Document ID: EPA-HQ-OW-2004-0002-0678
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2004-11-30T05:00Z

1
MEMORANDUM
Date:
October
15,
2004
To:
316(
b)
Phase
III
Rulemaking
Record
(
Non­
CBI)
From:
Anne
Jones,
ERG,
Inc.
Subject:
Cost
Timing
and
Cost
Sharing
Assumptions
for
Industry
Compliance
Costs
1.
Introduction
This
memorandum
provides
the
specific
timing
assumptions
for:

#
permitting
costs,

#
monitoring
costs,

#
capital
costs,
and
#
O&
M
costs
for
oil
and
gas
facilities
Also
included
are
detailed
cost
sharing
assumptions
for
shared
pre­
permitting
study
costs,
monitoring
costs,
and
permit
renewal
study
costs.

How
the
costs
are
arrayed
over
the
time
period
of
analysis
can
be
seen
in
spreadsheet
form
in
ERG's
Oil
and
Gas
316(
b)
Compliance
Cost
Model,
DCN
7­
4018
(
hereinafter,
Compliance
Cost
Model
or
DCN
7­
4018).
The
computation
of
present
values
and
annualized
costs
can
be
seen
in
the
spreadsheets.
The
methodology
for
the
present
value
and
annualization
computations
is
presented
in
the
Economic
Analysis
for
the
proposal
(
Chapter
C1)
(
U.
S.
EPA,
2004a)
(
hereinafter,
EA).

The
key
spreadsheets
in
the
Compliance
Cost
Model
whose
timing
assumptions
are
discussed
here
are
those
labeled:

#
Region
Permitting
Costs.
This
sheet
shows
costs
to
the
Federal
government
permitting
authorities
and
arrays
these
costs
over
the
time
frame
of
the
analysis.

#
Facility
Costs
 
Proposed
Rule.
This
sheet
shows
permitting
costs
to
the
MODUs
and
platforms.

#
Permitting
Costs
to
Facilities.
This
sheet
links
to
the
"
Facility
Costs
 
Proposed
Rule"
spreadsheet
and
arrays
the
permitting
costs
over
the
time
frame
of
the
analysis.

#
Capital,
O&
M,
and
Monitoring.
These
three
sheets
array
those
costs
over
the
time
frame
of
the
analysis
(
one
type
of
cost
per
sheet).

Other
pertinent
spreadsheets
in
the
Compliance
Cost
Model
include:
2
#
Total
Costs_
Undiscounted.
This
sheet
arrays
undiscounted
costs
over
the
time
frame
of
the
analysis
for
each
new
facility
expected
to
be
constructed
during
the
analysis
period.

#
Total_
Discounted_
2007_
3%.
This
sheet
discounts
the
total
costs
shown
in
"
Total
Costs_
Undiscounted"
spreadsheet
by
the
3
percent
social
rate
recommended
by
OMB.
The
costs
in
this
spreadsheet
are
discounted
to
the
assumed
effective
date
of
the
rule
(
2007).
This
is
one
of
two
spreadsheets
used
to
calculate
the
social
cost
of
the
rule.

#
Total_
Discounted_
2007_
7%.
This
sheet
is
comparable
to
the
previous
sheet
but
uses
a
7
percent
rate
cost
of
capital
rate
recommended
by
OMB.
This
is
the
second
sheet
used
in
the
calculation
of
the
social
cost
of
the
rule.

#
Total_
Discounted_
Comp_
YR.
This
sheet
calculates
the
discounted
costs
back
to
the
year
of
compliance
of
each
new
facility
at
a
7
percent
discount
rate.
This
spreadsheet
computes
the
compliance
costs
to
industry
(
pre­
tax).
These
costs
are
adjusted
on
the
spreadsheet
"
EA_
Tables"
(
discussed
next)
by
the
assumed
marginal
tax
rate
to
compute
the
post­
tax
costs
to
industry.

#
EA_
Tables.
This
sheet
pulls
present
value
costs
from
"
Total_
Discounted_
Comp_
YR"
and
computes
annualized
compliance
costs
to
industry.
It
also
shows
all
of
the
calculations
used
for
tables
in
Chapter
C3
in
the
EA,
except
those
for
social
costs
and
government
costs.

2.
Analytical
Time
Frames
and
Numbers
of
Affected
New
Facilities
ERG
assumes
that
there
are
20
years
in
the
construction
time
frame
for
this
rulemaking.
ERG
has
previously
determined
(
see
EA,
Chapter
C2)
that
over
this
20­
year
period,
20
deepwater
platforms,
20
semi­
submersible
mobile
offshore
drilling
units
(
MODUs),
80
jackup
MODUs,
3
drill
ships,
and
1
Alaska
platform
will
be
constructed.

#
Platforms.
The
deepwater
platforms
begin
construction
in
2007
and
one
per
year
is
added
until
2026.
All
platforms
are
assumed
to
be
constructed
in
the
Western
Gulf
of
Mexico.
(
Permitting
costs
should
be
similar
for
any
platforms
constructed
in
the
Eastern
Gulf)).
The
Alaska
platform
is
assumed
to
come
on
line
in
2014.

#
MODUs.
Semi­
submersibles
are
built
on
a
similar
schedule,
one
per
year
beginning
in
2007
and
ending
in
2026.
Four
jackups
per
year
from
2007
to
2026
are
assumed
to
be
built.
Three
drill
ships
are
built,
launching
in
2012,
2017,
and
2022.
Because
MODUs
are
mobile,
they
are
assumed
to
incur
costs
for
operating
in
both
the
Western
and
Eastern
Gulf
of
Mexico.
This
roughly
doubles
the
permitting
costs
assigned
to
MODUs.
The
assumption
may
overstate
costs,
since
not
all
MODUs
might
operate
in
the
Eastern
Gulf.
Also,
there
may
be
significant
costs
savings
once
a
Region
6
permit
application
is
completed,
since
much
of
the
information
required
for
both
permits
would
most
likely
be
identical.
3
All
facilities
are
assumed
to
have
a
30­
year
life,
which
is
also
the
time
frame
of
the
analysis.
The
last
facilities
launched
or
brought
on
line
end
their
lives
after
2055.
Thus
the
total
time
frame
of
the
analysis
spans
49
years
 
2007
(
the
assumed
effective
date
of
the
rule)
to
2055,
inclusive.

3.
Permit
Timing
and
Costs
3.1
The
Role
of
Regional
General
Permits
in
the
Timing
and
Sharing
of
Costs
to
Industry
Three
General
Permits
(
GPs)
apply
to
new
facilities
subject
to
316(
b)
requirements:

#
Region
6
General
Permit
applies
to
the
relatively
active
Western
Gulf
of
Mexico
(
GOM)
region;

#
Region
4
General
Permit
applies
to
the
currently
relatively
inactive
Eastern
GOM
region;
and
#
Region
10
General
Permit
(
Cook
Inlet
permit)
applies
to
Cook
Inlet,
Alaska.

The
GPs
are
expected
to
be
rewritten
to
accommodate
the
promulgated
requirements
of
316(
b)
as
each
GP
comes
up
for
renewal
at
the
end
of
its
5­
year
cycle.

The
current
Region
6
permit
was
effective
as
of
2002,
expired
in
2003,
and
is
planned
for
renewal
in
2004.
A
typical
5­
year
schedule
would
imply
that
a
permit
issued
in
2004
would
be
renewed
in
2009.
However,
a
study
of
produced
water
will
reopen
in
the
permitting
process
in
2007.
Thus,
the
likely
beginning
rounds
of
post­
promulgation
schedule
of
this
permit
is
thus
2007
and
2012.
The
Region
4
permit
expired
in
2003.
It
is
likely
to
be
renewed
in
2004.
The
probable
post­
promulgation
GP
renewal
schedule
is
considered
to
be
2009
and
2014.
The
planned
renewal
date
of
the
general
permit
for
Cook
Inlet
is
January
2005
but
the
permit
expires
in
2004.
The
likely
post­
promulgation
renewal
schedule
is
thus
2009
and
2014.
That
is,
the
relevant
GP
renewal
dates
are:

#
Region
6,
WGOM:
2007
and
2012
#
Region
4,
EGOM,
and
Region
10:
2009
and
2014.

The
rule
is
scheduled
to
be
promulgated
in
2006
with
an
effective
date
assumed
to
be
the
beginning
of
2007.
Three
years
of
environmental
studies
are
assumed
to
be
required
to
be
permitted
under
the
316(
b)
rule.
Thus,
the
first
possible
compliance
date
after
the
2007
effective
date
would
be
2010.
However,
the
general
permits
may
not
be
able
to
incorporate
316(
b)
requirements
during
the
2007­
2009
repermitting
cycles.
Therefore,
ERG
assumes
the
oil
and
gas
industries
will
be
required
to
comply
starting
in
2012
(
Region
6)
or
2014
(
Region
4
and
10).

Because
the
rule
becomes
effective
in
2007,
however,
ERG
is
assuming,
for
both
simplicity
and
to
be
conservative,
that
starting
in
2007,
new
oil
and
gas
facilities
will
have
installed
and
will
be
operating
relevant
CWIS
controls,
since
they
will
be
relatively
inexpensive
to
install
during
construction.
The
prepermitting
studies
are
assumed
to
start
in
2007
(
for
both
Region
6
and
Region
4),
but
other
permitting
4
tasks
will
not
begin
until
the
year
prior
to
when
the
GPs
renewals
are
finalized
(
2011
for
the
2012
Region
6
permit
or
2013
for
the
2014
Regions
4
and
10
permits),
or
the
year
in
which
the
facility
is
assumed
to
come
on
line
or
be
launched,
whichever
is
later.
Monitoring
will
only
begin
in
the
year
the
renewals
are
finalized
or
the
year
in
which
the
facility
comes
on
line
or
is
launched,
whichever
is
later.
The
timing
assumptions
for
Region
6
and
Region
4
permits
may
overstate
costs,
since
costs
are
moved
several
years
earlier
in
the
analysis
time
frame
than
they
would
be
if
ERG
assumed
only
those
facilities
constructed
in
2012
or
later
incur
compliance
costs.
The
costs
of
compliance
in
this
industry,
however,
are
relatively
small
overall,
so
any
overestimation
will
be
small.

Because
new
oil
and
gas
facilities
will
be
subject
to
316(
b)
requirements
under
these
GPs,
ERG
assumes
that
certain
administrative
functions
can
be
shared
among
new
facilities.
All
MODUs
and
platforms
expected
to
be
built
in
the
first
five
years
before
the
revised
Region
6
General
Permit
is
issued
(
2012)
are
expected
to
share
in
the
initial
costs
of
certain
biological
characterization
studies
that
would
be
required
by
316(
b)
under
the
Region
6
GP.
These
studies
are
assumed
to
begin
in
2007
and
extend
through
2009.
The
group
sharing
the
study
costs
comprises
5
deepwater
platforms,
5
semi­
submersibles
and
20
jackups.
They
are
also
assumed
to
share
in
the
cost
of
monitoring
studies,
which
must
be
performed
at
a
minimum
for
the
first
two
years
of
the
permit
and
then
at
least
once
per
year
for
each
repermitting
cycle.
Also
sharing
in
the
monitoring
costs
are
any
facilities
launched
or
coming
on
line
in
2012
and
2013
(
the
years
in
which
the
monitoring
is
initially
performed).
It
is
assumed
that
a
planning
horizon
of
no
more
than
5
years
from
2007
to
2011
would
apply
(
which
is
why
only
those
facilities
built
in
those
years
are
assumed
to
share
in
the
prepermitting
costs
that
are
incurred
in
2007­
2009).
Beyond
2011,
plans
for
new
facilities
are
considered
too
uncertain
to
assume
later
facilities
would
share
in
these
initial
costs.

Only
MODUs
are
assumed
to
share
the
costs
of
permitting
studies
under
the
Region
4
GP.
The
count
of
MODUs
sharing
the
study
costs
are
the
same
5
semi­
submersibles
and
20
jackups
that
are
expected
to
be
constructed
in
2007
to
2011,
as
mentioned
in
the
previous
paragraph.

Only
one
Alaska
project
is
anticipated,
at
most,
over
the
period
of
analysis
(
see
Chapter
C2
of
the
EA),
so
this
project
is
expected
to
incur
the
entire
cost
of
facility
permitting.
This
project
is
assumed
to
go
on
line
in
the
year
the
Region
10
permit
is
finalized
(
2014).
For
this
project,
ERG
assumes
that
the
3­
year
studies
are
performed
in
the
3
years
prior
to
start­
up
(
2011­
2013).

3.2
One­
Time
and
Recurring
Administrative
Costs
The
administrative
functions
associated
with
incorporating
the
316(
b)
requirements
into
the
applicable
General
Permits
are
either
one­
time
requirements
(
compilation
of
information
for
the
initial
postpromulgation
General
Permits)
or
recurring
requirements
(
compilation
of
information
for
subsequent
General
Permit
renewals;
and
monitoring,
record
keeping,
and
reporting).
More
detailed
information
on
the
derivation
of
permitting
activities
and
costs
can
be
seen
in
U.
S.
EPA
(
2004b).

EPA
assumes
that
the
rule
would
encourage
firms
to
pool
their
resources.
ERG
examines
three
types
of
costs
depending
on
whether
they
can
be
shared
or
whether
the
activities
they
reflect
are
incremental
to
current
requirements::

#
Those
that
can
be
shared:
Firms
that
are
planning
to
construct
new
platforms
or
MODUs
to
operate
in
the
GOM
within
the
first
5
years
before
the
applicable
General
Permit
is
5
reissued
with
316(
b)
requirements
in
place
are
assumed
to
share
certain
pre­
permitting
costs.
EPA
expects
that
these
firms
will
hire
a
consultant
to
perform
the
more
general
information
gathering
tasks
required
of
industry
before
facilities
can
be
permitted
under
a
GP
and
also
to
perform
the
two
years
of
monitoring
studies
required
in
the
first
two
years
of
the
permit
(
monitoring
costs
are
also
assumed
shared
by
the
number
facilities
permitted
in
the
first
or
second
year
of
the
first
permit
cycle).

#
Those
that
are
not
shared:
Other
activities
are
specific
to
each
facility
and
it
is
assumed
each
facility
will
incur
the
cost
of
these
activities
individually.

#
Those
that
are
not
incremental
to
current
requirements:
Some
of
the
permitting
activities,
may
not
incremental
to
existing
requirements.
Minerals
Management
Service
(
MMS)
will
be
finalizing
a
rule
(
possibly
mid­
August,
2004)
that
will
require
some
of
the
same
information
(
U.
S.
EPA,
2004b).
The
MMS
rule
is,
however,
not
applicable
to
Cook
Inlet.

3.2.1.
Initial
Post­
promulgation
General
Permit
Application
Activities
Costed
All
information
submitted
would
be
consistent
with
316(
b)
Phase
I,
Track
1
requirements.
Activities
and
costs
associated
with
the
initial
permit
renewal
application
include:

Start­
up
activities:
reading
and
understanding
the
rule;
mobilizing
and
planning;
and
training
staff.
This
is
a
facility­
specific
activity.
The
cost
of
this
activity
is
incurred
in
2007
for
all
facilities
built
between
2007
and
2011.
For
facilities
launched
or
going
on
line
in
2012
or
later,
however,
this
cost
is
assumed
to
be
incurred
in
the
year
before
the
"
compliance
year."
The
compliance
year
is
the
same
as
the
year
in
which
the
facility
is
launched
or
comes
on
line.

Permit
application
activities:
identifying
source
water
physical
data,
velocity
information,
and
cooling
water
intake
structure
data,
including
description
of
CWIS
operations,
flow
distribution
and
water
balance
diagram,
and
drawings
and
maps
to
support
CWIS
descriptions,
and
maintaining
copies
of
these
records.
These
activities
are
assumed
facility­
specific,
but
several
of
the
activities
duplicate
those
required
by
MMS.
There
are
no
incremental
costs
associated
with
duplicate
activities.
These
costs
begin
in
2011
(
the
year
before
the
Region
6
permit
is
effective)
for
all
facilities
constructed
in
2007
to
2011,
as
well
as
those
constructed
in
2012
under
Region
6
permitting.
They
begin
in
2013
for
all
facilities
subject
to
Region
4
and
Region
10
permitting
that
are
constructed
through
2014.
All
other
facilities
incur
these
costs
one
year
before
their
compliance
year.

Source
waterbody
flow
and
CWIS
velocity
flow
information:
Information
used
to
demonstrate
that
the
facility's
CWIS
meets
the
proportional
flow
requirements.
The
CWIS
velocity
flow
information
and
demonstration
is
assumed
to
be
facility­
specific,
but
none
of
these
activities
is
incremental
to
MMS
requirements.
The
waterbody
flow
calculation
activities
are
only
those
associated
with
compiling
site­
specific
information.
Other
waterbody
characterization
activities
that
can
be
shared
are
included
in
the
biologic
6
characterization
study
activities.
For
all
facilities,
this
activity
is
undertaken
the
year
before
the
"
compliance
year,"
or
in
2011
(
Region
6)
for
all
facilities
built
in
2007
to
2011
and
in
2013
(
Region
4)
for
all
facilities
built
between
2007
to
2013.

Design
and
construction
technology
plan:
delineation
of
the
hydrologic
zone
of
influence
for
the
CWIS,
description
of
technologies
to
be
implemented;
the
basis
for
technology
selection;
expected
performance
of
the
technology;
and
design
calculations,
drawings
and
estimates
to
support
the
technology
description
and
performance.
These
activities
are
assumed
facility­
specific.
Development
of
the
narrative
description
of
technologies
is
considered
an
MMS
requirement,
so
no
incremental
costs
are
assumed
incurred
for
this
activity.

Source
water
baseline
biological
characterization
data:
characterization
of
the
biological
community
in
the
region
and
operation
of
CWISs;
list
of
species
in
region;
identification
and
evaluation
of
primary
period
of
reproduction,
larval
recruitment,
and
period
of
peak
meroplankton
abundance
for
relevant
taxa;
and
description
of
the
likely
impact
of
CWISs
on
the
biological
community
due
to
impingement
and
entrainment.
This
is
considered
a
regional
study
to
be
conducted
over
a
three
year
period
by
a
contractor;
costs
are
assumed
to
be
shared
among
affected
facilities.
These
costs
are
incurred
in
2007,
2008
and
2009;
they
are
shared
by
the
30
MODUs
and
platforms
expected
to
be
constructed
from
2007
to
2011
under
the
Region
6
permit
and
by
the
25
MODUs
expected
to
be
constructed
from
2007
to
2011
under
the
Region
4
permit.

Source
of
Costs
and
Conversion
to
Per­
Facility
Costs
EPA's
contractor,
SAIC,
provided
costs
for
all
of
these
activities.
The
costs
provided
by
SAIC
are
shown
on
the
spreadsheet
"
Facility
Costs
 
Proposed
Rule"
in
the
Compliance
Cost
Model.
The
costs
provided
put
the
ICR
costs
that
were
presented
in
U.
S.
EPA
(
2004b)
onto
a
per­
facility
basis.
Per­
facility,
however,
has
a
different
connotation
depending
on
whether
the
cost
is
shared
or
will
be
incurred
by
every
facility
without
sharing.
The
costs
that
fall
on
each
facility
individually
are
assigned
to
every
facility
assumed
to
be
constructed
between
2007
and
2026.
The
shared
costs,
however,
were
provided
by
SAIC
on
a
per­
facility
basis
for
the
group
of
facilities
SAIC
assumes
would
be
included
in
the
study,
which
is
a
much
smaller
number
of
facilities
than
the
total
constructed
between
2007
and
2011.

For
the
Region
6
permit,
it
is
assumed
that
three
platforms
and
three
MODUs
are
involved
in
the
prepermitting
and
monitoring
studies.
Aggregate
costs
of
studies
at
these
six
facilities
in
Region
6
are
presented
in
the
Compliance
Cost
Model
in
the
spreadsheet
labeled
"
Facility
Costs
 
Proposed
Rule"
Column
H.

To
compute
the
share
of
these
costs
in
Region
6,
ERG
multiplied
the
costs
per
deepwater
platform
by
three
and
multiplied
the
costs
per
MODU
(
impingement
only)
by
three
and
added
these
costs
together
(
permit
costs
for
MODUs
in
the
Eastern
GOM
are
lower
in
some
cases,
since
new
MODUs
are
assumed
to
use
sea
chests
and
are
not
required
to
meet
entrainment
requirements,
eliminating
any
costs
associated
with
entrainment
studies).
These
total
costs
for
pre­
permitting
studies
and
monitoring
were
then
divided
among
the
group
of
facilities
expected
to
share
the
costs
of
the
initial
studies
(
25
MODUs
and
5
platforms
assumed
to
be
launched
and
to
come
on
line
in
the
2007­
2011
time
frame
of
the
analysis).
7
To
compute
the
total
cost
of
initial
studies
in
Region
4,
just
the
costs
of
studying
three
MODUs
were
aggregated
(
costs
of
the
characterization
study
activities
and
monitoring
studies
multiplied
by
3)
(
see
Column
I
in
the
Compliance
Cost
Model
spreadsheet
"
Facility
Costs
 
Proposed
Rule."
These
costs
were
then
divided
among
the
25
MODUs
expected
to
be
launched
between
2007
and
2011.

Table
1
below
lists
the
estimated
costs
per
individual
facility
of
each
of
the
initial
post­
promulgation
General
Permit
activities
described
above.
These
costs
are
those
assigned
to
every
platform
and
MODU,
thus
they
reflect
the
method
for
sharing
costs
outlined
above
(
that
is,
they
have
been
aggregated
to
a
total
cost
of
the
shared
cost
category
and
then
divided
by
30
or
25
facilities,
depending
on
the
permit).
Note
that
costs
shown
for
Region
4
also
apply
to
MODUs
in
Region
6
(
for
example,
the
cost
of
the
design
and
construction
technology
plan
is
$
1,141,
not
$
1,282
for
MODUs;
MODUs
are
assumed
to
meet
impingement
requirements
only,
thus
do
not
have
to
document
entrainment
plans).

Table
1:
Cost
of
Initial
Post­
Promulgation
NPDES
General
Permit
Application
Activities
(
Per
Facility,
June
2003
$)

Activity
Region
6
Region
4
Region
10
Start­
up
activitiesa
$
2,171
$
2,171
$
2,171
Permit
application
activitiesb
$
925
$
925
$
925
Source
waterbody
flow
informationa
$
1,416
$
1,416
$
1,416
CWIS
velocity
flow
informationf
$
0
$
0
$
0
Design
and
construction
technology
planb
$
1,282
$
1,141
$
1,282
Biological
characterization
studyc,
e
$
63,942
$
39,871
$
296,564
Total
Initial
Post­
Promulgation
NPDES
General
Permit
Application
Costd
$
69,737
$
45,524
$
302,358
a
The
costs
for
these
activities
are
incurred
in
2007
for
facilities
built
in
2007
to
2011
in
both
Eastern
and
Western
Gulf.
For
Alaska,
they
occur
in
2011.
b
The
costs
for
these
activities
are
incurred
in
2011
for
facilities
built
in
2007
to
2012
for
both
Eastern
and
Western
Gulf.
For
Alaska,
they
occur
in
2013.
c
The
costs
for
these
activities
are
incurred
during
2007­
2009
in
the
Eastern
and
Western
Gulf
and
are
shared
costs.
For
Alaska,
these
costs
are
incurred
during
2011­
2013.
d
Individual
numbers
may
not
add
to
total
due
to
independent
rounding.
e
Shared
study
costs.
f
Measured
as
incremental
to
MMS
requirements.

Source:
U.
S.
EPA,
2004b.
See
also
DCN
7­
4018.

Table
2
shows
the
shared
costs
in
more
detail,
showing
the
cost
per
facility
studied
broken
down
into
much
finer
levels
of
activities
than
those
summarized
in
Table
1,
the
aggregated
costs
of
those
activities,
and
the
facility
share
cost
(
the
cost
to
be
shared
by
all
facilities).
The
table
also
indicates
the
timing
assumption
for
each
activity
in
each
permit
region.
Note
that
costs
are
calculated
assuming
that
three
platforms
and
three
MODUs
are
studied
in
the
Western
Gulf
and
that
only
three
MODUs
are
studied
in
the
Eastern
Gulf.
For
the
most
part,
study
costs
are
calculated
as
platform
costs
times
three
plus
MODU
costs
times
three
(
which
are
the
same
as
costs
in
column
E
of
Table
2)
for
the
Region
6
permit
studies.
For
the
Region
4
permit,
costs
are
generally
calculated
as
MODU
costs
times
three.
8
Table
2:
Cost
Breakdown
for
Shared
Activities
(
Biological
Characterization
Study
and
Verification
Monitoring
Plan)(
June
2003
$)

Activity
(
A)
Deepwater
Platform
(
B)
MODU
(
Impingement
Only)
(
C)
Region
6
Aggregate
(
A*
3
+
E,

except
as
noted)
(
D)
Region
6
Share
(
C/
30)
(
E)
Region
4
Aggregate
(
B*
3,
except
as
noted)
(
F)
Region
4
Share
(
E/
25)
Timinga
Develop
Regional
Study
Design
and
Submit
to
Director
(
Done
Only
Once
Per
Permit;
No
Aggregation
Required)
$
5,007
$
5,007
$
5,007
$
167
$
5,007
$
200
2007
Develop
and
Submit
Source
Water
Sampling
Plans
for
Facilities
in
Regional
Study
$
1,857
$
1,857
$
11,142
$
371
$
5,571
$
223
2007
Revise
Regional
Study
Plans
Based
on
Director
Review
$
1,999
$
1,999
$
11,994
$
400
$
5,997
$
240
2007
Implement
Baseline
Deep
Water
Sampling
$
47,923
$
47,923
$
287,538
$
9,585
$
143,769
$
5,751
2007­
2009
Install
Remote
Monitoring
Device
for
Impingement
Monitoring
$
20,000
$
20,000
$
120,000
$
4,000
$
60,000
$
2,400
2007­
2009
Operation
&
Maintenance
of
Remote
Monitoring
Device
$
2,000
$
2,000
$
12,000
$
400
$
6,000
$
240
2007­
2009
Impingement
Deepwater
Monitoring
$
23,961
$
23,961
$
143,766
$
4,792
$
71,883
$
2,875
2007­
2009
Entrainment
Deepwater
Monitoring
$
23,961
$
0
$
71,883
$
2,396
$
0
$
0
2007­
2009
Helicopter
Transport
to
and
From
Facility
$
36,000
$
36,000
$
216,000
$
7,200
$
108,000
$
4,320
2007­
2009
Biological
Study
Laboratory
Analysis
$
102,960
$
93,600
$
589,680
$
19,656
$
280,800
$
11,232
2007­
2009
Profile
of
Source
Water
Biota
$
6,995
$
6,995
$
41,970
$
1,399
$
20,985
$
839
2007
Identification
of
Critical
Species
$
3,994
$
3,994
$
23,964
$
799
$
11,982
$
479
2007
Description
of
Additional
Stresses
$
3,497
$
3,497
$
20,982
$
699
$
10,491
$
420
2007
Gather
Tidal
Excursion
Information
$
1,162
$
1,162
$
6,972
$
232
$
3,468
$
139
2007
Write
Regional
Study
Based
on
Results
and
Submit
to
Director
(
Done
Once
Per
Permit)
$
16,390
$
16,390
$
16,390
$
546
$
16,390
$
656
2009
(
Region
6)

or
Table
2:
Cost
Breakdown
for
Shared
Activities
(
Biological
Characterization
Study
and
Verification
Monitoring
Plan)(
June
2003
$)

Activity
(
A)
Deepwater
Platform
(
B)
MODU
(
Impingement
Only)
(
C)
Region
6
Aggregate
(
A*
3
+
E,

except
as
noted)
(
D)
Region
6
Share
(
C/
30)
(
E)
Region
4
Aggregate
(
B*
3,
except
as
noted)
(
F)
Region
4
Share
(
E/
25)
Timinga
9
Revise
Regional
Study
(
Done
Once
Per
Permit)
$
1,999
$
1,999
$
1,999
$
67
$
1,999
$
80
2009/
2013
Recordkeeping
$
4,936
$
4,936
$
29,616
$
987
$
14,808
$
592
2007­
2009
Use
Regional
Results
for
Individual
Facility
Studies
(
applied
to
every
facility
to
be
covered
in
permit
 
not
a
shared
cost).
$
6,042
$
6,042
NA
$
6,042
NA
$
6,042
2009/
2013b
Finalize
Individual
Study
Based
on
Director
Review
(
applied
to
every
facility
to
be
covered
in
permit
 
not
a
shared
cost).
$
1,550
$
1,550
NA
$
1,550
NA
$
1,550
2009/
2013b
ODCs
Lump
Sum
for
Biological
Characterization
$
13,270
$
13,270
$
79,620
$
2,654
$
39,810
$
1,592
2007­
2009
Subtotal
for
Biological
Characterization
Study
NA
NA
$
1,690,523
$
63,943
$
806,978
$
39,871
NA
a
Costs
for
activities
over
2007­
2009
are
incurred
as
1/
3
of
the
cost
in
2007,
1/
3
in
2008
and
1/
3
in
2009.

b
2009
or
one
year
before
compliance
year
for
facilities
launched
or
coming
on
line
in
2012­
2026
for
Region
6
and
2013
or
one
year
before
compliance
year
for
facilities
launched
or
coming
on
line
in
2014­
2026
for
Region
4.

Source:
U.
S.
EPA,
2004b.
See
also
DCN
7­
4018.
10
3.2.2
Recurring
Cost:
Subsequent
NPDES
General
Permit
Renewals
Subsequent
General
Permit
renewals
would
require
collecting
and
submitting
the
same
type
of
information
required
for
the
initial
permit
renewal
application.
EPA
expects
that
both
the
facility
and
the
contractor
can
use
some
of
the
information
from
the
initial
studies.
Building
upon
existing
information
is
expected
to
require
less
effort
than
developing
the
data
the
first
time,
especially
in
situations
where
conditions
have
not
changed.
The
shared
recurring
permit
costs
are
assumed
to
be
shared
by
all
new
facilities
built
in
the
first
5­
year
cycle
plus
all
new
facilities
built
in
the
next
5­
year
cycle,
etc.,
so
as
time
goes
on,
shared
costs
are
shared
by
more
and
more
facilities
(
except
Alaska,
where
only
one
project
is
assumed
during
the
time
frame
of
the
analysis).
As
facilities
go
off
line
or
are
retired
(
after
30
years),
fewer
projects
share
in
these
studies.

ERG
assumes
all
costs
are
incurred
in
the
year
the
General
Permits
are
renewed.
For
Region
6,
this
means
these
costs
are
incurred
in
2017,
2022,
2027,
2032,
2037,
3042,
2047,
and
2052,
or
until
the
assumed
30­
year
life
of
the
facility
is
over.
For
the
Region
4
and
Region
10
permits,
these
costs
are
incurred
in
2019,
2024,
2029,
2034,
2039,
2044,
2049,
and
2054,
again
until
the
30­
year
life
of
the
facility
is
over.

Table
3
lists
the
estimated
costs
of
each
of
the
NPDES
General
Permit
renewal
activities
subsequent
to
the
first
round.
Since
these
numbers
change
slightly
as
facilities
come
on
or
off
line,
the
costs
shown
are
for
the
first
repermitting
cycle
following
the
initial
GP
renewal.

Table
3:
Cost
of
Subsequent
NPDES
General
Permit
Application
Activities
(
Per
Facility,
June
2003
$)

Activity
Region
6
Region
4
Region
10
Start­
up
activitiesa
$
692
$
692
$
692
Permit
application
activitiesa
$
190
$
190
$
190
Source
waterbody
flow
informationa
$
401
$
401
$
401
CWIS
velocity
flow
informationa
$
0
$
0
$
0
Design
and
construction
technology
plana
$
802
$
694
$
802
Biologic
characterization
studya
$
12,005
$
7,455
$
194,932
Total
Recurring
NPDES
Permit
Application
Costd
$
14,090
$
9,432
$
197,017
a
The
costs
for
these
activities
are
incurred
during
the
year
of
the
General
Permit
renewal.
Shared
costs
shown
are
for
the
first
permit
renewal
period
after
the
initial
permit
(
e.
g.,
2017);
these
costs
change
as
the
number
of
permitted
facilities
change.
For
simplicity,
all
costs
for
repermitting
are
assumed
to
be
incurred
in
one
year,
rather
than
spread
over
several
years
as
was
assumed
for
the
initial
round
of
permitting.
Total
costs
to
be
shared
in
Region
6
are
$
940,107
and
in
Region
4,
are
$
447,359
in
each
repermitting
cycle
year.
Additionally,
all
facilities
are
individually
assigned
$
2,386
to
develop
individual
studies
from
regional
results.
Total
costs
are
computed
using
the
per­
facility
study
costs
provided
by
SAIC
and
assuming
3
MODUs
and
3
platforms
are
studied
in
Region
6
and
3
MODUs
in
Region
4.
Costs
are
shared
in
2017
in
Region
6
among
97
facilities
and
in
2019
in
Region
4
among
87
facilities.

Source:
U.
S.
EPA,
2004b.
See
also
DCN
7­
4018.
11
Table
4
shows
the
number
of
facilities
sharing
in
each
repermitting
period.
All
facilities
that
are
operating
in
the
repermitting
year
or
are
expected
to
be
operating
for
at
least
one
year
during
that
permit
renewal
cycle
are
assumed
to
share
the
repermitting
cost.
For
example,
in
2017
under
the
Region
6
permit
renewal,
all
facilities
operating
in
2017
plus
those
coming
on
line
or
being
launched
in
2017
to
2021
are
assumed
to
share
the
costs
of
the
characterization
study.
As
vessels
or
platforms
reach
the
end
of
their
lives
(
30
years),
they
are
dropped
from
the
count
sharing
costs,
as
long
as
their
life
is
over
before
the
beginning
of
the
new
permit
renewal
cycle.
Thus
the
number
of
facilities
sharing
costs
rises
as
new
facilities
are
brought
on
line
or
are
launched
during
the
construction
time
frame,
remain
the
same
for
a
few
cycles,
then
decline
as
the
end
of
life
of
the
facility
is
reached.
Repermitting
ends
after
the
2052
cycle
in
Region
6
and
after
2054
in
Region
4,
since
the
last­
constructed
facilities
end
their
30­
year
lives
after
2055.

Table
4.
Numbers
of
Facilities
Sharing
Costs
by
Permit
Renewal
Year
Region
6
Region
4
Year
Number
Sharing
Costs
Year
Number
Sharing
Costs
2017
97
2019
87
2022
122
2024
103
2027
123
2029
103
2032
123
2034
103
2037
117
2039
88
2042
86
2044
62
2047
55
2,049
36
2052
24
2054
10
Source:
ERG
estimates.
See
also
DCN
7­
4018.

3.3
Annual
Administrative
Costs
of
Monitoring,
Record
Keeping,
and
Reporting
Annual
monitoring,
record
keeping,
and
reporting
activities
and
costs
include:

#
Biologic
monitoring
for
impingement
#
Biologic
monitoring
for
entrainment
#
Velocity
monitoring
#
Preparing
and
maintaining
a
yearly
status
report
These
costs
are
incurred
in
2012
and
2013
in
Region
6
and
in
2014
and
2015
in
Region
4
and
10.
For
Region
6,
these
costs
are
shared
among
the
initial
30
facilities
plus
those
facilities
that
are
launched
or
go
on
line
in
2012
for
the
2012
monitoring
costs;
plus
those
launched
or
coming
on
line
in
2013
for
the
2013
costs.
Similarly,
costs
are
shared
among
the
initial
25
MODUs
and
for
those
MODUs
launched
in
2014
and
2015
under
the
Region
4
permit.
12
Subsequent
monitoring
costs
are
incurred
in
the
same
year
as
the
permit
renewal
cycle
discussed
above.
The
number
of
facilities
operating
in
that
year,
plus
the
number
expected
to
be
launched
or
come
on
line
during
the
5­
year
permit
cycle,
are
assumed
to
share
in
this
cost.

Table
5
shows
the
costs
of
these
activities.

Table
5:
Cost
of
Monitoring
Activities
(
Per
Facility,
June
2003
$)

Activity
Region
6
Region
4
Region
10
Biologic
monitoring
for
impingement
$
4,350
$
1,963
$
0
Biologic
monitoring
for
entrainment
$
2,710
$
0
$
46,078
Velocity
monitoring
$
1,004
$
453
$
6,192
Preparing
and
maintaining
yearly
status
report
$
1,775
$
801
$
10,945
Total
Monitoring
Cost
$
9,839
$
3,217
$
63,215
a
The
costs
for
these
activities
are
incurred
during
the
first
two
years
of
the
initial
General
Permit
renewal
(
i.
e.,
2012
or
2014)
and
are
shared
by
37
facilities
and
41
facilities,
respectively,
in
Regions
6
and
4.
These
costs
are
incurred
for
one
year
in
each
subsequent
permit
renewal
cycle.
Shared
costs
shown
are
for
the
first
permit
cycle
only
(
2012
or
2014);
these
costs
change
as
the
number
of
permitted
facilities
change
over
time.
See
Table
6
for
the
number
of
facilities
expected
to
share
monitoring
costs
during
the
permit
renewal
cycles.
Total
shared
costs
are
$
364,039
in
Region
6
and
$
131,879
in
Region
4.

Source:
U.
S.
EPA,
2004b.
See
also
DCN
7­
4018.

Table
6
presents
the
number
of
facilities
sharing
monitoring
costs
in
the
years
in
which
they
are
incurred.
These
numbers
are
not
the
same
as
those
sharing
in
repermitting
costs.
It
is
assumed
only
those
facilities
assumed
operating
in
the
monitoring
years
share
monitoring
costs,
while
repermitting
costs
are
assumed
shared
by
all
facilities
operating
in
the
repermitting
year
plus
all
facilities
expected
to
be
launched
or
come
on
line
in
the
remaining
portion
of
the
5­
year
permitting
cycle.
13
Table
6.
Numbers
of
Facilities
Sharing
Monitoring
Costs
by
Year
Region
6
Region
4
Year
Number
Sharing
Costs
Year
Number
Sharing
Costs
2012/
2013
37/
43
2014/
2015
41/
46
2017
68
2019
67
2022
99
2024
93
2027
123
2029
103
2032
123
2034
123
2037
117
2039
88
2042
72
2044
62
2047
55
2,049
36
2052
20
2054
12
Source:
ERG
estimates.
See
also
DCN
7­
4018.

4.
Capital
and
O&
M
Timing
and
Costs
Capital
costs
are
incurred
in
the
"
compliance
year."
The
compliance
year
is
the
year
the
facility
is
assumed
to
be
launched
or
comes
on
line,
regardless
of
whether
the
relevant
general
permit
requirements
for
316(
b)
have
been
finalized.
We
therefore
assume
capital
costs
are
incurred
by
all
facilities
coming
on
line
or
launched
in
2007
through
2026
on
the
schedule
discussed
above
(
that
is,
1
deepwater
platform
per
year,
1
semi­
submersible
per
year,
4
jackups
per
year,
etc.).
Capital
costs
are
incurred
again
10
years
after
the
initial
installation
(
that
is,
a
10­
year
life
of
equipment
is
assumed).
So
for
a
facility
built
in
2007,
the
same
capital
cost
will
be
incurred
in
2017
and
2027
for
the
30­
year
life
of
the
facility.
A
capital
cost
is
not
incurred
in
2036,
since
this
is
the
end
of
life
in
this
example.
O&
M
costs
are
assumed
to
be
incurred
beginning
in
the
compliance
year
and
for
every
year
after,
for
the
30­
year
life
of
the
facility.

Table
7
shows
the
estimated
capital
and
O&
M
costs
for
each
type
of
new
facility.
Costs
were
derived
based
on
those
reported
in
EPA
(
2004c)
and
were
calculated
for
the
average
platform
or
MODU
by
type
for
application
to
new
facilities,
weighted
as
discussed
in
ERG
2004,
and
as
shown
in
a
spreadsheet
in
the
Rulemaking
Record
(
DCN
7­
4030).
14
Table
7:
Capital
and
O&
M
Costs
by
Facility
Type
(
June
2003
$)

Facility
Capital
Cost
O&
M
Cost
Deepwater
Platform
$
227,620
$
44,629
Alaska
Platform
$
339,610
$
152,341
Semi­
submersible
MODU
$
26,008
$
0
Jackup
MODU
$
156,540
$
0
Drill
Ship
$
222,062
$
0
Source:
U.
S.
EPA,
2004c,
ERG,
2004.
See
also
DCN
7­
4018.

References
ERG.
2004.
Calculation
of
Weights
for
Engineering
Cost
Estimates.
Memorandum
to
the
316(
b)
Phase
III
Rulemaking
Record.
September
24,
2004.

U.
S.
Environmental
Protection
Agency
(
U.
S.
EPA).
2004a.
Economic
Analysis
of
the
Proposed
Section
316(
b)
Phase
III
Rule.

U.
S.
Environmental
Protection
Agency
(
U.
S.
EPA).
2004b.
Information
Collection
Request
for
the
Proposed
316(
b)
Rule
for
Phase
III
Facilities.

U.
S.
Environmental
Protection
Agency
(
U.
S.
EPA).
2004c.
Technical
Development
Document
for
the
Proposed
Section
316(
b)
Phase
III
Rule..