economic impact on a substantial number of 

small entities. Small entities include small businesses, small organizations, and small 

governmental jurisdictions. 

For purposes of assessing the impacts of this proposed rule on small entities, small entity 

is defined as: (1) a small business as defined by the Small Business Administration’s (SBA) 

regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a 

city, county, town, school district or special district with a population of less than 50,000; and (3) 

a small organization that is any not-for-profit enterprise that is independently owned and 

operated and is not dominant in its field. For this source category, which has the NAICS code 

331112 (i.e., Electrometallurgical ferroalloy product manufacturing), the SBA small business 

size standard is 750 employees according to the SBA small business standards definitions. 

After considering the economic impacts of today’s proposed rule on small entities, I 

certify that this action will not have a significant economic impact on a substantial number of 

small entities. Neither of the companies affected by this rule is considered to be a small entity per 

the definition provided in this section. 

Although this proposed rule will not have a significant economic impact on a substantial 

number of small entities, the EPA nonetheless has tried to reduce the impact of this rule on small 
5-2

entities. To reduce the impacts, we are proposing emissions standards in a format that allow 

companies flexibility on how best to comply with them. Moreover, we are proposing stack limits 

that are based on a weighted average approach (as described in Sections V.C and V.D of the 

preamble) and have been established at the least stringent levels that we estimate will still result 

in acceptable risks to public health. Thus, the proposed stack limits are based on the least costly 

approach that will still provide an ample margin of safety for human health and the environment. 

In addition, the proposed compliance testing requirements were established in a way that 

minimizes the costs for testing and reporting while still providing the Agency the necessary 

information needed to ensure continuous compliance with the proposed standards. We continue 

to be interested in the potential impacts of the proposed rule on small entities and welcome 

comments on issues related to such impacts.

5.3 Energy Impacts

Executive Order 13211 (66 FR 28355, May 22, 2001) provides that agencies will prepare 

and submit to the Administrator of the Office of Information and Regulatory Affairs, Office of 

Management and Budget, a Statement of Energy Effects for certain actions identified as 

―significant energy actions.‖ Section 4(b) of Executive Order 13211 defines ―significant energy 

actions‖ as any action by an agency (normally published in the Federal Register) that

promulgates or is expected to lead to the promulgation of a final rule or regulation, including 

notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: 

(1) (i) that is a significant regulatory action under Executive Order 12866 or any successor order, 

and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; 

or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs 

as a significant energy action.

This rule is not a significant energy action as designated by the Administrator of the 

Office of Information and Regulatory Affairs because it is not likely to have a significant adverse 

impact on the supply, distribution, or use of energy. This action will not create any new 

requirements and therefore no additional costs for sources in the energy supply, distribution, or 

use sectors.
5-3

5.4 Unfunded Mandates Reform Act

5.4.1 Future and Disproportionate Costs

The UMRA requires that we estimate, where accurate estimation is reasonably feasible, 

future compliance costs imposed by the rule and any disproportionate budgetary effects. Our 

estimates of the future compliance costs of the proposed rule are discussed previously in this 

RIA. We do not believe that there will be any disproportionate budgetary effects of the proposed 

rule on any particular areas of the country, state or local governments, types of communities 

(e.g., urban, rural), or particular industry segments.

5.4.2 Effects on the National Economy

The UMRA requires that we estimate the effect of the proposed rule on the national 

economy. To the extent feasible, we must estimate the effect on productivity, economic growth, 

full employment, creation of productive jobs, and international competitiveness of U.S. goods 

and services if we determine that accurate estimates are reasonably feasible and that such effect 

is relevant and material. The nationwide economic impact of the proposed rule is presented 

earlier in this RIA chapter. This analysis provides estimates of the effect of the proposed rule on 

most of the categories mentioned above, and these estimates are presented earlier in this RIA 

chapter. The nature of this rule is such that it is not practical for us to use existing approaches, 

such as the Morgenstern et al. approach,

1

to estimate the impact on employment to the regulated 

entities and others from this proposed rule. In addition, we have determined that the proposed 

rule contains no regulatory requirements that might significantly or uniquely affect small 

governments. Therefore, today’s rule is not subject to the requirements of section 203 of the 

UMRA. 

5.5 Executive Order 13045: Protection of Children from Environmental Health Risks 

and Safety Risks

Executive Order 13045, ―Protection of Children from Environmental Health Risks and 

Safety Risks‖ (62 FR 19885, April 23, 1997), applies to any rule that (1) is determined to be 

―economically significant,‖ as defined under Executive Order 12866, and (2) concerns an 

environmental health or safety risk that EPA has reason to believe may have a disproportionate 

effect on children. If the regulatory action meets both criteria, EPA must evaluate the 

environmental health or safety effects of the planned rule on children and explain why the 

 

1 Morgenstern, R. D., W. A. Pizer, and J. S. Shih. 2002. ―Jobs versus the Environment: An Industry-Level 

Perspective.‖ Journal of Environmental Economics and Management 43(3):412-436.
5-4

planned regulation is preferable to other potentially effective and reasonably feasible alternatives 

considered by the Agency.

This proposed rule is not subject to Executive Order 13045 (62 FR 19885, April 23, 

1997) because the Agency does not believe the environmental health risks or safety risks 

addressed by this action present a disproportionate effect on children. If the regulatory action 

meets both criteria, the EPA must evaluate the environmental health or safety effects of the 

planned rule on children and explain why the planned regulation is preferable to other potentially 

effective and reasonably feasible alternatives considered by the Agency. 

This proposed rule is not subject to Executive Order 13045 (62 FR 19885, April 23, 

1997) because the Agency does not believe the environmental health risks or safety risks 

addressed by this action present a disproportionate risk to children. The report, Analysis of 

Socio-Economic Factors for Populations Living Near Ferroalloys Facilities, shows that on a 

nationwide basis, there are approximately 26,000 people exposed to a cancer risk at or above 1-

in-1 million and approximately 28,000 people exposed to a chronic noncancer TOSHI greater 

than 1 due to emissions from the source category. Except for persons in the ―Ages 65 and Up‖ 

demographic group which are slightly elevated compared to the national average, the 

percentages for the other demographic groups, including children 18 years and younger, are 

similar to or lower than their respective nationwide percentages.

This proposed rule is expected to reduce environmental impacts for everyone, including 

children. This action proposes emissions limits at the levels based on MACT, as required by the 

Clean Air Act. Based on our analysis, we believe that this rule does not have a disproportionate 

impact on children. 

The public is invited to submit comments or identify peer-reviewed studies and data that 

assess effects of early life exposure to manganese, lead, arsenic, nickel, or mercury.

5.6 Executive Order 12898: Federal Actions to Address Environmental Justice in 

Minority Populations and Low-Income Populations

Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy 

on environmental justice. Its main provision directs federal agencies, to the greatest extent 

practicable and permitted by law, to make environmental justice part of their mission by 

identifying and addressing, as appropriate, disproportionately high and adverse human health or 

environmental effects of their programs, policies, and activities on minority populations and lowincome populations in the United States.
5-5

For the proposed ferroalloys rule, the EPA has determined that the current health risks 

posed to anyone by emissions from this source category are unacceptable. There are about 

26,000 to 28,000 people nationwide that are currently subject to health risks which are nonnegligible (i.e., cancer risks greater than 1 in a million or chronic noncancer TOSHI greater than 

1) due to emissions from this source category. The demographic distribution of this ―at-risk‖ 

population is similar or below the national distribution of demographics for all groups except for 

the ―ages 65 and up‖ age group, which is 4 percent greater than its corresponding national 

percentage. The proposed rule will reduce the number of people in this at-risk group from 26,000 

- 28,000 people to about 1,000 people, thereby providing disproportionate benefits to a greater 

percentage of minorities. Therefore, the EPA has determined that the proposed rule will not have 

disproportionately high and adverse human health or environmental effects on minority or lowincome populations. Further, since it so significantly reduces the at-risk population in the process 

of ensuring public health protection with an ample margin of safety, it will actually provide 

disproportionate benefit to people ages 65 and up since they comprise a larger portion of the 

current at-risk group. 
6-1

SECTION 6

HUMAN HEALTH BENEFITS OF EMISSIONS REDUCTIONS

6.1 Synopsis

In this section, we provide an estimate of the monetized benefits associated with reducing 

particulate matter (PM) for the proposed NESHAP for Ferroalloys Production to address the 

results of the residual risk and technology review, RTR. For this rule, the PM reductions are the 

result of emission limits on the PM2.5. The total PM2.5 reductions are the consequence of the 

technologies installed to meet these limits. These estimates reflect the monetized human health 

benefits of reducing cases of morbidity and premature mortality among populations exposed to 

the PM2.5 reduced by this rulemaking. Using a 3% discount rate, we estimate the total monetized 

benefits of the proposed ferroalloy RTR to be $70 million to $180 million in the implementation 

year (2015). Using a 7% discount rate, we estimate the total monetized benefits of the Ferroalloy 

RTR to be $60 million to $160 million in the year of analysis (2015). All estimates are in 2010$.

These estimates reflect EPA’s most current interpretation of the scientific literature. 

Higher or lower estimates of benefits are possible using other assumptions; examples of this are 

provided in Figure 6-2 below. Data, resource, and methodological limitations prevented EPA 

from monetizing the benefits from several important benefit categories, including benefits from 

reducing hazardous air pollutants, ecosystem effects, and visibility impairment. The benefits 

from reducing other air pollutants have not been monetized in this analysis, including reducing 

mercury, HF, HCl and other HAPs emissions such as formaldehyde.

6.2 Calculation of PM2.5 Human Health Benefits

This rulemaking would reduce emissions of PM2.5, and the incidence of PM2.5-related 

health effects. For this rule, the PM reductions are the result of emission limits on PM. The total 

PM2.5 reductions are the consequence of the technologies installed to meet these limits. Due to 

analytical limitations, it was not possible to provide a comprehensive estimate of PM2.5-related 

benefits. Instead, we used the ―benefit-per-ton‖ approach to estimate these benefits based on the 

methodology described in Fann, Fulcher, and Hubbell (2009). The key assumptions are 
6-2

described in detail below. These PM2.5 benefit-per-ton estimates provide the total monetized 

human health benefits (the sum of premature mortality and premature morbidity) of reducing one 

ton of PM2.5 from a specified source. EPA has used the benefit per-ton technique in several 

previous RIAs, including the recent SO2 NAAQS RIA (U.S. EPA, 2010b). Table 6-1 shows the 

quantified and unquantified benefits captured in those benefit-per-ton estimates.

Table 6-1. Human Health and Welfare Effects of PM2.5 

Pollutant / 

Effect

Quantified and Monetized

in Primary Estimates

Unquantified Effects

Changes in:

PM2.5 Adult premature mortality 

Bronchitis: chronic and acute

Hospital admissions: respiratory and 

cardiovascular

Emergency room visits for asthma

Nonfatal heart attacks (myocardial infarction)

Lower and upper respiratory illness

Minor restricted-activity days

Work loss days

Asthma exacerbations (asthmatic population)

Infant mortality

Subchronic bronchitis cases

Low birth weight

Pre-term births

Pulmonary function

Nonfatal cardiovascular outcomes other than 

myocardial infarctions

Chronic respiratory diseases other than chronic 

bronchitis

Non-asthma respiratory emergency room visits

Visibility

Household soiling

Consistent with the Portland Cement NESHAP (U.S. EPA, 2009a), the PM2.5 benefits 

estimates utilize the concentration-response functions as reported in the epidemiology literature, 

as well as the 12 functions obtained in EPA’s expert elicitation study as a sensitivity analysis. 

 One estimate is based on the concentration-response (C-R) function developed from 

the extended analysis of American Cancer Society (ACS) cohort, as reported in Pope 

et al. (2002), a study that EPA has previously used to generate its primary benefits 

estimate. When calculating the estimate, EPA applied the effect coefficient as 

reported in the study without an adjustment for assumed concentration threshold of 

10 μg/m3as was done in recent (2006–2009) Office of Air and Radiation RIAs.

 One estimate is based on the C-R function developed from the extended analysis of 

the Harvard Six Cities cohort, as reported by Laden et al. (2006). This study, 

published after the completion of the Staff Paper for the 2006 PM2.5 NAAQS, has 

been used as an alternative estimate in the PM2.5 NAAQS RIA and PM2.5 benefits 

estimates in RIAs completed since the PM2.5 NAAQS. When calculating the estimate, 

EPA applied the effect coefficient as reported in the study without an adjustment for 

assumed concentration threshold of 10 μg/m3as was done in recent (2006–2009) 

RIAs.
6-3

 Twelve estimates are based on the C-R functions from EPA’s expert elicitation study 

(IEc, 2006; Roman et al., 2008) on the PM2.5 -mortality relationship and interpreted 

for benefits analysis in EPA’s final RIA for the PM2.5 NAAQS. For that study, twelve 

experts (labeled A through L) provided independent estimates of the PM2.5 -mortality 

concentration-response function. EPA practice has been to develop independent 

estimates of PM2.5 -mortality estimates corresponding to the concentration-response 

function provided by each of the twelve experts, to better characterize the degree of 

variability in the expert responses.

Readers interested in reviewing the general methodology for creating the benefit-per-ton 

estimates used in this analysis should consult Fann, Fulcher, and Hubbell (2009). As described in 

Fann, Fulcher, and Hubbell (2009), benefit-per-ton estimates are developed for selected 

pollutant/source category combinations. The per-ton values calculated therefore apply only to 

tons reduced from those specific pollutant/source combinations (e.g., SO2 emitted from electric 

generating units; NO2 emitted from mobile sources). In this analysis, we apply the national 

average benefit-per-ton estimate for a 2017 analysis year and multiply it by the corresponding 

emission reductions of directly emitted PM2.5, and VOCs to quantify the benefits of this rule. The 

benefit-per-ton estimates found in Fann, Fulcher, and Hubbell (2009) reflect a specific set of key 

assumptions and input data. As we update these underlying assumptions to reflect the scientific 

literature, we re-estimate the benefit-per-ton estimates and post the updated estimates at 

http://www.epa.gov/air/benmap/bpt.html. In addition, we adjust these estimates to match the 

currency year for the costs in this analysis.

These models assume that all fine particles, regardless of their chemical composition, are 

equally potent in causing premature mortality because the scientific evidence is not yet 

sufficient to allow differentiation of effect estimates by particle type (U.S. EPA, 2009b) . 

Directly emitted PM and VOCs are the dominant PM2.5 precursors affected by this rule. Even 

though we assume that all fine particles have equivalent health effects, the benefit-per-ton 

estimates vary between precursors because each ton of precursor reduced has a different 

propensity to form PM2.5 and a different pattern of transport, resulting geographic distribution of 

exposure. When more people are exposed, the benefits per ton are greater. For example, VOC 

emission has a lower benefit-per-ton estimate than direct PM2.5 because it does not directly 

transform into PM2.5 and because particles formed from VOC can transport many miles, 

including over areas with low populations. The benefit-per-ton coefficients in this analysis were 

derived using modified versions of the health impact functions used in the PM NAAQS 
6-4

Regulatory Impact Analysis. Specifically, this analysis uses the benefit-per-ton method first 

applied in the Portland Cement NESHAP RIA (U.S. EPA, 2009a), which incorporated three 

updates: a new population dataset, an expanded geographic scope of the benefit-per-ton 

calculation, and the functions directly from the epidemiology studies without an adjustment for 

an assumed threshold.1 Removing the threshold assumption is a key difference between the 

method used in this analysis of PM benefits and the methods used in RIAs prior to the Portland 

Cement proposal, and we now calculate incremental benefits down to the lowest modeled PM2.5 

air quality levels. 

In addition in this rule, we did have current air quality modeling results reflecting source 

apportionment specific data related to the ferroalloy industry, and interested readers may find a 

more detailed description of the methodology in the draft Technical Support Document (TSD) on 

estimating the benefits per ton of reducing PM2.5 and its precursors from the Ferroalloy Sector.2

EPA strives to use the best available science to support our benefits analyses, and we 

recognize that interpretation of the science regarding air pollution and health is dynamic and 

evolving. Based on our review of the current body of scientific literature, EPA now estimates 

PM-related mortality without applying an assumed concentration threshold. EPA’s Integrated

Science Assessment for Particulate Matter (U.S. EPA, 2009b), which was recently reviewed by 

EPA’s Clean Air Scientific Advisory Committee (U.S. EPA-SAB, 2009a; U.S. EPA-SAB, 

2009b), concluded that the scientific literature consistently finds that a no-threshold log-linear 

model most adequately portrays the PM-mortality concentration-response relationship while 

recognizing potential uncertainty about the exact shape of the concentration-response function. 

Since then, the Health Effects Subcommittee (U.S. EPA-SAB, 2010) of EPA’s Council 

concluded, ―The HES fully supports EPA’s decision to use a no-threshold model to estimate 

mortality reductions. This decision is supported by the data, which are quite consistent in 

showing effects down to the lowest measured levels. Analyses of cohorts using data from more 

recent years, during which time PM concentrations have fallen, continue to report strong 

 

1These updates were already included in Fann et al. (2009). An example of the effect of these updates is available in 

the Portland Cement proposal RIA (U.S. EPA, 2009a). The benefit-per-ton estimates have also been updated 

since the Portland Cement proposal RIA (U.S. EPA, 2009a) to incorporate a revised VSL, as discussed on the next 

page. 

2 U.S. Environmental Protection Agency. 2011. Technical support document: Estimating the benefit per ton of 

reducing PM2.5 precursors from the ferroalloy sector (Draft); EPA: Research Triangle Park, NC.
6-5

associations with mortality. Therefore, there is no evidence to support a truncation of the CRF.‖ 

In conjunction with the underlying scientific literature, this document provided a basis for 

reconsidering the application of thresholds in PM2.5 concentration-response functions used in 

EPA’s RIAs. For a summary of these scientific review statements and the panel members 

commenting on thresholds since 2002, please consult the Technical Support Document (TSD) 

Summary of Expert Opinions on the Existence of a Threshold (U.S. EPA, 2010c).

Consistent with this recent scientific advice, we are replacing the previous threshold 

sensitivity analysis with a new ―Lowest Measured Level‖ (LML) assessment. This information 

allows readers to determine the portion of population exposed to annual mean PM2.5 levels at or 

above the LML of each study; in general, our confidence in the estimated PM mortality 

decreases as we consider air quality levels further below the LML in major cohort studies that 

estimate PM-related mortality. While an LML assessment provides some insight into the level of 

uncertainty in the estimated PM mortality benefits, EPA does not view the LML as a threshold 

and continues to quantify PM-related mortality impacts using a full range of modeled air quality 

concentrations. It is important to emphasize that we have high confidence in PM2.5-related effects 

down to the lowest LML of the major cohort studies. Just because we have greater confidence in 

the benefits above the LML, this does not mean that we have no confidence that benefits occur 

below the LML.

For this analysis, policy-specific air quality data is not available due to time or resource 

limitations. For this rule, we are unable to estimate the percentage of premature mortality 

associated with this specific rule’s emission reductions at each PM2.5 level. However, we believe 

that it is still important to characterize the distribution of exposure to baseline air quality levels. 

As a surrogate measure of mortality impacts, we provide the percentage of the population 

exposed at each PM2.5 level using the most recent modeling available from the recently proposed 

Transport Rule (U.S. EPA, 2010e). It is important to note that baseline exposure is only one 

parameter in the health impact function, along with baseline incidence rates population, and 

change in air quality. In other words, the percentage of the population exposed to air pollution 

below the LML is not the same as the percentage of the population experiencing health impacts 

as a result of a specific emission reduction policy. The most important aspect, which we are 

unable to quantify for rules without air quality modeling, is the shift in exposure associated with 
6-6

this specific rule. Therefore, caution is warranted when interpreting the LML assessment. For 

more information on the data and conclusions in the LML assessment for rules without policyspecific air quality modeling, please consult the LML TSD (U.S. EPA, 2010d). The results of 

this analysis are provided in Section 6.4 of this RIA.

As is the nature of Regulatory Impact Analyses (RIAs), the assumptions and methods 

used to estimate air quality benefits evolve over time to reflect the Agency’s most current 

interpretation of the scientific and economic literature. For a period of time (2004–2008), the 

Office of Air and Radiation (OAR) valued mortality risk reductions using a value of statistical 

life (VSL) estimate derived from a limited analysis of some of the available studies. OAR arrived 

at a VSL using a range of $1 million to $10 million (2000$) consistent with two meta-analyses of 

the wage-risk literature. The $1 million value represented the lower end of the interquartile range 

from the Mrozek and Taylor (2002) meta-analysis of 33 studies. The $10 million value 

represented the upper end of the interquartile range from the Viscusi and Aldy (2003) metaanalysis of 43 studies. The mean estimate of $5.5 million (2000$)3 was also consistent with the 

mean VSL of $5.4 million estimated in the Kochi et al. (2006) meta-analysis. However, the 

Agency neither changed its official guidance on the use of VSL in rule-makings nor subjected 

the interim estimate to a scientific peer-review process through the Science Advisory Board 

(SAB) or other peer-review group. 

During this time, the Agency continued work to update its guidance on valuing mortality 

risk reductions; including commissioning a report from meta-analytic experts to evaluate 

methodological questions raised by EPA and the SAB on combining estimates from the various 

data sources. In addition, the Agency consulted several times with the Science Advisory Board 

Environmental Economics Advisory Committee (SAB-EEAC) on the issue. With input from the 

meta-analytic experts, the SAB-EEAC advised the Agency to update its guidance using specific, 

appropriate meta-analytic techniques to combine estimates from unique data sources and 

different studies, including those using different methodologies (i.e., wage-risk and stated 

preference) (U.S. EPA-SAB, 2007). 

 

3 After adjusting the VSL to account for a different currency year (2008$) and to account for income growth to 

2015, the $5.5 million VSL is $7.9 million. In this analysis, we use 2015 estimates as a surrogate for 2017 

estimates, which results in a slight underestimate of the benefits.
6-7

Until updated guidance is available, the Agency determined that a single, peer-reviewed 

estimate applied consistently best reflects the SAB-EEAC advice it has received. Therefore, the

Agency has decided to apply the VSL that was vetted and endorsed by the SAB in the Guidelines 

for Preparing Economic Analyses (U.S. EPA, 2000)

4 while the Agency continues its efforts to 

update its guidance on this issue. This approach calculates a mean value across VSL estimates 

derived from 26 labor market and contingent valuation studies published between 1974 and 

1991. The mean VSL across these studies is $6.3 million (2000$).5 The Agency is committed to 

using scientifically sound, appropriately reviewed evidence in valuing mortality risk reductions 

and has made significant progress in responding to the SAB-EEAC’s specific recommendations.

In implementing these rules, emission controls may lead to reductions in ambient PM2.5 

below the National Ambient Air Quality Standards (NAAQS) for PM in some areas and assist 

other areas with attaining the PM NAAQS. Because the PM NAAQS RIAs also calculate PM

benefits, there are important differences worth noting in the design and analytical objectives of 

each RIA. The NAAQS RIAs illustrate the potential costs and benefits of attaining a new air 

quality standard nationwide based on an array of emission control strategies for different sources. 

In short, NAAQS RIAs hypothesize, but do not predict, the control strategies that States may 

choose to enact when implementing a NAAQS. The setting of a NAAQS does not directly result 

in costs or benefits, and as such, the NAAQS RIAs are merely illustrative and are not intended to 

be added to the costs and benefits of other regulations that result in specific costs of control and 

emission reductions. However, some costs and benefits estimated in this RIA account for the 

same air quality improvements as estimated in the illustrative PM2.5 NAAQS RIA. 

By contrast, the emission reductions for this RTR rule are from a specific class of wellcharacterized sources (ferroalloy facilities). In general, EPA is more confident in the magnitude 

and location of the emission reductions for these rules. It is important to note that emission 

reductions anticipated from these rules do not result in emission increases elsewhere (other than 

 

4

In the (draft) update of the Economic Guidelines (U.S. EPA, 2008b), EPA retained the VSL endorsed by the SAB 

with the understanding that further updates to the mortality risk valuation guidance would be forthcoming in the 

near future. Therefore, this report does not represent final agency policy.

5

In this analysis, we adjust the VSL to account for a different currency year (2008$) and to account for income 

growth to 2015. After applying these adjustments to the $6.3 million value, the VSL is $9.1 million. In this 

analysis, we use 2015 estimates as a surrogate for 2017 estimates, which results in a slight underestimate of the 

benefits.
6-8

potential energy disbenefits). Emission reductions achieved under these and other promulgated 

rules will ultimately be reflected in the baseline of future NAAQS analyses, which would reduce 

the incremental costs and benefits associated with attaining the NAAQS. EPA remains forward 

looking towards the next iteration of the 5-year review cycle for the NAAQS, and as a result 

does not issue updated RIAs for existing NAAQS that retroactively update the baseline for 

NAAQS implementation. For more information on the relationship between the NAAQS and 

rules such as analyzed here, please see Section 1.2.4 of the SO2 NAAQS RIA (U.S. EPA, 2010f).

Figure 6-1. Breakdown of Monetized PM2.5 Health Benefits Estimates using Mortality 

Function from Pope et al. (2002)a

a

This pie chart breakdown is illustrative, using the results based on Pope et al. (2002) as an example. Using the 

Laden et al. (2006) function for premature mortality, the percentage of total monetized benefits due to adult 

mortality would be 97%. This chart shows the breakdown using a 3% discount rate, and the results would be 

similar if a 7% discount rate was used.

Table 6-2 provides a general summary of the primary approach results by pollutant, 

including the emission reductions and monetized benefits-per-ton at discount rates of 3% and 

7%.6 Table 6-3 provides a summary of the reductions in health incidences as a result of the 

 

6

To comply with Circular A-4, EPA provides monetized benefits using discount rates of 3% and 7% (OMB, 2003). 

These benefits are estimated for a specific analysis year (i.e., 2017 using 2015 values as a surrogate), and most of 

the PM benefits occur within that year with two exceptions: acute myocardial infarctions (AMIs) and premature 

mortality. For AMIs, we assume 5 years of follow-up medical costs and lost wages. For premature mortality, we 

Adult Mortality - Pope et 

al. 93%

Chronic Bronchitis 4%

AMI 2%

Acute Respiratory Symptoms 

0.5%

Infant Mortality 0.4%

Work Loss Days 0.2%

Hospital Admissions, Cardio 

0.2%

Hospital Admissions, Resp 

0.04%

Asthma Exacerbation 0.01%

Acute Bronchitis 0.01%

Upper Resp Symp 0.00%

Lower Resp Symp 0.00%

ER Visits, Resp 0.00%

Other 1%

Breakdown of Monetized PM2.5 Health Benefits using Pope et al. 

Mortality Function
6-9

pollution reductions. In Table 6-4, we provide the benefits using our anchor points of Pope et al.

and Laden et al. as well as the results from the expert elicitation on PM mortality. Figure 6-2

provides a visual representation of the range of benefits estimates of PM2.5 reductions.

Table 6-2. Summary of Monetized Benefits Estimates for the Ferroalloy Industry in 2015

(2010$)

a

Pollutant

Emissions 

Reductions 

(tons)

Benefit 

per ton 

(Pope, 

3%)

Benefit 

per ton 

(Laden, 

3%)

Benefit 

per ton 

(Pope, 

7%)

Benefit 

per ton 

(Laden, 

7%)

Total Monetized 

Benefits (millions 

2010$ at 3%)

Total Monetized 

Benefits (millions 

2010$ at 7%)

Direct PM2.5 257 $279,419 $689,629 $249,248 $618,705 $70 to $180 $60 to $160

Total $70 to $180 $60 to $ 160

a All estimates are for the year of analysis (2015), and are rounded to two significant figures so numbers may not 

sum across columns. In this analysis, we use 2016 estimates as a surrogate for 2015 estimates, which results in a 

slight overestimate of the benefits. These models assume that all fine particles, regardless of their chemical 

composition, are equally potent in causing premature mortality the scientific evidence is not yet sufficient to

allow differentiation of effect estimates by particle type. The benefit-per-ton estimates are updated and reflect new 

air quality modeling specific to the ferroalloys sector. The monetized benefits incorporate the conversion from 

precursor emissions to ambient fine particles. Confidence intervals are unavailable for this analysis because of the 

benefit-per-ton methodology.

 

assume that there is a ―cessation‖ lag between PM exposures and the total realization of changes in health 

effects. Although the structure of the lag is uncertain, EPA follows the advice of the SAB-HES to assume a 

segmented lag structure characterized by 30% of mortality reductions in the first year, 50% over years 2 to 5, and 

20% over the years 6 to 20 after the reduction in PM2.5 (U.S. EPA-SAB, 2004). Changes in the lag assumptions 

do not change the total number of estimated deaths but rather the timing of those deaths. Therefore, discounting 

only affects the AMI costs after the analysis year and the valuation of premature mortalities that occur after the 

analysis year. As such, the monetized benefits using a 7% discount rate are only approximately 10% less than the 

monetized benefits using a 3% discount rate. 
6-10

Table 6-3. Summary of Reductions in Health Incidences from PM2.5 Benefits for the 

Ferroalloy Sector in 2015

a

Reductions

Avoided Premature Mortality

Pope et al. 8

Laden et al. 20

Avoided Morbidity

Chronic Bronchitis 5

Acute Myocardial Infarction 9

Hospital Admissions, Respiratory 2

Hospital Admissions, Cardiovascular 3

Emergency Room Visits, Respiratory 5

Acute Bronchitis 11

Work Loss Days 946

Asthma Exacerbation 231

Lower Respiratory Symptoms 139

Upper Respiratory Symptoms 105

a All estimates are for the year of analysis (2015) and are rounded to whole numbers with two significant figures. In 

this analysis, we use 2016 estimates as a surrogate for 2015 estimates, which results in a slight overestimate of the 

benefits. These models assume that all fine particles, regardless of their chemical composition, are equally potent 

in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of 

effect estimates by particle type.
6-11

Table 6-4. All PM2.5 Benefits Estimates for the Ferroalloy Sector at Discount Rates of 3% 

and 7% in 2015 (in millions of 2010$)

a

PM2.5 Benefits

3% 7%

Benefit-per-ton Coefficients Derived from Epidemiology 

Literature

Pope et al. $70 $60

Laden et al. $180 $160

Benefit-per-ton Coefficients Derived from Expert Elicitation

Expert A $190 $170

Expert B $60 $60

Expert C $40 $130

Expert D $100 $90

Expert E $230 $210

Expert F $60 $50

Expert G $90 $80

Expert H $110 $100

Expert I $140 $130

Expert J $120 $100

Expert K $13 $12

Expert L $40 $35

a All estimates are rounded to two significant figures. Estimates do not include confidence intervals because they 

were derived through the benefit-per-ton technique described above. The benefits estimates from the expert 

elicitation are provided as a reasonable characterization of the uncertainty in the mortality estimates associated 

with the concentration-response function. Confidence intervals are unavailable for this analysis because of the 

benefit-per-ton methodology. 
6-12

Figure 6-2. Total Monetized PM2.5 Benefits Estimates for the Ferroalloy Sector in 2015

a This graph shows the estimated benefits at discount rates of 3% and 7% using effect coefficients derived from the 

Pope et al. (2002) study and the Laden et al. (2006) study, as well as 12 effect coefficients derived from EPA’s 

expert elicitation on PM mortality. The results shown are not the direct results from the studies or expert 

elicitation; rather, the estimates are based in part on the concentration-response function provided in those studies.

6.3 Unquantified Benefits

The monetized benefits estimated in this RIA only reflect the portion of benefits 

attributable to the health effect reductions associated with ambient fine particles. Methodological 

and time limitations prevented EPA from quantifying or monetizing the benefits from several 

important benefit categories, including benefits from reducing toxic emissions, ecosystem 

effects, and visibility impairment. The health benefits from reducing hazardous air pollutants 

(HAPs) including metals, HCl, HF, and formaldehyde as well as mercury have not been 

monetized in this analysis. Because we were unable to monetize the direct benefits associated 

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

Benefits Estimated from 2 Epidemiology Functions 

and 12 Expert Functions

3%

7%
6-13

with reducing HAPs among others, the monetized benefits estimate is an underestimate of the 

total benefits. The extent of this underestimate, whether small or large, is unknown. 

6.3.1 HAP Benefits

Even though emissions of air toxics from all sources in the U.S. declined by approximately 

42% since 1990, the 2005 National-Scale Air Toxics Assessment (NATA) predicts that most 

Americans are exposed to ambient concentrations of air toxics at levels that have the potential to 

cause adverse health effects (U.S. EPA, 2011b).7The levels of air toxics to which people are 

exposed vary depending on where people live and work and the kinds of activities in which they 

engage. In order to identify and prioritize air toxics, emission source types and locations that are 

of greatest potential concern, U.S. EPA conducts the NATA.8 The most recent NATA was 

conducted for calendar year 2005 and was released in March 2011. NATA includes four steps:

1) Compiling a national emissions inventory of air toxics emissions from outdoor sources

2) Estimating ambient and exposure concentrations of air toxics across the United States

3) Estimating population exposures across the United States

4) Characterizing potential public health risk due to inhalation of air toxics including both 

cancer and noncancer effects

Based on the 2005 NATA, EPA estimates that about 5% of census tracts nationwide have 

increased cancer risks greater than 100 in a million. The average national cancer risk is about 50 

in a million. Nationwide, the key pollutants that contribute most to the overall cancer risks are 

formaldehyde and benzene.9 Secondary formation (e.g., formaldehyde forming from other 

emitted pollutants) was the largest contributor to cancer risks, while stationary, mobile and 

background sources contribute almost equal portions of the remaining cancer risk.

 

7 The 2005 NATA is available on the Internet at http://www.epa.gov/ttn/atw/nata2005/.

8 The NATA modeling framework has a number of limitations that prevent its use as the sole basis for setting 

regulatory standards. These limitations and uncertainties are discussed on the 2005 NATA website. Even so, 

this modeling framework is very useful in identifying air toxic pollutants and sources of greatest concern, setting 

regulatory priorities, and informing the decision making process. U.S. EPA. (2011) 2005 National-Scale Air 

Toxics Assessment. http://www.epa.gov/ttn/atw/nata2005/

9 Details about the overall confidence of certainty ranking of the individual pieces of NATA assessments including 

both quantitative (e.g., model-to-monitor ratios) and qualitative (e.g., quality of data, review of emission 

inventories) judgments can be found at http://www.epa.gov/ttn/atw/nata/roy/page16.html.
6-14

Noncancer health effects can result from chronic,10 subchronic,11 or acute12 inhalation 

exposures to air toxics, and include neurological, cardiovascular, liver, kidney, and respiratory 

effects as well as effects on the immune and reproductive systems. According to the 2005 

NATA, about three-fourths of the U.S. population was exposed to an average chronic 

concentration of air toxics that has the potential for adverse noncancer respiratory health effects.

Results from the 2005 NATA indicate that acrolein is the primary driver for noncancer 

respiratory risk. 

Figure 6-3 and Figure 6-4 depict the estimated census tract-level carcinogenic risk and 

noncancer respiratory hazard from the assessment. It is important to note that large reductions in 

HAP emissions may not necessarily translate into significant reductions in health risk because 

toxicity varies by pollutant, and exposures may or may not exceed levels of concern. For 

example, acetaldehyde mass emissions are more than double acrolein emissions on a national 

basis, according to EPA’s 2005 National Emissions Inventory (NEI). However, the Integrated 

Risk Information System (IRIS) reference concentration (RfC) for acrolein is considerably lower 

than that for acetaldehyde, suggesting that acrolein could be potentially more toxic than 

acetaldehyde. Thus, it is important to account for the toxicity and exposure, as well as the mass 

of the targeted emissions. 

 

10 Chronic exposure is defined in the glossary of the Integrated Risk Information (IRIS) database 

(http://www.epa.gov/iris) as repeated exposure by the oral, dermal, or inhalation route for more than 

approximately 10% of the life span in humans (more than approximately 90 days to 2 years in typically used 

laboratory animal species).

11 Defined in the IRIS database as repeated exposure by the oral, dermal, or inhalation route for more than 30 days, 

up to approximately 10% of the life span in humans (more than 30 days up to approximately 90 days in typically 

used laboratory animal species).

12 Defined in the IRIS database as exposure by the oral, dermal, or inhalation route for 24 hours or less.
6-15

Figure 6-3 Estimated Chronic Census Tract Carcinogenic Risk from HAP exposure 

from outdoor sources (2005 NATA)
6-16

Figure 6-4 Estimated Chronic Census Tract Noncancer (Respiratory) Risk from HAP 

exposure from outdoor sources (2005 NATA)

Due to methodology and time limitations under the court-ordered schedule, we were 

unable to estimate the benefits associated with the hazardous air pollutants that would be reduced 

as a result of these rules. In a few previous analyses of the benefits of reductions in HAPs, EPA 

has quantified the benefits of potential reductions in the incidences of cancer and non-cancer risk 

(e.g., U.S. EPA, 1995). In those analyses, EPA relied on unit risk factors (URF) developed 

through risk assessment procedures.13 These URFs are designed to be conservative, and as such, 

are more likely to represent the high end of the distribution of risk rather than a best or most 

likely estimate of risk. As the purpose of a benefit analysis is to describe the benefits most likely 

to occur from a reduction in pollution, use of high-end, conservative risk estimates would 

 

13The unit risk factor is a quantitative estimate of the carcinogenic potency of a pollutant, often expressed as the 

probability of contracting cancer from a 70-year lifetime continuous exposure to a concentration of one μg/m3of 

a pollutant.
6-17

overestimate the benefits of the regulation. While we used high-end risk estimates in past 

analyses, advice from the EPA’s Science Advisory Board (SAB) recommended that we avoid 

using high-end estimates in benefit analyses (U.S. EPA-SAB, 2002). Since this time, EPA has 

continued to develop better methods for analyzing the benefits of reductions in HAPs.

As part of the second prospective analysis of the benefits and costs of the Clean Air Act 

(U.S. EPA, 2011a), EPA conducted a case study analysis of the health effects associated with 

reducing exposure to benzene in Houston from implementation of the Clean Air Act (IEc, 2009). 

While reviewing the draft report, EPA’s Advisory Council on Clean Air Compliance Analysis 

concluded that ―the challenges for assessing progress in health improvement as a result of 

reductions in emissions of hazardous air pollutants (HAPs) are daunting...due to a lack of 

exposure-response functions, uncertainties in emissions inventories and background levels, the 

difficulty of extrapolating risk estimates to low doses and the challenges of tracking health 

progress for diseases, such as cancer, that have long latency periods‖ (U.S. EPA-SAB, 2008).

In 2009, EPA convened a workshop to address the inherent complexities, limitations, and 

uncertainties in current methods to quantify the benefits of reducing HAPs. Recommendations 

from this workshop included identifying research priorities, focusing on susceptible and 

vulnerable populations, and improving dose-response relationships (Gwinn et al., 2011). 

In summary, monetization of the benefits of reductions in cancer incidences requires 

several important inputs, including central estimates of cancer risks, estimates of exposure to 

carcinogenic HAPs, and estimates of the value of an avoided case of cancer (fatal and non-fatal). 

Due to methodology and time limitations under the court-ordered schedule, we did not attempt to 

monetize the health benefits of reductions in HAPs in this analysis. Instead, we provide a 

qualitative analysis of the health effects associated with the HAPs anticipated to be reduced by 

these rules and we summarize the results of the residual risk assessment for the NESHAP. EPA 

remains committed to improving methods for estimating HAP benefits by continuing to explore 

additional concepts of benefits, including changes in the distribution of risk. 

Available emissions data show that several different HAPs are emitted from this sector. 

In the subsequent sections, we describe the health effects associated with the main HAPs of 
6-18

concern. This rule is anticipated to reduce 84.6 tons of total HAPs per year as shown in Chapter 

4 of this RIA, with 80 tons being metal HAP, 0.2 tons being mercury, and 2.4 tons being PAHs.

6.3.3.1 Arsenic (As)

Arsenic, a naturally occurring element, is found throughout the environment and is 

considered toxic through the oral, inhalation and dermal routes. Acute (short-term) high-level 

inhalation exposure to As dust or fumes has resulted in gastrointestinal effects (nausea, diarrhea, 

abdominal pain, and gastrointestinal hemorrhage); central and peripheral nervous system disorders 

have occurred in workers acutely exposed to inorganic As. Chronic (long-term) inhalation 

exposure to inorganic As in humans is associated with irritation of the skin and mucous 

membranes. Chronic inhalation can also lead to conjunctivitis, irritation of the throat and 

respiratory tract and perforation of the nasal septum.14 Chronic oral exposure has resulted in 

gastrointestinal effects, anemia, peripheral neuropathy, skin lesions, hyperpigmentation, and liver 

or kidney damage in humans. Inorganic As exposure in humans, by the inhalation route, has been 

shown to be strongly associated with lung cancer, while ingestion of inorganic As in humans has 

been linked to a form of skin cancer and also to bladder, liver, and lung cancer. EPA has classified 

inorganic As as a Group A, human carcinogen.15

6.3.3.2 Formaldehyde

Since 1987, EPA has classified formaldehyde as a probable human carcinogen based on 

evidence in humans and in rats, mice, hamsters, and monkeys.16 EPA is currently reviewing 

recently published epidemiological data. For instance, research conducted by the National 

Cancer Institute (NCI) found an increased risk of nasopharyngeal cancer and 

lymphohematopoietic malignancies such as leukemia among workers exposed to 

 

14 Agency for Toxic Substances and Disease Registry (ATSDR). Medical Management Guidelines for Arsenic. 

Atlanta, GA: U.S. Department of Health and Human Services. Available on the Internet at < 

http://www.atsdr.cdc.gov/mhmi/mmg168.html#bookmark02>

15 U.S. Environmental Protection Agency (U.S. EPA). 1998. Integrated Risk Information System File for Arsenic. 

Research and Development, National Center for Environmental Assessment, Washington, DC. This material is 

available electronically at: http://www.epa.gov/iris/subst/0278.htm.

16 U.S. EPA. 1987. Assessment of Health Risks to Garment Workers and Certain Home Residents from Exposure to 

Formaldehyde, Office of Pesticides and Toxic Substances, April 1987.
6-19

formaldehyde.17,18 In an analysis of the lymphohematopoietic cancer mortality from an extended 

follow-up of these workers, NCI confirmed an association between lymphohematopoietic cancer 

risk and peak exposures.19 A recent National Institute of Occupational Safety and Health 

(NIOSH) study of garment workers also found increased risk of death due to leukemia among 

workers exposed to formaldehyde.20 Extended follow-up of a cohort of British chemical workers 

did not find evidence of an increase in nasopharyngeal or lymphohematopoietic cancers, but a 

continuing statistically significant excess in lung cancers was reported.21

In the past 15 years there has been substantial research on the inhalation dosimetry for 

formaldehyde in rodents and primates by the CIIT Centers for Health Research (formerly the 

Chemical Industry Institute of Toxicology), with a focus on use of rodent data for refinement of 

the quantitative cancer dose-response assessment.22,23,24 CIIT’s risk assessment of formaldehyde 

incorporated mechanistic and dosimetric information on formaldehyde. However, it should be 

noted that recent research published by EPA indicates that when two-stage modeling 

assumptions are varied, resulting dose-response estimates can vary by several orders of 

magnitude.25,26,27,28 These findings are not supportive of interpreting the CIIT model results as 

 

17 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2003. Mortality from lymphohematopoetic 

malignancies among workers in formaldehyde industries. Journal of the National Cancer Institute 95: 1615-1623.

18 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2004. Mortality from solid cancers among 

workers in formaldehyde industries. American Journal of Epidemiology 159: 1117-1130.

19 Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, M. 2009. 

Mortality from lymphohematopoietic malignancies among workers in formaldehyde industries: The National 

Cancer Institute cohort. J. National Cancer Inst. 101: 751-761.

20 Pinkerton, L. E. 2004. Mortality among a cohort of garment workers exposed to formaldehyde: an update. 

Occup. Environ. Med. 61: 193-200.

21 Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended follow-up of a cohort of British chemical workers 

exposed to formaldehyde. J National Cancer Inst. 95:1608-1615.

22 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Kalisak, J Preston, and FJ Miller. 2003. Biologically 

motivated computational modeling of formaldehyde carcinogenicity in the F344 rat. Tox Sci 75: 432-447.

23 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Kalisak, J Preston, and FJ Miller. 2004. Human respiratory 

tract cancer risks of inhaled formaldehyde: Dose-response predictions derived from biologically-motivated 

computational modeling of a combined rodent and human dataset. Tox Sci 82: 279-296.

24 Chemical Industry Institute of Toxicology (CIIT).1999. Formaldehyde: Hazard characterization and dose-response 

assessment for carcinogenicity by the route of inhalation. CIIT, September 28, 1999. Research Triangle Park, NC.

25 U.S. EPA. Analysis of the Sensitivity and Uncertainty in 2-Stage Clonal Growth Models for Formaldehyde with

Relevance to Other Biologically-Based Dose Response (BBDR) Models. U.S. Environmental Protection Agency, 

Washington, D.C., EPA/600/R-08/103, 2008

26 Subramaniam, R; Chen, C; Crump, K; .et .al. (2008) Uncertainties in biologically-based modeling of 

formaldehyde-induced cancer risk: identification of key issues. Risk Anal 28(4):907-923.

27 Subramaniam, R; Chen, C; Crump, K; .et .al. (2007). Uncertainties in the CIIT 2-stage model for formaldehydeinduced nasal cancer in the F344 rat: a limited sensitivity analysis-I. Risk Anal 27:1237
6-20

providing a conservative (health protective) estimate of human risk.29 EPA research also 

examined the contribution of the two-stage modeling for formaldehyde towards characterizing 

the relative weights of key events in the mode-of-action of a carcinogen. For example, the 

model-based inference in the published CIIT study that formaldehyde’s direct mutagenic action 

is not relevant to the compound’s tumorigenicity was found not to hold under variations of 

modeling assumptions.30

Based on the developments of the last decade, in 2004, the working group of the IARC 

concluded that formaldehyde is carcinogenic to humans (Group 1), on the basis of sufficient 

evidence in humans and sufficient evidence in experimental animals - a higher classification than 

previous IARC evaluations. After reviewing the currently available epidemiological evidence, 

the IARC (2006) characterized the human evidence for formaldehyde carcinogenicity as 

―sufficient,‖ based upon the data on nasopharyngeal cancers; the epidemiologic evidence on 

leukemia was characterized as ―strong.‖31 EPA is reviewing the recent work cited above from the 

NCI and NIOSH, as well as the analysis by the CIIT Centers for Health Research and other 

studies, as part of a reassessment of the human hazard and dose-response associated with 

formaldehyde.

Formaldehyde exposure also causes a range of noncancer health effects, including 

irritation of the eyes (burning and watering of the eyes), nose and throat. Effects from repeated 

exposure in humans include respiratory tract irritation, chronic bronchitis and nasal epithelial 

lesions such as metaplasia and loss of cilia. Animal studies suggest that formaldehyde may also 

cause airway inflammation – including eosinophil infiltration into the airways. There are several 

studies that suggest that formaldehyde may increase the risk of asthma – particularly in the 

young.32,33

 

28 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensitivity analysis of biologically motivated model for formaldehydeinduced respiratory cancer in humans. Ann Occup Hyg 52:481-495.

29 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensitivity analysis of biologically motivated model for formaldehydeinduced respiratory cancer in humans. Ann Occup Hyg 52:481-495.

30 Subramaniam, R; Chen, C; Crump, K; .et .al. (2007). Uncertainties in the CIIT 2-stage model for formaldehydeinduced nasal cancer in the F344 rat: a limited sensitivity analysis-I. Risk Anal 27:1237

31 International Agency for Research on Cancer (2006) Formaldehyde, 2-Butoxyethanol and 1-tert-Butoxypropan-2-

ol. Monographs Volume 88. World Health Organization, Lyon, France.

32 Agency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for Formaldehyde. 

Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. 
6-21

6.3.3.3 Chromium (Cr)34

Chromium may be emitted in two forms, trivalent Cr (Cr+3) or hexavalent Cr (Cr+6). The 

respiratory tract is the major target organ for Cr+6 toxicity, for acute and chronic inhalation 

exposures. Shortness of breath, coughing, and wheezing have been reported from acute exposure 

to Cr+6, while perforations and ulcerations of the septum, bronchitis, decreased pulmonary 

function, pneumonia, and other respiratory effects have been noted from chronic exposures. 

Limited human studies suggest that Cr+6 inhalation exposure may be associated with complications 

during pregnancy and childbirth, but there are no supporting data from animal studies reporting 

reproductive effects from inhalation exposure to Cr+6. Human and animal studies have clearly 

established the carcinogenic potential of Cr+6 by the inhalation route, resulting in an increased risk 

of lung cancer. EPA has classified Cr+6 as a Group A, human carcinogen. Trivalent Cr is less 

toxic than Cr+6. The respiratory tract is also the major target organ for Cr+3 toxicity, similar to 

Cr+6. EPA has not classified Cr+3 with respect to carcinogenicity.

6.3.3.4 Dioxins (Chlorinated dibenzodioxins (CDDs) 35

A number of effects have been observed in people exposed to 2,3,7,8-TCDD levels that 

are at least 10 times higher than background levels. The most obvious health effect in people 

exposure to relatively large amounts of 2,3,7,8-TCDD is chloracne. Chloracne is a severe skin 

disease with acne-like lesions that occur mainly on the face and upper body. Other skin effects 

noted in people exposed to high doses of 2,3,7,8-TCDD include skin rashes, discoloration, and 

excessive body hair. Changes in blood and urine that may indicate liver damage also are seen in 

people. Alterations in the ability of the liver to metabolize (or breakdown) hemoglobin, lipids, 

sugar, and protein have been reported in people exposed to relatively high concentrations of 

2,3,7,8-TCDD. Most of the effects are considered mild and were reversible. However, in some 

 

http://www.atsdr.cdc.gov/toxprofiles/tp111.html

33 WHO (2002) Concise International Chemical Assessment Document 40: Formaldehyde. Published under the 

joint sponsorship of the United Nations Environment Programme, the International Labour Organization, and the 

World Health Organization, and produced within the framework of the Inter-Organization Programme for the 

Sound Management of Chemicals. Geneva.

34 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Chromium VI. National 

Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999. 

35 All health effects language for this section came from: Agency for Toxic Substances and Disease Registry 

(ATSDR). 1999. ToxFAQs for Chlorinated Dibenzo-p-dioxins (CDDs) (CAS#: 2,3,7,8-TCDD 1746-01-6). 

Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. Available on the Internet at 

http://www.atsdr.cdc.gov/tfacts104.html.
6-22

people these effects may last for many years. Slight increases in the risk of diabetes and 

abnormal glucose tolerance have been observed in some studies of people exposed to 2,3,7,8-

TCDD. We do not have enough information to know if exposure to 2,3,7,8-TCDD would result 

in reproductive or developmental effects in people, but animal studies suggest that this is a 

potential health concern. 

In certain animal species, 2,3,7,8-TCDD is especially harmful and can cause death after a 

single exposure. Exposure to lower levels can cause a variety of effects in animals, such as 

weight loss, liver damage, and disruption of the endocrine system. In many species of animals, 

2,3,7,8-TCDD weakens the immune system and causes a decrease in the system's ability to fight 

bacteria and viruses at relatively low levels (approximately 10 times higher than human 

background body burdens). In other animal studies, exposure to 2,3,7,8-TCDD has caused 

reproductive damage and birth defects. Some animal species exposed to CDDs during pregnancy 

had miscarriages and the offspring of animals exposed to 2,3,7,8-TCDD during pregnancy often 

had severe birth defects including skeletal deformities, kidney defects, and weakened immune 

responses. In some studies, effects were observed at body burdens 10 times higher than human 

background levels.

6.3.3.5 Furans (Chlorinated dibenzofurans (CDFs)) 36

Most of the information on the adverse health effects comes from studies in people who 

were accidentally exposed to food contaminated with CDFs. The amounts that these people were 

exposed to were much higher than are likely from environmental exposures or from a normal 

diet. Skin and eye irritations, especially severe acne, darkened skin color, and swollen eyelids 

with discharge, were the most obvious health effects of the CDF poisoning. CDF poisoning also 

caused vomiting and diarrhea, anemia, more frequent lung infections, numbness, effects on the 

nervous system, and mild changes in the liver. Children born to exposed mothers had skin 

irritation and more difficulty learning, but it is unknown if this effect was permanent or caused 

by CDFs alone or CDFs and polychlorinated biphenyls in combination.

 

36 All health effects language for this section came from: Agency for Toxic Substances and Disease Registry 

(ATSDR). 1995. ToxFAQsTM for Chlorodibenzofurans (CDFs). Atlanta, GA: U.S. Department of Health and 

Human Services, Public Health Service. Available on the Internet at <http://www.atsdr.cdc.gov/tfacts32.html>.
6-23

Many of the same effects that occurred in people accidentally exposed also occurred in 

laboratory animals that ate CDFs. Animals also had severe weight loss, and their stomachs, 

livers, kidneys, and immune systems were seriously injured. Some animals had birth defects and 

testicular damage, and in severe cases, some animals died. These effects in animals were seen 

when they were fed large amounts of CDFs over a short time, or small amounts over several 

weeks or months. Nothing is known about the possible health effects in animals from eating 

CDFs over a lifetime.

6.3.3.6 Hydrogen Chloride (HCl)

Hydrogen chloride is a corrosive gas that can cause irritation of the mucous membranes of 

the nose, throat, and respiratory tract. Brief exposure to 35 ppm causes throat irritation, and levels 

of 50 to 100 ppm are barely tolerable for 1 hour.37 The greatest impact is on the upper respiratory 

tract; exposure to high concentrations can rapidly lead to swelling and spasm of the throat and 

suffocation. Most seriously exposed persons have immediate onset of rapid breathing, blue 

coloring of the skin, and narrowing of the bronchioles. Exposure to HCl can lead to RADS, a 

chemically- or irritant-induced type of asthma. Children may be more vulnerable to corrosive 

agents than adults because of the relatively smaller diameter of their airways. Children may also 

be more vulnerable to gas exposure because of increased minute ventilation per kg and failure to 

evacuate an area promptly when exposed. Hydrogen chloride has not been classified for 

carcinogenic effects.38

6.3.3.7 Hydrogen Fluoride (HF)39

Acute (short-term) inhalation exposure to gaseous HF can cause severe respiratory 

damage in humans, including severe irritation and pulmonary edema. Chronic (long-term) oral 

 

37 Agency for Toxic Substances and Disease Registry (ATSDR). Medical Management Guidelines for Hydrogen 

Chloride. Atlanta, GA: U.S. Department of Health and Human Services. Available online at 

http://www.atsdr.cdc.gov/mmg/mmg.asp?id=758&tid=147#bookmark02.

38 U.S. Environmental Protection Agency (U.S. EPA). 1995. Integrated Risk Information System File of Hydrogen 

Chloride. Research and Development, National Center for Environmental Assessment, Washington, DC. This 

material is available electronically at .http://www.epa.gov/iris/subst/0396.htm.

39 U.S. Environmental Protection Agency. Health Issue Assessment: Summary Review of Health Effects Associated 

with Hydrogen Fluoride and Related Compounds. EPA/600/8-89/002F. Environmental Criteria and Assessment 

Office, Office of Health and Environmental Assessment, Office of Research and Development, Cincinnati, OH. 

1989.
6-24

exposure to fluoride at low levels has a beneficial effect of dental cavity prevention and may also 

be useful for the treatment of osteoporosis. Exposure to higher levels of fluoride may cause 

dental fluorosis. One study reported menstrual irregularities in women occupationally exposed 

to fluoride via inhalation. The EPA has not classified HF for carcinogenicity.

6.3.3.8 Manganese (Mn)40

Health effects in humans have been associated with both deficiencies and excess intakes of 

Mn. Chronic exposure to high levels of Mn by inhalation in humans results primarily in central 

nervous system effects. Visual reaction time, hand steadiness, and eye-hand coordination were 

affected in chronically-exposed workers. Manganism, characterized by feelings of weakness and 

lethargy, tremors, a masklike face, and psychological disturbances, may result from chronic 

exposure to higher levels. Impotence and loss of libido have been noted in male workers afflicted 

with manganism attributed to inhalation exposures. The EPA has classified Mn in Group D, not 

classifiable as to carcinogenicity in humans.

6.3.3.9 Mercury (Hg)

Mercury exists in three forms: elemental mercury, inorganic mercury compounds, and 

organic mercury compounds (primarily methylmercury), which may exhibit different health 

effects. EGUs emit elemental or inorganic mercury into the atmosphere, but not methylmercury. 

However, elemental and inorganic mercury are deposited on surface water, where they are 

converted by microscopic organisms to methylmercury, which is an important food contaminant. 

For the developing fetus, infants, and children, the primary health effect of methylmercury 

exposure is impaired neurological development. Methylmercury exposure in the womb, which can 

result from a mother's consumption of fish and shellfish contaminated with methylmercury, can 

adversely affect a baby's growing brain and nervous system. Observations from outbreaks of 

methylmercury poisoning (i.e. mothers poisoned with methylmercury showing no symptoms of 

nervous system damage that gave birth to infants with severe neurological disabilities) suggest that 

 

40 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Manganese. National 

Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999.
6-25

the developing nervous system of the fetus may be more vulnerable to methylmercury than the 

adult nervous system.41

6.3.3.10 Nickel (Ni)42

Respiratory effects have been reported in humans from inhalation exposure to Ni. No 

information is available regarding the reproductive or developmental effects of Ni in humans, but 

animal studies have reported such effects. Human and animal studies have reported an increased 

risk of lung and nasal cancers from exposure to Ni refinery dusts and nickel subsulfide. The EPA 

has classified nickel subsulfide as a human carcinogen and nickel carbonyl as a probable human 

carcinogen43,44. The IARC has classified Ni compounds as carcinogenic to humans.

6.3.3.11 Other Metals

Metals can cause a range of effects including, mucous membrane irritation (e.g. bronchitis, 

decreased lung function); gastrointestinal effects; nervous system disorders (from loss of function 

to tremors and numbness); skin irritation; and reproductive and developmental disorders. 

Additionally, several of the metals accumulate in the environment and in the human body. 

Cadmium, for example, is a cumulative pollutant which causes kidney effects after the cessation of 

exposure. Similarly, the onset of effects from beryllium exposure may be delayed by months to 

years. Many of the metal listed above are also known (arsenic, chromium (VI), nickel) or probable 

(cadmium, nickel carbonyl, lead, and beryllium) human carcinogens.

6.3.3.12 Polycyclic organic matter (POM)

The term polycyclic organic matter (POM) defines a broad class of compounds that 

includes the polycyclic aromatic hydrocarbon compounds (PAHs), of which benzo[a]pyrene is a 

member. POM compounds are formed primarily from combustion and are present in the 

 

41 US EPA Mercury Web page available at http://www.epa.gov/mercury/effects.htm.

42 Nickel (IARC Summary & Evaluation , Volume 49, 1990), 

http://www.inchem.org/documents/iarc/vol49/nickel.html

43 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Nickel Subsulfide. 

National Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999.

44 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Nickel Carbonyl. National 

Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999.
6-26

atmosphere in particulate form. Sources of air emissions are diverse and include cigarette smoke, 

vehicle exhaust, home heating, laying tar, and grilling meat. Cancer is the major concern from 

exposure to POM. Epidemiologic studies have reported an increase in lung cancer in humans 

exposed to coke oven emissions, roofing tar emissions, and cigarette smoke; all of these mixtures 

contain POM compounds. Animal studies have reported respiratory tract tumors from inhalation 

exposure to benzo[a]pyrene and forestomach tumors, leukemia, and lung tumors from oral 

exposure to benzo[a]pyrene. EPA has classified seven PAHs (benzo[a]pyrene, benz[a]anthracene, 

chrysene, benzo[b]fluoranthene, benzo[k]fluoranthene, dibenz[a,h]anthracene, and indeno[1,2,3-

cd]pyrene) as Group B2, probable human carcinogens

6.3.3.13Other Air Toxics

In addition to the compounds described above, other compounds from the ferroalloy 

sector would be affected by this rule. Information regarding the health effects of these 

compounds can be found in EPA’s IRIS database.45

6.4 Characterization of Uncertainty in the Monetized PM2.5 Benefits

In any complex analysis, there are likely to be many sources of uncertainty. Many inputs 

are used to derive the final estimate of economic benefits, including emission inventories, air 

quality models (with their associated parameters and inputs), epidemiological estimates of 

concentration-response (C-R) functions, estimates of values, population estimates, income 

estimates, and estimates of the future state of the world (i.e., regulations, technology, and human 

behavior). For some parameters or inputs it may be possible to provide a statistical representation 

of the underlying uncertainty distribution. For other parameters or inputs, the necessary 

information is not available. 

The annual benefit estimates presented in this analysis are also inherently variable due to 

the processes that govern pollutant emissions and ambient air quality in a given year. Factors 

such as hours of equipment use and weather are constantly variable, regardless of our ability to 

measure them accurately. As discussed in the PM2.5 NAAQS RIA (Table 4-5) (U.S. EPA, 2006), 

there are a variety of uncertainties associated with these PM benefits. Therefore, the estimates of 

annual benefits should be viewed as representative of the magnitude of benefits expected, rather 

than the actual benefits that would occur every year. 

 

45 U.S. EPA Integrated Risk Information System (IRIS) database is available at: www.epa.gov/iris
6-27

It is important to note that the monetized benefit-per-ton estimates used here reflect 

specific geographic patterns of emissions reductions and specific air quality and benefits 

modeling assumptions. For example, these estimates do not reflect local variability in population 

density, meteorology, exposure, baseline health incidence rates, or other local factors. Use of 

these $/ton values to estimate benefits associated with different emission control programs (e.g., 

for reducing emissions from large stationary sources like EGUs) may lead to higher or lower 

benefit estimates than if benefits were calculated based on direct air quality modeling. Great care 

should be taken in applying these estimates to emission reductions occurring in any specific 

location, as these are all based on national or broad regional emission reduction programs and 

therefore represent average benefits-per-ton over the entire United States. The benefits-per-ton 

for emission reductions in specific locations may be very different than the estimates presented 

here. 

PM2.5 mortality benefits are the largest benefit category that we monetized in this 

analysis. To better characterize the uncertainty associated with mortality impacts that are 

estimated to occur in areas with low baseline levels of PM2.5, we included the LML assessment.

Without policy-specific air quality modeling, we are unable to quantify the shift in exposure 

associated with this specific rule. For this rule, as a surrogate measure of mortality impacts, we 

provide the percentage of the population exposed at each PM2.5 level using the most recent 

modeling available from the proposed Transport Rule (U.S. EPA, 2010e). A very large 

proportion of the population is exposed at or above the lowest LML of the cohort studies 

(Figures 6-7 and 6-8), increasing our confidence in the PM mortality analysis. Figure 6-7 shows 

a bar chart of the percentage of the population exposed to various air quality levels in the preand post-policy policy. Figure 6-8 shows a cumulative distribution function of the same data. 

Both figures identify the LML for each of the major cohort studies. As the policy shifts the 

distribution of air quality levels, fewer people are exposed to PM2.5 levels at or above the LML. 

Using the Pope et al. (2002) study, the 85% of the population is exposed to annual mean PM2.5

levels at or above the LML of 7.5 μg/m3. Using the Laden et al. (2006) study, 40% of the 

population is exposed above the LML of 10 μg/m3. As we model mortality impacts among 

populations exposed to levels of PM2.5 that are successively lower than the LML of the lowest 

cohort study, our confidence in the results diminishes. However, the analysis above confirms that 

the great majority of the impacts occur at or above the lowest cohort study’s LML. It is important 

to emphasize that we have high confidence in PM2.5-related effects down to the lowest LML of 

the major cohort studies. Just because we have greater confidence in the benefits above the LML, 

this does not mean that we have no confidence that benefits occur below the LML.
6-28

Percentage of adult population by annual mean 

PM2.5 exposure (pre- and post- policy scenario)

0%

5%

10%

15%

20%

25%

1 2 3 4 5 5.8 6 7 7.5 8 9 10 11 12 13 14 15 16 17 18 19 20

Post-control Baseline

The control strategy lowers PM2.5

levels substantially, particularly 

among highly exposed 

populations. In the baseline, 85% 

of the population lived in areas 

where PM2.5 levels above the 

lowest measured levels of the 

Pope study, increasing our 

confidence in the estimated 

mortality reductions for this rule.

Pope et al. 2002 Laden et al. 2006

Figure 6-7. Percentage of Adult Population by Annual Mean PM2.5 Exposure

(pre- and post-policy policy)

Figure 6-8. Cumulative Distribution of Adult Population at Annual Mean PM2.5 levels 

(pre- and post-policy policy)
6-29

Above we present the estimates of the total monetized benefits, based on our 

interpretation of the best available scientific literature and methods and supported by the SABHES and the NAS (NRC, 2002). The benefits estimates are subject to a number of assumptions 

and uncertainties. For example, for key assumptions underlying the estimates for premature 

mortality, which typically account for at least 90% of the total monetized benefits, we were able 

to quantify include the following: 

1. PM2.5 benefits were derived through benefit per-ton estimates, which do not reflect 

local variability in population density, meteorology, exposure, baseline health 

incidence rates, or other local factors that might lead to an over-estimate or underestimate of the actual benefits of controlling directly emitted fine particulates. 

2. We assume that all fine particles, regardless of their chemical composition, are 

equally potent in causing premature mortality. This is an important assumption, 

because PM2.5 produced via transported precursors emitted from EGUs may differ 

significantly from direct PM2.5 released from diesel engines and other industrial 

sources, but the scientific evidence is not yet sufficient to allow differentiation of 

effect estimates by particle type. 

3. We assume that the health impact function for fine particles is linear down to the 

lowest air quality levels modeled in this analysis. Thus, the estimates include health 

benefits from reducing fine particles in areas with varied concentrations of PM2.5,

including both regions that are in attainment with fine particle standard and those that 

do not meet the standard down to the lowest modeled concentrations. 

4. To characterize the uncertainty in the relationship between PM2.5 and premature 

mortality (which typically accounts for 85% to 95% of total monetized benefits), we 

include a set of twelve estimates based on results of the expert elicitation study in 

addition to our core estimates. Even these multiple characterizations omit the 

uncertainty in air quality estimates, baseline incidence rates, populations exposed and 

transferability of the effect estimate to diverse locations. As a result, the reported 

confidence intervals and range of estimates give an incomplete picture about the 

overall uncertainty in the PM2.5 estimates. This information should be interpreted 

within the context of the larger uncertainty surrounding the entire analysis. For more 

information on the uncertainties associated with PM2.5 benefits, please consult the 

PM2.5 NAAQS RIA (Table 5-5).

This RIA does not include the type of detailed uncertainty assessment found in the PM 

NAAQS RIA (U.S. EPA, 2006) because we lack the necessary air quality input and monitoring 

data to run the benefits model. In addition, we have not conducted any air quality modeling for 

this rule. Moreover, it was not possible to develop benefit-per-ton metrics and associated 
6-30

estimates of uncertainty using the benefits estimates from the PM RIA because of the significant 

differences between the sources affected in that rule and those regulated here. However, the 

results of the Monte Carlo analyses of the health and welfare benefits presented in Chapter 5 of 

the PM RIA can provide some evidence of the uncertainty surrounding the benefits results 

presented in this analysis.
6-31

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National Ambient Air Quality Standards for Particulate Matter, Chapter 5. Available at 

<http://www.epa.gov/ttn/ecas/regdata/RIAs/Chapter%205--Benefits.pdf>.

U.S. Environmental Protection Agency (U.S. EPA). 2008a. Integrated Science Assessment for 

Sulfur Oxides—Health Criteria (Final Report). National Center for Environmental 

Assessment, Research Triangle Park, NC. Available at 

<http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=198843>.

U.S. Environmental Protection Agency (U.S. EPA). 2009a. Regulatory Impact Analysis: 

National Emission Standards for Hazardous Air Pollutants from the Portland Cement 

Manufacturing Industry. Office of Air Quality Planning and Standards, Research Triangle 

Park, NC. April. Available at 

<http://www.epa.gov/ttn/ecas/regdata/RIAs/portlandcementria_4-20-09.pdf >.

U.S. Environmental Protection Agency (U.S. EPA). 2009b. Integrated Science Assessment for 

Particulate Matter (Final Report). EPA-600-R-08-139F. National Center for 

Environmental Assessment—RTP Division. December. Available at 

<http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>.

U.S. Environmental Protection Agency (U.S. EPA). 2010a. Integrated Science Assessment for 

Carbon Monoxide. National Center for Environmental Assessment, Research Triangle 

Park, NC. EPA/600/R-09/019F. January. Available on the Internet at 

<http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686>.

U.S. Environmental Protection Agency (U.S. EPA). 2010b. Final Regulatory Impact Analysis 

(RIA) for the SO2 National Ambient Air Quality Standards (NAAQS). Office of Air 

Quality Planning and Standards, Research Triangle Park, NC. June. Available at 

<http://www.epa.gov/ttn/ecas/regdata/RIAs/fso2ria100602full.pdf>.

U.S. Environmental Protection Agency (U.S. EPA). 2010c. Summary of Expert Opinions on the 

Existence of a Threshold in the Concentration-Response Function for PM2.5-related 

Mortality: Technical Support Document. Compiled by Office of Air Quality Planning and 

Standards, Research Triangle Park, NC. July. Available at 

<http://www.epa.gov/ttn/ecas/benefits.html>.
6-33

U.S. Environmental Protection Agency (U.S. EPA). 2010d. Lowest Measured Level (LML) 

Assessment for Rules without Policy-Specific Air Quality Data Available: Technical 

Support Document. Office of Air Quality Planning and Standards, Research Triangle

Park, NC. July. Available at <

http://www.epa.gov/ttn/ecas/regdata/Benefits/thresholdstsd.pdf>.

U.S. Environmental Protection Agency (U.S. EPA). 2010e. Regulatory Impact Analysis for the 

Proposed Federal Transport Rule. Office of Air Quality Planning and Standards, 

Research Triangle Park, NC. July. Available at 

<http://www.epa.gov/ttn/ecas/regdata/RIAs/proposaltrria_final.pdf>. 

U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2007. SAB 

Advisory on EPA’s Issues in Valuing Mortality Risk Reduction. EPA-SAB-08-001. 

October. Available on the Internet at 

<http://yosemite.epa.gov/sab/sabproduct.nsf/4128007E7876B8F0852573760058A978/$F

ile/sab-08-001.pdf >.

U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2009a. 

Review of EPA’s Integrated Science Assessment for Particulate Matter (First External 

Review Draft, December 2008). EPA-COUNCIL-09-008. May. Available on the Internet 

at <http://yosemite.epa.gov/sab/SABPRODUCT.NSF/81e39f4c09954fcb8525

6ead006be86e/73ACCA834AB44A10852575BD0064346B/$File/EPA-CASAC-09-008-

unsigned.pdf>.

U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2009b. 

Consultation on EPA’s Particulate Matter National Ambient Air Quality Standards: 

Scope and Methods Plan for Health Risk and Exposure Assessment. EPA-COUNCIL-09-

009. May. Available on the Internet at <http://yosemite.epa.gov/sab/

SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86e/723FE644C5D758DF85257

5BD00763A32/$File/EPA-CASAC-09-009-unsigned.pdf>.

U.S. Environmental Protection Agency - Science Advisory Board (U.S. EPA-SAB). 2010. 

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the Clean Air Act. EPA-COUNCIL-10-001. June. Available on the Internet at 

<http://yosemite.epa.gov/sab/sabproduct.nsf/0/72D4EFA39E48CDB2852577450073877

6/$File/EPA-COUNCIL-10-001-unsigned.pdf>.

Viscusi, V. K., and J. E. Aldy. 2003. The Value of a Statistical Life: A Critical Review of Market 

Estimates throughout the World. Journal of Risk and Uncertainty 27(1):5-76.
7-1

SECTION 7

COMPARISON OF MONETIZED BENEFITS AND COSTS

7.1 Summary

Because we were unable to monetize the co-benefits associated with reducing HAPs, all 

monetized benefits reflect improvements in ambient PM2.5 concentrations from reductions in 

PM2.5 emissions. This results in an underestimate of the monetized benefits. Using a 3% 

discount rate, we estimate the total monetized benefits of this proposed rule to be $90 million to 

$220 million in the year of implementation (2015) as shown in Table 7-1. Using a 7% discount 

rate, we estimate the total monetized benefits to be $80 million to $190 million in 2017. The 

annualized social costs are $4.1 million. The net benefits are therefore $6 million to $176 million 

at a 3% discount rate for the benefits and $56 million to $156 million at a 7% discount rate. All 

estimates are in 2010$. The benefits from reducing other air pollutants have not been monetized 

in this analysis, including reducing tons of, black carbon and several HAPs emissions such as 

formaldehyde, mercury and nickel among others each year. 

Figure 7-1 shows the full range of net benefits estimates (i.e., annual benefits minus 

annualized costs) quantified in terms of PM2.5 benefits for the year of implementation (2015).

Table 7-1. Summary of the Annual Monetized Benefits, Social Costs, and Net Benefits for 

the Proposed Ferroalloys RTR in 2015 ($2010 millions)

a

3% Discount Rate 7% Discount Rate

Proposed Standard 

Total Monetized Benefitsb$70 to $180 $60 to $160

Total Social Costs $4 $4

Net Benefits $70 to $180 $60 to $160

Nonmonetized Benefits tons of 

Reduced exposure to HAPs, including formaldehyde, mercury , and nickel, 

cadmium 

Reduced Climate effects due to black carbon emissions

Ecosystem effects 

Visibility impairment 

a All estimates are for the year of implementation (2015) and are rounded to two significant figures. These results 

include units anticipated to come online and the lowest cost disposal assumption. 
7-2

b The total monetized benefits reflect the human health benefits associated with reducing exposure to PM2.5 through 

reductions of directly emitted PM2.5. It is important to note that the monetized benefits include many but not all 

health effects associated with PM2.5 exposure. Benefits are shown as a range from Pope et al. (2002) to Laden et 

al. (2006). These models assume that all fine particles, regardless of their chemical composition, are equally 

potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation 

of effect estimates by particle type. 

Figure 7-1. Net Annual Benefits Range in 2015 for PM2.5 Reductions for the Proposed 

Standard 

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

Pope et al.

Laden et al.

(2010$)

Cost estimate combined with total monetized benefits estimates derived from 2 

epidemiology functions and 12 expert functions
7-3
8-1

SECTION 8

REFERENCES FOR RIA

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8-3

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8-4

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