Regl. 2480, art. 3.45
ECI' calculated the total costs of
Cite as Reglamento Núm. 2480, Art. 3.45
Polyols
1.6
.3
.59
quantified. It is significant that the
compliance for each major industry
companies supplying cost data to the
Total industry
109.6
11.7
29.51
sector at each of the proposed alternarecord during the rulemaking proceedtive sets of permissible exposure
ing were most reticent about assigning
An essential limitation of the exlimits. Cost estimates were supplied to
numbers to these types of costs. One
trapolation process used by ECI in de-
ECI by various companies within the
company stated that a 1-day shutdown
veloping industry-wide cost estimates
industry sectors affected by the standof their facilities would cost $250,000
is the inherent assumption that all
ard. These estimates were then used to
(Ex. 92). It was noted at the hearing,
plants within an industry sector are at
determine the compliance costs of a
however, that the company already
the same stage of development in con-
"typical plant" within each sector,
carries out periodic turnaround eftrolling AN exposures. The effects of
based upon annual production in
forts, for which it does shut down fathis assumption on the overall cost espounds. The typical plant costs were
cilities. During these planned shuttimates depend upon the degree to
then extrapolated to the whole induswhich the sample plant is representatry sector level on the basis of total
downs, an engineering expert for the
company agreed that many different
tive of the industry sector as a whole.
annual production.
ECI's data base was limited to that
engineering changes could be made in
If the sample plant is more advanced
data which the companies contacted
addition to the programed maintethan most, then the cost estimates
nance activities during the shutdown
were willing to provide to them. As
based on the sample plant can be exnoted at the hearing, except for the
period (Tr. 1129). The $250,000 figure,
pected to understate the total compliinformation in the supplement to the
then, would not be due exclusively to
ance costs. On the other hand, if the
report ECI took the cost data as they
the implementation of engineering
sample plant lags behind most of the
received it, without independently recontrols, but would be attributable to
plants in the sector in controlling ex-
a number of different functions within
viewing it for proper engineering or
posures, then the overall cost estiaccounting (Ex. 15A; Tr. 509). In addithe facility.
mates can be expected to be overstattion, data was not received from
The type of cost to be incurred died.
within all of the major industry secrectly determines the planner's ability
The ECI report does not lean contors. Considerable data was received
to estimate its magnitude; some cost
sistently toward either of these alterfor the nitrile elastomer sector, but no
items are basic and must be assessed in
natives. For example, ECI's cost estidata on ABS manufacturing was supconnection with the engineering plan,
mates for the acrylic fiber manufacplied to ECI until the supplement was
whereas others may only be roughly
turers are based on data from a comprepared. In determining the costs of
projected, but are not at all reducible
pany which employs "solution polycompliance for the ABS sector, then,
to dollar figures. The form in which
merization" as its process. More of the
ECI used the nitrile elastomer cost figthe sampled companies in each sector
U.S. fiber production capacity, howevures (based on a 30 million pound
supplied their data to ECI leaves the
er, involves "suspension polymerizaplant) and extrapolated them to the
question open as to how much of
tion," which is more difficult to con-
ABS "typical plant" (figured at 200
either type of cost was included in
trol (Tr. 417-418). On the basis of that
million pounds) on the basis of simitheir calculations. It must be assumed,
factor alone, the ECI estimates for the
larity of process and process controls.
lacking any information to the confiber production sector might be ex-
The ECI method of extrapolation
trary, that the costs submitted by the
pected to be on the low side. However,
relied exclusively on companies within
companies reflected what their engion the other hand, the largest produceach industry sector to supply what
neering departments determined to be
er of acrylic fibers has reported that
they estimated to be the costs of comnecessary for compliance with the alits controls for AN are further adpliance for each of the three proposed
ternative proposed exposure limits.
vanced than the sample plant appears
exposure limits. ECI performed no in-
This necessarily would include those
to be (Ex. 11:(14)). This would indicate
dependent engineering assessment of
elements customarily assessed in engithat the extrapolation of costs from
the data received from these companeering plans, while excluding those
the sample plant to the entire indusnies. The data from the sampled comelements which could not be projected
try sector would result in the cost estipanies represented what the engineerin dollar figures. Nonetheless, even if
mates being overstated.
ing departments of those companies
this assumption were erroneous, the
The variability of this aspect of the
determined necessary for compliance.
question of downtime costs would not
report was recognized by ECI at the
There is no clear way to determine
detract from the Agency's determinahearing. When asked whether he felt
what specific cost items were included
tion that the standard is economically
the cost estimates were understated,
in each company's data. It must be asfeasible for the affected industry.
Dr. Bochinski replied, "Maybe in the
sumed, however, that the engineers
OSHA is satisfied that the data con-
0.2 level we might have understated.
engaged in providing the data were
tained in the ECI report clearly dem-
In some cases, 1 ppm and 2 ppm in
not solely concerned with hardware.
onstrates the feasibility of a 2 ppm
FEDERAL REGISTER, VOL. 43, NO. 192-TUESDAY, OCTOBER 3, 1978
45786
RULES AND REGULATIONS
standard for all of the major industry
from a "typical plant", therefore, will
degree of certainty how much the
sectors evaluated in the report.
be limited by the total number of
total costs would be understated. The
AN Manufacturing. There is no quesplants and the determination that any
data submitted by other fiber production that a 2 ppm standard is economione plant is "typical" of such a small
ers to the record would indicate that
cally feasible for the AN manufacturnumber.
the difference would in no way constiing sector. As has been stated
After the initial ECI report was pubtute an economic burden to the affectthroughout the record, AN manufaclished, Vistron later supplied cost estied industries.
turing is essentially a closed process,
mates for a 2 ppm standard for their
A countervailing consideration in
with the greatest potential for expomonomer production facilities. ECI inevaluating the cost estimates for this
sures arising from fugitive emissions,
corporated this data into their supplesector is the degree of compliance
leaks and spills, and during reactor
ment and noted that the results were
which already exists among fiber procleaning and other maintenace operconsistent with their previous figures
ducers. At least two producers of
ations. The companies have already
for this industry sector (Ex. 15A; Tr.
acrylic fibers have reported that most
developed engineering plans designed
511).
of their operations are already operatto tighten up their processes and limit
Acrylic fibers. ECI's estimates for
ing at between 1 and 2 ppm on a daypoints of process emissions into the
the acrylic fiber industry were based
to-day basis (Ex. 11:(14); 11:(10)). Since
workplace. The compliance costs for
exclusively on data received from Dow
the total number of producers in the
this sector of the AN industry should
Badische. This data was scaled to the
industry sector is not large, one would
pose no serious economic impact on
level of the "typical plant" and was
expect that ECI's estimates would be
the four affected companies, which toextrapolated from there to the total
overstated insofar as they do not congether produce 1.5 billion pounds of
acrylic fiber sector.
sider the advanced state of exposure
AN monomer per year.
The difficulty with assessing the accontrol within this sector.
The ECI cost estimates in the report
curacy of the cost estimates for acrylic
The 2 ppm standard is, without
for the AN manufactuing sector were
fiber manufacturing stems from two
question, economically feasible for the
obtained solely through a review of
countervailing factors. The first conacrylic fiber industry. Most producers
the OSHA rulemaking record. Until
cerns the type of manufacturing procare well along the way to compliance
Vistron supplied additional data for
esses used in the sampled plant and in
solely by means of engineering and
the 2 ppm level (which ECI incorpothe overall industry, whereas the
work practice controls in most of their
rated into the supplement to the
second has to do with the current exoperations. The cost estimates supreport), the only data employed by
posure and compliance conditions in
plied by ECI indicate that the compli-
ECI was from the du Pont and Monthe various companies in the industy.
ance costs should not cause the affectsanto submissions to the record.
The Dow Badische facility which
ed employers undue difficulty. In addi-
The du Pont and Monsanto data as.
supplied data to ECI produces acrylic
tion, ECI's cost estimates undoubtedly
submitted were not broken down by
fibers by means of "solution polymerinclude items and activities which
product, but contained cost estimates
ization." Solution polymerization inmost, if not all, of the producers have
for the respective companies' total
volves the formation of polymer in a
already implemented in their facilities.
AN-related operations. ECI took the
solvent, and the spinning of fibers di-
ABS/SAN Resins-Nitrile Elasdata and attempted to split the costs
rectly from this solution. This method
tomers. The extrapolation procedure
up according to product. As will be
of production is not the most widely
employed by ECI to determine complinoted, the efforts in this regard were
used means of manufacturing acrylic
ance costs for the ABS/SAN sector
not properly performed for the Monfibers. Most fiber production in the
and the nitrile elastomer sector of the
santo data, resulting in cost estimates
United States (over two-thirds, by one
AN industry has been strongly chalwhich were too high for the AN-manucompany estimate) involves "suspenlenged by various parties to the profacturing sector.
sion polymerization" (Ex. 156). Susceeding. The points of contention pri-
ECI assumed that the Monsanto
pension polymerization involves a formarily involve the following: The averdata ($34 million incremental costs for
mation of polymer in water. The polyaging of the costs for two nitrile
reaching 2 ppm) covered the costs for
mer if filtered, washed, and dried, at
rubber manufacturers which submittheir AN manufacturing and acrylic
which point the dried polymer is
ted data to ECI; the use of the nitrile
fiber manufacturing facilities only.
either stored for usage or taken immeelastomer costs to estimate the costs
However, as was noted at the hearing
diately to be dissolved in a solvent and
for the ABS/SAN sector; the formula
(Tr. 348), the costs supplied for Monspun directly into fibers. In suspension
used by ECI to extrapolate from nisanto were for all of their operations,
polymerization, it is necessary to open
trile elastomers to ABS/SAN resins;
including their ABS manufacturing faup the process in order to isolate dried
the size of the "typical plant" within
cilities. Therefore, ECI's figures for
polymer. Because this system is much
the ABS/SAN sector; and the question
Monsanto's AN and fiber production
less totally enclosed than a solution
of "return on investment".
are overstated. This is particularly evipolymerization process, it is more
ECI determined that the typical nident in light of the fact that control of
costly to reduce employee exposures
trile elastomer plant produces 30 mil-
ABS manufacturing is expected to inat a suspension polymerization facililion pounds per year. This figure has
volve higher costs than controls for
ty.
not been seriously questioned. The
monomer or fiber production.
ECI acknowledged at the hearing
cost estimate for this "typical plant"
ECI averaged the du Pont costs with
that suspension polymerization faciliwere determined by averaging cost
the Monsanto costs to obtain an averties will cost more to control than sodata received from two producers, Unage cost to apply to the AN manufaclution polymerization facilities (Tr.
iroyal and BF Goodrich. The cost data
turing sector. Insofar as the Monsanto
417-418). Since a solution polymerizafrom these companies were widely dicosts were improperly determined, the
tion plant was the source of the data
vergent, leading some to conclude that
ECI estimates for this sector are clearused to estimate costs for the entire
an averaging of these figures would be
ly erroneous on the high side.
fiber sector, it is clear that this factor
of questionable validity in estimating
The difficulty with relying upon
would result in an understatement of
total costs for the sector. The aver-
"typical plant" in the context of monthe total compliance costs. (It should
aged cost data were scaled by ECI to
omer manufacturing is that there are
be noted that other fiber companies
the level of the 30 million pound
only four companies which are in the
had the opportunity to submit cost
"typical plant".
industry, and no company has more
data to ECI, but did not do so.) It is
Data received after the ECI report
than two plants. Any extrapolation
not possible to determine with any
was published have indicated that the
FEDERAL REGISTER, VOL 43, NO. 192-TUESDAY, OCTOBER 3, 1978
RULES AND REGULATIONS
45787
initial estimates in the report may not
costs based upon the later data from
though the "typical plant" is only 2/5
be very far off the mark for the nitrile
an ABS facility for 2 ppm were estias large as the "sampled plant" in this
elastomer manufacturers. Cost figures
mated to be $3.7 million.
case, its capital costs will be more than
received from Reichhold Chemicals
ECI's extrapolation using the ABS
half as much as the larger plant.
(Ex. 15A) and Goodyear (Ex. 89) are
plant data resulted in a much lower
Therefore, an extrapolation to the
relatively consistent with the initial
total capital cost for the ABS/SAN inwhole industry sector on the basis of
ECI estimates for this industry sector.
dustry sector for the 2 ppm standard
the smaller typical plant will, in this
The Reichhold data, when extrapolatthan did the extrapolation from nitrile
case, result in a much higher overall
ed to the level of the "typical plant"
elastomers. However, the estimates for
capital cost. In addition, the other ele-
(30 million pounds per year), revealed
operating costs (labor, materials, and
ments which are necessary in all
cost estimates for capital investment
utilities) from the ABS plant were
plants, regardless of size, will increase
to be $1.2 million for the 2 ppm standconsiderably higher.
in total costs because there are more
ard. The Goodyear estimates of capi-
The main source of controversy conplants to consider.
tal requirements for their production
cerning the cost figures for the ABS/
SPI's calculations of the costs for
facilities, involving capacity of 31 mil-
SAN industry centered around the size
their 62.5 million pound "typical
lion pounds (1976), were approximateof the "typical plant" selected by ECI.
plant", using the ECI formula, result
ly $2.8 million for 2 ppm.
ECI determined that on the basis of
in a capital investment of $2.56 mil-
The findings as to estimated costs
their knowledge at the time, a 200 million. That figure, when extrapolated
for the nitrile elastomer sector reflect
lion pound per year plant was typical
to the entire industry sector, results in
the greater amount of data available
of the overall industry. However, in
a total capital cost for the ABS/SAN
to ECI on this sector in preparing
their posthearing comment, SPI inditheir report. Nitrile elastomer producsector of roughly twice the figure arcated that the actual "typical" plant
tion provided the largest number of
rived at by ECI.
was closer to 62.5 million pounds per
ECI's estimate of the size of the
plant estimates of all of the sectors
year (Ex. 148). Although SPI stated
sampled for the report (Tr. 508).
"typical plant" was based upon their
that this was the result of a survey of
On the basis of their in-house assessexperience and engineering judgment.
their member companies, there was no
ment of the alternative proposed expo-
SPI's estimate was based on a survey
detailed explanation of why their desure limits, Goodyear concluded that 2
of its membership of the industry.
scription of a "typical" plant differed
ppm was both economically and tech-
OSHA is unable to ascertan, with any
from that of ECI, nor was there a disnologically feasible for their manufacdegree of certainty, which approach is
cussion of how they made their deterturing facilities (and that even 1 ppm
more-accurate, nor is such a determimination.
would be feasible) (Ex. 89). There is no
nation really necessary. OSHA has in-
The method that ECI employed to
reason to believe that the impacts of a
corportated the higher estimate to esscale the costs of the "typical plant"
2 ppm standard on the other nitrile
tablish an upper bound of costs of
up to the entire industry sector inrubber manufacturers should be much
compliance for the ABS/SAN sector.
volved the use of an engineering formore severe from an economic stand-
We believe that this treatment of the
mula: Cost of equipment M=(Cost of
point.
available data provides an adequate
equipment N)
In summary, then, the available data
basis for evaluating the economic
on the nitrile elastomer industry indiimpact of the standard.
Cost for plant M =
cate that a 2 ppm standard is both
Another major issue which arose
technologically and economically fea-
(Cost for plant N)
Capacity of plant
0.65
concerning ECI's cost estimates, not
sible for that sector.
Capacity of-plant
only for ABS/SAN resins but for the
ECI determined that the manufacentire report, was the treatment of the
turing process and the points of AN
This formula allows for "economic
concept of "return on investment
emission were sufficiently similar bescale"; for example, equipment costs
(ROI)." It was contended by several
tween nitrile elastomers and ABS/
for a 100 million pound plant will be
parties that the ECI cost estimates did
SAN resins to allow the control costs
less than twice the costs for a 50 milnot incorportate a return on investfor nitrile manufacturing to be exlion pound plant, even though producment as part of the overall costs of
trapolated to ABS/SAN manufacturtion capacity is twice as much.
compliance with the standard (Ex. 76;
ing. This determination received con-
The plant (ABS/SAN) which sup-
Tr. 304; 393-4). It was argued that a
siderable criticism from parties to the
plied data to ECI produces 150 million
failure to include an amount for ROI
proceeding. Exposure conditions, it
pounds of resins per year. To estimate
would result in an overestimate of the
was contended, tend to be higher and
the cost for the "typical plant" with
industry's ability to pass through costs
more variable in nitrile elastomers. In
annual production capacity of 200 milto consumers as price increases. SPI,
addition, the "typical" nitrile plant is
lion pounds (according to ECI), the
in the cost tables in their posthearing
much smaller than ABS/SAN plant,
formula was employed as follows:
comment, chose to include an addiand may involve different types of
tional cost to represent the purportedcontrol problems.
Costs for 200 million 1b. plant =
ly omitted figure for ROI, based on
In the supplement to their report
their assumption that such a cost was
(Exh. 15A), ECI included data which
(Cost for 150 million lb. plant)
not incorporated in the ECI estimates
(200 million) 0.65
had been supplied by an ABS/SAN
X
(Ex. 148).
(150 million)
resin producer for the 2 ppm standard.
The record makes clear, however,
The revised total cost for the entire
*(Cost for 150 million lb. plant) (1.21)
that ECI did, indeed, include the consector (ABS/SAN) differed from the
cept of return on investment in develcost figures in the February 21 report-
Thus, one can see that although the
oping their report. Dr. Henry Beale, a
ed by only 2.5 percent.
typical plant is 1/3 larger than the sameconomist with Chase Econometrics,
The size of the "typical plant" in the
pled plant, its capital costs are only 21
testified for ECI as to the handling of
ABS/SAN sector was determined by
percent higher, using the formula.
economic factors in the report. When
ECI to be 200 million pounds/year.
Using SPI's determinations of the
questioned as to whether ROI was in-
The capital costs for the typical plant,
"typical plant" (only 62.5 million
cluded in the capital cost estimates,
based upon the nitrile extrapolation,
pounds/year instead of 200 million),
Dr. Beale responded in the affirmawere $6.8 million at 2 ppm. The capital
the formula works the other way. Altive:
FEDERAL REGISTER, VOL. 43, NO. 192-TUESDAY, OCTOBER 3, 1978
45788
RULES AND REGULATIONS
There is implicitly a 10-percent rate of
the total investment needed to achieve
average loss of labor productivity for
return on investment involved in that the
a 2 ppm standard was $1.6 million for
the entire AN industry was estimated
expenditures, the capital costs are based on
the polyol production sector. The anto be 2.89 percent.
an assumed useful life of 10 years recouped
nualized compliance costs were esti-
For the 2-ppm standard, output was
at the 10 percent rate * basically is (the
same thing as ROI) (Tr. 302).
mated to be approximately $0.6 milestimated to decrease by less than 4
lion per year.
percent with several sectors, such as
Therefore, SPI, in choosing to factor
Downstream employers. As discussed
AN monomer and polyol production,
an additional 10 percent ROI into
in the exemptions section, OSHA behaving reductions in output below 2
their calculations, has incorrectly aslieves that the final standard will efpercent.
sumed that no ROI was included in
fectively limit coverage to those em-
Initial capital costs of compliance
the ECI report. The additional 10 perployers with the greatest potential for
were estimated to be 27.2 percent of
cent results in double-counting, and
exposure to AN in the workplace. As
annual investment for AN production,
serves only to inflate both the total
was the case with the ETS, we anticias compared with 6 percent for pocompliance costs and, consequently,
pate that most downstream employers
lyols, and 48.3 percent for fibers. Howthe impacts of the standard on prices
will be exempted from coverage. A deever, these costs were estimated to be
and competition for ABS materials.
termined effort has been made to claras high as 139.1 percent of annual in-
SPI's estimates of the effects of the
ify the exemption provisions and
vestment for ABS/SAN resins, and
standard on competition are open to
broaden their scope where warranted
554.4 percent for nitrile elastomers.
question on several counts. First, as
by the evidence.
ECI concluded that for AN, polyols,
noted above, the erroneous inclusion
Economic impacts. After estimating
and fibers, the cost of compliance at 2
of an additional 10 percent ROI serves
the costs of compliance with the proppm would not have a significant
to inflate SPI's estimates of the standposed standard, ECI assessed the efimpact on output. Even for ABS/SAN
ard's impact on ABS prices. By artififects of these costs on economic indiresins, ECI estimated that the growth
cially inflating the total compliance
cators as related to the affected indusprospects of the industry were sufficosts, this element also increases the
tries. The impacts on critical matericiently great to make the costs of comprice increases which are necessary to
als, market structure, productivity,
pliance unlikely to produce any major
cover those costs. Second, as noted
employment, energy, and prices were
reduction in output. The one area of
earlier, there is no way for OSHA to
examined for each of the major segconcern to ECI at the 2-ppm level inverify whether SPI's "typical plant"
ments of the AN industry. The methvolved the nitrile elastomer sector.
estimate is more accurate than ECI's
odology employed in the analysis of
However, additional data submitted to
estimate.
these impacts was described at length
the record by two major producers in
To the extent that SPI's typical
in the report, and will be discussed
this sector (Uniroyal and Goodyear)
plant may be smaller than warranted,
here only insofar as major issues were
indicates that a 2-ppm standard is conthe compliance costs other than capiraised during the rulemaking.
sidered by them to be feasible, and is
tal will be inflated, since many of
Critical materials. ECI determined
not expected to have the serious conthese costs are based upon a cost per
that critical materials impact was not
sequences projected by ECI (Exs. 88;
plant basis.
relevant for AN or AN-derived materi-
89).
Finally, the SPI cost estimates, as do
als, since none of these materials are
Employment. At the 2-ppm standard,
the ECI cost estimates, necessarily
currently listed on the Department of
ECI anticipated that relatively small
assume that the plant supplying the
Commerce's list of strategic and critichanges in output will occur, so that
cost data is about average for the incal materials. They also determined
few, if any, workers will be laid off.
dustry. There- is every reason to bethat there would be no indirect effects
Any workers that are displaced are exlieve that many companies, including
on critical materials due to product
pected to be reabsorbed through
some within the ABS/SAN sector, are
substitution as a result of the standtransfers to other jobs in their compawell along the way in planning and
ard.
nies.
achieving reductions of employee ex-
Market structure. ECI concluded
Energy. ECI projected that for the 2-
posures to below 2 ppm. To the extent
that it would be most unlikely that
ppm standard, energy consumption
that companies have already installed
the costs of compliance with the prowould increase for the industry by
or are already implementing requireposed AN standard would have any
62,535 barrels of oil per year. or 173
ments of the standard, the incrementsignificant impacts on market strucbarrels per day.
al costs of compliance will be that
ture at the four-digit [sic] industry,
As ECI noted, even if these amounts
much lower. At least one producer of
level for any of the industry sectors
were quadrupled, they would be insig-
ABS/SAN resins already maintains
studied. Most of the sectors are alnificant on a daily basis in comparison
most of its operations below 2 ppm
ready highly concentrated. The four
to the total energy consumption of the
(Tr. 899-900).
firm concentration ratios range from
affected industry sectors (Tr. 444).
Even if the SPI cost estimates were
91 for ABS/SAN resins to 100 for acry-
At the hearing, ECI was questioned
to be accurate, the economic impact of
lonitrile monomer production. The
concerning the energy costs contained
the AN standard on the ABS/SAN
only major exceptions to this concluin their report (Tr. 442-444). It was
sector should be well within the capasion would be, in ECI's view, if one or
contended that these overall costs did
bilities of the affected employers. The
more firms in the nitrile elastomer innot include the energy requirements
ABS/SAN market is one of the most
dustry were to cease production, or if
for the high rates of ventilation which
buoyant of all products made from
compliance costs for the ABS/SAN in-
ECI felt would be needed for compli-
AN, and the demand for ABS and SAN
dustry were to substantially eliminate
ance (Ex. 76).
resins is expected to grow considerably
possibilities for entry into this growing
ECI did acknowledge that they did
in the future.
area by new firms. ECI determined
not include the additional energy costs
Polyols. Polymer polyol production
that at the 2-ppm level, the costs
from ventilation as a separate element
represented the smallest industry
would not be sufficiently large to
of their total energy cost estimates.
sector investigated by ECI in developcause either of these two eventualities
However, this is not to say that such
ing their report. Based upon data reto occur.
additional costs were omitted from the
ceived by one producer, ECI estimated
Productivity. ECI calculated the agreport. As we noted in our earlier disthat the "typical" polyol plant has a
gregate labor costs of the proposed 2-
cussion of costs, ECI's cost estimates
production capacity of 53.3 million
ppm standard to be $3,557,000 annualwere based solely upon data supplied
pounds per year. The ECI estimate of
ly. Based on a work force of 5,130, the
to them by companies within each
FEDERAL REGISTER, VOL. 43, NO. 192-TUESDAY, OCTOBER 3, 1978
RULES AND REGULATIONS
45789
sector. ECI did not apply independent
the equipment. Therefore, energy
it is clear that the findings of feasibilengineering judgment to the compacosts would be included in the O. & M.
ity carry forward to the final standnies' estimates, nor did they break
costs for each sector, based on ECI's
ard.
these estimates down by line items
extrapolations of the data as received.
As discussed in the exemption secneeded for compliance. Therefore,
Prices. Based upon their estimates of
tion, OSHA believes that the final
ECI's own determination of what was
the compliance costs of the proposed
standard will effectively limit coverage
needed to reach 2 ppm was not reflect-
2-ppm standard, ECI calculated the
to those employers with the greatest
ed in the costs received from the varcost per pound of product output for
potential for exposure to AN in the
ious companies. If a company detereach industry sector in the study.
workplace. As was the case with the
mined that ventilation was necessary,
Using that cost per pound, ECI then
ETS, we anticipate that most downthen it included ventilation costs in its
calculated a maximum passthrough of
stream employers will be exempted
estimates. Moreover, if a company faccosts, using a markup factor of 0.94.
form coverage. A determined effort
tored ventilation costs into its esti-
Finally, the estimated price increase
has been made to clarify the exempwas supplemented by the amount of
mates, it must, therefore, also have
tion provisions and broaden their
compliance costs from AN manufacfactored in the operating and maintescope where warranted by the eviture which would be passed through
dence.
nance (O. & M.) costs of such ventilato the AN users. The following table
ECI did not focus on downstream
tion. These costs would be expected to
represents ECI's calculations as deemployers in their analysis of the
include the energy costs of operating
scribed above:
costs and economic impacts of the proposal. They apparently assumed that
Product
Compliance, cost Costs (percent of Percent increase'
the exemption would be as wide-rangper pound (cents)
price)
ing as OSHA intended it to be. In addition, ECI indicated that at the time
AN monomer
0.20
0.74
0.70
Acrylic fibers
.92
1.48
1.84
they prepared their report, there was
AEN/SAN resins
21.25
31.25
2.05
32.98
2.15
3.08
little or no data available on down-
Nitrile rubber
1.89
2.82