establishments that make up NAICS 331525, OSHA estimated that 45
establishments (or 21 percent) work with beryllium. Of the 394
establishments that make up NAICS 331524, OSHA estimated that only 7
establishments (less than 2 percent) work with beryllium. Of the 21,960
establishments that make up NAICS 811310, OSHA estimated that 143 (0.7
percent) work with beryllium. However, when OSHA calculated the cost-
to-profit ratio, it used the average profit per firm for the entire
NAICs industry, not the average profit per firm for firms working with
beryllium.
(1) Normal Year-to-Year Variations in Prices and Profit Rates
    The United States has a dynamic and constantly changing economy in
which an annual percentage increase in industry revenues or prices of
one percent or more are common. Examples of year-to-year changes in an
industry that could cause such an increase in revenues or prices
include increases in fuel, material, real estate, or other costs; tax
increases; and shifts in demand.
    To demonstrate the normal year-to-year variation in prices for all
the manufacturers in general industry affected by the proposed rule,
OSHA developed in the PEA year-to-year producer price indices and year-
to-year percentage changes in producer prices, by industry, for the
years 1999-2010. For all of the industries estimated to be affected by
this proposed standard over the 12-year period, the average change in
producer prices was 4.4 percent a year--which is over 4 times as high
as OSHA's 1 percent cost-to-revenue threshold. For the industries found
to have the largest estimated potential annual cost impact as a
percentage of revenue shown in Chapter VI of the PEA are--NAICS 331524:
Aluminum Foundries (except Die-Casting), (0.71 percent); NAICS 331525(a
and b): Copper Foundries (except Die-Casting) (average of 0.81
percent); NAICS 332721a: Precision Turned Product Manufacturing of high
content beryllium (0.49 percent); \21\ and NAICS 811310: Commercial and
Industrial Machinery and Equipment (Except Automotive and Electronic)
Repair and Maintenance (0.55 percent)--the average annual changes in
producer prices in these industries over the 12-year period analyzed
were 3.1 percent, 8.2 percent, 3.6 percent and 2.3 percent,
respectively.
---------------------------------------------------------------------------

    \21\ By contrast, NAICS 332721b: Precision Turned Product
Manufacturing of low content beryllium alloys has a cost to revenue
ratio below 0.4 percent.
---------------------------------------------------------------------------

    Based on these data, it is clear that the potential price impacts
of the proposed rule in affected industries are all well within normal
year-to-year variations in prices in those industries. The maximum cost
impact of the proposed rule as a percentage of revenue in any affected
industry is 0.84 percent, while, as just noted, the average annual
change in producer prices for affected industries was 4.4 percent for
the period 1999-2010. In fact, Chapter VI of the PEA shows two of the
industries within the secondary smelting, refining, and alloying group,
for example, the prices rose over 60 percent in one year without
imperiling the existence of those industries. Thus, OSHA preliminarily
concludes that the potential price impacts of the proposal would not
threaten the economic viability of any industries affected by this
proposed standard.
    Profit rates are also subject to the dynamics of the U.S. economy.
A recession, a downturn in a particular industry, foreign competition,
or the increased competitiveness of producers of close domestic
substitutes are all easily capable of causing a decline in profit rates
in an industry of well in excess of ten percent in one year or for
several years in succession.
    To demonstrate the normal year-to-year variation in profit rates
for all the manufacturers affected by the proposed rule, OSHA presented
data in the PEA on year-to-year profit rates and year-to-year
percentage changes in profit rates, by industry, for the years 2002-
2009. For the industries that OSHA has estimated will be affected by
this

proposed standard over the 8-year period, the average change in profit
rates is calculated to be 39 percent per year. For the industries with
the largest estimated potential annual cost impacts as a percentage of
profit--NAICS 331524: Aluminum foundries (except die-casting), (14
percent); NAICS 331525(a and b): Copper foundries (except die-casting)
(16 percent); NAICS 332721a: Precision Turned Product Manufacturing of
high content beryllium (8 percent); \22\ and NAICS 811310 Commercial
and Industrial Machinery and Equipment (Except Automotive and
Electronic) Repair and Maintenance (10 percent)--the average annual
changes in profit rates in these industries over the eight-year period
were 35 percent, 35 percent, 11 percent, and 5 percent, respectively.
---------------------------------------------------------------------------

    \22\ By contrast, NAICS 332721b: Precision Turned Product
Manufacturing of low content beryllium alloys has a cost to profit
ratio of 6 percent.
---------------------------------------------------------------------------

    A longer-term loss of profits in excess of 10 percent a year could
be more problematic for some affected industries and might conceivably,
under sufficiently adverse circumstances, threaten an industry's
economic viability. However, as previously discussed, OSHA's analysis
indicates that affected industries would generally not absorb the costs
of the proposed rule in reduced profits but, instead, would be able to
pass on most or all of those costs in the form of higher prices (due to
the relative price inelasticity of demand for beryllium and beryllium-
containing inputs). It is possible that such price increases will
result in some reduction in output, and the reduction in output might
be met through the closure of a small percentage of the plants in the
industry. The only realistic circumstance where an entire industry
would be significantly affected by small potential price increases
would be where there is a very close or perfect substitute product
available not subject to OSHA regulation. In most cases where beryllium
is used, there is no substitute product that could be used in place of
beryllium and achieve the same level of performance. The main potential
concern would be substitution by foreign competition, but the following
discussion reveals why such competition is not likely.
(2) International Trade Effects
    World production of beryllium is a thin market, with only a handful
of countries known to process beryllium ores and concentrates into
beryllium products, and characterized by a high degree of variation and
uncertainty. The United States accounts for approximately 65 percent of
world beryllium deposits and 90 percent of world production, but there
is also a significant stockpiling of beryllium materials in Kazakhstan,
Russia, China, and possibly other countries (USGS, 2013a). For the
individual years 2008-2012, the United States' net import reliance as a
percentage of apparent consumption (that is, imports minus exports net
of industry and government stock adjustments) ranged from 10 percent to
61 percent (USGS, 2013b). To assure an adequate stockpile of beryllium
materials to support national defense interests, the U.S. Department of
Defense, in 2005, under the Defense Production Act, Title III, invested
in a public-private partnership with the leading U.S. beryllium
producer to build a new $90.4 million primary beryllium facility in
Elmore, Ohio. Construction of that facility was completed in 2011
(USGS, 2013b).
    One factor of importance to firms working with beryllium and
beryllium alloys is to have a reliable supply of beryllium materials.
U.S. manufacturers can have a relatively high confidence in the
availability of beryllium materials relative to manufacturers in many
foreign countries, particularly those that do not have economic or
national security partnerships with the United States.
    Firms using beryllium in production must consider not just the cost
of the chemical itself but also the various regulatory costs associated
with the use, transport, and disposal of the material. For example, for
marine transport, metallic beryllium powder and beryllium compounds are
classified by the International Maritime Organization (IMO) as
poisonous substances, presenting medical danger. Beryllium is also
classified as flammable. The United Nations classification of beryllium
and beryllium compounds for the transport of dangerous goods is
``poisonous substance'' and, for packing, a ``substance presenting
medium danger'' (WHO, 1990). Because of beryllium's toxicity, the
material is subject to various workplace restrictions as well as
international, national, and State requirements and guidelines
regarding beryllium content in environmental media (USGS, 2013a).
    As the previous discussion indicates, the production and use of
beryllium and beryllium alloys in the United States and foreign markets
appears to depend on the availability of production facilities;
beryllium stockpiles; national defense and political considerations;
regulations limiting the shipping of beryllium and beryllium products;
international, national, and State regulations and guidelines regarding
beryllium content in environmental media; and, of course, the special
performance properties of beryllium and beryllium alloys in various
applications. Relatively small changes in the price of beryllium would
seem to have a minor effect on the location of beryllium production and
use. In particular, as a result of this proposed rule, OSHA would
expect that, if all compliance costs were passed through in the form of
higher prices, a price increase of 0.11 percent, on average, for firms
manufacturing or using beryllium in the United States--and not
exceeding 1 percent in any affected industry--would have a negligible
effect on foreign competition and would therefore not threaten the
economic viability of any affected domestic industries.
(b) Economic Feasibility Screening Analysis: Small and Very Small
Businesses
    The preceding discussion focused on the economic viability of the
affected industries in their entirety. Even though OSHA found that the
proposed standard did not threaten the survival of these industries,
there is still the possibility that the competitive structure of these
industries could be significantly altered such as by small entities
exiting from the industry as a result of the proposed standard.
    To address this possibility, OSHA examined the annualized costs of
the proposed standard per affected small entity, and per affected very
small entity, for each affected industry. Again, OSHA used a minimum
threshold level of annualized compliance costs equal to one percent of
annual revenues--and, secondarily, annualized compliance costs equal to
ten percent of annual profits--below which the Agency has concluded
that the costs are unlikely to threaten the survival of small entities
or very small entities or, consequently, to alter the competitive
structure of the affected industries.
    Based on the results presented in Table IX-9, the annualized cost
of compliance with the proposed rule for the average affected small
entity is estimated to be $8,108 in 2010 dollars. Based on the results
presented in Table IX-10, the annualized cost of compliance with the
proposed rule for the average affected very small entity is estimated
to be $1,955 in 2010 dollars. These tables also show that there are no
industries in which the annualized costs of the proposed rule for small
entities or very small entities exceed one percent of annual revenues.
NAICS 331525b: Sand Copper Foundries (except die-casting) has the
highest estimated cost

impact as a percentage of revenues for small entities, 0.95 percent,
and NAICS 336322b: Other motor vehicle electrical and electronic
equipment has the highest estimated cost impact as a percentage of
revenues for very small entities, 0.70 percent.
    Small entities in four industries--NAICS 331525: Sand and non-sand
foundries (except die-casting); NAICS 331524(a and b): Aluminum
foundries (except die-casting); NAICS 811310: Commercial and Industrial
Machinery and Equipment; and NAICS 331522: Nonferrous (except aluminum)
die-casting foundries--have annualized costs in excess of 10 percent of
annual profits (17.45 percent, 16.12 percent, 11.68 percent, and 10.64
percent, respectively). Very small entities in 7 industries are
estimated to have annualized costs in excess of 10 percent of annual
profit; NAICS 336322b: Other motor vehicle electrical and electronic
equipment (38.49 percent); \23\ NAICS 336322a: Other motor vehicle
electrical and electronic equipment, (18.18 percent); NAICS 327113:
Porcelain electrical Supply Manufacturing (13.82 percent); NAICS
811310: Commercial and Industrial Machinery and Equipment (Except
Automotive and Electronic) Repair and Maintenance (12.76 percent);
NAICS 332721a: Precision turned product manufacturing (10.50 percent);
NAICS 336214: Travel trailer and camper manufacturing (10.75 percent);
and NAICS 336399: All other motor vehicle parts manufacturing (10.38
percent).
---------------------------------------------------------------------------

    \23\ NAICS 336322 contains entities that fall into three
separate application groups. NAICS 336322b is in the Beryllium Oxide
Ceramics and Composites application group. NAICS 336322a (which
follows in the text) is in the Fabrication of Beryllium Alloy
Products application group.
---------------------------------------------------------------------------

    In general, cost impacts for affected small entities or very small
entities will tend to be somewhat higher, on average, than the cost
impacts for the average business in those affected industries. That is
to be expected. After all, smaller businesses typically suffer from
diseconomies of scale in many aspects of their business, leading to
less revenue per dollar of cost and higher unit costs. Small businesses
are able to overcome these obstacles by providing specialized products
and services, offering local service and better service, or otherwise
creating a market niche for themselves. The higher cost impacts for
smaller businesses estimated for this rule--other than very small
entities in NAICS 336322b: Other motor vehicle electrical and
electronic equipment--generally fall within the range observed in other
OSHA regulations and, as verified by OSHA's lookback reviews, have not
been of such a magnitude to lead to the economic failure of regulated
small businesses.
    The ratio of annualized costs to annual profit is a sizable 38.49
percent in NAICS 336322b: Other motor vehicle electrical and electronic
equipment. However, OSHA believes that the actual ratio is
significantly lower. There are 386 very small entities in NAICS 336322,
of which only 6, or 1.5 percent, are affected entities using beryllium.
When OSHA calculated the cost-to-profit ratio, it used the average
profit per firm for the entire NAICs industry, not the average profit
rate for firms working with beryllium. The profit rate for all
establishments in NAICS 336322b was estimated at 1.83 percent. If, for
example, the average profit rate for a very small entity in NAICS
336322b were equal to 5.95 percent, the average profit rate for its
application group, Beryllium Oxide Ceramics and Composites, then the
ratio of the very small entity's annualized cost of the proposed rule
to its annual profit would actually be 11.77 percent. OSHA tentatively
concludes the 6 establishments in the NAICS specializing in beryllium
production will have a higher than average profit rate and will be able
to pass much of the cost onto the consumer for three main reasons: (1)
The absence of substitutes containing the rare performance
characteristics of beryllium; (2) the relative price insensitivity of
(other) motor vehicles containing the special performance
characteristics of beryllium and beryllium alloys; and (3) the fact
that electrical and electronic components made of beryllium or
beryllium-containing alloys typically account for only a small portion
of the overall cost of the finished (other) motor vehicles. The
annualized compliance cost to annual revenue ratio for NAICS 336332b is
0.70 percent, 0.30 percent below the 1 percent threshold. Based on
OSHA's experience, price increases of this magnitude have not
historically been associated with the economic failure of small
businesses.

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(c) Regulatory Flexibility Screening Analysis
    To determine if the Assistant Secretary of Labor for OSHA can
certify that the proposed beryllium standard will not have a
significant economic impact on a substantial number of small entities,
the Agency has developed screening tests to consider minimum threshold
effects of the proposed standard on small entities. The minimum
threshold effects for this purpose are annualized costs equal to one
percent of annual revenues, and annualized costs equal to five percent
of annual profits, applied to each affected industry. OSHA has applied
these screening tests both to small entities and to very small
entities. For purposes of certification, the threshold level cannot be
exceeded for affected small entities or very small entities in any
affected industry.
    Tables IX-9 and Table IX-10, presented above, show that the
annualized costs of the proposed standard do not exceed one percent of
annual revenues for affected small entities or affected very small
entities in any affected industry. These tables also show that the
annualized costs of the proposed standard exceed five percent of annual
profits for affected small entities in 12 industries and for affected
very small entities in 30 industries. OSHA is therefore unable to
certify that the proposed standard will not have a significant economic
impact on a substantial number of small entities and must prepare an
Initial Regulatory Flexibility Analysis (IRFA). The IRFA is presented
in Chapter IX of the PEA and is reproduced in Section IX.I of this
preamble.

G. Benefits and Net Benefits

    In this section, OSHA presents a summary of the estimated benefits
and net benefits of the proposed beryllium rule. This section proceeds
in five steps. The first step estimates the numbers of diseases and
deaths prevented by comparing the current (baseline) situation to a
world in which the proposed PEL is adopted in a final standard to a
world in which employees are exposed at the level of the proposed PEL
throughout their working lives. The second step also assumes that the
proposed PEL is adopted, but uses the results from the first step to
estimate what would happen under a more realistic scenario in which
employees have been exposed for varying periods of time to the baseline
situation and will thereafter be exposed to the new PEL.
    The third step covers the monetization of benefits. Then, in the
fourth step, OSHA estimates the net benefits and incremental benefits
of the proposed rule by comparing the monetized benefits to the costs
presented in Chapter V of the PEA. The models underlying each step
inevitably need to make a variety of assumptions based on limited data.
In the fifth step, OSHA provides a sensitivity analysis to explore the
robustness of the estimates of net benefits with respect to many of the
assumptions made in developing and applying the underlying models. A
full explanation of the derivation of the estimates presented here is
provided in Chapter VII of the PEA for the proposed rule. OSHA invites
comments on any aspect of the data and methods used to estimate the
benefits and net benefits of this proposed rule. Because dental labs
constitute a significant source of both costs and benefits to the rule
(over 40 percent), OSHA is particularly interested in comments
regarding the appropriateness of the model, assumptions, and data to
estimating the benefits to workers in that industry.
    OSHA has added to the docket the spreadsheets used to calculate the
estimates of benefits outlined below (OSHA, 2015a). Those interested in
exploring the details and methodology of OSHA's benefits analysis, such
as how the life table referred to below was developed and applied,
should consult those spreadsheets.
Step 1--Estimation of the Steady-State Number of Beryllium-Related
Diseases Avoided
Methods of Estimation
    The first step in OSHA's development of the benefits analysis
compares the situation in which employees continue to be at baseline
exposure levels for their entire working lives to the situation in
which all employees have been exposed at a given PEL for their entire
working lives. This is a comparison of two steady-state situations. To
do this, OSHA must estimate both the risk associated with the baseline
exposure levels and the risk following the promulgation of a new
beryllium standard. OSHA's approach assumes for inputs such as the
turnover rate and the exposure response function that they are similar
across all workers exposed to beryllium, regardless of industry.
    An exposure-response model, discussed below, is used to estimate a
worker's risk of beryllium-related disease based on the worker's
cumulative beryllium exposure. The Agency used a lifetime risk model to
estimate the baseline risk and the associated number of cases for the
various disease endpoints. A lifetime risk model explicitly follows a
worker each year, from work commencement onwards, accumulating the
worker's beryllium exposure in the workplace and estimating outcomes
each year for the competing risks that can occur. To go from exposure
to number of cases, the Agency needs to estimate an exposure-response
relationship, and this is discussed below. The possible outcomes are no
change, or the various health endpoints OSHA has considered (beryllium
sensitization, CBD, lung cancer, and the mortality associated with
these endpoints). As part of the estimation discussion, OSHA will
mention specific parameters used in some of the estimation methods, but
will further discuss how these parameters were derived later in this
section.
    The baseline lifetime risk model is the most complicated part of
the analysis. The Agency only needs to make relatively simple
adjustments to this model to reflect changes in activities and
conditions due to the standard, which, working through the model, then
lead to changes in relevant health outcomes. There are three channels
by which the standard generates benefits. First are estimated benefits
due to the lowering of the PEL. Second are estimated benefits with
further exposure reductions from the substitution of non-beryllium for
beryllium-containing materials, ending workers' beryllium exposures
entirely. This potential source of benefits is particularly significant
with respect to OSHA's assumptions for how dental labs are likely to
reduce exposures (see below). Finally, the model estimates benefits due
to the ancillary programs that are required by the proposed standard.
The last channel affects CBD and sensitization, endpoints which may be
mitigated or prevented with the help of ancillary provisions such as
dermal protection and medical surveillance for early detection, and for
which the Agency has some information on the effects on risk of
ancillary provisions. The benefits of ancillary provisions are not
estimated for lung cancer because the benefits from reducing lung
cancer are considered to be the result of reducing airborne exposure
only and thus the ancillary provisions will have no separable effect on
airborne exposures. The discussion here will concentrate on CBD as
being the most important and complex endpoint, and most illustrative of
other endpoints: The structure for other endpoints is the same; only
the exposure response functions are different. Here OSHA will

discuss first the exposure-response model, then the structure of the
year-to-year changes for a worker, then the estimated exposure
distribution in the affected population and the risk model with the
lowering of the PEL, and, last, the other adjustments for the ancillary
benefits and the substitution benefits.
    The exposure response model is designed to translate beryllium
exposure to risk of adverse health endpoints. In the case of beryllium
sensitization and CBD, the Agency uses the cumulative exposure data
from a beryllium manufacturing facility. Specifically, OSHA uses the
quartile data from the Cullman plant that is presented in Table VI-7 of
the Preliminary Risk Assessment in the preamble. The raw data from this
study show cases of CBD with cumulative exposures that would represent
an average exposure level of less than 0.1 [micro]g/m\3\ if exposed for
10 years; show cases of CBD with exposures lasting less than one year;
and show cases of CBD with actual average exposure of less than 0.1
[micro]g/m\3\.
    Prevalence is defined as the percentage of persons with a condition
in a population at a given point in time. The quartile data in Table
VI-7 of the Preliminary Risk Assessment are prevalence percentages (the
number of cases of illness documented over several years in the 319
person cohort from the Cullman plant) at different cumulative exposure
levels. The Cullman data do not cover persons who left the work force
or what happened to persons who remained in the workforce after the
study was completed. For the lifetime risk model, the prevalence
percentages will be translated into incidence percentages--the
estimated number of new cases predicted to occur each year. For this
purpose OSHA assumed that the incidence for any given cumulative
exposure level is constant from year to year and continues after
exposure ceases.
    To calculate incidence from prevalence, OSHA assumed a steady state
in which both the size of the beryllium-exposed affected population,
exposure concentrations during employment and prevalence are constant
over time. If these conditions are met, and turnover among workers with
a condition is equal to turnover for workers without a condition, then
the incidence rate will be equal to the turnover rate multiplied by the
prevalence rate. If the turnover rate among persons with a condition is
higher than the turnover rate for workers without the condition, then
this assumption will underestimate incidence. This might happen if, in
addition to other reasons for leaving work, persons with a condition
leave a place of employment more frequently because their disabilities
cause them to have difficulty continuing to do the work. If the
turnover rate among persons with a condition is lower than the turnover
rate for workers without the condition, then this assumption will
overestimate incidence. This could happen if an employer provides
special benefits to workers with the condition, and the employer would
cease to provide these benefits if the employee left work.
    To illustrate, if 10 percent of the work force (including 10
percent of those with the condition) leave each year and if the overall
prevalence is at 20 percent, then a 2 percent (10 percent times 20
percent) incidence rate will be needed in order to keep a steady 20
percent group prevalence rate each year. OSHA's model assumes a
constant 10 percent turnover rate (see later in this section for the
rationale for this particular turnover rate). While turnover rates are
not available for the specific set of employees in question, for
manufacturing as a whole, the turnover rates are greater than 20
percent, and greater than 30 percent for the economy as a whole (BLS,
2013). For this analysis, OSHA assumed an effective turnover rate of 10
percent. Different turnover rates will result in different incidence
rates. The lower the turnover rate the lower the estimated incidence
rate. This is a conservative assumption for the industries where
turnover rates may be higher. However, some occupations/industries,
such as dental lab technicians, may have lower turnover rates than
manufacturing workers. Additionally, the typical dental technician even
if leaving one workplace, has significant likelihood of continuing to
work as a dental technician and going to another workplace that uses
beryllium. OSHA welcomes comments on its turnover estimates and on
sectors, such as dental laboratories, where turnover may be lower than
ten percent.
    Using Table VI-7 of the Preliminary Risk Assessment, when a
worker's cumulative exposure is below 0.147 ([mu]g/m\3\-years), the
prevalence of CBD is 2.5 percent and so the derived annual risk would
be 0.25 percent (0.10 x 2.5 percent). It will stay at this level until
the worker has reached a cumulative exposure of 1.468, where it will
rise to 0.80 percent.
    The model assumes a maximum 45-year (250 days per year) working
life (ages 20 through 65 or age of death or onset of CBD, whichever is
earlier) and follows workers after retirement through age 80. The 45-
year working life is based on OSHA's legal requirements and is longer
than the working lives of most exposed workers. A shorter working life
will be examined later in this section. While employed, the worker
accumulates beryllium exposure at a rate depending on where the worker
is in the empirical exposure profile presented in Chapter IV of the PEA
(i.e., OSHA calculates a general risk model which depends on the
exposure level and then plug in our empirical exposure distribution to
estimate the final number of cases of various health outcomes).
Following a worker's retirement, there is no increased exposure, just a
constant annual risk resulting from the worker's final cumulative
exposure.
    OSHA's model follows the population of workers each year, keeping
track of cumulative exposure and various health outcomes. Explicitly,
each year the model calculates: The increased cumulative exposure level
for each worker versus last year, the incidence at the new exposure
level, the survival rate for this age bracket, and the percentage of
workers who have not previously developed CBD in earlier years.
    For any individual year, the equation for predicting new cases of
CBD for workers at age t is:

    New CBD cases rate(t) = modeled incidence rate(t) * survival
rate(t) * (1- currently have CBD rate(t)), where the variables used
are:
    New CBD cases rate(t) is the output variable to be calculated;
    cumulative exposure(t) = cumulative exposure(t-1) + current
exposure;
    modeled incidence rate(t) is a function of cumulative exposure;
and
    survival rate(t) is the background survival rate from mortality
due to other causes in the national population.

    Then for the next year the model updates the survival rate (due to
an increase in the worker's age), incidence rate (due to any increased
cumulative exposure), and the rate of those currently having CBD, which
increases due to the new CBD case rate of the year before. This process
then repeats for all 60 years.
    It is important to note that this model is based on the assumption
that prevalence is explained by an underlying constant incidence, and
as a result, prevalence will be different depending on the average
number of years of exposure in the population examined and (though a
sensitivity analysis is provided later) on the assumption of a maximum
of 45 years of exposure. OSHA also examined (OSHA 2015c) a model in
which prevalence is constant at the levels shown in Table VI-7 of the
preliminary

risk assessment, with a population age (and thus exposure) distribution
estimated based on an assumed constant turnover rate. OSHA solicits
comment on this and other alternative approaches to using the available
prevalence data to develop an exposure-response function for this
benefits analysis.
    In the next step, OSHA uses its model to take into account the
adoption of the lower proposed PEL. OSHA uses the exposure profile for
workers as estimated in Chapter IV of the PEA for each of the various
application groups. These exposure profiles estimate the number of
workers at various exposure levels, specifically the ranges less than
0.1 [mu]g/m\3\, 0.1 to 0.2, 0.2 to 0.5, 0.5 to 1.0, 1.0 to 2.0, and
greater than 2.0 [mu]g/m\3\. Translating these ranges into exposure
levels for the risk model, the model assumes an average exposure equal
to the midpoint of the range, except for the lower end, where it was
assumed to be equal to 0.1 [mu]g/m\3\, and the upper end, where it was
assumed to be equal to 2.0 [mu]g/m\3\.
    The model increases the workers' cumulative exposure each year by
these midpoints and then plugs these new values into the new case
equation. This alters the incidence rate as cumulative exposure crosses
a threshold of the quartile data. So then using the exposure profiles
by application group from Chapter IV of the PEA, the baseline exposure
flows through the life time risk model to give us a baseline number of
cases. Next OSHA calculated the number of cases estimated to occur
after the implementation of the proposed PEL of 0.2 [mu]g/m\3\. Here
OSHA simply takes the number of workers with current average exposure
above 0.2 [mu]g/m\3\ and set their exposure level at 0.2 [mu]g/m\3\;
all exposures for workers exposed below 0.2 [mu]g/m\3\ stay the same.
After adjusting the worker exposure profile in this way, OSHA goes
through all the same calculations and obtains a post-standard number of
CBD cases. Subtracting estimated post-standard CBD cases from estimated
pre-standard CBD cases gives us the number of CBD cases that would be
averted due to the proposed change in the PEL.
    Based on these methods, OSHA's estimate of benefits associated with
the proposed rule does not include benefits associated with current
compliance that have already been achieved with regard to the new
requirements, or benefits obtained from future compliance with existing
beryllium requirements. However, available exposure data indicate that
few employees are currently exposed above the existing standard's PEL
of 2.0 [mu]g/m\3\. To achieve consistency with the cost estimation
method in chapter V, all employees in the exposure profile that are
above 2.0 [mu]g/m\3\ are assumed to be at the 2.0 [mu]g/m\3\ level.
    There is also a component that applies only to dental labs. OSHA
has preliminarily assumed, based on the estimates of higher costs for
engineering controls than using substitutes presented in the cost
chapter, that rather than incur the costs of compliance with the
proposed standard, many dental labs are likely to stop using beryllium-
containing materials after the promulgation of the proposed
standard.\24\ OSHA estimated earlier in this PEA that, for the
baseline, only 25 percent of dental lab workers still work with
beryllium. OSHA estimates that, if OSHA adopts the proposed rule, 75
percent of the 25 percent still using beryllium will stop working with
beryllium; their beryllium exposure level will therefore drop to zero.
OSHA estimates that the 75 percent of workers will not be a random
sample of the dental lab exposure profile but instead will concentrate
among workers who are currently at the highest exposure levels because
it would cost more to reduce those higher exposures into compliance
with the proposed PEL. Under this judgment OSHA is estimating that the
rule would eliminate all cases of CBD in the 75 percent of dental lab
workers with the highest exposure levels. As discussed in the
sensitivity analysis below, dental labs constitute a significant source
of both costs and benefits to the rule (over 40 percent), and the
extent to which dental laboratories substitute other materials for
beryllium has significant effects on the benefits and costs of the
rule. To derive its baseline estimate of cases of CBD in dental
laboratories, OSHA (1) estimated baseline cases of CBD using the
existing rate of beryllium use in dental labs without a projection of
further substitution; (2) estimated cases of CBD with the proposed
regulation using an estimate that 75 percent of the dental labs with
higher exposure would switch to other materials and thus eliminate
exposure to beryllium; and (3) estimated that the turnover rate in the
industry is 10 percent. OSHA welcomes comments on all aspects of the
analysis of substitution away from beryllium in the dental laboratories
sector.
---------------------------------------------------------------------------

    \24\ In Chapter V (Costs) of the PEA, OSHA explored the cost of
putting in LEV instead of substitution. The Agency costed an
enclosure for 2 technicians: The Powder Safe Type A Enclosure, 32
inch wide with HEPA filter, AirClean Systems (2011), which including
operating and maintenance, was annualized at $411 per worker. This
is significantly higher than the annual cost for substitution of
$166 per worker, shown later in this section.
---------------------------------------------------------------------------

    Estimation results for both dental labs and non-dental workplaces
appear in the table below.

                                       CBD Case Estimates, 45-Year Totals, Baseline and With PEL of 0.2 [mu]g/m\3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Current beryllium exposure  ([mu]g/m\3\)
                                                                     ------------------------------------------------------------------------    Total
                                                                         < 0.1      0.1-0.2     0.2-0.5     0.5-1.0     1.0-2.0      > 2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................  Dental labs...............         827         636         432         608         155         466       3,124
                                          Non-dental................       5,912         631         738         287         112         214       7,893
                                                                     -----------------------------------------------------------------------------------
                                             Total..................       6,739       1,267       1,171         895         267         679      11,017
PEL = 0.2 [mu]g/m\3\....................  Dental labs...............         679           0           0           0           0           0         679
                                          Non-dental................       5,912         631         693         255          98         186       7,774
                                                                     -----------------------------------------------------------------------------------
                                             Total..................       6,591         631         693         255          98         186       8,454
Prevented by PEL reduction..............  Dental labs...............         148         636         432         608         155         466       2,444
                                          Non-dental................           0           0          45          32          14          27         119
                                                                     -----------------------------------------------------------------------------------
                                             Total..................         148         636         478         640         169         493       2,563
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In contrast to this PEL component of the benefits, both the
ancillary program benefits calculation and the substitution benefits
calculation are relatively simple. Both are percentages of the
lifetime-risk-model CBD cases that still occur in the post-standard
world. OSHA notes that in the context of existing CBD prevention
programs, some ancillary-provision programs similar to those included
in OSHA's proposal have eliminated a significant percentage of the
remaining CBD cases (discussed later in this chapter). If the ancillary
provisions reduce remaining CBD cases by 90 percent for example, and if
the estimated baseline contains 120 cases of CBD, and post-standard
compliance with a lower PEL reduces the total to 100 cases of CBD, then
90 of those remaining 100 cases of CBD would be averted due to the
ancillary programs.
    OSHA assumed, based on the clinical experience discussed further
below, that approximately 65 percent of CBD cases ultimately result in
death. Later in this chapter, OSHA provides a sensitivity analysis of
the effects of different values for assuming this percentage at 50
percent and 80 percent on the number of CBD deaths prevented. OSHA
welcomes comment on this assumption. OSHA's exposure-response model for
lung cancer is based on lung cancer mortality data. Thus, all of the
estimated cases of lung cancer in the benefits analysis are cases of
premature death from beryllium-related lung cancer.
    Finally, in recognition of the uncertainty in this aspect of these
models, OSHA presents a ``high'' estimate, a ``low'' estimate, and uses
the midpoint of these two as our ``primary'' estimate. The low estimate
is simply those CBD fatalities prevented due to everything except the
ancillary provisions, i.e., both the reduction in the PEL and the
substitution by dental labs. The high estimate includes both of these
factors plus all the ancillary benefits calculated at an effectiveness
rate of 90 percent in preventing cases of CBD not averted by the
reduction of the PEL. The midpoint is the combination of reductions
attributed to adopting the proposed PEL, substitution by dental labs,
and the ancillary provisions calculated at an effectiveness rate of
only 45 percent.
a. Chronic Beryllium Disease
    CBD is a respiratory disease in which the body's immune system
reacts to the presence of beryllium in the lung, causing a progression
of pathological changes including chronic inflammation and tissue
scarring. Immunological sensitization to beryllium (BeS) is a precursor
that occurs before early-stage CBD. Only sensitized individuals can go
on to develop CBD. In early, asymptomatic stages of CBD, small
granulomatous lesions and mild inflammation occur in the lungs. As CBD
progresses, the capacity and function of the lungs decrease, which
eventually affects other organs and bodily functions as well. Over time
the spread of lung fibrosis (scarring) and loss of pulmonary function
cause symptoms such as: A persistent dry cough, shortness of breath,
fatigue, night sweats, chest and join pain, clubbing of fingers due to
impaired oxygen exchange, and loss of appetite. In these later stages
CBD can also impair the liver, spleen, and kidneys, and cause health
effects such as granulomas of the skin and lymph nodes, and cor
pulmonale (enlargement of the heart). The speed and extent of disease
progression may be influenced by the level and duration of exposure,
treatment with corticosteroids, and genetics, but these effects are not
fully understood.
    Corticosteroid therapy, in workers whose beryllium exposure has
ceased, has been shown to control inflammation, ease symptoms, and in
some cases prevent the development of fibrosis. However, corticosteroid
use can have adverse effects, including increased risk of infections;
accelerated bone loss or osteoporosis; psychiatric effects such as
depression, sleep disturbances, and psychosis; adrenal suppression;
ocular effects; glucose intolerance; excessive weight gain; increased
risk of cardiovascular disease; and poor wound healing. The effects of
CBD, and of common treatments for CBD, are discussed in detail in this
preamble at Section V, Health Effects, and Section VIII, Significance
of Risk.
    OSHA's review of the literature on CBD suggests three broad types
of CBD progression (see this preamble at Section V, Health Effects). In
the first, individuals progress relatively directly toward death
related to CBD. They suffer rapidly advancing disability and their
death is significantly premature. Medical intervention is not applied,
or if it is, does little to slow the progression of disease. In the
second type, individuals live with CBD for an extended period of time.
The progression of CBD in these individuals is naturally slow, or may
be medically stabilized. They may suffer significant disability, in
terms of loss of lung function--and quality of life--and require
medical oversight their remaining years. They would be expected to lose
some years of normal lifespan. As discussed previously, advanced CBD
can involve organs and systems beyond the respiratory system; thus, CBD
can contribute to premature death from other causes. Finally,
individuals with the third type of CBD progression do not die
prematurely from causes related to CBD. The disease is stabilized and
may never progress to a debilitating state. These individuals
nevertheless may experience some disability or loss of lung function,
as well as side effects from medical treatment, and may be affected by
the disease in many areas of their lives: Work, recreation, family,
etc.\25\
---------------------------------------------------------------------------

    \25\ As indicated in the Health Effects section of this
preamble: ``It should be noted, however, that treatment with
corticosteroids has side-effects of their own that need to be
measured against the possibility of progression of disease (Gibson
et al., 1996; Zaki et al., 1987). Alternative treatments such as
azathiopurine and infliximab, while successful at treating symptoms
of CBD, have been demonstrated to have side-effects as well
(Pallavicino et al., 2013; Freeman, 2012)''.
---------------------------------------------------------------------------

    In the analysis that follows, OSHA assumes, based on the clinical
experience discussed below, that 35 percent of workers who develop CBD
experience the third type of progression and do not die prematurely
from CBD. The remaining 65 percent were estimated to die prematurely,
whether from rapid disease progression (type 1) or slow (type 2).
Although the proportion of CBD patients who die prematurely as a result
of the disease is not well understood or documented at this time, OSHA
believes this assumption is consistent with the information submitted
in response to the RFI. Newman et al. (2003) presented a scenario for
what they considered to be the ``typical'' CBD patient:

    We have included an example of a life care plan for a typical
clinical case of CBD. In this example, the hypothetical case is
diagnosed at age 40 and assumed to live an additional 33.7 years
(approximately 5% reduced life expectancy in this model). In this
hypothetical example, this individual would be considered to have
moderate severity of chronic beryllium disease at the time of
initial diagnosis. They require treatment with prednisone and
treatment for early cor pulmonale secondary to CBD. They have
experienced some, but not all, of the side effects of treatment and
only the most common CBD-related health effects.

    In short, most workers diagnosed with CBD are expected to have
shortened life expectancy, even if they do not progress rapidly and
directly to death. It should be emphasized that this represents the
Agency's best estimate of the mortality related to CBD based upon the
current available evidence. As described in Section V, Health Effects,
there is a substantial degree of uncertainty as to the prognosis for
those contracting CBD, particularly as the relatively less severe

cases are likely not to be studied closely for the remainder of their
lives.
    As mentioned previously, OSHA used the Cullman data set for
empirical estimates of beryllium sensitization and CBD prevalence in
its exposure response model, which translates beryllium exposure to
risk of adverse health endpoints for the purpose of determining the
benefits that could be achieved by preventing those adverse health
endpoints.
    OSHA chose the cumulative exposure quartile data as the basis for
this benefits analysis. The choice of cumulative quartiles was based in
part on the need to use the cumulative exposure forecast developed in
the model, and in part on the fact that in statistically fitted models
for CBD, the cumulative exposure tended to fit the CBD data better than
other exposure variables. OSHA also chose the quartile model because
the outside expert who examined the logistic and proportional hazards
models believed statistical modeling of the data set to be unreliable
due to its small size. In addition, the proportional hazards model with
its dummy variables by year of detection is difficult to interpret for
purposes of this section. Of course regression analyses are often
useful in empirical analysis. They can be a useful compact
representation of a set of data, allow investigations of various
variable interactions and possible causal relationships, have added
flexibility due to covariate transformations, and under certain
conditions can be shown to be statistically ``optimal.'' However, they
are only useful when used in the proper setting. The possibility of
misspecification of functional form, endogeneity, or incorrect
distributional assumptions are just three reasons to be cautious about
using regression analyses.
    On the other hand, the use of results produced by a quartile
analysis as inputs in a benefits assessment implies that the analytic
results are being interpreted as evidence of an exposure-response
causal relationship. Regression analysis is a more sophisticated
approach to estimating causal relationships (or even correlations) than
quartile or other quantile analysis, and any data limitations that may
apply to a particular regression-based exposure-response estimation
also apply to exposure-response estimation conducted with a quartile
analysis using the same data set. In this case, OSHA adopted the
quartile analysis because the logistic regression analysis yielded
extremely high prevalence rates for higher level of exposure over long
time periods that some might not find credible. Use of the quartile
analysis serves to show that there are significant benefits even
without using an extremely high estimate of prevalence for long periods
of exposure at high levels. As a check on the quartile model, the
Agency performed the same benefits calculation using the logit model
estimated by the Agency's outside expert, and these benefit results are
presented in a separate OSHA background document (OSHA, 2015b). The
difference in benefits between the two models is slight, and there is
no qualitative change in final outcomes. The Agency solicits comment on
these issues.
(1) Number of CBD Cases Prevented by the Proposed PEL
    To examine the effect of simply changing the PEL, including the
effect of the standard on some dental labs to discontinue their use of
beryllium, OSHA compared the number of CBD-related deaths (mortality)
and cases of non-fatal CBD (morbidity) that would occur if workers were
exposed for a 45-year working life to PELs of 0.1, 0.2, or 0.5 [mu]g/
m\3\ to the number of cases that would occur at levels of exposure at
or below the current PEL. The number of avoided cases over a
hypothetical working life of exposure for the current population at a
lower PEL is then equal to the difference between the number of cases
at levels of exposure at or below the current PEL for that population
minus the number of cases at the lower PEL. This approach represents a
steady-state comparison based on what would hypothetically happen to
workers who received a specific average level of occupational exposure
to beryllium during an entire working life. (Chapter VII in the PEA
modifies this approach by introducing a model that takes into account
the timing of benefits before steady state is reached.)
    As indicated in Table IX-11, the Agency estimates that there would
be 16,240 cases of beryllium sensitization, from which there would be
11,017, or about 70 percent, progressing to CBD. The Agency arrived at
these estimates by using the CBD and BeS prevalence values from the
Agency's preliminary risk analysis, the exposure profile at current
exposure levels (under an assumption of full, or fixed, compliance with
the existing beryllium PEL), and the model outlined in the previous
methods of estimation section after a working lifetime of exposure.
Applying the prior midpoint estimate, as explained above, that 65
percent of CBD cases cause or contribute to premature death, the Agency
predicts a total of 7,161 cases of mortality and 3,856 cases of
morbidity from exposure at current levels; this translates, annually,
to 165 cases of mortality and 86 cases of morbidity. At the proposed
PEL, OSHA's base model estimates that, due to the airborne factor only,
a total of 2,563 CBD cases would be avoided from exposure at current
levels, including 1,666 cases of mortality and 897 cases of morbidity--
or an average of 37 cases of mortality and 20 cases of morbidity
annually. OSHA has not estimated the quantitative benefits of
sensitization cases avoided.
    OSHA requests comment on this analysis, including feedback on the
data relied on and the approach and assumptions used. As discussed
earlier, based on information submitted in response to the RFI, the
Agency estimates that most of the workers with CBD will progress to an
early death, even if it comes after retirement, and has quantified
those cases prevented. However, given the evolving nature of science
and medicine, the Agency invites public comment on the current state of
CBD-related mortality.
    The proposed standard also includes provisions for medical
surveillance and removal. The Agency believes that to the extent the
proposal provides medical surveillance sooner and to more workers than
would have been the case in the absence of the proposed standard,
workers will be more likely to receive appropriate treatment and, where
necessary, removal from beryllium exposure. These interventions may
lessen the severity of beryllium-related illnesses, and possibly
prevent premature death. The Agency requests public comment on this
issue.
(2) CBD Cases Prevented by the Ancillary Provisions of the Proposed
Standard
    The nature of the chronic beryllium disease process should be
emphasized. As discussed in this preamble at Section V, Heath Effects,
the chronic beryllium disease process involves two steps. First,
workers become sensitized to beryllium. In most epidemiological studies
of CBD conducted to date, a large percentage of sensitized workers have
progressed to CBD. A certain percentage of the population has an
elevated risk of this occurring, even at very low exposure levels, and
sensitization can occur from dermal as well as inhalation exposure to
beryllium. For this reason, the threat of beryllium sensitization and
CBD persist to a substantial degree, even at very low levels of
airborne beryllium exposure. It is therefore desirable not only to
significantly reduce airborne beryllium exposure, but to avoid nearly
any source

of beryllium exposure, so as to prevent beryllium sensitization.
    The analysis presented above accounted only for CBD-prevention
benefits associated with the proposed reduction of the PEL, from 2 ug/
m\3\ to 0.2 ug/m\3\. However, the proposed standard also includes a
variety of ancillary provisions--including requirements for respiratory
protection, personal protective equipment (PPE), housekeeping
procedures, hygiene areas, medical surveillance, medical removal, and
training--that the Agency believes would further reduce workers' risk
of disease from beryllium exposure. These provisions were described in
Chapter I of the PEA and discussed extensively in Section XVIII of this
preamble, Summary and Explanation of the Proposed Standard.
    The leading manufacturer of beryllium in the U.S., Materion
Corporation (Materion), has implemented programs including these types
of provisions in several of its plants and has worked with NIOSH to
publish peer-reviewed studies of their effectiveness in reducing
workers' risk of sensitization and CBD. The Agency used the results of
these studies to estimate the health benefits associated with a
comprehensive standard for beryllium.
    The best available evidence on comprehensive beryllium programs
comes from studies of programs introduced at Materion plants in
Reading, PA; Tucson, AZ; and Elmore, OH. These studies are discussed in
detail in this preamble at Section VI, Preliminary Risk Assessment, and
Section VIII, Significance of Risk. All three facilities were in
compliance with the current PEL prior to instituting comprehensive
programs, and had taken steps to reduce airborne levels of beryllium
below the PEL, but their medical surveillance programs continued to
identify cases of sensitization and CBD among their workers. Beginning
around 2000, these facilities introduced comprehensive beryllium
programs that used a combination of engineering controls, dermal and
respiratory PPE, and stringent housekeeping measures to reduce workers'
dermal exposures and airborne exposures. These comprehensive beryllium
programs have substantially lowered the risk of sensitization among
workers. At the times that studies of the programs were published,
insufficient follow-up time had elapsed to report directly on the
results for CBD. However, since only sensitized workers can develop
CBD, reduction of sensitization risk necessarily reduces CBD risk as
well.
    In the Reading, PA copper beryllium plant, full-shift airborne
exposures in all jobs were reduced to a median of 0.1 ug/m\3\ or below,
and dermal protection was required for production-area workers,
beginning in 2000-2001 (Thomas et al., 2009). In 2002, the process with
the highest exposures (with a median of 0.1 ug/m\3\) was enclosed, and
workers involved in that process were required to use respiratory
protection. Among 45 workers hired after the enclosure was built and
respiratory protection instituted, one was found to be sensitized (2.2
percent). This is more than an 80 percent reduction in sensitization
from a previous group of 43 workers hired after 1992, 11.5 percent of
whom had been sensitized by the time of testing in 2000.
    In the Tucson beryllium ceramics plant, respiratory and skin
protection was instituted for all workers in production areas in 2000
(Cummings et al., 2007). BeLPT testing in 2000-2004 showed that only 1
(1 percent) of 97 workers hired during that time period was sensitized
to beryllium. This is a 90 percent reduction from the prevalence of
sensitization in a 1998 BeLPT screening, which found that 6 (9 percent)
of 69 workers hired after 1992 were sensitized.
    In the Elmore, OH beryllium production and processing facility, all
new workers were required to wear loose-fitting powered air-purifying
respirators (PAPRs) in manufacturing buildings, beginning in 1999
(Bailey et al., 2010). Skin protection became part of the protection
program for new workers in 2000, and glove use was required in
production areas and for handling work boots, beginning in 2001. Bailey
et al. (2010) found that 23 (8.9 percent) of 258 workers hired between
1993 and 1999, before institution of respiratory and dermal protection,
were sensitized to beryllium. The prevalence of sensitization among the
290 workers who were hired after the respiratory protection and PPE
measures were put in place was about 2 percent, close to an 80 percent
reduction in beryllium sensitization.
    In a response to OSHA's 2002 Request for Information (RFI), Lee
Newman et al. from National Jewish Medical and Research Center (NJMRC)
summarized results of beryllium program effectiveness from several
sources. Said Dr. Newman (in response to Question #33):

    Q. 33. What are the potential impacts of reducing occupational
exposures to beryllium in terms of costs of controls, costs for
training, benefits from reduction in the number or severity of
illnesses, effects on revenue and profit, changes in worker
productivity, or any other impact measures than you can identify?
    A: From experience in [the Tucson, AZ facility discussed above],
one can infer that approximately 90 percent of beryllium
sensitization can be eliminated. Furthermore, the preliminary data
would suggest that potentially 100 percent of CBD can be eliminated
with appropriate workplace control measures.
    In a study by Kelleher 2001, Martyny 2000, Newman, JOEM 2001) in
a plant that previously had rates of sensitization as high as 9.7
percent, the data suggests that when lifetime weighted average
exposures were below 0.02 [mu]g per cu meter that the rate of
sensitization fell to zero and the rate of CBD fell to zero as well.
    In an unpublished study, we have been conducting serial
surveillance including testing new hires in a precision machining
shop that handles beryllium and beryllium alloys in the Southeast
United States. At the time of the first screening with the blood
BeLPT of people tested within the first year of hire, we had a rate
of 6.7 percent (4/60) sensitization and with 50 percent of these
individuals showing CBD at the time of initial clinical evaluation.
At that time, the median exposures in the machining areas of the
plant was 0.47 [mu]g per cu meter. Subsequently, efforts were made
to reduce exposures, further educate the workforce, and increase
monitoring of exposure in the plant. Ongoing testing of newly hired
workers within the first year of hire demonstrated an incremental
decline in the rate of sensitization and in the rate of CBD. For
example, at the time of most recent testing when the median airborne
exposures in the machining shop were 0.13 [mu]g per cu meter, the
percentage of newly hired workers found to have beryllium
sensitization or CBD was now 0 percent (0/55). Notably, we also saw
an incremental decline in the percentage of longer term workers
being detected with sensitization and disease across this time
period of exposure reduction and improved hygiene practices.
    Thus, in calculating the potential economic benefit, it's
reasonable to work with the assumption that with appropriate efforts
to control exposures in the work place, rates of sensitization can
be reduced by over 90 percent. (NJMRC, RFI Ex. 6-20)
    OSHA has reviewed these papers and is in agreement with Dr.
Newman's testimony. OSHA judges Dr. Newman's estimate to be an upper
bound of the effectiveness of ancillary programs and examined the
results of using Dr. Newman's estimate that beryllium ancillary
programs can reduce BeS by 90 percent, and potentially eliminate CBD
where sensitization is reduced, because CBD can only occur where there
is sensitization. OSHA applied this 90 percent reduction factor to all
cases of CBD remaining after application of the reductions due to
lowering the PEL alone. OSHA applied this reduction broadly because the
proposed standard would require housekeeping and PPE related to skin
exposure (18,000 of

28,000 employees will need PPE because of possible skin exposure) to
apply to all or most employees likely to come in contact with beryllium
and not just those with exposure above the action level. Table IX-11
shows that there are 11,017 baseline cases of CBD and that the proposed
PEL of 0.2 [micro]g/m\3\ would prevent 2,563 cases through airborne
prevention alone. The remaining number of cases of CBD is then 8,454
(11,017 minus 2,563). If OSHA applies the full ninety percent reduction
factor to account for prevention of skin exposure (``non-airborne''
protections), then 7,609 (90 percent of 8,454 cases) additional cases
of CBD would be prevented.
    The Agency recognizes that there are significant differences
between the comprehensive programs discussed above and the proposed
standard. While the proposed standard includes many of the same
elements, it is generally less stringent. For example, the proposed
standard's requirements for respiratory protection and PPE are
narrower, and many provisions of the standard apply only to workers
exposed above the proposed TWA PEL or STEL. However, many provisions,
such as housekeeping and beryllium work areas, apply to all employers
covered by the proposed standard. To account for these differences,
OSHA has provided a range of benefits estimates (shown in Table IX-11),
first, assuming that there are no ancillary provisions to the standard,
and, second, assuming that the comprehensive standard achieves the full
90-percent reduction in risk documented in existing programs. The
Agency is taking the midpoint of these two numbers as its main estimate
of the benefits of avoided CBD due to the ancillary provisions of the
proposed standard. The results in Table IX-11 suggest that
approximately 60 percent of the beryllium sensitization cases and the
CBD cases avoided would be attributable to the ancillary provisions of
the standard. OSHA solicits comment on all aspects of this approach to
analyzing ancillary provisions and solicits additional data that might
serve to make more accurate estimates of the effects of ancillary
provisions. OSHA is interested in the extent of the effects of
ancillary provisions and whether these apply to all exposed employees
or only those exposed above or below a given exposure level.
(3) Morbidity Only Cases
    As previously indicated, the Agency does not believe that all CBD
cases will ultimately result in premature death. While currently strong
empirical data on this are lacking, the Agency estimates that
approximately 35 percent of cases would not ultimately be fatal, but
would result in some pain and suffering related to having CBD, and
possible side effects from steroid treatment, as well as the dread of
not knowing whether the disease will ultimately lead to premature
death. These would be described as ``mild'' cases of CBD relative to
the others. These are the residual cases of CBD after cases with
premature mortality have been counted. As indicated in Table IX-11, the
Agency estimates the standard will prevent 2,228 such cases (midpoint)
over 45 years, or an estimated 50 cases annually.
b. Lung Cancer
    In addition to the Agency's determinations with respect to the risk
of chronic beryllium disease, the Agency has preliminarily determined
that chronic beryllium exposure at the current PEL can lead to a
significantly elevated risk of (fatal) lung cancer. OSHA used the
estimation methodology outlined at the beginning of this section.
However, unlike with chronic beryllium disease, the underlying data
were based on incidence of lung cancer and thus there was no need to
address the possible limitations of prevalence data. The Agency also
used lifetime excess risk estimates of lung cancer mortality, presented
in Table VI-20 in Section VI of this preamble, Preliminary Risk
Assessment, to estimate the benefits of avoided lung cancer mortality.
The lung cancer risk estimates are derived from one of the best-fitting
models in a recent, high-quality NIOSH lung cancer study, and are based
on average exposure levels. The estimates of excess lifetime risk of
lung cancer were taken from the line in Table VI-20 in the risk
assessment labeled PWL (piecewise log-linear) not including
professional and asbestos workers. This model avoids possible
confounding from asbestos exposure and reduces the potential for
confounding due to smoking, as smoking rates and beryllium exposures
can be correlated via professional worker status. Of the three
estimates in the NIOSH study that excluded professional workers and
those with asbestos exposure, this model was chosen because it was at
the midpoint of risk results.
    Table IX-11 shows the number of avoided fatal lung cancers for PELs
of 0.2 [mu]g/m\3\, 0.1 [mu]g/m\3\, and 0.5 [mu]g/m\3\. At the proposed
PEL of 0.2 [mu]g/m\3\, an estimated 180 lung cancers would be prevented
over the lifetime of the current worker population. This is the
equivalent of 4.0 cases avoided annually, given a 45-year working life
of exposure.
    Combining the two major fatal health endpoints--for lung cancer and
CBD-related mortality--OSHA estimates that the proposed PEL would
prevent between 1,846 and 6,791 premature fatalities over the lifetime
of the current worker population, with a midpoint estimate of 4,318
fatalities prevented. This is the equivalent of between 41 and 151
premature fatalities avoided annually, with a midpoint estimate of 96
premature fatalities avoided annually, given a 45-year working life of
exposure.
    Note that the Agency based its estimates of reductions in the
number of beryllium-related diseases over a working life of constant
exposure for workers who are employed in a beryllium-exposed occupation
for their entire working lives, from ages 20 to 65. In other words,
workers are assumed not to enter or exit jobs with beryllium exposure
mid-career or to switch to other exposure groups during their working
lives. While the Agency is legally obligated to examine the effect of
exposures from a working lifetime of exposure and set its standard
accordingly,\26\ in an alternative analysis purely for informational
purposes, using the same underlying risk model for CBD, the Agency
examined, in Chapter VII of the PEA, the effect of assuming that
workers are exposed for a maximum of only 25 working years, as opposed
to the 45 years assumed in the main analysis. While all workers are
assumed to have less cumulative exposure under the 25-years-of-exposure
assumption, the effective exposed population over time is
proportionately increased.
---------------------------------------------------------------------------

    \26\ Section (6)(b)(5) of the OSH Act states: ``The Secretary,
in promulgating standards dealing with toxic materials or harmful
physical agents under this subsection, shall set the standard which
most adequately assures, to the extent feasible, on the basis of the
best available evidence, that no employee will suffer material
impairment of health or functional capacity even if such employee
has regular exposure to the hazard dealt with by such standard for
the period of his working life.'' Given that it is necessary for
OSHA to reach a determination of significant risk over a working
life, it is a logical extension to estimate what this translates
into in terms of estimated benefits for the affected population over
the same period.
---------------------------------------------------------------------------

    A comparison of exposures over a maximum of 25 working years versus
over a potentially 45-year working life shows variations in the number
of estimated prevented cases by health outcome. For chronic beryllium
disease, there is a substantial increase in the number of estimated
baseline and prevented cases if one assumes that the typical maximum
exposure period is 25 years, as opposed to 45. This reflects the

relatively flat CBD risk function within the relevant exposure range,
given varying levels of airborne beryllium exposure--shortening the
average tenure and increasing the exposed population over time
translates into larger total numbers of people sensitized to beryllium.
This, in turn, results in larger populations of individuals contracting
CBD. Since the lung cancer model itself is based on average, as opposed
to cumulative, exposure, it is not adaptable to estimate exposures over
a shorter period of time. As a practical matter, however, over 90
percent of illness and mortality attributable to beryllium exposure in
this analysis comes from CBD.
    Overall, the 45-year-maximum-working-life assumption yields smaller
estimates of the number of cases of avoided fatalities and illnesses
than does the maximum-25-years-of-exposure assumption. For example, the
midpoint estimates of the number of avoided fatalities and illnesses
related to CBD under the proposed PEL of 0.2 [mu]g/m\3\ increases from
92 and 50, respectively, under the maximum-45-year-working-life
assumption to 145 and 78, respectively, under the maximum-25-year-
working-life assumption--or approximately a 57 to 58 percent
increase.\27\
---------------------------------------------------------------------------

    \27\ Technically, this analysis assumes that workers receive 25
years' worth of beryllium exposure, but that they receive it over 45
working years, as is assumed by the risk models in the risk
assessment. It also accounts for the turnover implied by 25, as
opposed to 45, years of work. However, it is possible that an
alternate analysis, which accounts for the larger number of post-
exposure worker-years implied by workers departing their jobs before
the end of their working lifetime, might find even larger health
effects for workers receiving 25 years' worth of beryllium exposure.

---------------------------------------------------------------------------

[GRAPHIC] [TIFF OMITTED] TP07AU15.022

Step 2--Estimating the Stream of Benefits Over Time
    Risk assessments in the occupational environment are generally
designed to estimate the risk of an occupationally related illness over
the course of an individual worker's lifetime. As demonstrated
previously in this section, the current occupational exposure profile
for a particular substance for the current cohort of workers can be
matched up against the expected profile after the proposed standard
takes effect, creating a ``steady state'' estimate of benefits.
However, in order to annualize the benefits for the period of time
after the beryllium rule takes effect, it is necessary to create a
timeline of benefits for an entire active workforce over that period.
    While there are various approaches that could be taken for modeling
the workforce, there seem to be two polar extremes. At one extreme, one
could assume that none of the benefits occur until after the worker
retires, or at least 45 years in the future. In the case of lung
cancer, that period would effectively be at least 55 years, since the
45 years of exposure must be added to a 10-year latency period during
which it is assumed that lung cancer does not develop.\28\ At the other
extreme, one could assume that the benefits occur immediately, or at
least immediately after a designated lag. However, based on the various
risk models discussed in this preamble at Section VI, Risk Assessment,
which reflect real-world experience with development of disease over an
extended period of time, it appears that the actual pattern occurs at
some point between these two extremes.
---------------------------------------------------------------------------

    \28\ This assumption is consistent with the 10-year lag
incorporated in the lung cancer risk models used in OSHA's
preliminary risk assessment.
---------------------------------------------------------------------------

    At first glance, the simplest intermediate approach would be to
follow the pattern of the risk assessments, which are based in part on
life tables, and observe that typically the risk of the illness grows
gradually over the course of a working life and into retirement. Thus,
the older the person exposed to beryllium, the higher the odds that
that person will have developed the disease.
    However, while this is a good working model for an individual
exposed over a working life, it is not very descriptive of the effect
of lowering exposures for an entire working population. In the latter
case, in order to estimate the benefits of the standard over time, one
has to consider that workers currently being exposed to beryllium are
going to vary considerably in age. Since the calculated health risks
from beryllium exposure depend on a worker's cumulative exposure over a
working lifetime, the overall benefits of the proposed standard will
phase in over several decades, as the cumulative exposure gradually
falls for all age groups, until those now entering the workforce reach
retirement and the annual stream of beryllium-related illnesses reaches
a new, significantly lowered ``steady state.'' \29\ That said, the
near-term impact of the proposed rule estimated for those workers with
similar current levels of cumulative exposure will be greater for
workers who are now middle-aged or older. This conclusion follows in
part from the structure of the relative risk model used for lung cancer
in this analysis and the fact that the background mortality rates for
lung cancer increase with age.
---------------------------------------------------------------------------

    \29\ Technically, the RA lung cancer model is based on average
exposure, Nonetheless, as noted in the RA, the underlying studies
found lung cancer to be significantly related to cumulative
exposure. Particularly since the large majority of the benefits are
related to CBD, the Agency considers this fairly descriptive of the
overall phase-in of benefits from the standard.
---------------------------------------------------------------------------

    In order to characterize the magnitude of benefits before the
steady state is reached, OSHA created a linear phase-in model to
reflect the potential timing of benefits. Specifically, OSHA estimated
that, for all non-cancer cases, while the number of cases of beryllium-
related disease would gradually decline as a result of the proposed
rule, they would not reach the steady-state level until 45 years had
passed. The reduction in cases estimated to occur in any given year in
the future was estimated to be equal to the steady-state reduction (the
number of cases in the baseline minus the number of cases in the new
steady state) times the ratio of the number of years since the standard
was implemented and a working life of 45 years. Expressed
mathematically:

Nt = (C-S) x (t/45),

Where Nt is the number of non-malignant beryllium-related
diseases avoided in year t; C is the current annual number of non-
malignant beryllium-related diseases; S is the steady-state annual
number of non-malignant beryllium-related diseases; and t represents
the number of years after the proposed standard takes effect, with t
<= 45.

    In the case of lung cancer, the function representing the decline
in the number of beryllium-related cases as a result of the proposed
rule is similar, but there would be a 10-year lag before any reduction
in cancer cases would be achieved. Expressed mathematically, for lung
cancer:

Lt = (Cm-Sm) x ((t-10)/45)),

Where 10 <= t <= 55 and Lt is the number of lung cancer
cases avoided in year t as a result of the proposed rule;
Cm is the current annual number of beryllium-related lung
cancers; and Sm is the steady-state annual number of
beryllium-related lung cancers.

    This model was extended to 60 years for all the health effects
previously discussed in order to incorporate the 10-year lag, in the
case of lung cancer, and a maximum-45-year working life, as well as to
capture some occupationally-related disease that manifests itself after
retirement.\30\ As a practical matter, however, there is no overriding
reason for stopping the benefits analysis at 60 years. An internal
analysis by OSHA indicated that, both in terms of cases prevented, and
even with regard to monetized benefits, particularly when lower
discount rates are used, the estimated benefits of the standard are
larger on an annualized basis if the analysis extends further into the
future. The Agency welcomes comment on the merit of extending the
benefits analysis beyond the 60-years analyzed in the PEA.
---------------------------------------------------------------------------

    \30\ The left-hand columns in the tables in Appendix VII-A of
the PEA provide estimates using this model of the stream of
prevented fatalities and illnesses due to the proposed beryllium
rule.
---------------------------------------------------------------------------

    In order to compare costs to benefits, OSHA assumes that economic
conditions remain constant and that annualized costs--and the
underlying costs--will repeat for the entire 60-year time horizon used
for the benefits analysis (as discussed in Chapter V of the PEA). OSHA
welcomes comments on the assumption for both the benefit and cost
analysis that economic conditions remain constant for sixty years. OSHA
is particularly interested in what assumptions and time horizon should
be used instead and why.
Separating the Timing of Mortality
    In previous sections, OSHA modeled the timing and incidence of
morbidity. OSHA's benefit estimates are based on an underlying CBD-
related mortality rate of 65 percent. However, this mortality is not
simultaneous with the onset of morbidity. Although mortality from CBD
has not been well studied, OSHA believes, based on discussions with
experienced clinicians, that the average lag for a larger population
has a range of 10 to 30 years between morbidity and mortality. The
Agency's review of Workers Compensation data related to beryllium
exposure from the Office of Worker Compensation Programs (OWCP)
Division of Energy Employees Occupational Illness Compensation is
consistent with this range. Hence, for the purposes of this

proposal, OSHA estimates that mortality occurs on average 20 years
after the onset of CBD morbidity. Thus, for example, the prevented
deaths that would have occurred in year 21 after the promulgation of
the rule are associated with the CBD morbidity cases prevented in year
one. OSHA requests comment on this estimate and range.
    The Agency invites comment on each of these elements of the
analysis, particularly on the estimates of the expected life expectancy
of a patient with CBD.
Step 3--Monetizing the Benefits of the Proposed Rule
    To estimate the monetary value of the reductions in the number of
beryllium-related fatalities, OSHA relied, as OMB recommends, on
estimates developed from the willingness of affected individuals to pay
to avoid a marginal increase in the risk of fatality. While a
willingness-to-pay (WTP) approach clearly has theoretical merit, it
should be noted that an individual's willingness to pay to reduce the
risk of fatality would tend to underestimate the total willingness to
pay, which would include the willingness of others--particularly the
immediate family--to pay to reduce that individual's risk of fatality.
    For estimates using the willingness-to-pay concept, OSHA relied on
existing studies of the imputed value of fatalities avoided based on
the theory of compensating wage differentials in the labor market.
These studies rely on certain critical assumptions for their accuracy,
particularly that workers understand the risks to which they are
exposed and that workers have legitimate choices between high- and low-
risk jobs. These assumptions are far from obviously met in actual labor
markets.\31\ A number of academic studies, as summarized in Viscusi &
Aldy (2003), have shown a correlation between higher job risk and
higher wages, suggesting that employees demand monetary compensation in
return for a greater risk of injury or fatality. The estimated trade-
off between lower wages and marginal reductions in fatal occupational
risk--that is, workers' willingness to pay for marginal reductions in
such risk--yields an imputed value of an avoided fatality: The
willingness-to-pay amount for a reduction in risk divided by the
reduction in risk.\32\
---------------------------------------------------------------------------

    \31\ On the former assumption, see the discussion in Chapter II
of the PEA on imperfect information. On the latter, see, for
example, the discussion of wage compensation for risk for union
versus nonunion workers in Dorman and Hagstrom (1998).
    \32\ For example, if workers are willing to pay $90 each for a
1/100,000 reduction in the probability of dying on the job, then the
imputed value of an avoided fatality would be $90 divided by 1/
100,000, or $9,000,000. Another way to consider this result would be
to assume that 100,000 workers made this trade-off. On average, one
life would be saved at a cost of $9,000,000.
---------------------------------------------------------------------------

    OSHA has used this approach in many recent proposed and final
rules. Although this approach has been criticized for yielding results
that are less than statistically robust (see, for example, Hintermann,
Alberini and Markandya, 2010), a more recent WTP analysis, by Kniesner
et al. (2012), of the trade-off between fatal job risks and wages,
using panel data, seems to address many of the earlier econometric
criticisms by controlling for measurement error, endogeneity, and
heterogeneity. In conclusion, the Agency views the WTP approach as the
best available and will rely on it to monetize benefits.\33\ OSHA
welcomes comments on the use of willingness-to-pay measures and
estimates based on compensating wage differentials.
---------------------------------------------------------------------------

    \33\ Note that, consistent with the economics literature, these
estimates would be for reducing the risk of an acute (immediate)
fatality. They do not include an individual's willingness to pay to
avoid a higher risk of illness prior to fatality, which is
separately estimated in the following section.
---------------------------------------------------------------------------

    Viscusi & Aldy (2003) conducted a meta-analysis of studies in the
economics literature that use a willingness-to-pay methodology to
estimate the imputed value of life-saving programs and found that each
fatality avoided was valued at approximately $7 million in 2000
dollars. Using the GDP Deflator (U.S. BEA, 2010), this $7 million base
number in 2000 dollars yields an estimate of $8.7 million in 2010
dollars for each fatality avoided.\34\
---------------------------------------------------------------------------

    \34\ An alternative approach to valuing an avoided fatality is
to monetize, for each year that a life is extended, an estimate from
the economics literature of the value of that statistical life-year
(VSLY). See, for instance, Aldy and Viscusi (2007) for discussion of
VSLY theory and FDA (2003), pp. 41488-9, for an application of VSLY
in rulemaking. OSHA has not investigated this approach, but welcomes
comment on the issue.
---------------------------------------------------------------------------

    In addition to the benefits that are based on the implicit value of
fatalities avoided, workers also place an implicit value on
occupational injuries or illnesses avoided, which reflect their
willingness to pay to avoid monetary costs (for medical expenses and
lost wages) and quality-of-life losses as a result of occupational
illness. Chronic beryllium disease and lung cancer can adversely affect
individuals for years, or even decades, in non-fatal cases, or before
ultimately proving fatal. Because measures of the benefits of avoiding
these illnesses are rare and difficult to find, OSHA has included a
range based on a variety of estimation methods.
    For both CBD and lung cancer, there is typically some permanent
loss of lung function and disability, on-going medical treatments, side
effects of medicines, and major impacts on one's ability to work,
marry, enjoy family life, and quality of life.
    While diagnosis with CBD is evidence of material impairment of
health, placing a precise monetary value on this condition is
difficult, in part because the severity of symptoms may vary
significantly among individuals. For that reason, for this preliminary
analysis, the Agency employed a broad range of valuation, which should
encompass the range of severity these individuals may encounter.
    Using the willingness-to-pay approach, discussed in the context of
the imputed value of fatalities avoided, OSHA has estimated a range in
valuations (updated and reported in 2010 dollars) that runs from
approximately $62,000 per case--which reflects estimates developed by
Viscusi and Aldy (2003), based on a series of studies primarily
describing simple accidents--to upwards of $5 million per case--which
reflects work developed by Magat, Viscusi, and Huber (1996) for non-
fatal cancer. The latter number is based on an approach that places a
willingness-to-pay value to avoid serious illness that is calibrated
relative to the value of an avoided fatality. OSHA previously used this
approach in the Preliminary Economic Analysis (PEA) supporting its
respirable crystalline silica proposal (2013) and in the Final Economic
Analysis (FEA) supporting its hexavalent chromium final rule (2006),
and EPA (2003) used this approach in its Stage 2 Disinfection and
Disinfection Byproducts Rule concerning regulation of primary drinking
water. Based on Magat, Viscusi, and Huber (1996), EPA used studies on
the willingness to pay to avoid nonfatal lymphoma and chronic
bronchitis as a basis for valuing a case of nonfatal cancer at 58.3
percent of the value of a fatal cancer. OSHA's estimate of $5 million
for an avoided case of non-fatal cancer is based on this 58.3 percent
figure.
    The Agency believes this range of estimates, between $62,000 and $5
million, is descriptive of the value of preventing morbidity associated
with moderate to severe CBD that ultimately results in premature death.
\35\
---------------------------------------------------------------------------

    \35\ There are several benchmarks for valuation of health
impairment due to beryllium exposure, using a variety of techniques,
which provide a number of mid-range estimates between OSHA's high
and low estimates. For a fuller discussion of these benchmarks, see
Chapter VII of the PEA.

---------------------------------------------------------------------------

    While the Agency has estimated that 65 percent of CBD cases will
result in premature mortality, the Agency has also estimated that
approximately 35 percent of CBD cases will not result in premature
mortality. However, the Agency acknowledges that it is possible there
have been new developments in medicine and industrial hygiene related
to the benefits of early detection, medical intervention, and greater
control of exposure achieved within the past decade. For that reason,
as elsewhere, the Agency requests comment on these issues.
    Also not clear are the negative effects of the illness in terms of
lost productivity, medical costs, and potential side-effects of a
lifetime of immunosuppressive medication. Nonetheless, the Agency is
assigning a valuation of $62,000 per case, to reflect the WTP value of
a prevented injury not estimated to precede premature mortality. The
Agency believes this is conservative, in part because, with any given
case of CBD, the outcome is not known in advance, certainly not at the
point of discovery; indeed much of the psychic value of preventing the
cases may come from removing the threat of premature mortality. In
addition, as previously noted, some of these cases could involve
relatively severe forms of CBD where the worker died of other causes;
however, in those cases, the duration of the disease would be
shortened. While beryllium sensitization is a critical precursor of
CBD, this preliminary analysis does not attempt to assign a separate
value to sensitization itself.
    Particularly given the uncertainties in valuation on these
questions, the Agency is interested in public input on the issue of
valuing the cost to society of morbidity associated with CBD, both in
cases preceding mortality, and those that may not result in premature
mortality. The Agency is also interested in comments on whether it is
appropriate to assign a separate valuation to prevented sensitization
cases in their own right, and if so, how such cases should be valued.
a. Summary of Monetized Benefits
    Table IX-12 presents the estimated annualized (over 60 years, using
a 0 percent discount rate) benefits from each of these components of
the valuation, and the range of estimates, based on uncertainty of the
prevention factor (i.e., the estimated range of prevented cases,
depending on how large an impact the rule has on cases beyond an
airborne-only effect), and the range of uncertainty regarding valuation
of morbidity. (Mid-point estimates of the undiscounted benefits for
each of the first 60 years are provided in the middle columns of Table
VII-A-1 in Appendix VII-A at the end of Chapter VII in the PEA. The
estimates by year reach a peak of $3.5 billion in the 60th year. Note
that, by using a 60-year time-period, OSHA is not including any
monetized fatality benefits associated with reduced worker CBD cases
originating after year 40 because the 20-year lag takes these CBD
fatalities beyond the 60-year time horizon. To this extent, OSHA will
have underestimated benefits.)
    As shown in Table IX-12, the full range of monetized benefits,
undiscounted, for the proposed PEL of 0.2 [micro]g/m\3\ runs from $291
million annually, in the case of the lowest estimate of prevented cases
of CBD, and the lowest valuation for morbidity, up to $2.1 billion
annually, for the highest of both. Note that the value of total
benefits is more sensitive to the prevention factor used (ranging from
$430 million to $1.6 billion, given estimates at the midpoint of the
morbidity valuation) than to the valuation of morbidity (ranging from
$666 million to $1.3 billion, given estimates at the midpoint of
prevention factor).
    Also, the analysis illustrates that most of the morbidity benefits
are related to CBD and lung cancer cases that are ultimately fatal. At
the valuation and case frequency midpoint, $663 million in benefits are
related to mortality, $226 million are related to morbidity preceding
mortality, and $4.3 million are related to morbidity not preceding
mortality.

[GRAPHIC] [TIFF OMITTED] TP07AU15.023

b. Adjustment of WTP Estimates to Reflect Rising Real Income Over Time
    OSHA's estimates of the monetized benefits of the proposed rule are
based on the imputed value of each avoided fatality and each avoided
beryllium-related disease. As previously discussed, these, in turn, are
derived from a worker's willingness to pay to avoid a fatality (with an
imputed value per fatality avoided of $8.7 million in 2010 dollars) and
to avoid a beryllium-related disease (with an imputed value per disease
avoided of between $62,000

and $5 million in 2010 dollars). To this point, these imputed values
have been assumed to remain constant over time. However, two related
factors suggest that these values will tend to increase over time.
    First, economic theory indicates that the value of reducing life-
threatening and health-threatening risks--and correspondingly the
willingness of individuals to pay to reduce these risks--will increase
as real per capita income increases. With increased income, an
individual's health and life becomes more valuable relative to other
goods because, unlike other goods, they are without close substitutes
and in relatively fixed or limited supply. Expressed differently, as
income increases, consumption will increase but the marginal utility of
consumption will decrease. In contrast, added years of life (in good
health) is not subject to the same type of diminishing returns--
implying that an effective way to increase lifetime utility is by
extending one's life and maintaining one's good health (Hall and Jones,
2007).
    Second, real per capita income has broadly been increasing
throughout U.S. history, including recent periods. For example, for the
period 1950 through 2000, real per capita income grew at an average
rate of 2.31 percent a year (Hall and Jones, 2007),\36\ although real
per capita income for the recent 25-year period 1983 through 2008 grew
at an average rate of only 1.3 percent a year (U.S. Census Bureau,
2010). More important is the fact that real U.S. per capita income is
projected to grow significantly in future years. For example, the
Annual Energy Outlook (AEO) projections, prepared by the Energy
Information Administration (EIA) in the Department of Energy (DOE),
show an average annual growth rate of per capita income in the United
States of 2.7 percent for the period 2011-2035.\37\ The U.S.
Environmental Protection Agency prepared its economic analysis of the
Clean Air Act using the AEO projections. OSHA believes that it is
reasonable to use the same AEO projections employed by DOE and EPA, and
correspondingly projects that per capita income in the United States
will increase by 2.7 percent a year.
---------------------------------------------------------------------------

    \36\ The results are similar if the historical period includes a
major economic downturn (such as the United States has recently
experienced). From 1929 through 2003, a period in U.S. history that
includes the Great Depression, real per capita income still grew at
an average rate of 2.22 percent a year (Gomme and Rupert, 2004).
    \37\ The EIA used DOE's National Energy Modeling System (NEMS)
to produce the Annual Energy Outlook (AEO) projections (EIA, 2011).
Future per capita GDP was calculated by dividing the projected real
gross domestic product each year by the projected U.S. population
for that year.
---------------------------------------------------------------------------

    On the basis of the predicted increase in real per capita income in
the United States over time and the expected resulting increase in the
value of avoided fatalities and diseases, OSHA has adjusted its
estimates of the benefits of the proposed rule to reflect the
anticipated increase in their value over time. This type of adjustment
has been recognized by OMB (2003), supported by EPA's Science Advisory
Board (EPA, 2000), and applied by EPA \38\. OSHA proposes to accomplish
this adjustment by modifying benefits in year i from [Bi] to
[Bi * (1 + k)\i\], where ``k'' is the estimated annual
increase in the magnitude of the benefits of the proposed rule.
---------------------------------------------------------------------------

    \38\ See, for example, EPA (2003, 2008).
---------------------------------------------------------------------------

    What remains is to estimate a value for ``k'' with which to
increase benefits annually in response to annual increases in real per
capita income, where ``k'' is equal to ``(1+g) * ([eta])'', ``g'' is
the expected annual percentage increase in real per capita income, and
``[eta]'' is the income elasticity of the value of a statistical life.
Probably the most direct evidence of the value of ``k'' comes from the
work of Costa and Kahn (2003, 2004). They estimate repeated labor
market compensating wage differentials from cross-sectional hedonic
regressions using census and fatality data from the Bureau of Labor
Statistics for 1940, 1950, 1960, 1970, and 1980. In addition, with the
imputed income elasticity of the value of life on per capita GNP of 1.7
derived from the 1940-1980 data, they then predict the value of an
avoided fatality in 1900, 1920, and 2000. Given the change in the value
of an avoided fatality over time, it is possible to estimate a value of
``k'' of 3.4 percent a year from 1900-2000; of 4.3 percent a year from
1940-1980; and of 2.5 percent a year from 1980-2000.
    Other, more indirect evidence comes from estimates in the economics
literature of ``[eta]'', the income elasticity of the value of a
statistical life. Viscusi and Aldy (2003) performed a meta-analysis on
0.2 wage-risk studies and concluded that the confidence interval upper
bound on the income elasticity did not exceed 1.0 and that the point
estimates across a variety of model specifications ranged between 0.5
and 0.6. Applied to a long-term increase in per capita income of about
2.7 percent a year, this would suggest a value of ``k'' of about 1.5
percent a year.
    More recently, Kniesner, Viscusi, and Ziliak (2010), using panel
data quintile regressions, developed an estimate of the overall income
elasticity of the value of a statistical life of 1.44. Applied to a
long-term increase in per capita income of about 2.7 percent a year,
this would suggest a value of ``k'' of about 3.9 percent a year.
    Based on the preceding discussion of these three approaches for
estimating the annual increase in the value of the benefits of the
proposed rule and the fact that the projected increase in real per
capita income in the United States has flattened in recent years and
could flatten in the long run, OSHA suggests a conservative value for
``k'' of approximately two percent a year. The Agency invites comment
on this estimate and on estimates of the income elasticity of the value
of a statistical life.
    The Agency believes that the rising value, over time, of health
benefits is a real phenomenon that should be taken into account in
estimating the annualized benefits of the proposed rule. Table IX-13,
in the following section on discounting benefits, shows estimates of
the monetized benefits of the proposed rule (under alternative discount
rates) with this estimated increase in monetized benefits over time.
The Agency invites comment on this adjustment to monetized benefits.
c. The Discounting of Monetized Benefits
    As previously noted, the estimated stream of benefits arising from
the proposed beryllium rule is not constant from year to year, both
because of the 45-year delay after the rule takes effect until all
active workers obtain reduced beryllium exposure over their entire
working lives and because of, in the case of lung cancer, a 10-year
latency period between reduced exposure and a reduction in the
probability of disease. An appropriate discount rate \39\ is needed to
reflect the timing of benefits over the 60-year period after the rule
takes effect and to allow conversion to an equivalent steady stream of
annualized benefits.
---------------------------------------------------------------------------

    \39\ Here and elsewhere throughout this section, unless
otherwise noted, the term ``discount rate'' always refers to the
real discount rate--that is, the discount rate net of any
inflationary effects.
---------------------------------------------------------------------------

1. Alternative Discount Rates for Annualizing Benefits
    Following OMB (2003) guidelines, OSHA has estimated the annualized
benefits of the proposed rule using separate discount rates of 3
percent and 7 percent. Consistent with the Agency's own practices in
recent rulemakings, OSHA has also estimated, for benchmarking purposes,
undiscounted benefits--that is, benefits using a zero percent discount
rate.

    The question remains, what is the ``appropriate'' or ``preferred''
discount rate to use to monetize health benefits? The choice of
discount rate is a controversial topic, one that has been the source of
scholarly economic debate for several decades. However, in simplest
terms, the basic choices involve a social opportunity cost of capital
approach or social rate of time preference approach.
    The social opportunity cost of capital approach reflects the fact
that private funds spent to comply with government regulations have an
opportunity cost in terms of foregone private investments that could
otherwise have been made. The relevant discount rate in this case is
the pre-tax rate of return on the foregone investments (Lind, 1982, pp.
24-32).
    The rate of time preference approach is intended to measure the
tradeoff between current consumption and future consumption, or in the
context of the proposed rule, between current benefits and future
benefits. The individual rate of time preference is influenced by
uncertainty about the availability of the benefits at a future date and
whether the individual will be alive to enjoy the delayed benefits. By
comparison, the social rate of time preference takes a broader view
over a longer time horizon--ignoring individual mortality and the
riskiness of individual investments (which can be accounted for
separately).
    The usual method for estimating the social rate of time preference
is to calculate the post-tax real rate of return on long-term, risk-
free assets, such as U.S. Treasury securities (OMB, 2003, p. 33). A
variety of studies have estimated these rates of return over time and
reported them to be in the range of approximately 1-4 percent.
    In accordance with OMB Circular A-4 (2003), OSHA presents benefits
and net benefits estimates using discount rates of 3 percent
(representing the social rate of time preference) and 7 percent (a rate
estimated using the social cost of capital approach). The Agency is
interested in any evidence, theoretical or applied, that would inform
the application of discount rates to the costs and benefits of a
regulation.
2. Summary of Annualized Benefits under Alternative Discount Rates
    Table IX-13 presents OSHA's estimates of the sum of the annualized
benefits of the proposed rule, using alternative discount rates of 0,
3, and 7 percent, with the suggested adjustment for increasing
monetized benefits in response to annual increases in per capita income
over time.
    Given that the stream of benefits extends out 60 years, the value
of future benefits is sensitive to the choice of discount rate. The
undiscounted benefits in Table IX-13 range from $291 million to $2.1
billion annually. Using a 7 percent discount rate, the annualized
benefits range from $60 million to $591 million. As can be seen, going
from undiscounted benefits to a 7 percent discount rate has the effect
of cutting the annualized benefits of the proposed rule by about 74
percent.
    Taken as a whole, the Agency's best preliminary estimate of the
total annualized benefits of the proposed rule--using a 3 percent
discount rate with an adjustment for the increasing value of health
benefits over time--is between $158 million and $1.2 billion, with a
mid-point value of $576 million.

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Step 4: Net Benefits of the Proposed Rule
    OSHA has estimated, in Table IX-14, the monetized and annualized
net benefits of the proposed rule (with a PEL of 0.2 [mu]g/m\3\), based
on the benefits and costs previously presented. Table IX-14 also
provides estimates of annualized net benefits for alternative PELs of
0.1 and 0.5 [mu]g/m\3\. Both the proposed rule and the alternatives PEL
options have the same ancillary provisions and an action level equal to
half of the PEL in both cases.
    Table IX-14 is being provided for informational purposes only. As
previously noted, the OSH Act requires the Agency to set standards
based on eliminating significant risk to the extent feasible. An
alternative criterion of maximizing net (monetized) benefits may result
in very different regulatory outcomes. Thus, this analysis of net
benefits has not been used by OSHA as the basis for its decision
concerning the choice of a PEL or of other ancillary requirements for
the proposed beryllium rule.
    Table IX-14 shows net benefits using alternative discount rates of
0, 3, and 7 percent for benefits and costs, having previously included
an adjustment to monetized benefits to reflect increases in real per
capita income over time. OSHA has relied on a uniform discount rate
applied to both costs and benefits. The Agency is interested in any
evidence, theoretical or applied, that would support or refute the
application of differential discount rates to the costs and benefits of
a regulation.
    As previously noted in this section, the choice of discount rate
for annualizing benefits has a significant effect on annualized
benefits. The same is true for net benefits. For example, the net
benefits using a 7 percent discount rate for benefits are considerably
smaller than the net benefits using a 3 percent discount rate,
declining by over half under all scenarios. (Conversely, as noted in
Chapter V of the PEA, the choice of discount rate for annualizing costs
has a relatively minor effect on annualized costs.)
    Based on the results presented in Table IX-14, OSHA finds:
     While the net benefits of the proposed rule vary
considerably--depending on the choice of discount rate used to
annualize benefits and on whether the benefits being used are in the
high, midpoint, or low range--benefits exceed costs for the proposed
0.2 [mu]g/m\3\ PEL in all cases that OSHA considered.

     The Agency's best estimate of the net annualized benefits
of the proposed rule--using a uniform discount rate for both benefits
and costs of 3 percent--is between $120 million and $1.2 billion, with
a midpoint value of $538 million.
     The alternative of a 0.5 [mu]g/m\3\ PEL has lower net
benefits under all assumptions, whereas the effect on net benefits of
the 0.1 [mu]g/m\3\ PEL is mixed, relative to the proposed 0.2 [mu]g/
m\3\ PEL. However, for these alternative PELs, benefits were also found
to exceed costs in all cases that OSHA considered.
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Incremental Benefits of the Proposed Rule
    Incremental costs and benefits are those that are associated with
increasing the stringency of the standard. A comparison of incremental
benefits and costs provides an indication of the relative efficiency of
the proposed PEL and the alternative PELs. Again, OSHA has conducted
these calculations for informational purposes only and has not used
these results as the basis for selecting the PEL for the proposed rule.
    OSHA provides, in Table IX-15, estimates of the net benefits of the
alternative 0.1 and 0.5 [mu]g/m\3\ PELs. The incremental costs,
benefits, and net benefits of meeting a 0.5[mu]g/m\3\ PEL and then
going to a 0.2 [mu]g/m\3\ PEL (as well as meeting a 0.2 [mu]g/m\3\ PEL
and then going to a 0.1 [mu]g/m\3\ PEL--which the Agency has not yet
determined is feasible), for alternative discount rates of 3 and 7
percent, are presented in Table IX-15. Table IX-15 breaks out costs by
provision and benefits by type of disease and by morbidity/mortality.
As Table IX-15 shows, at a discount rate of 3 percent, a PEL of 0.2
[mu]g/m\3\, relative to a PEL of 0.5 [mu]g/m\3\, imposes additional
costs of $4.4 million per year; additional benefits of $172.7 million
per year; and additional net benefits of $168.2 million per year. The
proposed PEL of 0.2 [mu]g/m\3\ also has higher net benefits, relative
to a PEL of 0.5 [mu]g/m\3\, using a 7 percent discount rate.
    Table IX-15 demonstrates that, regardless of discount rate, there
are net benefits to be achieved by lowering exposures from the current
PEL of 2.0 [mu]g/m\3\ to 0.5 [mu]g/m\3\ and then, in turn, lowering
them further to 0.2 [mu]g/m\3\. However, the majority of the benefits
and costs attributable to the proposed rule are from the initial effort
to lower exposures to 0.5 [mu]g/m\3\. Consistent with the previous
analysis, net benefits decline across all increments as the discount
rate for annualizing benefits increases. As also shown in Table IX-15,
there is a slight positive net incremental benefit from going from a
PEL of 0.2 [mu]g/m\3\ to 0.1 [mu]g/m\3\ for a discount rate of 3
percent, and a slight negative net increment for a discount rate of 7
percent. (Note that these results are for OSHA's midpoint estimate of
benefits, although as indicated in Table IX-14, this is not universal
across all estimation parameters.)
    In addition to examining alternative PELs, OSHA also examined
alternatives to other provisions of the standard. These regulatory
alternatives are discussed Section IX.H of this preamble.

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Step 5: Sensitivity Analysis
    In this section, OSHA presents the results of two different types
of sensitivity analysis to demonstrate how robust the estimates of net
benefits are to changes in various cost and benefit parameters. In the
first type of sensitivity analysis, OSHA made a series of isolated
changes to individual cost and benefit input parameters in order to
determine their effects on the Agency's estimates of annualized costs,
annualized benefits, and annualized net benefits. In the second type of

sensitivity analysis--a so-called ``break-even'' analysis--OSHA also
investigated isolated changes to individual cost and benefit input
parameters, but with the objective of determining how much they would
have to change for annualized costs to equal annualized benefits. For
both types of sensitivity analyses, OSHA used the annualized costs and
benefits obtained from a three-percent discount rate as the reference
point.
    Again, the Agency has conducted these calculations for
informational purposes only and has not used these results as the basis
for selecting the PEL for the proposed rule.
a. Analysis of Isolated Changes to Inputs
    The methodology and calculations underlying the estimation of the
costs and benefits associated with this rulemaking are generally linear
and additive in nature. Thus, the sensitivity of the results and
conclusions of the analysis will generally be proportional to isolated
variations in a particular input parameter. For example, if the
estimated time that employees need to travel to (and from) medical
screenings were doubled, the corresponding labor costs would double as
well.
    OSHA evaluated a series of such changes in input parameters to test
whether and to what extent the general conclusions of the economic
analysis held up. OSHA first considered changes to input parameters
that affected only costs and then changes to input parameters that
affected only benefits. Each of the sensitivity tests on cost
parameters had only a very minor effect on total costs or net costs.
Much larger effects were observed when the benefits parameters were
modified; however, in all cases, net benefits remained significantly
positive. On the whole, OSHA found that the conclusions of the analysis
are reasonably robust, as changes in any of the cost or benefit input
parameters still show significant net benefits for the proposed rule.
The results of the individual sensitivity tests are summarized in Table
IX-16 and are described in more detail below.
    In the first of these sensitivity tests, where OSHA doubled the
estimated portion of employees in need of protective clothing and
equipment (PPE), essentially doubling the estimated baseline non-
compliance rate (e.g., from 10 to 20 percent), and estimates of other
input parameters remained unchanged, Table IX-16 shows that the
estimated total costs of compliance would increase by $1.4 million
annually, or by about 3.7 percent, while net benefits would also
decline by $1.4 million annually, from $538.2 million to $536.8 million
annually.
    In a second sensitivity test, OSHA increased the estimated unit
cost of ventilation from $13.18 per cfm for most sectors to $25 per cfm
for most sectors. As shown in Table IX-16, if OSHA's estimates of other
input parameters remained unchanged, the total estimated costs of
compliance would increase by $2.0 million annually, or by about 5.3
percent, while net benefits would also decline by $2.0 million
annually, from $538.2 million to $536.2 million annually.

[GRAPHIC] [TIFF OMITTED] TP07AU15.027

    In a third sensitivity test, OSHA increased the estimated share of
workers showing signs and symptoms of CBD from 15 to 25 percent,
thereby adding these workers to the group eligible for medical
surveillance and assuming that they would not be otherwise eligible for
another reason (working in a regulated area, exposed during an
emergency, etc.). As shown in Table IX-16, if OSHA's estimates of other
input parameters remained unchanged, the total estimated costs of
compliance would increase by $1.5 million annually, or by about 4.1
percent, while net benefits would also decline by $1.5 million
annually, from $538.2 million to $536.7 million annually.
    In a fourth sensitivity test, OSHA increased its estimated
incremental time per workers for housekeeping by 50

percent. As shown in Table IX-16, if OSHA's estimates of other input
parameters remained unchanged, the total estimated costs of compliance
would increase by $5.4 million annually, or by about 14.4 percent,
while net benefits would also decline by $5.4 million annually, from
$538.2 million to $532.8 million annually.
    In a fifth sensitivity test, OSHA increased the estimated number of
establishments needing engineering controls. For this sensitivity test,
if less than 50 percent of the establishments in an industry needed
engineering controls, OSHA doubled the percentage of establishments
needing engineering controls. If more than 50 percent of establishments
in an industry needed engineering controls, then OSHA increased the
percentage of establishment needing engineering control to 100 percent.
The purpose of this sensitivity analysis was to check the importance of
using a methodology that treated 50 percent of workers in a given
occupation exposed above the PEL as equivalent to 50 percent of
facilities lacking adequate exposure controls. As shown in Table IX-16,
if OSHA's estimates of other input parameters remained unchanged, the
total estimated costs of compliance would increase by $4.5 million, or
by about 11.9 percent, while net benefits would also decline by $4.5
million, from $538.2 million to $533.7 million annually.
    The Agency also performed sensitivity tests on several input
parameters used to estimate the benefits of the proposed rule. In the
first two tests, in an extension of results previously presented in
Table IX-12, the Agency examined the effect on annualized net benefits
of employing the high-end estimate of the benefits, as well as the low-
end estimate, specifically examining the effect on undiscounted
benefits of varying the valuation of individual morbidity cases. Table
IX-16 presents the effect on annualized net benefits of using the
extreme values of these ranges: the high morbidity valuation case and
the low morbidity valuation case. For the low estimate of valuation,
the benefits decline by 37.7 percent, to $359 million annually,
yielding net benefits of $321 million annually. As shown, using the
high estimate of morbidity valuation, the benefits rise by 77.0 percent
to $1.0 billion annually, yielding net benefits of $982 million
annually.
    In a third sensitivity test of benefits, the Agency examined the
effect of removing the component for the estimated rising value of
health and safety over time. This would reduce the benefits by 54.6
percent, or $314 million annually, lowering the net benefits to $224
million annually.
    In Chapter VII of the PEA the Agency examined the effect of raising
the discount rate for costs and benefits to 7 percent. Raising the
discount rate to 7 percent would increase costs by $1.5 million
annually and lower benefits by $320.5 million annually, yielding
annualized net benefits of $216.2 million.
    Also in Chapter VII of the PEA the Agency performed a sensitivity
analysis of dental lab substitution. In the PEA, OSHA estimates that 75
percent of the dental laboratory industry will react to a new standard
on beryllium by substituting away from using beryllium to the use of
other materials. Substitution is not costless, and Chapter V of the PEA
estimates the increased cost due to the higher costs of using non-
beryllium alloys. These costs are smaller than the avoided costs of the
ancillary provisions and engineering controls. Thus, as indicated in
Table VII-8 of the PEA, the benefits of the proposal would be lower and
the costs higher if there were less substitution out of beryllium in
dental labs. The lowest net benefits would occur if labs were unable to
substitute out beryllium-containing materials at all, and had to use
ventilation to control exposures. In this case, the proposal would
yield only $420 million in net benefits. The highest net benefits,
larger than assumed for OSHA's primary estimate, would be if all dental
labs substituted out of beryllium-containing materials as a result of
the proposal; as a result, the proposal would yield $573 million in net
benefits. Another possibility is a scenario is which technology and the
market move along rapidly away from using beryllium-containing
materials, independently of an OSHA rule, and the proposal itself would
therefore produce neither costs nor benefits in this sector. If dental
labs are removed from the PEA, the net benefits for the proposal--for
the remaining industry sectors--decline to $284 million. This analysis
demonstrates, however, that regardless of any assumption regarding
substitution in dental labs, the proposal would generate substantially
more monetized benefits than costs.
    Finally, the Agency examined in Chapter VII of the PEA the effects
of changes in two important inputs to the benefits analysis: the factor
that transforms CBD prevalence rates into incidence rates, needed for
the equilibrium lifetime risk model, and the percentage of CBD cases
that eventually lead to a fatality.
    From the Cullman dataset, the Agency has estimated the prevalence
of CBD cases at any point in time as a function of cumulative beryllium
exposure. In order to utilize the lifetime risk model, which tracks
workers over their working life in a job, OSHA has turned these
prevalence rates into an incidence rate, which is the rate of
contracting CBD at a point in time. OSHA's baseline estimate of the
turnover rate in the model is 10 percent. In Table VII-10 in the PEA,
OSHA also presented alternative turnover rates of 5 percent and 20
percent. A higher turnover rate translates into a higher incidence
rate, and the table shows that, from a baseline midpoint estimate with
10 percent turnover the number of CBD cases prevented is 6,367, while
raising the turnover rate to 20 percent causes this midpoint estimate
to rise to 11,751. Conversely, a rate of 5 percent lowers the number of
CBD cases prevented to 3,321. Translated into monetary benefits, the
table shows that the baseline midpoint estimate of $575.8 million now
ranges from $314.4 million to $1,038 million.
    Also in TableVII-10 of the PEA, the Agency looked at the effects of
varying the percentage of CBD cases that eventuate in fatality. The
Agency's baseline estimate of this outcome is 65 percent, with half of
this occurring relatively soon, and the other half after an extended
debilitating condition. The Agency judged that a reasonable range to
investigate was a low of 50 percent and a high of 80 percent, while
maintaining the shares of short-term and long-term endpoint fatality.
At a baseline of 65 percent, the midpoint estimate of total CBD cases
prevented is 4,139. At the low end of 50 percent mortality this
estimate lowers to 3,183 while at the high end of 80 percent mortality
this estimate rises to 5,094. Translated into monetary benefits, the
table shows that the baseline midpoint estimate of $575.8 million now
ranges from $500.1 million to $651.5 million.
b. ``Break-Even'' Analysis
    OSHA also performed sensitivity tests on several other parameters
used to estimate the net costs and benefits of the proposed rule.
However, for these, the Agency performed a ``break-even'' analysis,
asking how much the various cost and benefits inputs would have to vary
in order for the costs to equal, or break even with, the benefits. The
results are shown in Table IX-17.
    In one break-even test on cost estimates, OSHA examined how much
total costs would have to increase in order for costs to equal
benefits. As shown in Table IX-17, this point would

be reached if costs increased by $538.2 million, or by 1,431 percent.
    In a second test, looking specifically at the estimated engineering
control costs, the Agency found that these costs would need to increase
by $566.7 million, or 6,240 percent, for costs to equal benefits.
    In a third sensitivity test, on benefits, OSHA examined how much
its estimated monetary valuation of an avoided illness or an avoided
fatality would need to be reduced in order for the costs to equal the
benefits. Since the total valuation of prevented mortality and
morbidity are each estimated to exceed the estimated costs of $38
million, an independent break-even point for each is impossible. In
other words, for example, if no value is attached to an avoided illness
associated with the rule, but the estimated value of an avoided
fatality is held constant, the rule still has substantial net benefits.
Only through a reduction in the estimated net value of both components
is a break-even point possible.
    The Agency, therefore, examined how large an across-the-board
reduction in the monetized value of all avoided illnesses and
fatalities would be necessary for the benefits to equal the costs. As
shown in Table IX-17, a 94 percent reduction in the monetized value of
all avoided illnesses and fatalities would be necessary for costs to
equal benefits, reducing the estimated value to $733,303 per fatality
prevented, and an equivalent percentage reduction to about $4,048 per
illness prevented.
    In a fourth break-even sensitivity test, OSHA estimated how many
fewer beryllium-related fatalities and illnesses would be required for
benefits to equal costs. Paralleling the previous discussion,
eliminating either the prevented mortality or morbidity cases alone
would be insufficient to lower benefits to the break-even point. The
Agency therefore examined them as a group. As shown in Table IX-17, a
reduction of 96 percent, for both simultaneously, is required to reach
the break-even point--90 fewer fatalities prevented annually, and 46
fewer beryllium-related illnesses-only cases prevented annually.
    Taking into account both types of sensitivity analysis the Agency
performed on its point estimates of the annualized costs and annualized
benefits of the proposed rule, the results demonstrate that net
benefits would be positive in all plausible cases tested. In