disposal costs), we assume that the cost of treatment is approximately
$44 per ton of residual.  We do not include disposal costs in the
analysis because gasifiers would incur such costs regardless of whether
they accept OBHSM feedstock (i.e., residuals produced from the
gasification of conventional feedstock would also require disposal).
For the OBHSM generated by each refinery, we estimate the corresponding
tonnage of residuals that would require treatment as follows:

Estimate the total tonnage of feedstock inserted into the gasifier.  As
indicated in the main body of this document, refineries that accept and
gasify OBHSM would likely mix OBHSM feedstock with conventional
feedstock.  Therefore, the tonnage of residuals requiring testing would
depend on the tonnage of conventional feedstock mixed with OBHSM
feedstock.  Consistent with out assumption that OBHSM could represent no
more than 10 percent of a gasifier's feedstock capacity, we assume that
the OBHSM generated by a refinery would, when gasified, represent 10
percent of the feedstock included in the gasifier.  For example, if a
refinery without a gasification system were to send 100 tons of OBHSM to
a refinery equipped with a gasification system, we assume that 900 tons
of conventional feedstock would be included in the gasifier with the 100
tons of OBHSM for a total of 1,000 tons of feedstock.

Estimate the tonnage of residual associated with the feedstock tonnage
estimated in Step 1.  Because gasification systems convert feedstock
into synthesis gas fuel, the residual that remains after the
gasification process represents only a fraction of the feedstock
inserted into the gasification system.  Based on data from a 2003
Department of Energy Report, we estimate that no more than 4.4 tons of
residual are produced for every 100 tons of feedstock inserted into a
gasification system.  Continuing with the example presented in Step 1,
we would estimate that gasifying 100 tons of OBHSM and 900 tons of
conventional feedstock would yield 44 tons of residual.

Estimate the tonnage of residual requiring treatment.  As outlined
above, we assume that 2.5 percent of the residuals affected by the rule
would require treatment.  Therefore, a priori, we would assume that the
residuals associated with a given facility's OBHSM would face a 2.5
percent probability of requiring treatment prior to disposal.  Based on
this probability, we estimate the expected tonnage of residual requiring
treatment.  For example, if gasifying 100 tons of OBHSM with 900 tons of
conventional feedstock yields 44 tons of residual, we would estimate
that 1.1 tons of residual (2.5 percent of 44) would require treatment.

Third Party Impacts

Under the final rule, refineries that use the gasification exclusion may
divert their waste from commercial waste management facilities to
refineries equipped with gasification systems.  Consequently, commercial
waste management facilities may incur three types of costs under the
final rule: a decline in waste management revenues, energy replacement
costs, and reduced revenues related to the sale of recycled materials.
Below we summarize our estimation of these impacts.

Reduced Waste Management Revenues

If the final rule diverts refinery waste from commercial waste
management to gasification, commercial waste management facilities will
experience a loss in waste management revenue.  We estimate the
magnitude of these losses based on the volume of material diverted from
offsite management to gasification under the final rule, and the costs
associated with individual management methods provided above in Exhibit
B-2.

Increased Energy Costs

As indicated in the main body of this report, some of the material that
refineries send to offsite management facilities (e.g., cement kilns) in
the baseline is currently burned as a fuel by these facilities.  If
OBHSM is diverted away from such waste management facilities as a result
of the final rule, they will experience an energy loss and may need to
purchase replacement fuel.  The cost of this replacement fuel is
estimated using the same approach outlined above for "Generator Cost
Impacts: Energy Replacement Costs."

Reduced Revenues from the Sale of Recovered Materials

Under the final rule, refinery waste that is currently sent to recycling
facilities may be diverted to gasification.  This represents a loss to
recycling facilities because they sell many of the materials that they
recover from refinery waste.  The extent of these losses depends on the
volume of OBHSM diverted away from offsite recycling as a result of the
final rule and the amount and value of materials recovered from this
material in the baseline.  Based on BRS data for those facilities that
we assume will use the exclusion, we estimate the tonnage of OBHSM
diverted away from offsite recycling.  To estimate the value of
materials currently recovered from this waste, we use the approach for
material recycled onsite by refineries in the baseline as outlined above
under "Generator Cost Impacts: Material Replacement Costs."

   As stated in Executive Order 12898, a minority is an individual who
is a member of one of the following population groups: American Indian
or Alaskan Native; Asian or Pacific Islander; Black, not of Hispanic
origin; or Hispanic.

  Note that Exhibit 1 updates and amends Exhibit 10 of the Assessment
found on page 35.

 Federal Register (Volume 63, Number 151), "Hazardous Waste Management
System; Identification and Listing of Hazardous Waste; Petroleum
Refining Process Wastes; Land Disposal Restrictions for Newly Identified
Wastes; And CERCLA Hazardous Substance Designation and Reportable
Quantities." August 6, 1998.

 ETC, Incinerator and Landfill Cost Data,
http://www.etc.org/costsurvey8.cfm, accessed September 8, 2006.

 Federal Register (Volume 67, Number 57), "Regulation of Hazardous
Oil-Bearing Secondary Materials From the Petroleum Refining Industry and
Other Hazardous Secondary Materials Processed in a Gasification System
To Produce Synthesis Gas." March 25, 2002.

 Federal Register (Volume 63, Number 151), "Hazardous Waste Management
System; Identification and Listing of Hazardous Waste; Petroleum
Refining Process Wastes; Land Disposal Restrictions for Newly Identified
Wastes; And CERCLA Hazardous Substance Designation and Reportable
Quantities." August 6, 1998.

 As described below, we used BRS to identify those waste streams for
which sufficient information is available to determine likely
eligibility for the exclusion.  To the extent that additional waste
streams would also qualify for the exclusion, we may underestimate the
impacts of the final rule.

 We also assessed the available waste management data in the 2001 BRS
and identified waste quantities similar to those outlined below.

 The waste codes included in BRS represent the presence (but not the
concentration) of a specific hazardous substance in a waste stream.

 Glenn Farber, U.S. EPA, Office of Solid Waste, "Regulatory Impacts of
Proposed Exclusions of Petroleum Refinery Wastes," Memorandum to the
File, February 13, 2002.

 The 2003 BRS does not include proper identification information for one
refinery that generates approximately 22 tons of waste that may be
eligible for the exclusion.  The 153 facilities that we examined in our
analysis of the final rule does not include this facility.

 John J. Marano, "Refinery Technology Profiles: Gasification and
Supporting Technologies," prepared for U.S. Department of Energy
National Energy Technology Laboratory, June 2003.

 These two gasification units include one operated by Farmland
Industries in Coffeyville, Kansas and a second operated by Motiva
Enterprises in Convent, Louisiana.

 Gary DelGrego, "Experience with Low Value Feed Gasification at the El
Dorado, Kansas Refinery," presented at the 1999 Gasification
Technologies Conference.

 The Frontier facility currently has a temporary waiver under which its
OBHSM is excluded from the regulatory definition of solid waste if the
facility uses the material as a feedstock for producing synthesis gas
fuel.

 These three to five refineries represent the universe of gasification
systems currently in operation or expected to go online in the near
future.  In the long run, however, the final rule could encourage more
refineries to install gasification systems.  In addition, as the power
and hydrogen needs of refineries continue to grow, refineries may
install more pet coke gasification systems to help meet these needs.  A
study conducted for the U.S. Department of Energy in 2000 suggests that
40 refineries will produce adequate pet coke in 2010 to warrant the
construction of gasification systems to meet these needs  (Source: D.
Gray and G. Tomlinson, "Potential of Gasification in the U.S. Refining
Industry," prepared for U.S. Department of Energy, June 2000).  To the
extent that the rule and other market conditions lead to the
construction of additional gasification capacity not reflected in our
analysis, our current results may underestimate the longer-term impacts
of this rule.

 This estimate is based on data presented in Gary DelGrego, "Experience
with Low Value Feed Gasification at the El Dorado, Kansas Refinery,"
presented at the 1999 Gasification Technologies Conference.

 A characteristic hazardous waste is any waste that exhibits at least
one of four characteristics: ignitability, corrosivity, reactivity, or
toxicity.

 The unit management cost data that we used for this analysis do not
include transportation costs.  Therefore, we estimate avoided
transportation costs separately from avoided management costs, as
outlined below.

 I. Wernick and N.J. Themelis, "Recycling Metals for the Environment,"
Annual Reviews Energy and Environment, Vol. 23, p.465-97, 1998.

 Additional information on our estimation of the gasification tipping
fee is presented in Appendix B.

 The impacts listed in this section do not include the costs associated
with the gasification process itself (i.e., the cost of gasification
prior to the management of the resulting residuals).  We exclude these
costs from our analysis because we assume that the cost of gasifying
waste feedstock is the same as gasifying conventional feedstock.

 For the purposes of estimating feedstock savings, we assume that
refineries with gasification systems onsite produce their own petroleum
coke and residual oil feedstock.  If one of these refineries accepts
waste feedstock from another refinery, we assume that it could then sell
the petroleum coke and residual oil feedstock that it would have
otherwise used as gasification feedstock.  The value of this material
represents feedstock savings.

 For the three to five refineries that have onsite gasification systems,
the benefits of diverting waste to gasification would also include
feedstock savings.  To simplify the explanation of our methodology, we
include these impacts in our discussion of impacts for gasification
systems.

 For refineries with gasification systems onsite, the costs of diverting
waste to gasification also include the cost of managing the residuals
generated during the gasification process.  We describe this cost in our
discussion of gasifier impacts below.

 For example, if a refinery could potentially save up to $10,000 per
year if it sends its waste to a gasification system, it would be willing
to split these savings with a gasification system rather than experience
no savings at all.

 These estimates are based on waste quantity data from the 2003 BRS and
hazardous waste combustion pricing information from the Environmental
Technology Council (www.etc.org) converted to a per ton basis.

 ETC, Incinerator and Landfill Cost Data,
<http://www.etc.org/costsurvey8.cfm>, accessed September 8, 2006.  Cost
value adjusted for inflation using the GDP deflator.

 Ibid.

 Under the high-capacity scenario of the sensitivity analysis, we would
expect most of these facilities to use the exclusion because the tipping
fees associated with the high-capacity scenario would be much lower than
those associated with the low-capacity scenario.

 Sources used to determine whether individual facilities are small
entities include the following: “ReferenceUSA,” “Hoovers,”
“Yahoo! Finance,” “Google Finance,” public financial
information, and individual company websites.

   In addition, two separate directives issued by EPA, “Policy on
Evaluating Health Risks to Children” (October 1995) and “National
Agenda to Protect Children's Health from Environmental Threats”
(October 1996), call for consideration of children's health within risk
assessments and other components of regulatory analyses.

 As defined in Executive Order 13045, an economically significant rule
is any rulemaking that has an annual effect on the economy of $100
million or more, or would adversely affect in a material way the
economy, a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or state, local or tribal
governments or communities.

 According to the U.S. Energy Information Administration (EIA) Annual
Energy Outlook 2006, Table A2, one barrel of crude oil produced has a
heat content of 5.8 million Btu.

   As stated in Executive Order 12898, a minority is an individual who
is a member of one of the following population groups: American Indian
or Alaskan Native; Asian or Pacific Islander; Black, not of Hispanic
origin; or Hispanic.

 See, for instance, Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922),
Penn Central Transportation Co. v. City of New York 438 U.S. 104 (1978),
Nollan v. California Coastal Commission 483 U.S. 825 (1987), Lucas v.
South Carolina Coastal Council 112 S. Ct. 2886 (1992), Dolan v. City of
Tigard 114 S. Ct. 2309 (1994).  Also see Palazzolo v. Rhode Island 533
U.S. 606 (2001) and Kelo v. City of New London 545 U.S. 469 (2005).

   No universally accepted formula exists for determining at what point
direct economic impacts from regulatory action constitute a taking.
Rather, courts must make this determination on a case-by-case basis.
In the landmark Lucas decision, the U.S. Supreme Court proclaimed that a
100 percent deprivation in value most often, but not always, constitutes
a taking.  Recent case law includes many examples in which regulations
deprived owners of as much as 50 percent or more of the value associated
with the economic use of property, yet the court still ruled that the
regulations did not deny the owner all reasonable economic value.  For
instance, see Concrete Pipe and Products v. Construction Laborers
Pension Trust for Southern California, 113 S.Ct. 2264 (1993).

 Numerous court decisions ranging from landmark preservation to the
control of industrial pollution in residential areas have upheld
regulations while at the same time acknowledging the takings claims
associated with them on the basis of nuisance prevention and resource
protection goals.

 All of the refineries in group 2 are also in group 1.

 A description of RCRA storage requirements is available in U.S. EPA,
RCRA Orientation Manual 2006; Resource Conservation and Recovery Act,
March 2006.

 U.S. EPA, Best Demonstrated Available Technology (BDAT) Background
Document for K048, K049, K050, K051, and K052 (Final),
EPA530-SW-88-031C, August 15, 1988; U.S. EPA, Best Demonstrated
Available Technology (BDAT) Background Document for Newly Listed
Refinery Wastes: F037 and F038 (Final), EPA530-R-95-024, June 30, 1992;
and U.S. EPA, Best Demonstrated Available Technology (BDAT) Background
Document for K169, K170, and K171, 1998.

BDAT background documents for F037 and F038(1992), and K169-K171(1998).

 We assume coal would serve as the replacement fuel based on personal
communication with Scott Palmer, U.S. EPA, Office of Solid Waste,
September 8, 2006.  Our estimate of the cost of coal is from U.S.
Department of Energy, Energy Information Administration, Annual Coal
Report 2004, November 2005.

 I. Wernick and N.J. Themelis, "Recycling Metals for the Environment,"
Annual Reviews Energy and Environment, Vol. 23, p.465-97, 1998.

 Ibid.

 The three to five refineries that have their own gasification system
onsite are assumed not to incur this cost.

 John J. Marano, Refinery Technology Profiles: Gasification and
Supporting Technologies, prepared for U.S. Department of Energy National
Energy Technology Laboratory, June 2003.

 We estimate the per ton value of petroleum coke based on pricing data
in Platts, International Coal Report, December 11, 2006.  This document
presents a series of pricing values for different grades of petroleum
coke; our estimate of $39 per ton represents the average of these
values, converted to year 2005 dollars.

 Therefore, if a refinery received 1,000 shipments, we would assume
testing costs associated for 1,050 samples--an initial test for all
1,000 shipments and a re-test for the 5 percent expected to yield a
positive result on their first test.

 This estimate is based on a sampling cost of $41 per sample (in year
1999 dollars) and a TCLP (excluding pesticides and herbicides) cost of
$556 per test (in year 2000 dollars), as stated in DPRA, Inc., Unit Cost
Compendium, prepared for U.S. EPA, Office of Solid Waste, September 30,
2000.  We convert these estimates to year 2005 dollars in our analysis
using the GDP deflator.

 For the purposes of estimating testing costs, we assume one re-test per
positive test result.

 This $44 per ton value reflects the difference between the
Environmental Technology Council's "Bulk Without Treatment" and "Bulk
With Treatment" landfill prices, < http://www.etc.org/costsurvey8.cfm>,
accessed September 8, 2006.

 Although a fraction of the residuals produced from the gasification of
OBHSM under the final rule would require treatment prior to disposal, we
assume that these residuals, after treatment, would not exhibit the
characteristics of a hazardous waste.  Therefore, in light of the 2001
Hazardous Waste Identification Rule, this material could then be managed
as non-hazardous.  Federal Register (Volume 66, Number 95), "Hazardous
Waste Identification Rule (HWIR): Revisions to the Mixture and
Derived-From Rules," 27266-27297, May 16, 2001.

 This 10 percent estimate is based on data presented in Gary DelGrego,
"Experience with Low Value Feed Gasification at the El Dorado, Kansas
Refinery," presented at the 1999 Gasification Technologies Conference.

 John J. Marano, Refinery Technology Profiles: Gasification and
Supporting Technologies, prepared for U.S. Department of Energy National
Energy Technology Laboratory, June 2003.

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