WPC \z04cSs4a ]'*bۮ\GYWȍa-wl7뷼WڋM!K|+N;r8ӛ.Y(|M3jŪ&gWywO֝+Ux} _IJyWB[E5u/g~Z@56A1`Li89v>R̦7Dk.y00xCXnqhp!DRkӫ%5&ȿZ|ZCtd)c\:_ŐPuFj !,j.+_q.턂c 5A4RQa ~dL̙4 ZA'Mե$Œ1^.?U DQF xN rO  .=[5úf˽rBG˹*]Pw(2 DF8.y `{<|ArcNQW:>K7Zo͡S 0~ 0x 0k 0k 0V 0~ 0n 0? 0# 0 0  0 01 0C 0V\ 0 0! 0%" 0" 0# 0H$ 0% 0% 0& 0"' 0' 0e( 0) 0) 0* 0B^+ 0B+ 0B+U@$, %d, 0Bj, 0B, 0B, 0B0- 0Br- 0P- 0P. 03T.U`N0 0h0UJL2 0+2 0<4U.6EB6UBD6 06U 68U=BN8 08 0<%: 0/a; 02;U= 0 5= 0PU>UM>? 0? 0wA 0/[B 0iC 0\aE 0F 0,xA`&UniversScalableSSOURCE:0..S>,xA`&UniversScalableS,xA`&UniversScalable~d:4th tier (i)EHPA-Heading for 4th-tier sectionXXXK522AArialBoldTTK.... .. ..XXXK522AArialBoldTTKl* 8Bullet ListEHPA-Indented Bullet List0..0..jl,NotesEHPA-Formats notes below tableS>,xA`&UniversScalableSNOTES:0..S>,xA`&UniversScalableSEo:Appendix CovEHPA-Formats text for appendix cover sheet  6b2' xd6   K522AArialBoldTTK   6b2' xd6     K522AArialBoldTTKll *NoteEHPA-For single note below tableS>,xA`&UniversScalableSNOTE:0..S>,xA`&UniversScalableSo 0SourcesEHPA-Formats references at bottom of tableS>,xA`&UniversScalableS SOURCES:0 .. S>,xA`&UniversScalableS }d8Table TitleEHPA-Formats table titles in Pechan reports  XXXK522AArialBoldTTK 1 1  XXXK522AArialBoldTTKd{ 6ReferencesEHPA-Pechan references  &&&W6  `*Times New RomanTTW0....&  ..'    &&&W6  `*Times New RomanTTWR& 8BibliogrphyBibliography0....~:1st tier (A)EHPA-Heading for 1st-tier section&  &&&_I+X 2Times New RomanBoldTT_   '  &&&_I+X 2Times New RomanBoldTT_+X 2Times New RomanBoldTTHL8Tab settingReports  A7 (08@A^25th tierHeading for 5th levelXXXmLh @Times New RomanBold ItalicTTm.XXXmLh @Times New RomanBold ItalicTTmh @Times New RomanBold ItalicTTNE.NoticeDraft Documents@..\ NOTICE ..Thisdocumentisapreliminarydraft.IthasnotbeenformallyreleasedbytheU.S.EnvironmentalProtectionAgencyandshouldnotatthisstagebeconstruedtorepresentAgencypolicy.Itisbeingcirculatedforcommentsonitstechnicalmeritandpolicyimplications.h& :Bibliogrphy/Bibliography/Reference0.... P'   @ CONTENTS(continued)  !!((#Page ('2$ &T!   RST($0 ($0 0 (($0 0 0   P'   @ TABLES(continued)  !!((#Page W1($0  W2 ES- _ P'   XK7 (08@XK@^TABLEES1(continued) dTable_A&0 d d d  P'   K7 (08@XK@44TABLEES2(continued)Table_B Table_CTable_DTable_E eTable_FTable_GTable_H ##""d# t    \R'3\    X  z P'   "[ &"&K7 (08@XK@TABLE24(continued).     Table_I t    \R3'\ ##""&d#  Table_J Table_K Table_L Table_M Table_NTable_OTable_PTable_QTable_RTable_S'dxd Level 1 Level 2 Level 3 Level 4 Level 5('2$ &T!   ($ (    ) M << deUU!"&&BQnnD'd&&B&&cB&&BPnnZ  Q^D_d~=~P^ !"&&AQnnD&f&&A&&NA &&APnn;  Q^D_f~=~ P^ !"&&AQnnS d&&A&&HA&&APnn; Q^S_d~=~P^!"&&AQnnS f&&vA&&4A#&&APnn% Q^S_f~=~#P^!"&&AQ&&A&&AQnn[Dd&&6A&&AQnnDf&&oA&&AQnnSd&&RA&&AQnnS f Q~=~Q^D_d~+~Q^D_f~=Q^S_d~+~Q^S_f!"&&AP&&A&&A(&&AQnnSd&&A/&&&A&&A)&nn-1nn P~=~({Q^S_d/})^{1over}!"M8&%&&96[&&u6(&&6C&&{6"&&6Q&&6)&&#6&&6(&&6V&&6&&6D&&6)&&[6]&&6(&&#61&&6&&6t&&6)&&K 6&& 6D&&5AS&& && k /{[(C~"~Q)~-~(V~+~D)]~(1~-~t)~+~D}over{S}~=~k!"&& C&&&&&6kS&&6&&6D&&AQ&&KA(&&A1&&3A&&At&&#A)&&o &&&6V&&`6&&6D&&_AQ +C~=~{kS~-~D}over{Q(1~-~t)}~+~{V~+~D}over{Q}!"&&D&&&&&6k&&AT D~=~{k}over{T}!"&&S&&s&&&!Tr&&gT(&&T1&&OT&& Tr&&ST)nnT&&A[&&A(&&A1&&A&&Ar&&A)nnT&&KA&&A1&&A] #S~=~{r(1~+~r)^T}over{[(1~+~r)^T-1]}!"&&nP&&n&&n(&&nQnnSd&&n/&&&n&&n)&2nnZ1nn&&n&&EnC&&n(&&KnCnn3i&&<n,&&nqnn3i&&=n) ,P~=~(Q^S_d/)^{1over}~+~C~(C_i~,~q_i)!"&&n&&qnQnn%Shf&&n&&nQnnDSfnn>1&&n&&nQnncSfnn3>0 Q^S_f~=~Q_1^S_f~-~Q_0^S_f!"&&n&&qnVIM&&n&&sn(&&nPnno31&&n"&&nQnnISfnn>1&&n)&&2n&&n(&&,nPnn30&&*n"&&nQnnv S fnnF >0&& n) 1VIM~=(~P_1~"~Q_1^S_f)~-~(P_0~"~Q_0^S_f)!"&&n&&qnQnn%Df&&n&&nQnn^Dfnn.>1&&%n&&nQnnDfnng>0 Q^D_f~=~Q_1^D_f~-~Q_0^D_f!"&&n&&qnVX&&n&&n(&&KnPnn31&&In&&nQnnDfnn>1&&n)&&n&&n(&&nPnnx30&&n&&nQnnx D fnnH >0&&? n) +VX~=(P_1~*~Q_1^D_f~)~-~(P_0~*~Q_0^D_f~)!"&&A&&qANX&&A&&iA&&AQnnyDf&&@A&&A&&ZAQnnSQf NX~=~Q^D_f~-~Q^S_f!"&&A&&qAVNX&&A&&A&&5AVX&&eA&&#A&&AVIM VNX~=~VX~-~VIM!"&&&&qCSnnLSd&&&&LnnHQDdl0nnHSQDd,1&&(&&QnnvDd&&/&&3&&)&Rnnz1nn &&dQnnDd&&}&&; Pnn S1&& Qnn D dnnm ^1&&( && PnnV S0&& QnnH D dnn ^0 cCS_d~=intfromQ_1^D_dtoQ_0^D_d~(Q^D_d/)^{{1}over{ }}~dQ^D_d~+~P_1Q_1^D_d-~P_0Q_0^D_d!"&&&&qPS&&&&K[&&PnnS1&&Qnn9S|dnn ^1&&&&Pnn(S0&&fQnnS]dnn^0&&&&LnnQ SG dl0nnSQ SG d,1&&u (&& Q&&5 /&&g && )& Rnn' z1nn# && dQ&& && ZInn TMnn inn nn11&&Cnn/Si&&qnnSi&&$]&&&&n(&&1&&&&tt&&) PS~=~[P_1~Q_1^S_d~-~P_0Q_0^S_d~-~intfromQ_1^S_dtoQ_0^S_d(Q/)^{{1}over{}}~dQ~-~sumfrom{i=1}toMC_i~q_i]~*~(1-t)!"&&&&qRS&&&&KInn|MnnZ3inn|3nn31&&(&&CnnPi&&&&pcnn1i&&S)&&qnni&&b&& &&|PS&& "&&0 [&&l t&& /&& (&& 1&&h && t&& )&&D ] JRS~=~sumfrom{i=1}to{M}~(C_i~-~pc_i)q_i~+~PS~"~[{t/(1-t)}]!"&&nEC&&On&& n&&inCSnnD3d&&n&&n&&nPS&&n&&n&&"nRS EC~=~CS_d~+~PS~+~RS!"&&n&&qnL&&'n&&n[&&!nLCnn30&&n&&Mn(&&nPnn30&&n&&En(&&nQnn5Sxdnn>1&&n&&nQnnh S dnn8 >0&& n)&& n]&& n/&&# nWnn 30&&G n/&& n2000 8L~=~[LC_0~*~(P_0~*~(Q_1^S_d~-~Q_0^S_d)]~/~W_0~/~2000!"&&n&&qnE&&1n&&nEnn_30&&nPnn 30&&Kn(&&nQnn;S~dnn >1&&n&&nQnnnSdnn>>0&&n) "E~=~E_0P_0(Q_1^S_d~-~Q_0^S_d)Table_TTable_U!"&&7Max&&7!&&k7&&)7PnnFP&&7&&@7f&&r7(&&7Q&&27,&&7I&&7)&&x7&&67(&&r7P&&2 7&& 7Q&&t 7)&& 7&& 7(&& 7Pnno OI&&? 7&& 7I&&97)&&AQ&&A,&&AI Istack{Max~!~=~P_FP~*~f(Q,~I)~-~(P~*~Q)~-~(P_OI~*~I)#alignlQ,~I}!"&&nQ&&n&&ng&&n(&&?nP&&n,&&-nPnn3FP&&6n,&&nPnn)3OI&&n) Q~=~g(P,~P_FP,~P_OI)!"&&nQ&&n&&nAPnn&&nPnnuFPnn]>FP Q~=~AP^P_FP^_FPTable_VTable_W!"&&AQnnS&&WA&&Af&&A(&&AL&&9A,&&gAK&&A,&&AM&&A,&&At&&A) Q^S~=~f~(L,K,M,t)!"&&ATC&&EA&&Ah&&_A(&&AC&&A,&&CAK&&A,&&At&&A,&&KAQnnS&&=A) TC~=~h(C,K,t,Q^S)!"&&AMC&&wA&&5Ahnn&&A(&&AC&&A,&&AK&&4A,&&bAt&&A,&&AQnnvS&&A) MC~=~h'(C,K,t,Q^S)!"&&nQnns&&In&&n(&&CnP&&n,&&nPnnV3L&&n,&&nPnn=3M&&n,&&nK&&Kn,&&ynt&&n) Q^s~=~(P,P_L,P_M,K,t)!"&&nQnn3t&&n&&nA&&nKnn%mKnn >t&&ntnnH&&nLnn_LnnG>t&&)nMnn&Mnn>t /Q_t~=~A~K_t^_K~t^~L_t^_L~M_t^_M!"&&nln&&n&&nnn30&&n&&cn&&nln&&nP&&n&&wnnn32&&knln&&InK&& n&& nnn 33&&u nln&&S nPnn 3L&&\ n&& nnn 34&&nln&&nPnna3M&&n&&nnn;35&&nln&&nt Uln~=~_0~+~~ln~P~+~_2~ln~K~+_3~ln~P_L~+~_4~ln~P_M~+~_5~ln~t!"&&&&&(&&dnnUL&&b&& nnUM&&n1&&[n&&nnn3L&&n&&nnn?3M 1~=~{_L~+~_M}over{1~-~_L~-~_M}!"&&nln&&nQnn|3t&&n&&nln&&nA&&Jn&&nnnr3K&&nln&&nK&&n&&zn&&0 nln&& nt&& n&&N nnn 3L&&L nln&&* nL&& n&&nnn3M&&nln&&nM Dln~Q_t~=~ln~A~+~_K~ln~K~+~~ln~t~+~_L~ln~L~+~_M~ln~MTable_XTable_Y!"&&roi&&9&&v&&Px&&x&&x&&w&&F}&&FP&&F&&F&&F~&&Inn1991nnoWinnWnnEW1987&&oh&&oPj&&oj&&oj&&oi&&o&&Pq&&q&&q&&p^&(&&nnnUUi&&nannU3i&&/&& 5&&"&&M100 [roi~=~left\[~sumfrom{i~=~1987}to{1991}left\({n_i}over{a_i}right\)~right\]~/`5~"~100!"&&proi&&&&Sv&&Sx&&SHx&&S x&&Sx&&Sx&&SLx&&S x&&Sx&&Sx&&SPx&&Sx&&Sx&&Sw&&| }&&| &&| H&&| &&| &&| &&| L&&| &&| &&| &&| P&&| &&| &&| ~!&I&&h&&Tj&&j&&Xi&&io&&iTq&&iq&&iXp&&Inn1991nnPvinnrvnnv1987&&nnnGi&&$/&&5&&R&&&&n&&Ph&&j&&j&&i&&oPo&&oq&&oq&&op&&Inn1991nnV3innx3nn31987&&annMi&&*/&&5&&X&&&&k&& "&&A 100 proi~=~left\[~{left\(sumfrom{i=1987}to{1991}n_iright\)~/~5~+~~n}over{left\(sumfrom{i=1987}to{1991}a_iright\)~/~5~+~~k}~right\]~"100!"&&n&&nnnn"3n&&n&&nn{&&n(&&n&&nP&&nn"&&nqnng3n&&n)&&1n&&n(&&+n&&ncnn,3n&&n"&&R nqnn 3n&& n)&&- n}&& n"&&m n(&& n1&& n-&&g nt&& n) L~n_n~=~\{(~P~"~q_n)~~(~c_n~"~q_n)\}~"~(1`\-`t`)!"&&n&&nn&&mn&&+n{&&n(&&n&&knP&&+n"&&nqnn31&&n&&knPnn3o&&nn"&&n&&nq&& n)&& n&&X n(&& n&&@ ncnn 3n&&# n"&& nqnn 31&&U n)&& n}&&9n"&&n(&& n1&&}n-&&nt&&n) b~n~=~\{(~P~"~q_1~~P_o~"~~q)~~(~c_n~"~q_1)\}~"~(1`\-`t`)!"&&n&&nn&&mn&&+n(&&gn&&nPnnJ3o&&n"&&pnqnn3o&&n)&&n"&&3n(&&on1&&n&&nt&& n) *~n~=~(P_o~"~q_o)~"~(1~~t)!"&&d&&v/&&e&&H^&(&&PdnnU1991&&%ndnn31991&&n&&nenn31991 #d/e~=~{d_1991}over{d_1991~+~e_1991}!"&&jpd&&"/&&Te&&\&(&&$dnnU1990&&&&&&2k&&ndnn-31990&&un&&3nenn31990&&n&&n&&5nk <~pd/e~=~{~d_1990~+~~k}over{d_1990~+~e_1990~+~~k} P'   XK7 (08@XK@^TABLE41(continued)Table_Z  P'   K7 (08@XK@ppTABLE42(continued)Table_AA Table_ABTable_ACTable_ADTable_AETable_AF Table_AG!Table_AHA- "Table_AI#Table_AJ$Table_AK%Table_AL&Table_AMB- 'Table_AN(Table_AO$35;AGMU]c1I.A.1.a.(1)(a)i)a))* ?u{EPA.STYEPA Style with TOC markingI.A.1.a.(1)(a)i)a) Cu{TechnicalTechnical Document StyleI.A.1.a.(1)(a)i)a)  A_ekqwDocumentDocument StyleI.A.1.a.(1)(a)i)a)  CRight ParRight-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)W3#|) `(CG TimesScalable&&m P7&P/e `6Times New RomanItalicTT&&he xXQ&X*X 2Times New RomanBoldTTTX pQ%2A`ArialTTomanItalicTT  v2PkQ P+ `*Times New RomanTTcTT&o P'C&P22AArialBoldTTTTcTT 2p}wC   `*Times New RomanTTcTT&&U PyQ&P22AArialBoldTTTTcTTX:x2p}wCX+ `*Times New RomanTTcTTe P['CP02`s New RomanTTcTT`2PkCP,xA`&UniversScalableTcTTTxP7P+X 2Times New RomanBoldTTT&&oX pQ&h @Times New RomanBold ItalicTTXXRh x?QX+_ 0CG TimesBoldScalablelicTT_ p^7+_ 0CG TimesBoldScalablelicTT&&p_ p^7&) `(CG TimesScalableblelicTTc P7P)&_ `4CG TimesItalicScalablecTT&&k&_ x$&7&X( T$  hjlprt|  jEE#]i% &T!   7"`"&&dd7O  @ CONTENTS  !!((#Page  > Q  8   TABLES#d"d")(#.^^.  #vi   8   FIGURES#6"6"((#./  #viii   8   ACRONYMSANDABBREVIATIONS#d"d")(#.xxB  #ix 4   8   EXECUTIVESUMMARY#!!((#. 9  #ES-1 8  8  0`     ES.1 ` ECONOMICIMPACTANALYSISOBJECTIVES#!!((#.XXs` ` #ES-1   8  0`     ES.2 ` INDUSTRYCHARACTERIZATION#!!((#.i` ` #ES-2   8  0`     ES.3 ` CONTROLCOSTSANDCOSTEFFECTIVENESS#!!((#.t` ` #ES-4 v  8  0`     ES.4 ` ECONOMICMETHODOLOGYOVERVIEW#!!((#.m` ` #ES-7 P  8  0`     ES.5 ` PRIMARYREGULATORYIMPACTS#`!`!'(#.j` ` #ES-11 *z 8  0`     ES.6 ` SECONDARYREGULATORYIMPACTS#`!`!'(#.66l` ` #ES-14 T 8  0`     ES.7 ` ECONOMICCOST#`!`!'(#.LL]` ` #ES-14 . 8  0`     ES.8 ` POTENTIALSMALLBUSINESSIMPACTS#`!`!'(#.p` ` #ES-16  8   1.0INTRODUCTIONANDSUMMARYOFCHOSENREGULATORYALTERNATIVE#`"`")(#.f  #1 l 8  0`     1.1 ` INTRODUCTION#`"`")(#.\` ` #1 F 8  0`     1.2 ` SUMMARYOFCHOSENREGULATORYALTERNATIVE#`"`")(#.x` ` #2  p 8   2.0INDUSTRYPROFILE#`"`")(#. =  #5 $ 8  0`     2.1 ` INTRODUCTION#`"`")(#.\` ` #5  8  0`     2.2 ` PROFILEOFAFFECTEDFIRMSANDFACILITIES#`"`")(#.x` ` #5  8  0`   0 ` `  ` 2.2.1 GeneralProcessDescription#`"`")(#. #6 b 8  0`   0 ` `  ` 2.2.2 ProductDescription#`"`")(#.w #6 < 8  0`   0 ` `  ` 2.2.3 AffectedResinFacilities,Employment,andLocation#`"`")(#.LL #9 f 8  0`     2.3 ` MARKETSTRUCTURE#:":")(#.`` ` #18 @  8  0`   0 ` `  ` 2.3.1 MarketConcentration#:":")(#.$$x #18  ! 8  0`   0 ` `  ` 2.3.2 IndustryIntegrationandDiversification#:":")(#.HH #20 !" 8  0`   0 ` `  ` 2.3.3 FinancialProfile#:":")(#.u #21 ~"# 8  0`     2.4 ` MARKETSUPPLYCHARACTERISTICS#:":")(#.m` ` #21 X#$ 8  0`   0 ` `  ` 2.4.1 PastandPresentProduction#:":")(#. #21 2$% 8  0`   0 ` `  ` 2.4.2 SupplyDeterminants#:":")(#.w #24  %\ & 8  0`   0 ` `  ` 2.4.3 ExportsofSAN,MBS,PET,ABS,andPolystyrene#:":")(#. #26 %6!' 8  0`     2.5 ` MARKETDEMANDCHARACTERISTICS#:":")(#.m` ` #27 &"( 8  0`   0 ` `  ` 2.5.10 EndUseMarketsforMBS,SAN,PET,ABS,MABS,Polystyreneand '") NitrileResins#:":")(#.r #27 t(#* 8  0`   0 ` `  ` 2.5.2 DemandDeterminants#:":")(#.DDw #28 N)$+ 8  0`   0 ` `  ` 2.5.3 PastandPresentConsumption#:":")(#. #30 (*x%, 8  0`   0 ` `  ` 2.5.4 ImportsofSAN,MBS,PET,ABS,andPolystyrene#:":")(#. #32 +R&- 8  0`     2.6 ` MARKETOUTLOOK#:":")(#.^` ` #32 +,'. Ї   8   3.0ECONOMICMETHODOLOGY:":")(#.B37  8  0`     3.1 ` INTRODUCTION#:":")(#.\` ` #37   8  0`     3.2 ` MARKETMODEL#:":")(#.44\` ` #37   8  0`   0 ` `  ` 3.2.1 PartialEquilibriumAnalysis#:":")(#. #38 n  8  0`   0 ` `  ` 3.2.2 MarketDemandandSupply#:":")(#.| #39 H h 8  0`   0 ` `  ` 3.2.3 MarketSupplyShift#:":")(#.w #40 " B 8  0`   0 ` `  ` 3.2.4 ImpactoftheSupplyShiftonMarketPriceandQuantity#:":")(#.TT #44   8  0`   0 ` `  ` 3.2.5 TradeImpacts#:":")(#.q #44  8  0`   0 ` `  ` 3.2.6 PlantClosures#:":")(#.r #46  8  0`   0 ` `  ` 3.2.7 ChangesinEconomicWelfare#:":")(#. #46   8  0`   0 ` `  ` 3.2.8 LaborInputandEnergyInputImpacts#:":")(#. #49 d  8  0`   0 ` `  ` 3.2.9 BaselineInputs#:":")(#.$$s #50 >^  8  0`     3.3 ` INDUSTRYSUPPLYANDDEMANDELASTICITIES#:":")(#.  w` ` #53 8  8  0`   0 ` `  ` 3.3.1 Introduction#:":")(#.HHp #53   8  0`   0 ` `  ` 3.3.2 PriceElasticityofDemand#:":")(#.~ #53   8  0`   0 ` `  ` 3.3.3 PriceElasticityofSupply#:":")(#.**~ #59   8  0`     3.4 ` CAPITALAVAILABILITYANALYSIS#:":")(#.ppm` ` #66   8   4.0CONTROLCOSTS,ENVIRONMENTALIMPACTS,ANDCOSTEFFECTIVENESS#:":")(#.i  #73 4T 8  0`     4.1 ` INTRODUCTION#:":")(#.\` ` #73 . 8  0`     4.2 ` CONTROLCOSTESTIMATES#:":")(#.f` ` #73  8  0`     4.3 ` ESTIMATESOFECONOMICCOSTS#:":")(#.k` ` #79  8  0`     4.4 ` ESTIMATEDENVIRONMENTALIMPACTS#:":")(#.LLo` ` #81  8  0`     4.5 ` COSTEFFECTIVENESS#:":")(#.b` ` #83 v 8   5.0PRIMARYECONOMICIMPACTSANDCAPITALAVAILABILITYANALYSIS#:":")(#.g  #85 *J 8  0`     5.1 ` INTRODUCTION#:":")(#.\` ` #85 $ 8  0`     5.2 ` ESTIMATESOFPRIMARYIMPACTS#:":")(#.JJl` ` #85  8  0`     5.3 ` CAPITALAVAILABILITYANALYSIS#:":")(#.ppm` ` #89   8  0`     5.4 ` LIMITATIONS#:":")(#.[` ` #91 ! 8  0`     5.5 ` SUMMARY#:":")(#.  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W` ` #97 *6!' 8   7.0POTENTIALSMALLBUSINESSIMPACTS#:":")(#.M  #99 +") 8  0`     7.1 ` INTRODUCTION#:":")(#.\` ` #99  8  0`     7.2 ` METHODOLOGY#:":")(#.[` ` #99   8  0`     7.3 ` SMALLBUSINESSCATEGORIZATION#"")(#.m` ` #100   8  0`     7.4 ` SMALLBUSINESSIMPACTS#"")(#.f` ` #100 n   8   APPENDIXASENSITIVITYANALYSIS# " ")(#.H  #A-1 " B 8   APPENDIXBALTERNATIVEPETMODEL#"")(#.J  #B-1   OhU  @  TABLES .Ԉ  !!((#Page  > H4= (08@XHV  8 =  ES1.0==w =w SUMMARYOFGROUPIVNESHAPCOSTSINTHEFIFTHYEARBYRESIN B INDUSTRYANDEMISSIONPOINT#!!((#.X=w =w #ES-5   8 =  ES2.0==w =w SUMMARYOFGROUPIVNESHAPTOTALCAPITALCOSTSBYRESIN   INDUSTRYANDEMISSIONPOINT#!!((#.X=w =w #ES-8   8 =  ES3.0==w =w SUMMARYOFPRIMARYECONOMICIMPACTSOFPOLYMERSAND Z   RESINSGROUPIVNESHAP#`!`!'(#.UUS=w =w #ES-12 4   8 =  ES4.0==w =w SUMMARYOFSECONDARYECONOMICIMPACTSOFPOLYMERSAND ^  RESINSGROUPIVNESHAP#`!`!'(#.UUS=w =w #ES-15 8  8 =  ES5.0==w =w ANNUALECONOMICCOSTESTIMATESFORTHEPOLYMERSANDRESINS   GROUPIVREGULATIONBASEDONEXISTINGSOURCECOSTS#`!`!'(#.MMo=w =w #ES-16   8 =  21.0==w =w MBSMANUFACTURERSBYCAPACITY(1991)#:":")(#.uua=w =w #10 v  8 =  22.0==w =w SANMANUFACTURERSBYCAPACITY(1991)#:":")(#.iia=w =w #10 P  8 =  23.0==w =w PETMELTPHASERESINANDPETBOTTLEMANUFACTURERSBY *z CAPACITY#:":")(#. E=w =w #11 T 8 =  24.0==w =w PETFILMANDPETFIBERMANUFACTURERSBYCAPACITY#:":")(#.m=w =w #12 . 8 =  25.0==w =w ABSMANUFACTURERSBYCAPACITY#:":")(#.55Z=w =w #15  8 =  26.0==w =w POLYSTYRENEMANUFACTURERSBYCAPACITY#:":")(#.b=w =w #16  8 =  27.0==w =w 1991EMPLOYMENTLEVELSOFPOLYMERSANDRESINSGROUPIVFIRMS l #:":")(#.====w =w #178 =  28.0==w =w DISTRIBUTIONOFMANUFACTURERSBYRESINTYPEANDFACILITY  p LOCATION#:":")(#. E=w =w #19 J 8 =  29.0==w =w FINANCIALSTATISTICSFORAFFECTEDFIRMS#:":")(#.CCd=w =w #22 $ 8 =  210.0==w =w HISTORICALPRODUCTIONLEVELSFORSAN,MBS,ANDPET#:":")(#.n=w =w #23  8 =  211.0==w =w HISTORICALPRODUCTIONLEVELSFORABSANDPOLYSTYRENE#:":")(#.q=w =w #24  8 =  212.0==w =w PRICELEVELSFORMBS,SAN,PET,ABS,ANDPOLYSTYRENE#:":")(#.CCq=w =w #29 b 8 =  213.0==w =w SALESLEVELSFORMBS,SAN,PET,ABS,ANDPOLYSTYRENE#:":")(#.aaq=w =w #31 < 8 =  214.0==w =w PLANNEDCAPACITYEXPANSIONSTHROUGH1996BYRESINTYPE#:":")(#.s=w =w #33 f 8 =  31.0==w =w PRODUCTSPECIFICBASELINEINPUTS#:":")(#.aa]=w =w #51 @  8 =  32.0==w =w BASELINEINPUTSFORTHEPOLYMERSANDRESINSGROUPIV  ! INDUSTRIES#:":")(#.o o G=w =w #51 !" 8 =  33.0==w =w DATAINPUTSFORTHEESTIMATIONOFDEMANDEQUATIONSFOR ~"# GROUPIVINDUSTRIES#:":")(#.  P=w =w #56 X#$ 8 =  34.0==w =w DERIVEDDEMANDCOEFFICIENTS#:":")(#.X=w =w #58 2$% 8 =  35.0==w =w DATAINPUTSFORTHEESTIMATIONOFTHEPRODUCTIONFUNCTION  %\ & FORGROUPIVINDUSTRIES#:":")(#.T=w =w #63 %6!' 8 =  36.0==w =w ESTIMATEDSUPPLYMODELCOEFFICIENTSFORGROUPIVINDUSTRIES#:":")(#.x=w =w #65 &"( 8 =  41.0==w =w SUMMARYOFGROUPIVNESHAPCOSTSINTHEFIFTHYEARBYRESIN '") INDUSTRYANDEMISSIONPOINT#:":")(#.X=w =w #75 t(#* 8 =  42.0==w =w SUMMARYOFTOTALGROUPIVNESHAPCAPITALCOSTSBYRESIN N)$+ INDUSTRYANDEMISSIONPOINT#:":")(#.X=w =w #77 (*x%, 8 =  43.0==w =w ANNUALECONOMICCOSTESTIMATESFORTHEPOLYMERSANDRESINS +R&- GROUPIVREGULATIONBASEDONEXISTINGSOURCECOSTS#:":")(#.MMo=w =w #82 +,'. 8 =  44.0==w =w ESTIMATEDANNUALREDUCTIONSINEMISSIONSANDCOST  EFFECTIVENESSASSOCIATEDWITHTHECHOSENREGULATORYALTERNATIVE#:":")(#.A A H=w =w #82   8 =  51.0==w =w SUMMARYOFPRIMARYECONOMICIMPACTSOFPOLYMERSAND n  RESINSGROUPIVNESHAP#:":")(#.UUS=w =w #87 H h 8 =  52.0==w =w POSTNESHAPEFFECTSONFIRMS'DEBTEQUITYRATIOS#:":")(#.m=w =w #90 " B 8 =  53.0==w =w POSTNESHAPEFFECTSONFIRMS'RETURNONINVESTMENTLEVELS#:":")(#.EEv=w =w #90   8 =  61.0==w =w SUMMARYOFSECONDARYIMPACTSOFPOLYMERSANDRESINSGROUP  IVNESHAP#:":")(#.  F=w =w #94  8 =  62.0==w =w FOREIGNTRADE(NETEXPORTS)IMPACTS#:":")(#.`=w =w #96   8 =  A1.0==w =w PRICEELASTICITYOFDEMANDESTIMATES# " ")(#.aaa=w =w #A-1 d  8 =  A2.0==w =w SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:LOWEND >^  PRICEELASTICITYOFDEMANDSCENARIO# " ")(#.`=w =w #A-2 8  8 =  A3.0==w =w SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:HIGHEND   PRICEELASTICITYOFDEMANDSCENARIO# " ")(#.`=w =w #A-2   8 =  A4.0==w =w SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:HIGHEND   PRICEELASTICITYOFSUPPLYSCENARIO# " ")(#.`=w =w #A-3   8 =  A5.0==w =w SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:LOWEND Zz PRICEELASTICITYOFSUPPLYSCENARIO# " ")(#.`=w =w #A-4 4T 8 =  B1.0==w =w PRIMARYIMPACTSFORTHEPETINDUSTRYASSUMINGINDUSTRY . AVERAGEPERUNITCONTROLCOSTS#"")(#.99[=w =w #B-2  8 =  B2.0==w =w SECONDARYIMPACTSFORTHEPETINDUSTRYASSUMINGINDUSTRY  AVERAGEPERUNITCONTROLCOSTS#"")(#.99[=w =w #B-2   /X  v XUh  @VV  FIGURES M   !!((# Page  > Y  8 =  ES1.0==w =w ModelDevelopmentforEconomicImpactAnalysis#`!`!'(#.MMk=w =w #ES-10 B 8 =  31.0==w =w IllustrationofPostNESHAPMarketModel#:":")(#.e=w =w #43    SNZ    Z  @   ACRONYMSANDABBREVIATIONS  P   ABS =   acrylonitrilebutadienestyrene > ASM =   AnnualSurveyofManufactures h BCA =   BenefitCostAnalysis B CAA =   CleanAirAct   CTG =   ControlTechniqueGuideline   DuPont  E.I.duPontdeNemours   EIA0 = 0 =(#=(#economicimpactanalysisZ   (# (# EPA0 = 0 =(#=(#U.S.EnvironmentalProtectionAgency4   (# (# HAPs =   hazardousairpollutants ^  HON =   HazardousOrganicNESHAP 8  ITC =   InternationalTradeCommission   MABS =   methylmethacrylateacrylonitrilebutadienestyrene   MACT =   maximumachievablecontroltechnology v  MBS =   methylmethacrylatebutadienestyrene P  MRR =   monitoring,recordkeeping,andreporting *z NESHAP0  NationalEmissionStandardforHazardousAirPollutantsT (# (# OMB =   OfficeofManagementandBudget . PET =   polyethyleneterephthalate  PVC =   polyvinylchloride  RFA =   RegulatoryFlexibilityAct l SIC =   StandardIndustrialClassification F SAN =   styreneacrylonitrile  p SBA =   U.S.SmallBusinessAdministration J 2SLS =   twostageleastsquares $     <  "&`&&"&6&Ș&&"&`T7 (08@= T   [-     6?&6&Ș.=h6?    EXECUTIVESUMMARY-X Y     .&)&.=h6&Ș&&.&)  H&  6&Ș&&6&ȘI&)&&6&Ș    ES.1  ECONOMICIMPACTANALYSISOBJECTIVESHrZ Z B  'BZI&)&&I&)6&Ș&&I&)    Thepurposeofthis 3#economicimpactanalysis(EIA 3#[)istoevaluatetheeffectofthecontrolcosts F  associatedwiththePolymersandResinsGroupIV 3#NationalEmissionStandardforHazardousAirPollutants(NESHAP 3#\)onthebehavioroftheregulatedresinfacilities.TheEIAwasconductedbasedonthecostestimatesforoneregulatoryoptionchosenbythe 3#U.S.EnvironmentalProtectionAgency(EPA 3#])fortheregulationofaffectedfacilities.Thisanalysiscomparesthequantitativeeconomicimpactsofregulationtobaselineindustryconditionsthatwouldoccurintheabsenceofregulation.Theeconomicimpactsofregulationareestimatedfortheindustrybasedonfacilitylevelcosts.  Section112ofthe 3#CleanAirAct(CAA 3#3_)containsalistof 3#hazardousairpollutants(HAPs 3#~_)forwhichEPAhaspublishedalistofsourcecategoriesthatmustberegulated.Tomeetthisrequirement,EPAisevaluatingNESHAPalternativesfortheregulationofindustriesclassifiedwithinthePolymersandResinsGroupIVsourcecategory.TheNESHAPalternativesarebasedondifferentcontroloptionsfortheemissionpointswithinresinfacilitiesthatemitHAPs.Thiseconomicanalysisanalyzesthepotentialimpactsofregulationonthefollowingsevenaffectedthermoplasticresinindustries: 3#styreneacrylonitrile(SAN 3#a), 3#methylmethacrylatebutadienestyrene(MBS 3#a), 3#polyethyleneterephthalate(PET 3#Pb),acrylonitrilebutadienestyrene(ABS), 3#methylmethacrylateacrylonitrilebutadienestyrene(MABS 3#b),polystyrene,andnitrileresins.ThesesevenindustriesareclassifiedinthePolymersandResinsGroupIVsourcecategoryandwillbecollectivelyreferredtoasGroupIVindustriesthroughoutthisreport.ThisreportpresentstheresultsoftheeconomicanalysispreparedtosatisfytherequirementsofSection317oftheCAAwhichmandatesthatEPAevaluateregulatoryalternativesthroughanEIA.  TheobjectiveofthisEIAistoquantifytheimpactsofNESHAPcontrolcostsontheoutput,price,employment,andtradelevelsineachoftheGroupIVresinindustries.Theprobabilityofresinfacility ,`'1 closureisalsoestimated,inadditiontopotentialeffectsonthefinancialconditionsofaffectedfirms.Tocomplywiththerequirementsofthe 3#RegulatoryFlexibilityAct(RFA 3#1f),theEPAguidelinesforimplementingtheRFA,andtheSmallBusinessRegulatoryEnforcementFairnessActof1996(SBREFA),attentionisfocusedontheeffectsofcontrolcostsonthesmalleraffectedfirmsrelativetolargeraffectedfirms.H&  6&Ș&&6&ȘI&)&&6&Ș    ES.2  INDUSTRYCHARACTERIZATIONHhgber g Z   'Z xgI&)&&I&)6&Ș&&I&)    ThefirmsaffectedbythePolymersandResinsGroupIVNESHAPproduceMBS,SAN,PET,ABS, ^  MABS,polystyrene,andnitrileresins,andareclassifiedinStandardIndustrialClassification(SIC)code2821.Theregulationwillaffect75facilities,whichareownedandoperatedby28firms.MBScopolymersarecharacterizedbyhighimpactstrengthandtransparency,andaretypicallyhigherinpricethanothercommonmonomers.MBSresinsareusedprimarilyasanimpactmodifierforrigid 3#polyvinylchloride(PVC 3#j),whichinturnisusedintheproductionofpackaging,building,andconstructionproducts.TheMBSindustrycapacityissharednearlyequallybythreeproducers,andnoproducerisclearlydominantinthismarket.  SANcopolymersaretransparent,amorphousmaterialswithhighheatandchemicalresistance.SAN'sprimaryuseisasafeedstocktoABSproduction,whichisinturnusedtoprovideweatherresistanceforapplicationsincludingboats,swimmingpools,andrecreationalvehicles.SANresinsaremostoftenproducedforcaptiveusebyABSproducers,althoughsmallamountsofSANresinsarealsosoldonthemerchantmarket.TherearethreefirmsproducingSANatatotaloffivefacilities.Nofirmisclearlydominantinthismarket.  PETisahighmeltingpointpolymerthatisclear,andhasgoodgasandmoisturebarrierproperties.PETisproducedinthefollowingfourbasicforms:meltphaseresins,bottlegraderesins,PETfilm,andPET(polyester)fibers.MeltphasePETresinsareusedtoproducePETfilm,polyesterfibers,andindirectlyasaninputtoproductionofthesolidstateresinsusedtomanufacturePETbottles.PETproductionasawholeinvolvesthehighestnumberofproducersofanyofthesixresinindustriesinthisanalysis.ThebottlegradePETresinindustryismorehighlyconcentratedthantheotherthreePETcategories,havingonlyfourproducers.PETmeltphaseresinsandPETfilmareeachproducedby9firms,andPETfibersareproducedby14firms,withfiberproductiondominatedby2majorproducers. o+&< Ї  ABSisformedbyblendingSANwithSANgraftedrubberwhichincreasesimpactresistanceand,combinedwithacrylonitrile,producesheatresistantandsolventresistantplasticswhichhaveextensiveuses.Intheautomotiveindustry,ABShasreplacedthemajorityofsteeloraluminumpartsforuseininteriorpanels,grilles,wheelcovers,andmirrorhousings.ConsumergoodsmanufacturedwithABSincludehouseholdappliances,housewares,luggage,toys,furniture,andsportinggoods.Insheetform,ABSisusedasacomponentofrefrigeratordoorliningsandfoodstoragecompartments.TheABSindustryishighlyconcentrated,with99percentoftotaldomesticABSproductioncapacityownedbythreefirms.  MABSisformedfromABSblendedwithmethylmethacrylatewhichmakesaclearABSresincapableofusessimilartothoselistedforABS.MABSpolymersareutilizedbytheplasticsindustryinapplicationswhichrequireatough,transparent,andhighlyimpactresistantmaterial.TheprimaryuseofMABSresinsisintheproductionofbothfoodandnonfoodcontainers.ThereisonlyonedomesticproducerofMABSpolymers.  Polystyreneresinsarecharacterizedbybrittleness,opticalclarity,andpoorbarrierpropertiestooxygenandwater.Usesofthepolystyrenepolymerincludethemanufactureofdurablegoods,suchastelevisioncabinets,appliances,furniture,andbuildinginsulationboard.Itsmostcommonuseisforthemanufactureoffoamusedinfoodtrays,meattraysandeggcartons,aswellasinpackagingforelectronicsandotherdelicateitems.ThepolystyreneindustryistheleastconcentratedindustryintheGroupIVsourcecategory.Thereare15polystyreneproducers,with40percentoftotaldomesticproductioncapacityconcentratedinthehandsoftwoproducersandtheremaining60percentofcapacitysharedbythe13remainingproducers.  Nitrileresinsarecharacterizedbygoodabrasionandwaterresistantqualities,whichmakesthemsuitableforuseinawidevarietyofapplications.Theprimaryuseofnitrileelastomersisinthemanufactureofnitrilerubber,which,inturn,areusedtoproducecomponentsforautomobiles.Thereisonlyonedomesticnitrileresinproducer.H&  6&Ș&&6&ȘI&)&&6&Ș    ES.3  CONTROLCOSTSANDCOSTEFFECTIVENESSHCzber z ) %: ')SzI&)&&I&)6&Ș&&I&)    ThePolymersandResinsGroupIVNESHAPwouldrequiresourcestoachieveemissionlimits o+&< reflectingtheapplicationofthe 3#maximumachievablecontroltechnology(MACT 3#C|)tofouraffectedemissionpoints.ThisEIAanalyzesoneregulatoryalternativethatwaschosenbyEPAandisbasedontheavailablecontroloptionsforfouremissionpointswithinGroupIVresinfacilities.Forexistingsources,theMACTfloorwasbasedontheCAAstipulationthattheminimumstandardmustrepresenttheaverageemissionlimitationachievedbythebestperforming12percentofexistingsources.Fornewsources,costswereestimatedbasedonprojectedcontrolofnewprocessunitsandequipmentbuilt(or  c  reconstructedorreplaced)inthefirstfiveyearsafterpromulgation,andontheCAArequirementthattheMACTfloorbesetatthelevelofemissioncontrolthatisachievedinpracticebythebestcontrolledsimilarsource.  ControlcostsweredevelopedforthefollowingmajoremissionpointswithinGroupIVresinfacilities:equipmentleaks,miscellaneousprocessvents,wastewatercollectionandtreatmentsystems,andstoragetanks.CostestimateswereannualizedforthefifthyearafterpromulgationofthePolymersandResinsGroupIVNESHAPandareexpressedin1989dollarsthroughoutthisreport.Economicimpactswereestimatedbasedonthefacilitylevelcostsfortheproposedalternative,whichrepresentthecostoftheMACTflooroptionforallfouremissionpoints.TableES1presentsthenationalannualizedcostestimatesforcontrollingexistingsourcesandnewlyconstructedemissionpoints.ThesecostswerepreparedbytheengineeringcontractorforuseintheEIA.CostsareprovidedbyemissionpointfortheMACTfloorlevelofcontrolineachGroupIVindustry.Thetotalnationalannualizedcostforimplementationoftheregulatoryalternativeisapproximately$12.2million[includingmonitoring,recordkeeping,andreporting(MRR)costs]forexistingsourcesandasavingsofnearly$3.9millionforsourcesforecastedtobebuiltinthefirstfiveyearsafterpromulgationoftheregulation.  TableES1alsoshowstheHAPemissionreductionsassociatedwithcontrolatthefouremissionpointsandthecalculatedcosteffectivenessofeachcontrolmethod.TheHAPemissionreductionswerecalculatedbasedontheapplicationofsufficientcontrolstoeachemissionpointtobringthepointintocompliancewiththeregulatoryalternative.ThecosteffectivenessofthepredictedHAPemissionreductionrangesfromasavingsof$384toacostof$28,648permegagram,oranaverageof$413.9permegagramfortheNESHAP.TableES2presentsthetotalinvestmentcapitalcostsbyemissionpointassociatedwiththeregulatoryalternativeforeachofthesevenindustries.Totalcapitalinvestmentcostsareestimatedtobeapproximately$111millionfornewandexistingsourcesforthesevenaffectedindustriesfiveyearssubsequenttopromulgationoftheregulation. I,'> ЇH&  6&Ș&&6&ȘI&)&&6&Ș    ES.4  ECONOMICMETHODOLOGYOVERVIEWHinf b  'I&)&&I&)6&Ș&&I&)    Inthisstudy,datainputsareusedtoconstructaseparate,precontrolbaselineequilibriummarket d modelofeachofthesevenaffectedindustries.Thebaselinemodelsofthemarketsforthesesevenresinsprovidethebasicframeworknecessaryforanalyzingtheimpactofthecontrolcostsontheseindustries.TheIndustryProfileforthePolymersandResinsIVNESHAPcontainedindustrydatathatareusedas 9  inputstothebaselinemodelsandtotheestimationofpriceelasticitiesofdemandandsupply.Theindustryprofileincludesacharacterizationofthemarketstructureofeachaffectedindustry,providesnecessarysupplyanddemanddata,andidentifiesmarkettrends.Engineeringcontrolcoststudiesprovidethefinalmajordatainputrequiredtoquantifythepotentialimpactofcontrolmeasuresontheaffectedmarkets.TheseeconomicandengineeringcostdatainputswereevaluatedwithinthecontextofthemarketmodelstoestimatetheimpactsofregulatorycontrolmeasuresoneachoftheGroupIVresinindustries,andonsocietyasawhole.Thepotentialimpactsincludethefollowing:90  "0(#(#  Changesinmarketpriceandoutput;9inf  (#(# 90  "0(#(#  Financialimpactsonaffectedfirms;9inf  O(#(# 90  "0(#(#  Predictedclosureofaffectedresinfacilities;92inf  F(#(# 90  "0(#(#  Welfareanalysis;9inf   (#(# 90  "0(#(#  Smallbusinessimpacts;9tinf  $"(#(# 90  "0(#(#  Labormarketimpacts;9 inf  k$(#(# 90  "0(#(#  Energyuseimpacts;9inf  b&(#(# 90  "0(#(#  Foreigntradeimpacts;and96inf  ((#(# 90  "0(#(#  Regionalimpacts.9ђinf  @*(#(# ̀  ~".  r 7"`"&&d"&&d7  TRP'33' '3 Letter Landscape3'TX] r   TABLE 1VES1.SUMMARYOFGROUPIVNESHAPCOSTSINTHEFIFTHYEARBYRESININDUSTRYANDEMISSIONPOINT 1V1  6A &6&Ș"[  6A  *q_` ddd Xdd Xdd X8181q,td ,td,Rdd",dd,tdE,ptt5+  1ab" R r1 6abb%ab 6AnnualFifthYearCosts(1989DollarsperYear) <ab-""abb < =abb*"ab = SbbB*" r  abb rBSGroupIVIndustryandEmissionPoint 2bb! N bb 2ExistingSources ;b* N"bb ;NewConstruction ;b* N"b ;Total ;bb* N"b ;AnnualHAPEmissionReduction(Mg/yr) =bbb* N"bb =CostEffectiveness($/Mg) QbB* N" B r bbb BQA.MBS2 0b! h b 0 +! h!b +Ј ' h"U 'Ј ,b h#U ,Ј =bb* h$Ub =Ј QbB* h%U B  bb BQEquipmentLeaks 0b!" r&b 0$47,285 +!" r'b +$47,048 '" r(U '$94,333 ,b" r)U ,211.5 =bb*" r*Ub =$446.0 QbB*" r+U B  bb BQMiscellaneousProcessVents 0b!,| ,b 0$180,602 +!,| -b +$236,280 ',| .U '$416,882 ,b,| /U ,24.3 =bb*,| 0Ub =$17,155.6 QbB*,| 1U B  bb BQWastewaterSystems 0b!6 2b 0$143,239 +!6 3b +$143,239 '6 4U '$286,478 ,b6 5U ,10.0 =bb*6 6Ub =$28,647.8 QbB*6 7U B  bb BQStorageTanks 0b!@ 8b 0$0 +!@ 9b +$0 '@ :U '$0 ,b@ ;U ,0.0 =bb*@ <Ub =$0.0 SbbB*@ =U B  bb BSTotalMBS 2bb!J >bb 2$371,126 2b!J ?bb 2$426,567 ;b*J @Ub ;$797,693 ;bb*J AUb ;245.8 =bbb*J BUbb =$3,245.3 QbB*J CU B  bbb BQB.SAN2 0b!d Db 0 +!d Eb +Ј 'd FU 'Ј ,bd GU ,Ј =bb*d HUb =Ј QbB*d IU B  bb BQEquipmentLeaks 0b!nJb 0$137,108 +!nKb +$220 'nLU '$137,328 ,bnMU ,143.3 =bb*nNUb =$958.3 QbB*nOU B  bb BQMiscellaneousProcessVents 0b!xPb 0$0 +!xQb +$0 'xRU '$0 ,bxSU ,0.0 =bb*xTUb =$0.0 QbB*xUU B  bb BQWastewaterSystems 0b!Vb 0$281,018 +!Wb +$113,171 'XU '$394,189 ,bYU ,49.0 =bb*ZUb =$8,044.7 QbB*[U B  bb BQStorageTanks 0b!\b 0$0 +!]b +$0 '^U '$0 ,b_U ,0.0 =bb*`Ub =$0.0 SbbB*aU B  bb BSTotalSAN 2bb!bbb 2$418,126 2b!cbb 2$113,391 ;b*dUb ;$531,517 ;bb*eUb ;192.3 =bbb*fUbb =$2,764.0 QbB*gU B  bbb BQC.PET3 0b!hb 0 +!ib +Ј 'jU 'Ј ,bkU ,Ј =bb*lUb =Ј QbB*mU B  bb BQEquipmentLeaks 0b! nb 0$2,935,942 +! ob +$2,318,967 ' pU '$5,254,909 ,b qU ,4,071.61 =bb* rUb =$1290.6 QbB* sU B  bb BQMiscellaneousProcessVents 0b!tb 0$313,381 +!ub +$758,276 'vU '$1,071,657 ,bwU ,684.44 =bb*xUb =$1565.7 QbB*yU B  bb BQWastewaterSystems 0b!zb 0$5,749,586 +!{b +($9,653,905) '|U '($3,904,319) ,b}U ,12,621.23 =bb*~Ub =($309.3) QbB*U B  bb BQStorageTanks 0b!(b 0$64,678 +!(b +$157,724 '(U '$222,402 ,b(U ,113.33 =bb*(Ub =$1,962.42 SbbB*(U B  bb BSTotalPET 2bb!2bb 2$9,063,587 2b!2bb 2($6,418,938) ;b*2Ub ;$2,644,649 ;bb*2Ub ;17490.61 =bbb*2Ubb =$151.2 QbB*2U B  bbb BQD.0 u ABS2 :b+ LuAuAb :Ј 4*LUb 4Ј 'LU 'Ј ,bLU ,Ј =bb*LUb =Ј QbB*LU B  bb BQEquipmentLeaks 0b! Vb 0$168,089 4* VUb 4$69,607 ' VU '$237,695 ,b VU ,404.0 =bb* VUb =$588.4 QbB* VU B  bb BQMiscellaneousProcessVents 0b!!`b 0$1,712,377 4*!`Ub 4$1,779,934 '!`U '$3,492,311 ,b!`U ,330.3 =bb*!`Ub =$10,573.5 QbB*!`U B  bb BQWastewaterSystems 0b!"jb 0$0 4*"jUb 4$0 '"jU '$0 ,b"jU ,0.0 =bb*"jUb =$0.0 UbF."jU B   bb BUStorageTanks 0b! Bb 0$0 4* BUb 4$59,059 ' BU '$59,059 ,b BU ,4.2 =bb* BUb =$13,995.1 SbbB* BU B  bb BSTotalABS 2bb!" Lbb 2$1,880,465 ;b*" LUbb ;$1,908,600 ;b*" L Ub ;$3,789,065 ;bb*" L Ub ;738.5 =bbb*" L Ubb =$5,130.7 QbB*" L U B  bbb BQE.0 u MABS2 :b+ <f uAuAb :Ј 4*<fUb 4Ј '<fU 'Ј ,b<fU ,Ј =bb*<fUb =Ј QbB*<fU B  bb BQEquipmentLeaks 0b!Fpb 0$4,797 4*FpUb 4$0 'FpU '$4,797 ,bFpU ,2.5 =bb*FpUb =$1,918.8 QbB*FpU B  bb BQMiscellaneousProcessVents 0b!Pzb 0($79) 4*PzUb 4$0 'PzU '($79) ,bPzU ,38.0 =bb*PzUb =($2.1) QbB*PzU B  bb BQWastewaterSystems 0b!Zb 0$0 4*Z Ub 4$0 'Z!U '$0 ,bZ"U ,0.0 =bb*Z#Ub =$0.0 QbB*Z$U B  bb BQStorageTanks 0b!d%b 0$0 4*d&Ub 4$0 'd'U '$0 ,bd(U ,0.0 =bb*d)Ub =$0.0 SbbB*d*U B  bb BSTotalMABS 2bb!n+bb 2$4,718 ;b*n,Ubb ;$0 ;b*n-Ub ;$4,718 ;bb*n.Ub ;40.5 =bbb*n/Ubb =$116.6 QbB*n0U B  bbb BQF.0 u Polystyrene2 :b+ 1uAuAb :Ј 4*2Ub 4Ј '3U 'Ј ,b4U ,Ј =bb*5Ub =Ј QbB*6U B  bb BQEquipmentLeaks 0b! 7b 0$579,031 4* 8Ub 4$91,188 ' 9U '$670,218 ,b :U ,1,303.4 =bb* ;Ub =$514.2 QbB* <U B  bb BQMiscellaneousProcessVents 0b! =b 0($74,900) 4* >Ub 4($1,494) ' ?U '($76,394) ,b @U ,198.8 =bb* AUb =($384.3) QbB* BU B  bb BQWastewaterSystems 0b! Cb 0$0 4* DUb 4$0 ' EU '$0 ,b FU ,0.0 =bb* GUb =$0.0 QbB* HU B  bb BQStorageTanks 0b! Ib 0$0 4* JUb 4$0 ' KU '$0 ,b LU ,0.0 =bb* MUb =$0.0 QbB* NU B  bb BQTotalPolystyrene 0b! Ob 0$504,131 4* PUb 4$89,694 ' QU '$593,825 ,b RU ,1,502.2 =bb* SUb =$395.3 QbbB* TU B  bb RQG.0 u Nitrile2 :bb+ UuAuAbb :Ј 7b*VUbb 7Ј 7b*WUb 7Ј 9bb*XUb 9Ј =bbb*YUbb =Ј QbB*ZU R  bbb BQEquipmentLeaks 0b![b 0$6,164 4*\Ub 4$0 ']U '$6,164 ,b^U ,6.8 =bb*_Ub =$906.5 QbB*`U B  bb BQMiscellaneousProcessVents 0b!ab 0$767 4*bUb 4$0 'cU '$767 ,bdU ,3.4 =bb*eUb =$223.7 QbB*fU B  bb BQWastewaterSystems 0b!gb 0$0 4*hUb 4$0 'iU '$0 ,bjU ,0.0 =bb*kUb =$0.0 QbB*lU B  bb BQStorageTanks 0b!&mb 0$0 4*&nUb 4$0 '&oU '$0 ,b&pU ,0.0 =bb*&qUb =$0.0 SbbB*&rU B  bb BSTotalNitrile 2bb! 0sbb 2$6,931 ;b* 0tUbb ;$0 ;b* 0uUb ;$6,931 ;bb* 0vUb ;10.2 =bbb* 0wUbb =$677.5 Obba>* 0xU B  bbb JROTOTALFORREGULATORYALTERNATIVE 2bba!0!Zybba 2$12,249,084 ;ba*0!ZzUbba ;($3,880,686) ;ba*0!Z{Uba ;$8,368,398 ;ba*0!Z|Uba ;20,220.11 =bbab*0!Z}Uba =$413.9 PF*0!Z~U R0 J bbab BPЇ C"o "[>E~"oNOTE:0    1Costsreflectabsoluteregulatorycostsratherthanincrementalcosts. B// 0 u 0u/u/2AssumesregulatoryAlternative1ischosen. // 0 u 0u/u/3AssumesregulatoryAlternative2ischosen.Cs>M>E~"[ >M  1'%T ~// B  -  1"&`& "["b c    c]   b TRY3'P'3 3' Letter '3 Letter LandscapeT7"`"&&d"&&d7TheprogressionofstepsintheEIAprocessissummarizedinFigureES1.  G b b TRY3'b 4$0 'FpU '$4,797 ,b 3' Letter =$1,918.8 QbB*FpU B  bbTXd    TABLE 1VES2.SUMMARYOFGROUPIVNESHAPCAPITALCOSTSBYRESININDUSTRYANDEMISSIONPOINT 1V:1    *ef d.dtd tdRdd"ddtdEptt5_`(#(#,8( ,((,((,(8+  1ab" > D1 Aabb.ab ATotalCapitalCosts(1989Dollars) VbbE-"  D abb TVGroupIVIndustryandEmissionPoint ;b* bb ;ExistingSources ;b*  "b ;NewConstruction =bb*  "b =Total QbB* " T  bb ,TQA.0 H MBS 5+  BHzHzb 5Ј ' BU 'Ј 0b BU 0Ј QbB* BU T , b ,TQEquipmentLeaks +! pb +$174,426 ' pU '$157,174 0b pU 0$331,600 QbB* pU T , b ,TQMiscellaneousProcessVents +!N b +$93,204 'N U '$106,394 0bN U 0$199,598 QbB*N U T , b ,TQWastewaterSystems +!| b +$279,051 '| U '$279,051 0b| U 0$558,102 QbB*| U T , b ,TQStorageTanks +! b +$0 ' U '$0 0b !U 0$0 SbbB* "U T , b <TSTotalMBS 2b!( #bb 2$546,681 ;b*( $Ub ;$542,619 =bb*( %Ub =$1,089,300 QbB*( &U T < bb ,TQB.0 H SAN 5+ f'HzHzb 5Ј 'f(U 'Ј 0bf)U 0Ј QbB*f*U T , b ,TQEquipmentLeaks +!D+b +$504,790 'D,U '$0 0bD-U 0$504,790 QbB*D.U T , b ,TQMiscellaneousProcessVents +!r/b +$0 'r0U '$0 0br1U 0$0 QbB*r2U T , b ,TQWastewaterSystems +!3b +$579,252 '4U '$259,217 0b5U 0$838,469 QbB*6U T , b ,TQStorageTanks +!7b +$0 '8U '$0 0b9U 0$0 SbbB*:U T , b <TSTotalSAN 2b!L;bb 2$1,084,042 ;b*L<Ub ;$259,217 =bb*L=Ub =$1,343,259 QbB*L>U T < bb ,TQC.0 H PET 5+ :?HzHzb 5Ј ':@U 'Ј 0b:AU 0Ј QbB*:BU T , b ,TQEquipmentLeaks +!hCb +$6,076,491 'hDU '$4,876,206 0bhEU 0$10,952,697 QbB*hFU T , b ,TQMiscellaneousProcessVents +!Gb +$273,155 'HU '$442,362 0bIU 0$715,517 QbB*JU T , b ,TQWastewaterSystems +!Kb +$86,827,321 'LU '$0 0bMU 0$86,827,321 QbB*NU T , b ,TQStorageTanks +!BOb +$266,078 'BPU '$508,750 0bBQU 0$774,828 SbbB*BRU T , b <TSTotalPET 2b! pSbb 2$93,443,045 ;b* pTUb ;$5,827,318 =bb* pUUb =$99,270,363 QbB* pVU T < bb ,TQD.0 H ABS 5+ ^!WHzHzb 5Ј '^!XU 'Ј 0b^!YU 0Ј QbB*^!ZU T , b ,TQEquipmentLeaks +!"[b +$201,546 '"\U '$98,161 0b"]U 0$299,707 QbB*"^U T , b ,TQMiscellaneousProcessVents +!# _b +$4,004,211 '# `U '$3,419,086 0b# aU 0$7,423,297 QbB*# bU T , b ,TQWastewaterSystems +!$8 cb +$0 '$8 dU '$0 0b$8 eU 0$0 QbB*$8 fU T , b ,TQStorageTanks +!&f!gb +$0 '&f!hU '$172,276 0b&f!iU 0$172,276 SbbB*&f!jU T , b <TSTotalABS 2b!D'"kbb 2$4,205,757 ;b*D'"lUb ;$3,689,523 =bb*D'"mUb =$7,895,280 QbB*D'"nU T < bb ,TQE.0 H MABS 5+ (#oHzHzb 5Ј '(#pU 'Ј 0b(#qU 0Ј QbB*(#rU T , b ,TQEquipmentLeaks +!)%sb +$0 ')%tU '$0 0b)%uU 0$0 QbB*)%vU T , b ,TQMiscellaneousProcessVents +!*.&wb +$89,673 '*.&xU '$0 0b*.&yU 0$89,673 QbB**.&zU T , b ,TQWastewaterSystems +! ,\'{b +$0 ' ,\'|U '$0 0b ,\'}U 0$0 UbF. ,\'~U T , b ,TUStorageTanks +! Tb +$0 ' TU '$0 0b TU 0$0 SbbB* TU T , b <TSTotalMABS 2b!4 bb 2$89,673 ;b*4 Ub ;$0 =bb*4 Ub =$89,673 QbB*4 U T < bb ,TQF.0 H Polystyrene 5+ r  HzHzb 5Ј 'r  U 'Ј 0br  U 0Ј QbB*r  U T , b ,TQEquipmentLeaks +! b +$933,194 'U '$199,010 0bU 0$1,132,204 QbB*U T , b ,TQMiscellaneousProcessVents +!b +$243,527 'U '$2,045 0bU 0$245,572 QbB*U T , b ,TQWastewaterSystems +!Jb +$0 'JU '$0 0bJU 0$0 QbB*JU T , b ,TQStorageTanks +!*xb +$0 '*xU '$0 0b*xU 0$0 SbbB**xU T , b <TSTotalPolystyrene 2b!Xbb 2$1,176,721 ;b*XUb ;$201,055 =bb*XUb =$1,377,776 QbB*X U T < bb ,TQG.0 H Nitrile 5+  !HzHzb 5Ј ' "U 'Ј 0b #U 0Ј QbB* $U T , b ,TQEquipmentLeaks +! %b +$0 ' &U '$0 0b 'U 0$0 QbB* (U T , b ,TQMiscellaneousProcessVents +!@ )b +$8,770 '@ *U '$0 0b@ +U 0$8,770 QbB*@ ,U T , b ,TQWastewaterSystems +! n -b +$0 ' n .U '$0 0b n /U 0$0 QbB* n 0U T , b ,TQStorageTanks +!N1b +$0 'N2U '$0 0bN3U 0$0 SbbB*N4U T , b <TSTotalNitrile 2b!|5bb 2$8,770 ;b*|6Ub ;$0 =bb*|7Ub =$8,770 Kbba:*|8U T < bb lKTOTALFORREGULATORYALTERNATIVE 2ba!9bba 2$100,554,689 ;ba*:Uba ;$10,519,732 =bab*;Uba =$111,074,421 J@$<U l bab TJC"o&"&`>E~"oNOTE:0    1Costsreflectabsoluteregulatorycostsratherthanincrementalcosts.C!b>&&>E~"&`&&>&  1'%P>## T  -  1g  > gd  2YES1.0  ModelDevelopmentforEconomicImpactAnalysis 2Y (#(# H&  "&`&&"&`I&)&&"&`    ES.5  PRIMARYREGULATORYIMPACTSHtb   'I&)&&I&)"&`&&I&)    Primaryregulatoryimpactsincludeestimatedincreasesinthemarketequilibriumpriceofeachof d theGroupIVresins,decreasesinthemarketequilibriumdomesticoutputorproductionofeachresin,changesinthevalueofdomesticshipments,andfacilityclosures.Theanalysiswasconductedseparatelyforeachofthesevenaffectedindustrieswithoneexception.InsufficientdatawereavailabletoanalyzetheMABSindustryseparately.ForthisreasontheMABSimpactshavebeenincorporatedintotheABSanalysis.MABSproductionandcontrolcostsrepresentaverysmallportionoftheABSandMABStotals.Theprimaryregulatoryimpactsforeachaffectedindustry(MABSandABScombined)aresummarizedinTableES3.  AsshowninTableES3,theestimatedpriceincreasesforGroupIVresinsrangefromincreasesof$0.0003to$0.01,basedupon1989pricelevels.Thesepredictedpriceincreasesrepresentpercentageincreasesrangingfromalowof0.07percentfornitriletoahighof2.8percentforSAN.Domesticproductionwilldecreaseforeachoftheresinproductsby1.4millionkilogramsofMBS,3.8millionkilogramsofSAN,72.2millionkilogramsofPET,23.7millionkilogramsofABS/MABS,10.2millionkilogramsofpolystyrene,and0.028millionkilogramsofnitrileannually.Thisestimatedpercentagedecreaseinannualproductionforeachoftheresinsvariesfromalowof0.17percenttoahighof4.6percent.  Thepredictedchangeinthedollarvalueofdomesticshipments,orrevenuetoproducers,isexpectedtodecreaseforthesevenaffectedGroupIVresinindustries.AnnualrevenuesforMBSwilldeclineby$0.86million,forSANby$0.62million,forPETby$33.80million,forABS/MABSby$6.17million,forpolystyreneby$0.72million,andfornitrileby$.007millionannually.Theserevenuedecreaseestimatesarealsobasedupon1989pricelevels.  ~".   TABLE 1VES3.SUMMARYOFPRIMARYECONOMICIMPACTSOFPOLYMERSANDRESINSGROUPIVNESHAP 1V  *hi 9d.d8( (((((8ef(#(#,dd ,rdd,dd,dde,Fddb+  /a" > 8`/ 2a%a 2EstimatedImpacts4 VbE-" ` 8 a @VGroupIVIndustry 2bb!l b 2PriceIncreases1 ;bb*l  "bb ;ProductionDecreases2 ;bb*l "bb ;ValueofDomesticShipments3 ;bb*l "bb ;FacilityClosures LB*l " @  bb 0LMBS    Ј    Ј    Ј     ?5 " 0  0?ЀAmount    $0.009    (1.4)    ($0.86)    None ?5 " 0  0?ЀPercentage    1.0%     (2.8%)   ! (1.9%)   "  ?5 #" 0  0?   $ Ј   % Ј   & Ј   '  ?5 (" 0  0?SAN   ) Ј   * Ј   + Ј   ,  ?5 -" 0  0?ЀAmount   . $0.010   / (3.8)   0 ($0.62)   1 None ?5 2" 0  0?ЀPercentage   3 Ѐ2.8%   4 (4.6%)   5 Ѐ(1.9%)   6  ?5 7" 0  0?Ѐ  8 Ј  9 Ј  : Ј  ;  ?5<" 0  0?PET  &= Ј  &> Ј  &? Ј  &@  ?5&A" 0  0?ЀAmount  0B $0.006  0C (72.2)  0D ($33.80)  0E Five ?50F" 0  0?ЀPercentage  :G 0.9%  :H (2.4%)  :I (1.6%)  :J  ?5:K" 0  0?  DL Ј  DM Ј  DN Ј  DO  ?5DP" 0  0?ABS/MABS  NQ Ј  NR Ј  NS Ј  NT  ?5NU" 0  0?ЀAmount  XV $0.008  XW (23.7)  XX ($6.17)  XY None ?5XZ" 0  0?ЀPercentage  b[ 1.8%  b\ (4.1%)  b] (2.4%)  b^  ?5b_" 0  0?  l` Ј  la Ј  lb Ј  lc  ?5ld" 0  0?Polystyrene  &ve Ј  &vf Ј  &vg Ј  &vh  ?5&vi" 0  0?ЀAmount  0j $0.0008  0k (10.2)  0l ($0.72)  0m None ?50n" 0  0?ЀPercentage  :o 0.34%  :p (0.47%)  :q (0.13%)  :r  ?5:s" 0  0?  Dt Ј  Du Ј  Dv Ј  Dw  ?5Dx" 0  0?Nitrile  N y Ј  N z Ј  N { Ј  N |  ?5N }" 0  0?ЀAmount  X!~ $0.0003  X! (0.028)  X! ($0.007)  X! None Ba1X!" 0  80BЀPercentage 2a!b"a 20.07% 2a!b"a 2(0.17%) 2a!b"a 2(0.10%) 2a!b"a 2 PF*b"" 00 8 a 0PA"o&"&`>E~"oNOTES:0    1Pricesareshowninpriceperkilogram(1989dollars).v$~~ 0  0~~2Annualproductionquantitiesareshowninmillionsofkilograms.%d ~~ 0  0~~3Valuesofdomesticshipmentsareshowninmillionsof1989dollars.%!~~ 0  0~~4Bracketsindicatedecreasesornegativevalues.Au2 >&&>E~"&`&&>&  4*P&!~~ 4-#!#" 0   - <  "&`&&"&`6&Ș&&"&`K7 (08@K    &>"   NopredictedfacilityclosuresareanticipatedfortheMBS,SAN,ABS/MABS,polystyrene,ornitrileresinindustries.However,threepotentialclosuresareanticipatedforthePETindustry.Theseclosureswillnotlikelyresultinfirmclosuresbutmayresultinfacilityclosures.Totheextentthattheaffectedfacilitieshavethecapabilitytoproducealternativeproducts,thefacilitiesmayshiftproductiontoproductsotherthanPETinresponsetotheincurrenceofregulatorycostsratherthanshutdown.Closuredecisionswouldbebaseduponmanydecisionsincludingtheabilityandassociatedcostofswitchingtoproductionofanalternativeproduct.Thesefacilityclosuresarelikelytobeoverstatedforthefollowingreasons:90  "0(#(#  ThemodelassumesthatallPETfacilitiescompeteinanationalmarket.Inreality,some /  facilitiesmaybeprotectedbyregionalorlocaltradebarriers.929    (#(# 90  "0(#(#  Itisassumedthatthefacilitieswiththehighestcontrolcostperunitofproductionalsohavethe T highestbaselineproductioncosts.Thisisaworstcaseassumptionandmaynotbetrueineverycase.9Z:    (#(# 90  "0(#(#  Actualindividual1991PETproductiondatawereunavailableforseveralaffectedPET  p  facilities.Inlieuofthisinformation,capacitydataperfacilityfor1991wasusedtoestimatetheactualfacilityproductionbasedtheratiooftotalPETindustryproductiontototalPETindustrycapacity.Eachfacilitywasassumedtoproduceatthesamepercentageoftotalcapacityastheutilizationratethatoccurredattheindustrylevel.Theseproductionestimatesmaythereforedifferfromactual1991productionlevelsateachfacility.9;    (#(# 0  0(#(#Additionally,PETmeltphaseresinproductionwasexcludedfromannualproductionamountsbasedonthepremisethatPETmeltphaseresinisanintermediateproductwhichisusedintheproductionofotherPETproducts.IfPETmeltphaseresinisamarketablecommoditythatistradedinthemarketplace,thisassumptionwillbecorrectforindustrytotalsbutmaynotleadtoaccurateproductionestimatesforindividualfacilities.TheexclusionofPETmeltphaseresinproductionfromindividualfacilityproductiontotalsmayunderstateproductionestimatesforindividualfacilitiesandoverstatetheperunitcontrolcostsonafacilityspecificbasis. (#(#   +R&< H&   6&Ș&&6&ȘI&)&&6&Ș    ES.6  SECONDARYREGULATORYIMPACTSHBAone A   'RAI&)&&I&)6&Ș&&I&)    SecondaryimpactsofthePolymersandResinsGroupIVNESHAPincludepotentialeffectsofthe d regulationonthelabormarket,energyuse,foreigntrade,andregionalmarkets.Theeffectsonthelabormarket,energyuse,andbalanceoftradearesummarizedinTableES4.  LabormarketlossesresultingfromtheNESHAPareestimatedtobeapproximately85jobsforalloftheGroupIVresinindustriesintotal.ThisestimatereflectsthereductionsinjobspredictedtoresultfromtheanticipateddecreasesinannualproductionoftheseGroupIVresins.Noefforthasbeenmadetoestimatethenumberofjobsthatmaybecreatedasaresultoftheregulations,however,andasaresult,thisestimateofjoblossesislikelytobeoverstated.  Annualreductionsinenergyuseasaresultoftheregulationsareexpectedtoamounttoasavingsof$2.1million(1989dollars)annually.Netannualexportsarepredictedtodecreaseby$16million.Thisrepresentsapercentagedecreaserangingfromalowof0.84percentforthenitrileindustrytoahighof22.7percentfortheMBSindustry.  Regionaleffectsareexpectedtobeminimalsincethereisnospecificregionofthecountryinwhichfacilitieswillbeexperiencingadisproportionateburdenoftheregulatorycosts.H&  6&Ș&&6&ȘI&)&&6&Ș    ES.7  ECONOMICCOSTHGone gH b& 'b HI&)&&I&)6&Ș&&I&)    Airqualityregulationsaffectsociety'seconomicwellbeingbycausingareallocationofproductive f( resourcesintheeconomy.Resourcesareallocatedawayfromtheproductionofgoodsandservices(GroupIVresins)totheproductionofcleanerair.Economiccostsrepresentthetotalcosttosocietyassociatedwiththisreallocationofresources.  Theeconomiccostsofregulationincorporatecostsbornebyallofsocietyforpollutionabatement.Thesocial,oreconomic,costsreflecttheopportunitycostofresourcesused  &"4   TABLE 1VES4.SUMMARYOFSECONDARYECONOMICIMPACTSOFPOLYMERSANDRESINSGROUPIVNESHAP 1VK  *jk d9ddd rddddddeFddbhi(#(#,M dd ,?dd,ddU,ddu+  /a" > \/ 2a%a 2EstimatedImpacts1 RbA-" \ a LRGroupIVIndustry ;bb* Pb ;LaborInput2 ;bb* P"bb ;EnergyInput3 ;bb* P"bb ;ForeignTrade4 LB* P " d L bb ,TLMBS  >   Ј '>  U 'Ј '>  U 'Ј ?5>  U T , ,T?ЀAmount  l  (2) 'l U '($0.04) 'l U '(0.22) ?5l U T , ,T?ЀPercentage    (2.8%) ' U '(2.85%) ' U '(22.7%) ?5 U T , ,T?     Ј '  U 'Ј '  U 'Ј ?5  U T , ,T?SAN  F  Ј 'F U 'Ј 'F U 'Ј ?5F U T , ,T?ЀAmount  $t  (2) '$t U '($0.05) '$t U '(0.98) ?5$t !U T , ,T?ЀPercentage  R " (4.6%) 'R #U '(2.5%) 'R $U '(5.7%) ?5R %U T , ,T?   & Ј ' 'U 'Ј ' (U 'Ј ?5 )U T , ,T?PET  * Ј '+U 'Ј ',U 'Ј ?5-U T , ,T?ЀAmount  ,. (65) ',/U '($1.61) ',0U '(6.3) ?5,1U T , ,T?ЀPercentage   Z2 (2.4%) ' Z3U '(1.1%) ' Z4U '(4.4%) ?5 Z5U T , ,T?  86 Ј '87U 'Ј '88U 'Ј ?589U T , ,T?ABS/MABS  f: Ј 'f;U 'Ј 'f<U 'Ј ?5f=U T , ,T?ЀAmount  > (13) '?U '($0.32) '@U '(7.0) ?5AU T , ,T?ЀPercentage  B (4.1%) 'CU '(1.93%) 'DU '(19.2%) ?5EU T , ,T?  @F Ј '@GU 'Ј '@HU 'Ј ?5@IU T , ,T?Polystyrene  nJ Ј 'nKU 'Ј 'nLU 'Ј ?5nMU T , ,T?ЀAmount  LN (3) 'LOU '($0.079) 'LPU '(1.17) ?5LQU T , ,T?ЀPercentage  zR (0.47%) 'zSU '(0.21%) 'zTU '(0.87%) ?5zUU T , ,T?   V Ј ' WU 'Ј ' XU 'Ј ?5 YU T , ,T?Nitrile  !&Z Ј '!&[U 'Ј '!&\U 'Ј ?5!&]U T , ,T?ЀAmount  #T^ (0.015) '#T_U '($0.0004) '#T`U '(0.008) Ba1#TaU T , \TBЀPercentage 2a!2$ba 2(0.17%) ;a*2$cUa ;(0.18%) ;a*2$dUa ;(0.84%) PF*2$eU T0 \ a TPA6&6&Ș>E~6NOTES:0    1Bracketsindicatedecreasesornegativevalues.j&!g"" 0 t 0t"t"2Indicatesestimatedreductioninnumberofjobs.'X"h"" 0 t 0t"t"3Reductioninenergyuseinmillionsof1989dollars.'"i"" 0 t 0t"t"4Reductioninnetexports(exportslessimports)inmillionsofkilograms.A`*>&&>E~6&Ș&&>&  1'%D(#j"" T    1  (2$j aforemissioncontrol.Consumers,producers,andallofsocietybearthecostsofpollutioncontrolsintheformofhigherprices,lowerquantitiesproduced,andpossibletaxrevenuesthatmaybegainedorlost.Annualeconomiccostsof$9.8million($1989)forexistingsourcecontrolsareanticipatedforthechosenalternativeandareshownbyindustryinTableES5.Economiccostsareamoreaccurateestimateofthecostoftheregulationtosocietythanthecostofemissioncontrolstothedirectlyaffectedindustry.Thesumofeconomiccostsforexistingsourcescombinedwiththeengineeringestimatesofnewsourceannualcostsis$5.9million(1989$),andrepresentsanestimateoftheeconomiccostoftheregulationfiveyearsafterpromulgationoftheregulation.  TABLE 1VES5.ANNUALECONOMICCOSTESTIMATESFORTHEPOLYMERSANDRESINSGROUPIVREGULATIONBASEDONEXISTINGSOURCECOSTS 1Vf1  Y  (1989Dollars)  *lm ddM dd ?ddddUddujk(#(#,(( ,((,((,(((,((+  3ab"  3GroupIVIndustry 2ab!ab 2ChangeinConsumerSurplus ;ab*"ab ;ChangeinProducerSurplus ;ab*"ab ;ChangeinResidualSurplus ;ab*""ab ;TotalLossInSurplus LB*%"   ab ,TLMBS   ]& ($437,482) ' ]'U '$43,232 ' ](U '$23,279 ' ])U '($370,971) ?5 ]*U T , ,T?SAN  ;+ ($681,344) ';,U '$286,402 ';-U '$206,606 ';.U '($188,336) ?5;/U T , ,T?PET  i0 ($17,543,692) 'i1U '$10,084,464 'i2U '$0 'i3U '($7,459,228) ?5i4U T , ,T?ABS/MABS  5 ($1,796,680) '6U '$94,334 '7U '$232,852 '8U '($1,469,494) ?59U T , ,T?Polystyrene  : ($1,732,072) ';U '$884,124 '<U '$515,993 '=U '($331,955) ?5>U T , ,T?Nitrile  C? ($4,726) 'C@U '($1,429) 'CAU '($319) 'CBU '($6,474) Ba1CCU T , \TBTOTAL 2a!!qDa 2($22,195,996) ;a*!qEUa ;$11,391,127 ;a*!qFUa ;$978,411 ;a*!qGUa ;($9,826,458) PF*!qHU T0 \ a TPC6&6&Ș>E~6NOTE:0    1Bracketsindicateeconomiccosts.Cr*>&&>E~6&Ș&&>&  1'%Y J## T    1H&  6&Ș&&6&ȘI&)&&6&Ș    ES.8  POTENTIALSMALLBUSINESSIMPACTSHVs* s #hM '#fsI&)&&I&)6&Ș&&I&)    TheRFArequiresthatadeterminationmustbemadeastowhetherornotthesubjectregulation $ O wouldhaveasignificanteconomicimpactonasubstantialnumberofsmallentities.ThemajorityofaffectedGroupIVfirmsarelargechemicalcompanies,and,consequently,significantsmallbusinessimpactsarenotexpectedtoresultfromimplementationofthePolymersandResinsGroupIVNESHAP.Basedonavailableemploymentdataforeachoftheaffectedfirms,onlytwofirmsclassifyassmallbusinesses.CostsexpressedasapercentageofsalesforthesefirmsdonotindicatethattheNESHAP /+&Y willresultinadverseeconomicimpacts.   n[-     6?&6&Ș.=h6?    1.0INTRODUCTIONANDSUMMARYOFCHOSENREGULATORYALTERNATIVE-w* ^x  .&)&.=h6&Ș&&.&)  H&  6&Ș&&6&ȘI&)&&6&Ș    1.1  INTRODUCTIONHby* y F  'FryI&)&&I&)6&Ș&&I&)    Section112oftheCAAcontainsalistofHAPsforwhichEPAhaspublishedalistofsource J  categoriesthatmustberegulated.EPAisevaluatingalternativeNESHAPsforcontrollingHAPemissionsoccurringasaresultoftheproductionofMBS,SAN,PET,ABS,MABS,polystyrene,ornitrileresins.ThesesevenindustriesarecategorizedwithinthePolymersandResinsGroupIVsourcecategory,andwillbecollectivelyreferredtoasGroupIVresinsthroughoutthisreport.Thisreportevaluatestheeconomicimpactofonestandardontheseaffectedindustries.ThisanalysiswasconductedtosatisfytherequirementsofSection317oftheCAAwhichrequiresEPAtoevaluateregulatoryalternativesthroughanEIA.  ThischapterpresentsadiscussionoftheNESHAPalternativeunderanalysisinthisreport.Chapter2ofthisreportisacompilationofeconomicandfinancialdataonthesevenaffectedGroupIVindustriesincludedinthisanalysis.Chapter2alsopresentsanidentificationofaffectedresinfacilities,acharacterizationofmarketstructure,separatediscussionsofthefactorsthataffectsupplyanddemand,adiscussionofforeigntrade,afinancialprofile,andthequantitativedatainputsfortheEIAmodel.Chapter3outlinestheeconomicmethodologyusedinthisanalysis,thestructureofthemarketmodel,andtheprocessusedtoestimateindustrysupplyanddemandelasticities.  Chapter4presentsthecontrolcostsusedinthemodel,theestimatedemissionreductionsexpectedasaresultofregulation,andthecosteffectivenessoftheregulatoryoption.Alsoincludedisaquantitativeestimateofeconomiccostsandaqualitativediscussionofconceptualissuesassociatedwiththeestimationofeconomiccostsofemissioncontrols.Chapter5presentstheestimatesoftheprimaryimpactsdeterminedbythemodel,whichincludeestimatesofpostNESHAPprice,output,andvalueof +'0 domesticshipmentsineachofthesevenaffectedindustries.Acapitalavailabilityanalysisisalsoincludedinthischapteraswellasadiscussionofthelimitationsofthemodel.Chapter6presentsthesecondaryeconomicimpacts,whicharetheestimatedquantitativeimpactsonlaborinputs,energyuse,balanceoftrade,andregionalmarkets.Lastly,Chapter7specificallyaddressesthepotentialimpactsofregulationonsmallaffectedfirms.AppendixApresentstheresultsofsensitivityanalysesconductedtoquantifytheextenttowhichthepriceelasticitiesofdemandandsupplyaffecttheresultsofthemodel.AppendixBisanevaluationofthePETindustryusinganalternativemodelbasedontheassumptionthatallPETfacilitiesincurequalperunitcontrolcosts.H&  6&Ș&&6&ȘI&)&&6&Ș    1.2  SUMMARYOFCHOSENREGULATORYALTERNATIVEHthe  /  '/I&)&&I&)6&Ș&&I&)    TheCAAstipulatesthatHAPemissionstandardsforexistingsourcesmustatleastmatchthe 3  percentagereductionofHAPsachievedbyeither:(1)thebestperforming12percentofexistingsources,or(2)thebest5sourcesinacategoryorsubcategoryconsistingoffewerthan30sources.Fornewsources,theCAAstipulatesthat,ataminimum,theemissionstandardmustbesetatthehighestlevelofcontrolachievedbyanysimilarsource.ThisminimumlevelofcontrolforbothexistingandnewsourcesisreferredtoastheMACTfloor.  AsourcewithinaGroupIVresinfacilityisdefinedasthecollectionofemissionpointsinHAPemittingproductionprocesseswithinthesourcecategory.Thesourcecomprisesseveralemissionpoints.AnemissionpointisapieceofequipmentorcomponentofproductionthatproducesHAPs.ThedefinitionofsourceisanimportantelementofthisNESHAPbecauseitdescribesthespecificgroupingofemissionpointswithinthesourcecategorytowhichthisstandardapplies.TheNESHAPconsideredinthisEIArequirescontrolsonthefollowingemissionpointsinGroupIVresinproducingfacilities:storagetanks,equipmentleaks,miscellaneousprocessvents,andwastewatercollectionandtreatmentsystems.EPAchoseoneregulatoryalternativeforeachofthesevenregulatedindustries,andthisreportpresentstheresultsofthedetailedeconomicimpactanalyseswhichwerecompletedforeachoftheaffectedindustries.  EPAprovidedcostestimatesforcontrolsdeemedappropriateasoptionsforGroupIVresinproducingprocessesatexistingfacilities.CostsfornewfacilitieswereprovidedfortheMBS,SAN,PET,ABS,andpolystyreneindustries.Costsrepresenttheimpactofbringingeachfacilityfromexisting o+&< controllevelstothecontrolleveldefinedbyeachregulatoryalternativeforeachemissionpoint.TheGroupIVregulatoryalternativereflectstheapplicationofthe 3#HazardousOrganicNESHAP(HON 3#)ruleandtheBatchProcess 3#ControlTechniqueGuideline(CTG 3#D),whereapplicable.TheprovisionsofthesingleregulatoryalternativedevelopedforstoragetanksandwastewaterstreamsareequivalenttothoserequiredbyPart63,SubpartGoftheHONrule.ThelevelsofcontrolforequipmentleaksareidenticaltotheapplicationoftherequirementsofPart63,SubpartHoftheHONruletoallcomponentsinHAPservice.1TheprocessventprovisionsalsoresembletheHONwiththeexceptionofprovisionsforsome Z   vents.Forprocessventsthatoperatelessthan500hoursperyear,theregulatoryalternativeisbasedonEPA'sdraftCTGforBatchProcesses.Ineithersituation,theapplicabilityofcontrolrequirementsisbasedonventstreamcharacteristics.  ForPETprocesses,costswereprovidedfornewandexistingfacilitiesfortworegulatoryalternatives.RegulatoryAlternative1representstheapplicationoftheHONruleandtheBatchCTG,whereapplicable.RegulatoryAlternative2isthesameasAlternative1,withtheadditionofdeterminingwhetherthewaterleavingtheejectorsystemsbeforegoingtothecoolingtowerissubjecttotheHONwastewaterprovisions.2Theresultsoftheeconomicanalysispresentedinthisreportarebasedonthe ) costestimatesprovidedforAlternative2.  g"  @REFERENCES   1.0  U.S.EnvironmentalProtectionAgency.RegulatoryAlternativeBriefingPackageonthePolymers > &ResinsGroupIVIndustry.ReceivedfromJohnL.Sorrels,EIB.ResearchTrianglePark,NC.September14,1994. (#(# 2.0  Meardon,Kenneth.PacificEnvironmentalServices.LettertoLesEvans.U.S.Environmental   ProtectionAgency.RevisedCostsSummaryforMBS,SAN,andPETProcesses.ResearchTrianglePark,NC.July14,1994. Z  (#(# -     6?&6&Ș.=h6?    2.0INDUSTRYPROFILE-Ethe      .&)&.=h6&Ș&&.&)  H&  6&Ș&&6&ȘI&)&&6&Ș    2.1  INTRODUCTIONHܘthe H B  'BI&)&&I&)6&Ș&&I&)    ThischapterfocusesonthemarketsforGroupIVresins.Sections2.2through2.6ofthischapter F  provideanoverviewoftheactivitiesofthesesevenaffectedindustries.TheeconomicandfinancialinformationinthischaptercharacterizestheconditionsintheseindustrieswhicharelikelytodeterminethenatureofeconomicimpactsassociatedwiththeimplementationoftheNESHAP.Thequantitativedatacontainedinthischapterrepresenttheinputstotheeconomicmodel(presentedinChapter3)thatwereusedtoconducttheEIA.ThegeneraloutlookfortheGroupIVindustriesisalsodiscussedinthischapter.  Section2.2describestheresinproductionprocess,andidentifiestheuniquemarketcharacteristicsofeachresin.Section2.2alsoidentifiestheaffectedresinfacilitiesbyindustrylocationandproductioncapacity.Section2.3characterizesthestructureoftheaffectedindustriesintermsofmarketconcentrationandfirmintegration.AlsoincludedinSection2.3isafinancialprofileofaffectedfirms.Section2.4characterizesthesupplysideofthemarketbasedonproductiontrends,supplydeterminants,andexportlevels.Section2.5presentsdemandsidecharacteristics,includingendusemarkets,consumptiontrends,andimportlevels.Lastly,Section2.6presentsquantitativeestimatesofforecastsforgrowthineachindustry.H&  6&Ș&&6&ȘI&)&&6&Ș    2.2  PROFILEOFAFFECTEDFIRMSANDFACILITIESH $ % ' '%ȟI&)&&I&)6&Ș&&I&)    Thissectionreviewstheproductsandprocessesoftheaffectedresinindustriesandidentifiesany a'") differencesamongproductmarkets.Theaffectedfirmsareidentifiedbycapacity,employment,andlocationoffacilities.(Inthisreport,thetermfirmreferstothecompanyorproducer,whilethetermfacilityreferstotheactualresinproductionsiteorplant.) 6+&/ Ї+&  6&Ș&&6&Ș,& &&6&Ș    2.2.1  GeneralProcessDescription+Ţ 1  'բ,& &&,& 6&Ș&&,&     Plasticsproductioninvolvesusinghydrocarbonslargemoleculesderivedfrompetroleumand d naturalgas(andtosomeextent,coal)whichareseparatedthroughrefiningandcracking.Theresultantsmallercompoundsaremonomers,whichareusedtoproduceplastics.Polymerizationistheprocessoflinkingthesemonomersinaseriestoproducelongchainmoleculescalledpolymersusingmoderateamountsofheat,pressure,catalysts,andreactiveagents.Theresultantbasicplasticmaterials,knownasresins,aresoldbymanufacturersintheformofpellets,flakes,powder,orgranules.1The    resinsareusedasinputformanydiverseplasticproducts,includingfoodcontainers,appliances,constructionmaterials,andautomobileparts.+&  6&Ș&&6&Ș,& &&6&Ș    2.2.2  ProductDescription+I  3  'Y,& &&,& 6&Ș&&,&     TheaffectedGroupIVresinsareclassifiedasthermoplasticresins,andhaveavarietyofenduses.  Thissectiondescribesthepropertiesofeachresinindividuallyandidentifiesitsprimaryuses./6&Ș&&6&Ș,& &&6&Ș     2.2.2.1  MethylMethacrylateAcrylonitrileButadieneStyrene(MBS)/ .,& &&,& 6&Ș&&,&   MBSisatypeofstyrene l butadienecopolymerthatischaracterizedbyhighimpactstrengthandtransparency.Althoughhigherinpricethanmanyothercommonmonomers,theuseofmethacrylateincludesinputsintoproductsdemandinguniquestabilitycharacteristics,easeofuse,andhighqualitystandards.MBSpolymersareusefulasanimpactmodifierforrigidPVC,which,inturn,isusedintheproductionofpackaging,building,andconstructionproducts./6&Ș&&6&Ș,& &&6&Ș     2.2.2.2  StyreneAcrylonitrile(SAN)/ .,& &&,& 6&Ș&&,&   SANcopolymersaretransparent,amorphousmaterialswith ] * higherheatandchemicalresistancethanpolystyrene.Becauseofitsbrittleness,SANhasbeenmodifiedindifferentwaystoformthermoplasticswithgreaterimpactstrength.Intermsofendusemarkets,SANresinsaremostcommonlyusedinconsumerproducts,includingdishwashersafehousewaresandrefrigeratorshelves.SAN'sprimaryuse,however,isasaninputforABSproduction,whichisthenusedtoprovideweatherresistanceforapplicationsincludingboats,swimmingpools,andrecreationalvehicles./6&Ș&&6&Ș,& &&6&Ș     2.2.2.3  PolyethyleneTerephthalate(PET)/ ].,& &&,& 6&Ș&&,&   Atypeofthermoplasticpolyester,PETisahigh *%: meltingpointpolymerthatisclear,tough,andhasgoodgasandmoisturebarrierproperties.PETis +,'< producedinfourbasicformsthatincludePETbottlegraderesins,PETmeltphaseresins,PETfilms,andPET(polyester)fibers.  PETbottlegraderesins,themostfrequentlyusedform,isasaninputtotheproductionofsoftdrinkandliquorbottles.Inadditiontoitslightweight,theadvantageousqualitiesofPETincludebarrierproperties,impactstrength,andclarity,whichpromoteditspenetrationintothemarketsforcontainerapplicationsotherthanitsoriginaluseassoftdrinkbottles.PEThasbecometheresinofchoiceforsoftdrinkbottles.TheinitialbenefittousingPETintheproductionofbeveragebottlesisthatcomparedtoglass,steel,andaluminum,theweightofthebottleissignificantlylower.Becauseofthisweightreduction,bottlersrealizelowerlaborandenergycoststhroughoutthedistributionchain.Insheetform,PETfilm,whichismanufacturedwithPETmeltphaseresin,isahighercostspecialtyfilm,ascomparedtolowcostfilmsmadefromPVC,polyethylene,andpolyester.PETfilm'sprimaryendusesareinphotographicandmagneticfilm,aswellasinpackagingandelectronicproducts.  AthirdformofPETismeltphaseresinthatisusedintheproductionoftwoPETtypes:PETfilmandpolyesterfibers,andindirectlyasaninputtoproductionofthesolidstateresinsusedtomanufacturePETbottles.ThefourthformofPETisafiberformknownaspolyesterfibers,whichareusedinthemanufactureofclothing,furniture,carpets,andotherindustrialuses./6&Ș&&6&Ș,& &&6&Ș     2.2.2.4  AcrylonitrileButadieneStyrene(ABS)/ M.,& &&,& 6&Ș&&,&   ABSmaterialsarecomposedofacrylonitrile, E& butadiene,andstyrenecombinedbyavarietyofmethods,includingcopolymerizationandphysicalblending.ABSisformedbyblendingSANwithSANgraftedrubber.Whenblendedwiththispolybutadienerubbercomponent,SAN(whichisrigidandchemicallyresistant)createsABS(whichisopaque).Blendingstyrenewithpolybutadienerubberincreasesimpactresistanceand,combinedwithacrylonitrile,producesheatresistantandsolventresistantplasticswhichhaveextensiveuses.ThefavorablecharacteristicsofABSpolymersincludetoughness,dimensionalstability,chemicalresistance,electricalinsulatingproperties,andeaseoffabrication.2TherangeofapplicationsforABSplasticsis %6!4 broad,giventhatABSmeetsthepropertyrequirementsformanyplasticpartsatarelativelylowperunitprice.PrimaryendusesofABSareforthemanufactureofautomotiveparts,householdappliances,andfoodpackaging./6&Ș&&6&Ș,& &&6&Ș     2.2.2.5  MethylMethacrylateAcrylonitrileButadieneStyrene(MABS)/ h.,& &&,& 6&Ș&&,&   LikeMBS,MABSresins I,'> arecharacterizedbystrengthandtransparency,andaremoreexpensivethanmanyothercommonmonomers.MABSisformedfromABSblendedwithmethylmethacrylatewhichmakesaclearABScapableofusessimilartothoselistedforABS.MABSpolymersareutilizedbytheplasticsindustryinapplicationswhichrequireatough,transparent,highlyimpactresistant,andformablematerial.Withtheexceptionofbeingtransparent,MABSpolymersaresimilartoopaqueABSplastics,andareprimarilyusedintheproductionofbothfoodandnonfoodcontainers.Theprimaryenduseisinpackagingforitemssuchascups,lids,trays,andclamshellsforthefastfoodindustry.3 Z   /6&Ș&&6&Ș,& &&6&Ș     2.2.2.6  Polystyrene/.ofb .,& &&,& 6&Ș&&,&   Polystyreneresinsarederivedfrompetroleumbyproductsandnaturalgas, 8  andarelowcostresinswitheasyprocessability.Polystyreneischaracterizedbybrittleness,opticalclarity,andpoorbarrierpropertiestooxygenandwater.4Differentiationintheproductionofpolystyrene v  existsthroughvariationsofimpactstrengthandchemicalresistance.Inliquidform,polystyrenecanbeeasilyfabricatedintousefularticles,whichaccountsforthehighvolumewithwhichitisusedinworldcommerce.Usesofthepolystyrenepolymerincludethemanufactureofdurablegoods,suchastelevisioncabinets,appliances,furniture,andbuildinginsulationboard.Polystyrene'smostcommonuseisforthemanufactureoffoamusedinfoodtrays,meattraysandeggcartons,aswellasinpackagingforelectronicsandotherdelicateitems./6&Ș&&6&Ș,& &&6&Ș     2.2.2.7  NitrileResins/ofb .,& &&,& 6&Ș&&,&   Nitrileresins,alsoreferredtoasacrylonitrilecopolymerresins,offera $ broadbalanceoflowtemperature,oil,fuel,andsolventresistanceduetotheiracrylonitrilecontent.Thesecharacteristics,combinedwiththeirgoodabrasionandwaterresistantqualities,makethemsuitableforuseinawidevarietyofapplicationswithheatresistantrequirements.Differenttypesofnitrileresinsareproducedbyvaryingtheproportionofacrylonitrileintheblend.Themajorityofnitrileelastomersproducedarecopolymersofacrylonitrileandbutadiene.Theprimaryuseofnitrileelastomersisinthemanufactureofnitrilerubbers,which,inturn,areusedtoproducecomponentsforautomobiles.+&  6&Ș&&6&Ș,& &&6&Ș    2.2.3  AffectedResinFacilities,Employment,andLocation+ofb  -'}"6 '-',& &&,& 6&Ș&&,&     TheNESHAPwillaffect75facilities,whichareownedandoperatedby28firms.Table21shows (1$8 therelativesizesofthethreeMBSproducers.Thepercentageofindustrycapacityownedbyythesethreefirmsisfairlyevenlydivided.KanekaTexas,RohmandHaas,andElfAtochemeachown o+&< approximatelyonethirdofdomesticMBScapacity.Table22showsthedistributionofoperatingcapacityamongtheproducersofSAN.BecausecapacityinformationwasnotavailableforthreeSANfacilities,thecapacityisbasedontheaveragefacilitycapacity,giventotalindustrySANproductioncapacity.GeneralElectricownsapproximatelyhalfofdomesticSANproductioncapacity,followedbyMonsantoChemical,whichowns38percentoftheindustrycapacity.DowChemicalowns13percentofthetotal.ItisimportanttonotethatallABSresinproducershaveSANresinproductioncapacity.TheSANresinproducedbythesefirms,however,isnormallyusedforthemanufactureofABSresins.ThesecompaniesactuallysellrelativelysmallquantitiesofSANresinonthemerchantmarket.  ThecapacityforproducingPETmeltphaseresinandPETbottlesarepresentedinTable23.HoechstCelaneseCorporationownsthehighestshareofmeltphasecapacitywith26.4percent,andDuPontowns26.1percentoftheindustrytotal.KodakistheothermajorPETmeltphaseresinproducerwith22percentofcapacity.TheremainderofPETmeltphasecapacityissharedby6firms.KodakdominatesthePETbottlemarketwith52.6percentofindustrycapacity,followedbyGoodyearTire&Rubberwith28.4percentofindustrycapacity.AsshowninTable24,thecapacityforproducingPETfilmissharedbyninefirms. 3#E.I.duPontdeNemours(DuPont 3#)ownsthehighestdegreeofproductioncapacitywith28.9percentofthetotal.ThesecondlargestPETfilmproducersareICIAmericanHoldingsandBridgestone,eachwith15percentofindustrycapacity.DuPontalsoownsthehighestpercentageofindustrycapacityforPETfibersat34.4percent,andhasthesecondhighestshareofPETmeltphaseresincapacity.  E& @ TABLE 1V21.MBSMANUFACTURERSBYCAPACITY(1991) 1V5,6,7  *pq d d(( (((((((((lm(#(#,q 44,144B,O44B,44+  3ab" d @3Company ;ab* \ab ;FacilityLocation ;ab*6"ab ;Capacity(millionkilograms) ;ab*"ab ;PercentageofTotal(%) LB*6 "  @ ab @xL6A &6&Ș"[  6AKanekaTexasCorporation '" r  'Pasadena,TX '" r  '23 '" r " '35.9% ?5" r" x @ @x?ElfAtochem 'b  'Mobile,AL 'b  '18 'b " '28.2% ?5b " x @ @x?RohmandHaasCompany '  'Louisville,KY '  '23 ' " '35.9% Ba1 " x @ pxBTotal ;a* 2 a ; ;a* 2 "a ;64 ;a* 2 "a ;:0. 2  x0 p  a :"&`& "["ionofbei&ionofbei"ionofbei@ TABLE 1V22.SANMANUFACTURERSBYCAPACITY(1991) 1VV5,6,7 h  *rs ddq 44144BO44B44pq(#(#,d 44,>44p,O44e,445+  3ab" l @3Company ;ab* ab ;FacilityLocation ;ab*"ab ;Capacity(millionkilograms) ;ab*x%"ab ;PercentageofTotal(%) LB*'"  @ ab @xL"[ &"&`"ionofbeiDowChemical '*( 'Midland,MI '*) '30 '**" '12% ?5*+" x @ @x?GeneralElectricJointVenture 'j, 'BaySt.Louis,MS 'j- '59* 'j." '25% ?5j/" x @ @x?GeneralElectric 'Z0 'Selkirk,NY 'Z1 '59* 'Z2" '25% ?5Z3" x @ @x?MonsantoChemical '4 'Muscatine,IA '5 '59* '6" '25% ?57" x @ @x?MonsantoChemical '*8 'Addyston,OH '*9 '32 '*:" '13% Ba1*;" x @ pxBTotal ;a*j<a ; ;a*j=a ;239 ;a*j>"a ;100% PF*j?" x0 p a xPA"o "[>E~"oNOTES:0    *Indicatesthatcapacityreflectsanaveragecapacitybasedontotalindustrycapacity.A>M>E~"[ >M  :0.RA"" x    :"&`& "["?5  @A    ? TRP'3Y3' '3 Letter Landscape 3' LetterTX  TABLE 1V23.PETMELTPHASERESINANDPETBOTTLEMANUFACTURERSBYCAPACITY 1Vf  (MILLIONKILOGRAMS)(1991)5,6,7 ^   *tu ddd 44>44pO44e445rs.., 44,T44,S445,Z4DU,d44E,L44%+  3ab"  N3Company ;ab*`ab ;FacilityLocation ;ab*`ab ;MeltPhaseResin =abb*:"ab =PercentageofTotal(%) ;ab*: "abb ;PETBottle ;ab*: "ab ;PercentageofTotal(%) SbB*: " N  ab S"[ &"&`"?5AlliedSignalInc. ;b*Bb ;Moncure,NC ;b*Bb ;63 =bb*BUb =2.1% ;b*BUbb ;Ј ;b*BUb ;Ј SbB*BU  b SBASF ;b*8 b ;Lowland,TN ;b*8 b ;68 =bb*8 Ub =2.2% ;b*8 Ubb ;Ј ;b*8 Ub ;Ј LB*8 U  b LDuPont* '.  'Brevard,NC '.  '113 0b. U 0Ј 4*. Ub 4Ј '. U 'Ј ?5. U  ? '   'CapeFear,NC ' ! '113 0b "U 0Ј 4* #Ub 4Ј ' $U 'Ј ?5 %U  ? ' v& 'Circleville,OH ' v' '113 0b v(U 0Ј 4* v)Ub 4Ј ' v*U 'Ј ?5 v+U  ? ' \ , 'CooperRiver,SC ' \ - '113 0b \ .U 0Ј 4* \ /Ub 4Ј ' \ 0U 'Ј ?5 \ 1U  ? ' B 2 'Florence,SC ' B 3 '113 0b B 4U 0Ј 4* B 5Ub 4Ј ' B 6U 'Ј ?5 B 7U  ? '( 8 'Kinston,NC '( 9 '113 0b( :U 0Ј 4*( ;Ub 4Ј '( <U 'Ј ?5( =U  ? ' > 'OldHickory,TN ' ? '113 0b @U 0Ј 4* AUb 4Ј ' BU 'Ј Fb5 CU  FDUPONTTOTAL ;b*x Db ; ;b*x Eb ;Ј =bb*x FUb =26.1% ;b*x GUbb ;Ј ;b*x HUb ;Ј LB*x IU  b LEastmanKodak 'n J 'Columbia,SC 'n K '451 0bn LU 0Ј 4*n MUb 4342 'n NU 'Ј ?5n OU  ? 'TP 'Kingsport,TN 'TQ '193 0bTRU 0Ј 4*TSUb 4147 'TTU 'Ј ?5TUU  ? ':V 'Rochester,NY ':W '23 0b:XU 0Ј 4*:YUb 4Ј ':ZU 'Ј Fb5:[U  FKODAKTOTAL ;b* \b ; ;b* ]b ;Ј =bb* ^Ub =22.0% ;b* _Ubb ;Ј ;b* `Ub ;52.6% SbB*dbU   b SGoodyearTire&Rubber(Shell) ;b*Zcb ;PointPleasant,WV ;b*Zdb ;204 =bb*ZeUb =6.7% ;b*ZfUbb ;263 ;b*ZgUb ;28.4% LB*"iU   b LHoechstCelaneseCorp.** 'j 'Salisbury,NC 'k '201 0blU 0Ј 4*mUb 4Ј 'nU 'Ј ?5oU  ? 'p 'Shelby,NC 'q '201 0brU 0Ј 4*sUb 4Ј 'tU 'Ј ?5uU  ? 'hv 'Spartanburg,SC 'hw '201 0bhxU 0Ј 4*hyUb 4100 'hzU 'Ј ?5h{U  ? 'N| 'Greer,SC 'N} '201 0bN~U 0Ј 4*NUb 4Ј 'NU 'Ј Fb5NU  FHOECHSTCELANESETOTAL ;b*4b ; ;b*4b ;Ј =bb*4Ub =26.4% ;b*4Ubb ;Ј ;b*4Ub ;13.2% LB*xU   b LICIAmericas 'n 'Fayetteville,NC 'n '84 0bnU 0Ј 4*nUb 454 'nU 'Ј ?5nU  ? 'T 'Hopewell,VA 'T '27 0bTU 0Ј 4*TUb 4Ј 'TU 'Ј Fb5TU  FICIAMERICASTOTAL ;b*:b ; ;b*:b ;Ј =bb*:Ub =3.7% ;b*:Ubb ;Ј ;b*:Ub ;5.8% LB*U   b L3MCorporation '|  'Decatur,AL '|  '27 0b| U 0Ј 4*| Ub 4Ј '| U 'Ј ?5| U  ? 'b! 'Greenville,SC 'b! '11 0bb!U 0Ј 4*b!Ub 4Ј 'b!U 'Ј Fb5b!U  F3MCORPORATIONTOTAL ;b*H"b ; ;b*H"b ;Ј =bb*H"Ub =1.3% ;b*H"Ubb ;Ј ;b*H"Ub ;Ј SbB*H"U  b SWellman ;b*>#b ;Florence,SC ;b*>#b ;288 =bb*>#Ub =9.5% ;b*>#Ubb ;Ј ;b*>#Ub ;Ј SbB*>#U  b SYKK ;b*4$ b ;Macon,GA ;b*4$ b ;N/A =bb*4$ Ub =Ј ;b*4$ Ubb ;Ј ;b*4$ Ub ;Ј SaB.4$ U   b STOTALS ;a*a ; ;a*a ;3,034 =ab*Ua =100% ;a*Uab ;929 ;a*Ua ;100% PF*U 0  a 2PA"o "[>E~"oNOTES:0    *DuPontfacilities'meltphaseresincapacitiesreflectanindustryaveragebasedonthefirmtotalof793millionkilograms... 0 D 0D.D.**HoechstCelanese'smeltphaseresincapacitiesreflectanindustryaveragebasedonthefirmtotalof804millionkilograms.A>M>E~"[ >M  :0. ..  2   :vw xy{  TABLE 1V24.PETFILMANDPETFIBERMANUFACTURERSBYCAPACITY 1VԀ(MILLIONKILOGRAMS)(1991)5,6,7 8    *|} dd 44T44S445Z4DUd44EL44%tu.., 44,T44,S445,Z4DU,d44E,L44e+  3ab" L   l3Company** ;ab*4 "ab ;FacilityLocation ;ab*4 "ab ;PETFilm =abb* "ab =PercentageofTotal(%) ;ab* "abb ;PETFiber ;ab* "ab ;PercentageofTotal(%) SbB* " l   ab <S " AlliedSignalInc. ;b* b ;Moncure,NC ;b* b ;Ј =bb* Ub =Ј ;b* Ubb ;63 ;b* Ub ;3.6% SbB* U <  b <S BASF ;b* $b ;Lowland,TN ;b* $b ;Ј =bb* $Ub =Ј ;b* $Ubb ;23 ;b* $ Ub ;1.3% SbB* $!U <  b <SBemisCompany ;b* 8 "b ;NewLondon,WI ;b* 8 #b ;5 =bb* 8 $Ub =1.5% ;b* 8 %Ubb ;Ј ;b* 8 &Ub ;Ј SbB* 8 'U <  b <SBridgestone/Firestone ;b* L (b ;Hopewell,VA ;b* L )b ;50 =bb* L *Ub =14.9% ;b* L +Ubb ;19 ;b* L ,Ub ;1.1% LB* L -U <  b <L DuPont '` . 'Kinston,NC '` / 'Ј 0b` 0U 0Ј 4*` 1Ub 4609 '` 2U 'Ј ?5` 3U <  <? 'd 4 'Parkersburg,WV 'd 5 'Ј 0bd 6U 0Ј 4*d 7Ub 41 'd 8U 'Ј ?5d 9U <  <? 'h : ' Brevard,NC 'h ; '16 0bh <U 0Ј 4*h =Ub 4Ј 'h >U 'Ј ?5h ?U <  <? 'l@ ' Circleville,OH 'lA '33 0blBU 0Ј 4*lCUb 4Ј 'lDU 'Ј ?5lEU <  <? 'pF ' Florence,SC 'pG '48 0bpHU 0Ј 4*pIUb 4Ј 'pJU 'Ј Fb5pKU <  <FDUPONTTOTAL ;b*tLb ; ;b*tMb ;Ј =bb*tNUb =28.9% ;b*tOUbb ;Ј ;b*tPUb ;34.4% LB*tQU <  b <L EastmanKodak ' R 'Rochester,NY ' S '45 0b TU 013.4% 4* UUb 4Ј ' VU 'Ј ?5 WU <  <? 'X ' Kingsport,TN 'Y 'Ј 0bZU 0Ј 4*[Ub 472 '\U '4.1% ?5]U <  <? '^ ' Rochester,NY '_ '23 0b`U 0Ј 4*aUb 4Ј 'bU 'Ј Fb5cU <  <F KODAKTOTAL ;b*db ; ;b*eb ;Ј =bb*fUb =Ј ;b*gUbb ;Ј ;b*hUb ;Ј SbB*iU <  b <SFossManufacturing ;b*,jb ;Haverhill,MA ;b*,kb ;Ј =bb*,lUb =Ј ;b*,mUbb ;18 ;b*,nUb ;1.0% SbB*,oU <  b <SGoodyearTire&Rubber(Shell) ;b*@pb ;Scottsboro,AZ ;b*@qb ;Ј =bb*@rUb =Ј ;b*@sUbb ;16 ;b*@tUb ;0.9% SbB*@uU <  b <SGuilfordMills ;b*Tvb ;FuquayVarina,NC ;b*Twb ;Ј =bb*TxUb =Ј ;b*TyUbb ;6 ;b*TzUb ;0.3% LB*T{U <  b <L HoechstCelaneseCorp. 'h| 'Shelby,NC 'h} 'Ј 0bh~U 0Ј 4*hUb 4279 'hU 'Ј ?5hU <  <? 'l ' Spartanburg,SC 'l 'Ј 0blU 0Ј 4*lUb 4279 'lU 'Ј ?5lU <  <? 'p ' Greer,SC 'p '41 0bpU 012.2% 4*pUb 4Ј 'pU 'Ј Fb5pU <  <F HOECHSTCELANESETOTAL ;b*tb ; ;b*tb ;Ј =bb*tUb =Ј ;b*tUbb ;Ј ;b*tUb ;31.5% SbB*tU <  b <S ICIAmericas ;b* b ;Hopewell,VA ;b* b ;50 =bb* Ub =14.9% ;b* Ubb ;Ј ;b* Ub ;Ј SbB* U <  b <SKatema ;b*!b ;Calenton,MD ;b*!b ;Ј =bb*!Ub =Ј ;b*!Ubb ;2 ;b*!Ub ;0.1% SbB*!U <  b <SMartinColorFi ;b*",b ;Sumter,SC ;b*",b ;Ј =bb*",Ub =Ј ;b*",Ubb ;50 ;b*",Ub ;2.8% SbB*",U <  b <S)v'w'x'y'{')7"[" d"&&d7  TRP'3P'3 '3 Letter Landscape '3 Letter LandscapeTXXz    NorthAmericanRayon ;b*<b ;Elizabethton,TN ;b*<b ;Ј =bb*<Ub =Ј ;b*<Ubb ;7 ;b*<Ub ;0.4%PF.<U <   b <P 3MCorporation 'P < 'Decatur,AL 'P < '20 0bP <U 0Ј 4*P <Ub 4Ј 'P <U 'Ј ?5P <U <  <? 'T @ ' Greenville,SC 'T @ '18 0bT @ U 0Ј 4*T @ Ub 4Ј 'T @ U 'Ј Fb5T @ U <  <F 3MCORPORATIONTOTAL ;b*X D b ; ;b*X Db ;Ј =bb*X DUb =11.3% ;b*X DUbb ;Ј ;b*X DUb ;Ј SbB*X DU <  b <SRhonePoulencInc. ;b*l Xb ;Holcomb,NY ;b*l Xb ;2 =bb*l XUb =Ј ;b*l XUbb ;Ј ;b*l XUb ;Ј SbB*l XU <  b <STolaramFibers ;b* lb ;Ansonville,NC ;b* lb ;Ј =bb* lUb =Ј ;b* lUbb ;29 ;b* lUb ;1.6% LB* lU <  b <L Wellman ' 'Fayetteville,NC '  'Ј 0b!U 0Ј 4*"Ub 445 '#U 'Ј ?5$U <  <? '% ' Florence,SC '& 'Ј 0b'U 0Ј 4*(Ub 4165 ')U 'Ј ?5*U <  <? '+ ' Palmetto,SC* ', 'Ј 0b-U 0Ј 4*.Ub 488 '/U 'Ј Fb50U <  <F WELLMANTOTALS ;b*1b ; ;b*2b ;Ј =bb*3Ub =Ј ;b*4Ubb ;Ј ;b*5Ub ;16.8% Oa>*6U <  b 4<OTOTALS ;a* 7a ; ;a* 8a ;336 =ab* 9Ua =100% ;a* :Uab ;1,774 ;a* ;Ua ;100% PF* <U <0 4 a <PA"o "[>E~"oNOTES:0    *Wellman'sPalmettofacilityisscheduledtoenteroperationattheendof1993. >.. 0 D 0D.D.**FacilitiesinboldfacetyperepresentfacilitiesaffectedbytheproposedGroupIVregulation.A!N >M>E~"[ >M  N: ?.. Ѐ0&$ @ <  $  0"&`& "["P 3~   @ ~)))  TRY3'P'3 3' Letter '3 Letter LandscapeT7"`"&&d" d7z     Table25showsthedistributionofoperatingcapacityamongthefourproducersofABS.There  arenineaffectedfacilitiesownedandoperatedby4firms.Themajorityofcapacityisoperatedby3ofthesefirms.Table26presentsasimilarindustrybreakdownfortheaffectedpolystyrenemanufacturers.Thereare15polystyreneproducersoperating33facilities.DowChemicalandHuntsmanChemicalarethetwoprimaryproducers,with19percentand18.6percentofindustrycapacity,respectively.  BPChemicalsoperatestheonlynitrileresinfacility.ItsLima,Ohiofacilityhada1991operatingcapacityof19millionkilograms.OnlyoneproducerofMABSwasidentified,forwhichproductioncapacitywasnotavailable.  Onafirmlevel,employmentdatawereavailableforeachofthe28affectedfirms.FirmlevelemploymentdatawillsatisfytherequirementsoftheRFAbyidentifyingthepercentageofaffectedfirmsthatclassifyassmallbusinesses.Specifically,theRFA,alongwiththeEPAguidelinesforimplementingtheRegulatoryFlexibilityAct,andtherecentlysignedSmallBusinessRegulatoryEnforcementFairnessActof1996requirestheexaminationoftheeconomicimpactsofregulationson"smallbusinesses."A 3#finalregulatoryflexibilityanalysis 3#Wmustbepreparedifaproposedregulationwillhaveasignificanteconomicimpactonasubstantialnumberofsmallentities;accordingtotheEPAguidelines,suchananalysismustbepreparedifthereisanyeconomicimpactonsmallentities.  ThefirststepinthedeterminationoftheeffectoftheGroupIVNESHAPonsmallfirmsistoassigntheappropriatedefinitionofasmallentityinthePolymersandResinsGroupIVindustry.The 3#U.S.SmallBusiness 3#YAdministration(SBA)definessmallbusinessesinSICcode2821asemployingaworkforceof750employeesorless.8  ,   Table27lists1991employmentlevelsforeachoftheaffectedfirms.UndertheSBAdefinition,AmericanPolymers,Kama,NovacorChemicals,andKanekaTexasCorporationemploylessthan750workers.KamaandNovacorChemicalsarebothsubsidiariesoflargerfirms,andthereforedonotqualifyassmallbusinessesbySBAstandards.AmericanPolymersandKanekaTexasCorporationaretheonlytwofirmsaffectedbytheGroupIVNESHAPwhichmeetSBA'sdefinitionofasmallbusiness.Giventhatthemajorityofaffectedfirmsaresubsidiariesoflarge,chemicalcorporations,itisunlikelythattherewillbesignificanteconomicimpactsonaffectedsmallentities.EPAmayadoptanalternativedefinitionofasmallbusinessifanalternativesizecutoffcanbejustified.  I,'> @ TABLE 1V25.ABSMANUFACTURERSBYCAPACITY 1V]Ԁ(1991)5,6,7  * d%d 44T44S445Z4DUd44EL44e|}(#(#,P 44,p44e,44e,/44+  3ab" > @3Company ;ab*6ab ;FacilityLocation ;ab*6ab ;Capacity(millionkilograms) ;ab* "ab ;PercentageofTotal(%) SbB* "  @ ab `xSDiamondPolymers ;b* L b ;Akron,OH ;b* L b ;11 ;b* L Ub ;1.5% LB* LU x ` b PxLDowChemical '^  'Allyn'sPoint,CT '^  '27 '^ U 'Ј ?5^ U x P Px? '  'HangingRock,OH '  '32 ' U 'Ј ?5 U x P Px? 'R  'Midland,MI 'R  '122 'R U 'Ј ?5R U x P Px? 'T  'Torrance,CA 'T  '18 'T U 'Ј Fb5T U x P `xF ;b* b ;DowTotal ;b* b ;199 ;b* !Ub ;26.7% LB* "U x ` b PxLGeneralElectric 'X# 'Ottawa,IL 'X$ '136 'X%U 'Ј ?5X&U x P Px? 'Z' 'Washington,WV 'Z( '109 'Z)U 'Ј Fb5Z*U x P `xF ;b*+b ;GETotal ;b*,b ;245 ;b*-Ub ;32.7% LB*.U x ` b PxLMonsantoChemical '^/ 'Addyston,OH '^0 '204 '^1U 'Ј ?5^2U x P Px? '`3 'Muscatine,IA '`4 '90 '`5U 'Ѐ Fb5`6 x P `xF ;b*7b ;MonsantoTotal ;b*8b ;294 ;b*9Ub ;39.3% Oa>*:U x ` b xO ;a*d;a ;INDUSTRYTOTAL ;a*d<a ;749 ;a*d=Ua ;Ј:0.d>U x0  a :  n> @TABLE 1V26.POLYSTYRENEMANUFACTURERSBYCAPACITY 1VlԀ(1992)5,6,7  * ddP 44p44e44e/44(#(#,f dd,ddu,; dd+  3ab" > h3Company ;ab*6ab ;Capacity(millionkilograms) ;ab*"ab ;PercentageofTotal(%) LB*6"  h ab PxLAmericanPolymersInc. '" r '32 '" r U '1.1% ?5" r U x P Px?AmocoChemical 't   '357 't  U '12.6% ?5t  U x P Px?ARCOChemical '  '45 ' U '1.6% ?5 U x P Px?BASF 'h  '283a 'h U '10.0% ?5h U x P Px?ChevronChemical 'j  '217 'j U '7.5% ?5j U x P Px?DartContainerCorp. '  '32 ' U '1.1% ?5 U x P Px?DowChemical '^  '548 '^ U '19.3% ?5^ U x P Px?FinaOilandChemicalCo. '` '290 '`U '10.2% ?5`U x P Px?HuntsmanChemicalCorp. '  '527 '!U '18.6% ?5"U x P Px?GE-HuntsmanJointVenture 'T# '45 'T$U '1.6% ?5T%U x P Px?KamaCorporation 'V& '36 'V'U '1.3% ?5V(U x P Px?MonsantoChemical ') '72 '*U '2.5% ?5+U x P Px?NovacorChemicals 'J, '290 'J-U '10.2% ?5J.U x P Px?Rohm&Haas 'L/ '25 'L0U '1.0% ?5L1U x P Px?ScottPaperCo. '2 '41 '3U '1.4% Ba14U x P xBTotals ;a*@5a ;2,840 ;a*@6Ua ;100.0% PF*@7U x0  a xPa"o&"&`>E~"oBASFpurchasedMobil's285millionkilogrampolystyrenecapacityin1992.>&&>E~"&`&&>&0&$L 9 x    0   :9   TABLE 1V27.1991EMPLOYMENTLEVELSOFPOLYMERSANDRESINSGROUPIVFIRMS 1Va{9,10,11    *q ddf ddddu; dd(#(#q,edd , ddU+  3ab" h x3FirmName 2ab!ab 2NumberofEmployees LB*"  x ab 8`LAlliedSignal   B 105,800 6, B ` 8 8`6AmericanPolymers  , |  45 6,, |  ` 8 8`6Amoco  f   54,524 6,f   ` 8 8`6ARCOChemical     27,300 6,  ` 8 8`6BASF  *  133,759 6,*  ` 8 8`6BFGoodrich  d  11,892 6,d  ` 8 8`6BPChemical  N  118,050 6,N  ` 8 8`6ChevronChemical    54,028 6,  ` 8 8`6DartContainerCorporation   3,000 6, ` 8 8`6DowChemical  L 62,100 6,L ` 8 8`6E.I.duPontdeNemours  6 143,961 6,6 ` 8 8`6EastmanKodakCo.  p 134,450 6,p ` 8 8`6Fina(AmericanPetrofina)   3,997 6,  ` 8 8`6GeneralElectric  4! 284,000 6,4" ` 8 8`6HoechstCelaneseCorp.  n# 31,600 6,n$ ` 8 8`6HuntsmanChemical  X% 1,277 6,X& ` 8 8`6ICIAmericanHoldingsInc.  ' 9,500 6,( ` 8 8`6Kama  ) 300* 6,* ` 8 8`6KanekaTexasCorporation   V+ 160 6, V, ` 8 8`6Metco(ElfAtochem)  @!- 4,500 6,@!. ` 8 8`6MonsantoChemical  z"/ 41,081 6,z"0 ` 8 8`6NovacorChemicals  #1 700* 6,#2 ` 8 8`6RohmandHaasCo.  $> 3 12,872 6,$> 4 ` 8 8`6ScottPaperCo.  (&x!5 29,100 6,(&x!6 ` 8 8`6Shell  b'"7 30,000 6,b'"8 ` 8 8`63M  (#9 88,477 6,(#: ` 8 8`6Wellman  )&%; 2,900 6,)&%< ` 8 8`6YKK  +`&= 1,900 =a0+`&> ` 8 ="o&"&`>E~"oNotes:0  *KamaandNovacorChemicalsaresubsidiariesoflargerfirmswhichdonotclassifyassmallbusinessesby z,'? SBAstandards.>42-h(@""   a >>&&>E~"&`&&>&  -)@   NationalproductioncapacitybyresintypeissummarizedonaregionalandStatebasisinTable28.(OnlyEPAregionsandStatesinwhichatleastoneresinfacilityislocatedareincludedinthetable.)Certainindustrycharacteristicsareevidentfromtheregionalcategorizationinthistable.FortythreepercentoffacilitieswhichproducethesevenresintypesarelocatedintheSoutheasternUnitedStates.ThegeographicaldistributionoftheaffectedfacilitieswillbecriticaltothedeterminationoftheregionalimpactsoftheNESHAP.TheleadingStatesbytotalnumberoffacilitiesareOhio,NorthCarolina,andSouthCarolina.Table28alsoshowsthetotalnumberoffacilitiesbyresintype.ThemajorityoffacilitiesinthePolymersandResinsIVcategoryproducepolystyrene,followedbyPET.Intermsofcapacity,meltphasePETresinproductionaccountsforthehighestcapacityinGroupIV(3,034millionkg),followedbypolystyrene(2,840millionkg).H&  "&`&&"&`I&)&&"&`    2.3  MARKETSTRUCTUREH N    'I&)&&I&)"&`&&I&)    ThepurposeofthissectionistocharacterizethemarketstructuresintheGroupIVresin q industries.Marketstructurehasimportantimplicationsfortheresultantpriceincreasesthatoccurasaresultofcontrols.Forexample,inaperfectlycompetitivemarket,theimpositionofcontrolcostswillshifttheindustrysupplycurvebyanamountequaltotheperunitcontrolcosts,andthepriceincreasewillequalthecostincrease.AnindicationofthemarketstructureofthesevenaffectedGroupIVresinindustriesisprovidedbyanassessmentofthenumberoffirmsoperatingresinfacilities,verticalintegration,anddiversification.+&  "&`&&"&`,& &&"&`    2.3.1  MarketConcentration+{ N  ( ',& &&,& "&`&&,&     Marketconcentrationisameasureoftheoutputofthelargestfirmsintheindustry,expressedasa ] * percentageoftotalnationaloutput.ForeachoftheGroupIVresinindustries,however,thenecessaryproductiondataonafacilitylevelwerenotavailable.Forthisanalysis,therefore,thefirmsineachofthesevenindustrieswereanalyzedintermsofproductioncapacityratherthanbyaspecificmeasureofresinoutput.BecauseMABSandnitrileresinsareproducedbyonlyonefirm,marketconcentrationisnotconsideredforthesetwoindustries.AswasshowninTable21,theMBSindustrycapacityissharednearlyequallybythethreefirmswithnosinglefirmdominatingthe  (W#6   TABLE 1V28.DISTRIBUTIONOFMANUFACTURERSBYRESINTYPEANDFACILITYLOCATION 1V5,6,7    "[ &"&`" N*` ddedd  ddU(#(#`, ,,,,@,,,,,,,,,,,3,,2,,,3+  7abb& h bl7EPARegion Pabb?0L "abb PState Pabb?0"abb PTotalFacilitiesbyResinType Dabbb1""abb DStateTotal XN; d "ajj l b abbb b<X      (bb    (ABS ;bb*  "bb ;SAN ;bb*  "bb ;PET ;bb* "bb ;MBS ;bb* "bb ;MABS ;bb* "bb ;Polystyrene ;bb* "bb ;Nitrile /% "bb / Nb^9  < b  <dNI Sb^>)( x"b^d dS Sb^>)( xb^d dS Sb^>)( x"b^d dS Sb^>)( x"b^d dS Sb^>)( x"b^d dS Sb^>)( x"b^d dS Sb^>)( x"b^d dS Sb^>)( x"b^d dS Sbb^>)( x"b^d dS [bL4( x" <  bb^d <[ 9b*, |"b 9Connecticut 9b*, |b 91 9b*, |"b 9 9b*, | "b 9 9b*, |!"b 9 9b*, |""b 9 9b*, |#"b 91 9b*, |$"b 9 =bb*, |%"b =2 QbB*, |&" <  bb <QЀ 9b*0 '"b 9Massachusetts 9b*0 (b 9 9b*0 )"b 9 9b*0 *"b 9 9b*0 +"b 9 9b*0 ,"b 9 9b*0 -"b 92 9b*0 ."b 9 =bb*0 /"b =2 ab^L*0 0" <  bb <daII Sb^>)4 1"b^d dS Jb^5 4 2b^d dJ Sb^>)4 3"b^d dS Sb^>)4 4"b^d dS Sb^>)4 5"b^d dS Sb^>)4 6"b^d dS Sb^>)4 7"b^d dS Sb^>)4 8"b^d dS Sbb^>)4 9"b^d dS [bL44 :" <  bb^d <[ 9b*8 ;"b 9NewJersey 9b*8 <b 9 9b*8 ="b 9 9b*8 >"b 9 9b*8 ?"b 9 9b*8 @"b 9 9b*8 A"b 91 9b*8 B"b 9 =bb*8 C"b =1 QbB*8 D" <  bb <Q 9b*< E"b 9NewYork 9b*< Fb 9 9b*< G"b 91 9b*< H"b 91 9b*< I"b 9 9b*< J"b 9 9b*< K"b 91 9b*< L"b 9 =bb*< M"b =3 ab^L*< N" <  bb <daIII Sb^>)@ O"b^d dS Jb^5 @ Pb^d dJ Sb^>)@ Q"b^d dS Sb^>)@ R"b^d dS Sb^>)@ S"b^d dS Sb^>)@ T"b^d dS Sb^>)@ U"b^d dS Sb^>)@ V"b^d dS Sbb^>)@ W"b^d dS [bL4@ X" <  bb^d <[ 9b*D Y"b 9Pennsylvania 9b*D Zb 9 9b*D ["b 9 9b*D \"b 9 9b*D ]"b 9 9b*D ^"b 9 9b*D _"b 93 9b*D `"b 9 =bb*D a"b =3 QbB*D b" <  bb <Q 9b*Hc"b 9Virginia 9b*Hdb 9 9b*He"b 9 9b*Hf"b 91 9b*Hg"b 9 9b*Hh"b 9 9b*Hi"b 91 9b*Hj"b 9 =bb*Hk"b =2 QbB*Hl" <  bb <Q 9b*Lm"b 9WestVirginia 9b*Lnb 9Ѐ 9b*Lo"b 9 9b*Lp"b 91 9b*Lq"b 9 9b*Lr"b 91 9b*Ls"b 9 9b*Lt"b 9 =bb*Lu"b =2 ab^L*Lv" <  bb <daIV Sb^>)Pw"b^d dS Jb^5 Pxb^d dJ Sb^>)Py"b^d dS Sb^>)Pz"b^d dS Sb^>)P{"b^d dS Sb^>)P|"b^d dS Sb^>)P}"b^d dS Sb^>)P~"b^d dS Sbb^>)P"b^d dS [bL4P" <  bb^d <[ 9b*T"b 9Alabama 9b*Tb 9 9b*T"b 9 9b*T"b 91 9b*T"b 91 9b*T"b 9 9b*T"b 91 9b*T"b 9 =bb*T"b =3 QbB*T" <  bb <Q 9b*X"b 9Georgia 9b*Xb 9 9b*X"b 9 9b*X"b 91 9b*X"b 9 9b*X"b 9 9b*X"b 91 9b*X"b 9 =bb*X"b =2 QbB*X" <  bb <Q 9b*\"b 9Kentucky 9b*\b 9 9b*\"b 9 9b*\"b 9 9b*\"b 91 9b*\"b 9 9b*\"b 91 9b*\"b 9 =bb*\"b =2 QbB*\" <  bb <Q 9b*`"b 9Mississippi 9b*`b 9 9b*`"b 91 9b*`"b 9 9b*`"b 9 9b*`"b 9 9b*`"b 9 9b*`"b 9 =bb*`"b =1 QbB*`" <  bb <Q 9b*d"b 9NorthCarolina 9b*db 9 9b*d"b 9 9b*d"b 97 9b*d"b 9 9b*d"b 9 9b*d"b 9 9b*d"b 9 =bb*d"b =7 QbB*d" <  bb <Q 9b*h"b 9SouthCarolina 9b*hb 9 9b*h"b 9 9b*h"b 97 9b*h"b 9 9b*h"b 9 9b*h"b 9 9b*h"b 9 =bb*h"b =7 QbB*h" <  bb <Q 9b*l"b 9Tennessee 9b*lb 9 9b*l"b 9 9b*l"b 93 9b*l"b 9 9b*l"b 9 9b*l"b 9 9b*l"b 9 =bb*l"b =3 ab^L*l" <  bb <daV Sb^>)p"b^d dS Jb^5 pb^d dJ Sb^>)p"b^d dS Sb^>)p"b^d dS Sb^>)p"b^d dS Sb^>)p"b^d dS Sb^>)p"b^d dS Sb^>)p"b^d dS Sbb^>)p"b^d dS [bL4p" <  bb^d <[ 9b*t"b 9Illinois 9b*tb 91 9b*t"b 9 9b*t"b 9 9b*t"b 9 9b*t"b 9 9b*t"b 95 9b*t"b 9 =bb*t"b =6 QbB*t" <  bb <Q 9b*x"b 9Michigan 9b*xb 91 9b*x"b 91 9b*x"b 9 9b*x"b 9 9b*x"b 9 9b*x"b 93 9b*x"b 9 =bb*x"b =5 QbB*x" <  bb <Q 9b*| "b 9Ohio 9b*| b 92 9b*| "b 91 9b*| "b 91 9b*| "b 9 9b*| "b 9 9b*| "b 95 9b*| "b 91 =bb*| "b =10 ab^L*| " <  bb <daVI Sb^>)!"b^d dS Jb^5 !b^d dJ Sb^>)!"b^d dS Sb^>)!"b^d dS Sb^>)!"b^d dS Sb^>)!"b^d dS Sb^>)!"b^d dS Sb^>)!"b^d dS Sbb^>)!"b^d dS [bL4!" <  bb^d <[ 9b*""b 9Louisiana 9b*"b 9 9b*""b 9 9b*""b 9 9b*""b 9 9b*""b 9 9b*""b 91 9b*""b 9 =bb*""b =1 QbB*"" <  bb <Q 9b*#"b 9Texas 9b*#b 9 9b*#"b 9 9b*#"b 9 9b*#"b 91 9b*#"b 9 9b*# "b 91 9b*# "b 9 =bb*# "b =2 ab^L*# " <  bb <daVII Sb^>)$ "b^d dS Jb^5 $b^d dJ Sb^>)$"b^d dS Sb^>)$"b^d dS Sb^>)$"b^d dS Sb^>)$"b^d dS Sb^>)$"b^d dS Sb^>)$"b^d dS Sbb^>)$"b^d dS [bL4$" <  bb^d <[ 9b*% "b 9Iowa 9b*% b 91 9b*% "b 91 9b*% "b 9 9b*% "b 9 9b*% "b 9 9b*% "b 9 9b*% "b 9 =bb*% "b =2 ab^L*% " <  bb <daIX Sb^>)&!!"b^d dS Jb^5 &!"b^d dJ Sb^>)&!#"b^d dS Sb^>)&!$"b^d dS Sb^>)&!%"b^d dS Sb^>)&!&"b^d dS Sb^>)&!'"b^d dS Sb^>)&!("b^d dS Sbb^>)&!)"b^d dS [bL4&!*" <  bb^d <[ 9b*'"+"b 9California 9b*'",b 91 9b*'"-"b 9 9b*'"."b 9 9b*'"/"b 9 9b*'"0"b 9 9b*'"1"b 93 9b*'"2"b 9 =bb*'"3"b =4 QbB*'"4" <  bb <Q 9b*(#5"b 9 0b!(#6b 0 9b*(#7"b 9 9b*(#8"b 9 9b*(#9"b 9 9b*(#:"b 9 9b*(#;"b 9 9b*(#<"b 9 =bb*(#="b =Ѐ Oba>*(#>" <  bb 4<O ;ba*)$?"ba ;TOTALS ;ba*)$@ba ;7 ;ba*)$A"ba ;5 ;ba*)$B"ba ;23 ;ba*)$C"ba ;3 ;ba*)$D"ba ;1 ;ba*)$E"ba ;30 ;ba*)$F"ba ;1 =bab*)$G"ba =70:0.)$H" <0 4 bab :"&`& "["bb  *%H market.GEandMonsantodominatetheSANindustry,althoughthereisnotgreatdiversityinthedistributionofSANcapacity.PETproductionasawholeinvolvesthehighestnumberofproducersofanyofthesevenresinindustriesinthisanalysis.ThemarketconcentrationinthePETindustryislessconcentratedthanintheSANorMBSindustries.ThePETbottleindustryismorehighlyconcentratedthantheotherthreePETcategories,havingonlyfourproducers.Ofthesefour,EastmanKodakownsslightlyoverhalfoftheindustrycapacity,followedbyShellwith28.3percentoftotalcapacity.TheABSmarketishighlyconcentrated,giventhat3ofthe4firmsshare98.7percentoftotalindustryproductioncapacity.GeneralElectricownsthehighestsharewith40percentofthetotal,followedbyMonsantowith35percentofABScapacity,andDowChemicalwith24percentoftotalcapacity.  ThedistributionofpolystyrenecapacityindicatesthatthepolystyreneindustryistheleastconcentratedindustryintheGroupIVsourcecategory.DowChemicalandHuntsmanChemicalarethetoptwofirmsbyproductioncapacityownership,with19.3percentand18.6percentofindustrycapacity,respectively.Amocoownsthethirdhighestpercentageofpolystyrenecapacitywith12.3percent.Theremaining49.8percentofcapacityissharedbythe12remainingproducers.+&  "&`&&"&`,& &&"&`    2.3.2  IndustryIntegrationandDiversification+wb   p  ' ,& &&,& "&`&&,&     ThemajorityoffirmsaffectedbytheGroupIVNESHAParelargefirmsthatarevertically $" integratedtotheextentthatthesamefirmsuppliesinputforseveralstagesoftheproductionandmarketingprocess.Themajorityoffirmsinthisindustryownsegmentsthatareresponsibleforexplorationandproductionofcrudeoil(amajorinputtochemicalproduction)andformarketingthechemicalsandpolymersproduced.Forthelargerfirmsinthisindustry,horizontalintegrationexiststotheextentthatthesefirmsoperateseveralresinproducingfacilities.Themajorfirmsoperateseveralfacilities,andthelargest,DuPont,operatessevendomesticfacilities.Ofthe28affectedfirms,16operatemorethanonefacility.Diversificationindicatestheextenttowhichaffectedfirmshavedevelopedotherrevenuegeneratingoperations.Giventhatthemajorityoftheaffectedfirmsareindivisionsoflarge,diversifiedcorporations,thefinancialresourcesforcapitalinvestmentincontrolequipmentmaybemoreaccessiblethanforanindustrycharacterizedbyalargenumberofsmallerfirms.+&  "&`&&"&`,& &&"&`    2.3.3  FinancialProfile+Xb  o+&< 'o+h,& &&,& "&`&&,&     Thissubsectionpresentstheavailablefinancialdataforaffectedfirms.Inordertoevaluatethe #-s(> financialconditionofthefirms,annualreportstostockholderswereusedasaprimarysourceofdata. j.)@ BecausetheEIAisconductedonafirmlevel,itisusefultoexamineoverallcorporateprofitabilityasapreliminaryindicatorofthebaselineconditionsofaffectedfirmsintheindustry.CorporateleveldataarealsousefulasanindicationofthefinancialresourcesavailabletoaffectedfirmsandtheabilityofthiscapitaltocoverincreasedcompliancecostsafterpromulgationoftheNESHAP.  Table29presentsnetincometoassetsratiosthatwereaveragedfrom1987to1991foreachoftheirfirmsforwhichdatawereavailable.Alsopresentedarelongtermdebttolongtermdebtplusequityratiosforthemostcurrentyearforwhichdatawereavailable.Theseratiosareusedtorepresentthebaselineinthefinancialimpactsanalysis,theresultsofwhichprovidequantitativeestimatesoftheeffectofNESHAPcompliancecostsonthefinancialconditionsofaffectedfirms.TheresultsofthecapitalavailabilityanalysisarepresentedinSection5.3ofthisreport.H&  "&`&&"&`I&)&&"&`    2.4  MARKETSUPPLYCHARACTERISTICSHosts  T 'I&)&&I&)"&`&&I&)    ThissectionanalyzesthesupplysideofeachoftheGroupIVresinindustries.Historical  productiondataarepresented,andthefactorsthataffectproductionareidentified.Theroleofforeigncompetitioninthisindustryisalsoassessed.Thefocusofthesectionisonoverallindustrysupplyandtheexistingconditionsinthemarketplace.+&  "&`&&"&`,& &&"&`    2.4.1  PastandPresentProduction+tosts  k$ ',& &&,& "&`&&,&     ThedomesticsupplyofMBS,SAN,andPETforthepastdecadeareshowninTable210.Of & thesethreeindustries,PEThasshownthegreatestgrowthindomesticproduction.TheaverageannualgrowthrateforPETbetween1980and1991was7percent.SAN'saverageannualgrowthduringthisperiodwasonly0.6percent.ProductionlevelsofMBSareshownfor1985through1991.TimeseriesdataontheproductionofMBSreflectsignificantyearlyfluctuationsdueinparttochangesinthelineitemdefinitionsusedbytheU.S.InternationalTradeCommissiontoreportdata.  2$0 @ TABLE 1V29.FINANCIALSTATISTICSFORAFFECTEDFIRMS 1Vq10  * d !d ,,@,,,,,,3,2,,3(#(#, dd, dd,dd+  3ab" > @3Company ;ab* ab ;NetIncometoAssetsRatio*1987to1991Average(%) ;ab*  "ab ;LongTermDebttoLTDebtandEquity(%) LB*  "  @ ab PxLAlliedSignalInc. ' L  '6.3 ' LU '43.5 ?5 LU x P Px?Amoco 'N  '5.5 'N U '28.2 ?5N U x P Px?ARCO '  '11.2 ' U '39.8 ?5 U x P Px?BPChemicals 'B  '4.0 'B U '43.4 ?5B U x P Px?Chevron 'D  '3.9 'D U '28.2 ?5D U x P Px?E.I.deNemoursDuPont '  '2.7 ' U 'N/A ?5 " x P Px?DowChemical '8 '8.7 '8 U '66.8 ?58!U x P Px?EastmanKodak ':" '6.6 ':#U '61.6 ?5:$U x P Px?ElfAtochem '% '1.0 '&U 'N/A ?5'" x P Px?Fina '.( '4.1 '.)U '93.1 ?5.*U x P Px?GeneralElectric '0+ '3.1 '0,U '58.7 ?50-U x P Px?ICI '. '7.5 '/U '30.2 ?50U x P Px?Monsanto '$1 '6.7 '$2U '36.3 ?5$3U x P Px?Rohm&Haas '&v4 '9.8 '&v5U '35.1 ?5&v6U x P Px?Scott 'x7 '3.8 'x8U '54.1 ?5x9U x P Px?Shell ': '4.6 ';U '11.0 ?5<U x P Px?3M ' l= '13.0 ' l>U '10.7 Ba1 l?U x P xBWellman ;a*n!@a ;10.0 ;a*n!AUa ;42.5 PF*n!BU x0  a xPA"o&"&`>E~"oNOTES:0    *Netincomereflectsprofitsderivedfromallsourcesafterdeductionsofexpenses,taxes,andfixedcharges, #D butbeforeanydiscontinuedoperations,extraordinaryitems,anddividendpayments.Aosts>&&>E~"&`&&>&  :0.h$E"" x    :  %V E cec  TABLE 1V210.HISTORICALPRODUCTIONLEVELSFORSAN,MBS,ANDPET 1V (19801991)12    *q dd dd dddd(#(#q,dd ,dd,dd",dd"+  /a" h / 6ab%a 6ProductionbyResinType(millionkilograms) VbE-"   ab `xVYear 2b!" rb 2SAN ;b*" r"b ;MBS ;b*" r "b ;PET* LB*" r " x ` b PxL1980     N/A     N/A     1,616 6,  x P Px61981   & 48.4   & N/A   & 1,640 6, & x P Px61982  (x  41.2  (x  N/A  (x  1,781 6,(x  x P Px61983  z  42.1  z  N/A  z  2,011 6,z  x P Px61984    44.8    N/A    2,000 6,  x P Px61985  n  39.4  n  69.8  n ! 2,019 6,n " x P Px61986  p# 41.6  p$ 88.1  p% 2,144 6,p& x P Px61987  ' 57.0  ( 42.2  ) 2,464 6,* x P Px61988  d+ 67.0  d, 52.0  d- 2,623 6,d. x P Px61989  f/ 51.0  f0 61.6  f1 2,840 6,f2 x P Px61990  3 61.1  4 N/A  5 2,795 9a(6 x P x91991 2a! Z7a 251.6 2a! Z8a 251.0 2a! Z9a 22,987 G=! Z: x0  a xGA"o&"&`>E~"oNOTES:0    *PETproductionreflectstheproductionofpolyesterfibers,PETbottleresins,andPETfilm.AE#( >&&>E~"&`&&>&  1'%f<"" x    1  HistoricalproductiontrendsinthelastdecadeforABSandpolystyreneareshowninTable211.RelativestabilityhascharacterizedthemarketsforABSandpolystyreneduringthepastdecade.TheaverageannualgrowthrateforABSfrom1980through1992was1.2percent.Polystyrenegrowthaveragedminus0.6percentoverthissameperiod.Polystyrenehasbeentheweakestperformingthermoplasticresininrecentyears,withproductionhavingdeclinedfor3consecutiveyearssince1988,dueinparttolowerpackagingdemand.Environmentalconcernsrelatedtothewastedisposalproblemsassociatedwithpackagingproductshavealsorestrictedgrowth.TimeseriesproductioninformationforMABSandnitrileresinswerenotavailable. -(V &  @TABLE 1V211.HISTORICALPRODUCTIONLEVELSFORABSANDPOLYSTYRENE 1V'Ԉ@(19801991)12  * dddd dddd"dd"(#(#,( dd ,( dd,( dd+  /a" h / 6ab%a 6ProductionbyResinType(millionkilograms) VbE-"   ab `xVYear 2b!" rb 2ABS ;b*" r"b ;Polystyrene LB*" r " x ` b PxL1980     444     2,352 6,   x P Px61981   &  461   & 2,215 6, & x P Px61982  (x  371  (x  2,372 6,(x  x P Px61983  z  477  z  2,310 6,z  x P Px61984    552    2,347 6,  x P Px61985  n  610  n  2,163 6,n  x P Px61986  p 515  p 2,023 6,p x P Px61987   571    2,456 6,! x P Px61988  d" 873  d# 2,562 6,d$ x P Px61989  f% 547  f& 2,400 6,f' x P Px61990  ( 521  ) 2,351 9a(* x P x91991 2a! Z+a 2509 2a! Z,a 22,1901'% Z- x0  a 1''+&  "&`&&"&`,& &&"&`    2.4.2  SupplyDeterminants+p1(  1 1 '1,& &&,& "&`&&,&     Resinproductiondecisionsareprimarilyafunctionofinputprices,productioncosts,resinprices, V3 existingcapacitylevels,andinternationaltradetrends.Decisionsmadebyproducersincludeidentifyingwhichprocessorsandmarketstocontinuetoserveandwhichfacilitiestocontinueoperating.Thecostsoftheinputstoproductionareamajorfactorinthedeterminationofproduction +#{9 levels.Inputstoproductionincludepetroleum,naturalgas,andcoal,whicharesubjectedtoarefiningprocessyieldingpetrochemicalfeedstocks.Thesebasicmaterialsaremixedwithothersubstances(ammoniaandformaldehyde,forexample)toyieldintermediates,whichcanthenbecatalyzedintomonomersandfinallytopolymersorresins.13 G(#A   ExistingFederal,State,andlocalregulationscanalsohaveanimpactonthequantityofresinssuppliedbyU.S.facilities.Facilitiesthatarealreadyregulatedmayhavepreviouslyalteredtheirproduction,andmaythereforehavealreadyalteredtheindustrysupplyschedule.TheindustrysupplycurveusedintheEIAincorporatedanychangesinproductionthathaveoccurredasaresultofother .)K regulationstotheextentthatthesupplycurveaccountsforthelevelofexistingcontrolsatcompaniesintheindustry.  Competitionintheresinmarkettakesplaceontwolevels:amongproducersofthesameresintypeandamongvariousresinswithsimilarcharacteristics.Inchoosingtheappropriateresinforagivenapplication,endusersconsiderpolymerproperties,fabricationtechnique,anddevices(e.g.,mold)tobeusedformanufacturingthefinalproduct.Surfaceappearanceandimpactresistancearebothofimportance.Consequently,resinsuppliersareconstantlyseekingimprovementstotheirproductsinordertomaintainmarketshare.  In1992,forexample,SANproducerswereintroducinghighclarityversionsofSANtargetedtoreplacemorecostlyresinsinhousewaresapplications.Overall,themovementinthesupplyofresinsistowardhigherlevelsofcompetitionasenvironmentalpressures,shiftsinglobalsupplyviacapacityexpansion,andusespecificinnovationsrequiresupplierstomaintaintheircompetitiveedgebydevelopingresinsdesignedtomeetuserspecifications.  PETcancompeteeffectivelywiththethermosetresinsincertainapplicationsrequiringgoodelectricalproperties,betterimpactstrength,andsuperiorprocessingcapabilities.14Enhancementsin g" thePETmarketincludethedevelopmentofthinPETfilm.PETmeltphaseandbottleproducersarerefiningmaterialpropertiestoachievebenefits,includinglighterbottleweight.PETbottlescompetedirectlywithglassbottlesandaluminumcans.ThirtyfivemillionkilogramsofPETismanufacturedintorefillablebottlesannually,butthisnumberisprojectedtoexceed90millionkilogramsoverthenext5years.15  ,   PolystyrenecompeteswithPVC,whichiseconomicalalsobuthasmarginalheatdistortionpropertiesinsomeuses.Polystyrenecompetesdirectlywithpolypropyleneandhighdensitypolyethyleneinpackagingmarkets.Thetwoformerresinsaremorethan3.6centsperkilogramcheaperthanpolystyrene,andifthisgapcontinues,polystyrenecouldlosesomemarketshareinthepackagingindustryasthelowcostmaterialsincreasetheiruseinpackagingproducts.Thelowcostofpolystyreneanditshighthermalstabilityareimportanttotheuseofpolystyreneinrigidthermoplasticfoams,whichpermitsitsuseinmostconstructionapplications.  Suppliersinturnareturningattentiontodevelopingpolystyrenegradeswithimprovedproperties -(@ fornonpackagingapplications.OnegrowthareaisinthesubstitutionofpolystyreneforABSinrefrigeratorliners.Polystyreneproducersarefocusingmarketdevelopmentonimprovingimpactstrengthandsurfaceappearance.16Polystyrenecouldalsogainmarketshareinotherendusemarkets > whereABScouldbeconsideredan"overengineered"complexresinchoice.17    ABScompeteswithpolystyrene,polypropylene,andtheengineeredresinpolycarbonateonpriceandperformance.TheabilitytomanufactureABSwithamethodcalledcontinuousmassprocessingisbecomingimportanttoABSproducers.Thisproductionmethodallowsforenhancedcolorconsistence,whicheliminatestheneedforpainting,makingABSamoreattractiveoptionforapplicationswheretheeliminationofthefinishingstepiscostefficientandenvironmentallyefficient.Thistechnologicaldevelopmentisexpectedtobethemostsignificantintheautomotivemarket,giventhatABShasasignificantshareofappearancepartsinautomobileinteriors.Polypropyleneisthenearestcompetitorinthismarket.Upgradedcommodityresinsare"chippingaway"atlowendABSapplicationssuchasdiskpackagingandvideocassettes,althoughABSisgainingshareinlargemarketslikeautomotiveinteriorsandappliances.18  +&  "&`&&"&`,& &&"&`    2.4.3  ExportsofSAN,MBS,PET,ABS,andPolystyrene+iGeape G  p  ' yG,& &&,& "&`&&,&     Somemeasureoftheextentofforeigncompetitioncanbeobtainedbycomparingexportswith $" domesticproduction.TheForeignTradeDivisionoftheU.S.BureauoftheCensuscollectstradedatabyresintypeaccordingtoacommoditycodingsystem.In1991,exportsofSANrepresented36percentofdomesticproductionandPETexportsrepresented7percentofdomesticproduction.19(MBS ( andnitrileresinswerenotassignedauniqueexportcodeduring1991.)TradedataforABSandpolystyrenewereobtainedfromModernPlastics.20In1991,exportsofABSrepresented16percentof 7!, domesticproductionandpolystyreneexportsrepresented6percentofdomesticproduction.H&  "&`&&"&`I&)&&"&`    2.5  MARKETDEMANDCHARACTERISTICSHKeape DL  %\ 2 ' %KI&)&&I&)"&`&&I&)    ThepurposeofthissectionofthechapteristocharacterizethedemandsideoftheMBS,SAN, &"4 PET,ABS,MABS,polystyrene,andnitrileresinindustries.Inthepastdecade,theoveralldemandforplasticshasincreased,asplasticshavebeenrecognizedassubstitutesforother,morecostlymaterials.Forexample,plasticshavereplacedmetalsinconstructionandpackagingapplications,paperandglassinpackaging,andwoodinfurnitureproduction.Higherdemandforplasticstranslatesintohigherdemandsforinputresins,includingthoseclassifiedinthePolymersandResinsGroupIVsourcecategory.Thefollowingsectionspresentanexaminationofthefactorsthatdeterminedemandlevels, j.)@ includingtheidentificationoftheendusemarkets,anevaluationofhistoricalconsumptionpatterns,andanassessmentoftherolethatimportsplayinsatisfyingdomesticdemand.+&  "&`&&"&`,& &&"&`    2.5.10  EndUseMarketsforMBS,SAN,PET,ABS,MABS,PolystyreneandNitrileResins+Peape MQ(#(# 'P,& &&,& "&`&&,&     ThetwoprimaryenduseindustriesforMBS,SAN,andPETresinsaretheconstruction, 9  automotive,andsoftdrinkbottlemarkets,respectively.Inadditiontotheconstructionandautomotivemarkets,othermajorendusemarketsincludepackaging,consumerproducts,electronics,andfurniture.Demandforpackaging,disposables,andlowcostconsumergoodsusuallyfollowsGrossDomesticProduct(GDP)trends.ThestrongestsourceofdemandforPETresinsisfromsoftdrinkbottlemakers.Giventhehighcostsavingsderivedfromusingplasticratherthanglasscontainers,thisendusemarketisastrongone.  ThemostcommonendusemarketforABSin1992wastheconsumergoodsmarket,whichaccountedfor19percentofABSconsumption,followedcloselybytheautomotivemarket,accountingfor18percentofABSsales.ConsumergoodsmanufacturedwithABSincludeappliances,housewares,luggage,toys,furniture,andsportinggoods.Insheetform,ABSisusedasacomponentofrefrigeratordoorlinersandfoodstoragecompartments.Intheautomotiveindustry,ABSreplacedthemajorityofsteeloraluminumpartsforuseininteriorpanelsandtrim,grilles,wheelcovers,andmirrorhousings.Inthebusinessproductsendusecategory,ABSisthemostcommonlyusedmaterialforcomputerdiskhousings,andhashistoricallybeenusedtomoldtelephones,calculators,andbusinessmachines.CertaingradesofABSaremadeintopipesandrigidfoaminsulationforthebuildingandconstructionmarketwhichaccountedfor13percentofABSsalesin1992.  Theleadingusesforpolystyrenein1992wereinfoodcontainersandpackaging(50.8percent),electronics(12percent),consumerproducts(15percent),andconstruction(6percent).Thebenefittopolystyreneforfoodserviceproductsisthatpolystyrenecontainersaresanitary,sturdy,lightweight,andeconomical.Insheetform,polystyreneisusedforfoodtraysandblisterpackaging.Onevariationofpolystyreneisasareplacementmaterialformicrofloppydiskcasingsandtelevisioncabinets.Polystyrenefilmabsorbslittlemoisture,hasfavorabledimensionalstability,doesnotbecomebrittle,andhastheabilitytopassthroughpackagingmachineryathighspeeds.Thesearecentralfactorsintheuseofpolystyrenefilminwindowenvelopes,forexample.  MABSpolymersaresimilartoABSplastics,andareusedmainlyforthemanufactureoffoodand -M)@ nonfoodcontainers.Theprimaryuseofnitrileelastomersisinthemanufactureofnitrilerubberswhich,inturn,areusedmainlytoproducerubberhosesandtubesforautomobiles,aswellasinavarietyofmiscellaneousplasticsproducts.Domesticsalesofnitrileresinsarecloselyrelatedtotheperformanceofthedomesticautomobileindustrywhichisthemainenduserofthisresin.+&  "&`&&"&`,& &&"&`    2.5.2  DemandDeterminants+]eape R^  c  ' ],& &&,& "&`&&,&     ThedemandforMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresinsisprimarily    determinedbypricelevel,thepriceofavailablesubstitutes,generaleconomicconditions,andendusemarketconditions.Thedegreetowhichpricelevelinfluencesthequantityofresinsdemandedisreferredtoasthepriceelasticityofdemand,whichisexploredlaterinthisreport.PricesofGroupIV   resinsaffectthewillingnessofconsumerstochoosetheseresinsoverothersubstituteresins.Table212presentspricelevelsforMBS,SAN,PET,ABS,andpolystyrenefortheyears1980through1991.TimeseriespricedataforMABSandnitrileresinswerenotavailable.Increasedcompetitionhasputconsiderablepressureonresinpricesoverthepastdecade.Highperformancecharacteristics,coupledwithhighlypricesensitivedemandformostplasticmaterials,continuestoencouragematerialsubstitutionamongresins.22 F     Inthemarketforpolystyrene,inwhichtheprimaryendusesarepackaging,disposables,andlowcostconsumergoods,consumptionusuallyfollowsthetrendsofGDP.Thedecreasesindemandforpolystyrenearedue,inpart,tosloweconomicgrowthandenvironmentallyinducedcutbacksinpackaginganddisposables.Astherecyclinginfrastructuredevelopsmorefully,demanddecreasesmayintensifyasthedemandforpolystyreneproductsweakensfurther.  7!, @,,TABLE 1V212.PRICELEVELSFORMBS,SAN,PET,ABS,ANDPOLYSTYRENE 1VaeԈ@(19801991)21  *q dd( dd ( dd( dd(#(#q,[dd ,ydd",ydd",dd",dd%,ddU+  /a" h / 6ab%a 6Price/Kilogram(1990Dollars) VbE-"   ab `xVYear 2b!" rb 2MBS ;b*" r"b ;SAN ;b*" r "b ;PET ;b*" r "b ;ABS ;b*" r "b ;Polystyrene LB*" r " x ` b @xL"[ &"&`"mcheaper1980     NP    NP    0.64    0.46 ' U '0.33 ?5 U x @ @x?1981    NP    NP    0.60    0.47    0.30 6,  x @ @x61982  T  NP  T  0.66  T  0.57  T  0.49  T  0.26 6,T  x @ @x61983  D  NP  D  0.67  D ! 0.54  D " 0.49  D # 0.24 6,D $ x @ @x61984   % NP   & 0.47   ' 0.82   ( 0.48   ) 0.20 6, * x @ @x61985   + 0.83   , 0.42   - 0.71   . 0.45   / 0.18 6, 0 x @ @x61986  T1 1.07  T2 0.61  T3 0.73  T4 0.39  T5 0.17 6,T6 x @ @x61987  D7 1.06  D8 0.64  D9 0.75  D: 0.41  D; 0.24 6,D< x @ @x61988  = 1.28  > NP  ? 0.74  @ 0.46  A 0.29 6,B x @ @x61989  C 0.93  D NP  E 0.72  F 0.44  G 0.25 6,H x @ @x61990  TI NP  TJ NP  TK 0.64  TL 0.40  TM 0.18 9a(TN x @ px91991 2a!DOa 20.45 2a!DPa 2NP 2a!DQa 20.70 2a!DRa 20.38 2a!DSa 20.18 G=!DT x0 p a xGA"o "[>E~"oNOTES:0   NPindicatesthattheInternationalTradeCommissiondidnotpublishresinasalineitemin |V thatyear.Atditi>M>E~"[ >M  1'%jW  x    1"&`& "["condition  W     Themajorendmarketsfortheresinindustryhavebeenexperiencinglowgrowthratessince1986.ThetwoprimaryenduseindustriesforGroupIVresinsaretheautomotiveandconstructionmarkets.Theconstructionindustryhasbeeninaperiodofdeclinesince1986.Thistrendisexpectedtocontinueashighvacancyratesandloanproblemsforfinanciallenderscontinue.23Polystyrenesales  c  aresensitivetoconditionsinthehousingmarket.Housingstartshavehistoricallyhadapositiveeffectonpolystyrenedemandlevels.Consequently,asnewconstructionbeganadeclinein1988,aconcurrentdeclineinpolystyrenesalesoccurred.  Domesticproductionofautomobileshasbeendecliningsince1985,withtheexceptionof1988,whichshowedaslightriseinproduction.Asdiscussedintheprevioussection,themostcommonuseofABSandnitrileresinsisintheautomotivemarket.TheriseinABSuseinautomobilesreflectsadesireonthepartofautomobilemanufacturerstodecreasetheweightandcostoftheirvehicles.Asautomobileproductiondeclines,asithasinrecentyears,ABSandnitrileresindemandfromthissectorwilldecrease.+&  "&`&&"&`,& &&"&`    2.5.3  PastandPresentConsumption+{diti /| g" 'g{,& &&,& "&`&&,&     Table213showsthesalesofMBS,SAN,PET,ABS,andpolystyrenefrom1980through1991. k$ Thesalesdataforthesefiveresinsillustratethefluctuationsthatoccurintheresinindustryduetoconstantlychangingproductspecificationsandthestateoftechnology.(MABSandnitrileresinssalesdatawerenotavailable.)PETdemandinthepackagingresinsandfilmsenduses,however,hasnotexperiencednegativegrowthduetoasloweconomy.TheabilityofPETtoremaininhighdemandhasbeenattributedtoneworexpandedusesduetoresinsubstitutionandprocessinnovations,inadditiontoPET'sperceivedenvironmentalbenefits.  Afterapeakin1988,ABSdemandhasleveledoutsince1989,withanaverageannualgrowthrateof0.4percentsince1980.Thedemandforpolystyrenehasincreasedslowly,butconsistently,bothdomesticallyandworldwide,withanaverageannualgrowthrateof3percentsince1980.  (*x%: @TABLE 1V213.SALESLEVELSFORMBS,SAN,PET,ABS,ANDPOLYSTYRENE 1V.Ԉ@(19801991)24  * dd[dd ydd"ydd"dd"dd%ddU(#(#,Qdd ,Qdd",Qdd",dd,udd,dd%+  /a" h / 2a%a 2ResinSalesbyType(millionkilograms) VbE-"  a pV 2bb!" rb 2MBS ;bb*" r"bb ;SAN1 ;bb*" r "bb ;PET ;bb*" r "bb ;ABS ;bb*" r "bb ;Polystyrene LB*" r "  p bb PxL1980     NP    NP    167    423    1,629 6,  x P Px61981   & NP   & 47.5   & 197   & 417   & 1,631 6, & x P Px61982  (x  NP  (x  38.5  (x  229  (x  340  (x  1,448 6,(x  x P Px61983  z  NP  z  41.2  z ! 266  z " 460  z # 1,632 6,z $ x P Px61984   % NP   & 39.8   ' 363   ( 501   ) 1,736 6, * x P Px61985  n + NP  n , 38.0  n - 388  n . 470  n / 1,859 6,n 0 x P Px61986  p1 NP  p2 39.4  p3 469  p4 495  p5 2,020 6,p6 x P Px61987  7 78.2  8 57.5  9 546  : 562  ; 2,199 6,< x P Px61988  d= 43.5  d> 66.1  d? 624  d@ 842  dA 2,275 6,dB x P Px61989  fC 61.2  fD 48.9  fE 1,019  fF 500  fG 2,321 6,fH x P Px61990  I NP  J 60.6  K 969  L 519  M 2,285 9a(N x P x91991 2a! ZOa 244.8 2a! ZPa 251.6 2a! ZQa 21,060 2a! ZRa 2439 2a! ZSa 22,207 G=! ZT x0  a xGA"o&"&`>E~"oNOTES:0    1IncludesSANsalesonthemerchantmarket,inadditiontoSANproducedforcaptiveuse.fV5"5" 0  05"5"2IncludessalesofPETresins(film,bottle).Asinc>&&>E~"&`&&>&  1'%TW5"5" x    1  W +&  "&`&&"&`,& &&"&`    2.5.4  ImportsofSAN,MBS,PET,ABS,andPolystyrene+sinc  G ',& &&,& "&`&&,&     Importsasapercentageofdomesticconsumptionrangefrom1.3to11percentforGroupIV  resins.TradedataforMABSandnitrileresinswerenotavailable.ImportsofPETresinshaveincreasedsteadilysince1986atanaverageannualgrowthrateof12.2percent,andin1991,PETimportswereonly2percentofdomesticconsumption.Asapercentageofdomesticconsumption,SANimportswereonly2.5percentofdomesticSANsalesin1991.In1991,importsofMBScopolymersaccountedfor6.3percentofdomesticsales.ImportsofABSrepresented11percentofdomesticconsumptionin1991,andpolystyreneimportlevelswere1.3percentofdomesticsales.H&  "&`&&"&`I&)&&"&`    2.6  MARKETOUTLOOKHsinc ' 3  '˖I&)&&I&)"&`&&I&)    Thissectionpresentsquantitativecapacitygrowthprojectionsavailablefromtheliteratureforeach  affectedindustry.ProjectionsareimportanttotheEIAsincefuturemarketconditionscontributetothepotentialimpactsoftheNESHAPthatareassessedforthefifthyearafterregulation.PlannedcapacityexpansionsforPET,ABS,andpolystyreneareshowninTable214.&    TABLE 1V214.PLANNEDCAPACITYEXPANSIONSTHROUGH1996BYRESINTYPE 1V25,26,27 $!   * ddQdd Qdd"Qdd"ddudddd%(#(#,dd ,ddU,dd+  /a" b$ Px/ 2a%*%a 2MillionKilograms VbE-*&" x P a XVЀResinType 2bb!6(b 2Ѐ1991Capacity ;bb*6*"bb ;PlannedExpansionthrough1996 LB*6," X  bb HLPET  !h- 6,073  !h. 1,387 6,!h/ H  H6ABS  :"0 839  :"1 175 9a(:"2 H  PH9Polystyrene 2a!\#3a 22,906 2a!\#4a 24651'%\#5 H0 P  a 1'   ThePETmarketiscurrentlycharacterizedbyproductioncapacitythatisalreadyoperatingatnearlyfullcapacitywhich,combinedwiththeexistinghighlevelsofdemand,mayrestrictgrowthinthismarket.Gainsinprocesstechnologyhavepermittedahighandanefficientamountofbottleproductionandmarketswithhighgrowthpotentialhaveemerged.Alikelyresultofthissupplysituationisanincreaseinpricelevels,giventhatdemandisup,inventoriesaredown,andrawmaterialscostsareincreasing.PETisalsotheplasticthatisrecycledthemostaspost-consumerscrapintheUnitedStates.PresentmarketsforrecycledPETincludecarpeting,fiberfill,unsaturated .)E polyester,rigidurethanefoam,strapping,andengineeringplastics.  GrowthprojectionsforPETwereavailableonlyinthesoftdrinkbottleendusemarket.AverageannualgrowthforPETbottlesiscurrently15percent.SoftdrinkproducersviewPETrefillablebottlesasagrowthproduct,whichallowsthemtopackagetheirproductinlargecontainersinmarketswheretheuseofglasshasrestrictedcontainersize.Duetoahighconversioncost,refillablePETbottlesarenotexpectedtobeinhighdemandintheUnitedStates. ChemicalMarketingReporterpredictsthe Z   bottlegradePETresinmarkettogrowatarateof10percentperyearthrough1997.25󀀀Intheabsence   ofgrowthratesfortheother3PETtypes,EPA'sengineeringcontractorassumedanaverageannualgrowthrateof3percent.28CombiningthesetwoestimatesresultsingrowthofPETcapacityby1,387 /  millionkilogramsoverthenext5years.  NoquantitativeestimatesofgrowthintheSANindustrywereavailable.GiventhatSAN'sprimaryuseisasaninputtotheproductionofABS,andthatthreeofthefourSANmanufacturersalsoproduceABS,theoutlookforSANisexpectedtobeinaccordancewiththeABSoutlookinTable214.GrowthprojectionsfortheABSmarketare3to5percentperyearthrough1998.26 )   Producersreportthatdemandforpolystyrenehasbeenfairlysteadyforthepastyear.Polystyreneproducershavebeenrepositioningthemselvestorecreateoldmarkets,includingthoseinwhichpolystyreneisnotperceivedasenvironmentallyfriendly.Onegrowthmarketforpolystyreneisinthedisposablecutlerymarket,inwhichtheprimarycompetitorispolypropylene.Anotherendusemarketthatlookspromisingforoutputgrowthisforrefrigeratorlinings,auseforwhichpolystyrenecompetesdirectlywithABS.Theoutlookforpolystyreneispositive,withanaverageannualgrowthrateof3percent.27 "a.   QuantitativegrowthestimateswerenotavailableforMBS.TheusesofMBSaresimilartothoseofpolystyrene,whichisestimatedtohaveanaverageannualgrowthrateof3percentperyearthrough1998.27BecauseMBSpolymersaremainlyusedasanimpactmodifierforrigidpolyvinylchloride,the -'}"6 outlookforthismarketwillbedeterminedmainlybythehealthofthepackaging,building,andconstructionmarkets.  QuantitativegrowthestimateswerenotavailableforMABSandnitrileresins.Aspresentedearlierinthischapter,thepropertiesandendusesofthesetworesinsaresimilartothoseofABS.MABS -(@ polymersarealsosimilartoopaqueABSplastics,andareprimarilyusedintheproductionoffoodcontainers.MABSisformedfromABSandisaclearerformofthisresin,capableofusessimilartothoseofABS.  > @ REFERENCES   1.0  SocietyofthePlasticsIndustry,Inc.PlasticsEngineeringHandbookoftheSPI.FifthEdition. > Berins,M.L.(ed.).VanNostrandReinhold.NewYork,NY.1991. (#(# 2.0  Kirkothmer.KirkothmerEncyclopediaofChemicalTechnology.ThirdEdition.Vols.1,15,   18,21.JohnWileyandSons.NewYork,NY.January1978.Vol.I,p.442. (#(# 3.0  Reference2.Vol.15,p.377.Z  (#(# 4.0  Reference2.Vol.21,p.802.^ (#(# 5.0  PacificEnvironmentalServices.BackgroundInformationonPolymersandResinsGroupIV   Industry.ReceivedfromLarrySorrels.March1993. (#(# 6.0  SRIInternational,Inc.1992DirectoryofChemicalProducers.MenloPark,CA.1992.P (#(# 7.0  ModernPlastics.Resins1993.NewYork,NY.January1993.T(#(# 8.0  U.S.SmallBusinessAdministration."SmallBusinessSizeStandards;FinalandInterimFinal  Rules."13CFR121.FederalRegister.December21,1989.(#(# 9.0  PacificEnvironmentalServices.BackgroundInformationonPolymersandResinsGroupIV F Industry.ReceivedfromLarrySorrels.March1993. (#(# 10.0  Annualreportsofvariouspubliclyownedfirms.$(#(# 11.0  Dun&Bradstreet.Dun'sMillionDollarDirectory1993.Bethlehem,PA.1993.(#(# 12.0  U.S.DepartmentofCommerce,InternationalTradeCommission.SyntheticOrganicChemicals: < UnitedStatesProductionandSales,1970through1991.TimeSeriesDataRequest.Washington,DC.March17,1993. (#(# 13.0  Reference2.Vol.21,p.770.!"(#(# 14.0  Reference2.Vol.18,p.567.X#$(#(# 15.0  ModernPlastics.Encyclopedia'93.NewYork,NY.December1992.p.68. %\ &(#(# 16.0  Reference7.p.62.&"((#(# 17.0  Reference7.p.63.t(#*(#(# 18.  Reference7.p.63. (*x%, 19.0  U.S.DepartmentofCommerce,BureauoftheCensus,TradeDataInquiriesandControlSection. +,'. DataRequest.Washington,DC.March11,1993. (#(# 20.  Reference7.p.83. j.)1 Ї21.  Reference12.  22.0  Reference7.p.62.d(#(# 23.0  StandardandPoor's.IndustrySurveys:Chemicals.Vol.160,No.45,Sec.1.November5, h 1992. (#(# 24.  Reference12.   25.0  ChemicalMarketingReporter.ChemicalProfile:PET.May3,1993.Z  (#(# 26.0  ChemicalMarketingReporter.ChemicalProfile:ABS.March21,1994.^ (#(# 27.0  ChemicalMarketingReporter.ChemicalProfile:Polystyrene.April25,1994. (#(# 28.0  Meardon,Ken.PacificEnvironmentalServices.LettertoLarrySorrels,U.S.Environmental v  ProtectionAgency.CostandEconomicImpactsSection.EstimatedNewGrowthforGroupIV P  Resins.ResearchTrianglePark,NC.June30,1994.*z(#(#   T -       "9&"&`.=h"9    3.0ECONOMICMETHODOLOGY-ڼd,m      .&)&.=h"&`&&.&)  H&  "&`&&"&`I&)&&"&`    3.1  INTRODUCTIONHd,m  B  'BI&)&&I&)"&`&&I&)    Thepurposeofthischapteristooutlinetheeconomicmethodologyusedinthisanalysis.Baseline F  valuesusedinthepartialequilibriumanalysisarepresented,andtheanalyticalmethodsusedtoconductthefollowinganalysesaredescribedindividuallyinthischapter:90  "0(#(#  Partialequilibriummodelusedtocomputepostcontrolprice,output,andtradeimpacts;9 out  b (#(# 90  "0(#(#  Economicsurpluschanges;9out  Y(#(# 90  "0(#(#  Laborandenergyimpacts;and9|out  (#(# 90  "0(#(#  Capitalavailability.9out  7(#(# H&  "&`&&"&`I&)&&"&`    3.2  MARKETMODELHout  u 'uI&)&&I&)"&`&&I&)    Theframeworkfortheanalysisofeconomicimpactsoneachofthesevenaffectedresinindustries )y isapartialequilibriummodel.Apartialequilibriumanalysisisananalyticaltooloftenusedbyeconomiststoanalyzethesinglemarketmodel.Thismethodassumesthatsomevariablesareexogenouslyfixedatpredeterminedlevels.Thegoalofthepartialequilibriummodelistospecifymarketsupplyanddemand,estimatethepostcontrolshiftinmarketsupply,estimatethechangeinmarketequilibrium(priceandquantity),andpredictplantclosures.Thissectionpresentstheframeworkofthepartialequilibriummodel,baselineequilibriumconditions,thecalculationofthesupplycurveshift,andthemethodologyusedtocalculateimpactsontrade,closure,andlaborandenergyinputs.Thebaselineinputsforeachofthesevenaffectedindustriesarealsopresented.+&  "&`&&"&`,& &&"&`    3.2.1  PartialEquilibriumAnalysis+out  )?%- '),& &&,& "&`&&,&     Apartialequilibriumanalysiswasusedtoestimatetheeconomicimpactsofthechosenregulatory +&/ optionsforeachofthesevenaffectedindustries.Formodelingpurposes,itwasassumedthateachoftheindustriesisoperatinginaperfectlycompetitivemarket.Perfectlycompetitiveindustriesare 1.)3 characterizedbythefollowingconditions:thepresenceofmanysellers;productionofahomogeneousproduct;asmallmarketshareownedbyeachfirmintheindustry;freelyavailableinformationregardingprices,technology,andprofitopportunities;freedomofentryandexitbyfirmsintheindustry;andcompetingsellerswhicharenotconsideredasathreattomarketsharebyotherfirmsintheindustry.1Theimplicationofanassumptionofperfectcompetitiontothisanalysisisthatperfect   competitionconstrainsfirmsintheindustrytobepricetakersduetotheabsenceofthemarketpowernecessarytoaffectmarketprice.Firmswhichoperateinaperfectlycompetitiveindustryarealsoassumedtominimizecosts.  ThesevenaffectedGroupIVindustriesinthisanalysisdonotmeetthestrictdefinitionofperfectcompetitionparticularlywhenevaluatedonthebasisofthemostwidelyappliedofthesecriterionthenumberoffirmsinthemarket.ThenumberoffirmsineachofthePolymersandResinsGroupIVindustriesrangesfromonetofifteen.Ignoringotherfactors,thesefirmsarelikelytobecharacterizedasoligopolistists.However,theproductsproducedbythesefirmshaveclosesubstitutabilitywithotherresinsproducedinthemarketplace.Thus,theaffectedfirmsproducingGroupIVresinsfacecompetitionnotonlyfromotherfirmsproducingthesameresins,andalsofromfirmsproducingotherresinswhicharetechnicallyproducedbyanotherindustry,butarenonethelessconsideredtobeareasonablesubstitutebytheconsumer(i.e.businessfirm)usingtheresinasaninputtoproduction.  Thepresenceofclosesubstitutesinthemarketplaceyieldstheoptionofmodelingindustrieswithfewproducersasoligopolistic.Furtheradequatemodelingofoligopolymarketsrequiresmoreindepthinformationoneconomicbehaviorthaniscurrentlyavailable,giventhescopeofthisanalysis.ItisaccuratetoconcludethattheaffectedGroupIVfirmswillexhibitgreatermarketpower(controloverthemarketprice)thanispostulatedintheperfectlycompetitivemodelusedintheanalysis.However,ifoneassumesthemostextremecasethateachofthesefirmsisapuremonopolist,theprimarymarketimpactsarelikelytobelessseverethanthoseestimatedinthisanalysisundertheassumptionofpurecompetition.  Thepuremonopolistmaximizesprofitsbyproducingalevelofproductionthatequatesthefirm'smarginalrevenue(increaseinrevenueassociatedwithproducingonemoreunitofaproduct)withthefirm'smarginalcostofproduction(increaseincostresultingfromproductionofonemoreunitofaproduct).Increasesinfixedcosts,suchasemissioncontrolcapitalcosts,willnotaltertheprofitmaximizingmonopolistproductionquantitychoiceunlessthesecostsforcethefirmtoincurlossesand -(@ shutdown.Sinceasignificantportionoftheemissioncontrolcostestimatesusedinthisanalysisareduetothenecessarycapitalinvestmentrequiredbyfirms,itislikelythattheestimatedmarketimpactsundertheassumptionofacompetitivemarketplace(i.e.increasesinmarketpriceanddecreasesinmarketoutput)wouldexceedthoseestimatedassumingamonopolymarket.Fromthisstandpoint,theassumptionofperfectcompetitionmaybeinterpretedasanupperboundontheestimatedmarketimpactsresultingfromtheNESHAP.+&  "&`&&"&`,& &&"&`    3.2.2  MarketDemandandSupply+out t   ' ,& &&,& "&`&&,&     Thebaseline,orprecontrollevelsforeachoftheGroupIVresinmarketsareeachdefinedwitha U  domesticmarketdemandequation,adomesticmarketsupplyequation,aforeignsupplyequation(imports),andaforeigndemandequation(exports).Itisassumedthateachofthesemarketswillclear,orachieveanequilibrium.Thefollowingequationsidentifythemarketdemand,supply,andequilibriumconditionsforeachaffectedindustry:QA=zx 0 @Xdddddddd@Exd d,L@X (#(#  (#(#QA=zx 0 @Xdddddddd@EFxt d'LF@S (#(#  (#(#QA=zx 0 @Xdddddddd@Exq d'L@S (#(#  (#(#QA=zx 0 @Xdddddddd@Ebx| d'Lb@S (#(#  (#(#QA=zx 0 @Xdddddddd@Ex d6 'L@S (#(#  (#(#where:  QDd0  =0 (#(#thequantityoftheGroupIVresindemandedbydomesticconsumersannually, %\ 2 (# (#   QDf0  =0 (#(#thequantityoftheGroupIVresindemandedbyforeignconsumersandproducedby S&!4 domesticproducersannually(orexports),  (# (#   QSd0  =0 (#(#thequantityoftheGroupIVresinproducedbydomesticsupplier(s)annually,(1$8 (# (#   QSf0  =0 (#(#thequantityoftheGroupIVresinproducedbyforeignsuppliersandsoldintheUnited (*x%: Statesannually(orimports),  (# (#   P0  =0 (#(#thepriceoftheGroupIVresin,,(> (# (#   0  =0 (#(#thepriceelasticityofdemandfortheGroupIVresin,and-M)@ (# (#   0  =0 (#(#thepriceelasticityofsupplyfortheGroupIVresin. (# (#   Theconstants,, ,,and#,areparametersestimatedbythemodel,whicharecomputedsuch > thatthebaselineequilibriumpriceisnormalizedtoone.Themarketspecificationassumesthatdomesticandforeignsupplyelasticitiesarethesame,andthatdomesticandforeigndemandelasticitiesareidentical.Theseassumptionsarenecessary,sincedatawerenotreadilyavailabletoestimatethepriceelasticityofsupplyforforeignsuppliersandthepriceelasticityofdemandforforeignconsumers.+&  "&`&&"&`,& &&"&`    3.2.3  MarketSupplyShift+b  8  'r,& &&,& "&`&&,&     Thedomesticsupplyequationshownabovemaybesolvedfortheprice,P,ofeachoftheseven   GroupIVresins,respectively,toderiveaninversesupplyfunctionthatservesasthebaselinesupply 3  functionforeachindustry.Theinversedomesticsupplyequationforeachindustryisasfollows:QA=zx 0 @Xdddddddd@Eqxs dLLq@ (#(#   (#(#  Arationalprofitmaximizingbusinessfirmwillseektoincreasethepriceoftheproductitsellsbyanamountthatrecoversthecapitalandoperationcostsoftheregulatorycontrolrequirementsovertheusefullifeoftheemissioncontrolequipment.Thisrelationshipisidentifiedinthefollowingequation:QA=zx 0 @Xdddddddd@Ex4 d L@  (#(#   (#(#where:  C  =0  theincreaseinthesupplyprice,7!, (# (#   Q0  =0 (#(#output,~". (# (#   V0  =0 (#(#ameasureofannualoperatingandmaintenancecontrolcosts,#0 (# (#   D0  =0 (#(#annualdepreciation(straightlinedepreciationisassumed), %\ 2 (# (#   t0  =0 (#(#themarginalcorporateincometaxrate,S&!4 (# (#   S0  =0 (#(#acapitalrecoveryfactor,and'"6 (# (#   k0  =0 (#(#theinvestmentcostofemissioncontrols.(1$8 (# (#   Thus,themodelassumesthatindividualpolymerandresinfacilitieswillseektoincreasetheproductsupplypricebyanamount,C,thatequatestheinvestmentcostsincontrolequipment,k,tothe ,(> presentvalueofthenetrevenuestream(revenueslessexpenditures)relatedtotheequipment.Solving -M)@ theequationforthesupplypriceincrease,C,yieldsthefollowingequation:  QA=zx 0 @Xdddddddd@Ex\ dL@  (#(#   (#(#  Estimatesoftheannualoperationandmaintenancecontrolcostsandoftheinvestmentcostof  c  emissioncontrols,Vandk,respectively,wereobtainedfromengineeringstudiesconductedbyan Z   engineeringcontractorforEPAandarebasedon1989pricelevels.Productionlevelsreflectcalendaryear1991values.Thevariablesforannualdepreciationandthecapitalrecoveryfactor,DandS, 8  respectively,arecomputedasfollows:QA=zx 0 @Xdddddddd@EvxdULv@  (#(#      (#(#QA=zx 0 @Xdddddddd@Ex duL@F ߰&  where:  r0  =0 (#(#thediscountratefacedbyproducers,whichisassumedtobe10percent,and<( (# (#   T0  =0 (#(#thelifeoftheemissioncontrolequipment,whichis10yearsformostoftheproposed * emissioncontrolequipment.'  (# (#   EmissioncontrolcostswillincreasethesupplypriceforeachGroupIVresinbyanamountequivalenttotheperunitcostoftheannualrecoveryofinvestmentcostsplustheannualoperatingcostsofemissioncontrolequipment,orCi(idenotesthenumberofaffectedfacilitiesineachoftheseven %6!4 industries).ThebaselineproductcostcurveforeachoftheGroupIVresinsisunknownbecauseproductioncostsfortheindividualfacilitiesareunknown.Therefore,anassumptionismadethattheaffectedfacilitiesineachindustrywiththehighestaftertaxperunitcontrolcostsaremarginalinthepostcontrolmarket.Inotherwords,thosefirmswiththehighestaftertax,perunitcontrolcostsalsohavethehighestperunitprecontrolproductioncosts.Thisisaworstcasescenariomodelassumptionthatmaynotbethecaseinreality.Theassumption,however,resultsintheupperboundofpossible -(@ marketimpactsoccurringastheresultofregulation.Baseduponthisassumption,thepostcontrolsupplyfunctioncanbeexpressedasfollows:QA=zx 0 @Xdddddddd@E>x dL>@  (#(#   (#(#where:  c    C(C,qi)0  =0  (# (#afunctionthatshiftsthesupplyfunctiontoreflecttheincurrenceofcontrolcosts,Z   (# (#   Ci0  0 (#(#=0  (# (#theverticalshiftthatoccursinthesupplycurvefortheithfacilitytoreflectthe   increasedcostofproductioninthepostcontrolmarket,and  (# (#   qi0  0 (#(#=0  (# (#thequantityproducedbytheithfacilityproducingeachGroupIVresin, /  respectively.  (# (#   ThisshiftinthesupplycurveisshowngraphicallyinFigure31.  T  2Y31.0  IllustrationofPostNESHAPMarketModel 2YԀ(sameasFig.ES1) (#(# +&  "&`&&"&`,& &&"&`    3.2.4  ImpactoftheSupplyShiftonMarketPriceandQuantity+%ts,   '5,& &&,& "&`&&,&     Theimpactofthecontrolstandardsonmarketequilibriumpriceandoutputisderivedbysolving d forthepostcontrolmarketequilibriumandcomparingthenewequilibriumpriceandquantitytothebaselineequilibriumconditions.Sincepostcontroldomesticsupplyisassumedtobesegmented,orastepfunction,aspecialalgorithmwasdevelopedtosolveforthepostcontrolmarketequilibrium.Thealgorithmfirstsearchesforthesegmentinthepostcontrolsupplyfunctionatwhichequilibriumoccurs,andthensolvesforthepostcontrolmarketpricethatclearsthemarket.  Sincethemarketclearingpriceoccurswherethesumofdomesticdemandandforeigndemandofdomesticproductionequalspostcontroldomesticsupplyplusforeignsupply,thealgorithmsimultaneouslysolvesforthefollowingpostcontrolvariables:90  "0(#(#  Equilibriummarketprice;9 ts,  q(#(# 90  "0(#(#  Equilibriummarketquantity;9ts,  (#(# 90  "0(#(#  Changeinthevalueofdomesticproductionorrevenuestoproducers;O(#(# 9C ts,  90  "0(#(#  Quantitysuppliedbydomesticproducers;9 ts,  F(#(# 90  "0(#(#  Quantitysuppliedbyforeignproducers(imports);9 ts,   (#(# 90  "0(#(#  Quantitydemanded(domesticproduction)byforeignconsumers(exports);and$"(#(# 9c ts,  90  "0(#(#  Quantitydemandedbydomesticconsumers.90 ts,  k$(#(# Thechangesintheseequilibriumvariablesareestimatedbycomparingbaselineequilibriumvaluestopostcontrolequilibriumvalues.+&  "&`&&"&`,& &&"&`    3.2.5  TradeImpacts+a ts,   ~". '~"q ,& &&,& "&`&&,&     Tradeimpactsarereportedasthechangeinboththevolumeandthedollarvalueofexports, 2$0 imports,andnetexports(exportsminusimports).Thepriceelasticityofdemandforeachoftheproductshasbeenassumedtobeidenticalforforeignanddomesticconsumers,andthepriceelasticityofsupplyispresumedthesameforforeignanddomesticproducers.Asthevolumeofimportsrisesandthevolumeofexportsfalls,thevolumeofnetexportswilldecline.Sinceeachoftheresinsbeinganalyzedhaselasticdemand,itispossibletopredictthedirectionalchangeanticipatedinthedollarvalueofnetexports.Asaresultoftheemissioncontrols,thequantityofexportswilldecline,whilethepriceofeachoftheGroupIVresins,respectively,willincrease.Priceincreasesforproductswithelasticdemandresultinrevenuedecreasesfortheproducer.Consequently,thedollarvalueofexports j.)@ isanticipatedtodecreaseasaresultoftheemissioncontrols.Sincethepricepaidforimportsandthequantityofimportsincrease,thedollarvalueofimportswillincrease.Sincethedollarvalueofimportsriseandthedollarvalueofexportsfall,theresultingdollarvalueofnetexportswilldeclineinthepostcontrolmarket.  Thefollowingalgorithmsareusedtocomputethetradeimpactsoftheproposedregulatoryalternative:QA=zx 0 @Xdddddddd@E x5Q dmL @  (#(#     (#(#TD@zx 0 @Xdddddddd@Ex5* d$ mL@ ߰QA=zx 0 @Xdddddddd@Ex5* d#mL@  (#(#         (#(#QA=zx 0 @Xdddddddd@Ex5 d mL@QA=zx 0 @Xdddddddd@Ebx d'Lb@SQA=zx 0 @Xdddddddd@Ex dL@where:  QSf0  =0 (#(#thechangeinthevolumeofimports,X#0 (# (#   VIM0  =0  (# (#thechangeinthedollarvalueofimports,$2 (# (#   QDf0  =0 (#(#thechangeinthevolumeofexports,%6!4 (# (#   VX0  =0 (#(#thechangeinthedollarvalueofexports,-'}"6 (# (#   NX0  =0 (#(#thevolumechangeinnetexports,andt(#8 (# (#   VNX0  =0  (# (#thechangeinthedollarvalueofnetexports.) %: (# (# Thesubscripts1and0refertothepostandprecontrolequilibriumvalues,respectively,andallothervariableshavebeenpreviouslyidentified. -(@ Ї+&  "&`&&"&`,& &&"&`    3.2.6  PlantClosures+ts,   '*,& &&,& "&`&&,&     ItisassumedthataGroupIVfacilitywillcloseifitspostcontrolsupplypriceexceedsthepost d controlmarketequilibriumprice.Closuresinthisanalysisrelatetofacilities.Sincemostoftheaffectedfirmsproducediversifiedproducts,closureofafacilityintheanalysismaysimplymeanthatthefirmislikelytoceaseproductionofaparticularGroupIVresin,ortoeliminateonelineofproduction.Thefirmitselfwillnotshutdown;however,anindividualfacilitymaycloseorsimplyalineofproductionbediscontinued.    +&  "&`&&"&`,& &&"&`    3.2.7  ChangesinEconomicWelfare+ ort H! U  'U ,& &&,& "&`&&,&     Regulatorycontrolrequirementswillresultinchangesinthemarketequilibriumpriceandquantity  Y  ofGroupIVresinsproducedandsold.ThesechangesinthemarketequilibriumpriceandquantitywillaffectthewelfareofconsumersofproductsmanufacturedwithGroupIVresins,producersoftheseproducts,andsocietyasawhole.Themethodsusedtomeasurethesechangesinwelfarearedescribedbelow./"&`&&"&`,& &&"&`     3.2.7.1  ChangesinConsumerSurplus/#ort N$.,& &&,& "&`&&,&   Consumerswillbearalossinconsumersurplus,ora  deadweightloss,associatedwiththereductionintheamountofGroupIVresinssoldduetohigherpriceschargedfortheseresins.Thislossinconsumersurplusrepresentstheamountconsumerswouldhavebeenwillingtopayovertheprecontrolpriceforproductioneliminated.Additionally,consumerswillhavetopayahigherpriceforpostcontroloutput.Thisconsumersurpluschangefordomesticconsumers,CSd,isgivenby: 1( QA=zx 0 @Xdddddddd@Ex x#Hd [Lx @ (#(#    (#(#Thechangeinconsumersurplusisanestimateofthelossesofsurplusincurredbydomesticconsumersonly.Althoughbothdomesticandforeignconsumersmaysufferalossinsurplusasaresultofemissioncontrols,thisstudyfocusesonthechangeindomesticconsumersurplusonly.Thevariable, "(r#6 CSd,representsthechangeindomesticconsumersurplusthatresultsfromthechangeinmarket i)$8 equilibriumpriceandquantityoccurringaftertheincurrenceofregulatorycontrolcosts./"&`&&"&`,& &&"&`     3.2.7.2  ChangeinProducerSurplus/a*ort *.,& &&,& "&`&&,&   Thechangeinproducersurplusiscomposedoftwo >-(> elements.Thefirstelementrelatestooutputeliminatedastheresultofemissioncontrols.Thesecond .)@ elementisassociatedwiththechangeinpriceandcostofproductionforthenewmarketequilibriumquantity.Thetotalchangeinproducersurplusisthesumofthesetwoelements.Aftertaxmeasuresofsurpluschangesarerequiredtoestimatetheimpactofairqualitycontrolsonproducers'welfare.Theaftertaxsurpluschangeiscomputedbymultiplyingthepretaxsurpluschangebyafactorof1minusthetaxrate,or(1t),wheretisthemarginaltaxrate.Everydollarofaftertaxsurpluslossrepresentsacorrespondinglossintaxrevenuesofanamountequaltot/(1t)dollars.  Theloweroutputlevelsasaresultofcontrolcostscauseproducerstosufferawelfarelossinproducersurplus.AffectedGroupIVfacilitieswhichcontinueproducingaftertheincurrenceofcontrolcostsrealizeawelfaregainoneachunitofproductionproducedattributabletotheincrementalincreaseinthemarketprice.Producerswillalsoexperienceadecreaseinwelfareperunitofproductionrelatingtotheincreasedcapitalcostsandoperatingcostofemissioncontrols.Thetotalchangeinproducersurplusisspecifiedbythefollowingequation:QA=zx 0 @Xdddddddd@EKx#d[LK@ (#(#    (#(#  Sincedomesticsurpluschangesaretheobjectofinterest,thewelfaregainexperiencedbyforeignproducersduetohigherpricesisnotconsidered.Thisproceduretreatshigherpricespaidforimportsasadeadweightlossinconsumersurplus.HigherpricespaidtoforeignproducersrepresentsimplyatransferofsurplusfromtheUnitedStatestoothercountriesfromaworldeconomyperspective,butawelfarelossfromtheperspectiveofthedomesticeconomy./"&`&&"&`,& &&"&`     3.2.7.3  ResidualEffectonSociety/3ort  4.,& &&,& "&`&&,&   Thechangesineconomicsurplus,asmeasuredbythe "a. changeinconsumersurplusandproducersurplus,mustbeadjustedtoreflectthetruechangeinsocialwelfareresultingfromtheregulations.Theadditionaladjustmentsrelatetodifferencesintaxeffects,andtothedifferencebetweentheprivatediscountrateandthesocialdiscountrate.  Twoadjustmentsarenecessarytoadjusttheestimatedchangesineconomicsurplusfortaxeffects.Thefirstrelatestotheperunitcontrolcost,Cithatreflectsaftertaxcontrolcostsandisusedtopredict )&%: thepostcontrolmarketequilibrium.Thetruecostofemissioncontrolsmustbemeasuredonapretaxbasis. -(@   Asecondtaxrelatedadjustmentisrequiredbecausesurpluschangesreflecttheaftertaxwelfareimpactsofemissioncontrolcostsonaffectedfacilities.Asnotedpreviously,aonedollarlossinpretaxsurplusimposesanaftertaxburdenontheaffectedplantofanamountequalto(1t)dollars.Alternatively,aonedollarlossinaftertaxproducersurpluscausesacomplimentarylossoft/(1t)dollarsintaxrevenue.  Economicsurplusmustalsobeadjustedbecausetheprivateandsocialdiscountratesdiffer.Theprivatediscountrateisusedtoshiftthesupplycurveoffirmsintheindustrysincethisratereflectsthemarginalcostofcapitaltoaffectedfirms.Theeconomiccostsofregulationmustreflectthesocialcostofcapital.Thesocialdiscountratereflectsthesocialopportunitycostofresourcesdisplacedbyinvestmentsinemissioncontrols.  Thetotaladjustmentforthetwotaxeffectsandthesocialcostofcapitalisreferredtoastheresidualchangeineconomicsurplus,orRS.Thisadjustmentisspecifiedbythefollowingequation: K QA=zx 0 @Xdddddddd@Exd L@J (#(#   (#(#where:  pci0  =0 (#(#theperunitcostofcontrolsforeachfacility,assumingataxrateofzero,andadiscount $ rateof7percent.  (# (# Allothervariableshavebeenpreviouslydefined./"&`&&"&`,& &&"&`     3.2.7.4  TotalEconomicCosts/R>ort >.,& &&,& "&`&&,&   Thetotaleconomiccostsoftheregulationsarethesumofthe "a. changesinconsumersurplus,producersurplus,andtheresidualsurplus.Thisrelationshipisdefinedinthefollowingequations:QA=zx 0 @Xdddddddd@E&x: dL&@B (#(#  (#(#where:  EC0  =0 (#(#theeconomiccostofthecontrols.)&%: (# (# Allothervariableshavebeenpreviouslydefined. -(@ +&  "&`&&"&`,& &&"&`    3.2.8  LaborInputandEnergyInputImpacts+Alati EB  'A,& &&,& "&`&&,&     Theestimatesofthelabormarketandenergymarketimpactsassociatedwiththealternative d standardsarebasedonthebaselineinputoutputratiosandtheestimatedchangesindomesticproduction./"&`&&"&`,& &&"&`     3.2.8.1  LaborInputImpacts/&Dlati D.,& &&,& "&`&&,&   Thelabormarketimpactsaremeasuredasthenumberofjobslost    duetodomesticoutputreductions.Theestimatednumberofjoblossesareafunctionofthechangeinlevelofproductionthatisanticipatedtooccurasaresultoftheemissioncontrols.Employmentinformationisnotavailableonaresinspecificbasis.Forthisreason,totalproductionwagespaidandhoursworkedarebaseduponthelevelsreportedforSICcode2821,PlasticMaterials,SyntheticResins,andNonvulcanizableElastomers.TheratioofproductionwagestototalrevenuesforSICcode2821iscalculated.ThisratioisthenmultipliedbythedecreaseinvalueofdomesticproductiontoestablishthewagedecreasethatislikelytooccurasaresultoftheNESHAP.Thisdecreaseinproductionwagesisdividedbytheaverage1989hourlywageandby2,000hours(averagenumberofhoursworkedannuallyperemployee)toestimatethetransitionalemployeelayoffsthatarelikelytoresultfromtheregulation.Thelossinemploymentexpressedintermsofnumberofworkersisspecifiedasfollows:QA=zx 0 @Xdddddddd@Ex5dNmL@ (#(#   (#(#where:  L0  0 (#(#=0  (# (#thechangeintheemploymentlevelexpressedintermsofnumberofworkers, [* (# (#   LC00  0 (#(#=0  (# (#thetotalproductionwagesbasedon1989pricelevelsand1991productionlevels, R!, and  (# (#   W00  0 (#(#=0  (# (#thehourlywageforproductionworkersinSICcode2821basedon1989price #00 levels.  (# (# 0  Thenumber2,000intheequationrepresentsthenumberofhoursworkedannuallybyanaverageemployee,thesubscripts0and1representprecontrolandpostcontrolvalues,respectively,andallothervariableshavebeenpreviouslydefined. (#(# /"&`&&"&`,& &&"&`     3.2.8.2  EnergyInputImpacts/Mlati AN.,& &&,& "&`&&,&   Thereductioninenergyinputsoccurringasaresultofthe ,!(> NESHAPiscalculatedbasedontheexpectedreductioninexpendituresforenergyinputsattributableto 3.)@ postNESHAPproductiondecreases.Theexpectedchangeinuseofenergyinputsiscalculatedasfollows:QA=zx 0 @Xdddddddd@E>x5 d0mL>@ (#(#   (#(#where:  E0  =0 (#(#thechangeinexpendituresonenergyinputs,andZ   (# (#   E00  =0 (#(#thebaselineexpenditureonenergyinputperdollarvalueofoutputreportedforSIC   code2821.  (# (# Allothervariablesareaspreviouslydefined.+&  "&`&&"&`,& &&"&`    3.2.9  BaselineInputs+Rlati S T 'R,& &&,& "&`&&,&     Thepartialequilibriummodelusedinthisanalysisrequires,asdatainputs,baselinevaluesfor  variablesandparametersthathavebeenpreviouslydescribedtocharacterizeeachoftheGroupIVresinmarkets.Thesedatainputsincludethenumberofdomesticfacilitiescurrentlyinoperation,theannualcapacityperfacility,andtherelevantcontrolcostsperfacility.Table31liststhevariableandparameterinputstothemodelthatvaryforeachGroupIVindustry.Someofthedatainputswereunavailablefortheindividualproducts,ordonotdifferacrossGroupIVresinindustries.Table32listsvariablesandparametersthatareassumedtobethesameforeachoftheaffectedGroupIVresinindustries.Dataregardingthemarketprice,importratio,exportratio,andpriceelasticityofdemandfornitrilewereunavailable.Ithasbeenassumedthatthemarketprice,importratio,exportratio,andpriceelasticityofdemandfortheABSindustryarerepresentativeuseinthenitrileindustry.  '"6 &   @K K TABLE 1V31.PRODUCTSPECIFICBASELINEINPUTS 1VvXԈ"[ &"&`"srelation*q dddd ddUdd(#(#q, ,(,%,N,%,,%,,%,,%,k,%+  /a" d H/ 4ab%a 4ValuesbyGroupIVResinType RbE-" H  ab (RVariable/Parameter 0bb!b 0MBS 9bb*"bb 9SAN 9bb*"bb 9PET 9bb*"bb 9ABS/MABS 9bb* "bb 9Polystyrene 9bb* "bb 9Nitrile Oba>* " ( bb `(OPrice(P0)1   DomesticOutput,(Q0S)2  ԍ  ԍ   Imports,(Q0Sf)2 Z  Exports,(Q0Df)2  : DemandElasticity( )     2bba!z ba 2$0.9350  ԍ  ԍ2.803.78̄2.51     ;bba* "bba ;$0.3982  ԍ  ԍ1.3118.60̄1.61     ;bba* &"bba ;$0.722,987  ԍ  ԍ43.5190.8̄2.72     ;bba* /"bba ;$0.44576  ԍ  ԍ4891.6̄1.83     ;bba* 8"bba ;$0.252,189.8  ԍ  ԍ27.6163.1̄1.31     ;bba* A"bba ;$0.443 B 15.9  ԍ  ԍ1.43  F 2.43 < H ̄1.83     PF* J" (0 ` bba (P A"o "[>E~"oNOTES:0    1Centsperkilogram,excludingtaxes(1989$). L # # 0 , 0, #, #2Millionsofkilogramsperyear(1991productionlevels).R M # # 0 , 0, #, #3Themarketprice,importratio,andexportratioareassumedtobethesameastheABSandMABSindustries.Ac>M>E~"[ >M  1'%@ N # # (    1'6Xsre  &  TABLE 1V32.BASELINEINPUTSFORTHEPOLYMERSANDRESINSGROUPIVINDUSTRIES 1Vf  srelation"srelation* dd (,%N,%,%,%,%k,%(#(#,dd ,dd"+  3ab" vS <3Variable 2ab!Tab 2 Value Fa5!U <  ab FSupplyElasticity() V Taxrate(t)PrivateDiscountrate(r)SocialDiscountrateEquipmentlife(T)LaborCostRatio(LC0)1 f` EnergyCostRatio(E0)2  Fb Wage(W)3 2a!"da 24.7735%10%7%10years7.13%3.10%$28.47 G=!"s 0 a  GA"o "[>E~"oNOTES:0    1Productionwagesperdollarvalueofshipments(1989$).R$u"" 0 t 0t"t"2Energyexpendituresperdollarvalueofshipments(1989$).$@ v"" 0 t 0t"t"3PerhourproductionwageforSICcode2821(1989$).Aj >M>E~"[ >M  1'%% w""    1'f"&`& "["    ,&|!w   Tables31and32listthebaselineparametersandvariablesusedtocharacterizebaselinemarketconditions.ThebaselinemarketpricesandquantitiesforMBS,SAN,PET,ABS,andpolystyrenewereobtainedfromtheU.S.DepartmentofCommerce'sInternationalTradeCommission(ITC).2  ImportsandexportsofMBS,SAN,andPETresinswereobtainedfromtheU.S.DepartmentofCommerce'sBureauoftheCensus.3TradedataforABSandpolystyrenewereobtainedfromModern  c  Plastics.4Thep ricesarestatedincentsperkilogramexcludingtaxes,andindustryoutputisstatedin Z   millionsofkilogramsproducedannually.ThepriceelasticitiesofsupplyanddemandwereestimatedeconometricallyandarediscussedinSection3.3,IndustrySupplyandDemandElasticities. 8    Themarginaltaxrateof35percent,privatediscountrateof10percent,andsocialdiscountrateof7percentareratesthathavebeenassumedfortheanalysisassurrogatesfortheactualratesintheeconomy.Themarginaltaxrateof35percentreflectsthe1993marginalcorporatetaxrateforthehighestincomebracket.Sincetheaffectedfirmsareverylargemultiproductfirms,thistaxrateseemsthemostappropriateforthisanalysis.The1993Federalcorporatetaxratesvaryfromahighof39percenttoalowof34percentfortaxableincomelevelsabove$100,000peryear.NoattempthasbeenmadetoincorporateStateorlocaltaxesintothisestimate.The7percentsocialdiscountrateisconsistentwiththemostcurrentUnitedStatesOfficeofManagementandBudget(OMB)guidance.5 g" Theequipmentlifeof10yearswasobtainedfromtheengineeringstudyofemissioncontrolcostsconductedbyanengineeringcontractorforEPA.Thisequipmentlifeisapplicableformostofthepollutioncontrolequipmentconsideredintheanalysis.Theproductionwagesperdollarvalueofshipments(LC),hoursworked,wages,andtheenergyexpenditurepervalueofshipments(E)were * calculatedfromdataobtainedfromtheAnnualSurveyofManufactures(ASM)6,forcalendaryears  , 1989and1991.DatafromtheASMwhichwereusedtoderivetheseestimatesinclude:the1989and1991annualvaluesforproductionhoursworkedandproductionwages,1989and1991dollarvalueofdomesticshipments,1989and1991priceindicesforvalueofdomesticshipments,andthe1989and1991totalexpendituresonenergy.AllofthedataacquiredfromtheASMreflectthosereportedforSICcode2821. -'}"6 H&  "&`&&"&`I&)&&"&`    3.3  INDUSTRYSUPPLYANDDEMANDELASTICITIESHx  y ) %: ')xI&)&&I&)"&`&&I&)  +&  "&`&&"&`,& &&"&`    3.3.1  Introduction+y  hz o+&< 'o+ z,& &&,& "&`&&,&     Demandandsupplyelasticitiesarecrucialcomponentsofthepartialequilibriummodelusedto #-s(> quantifytheeconomicimpactofregulatorycontrolcostmeasuresontheaffectedGroupIVindustries. j.)@ Thepriceelasticitiesofdemandandsupplyforeachresinwereunavailablefrompublishedsources.Itwasthereforedeterminedthatthepriceelasticityofdemandandsupplyshouldbeestimatedeconometricallyforthisanalysis.Thefollowingsectionspresenttheanalyticalapproachandthedataemployedtoestimatethepriceelasticitiesofdemandandsupplyusedinthepartialequilibriumanalysis.Thetechniquesutilizedtoestimatethepriceelasticityofdemandandsupplyareconsistentwitheconomictheoryand,atthesametime,utilizethedataavailable.+&  "&`&&"&`,& &&"&`    3.3.2  PriceElasticityofDemand+~  ~   ' ~,& &&,& "&`&&,&     Thepriceelasticityofdemand,orownpriceelasticityofdemand,isameasureofthesensitivityof U  buyersofaproducttoachangeinpriceoftheproduct.Thepriceelasticityofdemandrepresentsthepercentagechangeinthequantitydemandedresultingfromeach1percentchangeinthepriceoftheproduct./"&`&&"&`,& &&"&`     3.3.2.1  Approach/;ity .,& &&,& "&`&&,&   MBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresinsareusedas  intermediateproductstoproducefinalgoods.Thedemandfortheseproductsisthereforederivedfromthedemandforthesefinalproducts.InformationconcerningtheendusesbyresintypeisprovidedintheIndustryProfileForthePolymerandResinsIVNESHAPRevisedReport.7Accordingtothe   informationcontainedinthisprofilereport,MBSisusedprimarilyasaninputintoPVC(polyvinylchloride)production,whichisthenusedasaninputintoproductionofbuilding,construction,andpackagingproducts.SANisusedprimarilyforconsumerproductsincludingrefrigeratorshelvesanddishwashersafehousewares.PET'sendusesareprimarilyasinputsforsoftdrinkbottles,custombottling,andmagneticfilm.ABSandnitrileresinsareprimarilyusedtoproductautomotivepartsandhousewares.MABS'andpolystyrene'sprimaryendusesareasinputstothemanufactureoffoodandnonfoodpackaging.Themethodologyusedtoestimatethepriceelasticityofdemandforeachproductwillconsidertherelevantendusemarketforeachresin.̀  TheassumptionwasmadethatfirmsusingMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresinsasinputsintotheirproductiveprocessesseektomaximizeprofits.Theprofitfunctionforthesefirmsmaybewrittenasfollows:QA=zx 0 @Xdddddddd@EC*xdLC*@  (#(#   (#(#where: .h)@   !0  0 (#(#=0  (# (#profit, (# (#   PFP0  0 (#(#=0  (# (#thepriceofthefinalproductorenduseproduct,G (# (#   f(Q,I)0  =0  (# (#theproductionfunctionofthefirmproducingthefinalproduct,> (# (#   P0  0 (#(#=0  (# (#thepriceoftheGroupIVresin, (# (#   Q0  0 (#(#=0  (# (#thequantityinputuseoftheGroupIVresin,  (# (#   POI0  0 (#(#=0  (# (#avectorofpricesofotherinputsusedtoproducethefinalproduct,and c  (# (#   I0  0 (#(#=0  (# (#avectorofotherinputsusedtoproducethefinalproduct.Z   (# (# Allothervariableshavebeenpreviouslydefined.  ThesolutiontotheprofitfunctionmaximizationresultsinasystemofderiveddemandequationsforMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresins.Thederiveddemandequationsareofthefollowingform:QA=zx 0 @Xdddddddd@Ex? dL@B (#(#  (#(#Amultiplicativefunctionalformofthederiveddemandequationisassumedbecauseoftheusefulpropertiesassociatedwiththisfunctionalform.Thefunctionalformofthederiveddemandfunctionisexpressedinthefollowingformula:QA=zx 0 @Xdddddddd@Egx5! d6mLg@ (#(#   (#(#where:  0  =0 (#(#thepriceelasticityofdemandfortheGroupIVresin,and* (# (#   FP0  =0 (#(#thefinalproductpriceelasticitywithrespecttotheuseoftheGroupIVresin. , (# (# Allothervariableshavebeenpreviouslydefined.,FP,andAareparameterstobeestimatedbythe "a. model.representstheownpriceelasticityofdemand.Thepriceofotherinputs(representedbyPOI) X#0 hasbeenomittedfromtheestimatedmodel,becausedatarelevanttotheseinputswereunavailable.TheimplicationofthisomissionisthattheuseofMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresinproductionisfixedbytechnology.  ThemarketpriceandquantitysoldofeachGroupIVresinaresimultaneouslydeterminedbythedemandandsupplyequations.Forthisreason,itisadvantageoustoapplyasystemsestimatortoobtainunbiasedandconsistentestimatesofthecoefficientsforthedemandequations.8 3#Twostageleast I,'> squares(2SLS 3#")istheestimationprocedureusedinthisanalysistoestimatethedemandequationsfor -(@ theGroupIVresins.Twostageleastsquaresusestheinformationavailablefromthespecificationofanequationsystemtoobtainauniqueestimateforeachstructuralparameter.Thepredetermined,orexogenous,variablesinthedemandandsupplyequationsareusedasinstruments.Thesupplysidevariablesusedtoestimatethedemandfunctionsinclude:therealcapitalstockvariableforSICcode2821adjustedforcapacityutilization(K),atechnologytimetrend(t),andtheweightedaveragepriceindexforthecostoflaborandmaterialsforSICcode2821(PK,L).  c  /"&`&&"&`,& &&"&`     3.3.2.2  Data/Aity .,& &&,& "&`&&,&   Datarelevanttotheeconometricmodelingofthepriceelasticityofdemandfor   MBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresins,includingthevariablesymbol,unitsofmeasure,andvariabledescriptionsarelistedinTable33.ConsistenttimeseriespriceandquantitysolddataforGroupIVresinswerenotavailableinsufficientdetailtoestimatethepriceelasticityofdemandforeachproductwiththisinformation.TimeseriespricedatawereavailablefortheABSandpolystyreneindustriesbutwereunavailablefortheMBS,SAN,andPETindustries.Inlieuofthisinformation,annualpriceandsalesquantitydataforStyrenicPlasticsareconsideredasthepriceandquantitysoldforMBS,SAN,andPET,respectivelyintheeconometricestimationofthepriceelasticityofdemandforeachproduct.SincetheseGroupIVresinsareasubsetoftheStyrenicPlasticscategoryofproducts,thispriceandsalesinformationisrelevanttotheproductsbeingstudied.AtimeseriesofdomesticpriceandsalesquantitieswereobtainedfromtheITCforStyrenicPlasticsandABSfor19701991andforpolystyrenefrom19761991tobeusedintheeconometricestimation.9Thefinal $ productsproducedwitheachGroupIVresindiffer,aspreviouslydiscussed.  Aseriesofpricesforthesefinalproductsweresought.Thepriceofconstructionandbuilding,theprimaryendproductusesforMBS,isrelevanttothedemandestimationforMBS.Atimeseriesofthepriceindexforbuildingandconstructionwasacquiredfromthe1992StatisticalAbstractforbuilding  5, andconstructionfortheperiod19701991.10SinceSANisprimarilyaninputtotheproductionof ,"|. &sticityof"sticityofmiscellaneousplasticproductsandrefrigeratorshelves,thefollowingtwoalternativepriceindiceswereconsideredintheestimationofthepriceelasticityofdemandforSAN:thepriceindexforvalueofshipmentsforSICcode3079,PlasticProducts,NotElsewhereClassified,andthepriceindexforSIC &Q!4 code3632,HouseholdRefrigeratorsandHomeandFarmFreezers.Timeseriespriceindicesdata H'"6 wereavailablefromtheASMforthesevariablesfortheperiod19701991.11󀀀 (#8 Theempiricalresultsfor (#8 theSANdemandmodelusingSICcode3079werenotsuccessfulandareneitherusedintheanalysisnorreported.  PETisusedasafactorofproductioninsoftdrinkbottlingandmagneticfilm.Atimeseriesofthe -(@ priceindexforvalueofdomesticshipmentsforSICcode2086,BottledandCannedSoftDrinkand  CarbonatedWaterswasacquiredfromtheASMfortheperiod1970through1991.11󀀀  G   TABLE 1V33.DATAINPUTSFORTHEESTIMATIONOFDEMANDEQUATIONSFORGROUPIVINDUSTRIES 1V*  *` dddd dd"(#(#`,(( ,p(( ,(( +  3ab" > 3Variable 2ab!6ab 2UnitofMeasure 2ab!6ab 2Description Fa5!6   ab `xF1.0 8 TimeTrendtH 88 2.0 8 Price(StyrenicPlastics)P1" r88 3.0 8 SalesVolumeofStyrenicPlasticsQ1 L 88 4.0 8 PriceFinalGoodsPFP  88 0 8 a.BuildingandConstruction2  88 0 8 b.Refrigerators3d 88 0 8 c.SoftDrinkManufacturing3> 88 0 8 d.PlasticProducts,NEC3h 88 0 8 e.PlasticPipe3B 88 0 8 f.MotorVehiclePartsandAccessories3 88 0 8 g.PlasticFoamProducts3 88 0 8 h.HouseholdAudioandVideoEquip.388 0 8 i.ElectricHousewaresandFans3Z88 5.0 8 Costofmaterialinputs3488 6.0 8 Priceindexformaterialinputs3^88 7.0 8 ProductionWorkerWages3888 8.0 8 ProductionWorkerHours388 9.0 8 RealCapitalStock388 10.0 8 CapacityUtilizationFactor4v88 11.0 8 ImplicitPriceDeflator5 <a+ P88a <Єpriceperkilogrammillionsofkilogramsindexindexindexindexindexindexindexindexindexmillionsofdollarsindexmillionsofdollarsmillionsofhoursmillionsof1987$percentageindex ;a*P0a ;ЄAnnualAveragePriceQuantitysoldofStyrenicPlastics̄SICcode3632SICcode3632SICcode2086SICcode3079SICcode3084SICcode3714SICcode3086SICcode3651SICcode3634SICcode2821SICcode2821SICcode2821SICcode2821SICcode28Baseyearis1987 G=!PE x0 ` a xGA"o&"&`>E~"oNOTES:0    1.InternationalTradeCommission.G##  8   2.1993StatisticalAbstract. 8   3.AnnualSurveyofManufactures. 8   4.FederalReserveBoard. 8   5.BusinessStatistics19611991.A1>&&>E~"&`&&>&  '$tK x    '&991.10"991.10  K In1987,magneticfilmproductionwasseparatedintoSICcode3081,UnsupportedPlasticSheetand  Film.However,insufficienttimeseriesdatawereavailableforthisSICcodetobeusedinthemodel G estimation.Priorto1987,theseproductswereclassifiedasSICcode3079PlasticProducts,Not > ElsewhereClassified.ThemodelestimationwithpriceinformationforSICcode3079was  unsuccessful,aspreviouslydiscussed,andtheseresultsareneitherusedinthestudynorreported.However,themodelusingthepriceindexforvalueofdomesticshipmentsforSICcode2086fortheperiod1970through1991isutilizedtoestimatethepriceelasticityofdemandforPET.TimeseriesdatawereunavailableforthenitrileandMABSindustries.ForthisreasontheresultsoftheanalysisfortheABSindustryisassumedtobeapplicabletotheseindustries.TheprimaryendproductusesforABS,MABS,andnitrileincludeconsumerproducts,automotivecomponents,miscellaneousplasticproducts,andpipesandfittings.TimeseriespricedatawereobtainedfromtheASMforSICcode3084,PlasticPipe,SICcode3714,MotorVehiclePartsandAccessories,andSICcode3079,Plastic   Products,NEC.Themodelswereestimatedwitheachoftheseenduseproductsfor1970through T 1991.Themodelusingpricesofautomotiveparts(SICcode3714)isusedintheanalysis.Othermodelsestimatedwereunsuccessful.Finally,polystyreneisusedprimarilyinmiscellaneouspackagingandelectronics.TimeseriespricedatawereobtainedfromtheASMforSICcode3651,Household ) AudioandVideoEquipment,SICcode3634,ElectronicHousewaresandFans,andSICcode3079,  p  MiscellaneousPlasticProducts,NECfor1976through1991.Econometricestimatesweredeveloped g" usingeachofthealternativeenduseproductpricedata.ThemodelutilizingpricedataforSICcode3634isusedintheanalysis.Othermodelsestimatedwereunsuccessful.AllpricedataweredeflatedtoreflectrealvaluesusingtheImplicitGrossDomesticPriceDeflatorobtainedfromBusinessStatistics <( for1970through1991.12󀀀Therealcapitalstockvariablewasadjustedtoreflectvaryingannual * capacityutilizationusingtheannualcapacityutilizationrateforSICcode28obtainedfromtheFederalReserveBoardfortheyears1970through1991.13 "a. /"&`&&"&`,& &&"&`     3.3.3.2  StatisticalResults/Ƽ1  .,& &&,& "&`&&,&   TwostageleastsquareeconometricmodelswereestimatedforMBS, $2 SAN,PET,ABS,MABS,polystyrene,andnitrileresins,respectively,usingthepreviouslydiscusseddataandtechniques.ThemodelresultsforthecoefficientsofthedemandmodelsforthesesevenGroupIVresinsarereportedinTable34. -(@ Ї&991.10"991.10@ TABLE 1V34.DERIVEDDEMANDCOEFFICIENTS 1VԈ*q dd(( p(( (( (#(#q,dd ,dd,ddu+  /a"  h/Product .a!;a .OwnPrice1 7a*;"a 7EndUseFP1 ObB*;" h a pOMBS .b! b .Є2.51(.803) .b!_  b .7.31(2.222) C9!_   p  b `CSAN     Є1.61(.607)  s  Є.120(.179) 6,s  `  `6PET    Є2.72(.793)    7.37(2.131) 6,  `  `6ABS/MABS/Nitrile    Є1.83(.277)    2.28(.995) 9a(  `  @`9Polystyrene 2a! a 2Є1.31(.473) 2a! a 2Є.46(.539) G=! " `0 @ a `GA"o&"&`>E~"oNOTES:0 |   Standarderrorsareshowninparenthesis.A/>&&>E~"&`&&>&  1'%C$| @| @ `    1&*q"*qStandarderrorsareshowninparenthesis.EachofthecoefficientsreportedhavetheanticipatedsignandarestatisticallysignificantwiththeexceptionoftheenduseproductcoefficientforSANandforpolystyrene.Thesecoefficientarenotstatisticallysignificantanddonothavetheanticipatedsign.EachofthemodelswereadjustedtocorrectforfirstorderserialcorrelationusingthePraisWinstenalgorithm.  TheelasticityestimatesforeachoftheGroupIVresinsreflectthatthedemandforeachresiniselastic.Regulatorycontrolcostsaremorelikelytobepaidbyconsumersofproductswithinelasticdemandwhencomparedtoproductswithelasticdemand,allotherthingsheldconstant.Priceincreasesforproductswithelasticpriceelasticityofdemandleadtorevenuedecreasesforproducersoftheproduct.Thus,onecanpredictthatpriceincreasesresultingfromimplementationofregulatorycontrolcostswillleadtoadecreaseinrevenuesforfirmsintheaffectedGroupIVindustries.̀  Adegreeofuncertaintyisassociatedwiththismethodofdemandestimation.Theestimationisnotrobustsincethemodelresultsvarydependingupontheinstrumentsusedintheestimationprocess,andasaresultofthecorrectionmethodsforserialcorrelation.Forthesereasons,asensitivityanalysisofthepriceelasticityofdemandestimatesispresentedusingarangeofelasticitiesthatdifferbyaplusoneandminusonestandarddeviationfromthoseutilizedintheanalysis.AlowerandupperboundestimateforMBSof1.71and3.31,forSANof1.0and2.22,forPETof1.93and .*K Є3.51,forABS/MABS/nitrileof1.55and2.10,andforpolystyreneof.84and1.79isassumedinthissensitivityanalysis.TheresultsofthesensitivityanalysisarereportedinAppendixA.+&  "&`&&"&`,& &&"&`    3.3.3  PriceElasticityofSupply+ m  ',& &&,& "&`&&,&     Thepriceelasticityofsupply,orownpriceelasticityofsupply,isameasureoftheresponsiveness 9  ofproducerstochangesinthepriceofaproduct.Thepriceelasticityofsupplyindicatesthepercentagechangeinthequantitysuppliedofaproductresultingfromeach1percentchangeinthepriceoftheproduct./"&`&&"&`,& &&"&`     3.3.3.1  ModelApproach/ .,& &&,& "&`&&,&   Publishedsourcesofthepriceelasticityofsupplyusingcurrentdata   werenotreadilyavailable.Forthisreason,aneconometricanalysisofthepriceelasticityofsupplyforthePolymersandResinsGroupIVindustrieswasconducted.Theapproachusedtoestimatethepriceelasticityofsupplymakesuseoftheproductionfunction.Thetheoreticalmethodologyofderivingasupplyelasticityfromanestimatedproductionfunctionwillbebrieflydiscussedwiththeindustryproductionfunctiondefinedasfollows:QA=zx 0 @Xdddddddd@Eax dXLa@3 (#(#& c ԰  (#(#where:  QS0  =0 (#(#thequantityofMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresinsproduced 6$ bydomesticGroupIVfacilities,'ca  (# (#   L0  =0 (#(#thelaborinput,ornumberoflaborhours,( (# (#   K0  =0 (#(#realcapitalstock, [* (# (#   M0  =0 (#(#thematerialinputs,andR!, (# (#   t0  =0 (#(#atimevariabletoreflecttechnologychanges.". (# (#   Inacompetitivemarket,marketforcesconstrainfirmstoproduceatthecostminimizingoutputlevel.Costminimizationallowsforthedualitymappingofafirm'stechnology(summarizedbythefirm'sproductionfunction)tothefirm'seconomicbehavior(summarizedbythefirm'scostfunction).Thetotalcostfunctionforapolymerandresinfacilityisasfollows:QA=zx 0 @Xdddddddd@EC*xu dLC*@3 (#(#  (#(#where:  TC  =  thetotalcostofproduction,and .h)@   C  =  thecostofproduction(includingcostofmaterialsandlabor).  Allothervariableshavebeenpreviouslydefined.  Thismethodologyassumesthatcapitalstockisfixed,orasunkcostofproduction.Theassumptionofafixedcapitalstockmaybeviewedasashortrunmodelingassumption.Thisassumptionisconsistentwiththeobjectiveofmodelingtheadjustmentofsupplytopricechangesafterimplementationofcontrols.Firmswillmakeeconomicdecisionsthatconsiderthosecostsofproductionthatarediscretionaryoravoidable.Theseavoidablecostsincludeproductioncosts,suchaslaborandmaterials,andemissioncontrolcosts.Incontrast,costsassociatedwithexistingcapitalarenotavoidableordiscretionary.Differentiatingthetotalcostfunctionwithrespectto QS derivesthe v  followingmarginalcostfunction:QA=zx 0 @Xdddddddd@Ex9 dL@3 (#(#  (#(#where MC isthemarginalcostofproductionandallothervariableshavebeenpreviouslydefined.    Profitmaximizingcompetitivefirmswillchoosetoproducethequantityofoutputthatequatesmarketprice, P ,tothemarginalcostofproduction.Settingthepriceequaltotheprecedingmarginal g" costfunctionandsolvingfor QS yieldsthefollowingimpliedsupplyfunction: $ QA=zx 0 @Xdddddddd@Ex> d4L@` (#(#  (#(#where:  P0  =0 (#(#thepriceofMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresins, , (# (#   PL0  =0 (#(#thepriceoflabor,and"a. (# (#   PM0  =0 (#(#thepriceofmaterialsinput.X#0 (# (# Allothervariableshavebeenpreviouslydefined.  Anexplicitfunctionalformoftheproductionfunctionmaybeassumedtofacilitateestimationofthemodel.Forthisanalysis,theCobbDouglas,ormultiplicativeform,oftheproductionfunctionispostulated.TheCobbDouglasproductionfunctionhastheconvenientpropertyofyieldingconstantelasticitymeasures.Thefunctionalformoftheproductionfunctionbecomes: -(@ QA=zx 0 @Xdddddddd@Ex5y dmL@ (#(#   (#(#where:  Qt0  0 (#(#0  (# (#0 (# (#=0 (# (#thesumoftheindustryoutputofMBS,SAN,PET,ABS,MABS,   polystyrene,andnitrileresinsproducedinyeart,  (# (#   Kt0  0 (#(#0  (# (#0 (# (#=0 (# (#therealcapitalstockinyeart,Z   (# (#   Lt0  0 (#(#0  (# (#0 (# (#=0 (# (#thequantityoflaborhoursusedtoproduceGroupIVresinsinyeart,  (# (#   Mt0  0 (#(#0  (# (#0 (# (#=0 (# (#thematerialinputsinyeart,and8  (# (#   A,K,L,M,0 =0 (# (#parameterstobeestimatedbythemodel./  (# (#   Thisequationcanbewritteninlinearformbytakingthenaturallogarithmsofbothsidesoftheequation.Linearregressiontechniquesmaythenbeapplied.Usingtheapproachdescribed,theimpliedsupplyfunctionmaybederivedas:QA=zx 0 @Xdddddddd@ExdL@B (#(#  (#(#where:  PL0  =0 (#(#thefactorpriceofthelaborinput,g" (# (#   PM0  =0 (#(#thefactorpriceofthematerialinput,and$ (# (#   K0  =0 (#(#fixedrealcapital.E& (# (# The   i and  coefficientsarefunctionsofthe i ,thecoefficientsoftheproductionfunction.The * supplyelasticity,  ,isequaltothefollowing:  , QA=zx 0 @Xdddddddd@E"xW d8L"@d  (#(#   (#(#  Itisnecessarytoplacesomerestrictionsontheestimatedcoefficientsoftheproductionfunctioninordertohavewelldefinedsupplyfunctioncoefficients.Thesumofthecoefficientsforlaborandmaterialsshouldbelessthanone.Coefficientvaluesfor L and M thatequaltooneresultinaprice t(#8 elasticityofsupplythatisundefined,andvaluesgreaterthanoneresultinnegativesupplyelasticitymeasures.Forthesereasons,theproductionfunctionisestimatedwiththerestrictionthatthesumofthecoefficientsfortheinputsequalone.Thisisanalogoustoassumingthatthepolymersandresinsindustryexhibitsconstantreturnstoscale,orisalongrunconstantcostindustry.Thisassumption -(@ seemsreasonableonanaprioribasisandisnotinconsistentwiththedata.  /"&`&&"&`,& &&"&`     3.3.3.3  EstimatedModel/-hat .,& &&,& "&`&&,&   TheestimatedmodelreflectstheproductionfunctionfortheMBS, > SAN,PET,ABS,MABS,polystyrene,andnitrileresinindustries,usingannualtimeseriesdatafortheyearsfrom1959through1991.Thefollowingmodelwasestimatedeconometrically:QA=zx 0 @Xdddddddd@E. xdIL. @B! (#(#  (#(#whereeachofthevariablesandcoefficientshavebeenpreviouslydefined./"&`&&"&`,& &&"&`     3.3.3.4  Data/lhat .,& &&,& "&`&&,&   ThedatausedtoestimatethemodelareenumeratedinTable35.Thistable J  containsalistofthevariablesincludedinthemodel,theunitsofmeasure,andabriefdescriptionofthedata.Thedataforthepriceelasticityofsupplyestimationmodelincludes:thevalueofdomesticshipmentsinmillionsofdollars;thepriceindexforvalueofdomesticshipments(thevalueofdomesticshipmentsdeflatedbythepriceindexrepresentthequantityvariable, Q torthedependentvariablein  theanalysis);atechnologytimevariable, t ;realnetcapitalstockadjustedforcapacityutilization, Kt in  millionsofdollars;thenumberofproductionlabormanhours, Lt ;thematerialinputsinmillionsof _ dollars, Mt ;andthepriceindexforvalueofmaterials.Datatoestimatetheproductionfunctionona V  resinspecificbasiswereunavailable;therefore,dataforSICcode2821isutilizedforeachofthevariablespreviouslyenumeratedwiththeexceptionofthetimevariableandthecapacityutilizationfactor,whichisona2digitSICcodelevel.ThecapitalstockvariablerepresentsrealnetcapitalstockforSICcode2821adjustedforcapacityutilizationusingthecapacityutilizationfactor.  TABLE 1V35.DATAINPUTSFORTHEESTIMATIONOFTHEPRODUCTIONFUNCTIONFORGROUPIVINDUSTRIES 1V  *q dddd ddddu(#(#q,rdd , dd ,/ dd +  3ab" $% 1 3Variable 2ab!}% 2ab 2UnitofMeasure 2ab!}% 3ab 2Description Fa5!}% 4   ab P xF Qt (x t  Kt  D  Lt z    Mt 2a! a 2MillionsofdollarsYearsMillionsof1987dollarsThousandoflabormanhoursMillionsofdollars 2a!` a 2ThevalueofshipmentsforSICcode2821deflatedbythepriceindexforvalueofshipments1 , technologytimetrendRealcapitalstockforSICcode2821adjustedforcapacityutilization1,2  n" ProductionworkerhoursforSICcode28211  % DollarvalueofmaterialinputforSICcode2821deflatedtorealvaluesusingthematerialspriceindex1 G=!d ) x0 P a xGA"o&"&`>E~"oNOTES:0    1AnnualSurveyofManufactures.p+"" 0 t 0t"t"2FederalReserveBoard.A>&&>E~"&`&&>&  1'%^,"" x    1& "   Thecapitalstockvariablewasthemostdifficultvariabletoquantifyforuseintheeconometricmodel.Ideally,thisvariableshouldrepresenttheeconomicvalueofthecapitalstockactuallyusedbyeachfacilitytoproduceGroupIVresinsforeachyearofthestudy.ThemostreasonabledataforthisvariablewouldbethenumberofmachinehoursactuallyusedtoproduceGroupIVresinseachyear.Thesedataareunavailable.Inlieuofmachinehoursdata,thedollarvalueofnetcapitalstockinconstant1987prices,orrealnetcapitalstock,isusedasaproxyforthisvariable.However,thisdataisflawedintwoways.First,thedatarepresentaccountingvaluationsofcapitalstockratherthaneconomicvaluations.Thisaberrationisnoteasilyremedied,butisgenerallyconsideredunavoidableinmoststudiesofthiskind.Thesecondflawinvolvescapitalinvestmentthatisidleandnotactuallyusedinproductioninaparticularyear.Thiserrormaybecorrectedbyadjustingthecapitalinvestmenttoexcludetheportionofcapitalinvestmentthatisidleanddoesnotcontributedirectlytoproductioninagivenyear.Inanefforttofurtherrefinethedata,realcapitalstockwasadjustedforcapacityutilization.Thisrefinementresultsinadatainputthatconsidersthepercentageofrealcapitalstockactuallyutilizedinresinproductioneachyear./"&`&&"&`,& &&"&`     3.3.3.5  StatisticalResults/d   .,& &&,& "&`&&,&   Arestrictedleastsquaresestimatorwasusedtoestimatethe =+&O coefficientsoftheproductionfunctionmodel.Aloglinearspecificationwasestimatedwiththesumofthe i restrictedtounity.Thisprocedureisconsistentwiththeassumptionofconstantreturnstoscale. -6)S ThemodelwasfurtheradjustedtocorrectforfirstorderserialcorrelationusingthePraisWinstenalgorithm.TheresultsoftheestimatedmodelarepresentedinTable36.Allofthecoefficientshavetheexpectedsign,butonlythematerialscoefficientissignificantlydifferentfromzerowithahighdegreeofconfidence.  &  TABLE 1V36.ESTIMATEDSUPPLYMODELCOEFFICIENTSFORGROUPIVINDUSTRIES 1V?  *q ddrdd dd / dd (#(#q,dd ,dd+  /a" ^  Dl/Variable 7a*z a 7EstimatedCoefficients1 Oba>*z " l D a LO t 0 t time t t   Kt 0 t CapitalStock.~ t t   Lt 0 t Labor t t   Mt 0 t Materials <ba+ Jt t ba <Ј.0573(.0497)̀̈.1732(.2382)̈̈.0252(.1873)̈̈.8015(.1230) G=!$t% L0 ba <GA"o&"&`>E~"oNOTES:0    1Standarderrorsareshowninparenthesis.A >&&>E~"&`&&>&  1'%D'"" <    1'Z   UsingtheestimatedcoefficientsinTable36andtheformulaforsupplyelasticityshownunderSection3.3.3.1,ModelApproach,thepriceelasticityofsupplyfortheMBS,SAN,PET,ABS,MABS, - polystyrene,andnitrileresinsisderivedtobe4.77.Thecalculationofstatisticalsignificanceforthiselasticitymeasureisnotastraightforwardcalculationsincetheestimatedfunctioninnonlinear.Noattempthasbeenmadetoassessthestatisticalsignificanceoftheestimatedelasticity.Thecorrectionsforserialcorrelationandtherestrictedmodelresultsyieldthestandardmeasuresofgoodnessoffit(R2) ##5 inaccurate.HowevertheordinaryleastsquaresestimatedmodelthatisunrestrictedandunadjustedforserialcorrelationhasanR2of0.98. a&!9 /"&`&&"&`,& &&"&`     3.3.3.6  LimitationsoftheSupplyElasticityEstimates/ .,& &&,& "&`&&,&   Theestimatedpriceelasticityofsupply (?$= fortheaffectedGroupIVindustriesreflectsthattheresinmanufacturingindustryintheUnitedStateswillincreaseproductionoftheseproductsby4.77percentforevery1.0percentincreaseinthepriceoftheseproducts.Theprecedingmethodologydoesnotdirectlyestimatethesupplyelasticitiesfortheindividualproductsduetoalackofnecessarydata.Theassumptionimplicitintheuseofthissupply &.v)E elasticityestimateisthattheelasticitiesoftheindividualproductswillnotdiffersignificantlyfromthepriceelasticityofsupplyforallproductsclassifiedunderSICcode2821.Thisassumptiondoesnotseemtotallyunreasonablesincesimilarfactorinputsareusedtoproduceeachoftheseresins.  Theuncertaintyofthesupplyestimateisacknowledged.TheresultsofasensitivityanalysisofthepriceelasticitysupplyisincludedinAppendixAforahighandlowestimateofthepriceelasticityofsupplyof5.77and3.77,respectively.H&  "&`&&"&`I&)&&"&`    3.4  CAPITALAVAILABILITYANALYSISH t 8  'I&)&&I&)"&`&&I&)    Itisnecessarytoestimatetheimpactoftheemissioncontrolsontheaffectedfirms'financial   performanceandtheirabilitytofinancetheadditionalcapitalinvestmentinemissioncontrolequipment.Thecapitalavailabilityanalysishasbeenconductedonafirmlevel,giventhatsufficientfinancialdatawereavailableonafirmleveltodoso.  Onemeasureoffinancialperformancefrequentlyusedtoassesstheprofitabilityofafirmisnetincomebeforeinterestexpenseexpressedasapercentageoffirmassets,orrateofreturnoninvestment.Theprecontrolrateofreturnoninvestment(roi)iscalculatedasfollows:   QA=zx 0 @Xdddddddd@Ex> dv vL@" (#(#   (#(#whereniisincomebeforeinterestpaymentsandaiistotalassets.Afiveyearaverageisusedtoavoid ( annualfluctuationsthatmayoccurinincomedata.Theregulationscouldpotentiallyhaveaneffectonincomebeforetaxes,ni,forfirmsintheindustryandonthelevelofassetsforfirmsintheindustry,ai. 7!, Thebaselineaveragerateofreturnoninvestmentforfirmsinthesamplerangefrom1percentforElfAtochemto13percentfor3MCorporation.Thepostcontrolreturnoninvestment(proi)iscalculated #0 foreachfirmasfollows:QA=zx 0 @Xdddddddd@ES&xu dj LS&@# (#(#     (#(#where:  proi  =0  postcontrolreturnoninvestment,-M)@ (# (#   n    =0 changeinincomeaftertaxesandbeforeinterestresultingfromimplementationof  emissioncontrolsforeachfirminthesample,and  (# (#   k    =0 changeininvestmentorassetsforeachfirminthesample.> (# (#   Thechangeinafirm'snetincome,ni,iscalculatedusingtheresultsofthepartialequilibrium   model.Afirm'spostcontrolnetincomehasthefollowingthreecomponents:(1)thechangeinrevenueattributabletothechangeinprice,(2)thechangeincostattributabletothefirm'sincurrenceofcompliancecosts,and(3)applicabletaxes.TheneteffectofthesethreecomponentsdeterminestheimpactoftheNESHAPonfirms'netincomelevels.Thechangeinnetincome,orn,foreachfirmis 8  calculatedasfollows:QA=zx 0 @Xdddddddd@Evxd Lv@B$ (#(#  (#(#where:  P    =0 thechangeinmarketprice,orP1󀄀Po, (# (#   qn    =0 thelevelofoutputforfirmn,and) (# (#   cn    =0 totalannualizedperunitcostofcompliance(includingtaxes)forfirmn. p  (# (# 0  t    =0 (#(#taxrateof35percentg" (# (# Anadjustmentneedstobemadeforthemarginalfirmthatwillexperiencepostcontrolchangesinproduction.ForeachmarginalMBS,SAN,PET,ABS,MABs,polystyrene,andnitrileresinfirm,thechangeinnetincomeiscalculatedasfollows:QA=zx 0 @Xdddddddd@E x dbL @B% (#(#  (#(#where:  q1  =0  firm'spostcontrolproduction,orqo󀄀(Q1Sd󀄀Q0Sd),$2 (# (#   Po  =0  baselinemarketprice,and%6!4 (# (#   q  =0  decreaseindomesticproduction,orQ1Sd󀄀Q0Sd.-'}"6 (# (#   SomePETfirmsoperatefacilitiesthatarepredictedtoceaseproducingPETbasedonthemodelresults.IfthefirmceasestoproducePET,thenthechangeinnetincomeiscomputedasfollows:QA=zx 0 @Xdddddddd@EI,x d\LI,@B& (#(#  -(@ where:  qo0  =0 (#(#postcontrolproductionG (# (#   Po0  =0 (#(#thebaselinemarketprice> (# (#   t0  =0 (#(#thecorporatetaxrate (# (# ThePETfirmswithfacilitiesthatarepredictedtoclosewillalsoexperiencedecreasesinavoidablecosts.Suchcostsarenotquantifiableandhavebeenomittedfromtheanalysis.Thisomissiontendstooverstatetheadverseimpactsonthesemarginalfirms.  Theabilityofaffectedfirmstofinancethecapitalequipmentassociatedwithemissioncontrolisalsorelevanttotheanalysis.Numerousfinancialratioscanbeexaminedtoanalyzetheabilityofafirmtofinancecapitalexpenditures.Onealternativeisameasureofhistoricalprofitability,suchasrateofreturnoninvestment.Theapproachusedtoanalyzethismeasurehasbeenpreviouslydescribed.Thebondratingofafirmisanotherindicationofthecreditworthinessofafirm,ortheabilityofafirmtofinancecapitalexpenditureswithdebtcapital.Suchdataareunavailableformanyofthefirmssubjecttotheregulation,andconsequently,bondratingsarenotanalyzed.Abilitytopayinterestpaymentsandcoverageratiosaretwoothercriteriasometimesusedtoassessthecapabilityofafirmtofinancecapitalexpenditures.Thedataavailabletoconductthecapitalavailabilityanalysisbasedonthesetwocriteriawerealsounavailable.  Finally,thedegreeofdebtleverageordebtequityratioofafirmisconsideredinassessingtheabilityofafirmtofinancecapitalexpenditures.Theprecontroldebtequityratioisthefollowing:QA=zx 0 @Xdddddddd@E xB d8L @d' (#(#   (#(#where:  d/e0  =0 (#(#thedebtequityratio,%6!4 (# (#   d0  =0 (#(#debtcapital,and-'}"6 (# (#   e0  =0 (#(#equitycapital.t(#8 (# (# Sincecapitalinformationislessvolatilethanearningsinformation,itisappropriatetousethelatestavailableinformationforthiscalculation.Thebaselinedebtequityratioforfirmsinthesamplerangefrom11percentfor3MCorporationto93percentforFina(AmericanPetrofina).Ifoneassumesthat -(@ thecapitalcostsofcontrolequipmentarefinancedsolelybydebt,thedebtequityratiobecomes:QA=zx 0 @Xdddddddd@Ex d8L@d( (#(#   (#(#where:  pd/e0  =0 (#(#thepostcontroldebtequityratioassumingthatthecontrolequipmentcostsarefinanced  c  solelywithdebt.  (# (# Obviously,firmsmaychoosetoissuecapitalstocktofinancethecapitalexpenditureortofinancetheinvestmentthroughinternallygeneratedfunds.Assumingthatthecapitalcostsarefinancedsolelybydebtmaybeviewedasaworsecasescenario.  Themethodsusedtoanalyzethecapitalavailabilitydohavesomelimitations.Theapproachmatches1991debtandequityvalueswithestimatedcapitalexpendituresforcontrolequipment.Average1987through1991incomeandassetmeasuresarematchedwithchangesinincomeandcapitalexpendituresassociatedwiththecontrolmeasures.Thecontrolcostchangesandincomechangesreflect1989pricelevels.Thefinancialdatausedintheanalysisrepresentsthemostrecentdataavailable.Itisinappropriatetosimplyindextheincome,asset,debt,andequityvaluesto1992pricelevelsforthefollowingreasons.Assets,debt,andequityrepresentembeddedvaluesthatarenotsubjecttopricelevelchangesexceptfornewadditionssuchascapitalexpenditures.Incomeisvolatileandvariesfromperiodtoperiod.Forthisreason,averageincomemeasuresareusedinthestudy.Annualizedcompliancecostsareoverstatedfromafinancialincomeperspectivesincethesecostsincludeacomponentforearnings,orreturnoninvestment,whichtendstooverstatethefinancialimpactsofemissioncontrolsforfirmsintheseindustries.Totheextentthatthepartialequilibriummodelresultsareaworstcasescenarioapproach,theapproachfollowedforfinancialimpactsalsooverstatesthenegativeimpactoftheemissioncontrolsonthefinancialoperationsoftheaffectedGroupIVfirms.  -'}"6 @ REFERENCES   1.  Hyman,DavidN.,Economics,IrwinPublishing,Homewood,IL.1989,pp.214215. > 2.0  U.S.DepartmentofCommerce,InternationalTradeCommission.SyntheticOrganicChemicals: B U.S.ProductionandSales.TimeSeriesDataRequest.Washington,DC.March17,1993. (#(# 3.0  U.S.DepartmentofCommerce,BureauoftheCensus,TradeDataInquiriesandControlSection.   DataRequest.Washington,DC.March11,1993. (#(# 4.0  ModernPlastics.Resins1993.NewYork,NY.January1993.^ (#(# 5.0  U.S.OfficeofManagementandBudget.GuidelinesandDiscountRatesforBenefitCostAnalysis   ofFederalPrograms.CircularNumberA94.Washington,DC.October29,1992. (#(# 6.0  U.S.DepartmentofCommerce,BureauoftheCensus.AnnualSurveyofManufactures. P  Washington,DC.19591991. (#(# 7.0  U.S.EnvironmentalProtectionAgency.IndustryProfileforthePolymersandResinsIV . NESHAPRevisedDraft.August26,1993. (#(# 8.0  RobertS.PindyckandDanielL.Rubinfeld.EconometricModelsandEconomicForecasts,2nd l Edition.McGrawHillPublishing.1981.pp.174201. (#(# 9.  Reference2. J 10.0  U.S.DepartmentCommerce,BureauoftheCensus.StatisticalAbstractoftheUnitedStates:  1992.112thEdition.Washington,DC.1992.p.706. (#(# 11.  Reference6. < 12.0  U.S.DepartmentofCommerce,BureauofEconomicAnalysis.BusinessStatistics19631991. @  27thEdition.Washington,DC.June1992. (#(# 13.0  BoardofGovernorsoftheFederalReserveSystem,DivisionofResearchandStatistics.Industrial ~"# ProductionandCapacityUtilization.DataRequest.August18,1994. (#(#   2$% -     "9&"&`.=h"9    4.0CONTROLCOSTS,ENVIRONMENTALIMPACTS,ANDCOSTEFFECTIVENESS-Mchan .N  .&)&.=h"&`&&.&)  H&  "&`&&"&`I&)&&"&`    4.1  INTRODUCTIONH5Ochan O F  'FEOI&)&&I&)"&`&&I&)    Inputstothemodeloutlinedinthepreviouschapterincludethequantitativedatasummarizedin J  Chapter2.0andcontrolcostestimatesprovidedbyEPA.ThischaptersummarizesthecostinputsusedinthisEIAthatwereprovidedonafacilitylevelforeachofthesevenaffectedindustries.  AformalBenefitCostAnalysis(BCA)requiresestimatesofeconomiccostsassociatedwithregulation,whichdonotcorrespondtoemissioncontrolcosts.Thischapterpresentstheprogressionofstepswhichweretakentoarriveatestimatesofeconomiccostsbasedontheemissioncontrolcostestimates.Theenvironmentalimpactsassociatedwiththechosenregulatoryoptioninthisanalysisaresummarizedandthecosteffectivenessoftheregulatoryoptionispresented.H&  "&`&&"&`I&)&&"&`    4.2  CONTROLCOSTESTIMATESHSchan T  'SI&)&&I&)"&`&&I&)    ControlcostestimatesandemissionreductionswereprovidedbyEPA'sengineeringcontractoron t afacilitylevelforeachaffectedemissionpoint.1,2ThecostestimatesprovidedbyEPArepresentthe   impactofbringingeachfacilityfromexistingcontrollevelstothecontrolleveldefinedbyeachregulatoryalternative.Theemissionpointsforwhichcostswereprovidedincludestoragetanks,equipmentleaks,wastewaterstreams,continuousstreamprocessvents,andbatchstreamprocessvents.Thecontrolcostsestimatedforeachresinfacilitycanbedividedintofixedandvariablecomponents.Fixedcostsareconstantoveralllevelsofoutputofaprocess,andusuallyentailplantandequipment.Variablecostswillvaryastherateofoutputchanges.Annualandvariablecostestimatesincludecostsfor 3#monitoring,recordkeeping,andreporting(MRR 3#sX)requirements.Thecostswerecalculatedfornewandexistingemissionsources.Newsourcecostsrepresentthecontrolofnewprocessunitsandequipmentbuilt(orreconstructedorreplaced)inthefirstfiveyearsafterpromulgationbasedonavailableindustrygrowthrates.3 -(2 Ї  Table41presentsthenationalannualizedcostestimatesforcontrollingexistingsourcesandnewlyconstructedemissionpointsinthefifthyearafterpromulgationofthePolymersandResinsGroupIVNESHAP.Emissioncontrolcostsaretheannualizedcapitalandannualoperatingandmaintenancecostsofcontrolsbasedontheassumptionthatallaffectedresinfacilitiesinstallcontrols.CostsareprovidedbyemissionpointfortheMACTfloorlevelofcontrol.Thetotalnationalannualizedcostforimplementationoftheregulatoryalternativeisapproximately$3.5million(includingMRRcosts)forexistingsourcesandasavingsofnearly$6.2millionforsourcesbuiltinthefirstfiveyearsafterpromulgationoftheregulation.ThereisnonewconstructionprojectedfortheMABSornitrileindustries.Table41alsopresentstheHAPemissionreductionsassociatedwithcontrolatthefouremissionpointsandthecalculatedcosteffectivenessofeachcontrolmethod.TheHAPemissionreductionswerecalculatedbasedontheapplicationofsufficientcontrolstoeachemissionpointtobringthepointintocompliancewiththeregulatoryalternative.ThecosteffectivenessofthepredictedHAPemissionreductionrangesfromasavingsof$1,772toacostof$43,067permegagram,andanaverageof$262permegagramfortheNESHAP.  Table42presentsthetotalinvestmentcapitalcostsbyemissionpointassociatedwiththeregulatoryalternativeforeachofthesevenindustries.Totalcapitalinvestmentcostsareestimatedtobe$17millionfornewandexistingsourcesforthesevenaffectedindustriesfiveyearssubsequenttopromulgationoftheregulation.  Foruseasinputstotheeconomicmodel,annualizedcostsweresummedonafacilitylevelforeachofthe75affectedfacilities.Thecontrolcostsassociatedwitheachoftheindustriesandemissionpointsarediscussedseparatelybelow.SANcostswereprovidedforcontinuousandbatchstreamprocessvents,andanAMSAN/ASAfacilitythatproducesSANforcaptiveuseintheproductionofABS.PETcostswereprovidedbyTPAcontinuousstreams,TPAbatchstreams,DMTcontinuousstreams,andDMTbatchstreams.ThecostsforcontrollingABSandpolystyrenefacilitieswereprovidedforcontinuousandbatchstreamprocessvents.PETfacilitiesaretheonlyfacilitiesforwhichadditionalcontrolonstoragetanksisrequiredbytheregulation.  t(#8  t  i TRP'3Y3' '3 Letter Landscape 3' LetterTX  t   TABLE 1V41.SUMMARYOFGROUPIVNESHAPCOSTSINTHEFIFTHYEARBYRESININDUSTRYANDEMISSIONPOINT 1Ve1  "[ &"&`"ithchange  *` dddd dd8181`,td ,td,Rdd",dd,tdE,ptt5+  1ab" R r1 6abb%ab 6AnnualFifthYearCosts(1989DollarsperYear) <ab-""abb < =abb*"ab = SbbB*" r  abb rBSGroupIVIndustrybyEmissionPoint 2bb! N bb 2ExistingSources ;b* N"bb ;NewConstruction ;b* N"b ;Total ;bb* N"b ;AnnualHAPEmissionReduction(Mg/yr) =bbb* N"bb =CostEffectiveness($/Mg) QbB* N" B r bbb BQA.MBS2 0b! h b 0 +! h!b +Ј ' h"U 'Ј ,b h#U ,Ј =bb* h$Ub =Ј QbB* h%U B  bb BQEquipmentLeaks 0b!" r&b 0$23,143 +!" r'b +$216 '" r(U '$23,358 ,b" r)U ,41.5 =bb*" r*Ub =$563.1 QbB*" r+U B  bb BQMiscellaneousProcessVents 0b!,| ,b 0$180,603 +!,| -b +$239,640 ',| .U '$420,244 ,b,| /U ,25.9 =bb*,| 0Ub =$16,244.4 QbB*,| 1U B  bb BQWastewaterSystems 0b!6 2b 0$143,239 +!6 3b +$0 '6 4U '$143,239 ,b6 5U ,5.0 =bb*6 6Ub =$28,647.8 QbB*6 7U B  bb BQStorageTanks 0b!@ 8b 0$0 +!@ 9b +$3,179 '@ :U '$3,179 ,b@ ;U ,1.7 =bb*@ <Ub =$1,926.9 SbbB*@ =U B  bb BSTotalMBS 2bb!J >bb 2$346,985 2b!J ?bb 2$243,035 ;b*J @Ub ;$590,021 ;bb*J AUb ;74.0 =bbb*J BUbb =$7,963.3 QbB*J CU B  bbb BQB.SAN2 0b!d Db 0 +!d Eb +Ј 'd FU 'Ј ,bd GU ,Ј =bb*d HUb =Ј QbB*d IU B  bb BQEquipmentLeaks 0b!nJb 0$66,987 +!nKb +($6,878) 'nLU '$60,109 ,bnMU ,123.4 =bb*nNUb =$487.1 QbB*nOU B  bb BQMiscellaneousProcessVents 0b!xPb 0$0 +!xQb +$0 'xRU '$0 ,bxSU ,0.0 =bb*xTUb =$0.0 QbB*xUU B  bb BQWastewaterSystems 0b!Vb 0$281,018 +!Wb +$0 'XU '$281,018 ,bYU ,30.0 =bb*ZUb =$9,367.3 QbB*[U B  bb BQStorageTanks 0b!\b 0$0 +!]b +$0 '^U '$0 ,b_U ,0.0 =bb*`Ub =$0.0 SbbB*aU B  bb BSTotalSAN 2bb!bbb 2$348,005 2b!cbb 2($6,878) ;b*dUb ;$341,127 ;bb*eUb ;153.4 =bbb*fUbb =$2,223.8 QbB*gU B  bbb BQC.PET3 0b!hb 0 +!ib +Ј 'jU 'Ј ,bkU ,Ј =bb*lUb =Ј QbB*mU B  bb BQEquipmentLeaks 0b! nb 0$892,942 +! ob +$705,967 ' pU '$1,598,909 ,b qU ,2,003.6 =bb* rUb =$798.0 QbB* sU B  bb BQMiscellaneousProcessVents 0b!tb 0($5,424,619) +!ub +$758,276 'vU '($4,666,343) ,bwU ,(5,725.6) =bb*xUb =$815.0 QbB*yU B  bb BQWastewaterSystems 0b!zb 0($424,619) +!{b +($9,653,905) '|U '($3,904,319) ,b}U ,12,621.2 =bb*~Ub =($309.3) QbB*U B  bb BQStorageTanks 0b!(b 0$64,678 +!(b +$157,724 '(U '$222,402 ,b(U ,113.3 =bb*(Ub =$1,962.4 SbbB*(U B  bb BSTotalPET 2bb!2bb 2$1,282,587 2b!2bb 2($8,031,938) ;b*2Ub ;($6,749,351) ;bb*2Ub ;9,012.6 =bbb*2Ubb =($748.9) QbB*2U B  bbb BQD.0 u ABS2 :b+ LuAuAb :Ј 4*LUb 4Ј 'LU 'Ј ,bLU ,Ј =bb*LUb =Ј QbB*LU B  bb BQEquipmentLeaks 0b! Vb 0($110,449) 4* VUb 4($214,159) ' VU '($324,608) ,b VU ,283.0 =bb* VUb =($1,147.0) QbB* VU B  bb BQMiscellaneousProcessVents 0b!!`b 0$1,712,377 4*!`Ub 4$1,779,934 '!`U '$3,492,311 ,b!`U ,330.3 =bb*!`Ub =$10,573.5 QbB*!`U B  bb BQWastewaterSystems 0b!"jb 0$0 4*"jUb 4$0 '"jU '$0 ,b"jU ,0.0 =bb*"jUb =$0.0 QbB*"jU B  bb BQStorageTanks 0b!$#tb 0$0 4*$#tUb 4$59,059 '$#tU '$59,059 ,b$#tU ,4.2 =bb*$#tUb =$14,061.7 SbbB*$#tU B  bb BSTotalABS 2bb!.$~bb 2$1,601,927 ;b*.$~Ubb ;$1,624,834 ;b*.$~Ub ;$3,226,762 ;bb*.$~Ub ;617.5 =bbb*.$~Ubb =$5,225.5 UbF..$~U B   bbb BUE.0 u MABS2 :b+  BuAuAb :Ј 4* BUb 4Ј ' BU 'Ј ,b BU ,Ј =bb* BUb =Ј QbB* BU B  bb BQEquipmentLeaks 0b!" Lb 0($64,600) 4*" LUb 4$0 '" L U '($64,600) ,b" L U ,(1.5) =bb*" L Ub =$43,066.7 QbB*" L U B  bb BQMiscellaneousProcessVents 0b!,V b 0($79) 4*,VUb 4$0 ',VU '($79) ,b,VU ,38.0 =bb*,VUb =($2.1) QbB*,VU B  bb BQWastewaterSystems 0b!6`b 0$0 4*6`Ub 4$0 '6`U '$0 ,b6`U ,0.0 =bb*6`Ub =$0.0 QbB*6`U B  bb BQStorageTanks 0b!@jb 0$0 4*@jUb 4$0 '@jU '$0 ,b@jU ,0.0 =bb*@jUb =$0.0 SbbB*@jU B  bb BSTotalMABS 2bb!Jtbb 2($64,679) ;b*Jt Ubb ;$0 ;b*Jt!Ub ;($64,679) ;bb*Jt"Ub ;36.5 =bbb*Jt#Ubb =($1,772.0) QbB*Jt$U B  bbb BQF.0 u Polystyrene2 :b+ d%uAuAb :Ј 4*d&Ub 4Ј 'd'U 'Ј ,bd(U ,Ј =bb*d)Ub =Ј QbB*d*U B  bb BQEquipmentLeaks 0b!n+b 0$5,728 4*n,Ub 4($11,355) 'n-U '($5,627) ,bn.U ,304.4 =bb*n/Ub =($18.5) QbB*n0U B  bb BQMiscellaneousProcessVents 0b!x1b 0($74,900) 4*x2Ub 4($1,494) 'x3U '($76,394) ,bx4U ,198.8 =bb*x5Ub =($384.3) QbB*x6U B  bb BQWastewaterSystems 0b! 7b 0$0 4* 8Ub 4$0 ' 9U '$0 ,b :U ,0.0 =bb* ;Ub =$0.0 QbB* <U B  bb BQStorageTanks 0b! =b 0$0 4* >Ub 4$0 ' ?U '$0 ,b @U ,0.0 =bb* AUb =$0.0 QbB* BU B  bb BQTotalPolystyrene 0b! Cb 0($69,171) 4* DUb 4($12,849) ' EU '($82,020) ,b FU ,503.2 =bb* GUb =($163.0) QbbB* HU B  bb RQG.0 u Nitrile2 :bb+  IuAuAbb :Ј 7b* JUbb 7Ј 7b* KUb 7Ј 9bb* LUb 9Ј =bbb* MUbb =Ј QbB* NU R  bbb BQEquipmentLeaks 0b! Ob 0$6,164 4* PUb 4$0 ' QU '$6,164 ,b RU ,6.8 =bb* SUb =$906.5 QbB* TU B  bb BQMiscellaneousProcessVents 0b!Ub 0$767 4*VUb 4$0 'WU '$767 ,bXU ,3.4 =bb*YUb =$225.7 QbB*ZU B  bb BQWastewaterSystems 0b![b 0$0 4*\Ub 4$0 ']U '$0 ,b^U ,0.0 =bb*_Ub =$0.0 QbB*`U B  bb BQStorageTanks 0b!ab 0$0 4*bUb 4$0 'cU '$0 ,bdU ,0.0 =bb*eUb =$0.0 SbbB*fU B  bb BSTotalNitrile 2bb! gbb 2$6,931 ;b* hUbb ;$0 ;b* iUb ;$6,931 ;bb* jUb ;10.2 =bbb* kUbb =$679.5 Obba>* lU B  bbb JROTOTALFORREGULATORYALTERNATIVE 2bba! 6mbba 2$3,452,586 ;ba* 6nUbba ;($6,183,795) ;ba* 6oUba ;($2,731,210) ;ba* 6pUba ;10,407.4 =bbab* 6qUba =($262.4) PF* 6rU R0 J bbab BPC"o "[>E~"oNOTE:0    1Costsreflectabsoluteregulatorycostsratherthanincrementalcosts.!8t// 0 u 0u/u/2AssumesregulatoryAlternative1ischosen.!u// 0 u 0u/u/3AssumesregulatoryAlternative2ischosen.C>M>E~"[ >M  1'%J"tv// B  -  1"&`& "["+  I  "v g    + TRY3'P'3 3' Letter '3 Letter LandscapeTX     TABLE 1V42.SUMMARYOFTOTALGROUPIVNESHAPCAPITALCOSTSBYRESIN  INDUSTRYANDEMISSIONPOINT 1V1    * d.dtd tdRdd"ddtdEptt5(#(#,8( ,((,((,(8+  1ab" > J1 Aabb.ab ATotalCapitalCosts(1989Dollars) VbbE-"  J abb ZVGroupIVIndustryandEmissionPoint ;b* bb ;ExistingSources ;b*  "b ;NewConstruction =bb*  "b =Total QbB* " Z  bb 2ZQA.0 H MBS 5+  THzHzb 5Ј ' TU 'Ј 0b TU 0Ј QbB* TU Z 2 b 2ZQEquipmentLeaks +!8 b +$167,426 '8 U '$16,252 0b8 U 0$183,678 QbB*8 U Z 2 b 2ZQMiscellaneousProcessVents +!l b +$93,204 'l U '$405,446 0bl U 0$498,650 QbB*l U Z 2 b 2ZQWastewaterSystems +! b +$279,051 ' U '$0 0b U 0$279,051 QbB* U Z 2 b 2ZQStorageTanks +!$ b +$0 '$ U '$18,083 0b$ !U 0$18,083 SbbB*$ "U Z 2 b BZSTotalMBS 2b!X #bb 2$539,681 ;b*X $Ub ;$439,781 =bb*X %Ub =$979,462 QbB*X &U Z B bb 2ZQB.0 H SAN 5+ L'HzHzb 5Ј 'L(U 'Ј 0bL)U 0Ј QbB*L*U Z 2 b 2ZQEquipmentLeaks +!+b +$498,790 ',U '$176,188 0b-U 0$674,978 QbB*.U Z 2 b 2ZQMiscellaneousProcessVents +!/b +$0 '0U '$0 0b1U 0$0 QbB*2U Z 2 b 2ZQWastewaterSystems +!83b +$579,252 '84U '$0 0b85U 0$579,252 QbB*86U Z 2 b 2ZQStorageTanks +!l7b +$0 'l8U '$0 0bl9U 0$0 SbbB*l:U Z 2 b BZSTotalSAN 2b!P;bb 2$1,078,042 ;b*P<Ub ;$176,188 =bb*P=Ub =$1,254,230 QbB*P>U Z B bb 2ZQC.0 H PET 5+ ?HzHzb 5Ј '@U 'Ј 0bAU 0Ј QbB*BU Z 2 b 2ZQEquipmentLeaks +!Cb +$1,342,191 'DU '$1,809,206 0bEU 0$2,431,697 QbB*FU Z 2 b 2ZQMiscellaneousProcessVents +!LGb +($84,768,845) 'LHU '$442,362 0bLIU 0($84,326,483) QbB*LJU Z 2 b 2ZQWastewaterSystems +!0Kb +$86,827,321 '0LU '$0 0b0MU 0$86,827,321 QbB*0NU Z 2 b 2ZQStorageTanks +!dOb +$266,078 'dPU '$508,750 0bdQU 0$774,828 SbbB*dRU Z 2 b BZSTotalPET 2b! Sbb 2$3,667,045 ;b* TUb ;$2,040,318 =bb* UUb =$5,707,363 QbB* VU Z B bb 2ZQD.0 H ABS 5+ !,WHzHzb 5Ј '!,XU 'Ј 0b!,YU 0Ј QbB*!,ZU Z 2 b 2ZQEquipmentLeaks +!#`[b +$224,546 '#`\U '$111,161 0b#`]U 0$335,707 QbB*#`^U Z 2 b 2ZQMiscellaneousProcessVents +!D$_b +$4,004,211 'D$`U '$3,419,086 0bD$aU 0$7,423,297 QbB*D$bU Z 2 b 2ZQWastewaterSystems +!x% cb +$0 'x% dU '$0 0bx% eU 0$0 QbB*x% fU Z 2 b 2ZQStorageTanks +!&!gb +$0 '&!hU '$172,276 0b&!iU 0$172,276 SbbB*&!jU Z 2 b BZSTotalABS 2b!'0#kbb 2$4,228,757 ;b*'0#lUb ;$3,702,523 =bb*'0#mUb =$7,931,280 QbB*'0#nU Z B bb 2ZQE.0 H MABS 5+ $)t$oHzHzb 5Ј '$)t$pU 'Ј 0b$)t$qU 0Ј QbB*$)t$rU Z 2 b 2ZQEquipmentLeaks +!X*%sb +$30,000 'X*%tU '$0 0bX*%uU 0$30,000 QbB*X*%vU Z 2 b 2ZQMiscellaneousProcessVents +!+&wb +$89,673 '+&xU '$0 0b+&yU 0$89,673 QbB*+&zU Z 2 b 2ZQWastewaterSystems +!,({b +$0 ',(|U '$0 0b,(}U 0$0 QbB*,(~U Z 2 b 2ZQStorageTanks +!-D)b +$0 '-D)U '$0 0b-D)U 0$0 WbbF.-D)U Z 2 b BZWTotalMABS 2b! Zbb 2$119,673 ;b* ZUb ;$0 =bb* ZUb =$119,673 QbB* ZU Z B bb 2ZQF.0 H Polystyrene 5+ \ HzHzb 5Ј '\ U 'Ј 0b\ U 0Ј QbB*\ U Z 2 b 2ZQEquipmentLeaks +!  b +$806,120 '  U '$172,010 0b  U 0$978,130 QbB*  U Z 2 b 2ZQMiscellaneousProcessVents +! b +$243,527 'U '$2,045 0bU 0$245,572 QbB*U Z 2 b 2ZQWastewaterSystems +!:b +$0 ':U '$0 0b:U 0$0 QbB*:U Z 2 b 2ZQStorageTanks +!,nb +$0 ',nU '$0 0b,nU 0$0 SbbB*,nU Z 2 b BZSTotalPolystyrene 2b!`bb 2$1,049,647 ;b*`Ub ;$174,055 =bb*`Ub =$1,223,702 QbB*`U Z B bb 2ZQG.0 H Nitrile 5+ HzHzb 5Ј 'U 'Ј 0bU 0Ј QbB* U Z 2 b 2ZQEquipmentLeaks +! !b +$0 ' "U '$0 0b #U 0$0 QbB* $U Z 2 b 2ZQMiscellaneousProcessVents +! N %b +$8,770 ' N &U '$0 0b N 'U 0$8,770 QbB* N (U Z 2 b 2ZQWastewaterSystems +!@ )b +$0 '@ *U '$0 0b@ +U 0$0 QbB*@ ,U Z 2 b 2ZQStorageTanks +!t -b +$0 't .U '$0 0bt /U 0$0 SbbB*t 0U Z 2 b BZSTotalNitrile 2b!1bb 2$8,770 ;b*2Ub ;$0 =bb*3Ub =$8,770 Obba>*4U Z B bb rjOTOTALFORREGULATORYALTERNATIVE 2ba!>5bba 2$10,691,615 ;ba*>6Uba ;$6,532,865 =bab*>7Uba =$17,224,480 PF*>8U j0 r bab ZPC"o&"&`>E~"oNOTE:0    1Costsreflectabsoluteregulatorycostsratherthanincrementalcosts.C/quip>&&>E~"&`&&>&  1'%:|:## Z  -  1  : i     ThemethodologiesusedtoestimatethecostsfortheexpectedregulatoryalternativearethesameasthemethodologiesusedtoestimatethecostsoftheHONrule.4Forstoragetanks,requiredcontrol > measuresrangefromfloatingroofstoclosedventsystemsroutedtoacontroldevice.CostsarezeroforeachMBSandSANfacilitysincealltanksarecurrentlymeetingtheHONrequirements.5ForPET   processes,costsforstoragetankprovisionsareidenticalforeachprocessatagivenfacility.Itwasassumedthatthestoragetanksaresharedamongthefourtypesofprocesses.Indeterminingafacility'stotalcost,therefore,storagetankimpactswerecountedonlyoncetoavoidoverstatingafacility'scompliancecostimpacts.5Forequipmentleaks,facilitieshaveseveralcomplianceoptions.Facilities 8  arerequiredtodevelopandimplementleakdetectionandrepairprogramsortoinstallcertaintypesofemissionreducing,oremissioneliminating,equipment.CostsforequipmentleakprovisionswerebasedonthecalculationusedintheHON.Forprocessvents,costswereprovidedforcontinuousstreamsandforbatchstreams.Forbatchprocessesthatventlessthan500hoursperyear,theregulatoryalternativeisbasedonEPA'sdraftCTGforBatchProcesses.6Thisapproachdetermines K whethercontrolisrequiredbasedonventstreamcharacteristics.Forwastewater,theNESHAPprovisionsrequirethatwastewaterbekeptintanks,impoundments,containers,drainsystems,andothervesselsthatdonotallowexposuretotheatmosphereuntilitisrecycledortreatedtoreduceHAPconcentration.CostsforwastewaterprovisionsweredevelopedusingHONmethodologies.H&  "&`&&"&`I&)&&"&`    4.3  ESTIMATESOFECONOMICCOSTSHtoe c E& 'I&)&&I&)"&`&&I&)    Airqualityregulationsaffectsociety'seconomicwellbeingbycausingareallocationofproductive ( resourceswithintheeconomy.Resourcesareallocatedawayfromtheproductionofgoodsandservices(MBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresins)totheproductionofcleanerair.Estimatesoftheeconomiccostsofcleanerairrequireanassessmentofcoststobeincurredbysocietyasaresultofemissioncontrolmeasures.Bydefinition,theeconomiccostsofpollutioncontrolaretheopportunitycostsincurredbysocietyforproductiveresourcesreallocatedintheeconomytopollutionabatement.Theeconomiccostsoftheregulationcanbemeasuredasthevaluethatsocietyplacesongoodsandservicesnotproducedasaresultofresourcesbeingdivertedtotheproductionofimprovedairquality.Theconceptuallycorrectvaluationofthesecostsrequirestheidentificationofsociety'swillingnesstobecompensatedfortheforegoneconsumptionopportunitiesresultingfromtheregulation.Incontrasttotheeconomiccostofregulation,emissioncompliancecostsconsideronlythedirectcostofemissioncontrolstotheindustryaffectedbytheregulation.Economiccostsareamoreaccuratemeasureofthecostsoftheregulationtosocietythananengineeringestimateofcompliance -M)@ costs.However,compliancecostestimatesprovideanessentialelementintheeconomicanalysis.  Economiccostsareincurredbyconsumers,producers,andsocietyatlargeasaresultofpollutioncontrolregulations.Thesecostsaremeasuredaschangesinconsumersurplus,producersurplus,andresidualsurplustosociety.Consumersurplusisameasureofwellbeingorofthewelfareofconsumersofagoodandisdefinedasthedifferencebetweenthetotalbenefitsofconsumingagoodandthemarketpricepaidforthegood.PollutioncontrolmeasureswillresultinalossinconsumersurplusduetohigherpricespaidforGroupIVresinsandtothedeadweightlossinsurpluscausedbyreducedoutputofthesesevenresinsinthepostcontrolmarket.  Producersurplusisameasureofproducers'welfarethatreflectsthedifferencebetweenthemarketpricechargedforaproductandthemarginalcostofproduction.Pollutioncontrolswillresultinachangeinproducersurplusthatconsistsofthreecomponents.Thesecomponentsinclude:surplusgainsrelatingtoincreasedrevenuesexperiencedbyfirmsintheGroupIVindustriesattributabletohigherpostcontrolprices,surpluslossesassociatedwithincreasedcostsofproductionforannualizedemissioncontrolcosts,andsurpluslossesduetoreductionsinpostcontroloutput.Thenetchangeinproducersurplusisthesumofthesesurplusgainsandlosses.  Additionaladjustmentsorchangesintheresidualsurplustosocietyarenecessarytoreflecttheeconomiccoststosocietyofpollutioncontrols,andtheseadjustmentsarereferredtoasthechangeinresidualsurplustosociety.Specifically,adjustmentsarenecessarytoconsidertaxgainsorlossesassociatedwiththeregulationandtoadjustfordifferencesbetweenthesocialdiscountrateandtheprivatediscountrate.Sincecontrolmeasuresinvolvethepurchaseoflonglivedassets,itisnecessarytoannualizethecostofemissioncontrols.Annualizationofcostsrequiretheuseofadiscountrateorthecostofcapital.Theprivatecostofcapital(assumedtobe10percent)istherelevantdiscountratetouseinestimatingannualizedcompliancecostsandmarketchangesresultingfromtheregulation.FirmsintheMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileindustrieswillmakesupplydecisionsinthepostcontrolmarketbaseduponincreasesinthecostsofproduction.Theprivatecostofcapitalmoreaccuratelyreflectsthecapitalcosttofirmsassociatedwiththepollutioncontrols.Alternatively,thesocialcostsofcapital(assumedtobe7percent)istherelevantdiscountratetoconsiderinestimatingtheeconomiccostsoftheregulation.7Theeconomiccostoftheregulation +R&< representsthecostoftheregulationtosociety,ortheopportunitycostsofresourcesdisplacedbyemissioncontrols.Ariskfreediscountrate,orthesocialdiscountrate,betterreflectsthecapitalcost -(@ oftheregulationtosociety.  Thesumofthechangeinconsumersurplus,producersurplusandresidualsurplustosocietyconstitutestheeconomiccostsoftheregulation.Table43summarizestheeconomiccostsassociatedwiththeregulatoryalternative.Theeconomiccostforthesevenaffectedindustriescombinedis$4.3millionforexistingsources(1989$).Theeconomiccostsfornewandexistingsourcesfiveyearssubsequenttopromulgationoftheregulationmaybeestimatedbyaddingengineeringcontrolcostsfornewsourcestotheeconomiccostsofexistingsources.Anannualeconomicgainof$1.9millionisestimatedfromcompliancewiththeregulationforexistingandnewsources(1989$).H&  "&`&&"&`I&)&&"&`    4.4  ESTIMATEDENVIRONMENTALIMPACTSHttoe  v  'vI&)&&I&)"&`&&I&)    Table44reportsestimatesofannualemissionreductionsassociatedwiththechosenalternative. *z TheHAPemissionreductionswerecalculatedbasedontheapplicationofsufficientcontrolstoeachemissionpointtobringeachpointintocompliancewiththeregulatoryalternative.TheestimateoftotalHAPemissionreductionsis10,407.4Mgperyear.  F   TABLE 1V43.ANNUALECONOMICCOSTESTIMATESFORTHEPOLYMERSANDRESINSGROUPIVREGULATIONBASEDONEXISTINGSOURCECOSTS 1V1,2  (1989Dollars)   s * d.d8( (((((8(#(#,(( ,((,((,(((,((+  3ab" B 3GroupIVIndustry 2ab!* zab 2ChangeinConsumerSurplus ;ab** z "ab ;ChangeinProducerSurplus ;ab** z"ab ;ChangeinResidualSurplus ;ab** z"ab ;TotalLossInSurplus LB** z"   ab ,TLMBS  h  ($397,306) 'h U '$31,294 'h U '$44,323 'h U '($321,688) ?5h U T , ,T?SAN    ($683,877) ' U '$334,357 ' U '$232,079 ' U '($117,441) ?5 U T , ,T?PET    ($29,765,757) ' U '$26,802,696 ' !U '$0 ' "U '($2,963,061) ?5 #U T , ,T?ABS/MABS  B $ ($3,757,059) 'B %U '$1,603,303 'B &U '$1,069,534 'B 'U '($1,084,222) ?5B (U T , ,T?Polystyrene   p ) ($905,538) ' p *U '$659,740 ' p +U '$409,995 ' p ,U '($164,197) ?5 p -U T , ,T?Nitrile  N . ($4,726) 'N /U '($1,429) 'N 0U '($319) 'N 1U '($6,474) Ba1N 2U T , \TBTOTAL 2a!|3a 2($35,514,263) ;a*|4Ua ;$29,429,961 ;a*|5Ua ;$1,755,612 ;a*|6Ua ;($4,328,690) PF*|7U T0 \ a TPC"o&"&`>E~"oNOTE:0    1Bracketsindicateeconomiccosts.C GSO>&&>E~"&`&&>&  1'%9## T    1STIN  TABLE 1V44.ESTIMATEDANNUALREDUCTIONSINEMISSIONSANDCOSTEFFECTIVENESSASSOCIATEDWITHTHECHOSENREGULATORYALTERNATIVE 1V'   * d d(( ((((((((((#(#,( dd ,( dd,( dd +  3ab" > 8x3GroupIVIndustry 2ab!6@ab 2HAPEmissionReduction(Megagrams/Yr) ;ab*6B"ab ;ЀHAPCostEffectiveness*($/Year) LB*6D" x 8 ab HLMBS  hE 74.0 'hFU '$7,631 ?5hGU H  H?SAN  :H 153.4 ':IU '$721 ?5:JU H  H?PET  \K 9,012.6 '\LU '($562) ?5\MU H  H?ABS/MABS  ~ N 654 '~ OU '$4,142 ?5~ PU H  H?Polystyrene  !Q 503.2 '!RU '($352) ?5!SU H  H?Nitrile  "T 10.2 '"UU '$635 Ba1"VU H  PHBTOTAL 2a!#4Wa 210,407.4 ;a*#4XUa ;($178) PF*#4YU H0 P a HPA"o&"&`>E~"oNOTES:0    *Costeffectivenessiscomputedasestimatedannualizedeconomiccostsfornewandexistingsources &`![ dividedbyestimatedemissionsreduced.Comparisonsaremadebetweentheregulatoryalternativeandbaselineconditions.A^GSO>&&>E~"&`&&>&  1'%L'"]"" H    1  ':#] H&  "&`&&"&`I&)&&"&`    4.5  COSTEFFECTIVENESSHsGSO   'I&)&&I&)"&`&&I&)    Economiccosteffectivenessiscomputedbydividingtheannualizedeconomiccostsbythe d estimatedemissionreductions.TheNESHAPhasacalculatedtotalcostof($178)permegagramofHAPreducedfornewandexistingsources.  Generally,adominantalternativeresultsinthesameorhigheremissionreductionatalowercostthanallotheralternatives.Becausethisanalysisevaluatedonlyonealternative,however,thereisnobasisforcomparison.  U  @ REFERENCES   1.0  King,Bennett.PacificEnvironmentalServices.LettertoLarrySorrels.U.S.Environmental > ProtectionAgency.RevisedDraftCostsImpactsforCourtOrderGroupIVResins.ResearchTrianglePark,NC.September12,1994. (#(# 2.0  King,Bennett.PacificEnvironmentalServices,Inc.LettertoLarrySorrels,U.S.Environmental   ProtectionAgency,OfficeofAirQualityPlanningandStandards.DraftCostImpactsforOrphanGroupIVResins.ResearchTrianglePark,NC.November30,1994. (#(# 3.0  Meardon,Kenneth.PacificEnvironmentalServices.LettertoLarrySorrels.U.S. ^  EnvironmentalProtectionAgency.EstimatedNewGrowthforGroupIVResinsSources.ResearchTrianglePark,NC.June30,1994. (#(# 4.0  U.S.EnvironmentalProtectionAgency."HazardousAirPollutantEmissionsfromProcessUnits v  intheSyntheticOrganicManufacturingIndustryBackgroundInformationforProposed P  Standards.Volume1B:ControlTechnologies."DraftEIS.EPA453/D92016b.ResearchTrianglePark,NC.November1992. (#(# 5.0  Reference1.(#(# 6.0  U.S.EnvironmentalProtectionAgency."ControlofVolatileOrganicCompoundEmissionsfrom l BatchProcesses."DraftDocument.EPA453/R93017.ResearchTrianglePark,NC.November1993. (#(# 7.0  U.S.OfficeofManagementandBudget.GuidelinesandDiscountRatesforBenefitCostAnalysis $ ofFederalPrograms.CircularNumberA94.Washington,DC.October29,1992. (#(#    -     "9&"&`.=h"9    5.0PRIMARYECONOMICIMPACTSANDCAPITALAVAILABILITYANALYSIS-<      .&)&.=h"&`&&.&)  & " H&  "&`&&"&`I&)&&"&`    5.1  INTRODUCTIONH1"  " F  'FA"I&)&&I&)"&`&&I&)    EstimatesoftheprimaryeconomicimpactsresultingfromimplementationoftheNESHAPandthe J  resultsofthecapitalavailabilityanalysisarepresentedinthischapter.Primaryimpactsincludechangesinthemarketequilibriumpriceandoutputlevels,changesinthevalueofshipmentsorrevenuestodomesticproducers,andplantclosures.Thecapitalavailabilityanalysisassessestheabilityofaffectedfirmstoraisecapitalandtheimpactsofcontrolcostsonfirmprofitability.H&  "&`&&"&`I&)&&"&`    5.2  ESTIMATESOFPRIMARYIMPACTSH%  %  '%I&)&&I&)"&`&&I&)    Thepartialequilibriummodelisusedtoanalyzethemarketoutcomeoftheregulation.As X outlinedinChapter3ofthisreport,thepurchaseofemissioncontrolequipmentwillresultinanupwardverticalshiftinthedomesticsupplycurveforeachofthesevenaffectedGroupIVmarkets.Theheightoftheshiftisdeterminedbytheaftertaxcashflowrequiredtooffsettheperunitincreaseinproductioncosts.Sincethecontrolcostsvaryforeachoftheaffectedfacilities,thepostcontrolsupplycurveissegmented,orastepfunction.Sincetheunderlyingproductioncostsforeachfacilityareunknown,aworstcaseassumptionwasnecessary.Thefacilitieswiththehighestcontrolcostsperunitofproductionwereassumedtoalsohavethehighestprecontrolperunitcostofproduction.Thus,firmswiththehighestperunitcostofemissioncontrolareassumedtobemarginalinthepostcontrolmarket.  Foreigndemandandsupplyareassumedtohavethesamepriceelasticitiesasdomesticdemandandsupply,respectively.TheUnitedStateshadapositivetradebalanceforMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresinsin1991.NetexportsarethereforepositiveforeachGroupIVresininthebaselinemarketmodels.Foreignanddomesticpostcontrolsupplyareaddedtogethertoformthetotalpostcontrolmarketsupply.Theintersectionofthispostcontrolsupplywithmarket -(2 demandwilldeterminethenewmarketequilibriumpriceandquantityineachGroupIVindustry.  Table51presentstheprimaryimpactspredictedbythepartialequilibriummodel.Theanticipatedperkilogrampriceincreasesare$0.008,$0.011,$0.011,$0.007,$0.0004,and$0.0003forMBS,SAN,PET,ABS/MABS,polystyrene,andnitrileresins,respectively.ThepercentageincreasesforeachGroupIVresinrangefromahighof2.8percentforSANtoalowof0.1percentfornitrile.Productionisexpectedtodecreaseby1.3millionkilograms,3.8millionkilograms,122.3millionkilograms,22.0millionkilograms,5.4millionkilograms,and0.03millionkilogramsfortheMBS,SAN,PET,ABS/MABS,polystyrene,andnitrileindustries,respectively.Theseresultsrepresentanoveralldecreaseindomesticproductionrangingfrom0.2percentto4.6percent.  Thevalueofdomesticshipments,orrevenues,fordomesticproducersisexpectedtodecreaseforeachaffectedGroupIVindustry.Thepredicteddecreasesinannualrevenuesforindividualproductsare$0.78millionforMBS,$0.62millionforSAN,and$57.42millionforPET,$5.71millionforABS/MABS,$390thousandforpolystyrene,and$7thousandfornitrileresinsannually(1989dollars).Thepercentagedecreasesrangefromalowof0.1percentfornitriletoahighof2.7percentforABS/MABS.Economictheorypredictsthatrevenuedecreasesareexpectedtooccurwhenpricesareincreasedforproductswhichhaveanelasticpriceelasticityofdemand,holdingallotherfactorsconstant.Thisrevenuedecreaseresultsbecausethepercentageincreaseinpriceislessthanthepercentagedecreaseinquantityforgoodswithelasticdemand.TheestimatedrevenuedecreasesineachoftheGroupIVindustriesfollowsthistheory.  ItisanticipatedthattherewillnotbeanyMBS,SAN,ABS/MABS,polystyrene,ornitrilefacilityclosuresasaresultoftheNESHAP.However,themodelpredictsthatapproximatelythreePETfacilitiesmayceasetoproducePETorclose.Thesefacilitiesmaycloseforoperationor,ifthefirmisamultiproductfirm,mayceasetoproducePET.Asstatedearlierinthischapter,thosefacilitieswiththehighestperunitcontrolcostsareassumedtobemarginalinthepostcontrolmarket.TheanalysisofthePETindustryindicatesthatthemarginalfirmsaresmallproducersofPET.Asaresult,smallindustrydecreasesinproductionwillcausethesefirmstoceasetoproducePET.FirmsthathavepostcontrolsupplypricesthatexceedthemarketequilibriumpriceareassumedtocloseorceasetoproducePETresins.Thisassumptionisconsistentwiththetheoryofperfectcompetitionwhichpresumesthatallfirmsintheindustryarepricetakers.Inreality,firmswiththehighestperunitcontrolcostsmaynothavethehighestunderlyingcostofproductionaspostulatedintheanalysis. -(@ Ѐ     TABLE 1V51.SUMMARYOFPRIMARYECONOMICIMPACTSOFPOLYMERSANDRESINSGROUPIVNESHAP 1V8  *q 9d d( dd ( dd( dd (#(#q,dd ,&dd,;dd,Odde, ddb+  /a" > 8`/ 2a%a 2EstimatedImpacts4 VbE-" ` 8 a @VGroupIVIndustry 2bb!l b 2PriceIncreases1 ;bb*l  "bb ;Production2 ;bb*l "bb ;ValueofDomesticShipments3 ;bb*l "bb ;FacilityClosures LB*l " @  bb 0LMBS    Ј    Ј    Ј     ?5 " 0  0?ЀAmount    $0.008    (1.3)    ($0.78)    None ?5 " 0  0?ЀPercentage    0.9%     (2.5%)   ! (1.7%)   "  ?5 #" 0  0?   $ Ј   % Ј   & Ј   '  ?5 (" 0  0?SAN   ) Ј   * Ј   + Ј   ,  ?5 -" 0  0?ЀAmount   . $0.011   / (3.8)   0 ($0.62)   1 None ?5 2" 0  0?ЀPercentage   3 Ѐ2.8%   4 (4.6%)   5 Ѐ(2.0%)   6  ?5 7" 0  0?Ѐ  8 Ј  9 Ј  : Ј  ;  ?5<" 0  0?PET  &= Ј  &> Ј  &? Ј  &@  ?5&A" 0  0?ЀAmount  0B $0.011  0C (122.3)  0D ($57.42)  0E Three ?50F" 0  0?ЀPercentage  :G 1.5%  :H (4.1%)  :I (2.7%)  :J  ?5:K" 0  0?  DL Ј  DM Ј  DN Ј  DO  ?5DP" 0  0?ABS/MABS  NQ Ј  NR Ј  NS Ј  NT  ?5NU" 0  0?ЀAmount  XV $0.007  XW (22.0)  XX ($5.71)  XY None ?5XZ" 0  0?ЀPercentage  b[ 1.6%  b\ (3.8%)  b] (2.3%)  b^  ?5b_" 0  0?  l` Ј  la Ј  lb Ј  lc  ?5ld" 0  0?Polystyrene  &ve Ј  &vf Ј  &vg Ј  &vh  ?5&vi" 0  0?ЀAmount  0j $0.0004  0k (5.4)  0l ($0.39)  0m None ?50n" 0  0?ЀPercentage  :o 0.2%  :p (0.2%)  :q (0.1%)  :r  ?5:s" 0  0?  Dt Ј  Du Ј  Dv Ј  Dw  ?5Dx" 0  0?Nitrile  N y Ј  N z Ј  N { Ј  N |  ?5N }" 0  0?ЀAmount  X!~ $0.0003  X! (0.03)  X! ($0.007)  X! None Ba1X!" 0  80BЀPercentage 2a!b"a 20.1% 2a!b"a 2(0.2%) 2a!b"a 2(0.1%) 2a!b"a 2 PF*b"" 00 8 a 0PA"o&"&`>E~"oNOTES:0    1Pricesareshowninpriceperkilogram(1989dollars).v$ 0 t 0tt2Annualproductionquantitiesareshowninmillionsofkilograms.%d  0 t 0tt3Valuesofdomesticshipmentsareshowninmillionsof1989dollars.%! 0 t 0tt4Bracketsindicatedecreasesornegativevalues.A0O >&&>E~"&`&&>&  4*P&! 4-#!#" 0   -&Ј "Ј   &>" Thisisaworstcaseassumptionthatislikelytobiastheresultsandasaresult,overstatethenumberofplantclosuresandotheradverseeffectsoftheemissioncontrols.  OffurthernoteistheuncertaintyassociatedwiththeestimatesoffacilitylevelproductionquantitiesforPETfacilities.PETmeltphaseproductionhasbeeneliminatedfromtheoverallproductionoftheindustrybasedonthefactthatPETmeltphaseresinisanintermediateproductusedasaninputintootherPETproduction.IfsomefirmsproducePETmeltphaseasacommoditytobesoldtootherPETproducers,theindividualfacilityproductionmaybeunderstatedwhileindustrytotalsarecorrect.Additionally,actualproductiondataonafacilitylevelwereunavailable.Theindividualfacilityproductionlevelsusedinthisanalysisarebaseduponfacilitylevelcapacityin1991andtotal1991industryproduction.Theindividualfacilityproductionwascalculatedbymultiplyingeachfacility'sproductioncapacitybytheratiooftotalindustryproductiontototalindustrycapacityfor1991.Totheextentthatactualfacilitycapacityutilizationdiffersfromthatofthewholeindustry,theestimatedimpactsforindividualfacilitiesmaybeeitherunderstatedoroverstated.AnalternativemodelestimatingmarketimpactsbasedonindustryaveragepriceincreaseswasconsideredtoofferadditionalinformationregardingthelikelyprimaryimpactsofregulationsforPETproducers.TheresultsofthismodelarereportedinAppendixB.  Inaddition,industryspecificdatawerenotavailablefortheMABSindustry.Forthisreason,theMABSandABSindustriesareanalyzedasoneindustry.TheMABSproductionandcontrolcostsrepresentonlyafractionoftheindustrytotalsforMABSandABS.SinceMABSandABShaveahighdegreeofsimilarity,itisreasonabletomodeltheseindustriesjointly.  TheestimatedprimaryimpactsreportedfortheGroupIVindustriesdependuponthesetofparametersusedinthepartialequilibriummodel.Twooftheparameters,thepriceelasticityofdemandandthepriceelasticityofsupply,havesomedegreeofestimationuncertainty.Forthisreason,asensitivityanalysiswasconducted.TheresultsoftheseanalysesarepresentedinAppendixA.Sensitivityanalyseswereperformedforlowandhighendestimatesofdemandandsupplyelasticities,respectively.Ingeneral,thesensitivityanalysisshowsthattheestimatedprimaryimpactsarerelativelyinsensitivetoreasonablechangesofpriceelasticityofdemandandpriceelasticityofsupplyestimates.H&  "&`&&"&`I&)&&"&`    5.3  CAPITALAVAILABILITYANALYSISH\  b] I,'> 'I,]I&)&&I&)"&`&&I&)    Thecapitalavailabilityanalysisinvolvesexaminingpreandpostcontrolvaluesofselected -M)@ financialratios.Theratiosselectedforuseinthisanalysisaretherateofreturnoninvestmentandthedebtequityratio.Thesefinancialstatisticsprovideinsightintotheabilityofaffectedfirmstoraisethenecessarycapitaltofinancetheinvestmentinemissioncontrolequipment.Datawereavailabletoestimatetheseratiosfor18ofthe28affectedfirms.Thisanalysisdoesnotincludethefollowingfirms:AmericanPolymers,BASF,BFGoodrich,DartContainerCorporation,HoechstCelanese,HuntsmanChemical,Kama,Kaneka,NovacorChemical,andYKK.  Fortheremainingfirms,netincomewasaveragedforthefiveyearperiodfrom1987through1991toavoidannualfluctuationsthatmayoccurinincomeduetochangesinthebusinesscycle.Debtandequitycapitalarenotsubjecttoannualfluctuations,and,asaresult,themostrecentdataavailable(1990or1991)wasusedinthisanalysis.Tables5-2and53showtheestimatedimpactonfinancialratiosforfirmsintheseindustries.Thetotalcapitalinvestmentincontrolequipmentwasappliedtocurrentdebtequityratiosfor16affectedfirms.Table5-2showsthebaselineandpostcontroldebtequityratiosforeachofthefirmsincludedinthisanalysis.Theeffectsofinvestmentincontrolequipmentonthesefirms'equityratiosareminimal,andaverageratiospresentedarangeofeffectsfromadecreaseof0.99percenttoanincreaseof0.20percent.Duetotheconfidentialityoffirmspecificcontrolcostestimates,PETproducerfinancialratiosarepresentedinthetableasanaggregateaverage.ThepercentchangesinthedebttoequityratioforindividualPETfirmsrangefromadecreaseof4.7percenttoanincreaseof0.3percent.  $ @TABLE 1V52.POSTNESHAPEFFECTSONFIRMS'DEBTEQUITYRATIOS 1VeԈ* d9ddd &dd;ddOdde ddb(#(#,dd ,dd",pdd",`dd",hdd"+  /a" d H`/ 6ab%a 6LongTermDebtEquityRatios(%) VbE-" ` H ab 0VFirm 2b!.b 2Baseline 2b!.b 2PostNESHAP 2b!.b 2DifferenceinRatios 2b! b 2PercentageChange(%) C9!  0  b 0CAmoco   "  28.2%   "  28.2%   " 0.00   " 0.00% 6, " 0  06ARCO   , 39.8%   , 39.8%   , 0.00   , 0.00% 6, , 0  06BPChemicals   6 43.4%   6 43.4%   6 0.00   6 0.00% 6, 6 0  06Chevron   @ 28.2%   @ 28.2%   @ 0.00   @ 0.00% 6, @ 0  06DowChemical   J  66.8%   J ! 66.8%   J " 0.00   J # 0.00% 6, J $ 0  06Fina  T % 93.1%  T & 93.1%  T ' 0.00  T ( 0.00% 6,T ) 0  06GeneralElectric  ^ * 58.7%  ^ + 58.7%  ^ , 0.01  ^ - 0.01% 6,^ . 0  06Monsanto  h / 36.3%  h 0 36.3%  h 1 0.01  h 2 (0.03%) 6,h 3 0  06Rohm&Haas  "r 4 35.1%  "r 5 35.1%  "r 6 0.02  "r 7 0.02% 6,"r 8 0  06Scott  ,|9 54.1%  ,|: 54.1%  ,|; 0.00  ,|< 0.00% 6,,|= 0  06AveragePETPRODUCERS1  `? 33.2%  `A 32.9%  `C (0.33)  `E (0.99%) =a0`G 0  `=C"o&"&`>E~"oNOTE:0    1Includes3MCorporation,AlliedSignal,Inc.,ICI,Kodak,Shell,andWellman.Ccrvail>&&>E~"&`&&>&  >42JH"" `  a >  TABLE 1V53.POSTNESHAPEFFECTSONFIRMS'RETURNONINVESTMENTLEVELS 1Vs  *  dddd dd"pdd"`dd"hdd"(#(#,dd ,ddu,dd,@dde,dde+  /a" PL H`/ 6ab%Ma 6NetIncometoAssetsRatio(%) VbE-N" ` H ab 0VFirm ;b*Ob ;Baseline ;b*P"b ;AfterTaxPostNESHAP ;b*R"b ;DifferenceinRatios ;b*T"b ;PercentageChange(%) LB*V" 0  b 0LAmoco  W 5.48%  X 5.48%  Y 0.00  Z (0.01%) 6,[ 0  06ARCO  \ 11.19%  ] 11.19%  ^ 0.00  _ 0.02% 6,` 0  06BPChemicals  "a 3.99%  "b 3.99%  "c 0.00  "d 0.00% 6,"e 0  06Chevron   ,f 3.92%   ,g 3.92%   ,h 0.00   ,i 0.00% 6, ,j 0  06DowChemical  !6k 8.74%  !6l 8.74%  !6m 0.00  !6n 0.00% 6,!6o 0  06ElfAtochem  "@p 1.01%  "@q 1.01%  "@r 0.00  "@s (0.02%) 6,"@t 0  06Fina  #Ju 4.05%  #Jv 4.06%  #Jw 0.00  #Jx (0.08%) 6,#Jy 0  06GeneralElectric  %T z 3.06%  %T { 3.06%  %T | 0.00  %T } (0.12%) 6,%T ~ 0  06Monsanto  &^! 6.69%  &^! 6.69%  &^! 0.00  &^! (0.04%) 6,&^! 0  06Rohm&Haas  'h" 9.84%  'h" 9.84%  'h" 0.00  'h" (0.02%) 6,'h" 0  06Scott  "(r# 3.78%  "(r# 3.78%  "(r# 0.00  "(r# 0.00% 6,"(r# 0  06AveragePETPRODUCERS1  *V% Ј7.25%  *V% Ј7.35%  *V% Ј0.10  *V% Ј1.45% =a0*V% 0  `=C"o&"&`>E~"oNOTE:0    1Includes,3MCorporation,AlliedSignal,DuPont,ICI,Kodak,Shell,andWellman.C.78%>&&>E~"&`&&>&  >42@+&"" `   a >  +.'   TheeffectoftheNESHAPonratesofreturnoninvestmentwasanalyzedfor18affectedfirms.TheresultsofthisanalysisareshowninTable53.AsdescribedinSection3.4,theeffectoftheregulationonnetincomeincludestheneteffectofnewmarketpricesonrevenueandtheincurrenceofcontrolcosts.Formarginalfirms,theeffectonnetincomealsoincorporatesthelossinrevenueduetopostNESHAPdecreasesinproduction.Theeffectoftheregulationonfirms'assetlevelsisequaltothecapitalinvestmentnecessaryforthepurchaseofcontrolequipment.TheNESHAPisnotexpectedtohaveasignificanteffectonthereturnoninvestmentforanyofthefirmsinthesample.TheeffectoftheNESHAPontherateofreturnoninvestmentforthesefirmsrangefromadecreaseof0.01percenttoanincreaseof1.50percent.ThefinancialratiosforthePETindustryarepresentedasanaggregateduetoconfidentialityoffirmspecificdata.TheindividualPETfirmfinancialimpactrangesfromandecreaseof0.01percenttoaincreaseof7.1percent.Boththedebtequityratiosandratesofreturnoninvestmentremainvirtuallyunchangedasaresultoftheemissioncontrols.H&  "&`&&"&`I&)&&"&`    5.4  LIMITATIONSH.78% Q K 'KI&)&&I&)"&`&&I&)    Severalqualificationsoftheprimaryimpactresultspresentedinthischapterarerequired.A O singlenationalmarketforahomogenousproductisassumedinthepartialequilibriumanalysis.Theremay,however,besomeregionaltradebarriersthatwouldprotectindividualGroupIVresinproducers.Theanalysisalsoassumesthatthefacilitieswiththehighestcontrolcostsaremarginalinthepostcontrolmarket.FacilitiesthataremarginalinthepostcontrolmarketforPEThaveperunitcontrolcoststhatsignificantlyexceedtheaverage.Thismayeitherbetheresultoftheengineeringmethodusedtoassigncoststoindividualfacilities,ormaybeduetotheuncertaintysurroundingtheestimatesofPETfacilitylevelproduction.Theresultoftheforegoinglistofqualificationsisoverstatementoftheimpactsofthechosenalternativeonthemarketequilibriumpriceandquantity,revenues,andplantclosures.Finally,somefacilitiesmayfinditprofitabletoexpandproductioninthepostcontrolmarket.Thiswouldoccurwhenafirmfounditspostcontrolincrementalunitcoststobesmallerthanthepostcontrolmarketprice.Expansionbythesefirmswouldresultinasmallerdecreaseinoutputandincreaseinpricethanwouldotherwiseoccur.  TheresultsofthesensitivityanalysisofdemandandsupplyelasticitiesarereportedinAppendixA.Theseresultsshowslightlylessadverseimpactsonproducerswhendemandislesselastic,orwhensupplyislesselastic,intermsofreductioninmarketoutputandreductioninvalueofdomesticshipments.Theresultsoftheeconomicanalysisarethereforerelativelyinsensitivetoreasonablevariationsinthepriceelasticityofdemandorthepriceelasticityofsupplyinputs. -M)@ Ї  Thecapitalavailabilityanalysisalsohaslimitations.First,futurebaselineperformancemaynotresemblepastlevels.Additionally,thetoolsusedintheanalysisarelimitedinscope.H&  "&`&&"&`I&)&&"&`    5.5  SUMMARYH%.78%   '5I&)&&I&)"&`&&I&)    Theestimatedimpactsoftheemissioncontrolsarerelativelysmall.Predictedpriceincreasesin 9  GroupIVresinsrangefromalowof0.1percentfornitriletoahighof2.8percentfortheSANindustry.Productiondecreasesrangefromalowof0.2percentforthenitrileindustrytoahighof4.6percentfortheSANindustry.Thevalueofdomesticshipments,orrevenuestodomesticproducers,fortheMBS,SAN,PET,ABS/MABS,polystyrene,andnitrileresinsareanticipatedtodecrease$0.78,$0.62,$57.42,$5.71,$0.39,and$0.007millionannually(1989$).Emissioncontrolcostsaresmallrelativetothefinancialresourcesofaffectedproducers,andonaverage,GroupIVresinproducersshouldnotfinditdifficulttoraisethecapitalnecessarytofinancethepurchaseandinstallationofemissioncontrols.  q -       "9&"&`.=h"9    6.0SECONDARYECONOMICIMPACTS-ؕ.78%      .&)&.=h"&`&&.&)  H&  "&`&&"&`I&)&&"&`    6.1  INTRODUCTIONH.78%  B  'BI&)&&I&)"&`&&I&)    Inadditiontoimpactsonprice,production,andrevenue,implementationofemissioncontrolsis F  likelytohavesecondaryimpactsincludingchangesinlaborinputs,changesinenergyinputs,balanceoftradeimpacts,andregionaleffects.Thepotentialchangesinemployment,useofenergyinputs,balanceoftrade,andregionalimpactdistributionarepresentedindividuallybelow.H&  "&`&&"&`I&)&&"&`    6.2  LABORMARKETIMPACTSH{.78%  Y 'YI&)&&I&)"&`&&I&)    TheestimatedlaborimpactsassociatedwiththeNESHAParebasedontheresultsofthepartial  ] equilibriumanalysesoftheGroupIVresinindustries,andarereportedinTable61.ThenumberofworkersemployedbyfirmsinSICcode2821isestimatedtodecreasebyupto127workersasaresultoftheemissioncontrols.Thesejoblossesinclude1workerforMBSand2forSAN,respectively,110workersinthePETindustry,12intheABS/MABSindustries,2inthepolystyreneindustry,andlessthanoneinthenitrileindustry.Thesejoblossesareconsideredtransitionalinnature.TheestimatedlossinnumberofworkersresultsprimarilyfromprojectedreductionsinlevelsofproductionreportedinChapter5foreachofthesevenGroupIVresins.Gainsinemploymentanticipatedtoresultfromoperationandmaintenanceofcontrolequipmenthavenotbeenincludedintheanalysisduetothelackofreliabledata.Estimatesofemploymentlossesdonotconsiderpotentialemploymentgainsinindustriesthatproducesubstituteresins.Similarly,lossesinemploymentinindustriesthatuseGroupIVresinsasinputsorinindustriesthatprovidecomplementgoodsarenotconsidered.ThechangesinemploymentreflectedinthisanalysisareonlydirectemploymentlossesduetoreductionsindomesticproductionoftheGroupIVresins.  )?%-   TABLE 1V61.SUMMARYOFSECONDARYIMPACTSOFPOLYMERSANDRESINSGROUPIVNESHAP 1Vo  *   dddd ddudd@ddedde (#(#,M dd ,?dd,ddU,ddu+  /a" > \/ 2a%a 2EstimatedImpacts1 RbA-" \ a LRGroupIVIndustry ;bb* Pb ;LaborInput2 ;bb* P"bb ;EnergyInput3 ;bb* P"bb ;ForeignTrade4 LB* P " d L bb ,TLMBS  >   Ј '>  U 'Ј '>  U 'Ј ?5>  U T , ,T?ЀAmount  l  (1) 'l U '($0.04) 'l U '(0.20) ?5l U T , ,T?ЀPercentage    (2.5%) ' U '(2.6%) ' U '(20.6%) ?5 U T , ,T?     Ј '  U 'Ј '  U 'Ј ?5  U T , ,T?SAN  F  Ј 'F U 'Ј 'F U 'Ј ?5F U T , ,T?ЀAmount  $t  (2) '$t U '($0.05) '$t U '(0.98) ?5$t !U T , ,T?ЀPercentage  R " (4.6%) 'R #U '(2.5%) 'R $U '(5.7%) ?5R %U T , ,T?   & Ј ' 'U 'Ј ' (U 'Ј ?5 )U T , ,T?PET  * Ј '+U 'Ј ',U 'Ј ?5-U T , ,T?ЀAmount  ,. (110) ',/U '($2.73) ',0U '(10.67) ?5,1U T , ,T?ЀPercentage   Z2 (4.1%) ' Z3U '(4.3%) ' Z4U '(7.2%) ?5 Z5U T , ,T?  86 Ј '87U 'Ј '88U 'Ј ?589U T , ,T?ABS/MABS  f: Ј 'f;U 'Ј 'f<U 'Ј ?5f=U T , ,T?ЀAmount  > (12) '?U '($0.30) '@U '(6.51) ?5AU T , ,T?ЀPercentage  B (3.8%) 'CU '(1.8%) 'DU '(14.9%) ?5EU T , ,T?  @F Ј '@GU 'Ј '@HU 'Ј ?5@IU T , ,T?Polystyrene  nJ Ј 'nKU 'Ј 'nLU 'Ј ?5nMU T , ,T?ЀAmount  LN (2) 'LOU '($0.04) 'LPU '(0.61) ?5LQU T , ,T?ЀPercentage  zR (0.3%) 'zSU '(0.3%) 'zTU '(0.5%) ?5zUU T , ,T?   V Ј ' WU 'Ј ' XU 'Ј ?5 YU T , ,T?Nitrile  !&Z Ј '!&[U 'Ј '!&\U 'Ј ?5!&]U T , ,T?ЀAmount  #T^ (0.015) '#T_U '($0.0004) '#T`U '(0.008) Ba1#TaU T , \TBЀPercentage 2a!2$ba 2(0.2%) ;a*2$cUa ;(0.2%) ;a*2$dUa ;(0.8%) PF*2$eU T0 \ a TPA"o&"&`>E~"oNOTES:0    1Bracketsindicatedecreasesornegativevalues.j&!g"" 0 t 0t"t"2Indicatesestimatedreductioninnumberofjobs.'X"h"" 0 t 0t"t"3Reductioninenergyuseinmillionsof1989dollars.'"i"" 0 t 0t"t"4Reductioninnetexports(exportslessimports)inmillionsofkilograms.Aons.>&&>E~"&`&&>&  1'%D(#j"" T    1  (2$j   Thelossinemploymentisrelativelysmallintermsofnumberofjobslost.Themagnitudeofpredictedjoblossesdirectlyresultsfromtherelativelysmallestimateddecreaseinproductionandtherelativelylowlaborintensityinthepolymersandresinsindustry.H&  "&`&&"&`I&)&&"&`    6.3  ENERGYINPUTMARKETH`ns. ̺   ' pI&)&&I&)"&`&&I&)    Themethodusedtoestimatereductionsinenergyinputuserelatesthebaselineenergy    expenditurestothelevelofproduction.Anestimateddecreaseinannualenergyuseof$0.04,$0.05,$2.73,$0.30,$0.04,and$0.0004million(1989$)annuallyfortheMBS,SAN,PET,ABS/MABS,polystyrene,andnitrileresinindustries,respectivelyisexpectedasaresultoftheemissioncontrols.TheestimatedimpactsonenergyusebyGroupIVindustriesarereportedinTable61.Asproductiondecreases,theamountofenergyinpututilizedbyeachaffectedindustryalsodeclines.Theestimatedchangesinenergyusedonotconsidertheincreasedenergyuseassociatedwithoperatingandmaintainingemissioncontrolequipment.Insufficientdatawereavailabletoconsidersuchchangesinenergycosts.H&  "&`&&"&`I&)&&"&`    6.4  FOREIGNTRADEHns. ` F 'FI&)&&I&)"&`&&I&)    TheimplementationoftheNESHAPwillincreasethecostsofproductionfordomesticGroupIV J  resinproducersrelativetoforeignproducers,allotherfactorsbeingequal.ThischangeintherelativepriceofimportswillcausedomesticimportsofGroupIVresinstoincreaseanddomesticexportsofGroupIVresinstodecrease.TheoverallbalanceoftradeforGroupIVresinsiscurrentlypositive(exportsexceedimports).TheNESHAPislikelytocausethebalanceoftradetobecomelesspositive.TheestimatedimpactsonnetexportsforthesevenGroupIVindustriesrangefromadeclineof0.008millionkilogramsannuallyforthenitrileindustryto10.67millionkilogramsforABS/MABSindustries.ThepredictedchangesinthetradebalanceforeachGroupIVindustryarereportedinTable62.  2$0 @ TABLE 1V62.FOREIGNTRADE(NETEXPORTS)IMPACTS 1VԈ*   ddM dd ?ddddUddu  (#(#,dd ,ddU, dd,dd+  /a" d / 6ab% \a 6EstimatedImpacts1 VbE- \"   ab 8xVGroupIVIndustry 2b!H b 2Amount2 ;b*H "b ;Percentage ;b*H  "b ;DollarValueofNetExportChange3 LB*H  " x 8 b PxLMBS     (0.20)    (20.6%)    ($0.18) 6,  x P Px6SAN   L (0.98)   L (5.7%)   L ($0.21) 6, L x P Px6PET  N  (10.67)  N  (7.2%)  N  ($6.22) 6,N  x P Px6ABS/MABS    (6.51)    (14.9%)    ($2.60) 6,  x P Px6Polystyrene  B  (0.61)  B  (0.5%)  B  ($0.09) 9a(B  x P x9Nitrile 2a!D !a 2(0.008) 2a!D "a 2(0.8%) 2a!D #a 2($0.003) G=!D $ x0  a jxGA"o&"&`>E~"oNOTES:0    1Bracketsindicatereductionsornegativevalues.%"" 0 t 0t"t"2Millionsofkilograms.d&"" 0 t 0t"t"3Millionsofdollars($1989).A)>&&>E~"&`&&>&  1'%R'"" x j   1  ' H&  "&`&&"&`I&)&&"&`    6.5  REGIONALIMPACTSH)    'I&)&&I&)"&`&&I&)    NosignificantregionalimpactsareexpectedtoresultfromimplementationoftheNESHAP.The d estimatedimpactsoftheregulationdonotadverselyimpactoneregionofthecountryrelativetoanother.H&  "&`&&"&`I&)&&"&`    6.6  LIMITATIONSH) H    ' I&)&&I&)"&`&&I&)    Theestimatesofthesecondaryimpactsassociatedwiththeemissioncontrolsarebasedonchanges 4   predictedbythepartialequilibriummodelforeachofthesevenindustries.ThelimitationsdescribedinSection5.4ofthepreviouschapterarealsoapplicabletothesecondaryeconomicimpactsreportedinthischapter.Aspreviouslynoted,theemploymentlossesdonotconsiderpotentialemploymentgainsforoperatingtheemissioncontrolequipment.Likewise,thegainsorlossesinmarketsindirectlyaffectedbytheregulations,suchassubstituteproductmarkets,complementproductsmarkets,orinmarketsthatuseGroupIVresinsasinputstoproduction,havenotbeenconsidered.ItisimportanttonotethatthepotentialjoblossespredictedbythemodelareonlythosewhichareattributabletotheestimatesofproductionlossesintheMBS,SAN,PET,ABS,MABS,polystyrene,andnitrileresinindustries.H&  "&`&&"&`I&)&&"&`    6.7  SUMMARYH) N A" 'AI&)&&I&)"&`&&I&)    Theestimatedsecondaryeconomicimpactsarerelativelysmall.Asmanyas127joblossesmay E$ occurnationwide.Energyinputreductionsareestimatedtobeapproximately$3.2millionannually(1989$).Adecreaseinnetexportsof19.0millionkilogramsannuallyofGroupIVresinproductsispredicted.Nosignificantregionalimpactsareexpected.   * -       "9&"&`.=h"9    7.0POTENTIALSMALLBUSINESSIMPACTS-) z     .&)&.=h"&`&&.&)  H&  "&`&&"&`I&)&&"&`    7.1  INTRODUCTIONHy)  B  'BI&)&&I&)"&`&&I&)    TheRegulatoryFlexibilityAct(henceforthreferredtoastheAct),theEPAguidelinesfor F  implementingtheRegulatoryFlexibilityAct,andtheSmallBusinessRegulatoryEnforcementFairnessAct(SBREFA)of1996requiresthatspecialconsiderationbegiventotheeffectsofallproposedregulationsonsmallbusinessentities.TheActrequiresthatadeterminationbemadeastowhetherthesubjectregulationwillhaveasignificantimpactonasubstantialnumberofsmallentities.Fourmaincriteriaarefrequentlyusedforassessingwhethertheimpactsaresignificant.EPAfrequentlyusesoneormoreofthefollowingcriteriatodeterminethepotentialforaregulationtohaveasignificantimpactonsmallfirms:0  0(#(#Annualcompliancecosts(annualizedcapital,operating,reporting,etc.)expressedasa u percentageofcostofproductionforsmallentitiesfortherelevantprocessorproductincreasesignificantly; (#(# 0  0(#(#Compliancecostsasapercentageofsalesforsmallentitiesaresignificantlyhigherthan J compliancecostsasapercentofsalesforlargeentities; (#(# 0  0(#(#Capitalcostsofcompliancerepresentasignificantportionofcapitalavailabletosmall !(! entities,consideringinternalcashflowplusexternalfinancingcapabilities;and (#(# 0  0(#(#Therequirementsoftheregulationarelikelytoresultinclosureofsmallentities.f$%(#(# H&  "&`&&"&`I&)&&"&`    7.2  METHODOLOGYHJ)  &D") '&ZI&)&&I&)"&`&&I&)    Dataarenotreadilyavailabletocomparecompliancecoststoeitherproductioncostsortothe (#+ capitalavailabletosmallfirms.Theinformationnecessarytomakesuchcomparisonsaregenerallyconsideredproprietarybysmallbusinessfirms.InordertodetermineifthepotentialforsmallbusinessimpactsissignificantfortheGroupIVNESHAP,thisanalysiswillfocusontheremainingtwocriteria:thepotentialforclosure,andacomparisonofcompliancecostsasapercentageofsales.EPA'smost -)3 recentguidanceonimplementingtheRegulatoryFlexibilityActprovidesthatanynumberofsmall  entitiesisconsideredtobesubstantial.Thepotentialforclosure,andcosttosalesratios,areanalyzedforthisanalysisbasedonavailabledata.EPA,however,isresponsiblefordeterminingwhethertheresultspresentedinthischapterindicatethatfurtheranalysisoftheimpactonsmallbusinessaffectedbytheGroupIVNESHAPiswarranted.H&  "&`&&"&`I&)&&"&`    7.3  SMALLBUSINESSCATEGORIZATIONH)  Z   'Z I&)&&I&)"&`&&I&)    ConsistentwithSBAsizestandards,aresinproducingfirmisclassifiedasasmallbusinessifithas ^  lessthan750employees.Afirmmustalsobeunaffiliatedwithalargerbusinessentitytobeconsideredasmallbusinessentity.InformationnecessarytodeterminewhetheranyaffectedGroupIVfirmsweresmallbusinesseswasobtainedfromnationaldirectoriesofcorporations.BasedupontheSBAsizecriterion,onlytwofirms,AmericanPolymersandKanekaTexasCorporation,employlessthan750workers.H&  "&`&&"&`I&)&&"&`    7.4  SMALLBUSINESSIMPACTSH$)  O '4I&)&&I&)"&`&&I&)    KanekaTexasisanMBSproducer,andsincetheresultsofthepartialequilibriumanalysisleadto  theconclusionthatnoMBSfacilitiesareatriskofclosure,thiscriterionforadversesmallbusinesseffectsisnotmet.AmericanPolymersisaproducerofpolystyrenepellets.Theresultsoftheanalysisestimatethatnofacilitiesareatriskofclosure.  InformationwasavailabletocalculatecompliancecoststobeincurredbyAmericanPolymersandKanekaTexasasapercentageofsales.In1992,Kaneka'ssaleswere$71million.Totalcompliancecostestimatesforthisfirmbasedon1991productionis$848,or0.001percentoftotalsales.In1992,AmericanPolymershadsalesof$50million.ThecostofcontrollingAmericanPolymer'spolystyrenefacilitybasedon1991productionis$253,or0.001percentoftotalsales.Becausethesetwopercentagesareminimal,theconclusionisdrawnthatasignificantnumberofsmallbusinessesarenotadverselyaffectedbytheNESHAP.  &"4 gn  APPENDIXA  SENSITIVITYANALYSIS  G     ThesensitivityanalysiscontainedinthisAppendixexploresthedegreetowhichtheresultspresentedearlierinthisreportaresensitivetotheestimatesofthepriceelasticitiesofdemandandsupplywhichwereusedasinputstothemodel.Theanalysisofthepriceelasticityofdemandwillpresumethatthesupplyelasticityis4.77ashypothesizedinthepartialequilibriummodel.Alternatively,thesensitivityanalysisofthepriceelasticityofsupplywillassumethatthedemandelasticityestimatespostulatedinthemodelandlistedundertheElasticityMeasurecolumninTableA1 8  remainunchangedforeachoftheGroupIVresins.  TheresultspresentedinthisreportarebaseduponpriceelasticitiesofdemandestimatesforMBS,SAN,PET,ABS/MABS,polystyrene,andnitrileresinsthatdifferbyonestandarderrorfromthoseusedinthemodel.TableA1presentsthealternativemeasuresofpriceelasticitiesofdemandforeachGroupIVresin.  TheresultsofthesensitivityanalysisrelativetodemandelasticityestimatesarepresentedinTablesA2andA3.TableA2reportsresultsunderthelowendestimateofthepriceelasticityofdemandscenario,andTableA3reportsresultsunderthehighendmeasureofthepriceelasticityofdemandscenario.&  @7 7 TABLE 1VA1.PRICEELASTICITYOFDEMANDESTIMATES 1VԈ* d ddd ddU dddd  (#(#,dd ,dd,6dd",dd"+  3ab" 7!, 3GroupIVIndustry 2ab!!/-ab 2ElasticityMeasure ;ab*!/."ab ;HighEstimate ;ab*!//"ab ;LowEstimate LB*!/0"   ab PxLMBS  A#1 Є2.51  A#2 Є3.31  A#3 Є1.71 6,A#4 x P Px6SAN  $5 Є1.61  $6 Є2.22  $7 Є1.0 6,$8 x P Px6PET  %5!9 Є2.72  %5!: Є3.51  %5!; Є1.93 6,%5!< x P Px6ABS/MABS  7'"= Є1.83  7'"> Є2.10  7'"? Є1.55 6,7'"@ x P Px6Polystyrene  (#A Є1.31  (#B Є1.79  (#C Є0.84 9a((#D x P x9Nitrile 2a!)+%Ea 2Є1.83 2a!)+%Fa 2Є2.10 2a!)+%Ga 2Є1.551'%)+%H x0   a 1'   ,,|'J   &   TABLE 1VA2.SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:LOWENDPRICEELASTICITYOFDEMANDSCENARIO 1V1     * dddd dd6dd"dd"(#(#,dd ,dd",dd",dd+  3ab" > @3GroupIVIndustry 2ab! ab 2MarketPriceChange(%) ;ab*  "ab ;MarketOutputChange(%) ;ab*  "ab ;ChangeintheValueofShipments(%) LB*"  @ ab PxLMBS   L 1.1%   L (2.2%)   L (1.2%) 6, L x P Px6SAN  N  3.0%  N  (3.3%)  N  (0.3%) 6,N  x P Px6PET    1.0%    (1.94%)    (1.0%) 6,  x P Px6ABS/MABS  B  1.8%  B  (3.8%)  B  (2.0%) 6,B  x P Px6Polystyrene  D  0.4%  D  (0.3%)  D ! (0.03%) 9a(D " x P x9Nitrile 2a! #a 20.07% 2a! $a 2(0.16%) 2a! %a 2(0.08%) G=! & x0  a xGA"o&"&`>E~"oNOTES:0    1Bracketsindicatedecreasesornegativevalues.>&&>E~"o>E~A|gnif>&&>E~"&`&&>&  1'%B("" x    1'  & ' TABLE 1VA3.SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:HIGHENDPRICEELASTICITYOFDEMANDSCENARIO 1V-1 "-   * dddd dd"dd"dd(#(#,dd ,dd",dd",dd+  3ab" / @3GroupIVIndustry 2ab!22ab 2MarketPriceChange(%) 2ab!25ab 2MarketQuantityChange(%) 2ab!28ab 2ChangeintheValueofShipments(%) LB*X:"  @ ab PxLMBS  D; 0.9%  D< (3.2%)  D= (2.4%) 6,D> x P Px6SAN  ? 2.5%  @ (5.7%)  A (3.3%) 6,B x P Px6PET   8C 0.8%   8D (2.8%)   8E (2.0%) 6, 8F x P Px6ABS/MABS  :"G 1.7%  :"H (4.4%)  :"I (2.8%) 6,:"J x P Px6Polystyrene  #K 0.3%  #L (0.6%)  #M (0.3%) 9a(#N x P x9Nitrile 2a!$. Oa 20.07% 2a!$. Pa 2(0.19%) 2a!$. Qa 2(0.12%) G=!$. R x0  a xGA"o&"&`>E~"oNOTES:0    1Bracketsindicatedecreasesornegativevalues.A gnif>&&>E~"&`&&>&  1'%:'"T"" x    1''  '(#T   TheresultsofthelowenddemandelasticityscenariodifferverylittlefromthereportedmodelresultspresentedinChapter5.Thesignsofthechangesinprice,quantity,andvalueofshipmentsareunchanged,andtherelativesizeofthechangesarenotsignificantlydifferent.Theresultsofthisanalysistendtopresentrelativelymorefavorableresultsfortheaffectedindustries.Thescenarioforthehighendelasticityalsodoesnotdiffersignificantlyfromthepreviouslyreportedresultsforpriceincreasesandproductiondecreases.  TheresultsofthesensitivityanalysesunderhighandlowendpriceelasticitiesofsupplyscenariosarereportedinTableA4andTableA5,respectively.Thehighendestimateusedinthisanalysiswas5.77,andthelowendestimateofthepriceelasticityofsupplyusedinthisanalysiswas3.77.Again,theresultsdonotdiffergreatlyfromthoseusedinthepartialequilibriummodel.TheresultsunderthelowendsupplyelasticityscenarioareslightlymorefavorabletotheGroupIVindustriesthanthosepreviouslyreportedinChapter5.  &  TABLE 1VA4.SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:HIGHENDPRICEELASTICITYOFSUPPLYSCENARIO 1V  * dddd dd"dd"dd(#(#,dd ,dd",dd",dd+  3ab"  p @3GroupIVIndustry 2ab!|"ab 2MarketPriceChange(%) 2ab!|%ab 2MarketQuantityChange(%) 2ab!|(ab 2ChangeintheValueofShipments(%) LB**"  @ ab PxLMBS  .+ 1.0%  ., (3.0%)  .- (2.0%) 6,.. x P Px6SAN  0/ 2.9%  00 (4.8%)  01 (2.1%) 6,02 x P Px6PET  3 0.9%  4 (2.4%)  5 (1.6%) 6,6 x P Px6ABS/MABS   $7 1.8%   $8 (4.5%)   $9 (2.7%) 6, $: x P Px6Polystyrene  &"v; 0.4%  &"v< (0.5%)  &"v= (0.1%) 9a(&"v> x P x9Nitrile 2a!x#?a 20.08% 2a!x#@a 2(0.2%) 2a!x#Aa 2(0.1%) G=!x#B x0  a xGA"o&"&`>E~"oNOTES:0    1Bracketsindicatedecreasesornegativevalues.Agnif>&&>E~"&`&&>&  1'%%$!D"" x    1'w  &(v#F   & '  asiTABLE 1VA5.SENSITIVITYANALYSISFORESTIMATEDPRIMARYIMPACTS:LOWENDPRICEELASTICITYOFSUPPLYSCENARIO 1V  * dddd dd"dd"dd(#(#,dd ,dd",dd",dd+  3ab" > @3GroupIVIndustry 2ab! ab 2MarketPriceChange(%) 2ab!  ab 2MarketQuantityChange(%) 2ab!  ab 2ChangeintheValueofShipments(%) LB*"  @ ab PxLMBS   L  0.9%   L (2.5%)   L (1.6%) 6, L x P Px6SAN  N  2.6%  N  (4.3%)  N  (1.8%) 6,N  x P Px6PET    0.8%    (2.2%)    (1.4%) 6,  x P Px6ABS/MABS  B  1.6%  B  (3.7%)  B  (2.1%) 6,B  x P Px6Polystyrene  D  0.3%  D  (0.4%)  D ! (0.1%) 9a(D " x P x9Nitrile 2a! #a 20.07% 2a! $a 2(0.2%) 2a! %a 2(0.1%) G=! & x0  a xGA"o&"&`>E~"oNOTES:0    1Bracketsindicatedecreasesornegativevalues.A#gnif>&&>E~"&`&&>&  1'%B("" x    1''T  Insummary,theresultsofthesesensitivityanalysesdonotindicatethatthemodelresultsaresensitivetoreasonablechangesinthepriceelasticitiesofdemandorsupply.Thisconclusionprovidessupportforgreaterconfidenceinthereportedmodelresults.  0   APPENDIXB  ALTERNATIVEPETMODEL  G     AppendixBreportstheprimaryandsecondarymarketimpactsoftheproposedregulatoryalternativeforthePETindustryassumingthatallfacilitiesfaceidenticalaverageperunitemissioncontrolcosts.TheresultsofthisalternativemodelarepresentedtoaddresstheissueofuncertaintyconcerningtheindividualPETfacilityproductionlevels.Ingeneral,theprimaryandsecondarymarketimpactsaresignificantlyloweredwhentheassumptionismadethateachfacilityfacesthesameindustryaverageperunitemissioncontrolcosts.TheprimarymarketimpactsandthesecondarymarketimpactsofthisalternativeaveragecostPETmodelarepresentedinTablesB1andB2,respectively.Nofacilityclosuresarepredictedwhenidenticalaveragecontrolcostsareassumed.Impactsonprice,output,anddomesticvalueofshipment(orrevenue)decreasesforthePETindustryarelessthan1percent.Employmentlossesdeclineto20forthisindustrywhileenergyusereductionsandtradeeffectsareminor.Basedupontheresultsofthisanalysis,itisreasonabletoconcludethattheregulatoryimpactsareminorwhentheassumptionismadethatallproducersfaceidenticalaverageperunitemissioncontrolcosts.& R   TABLE 1VB1.PRIMARYIMPACTSFORTHEPETINDUSTRYASSUMINGINDUSTRYAVERAGEPERUNITCONTROLCOSTS 1V ,  * dddd dd"dd"dd(#(#,<dd ,<td +  /a" f( /PrimaryImpactType 0ab!)a 0AmountorPercentageChange4 Fba5!*  ab FPrice1  !p+ ЀAmount̀PercentageQuantitydomesticsales2 #. ЀAmount̀PercentageValueofDomesticSales3 <&!1 ЀAmount̀PercentageFacilityClosures̀ 2bba!)$5ba 2$.00190.26%(21.9)(0.73%)($10.22)(0.48%)None:0.($?" 0  bba :"o&"&`>E~"oNotes:  1Pricesareshownindollarsperkilogram(1989$). +&@     2Quantitiesareshowninmillionsofkilograms. &,v'A     3Valueofdomesticshipmentsareshowninmillionsof1989dollars. ,(B     4Negativeamountsareshowninbrackets'R+>&&>E~"&`&&>&. b-(C  <.)D Ї& <   TABLE 1VB2.SECONDARYIMPACTSFORTHEPETINDUSTRYASSUMINGINDUSTRYAVERAGEPERUNITCONTROLCOSTS 1V!2  *` dd<dd <td (#(#`,<dd ,<td +  /a" h /SecondaryImpactType 0ab!a 0AmountorPercentageChange5 Fba5!  ab ( FLabormarketjoblosses1 " r ЀAmount̀PercentageEnergyexpendituredecreases2    ЀAmount̀PercentageForeignTradeImpacts:̀Changeinnetexportsquantity3 h  ЀChangeinthedollarvalueofnetexports4 2bba! ba 220joblosses(0.73%)($0.49)(0.33%)(1.89)($1.09):0. " 0 (  bba :"o&"&`>E~"oNotes:  1Numberofjoblossesareroundedtothenearestwholenumber.      2Energyexpendituredecreasesareshowninmillionsof1989dollars. N     3Changeinnetexportquantityisshowninmillionsofkilograms. <     4Changeinthedollarvalueofnetexportsisshowninmillionsof1989dollars.      5Negativevaluesareshowninbrackets.'<2