Document ID: EPA-HQ-OAR-2002-0064-0235
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-05-14T04:00Z

Solvent Cleaning SISNOSE Screening Analysis

1. Summary

The Environmental Protection Agency (EPA) Office of Air and Radiation
has analyzed the potential economic impacts of options for regulation of
n-propyl bromide (nPB) under the Significant New Alternatives Policy
(SNAP) program for the adhesives and aerosols manufacturing categories.
Two alternative regulatory actions have been evaluated: 

continued use of nPB is “acceptable” (with appropriate equipment)

continued use of nPB is “unacceptable.” 

A screening analysis was conducted to determine whether regulatory
options under consideration could result in a “significant impact on a
substantial number of small entities” (SISNOSE). This screening
analysis of small business impacts is conducted in conformance with EPA
guidance for compliance with the Regulatory Flexibility Act (RFA) and
the Small Business Regulatory Enforcement Fairness Act (SBREFA).

Under the guidance, regulatory impacts are classified as category 1, 2,
or 3. Category 1 means that the rule is presumed not to have a SISNOSE.
Category 3 means that a SISNOSE is presumed to exist. Category 2 means
that no presumption applies and consultation with the Small Business
Advocacy Chair is needed to make a determination. Conclusions are
summarized in Table 1 for each of the affected manufacturing categories
as identified by their North American Industrial Classification System
(NAICS) codes.

As shown in Table 1, results for the Engineering Services and Other
Scientific and Technical Services NAICS codes are the only ones that
exhibit category 2 status under current assumptions.

Table 1. Conclusions of RFA/SBREFA screening analysis

	NPB acceptable with 12 ppm AEL	NPB unacceptable

NAICS 331 -- Primary Metal Manufacturing	Category 1	Category 1

NAICS 332 – Fabricated Metal Product Manufacturing	Category 1	Category
1

NAICS 333 – Machinery Manufacturing	Category 1	Category 1

NAICS 334 – Computer & Electronic Product Manufacturing	Category 1
Category 1

NAICS 335 – Electrical Equip, Appliance & Component Manufacturing
Category 1	Category 1

NAICS 336 – Transportation Equipment Manufacturing	Category 1	Category
1

NAICS 337 – Furniture & Related Product Manufacturing	Category 1
Category 1

NAICS 339 – Miscellaneous Manufacturing	Category 1	Category 1

NAICS 541330 – Engineering Services	Category 2	Category 2

NAICS 541690 – Other Scientific & Technical Consulting Services
Category 2	Category 2

The classification criteria prescribed in the EPA guidance for making
the above categorizations are as follows:

Category 1

The number of small companies that have compliance costs greater than 1%
of sales is less than 1,000 and less than 20% of the total number of
small companies.

The number of small companies that have compliance costs greater than 3%
of sales is less than 100.

Category 2

The number of small companies that have compliance costs greater than 1%
of sales is more than 1,000 or more than 20% of the total number of
small companies.

The number of small companies that have compliance costs greater than 3%
of sales is between 100 and 999, and less than 20% of the total number
of small companies.

Category 3

The number of small companies that have compliance costs greater than 3%
of sales is more than 1,000 or more than 20% of the total number of
small companies.

The level of aggregation at which these classification criteria are
applied is left open to interpretation in the EPA guidance. They can be
applied at the level of an overall rulemaking, by manufacturing category
(i.e., NAICS code), or at any level that is relevant to understanding
impacts on small businesses. In this case, results are summarized at the
at the level of individual NAICS codes and at the level of company size
categories. Small manufacturing businesses are defined as firms
employing fewer than 500 people; small service firms are defined as
those with receipts of less than $5 million/yr.

2. Impacts of Regulatory Alternatives

2.1 nPB Acceptable

It is assumed that the existing use of nPB is in a vapor degreaser in
all NAICS codes.  The effect of a 12 parts-per-million (ppm) acceptable
exposure limit (AEL) is assumed to require an upgrade in the performance
of the vapor degreaser equipment for about 30 percent of companies. 
Although some businesses may opt to purchase a new degreaser, the impact
of the regulatory option is limited to the incremental cost of the
required upgrade.  Upgrade capital costs are estimated to be $15,000 for
a 13 sq ft vapor degreaser (ICF, 2004).  Using the relationships between
surface area and nPB usage documented in the analysis supporting the
proposed rulemaking (EPA, 2003), this $15,000/13 sq ft capital cost
estimate is scaled to create an upgrade cost function that indicates an
incremental cost of $2.67 per pound of nPB use for degreasers using up
to 6,000 pounds per year and $1.90 per pound of nPB use for degreasers
using more than 6,000 pounds per year.  These incremental cost factors
are applied to the nPB usage projected to occur in each NAICS code and
company size category to produce impact estimates.

The only other capital cost item involved in continuing to use nPB in an
upgraded degreaser is training cost.  This is estimated at a constant
$1018 per firm.  This assumption is imported from prior SISNOSE analyses
of impacts on adhesive and aerosol users of nPB.

The major effect of the degreaser upgrade on operating costs is expected
to be a reduction in solvent usage and consequent cost savings.  Among
degreasers that do not currently meet a 12 ppm AEL, the average exposure
is estimated to be about 41 ppm.  The difference between 41 ppm and 12
ppm implies a 71% reduction in solvent use will result from the upgrade.
 This equates to a dollar savings of $2.82 per pound of nPB used.  The
total savings are substantial and confirm the suspicion that the
degreaser upgrade will pay for itself fairly quickly in most instances. 

The only other operating cost considered is the cost of personal
protection equipment.  The costs assumed for this are imported from the
SISNOSE analysis of adhesives and aerosols users of nPB that were
derived originally from the OSHA impact analysis of methylene chloride
regulations.  These costs are quite significant and are the primary
reason that a category 2 impact designation is indicated in NAICS codes
541330 and 541690 for the “nPB acceptable” regulatory alternative. 
It is important to note however that there are estimated to be only 50
to 60 companies using nPB in these NAICS codes, representing much less
than one percent of the total number of firms in each.

2.2 nPB Unacceptable

The projected choices of alternatives to nPB are based in large part on
analysis of recent market trends.  Flammables, such as isopropyl
alcohol, and aqueous cleaning approaches are ruled out.  In the case of
flammables, the cost of explosion proofing and fire suppression is
believed to heavily outweigh any advantage gained by using a less
expensive solvent.  In the case of aqueous cleaning, experience has
shown that as much as a third of the market has already adopted it where
it has been proven effective and cost-effective.  As a result, it is
thought that there is little further potential that has not already been
vigorously explored.  It might be possible to see another 5% shift to
aqueous, but the analysis assumes zero to be more conservative.

The remaining alternatives include chlorinated solvents that are
presumed to be the choice by metals cleaning businesses (NAICS codes
331, 332, 333, and 337) and HCFC 225 and Trans-DCE that are preferred
choices in the electronics and precision cleaning businesses (NAICS
codes 334, 335, 336, 339, 541330, and 541690).

It is assumed that the use of chlorinated solvents will require the same
vapor degreaser upgrade as required for nPB due to air pollution
requirements.  The same capital costs are therefore assumed and the same
degree of reduction in solvent usage is assumed.  The major difference
in the cost of this substitution is the lack of a requirement for
personal protective equipment due to the higher exposure limits.

It is assumed that the use of HCFC 225 and Trans-DCE can be accommodated
without the need to modify vapor degreasers, eliminating an important
capital cost.  However, these solvents are considerably more expensive
at $13.50/lb for HCFC 225 and $16.50/lb for Trans DCE.  This results in
an impact that exceeds 1% of sales in the smallest company size category
in NAICS Codes 334, 335, and 336.  However, there are fewer than 100
firms affected which leaves the result well within the category 1
SISNOSE designation.  In NAICS Codes 541330 and 541690, however, the
impact of these more expensive solvents produces impacts in the 1%-to-2%
of sales range that do obtain a category 2 SISNOSE designation.  It is
again important to note that there are estimated to be only 50 to 60
companies using nPB in these NAICS codes, representing much less than
one percent of the total number of firms in each.

References

EPA 2003, Economic Impacts: Options for SNAP Decision on n-Propyl
Bromide, U.S. Environmental Protection Agency, March 20, 2003.

ICF 2004, The U.S. Solvent Cleaning Industry and the Transition to
Non-Ozone Depleting Substances, ICF Consulting, prepared for the U.S.
Environmental Protection Agency, August 2004.

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