Economic and Small Business Impact Analysis for the Proposed Secondary
Aluminum NESHAP

 Background

This report is the economic and small business impact analysis for the
proposed revisions to the Secondary Aluminum NESHAP, which will be
signed as per a court-ordered schedule onby January 3130, 2012.
Implementation of the rule is required by 3 yearsThe proposed amendments
will allow sources up to 90 days after promulgation ofto comply with the
final rule, which will take place underprovisions of the rule that are
unrelated to testing. Otherwise, sources will have to comply with the
testing provisions upon their next regularly scheduled testing. The
court-order on ordered deadline for promulgation is October 3031, 2012.
This proposal includes amendments to the existing NESHAP that was
promulgated in 19992000 to correct and clarify rule requirements and
provisions. These proposed amendments would:

Add work practice standards for a requirement that the existing
numerical limits apply at times, including periods of startup and
shutdown for some processes;

Add a definition of affirmative defense;

Add a requirement to report performance testing through the Electronic
Reporting Tool (ERT);

Add rule provisions allowing furnaces to change designations;

Add operating requirements such as monitoring of lime injection rates
and specificationssolicit comments for improving the scrap cleaning
processesinspection program; and

Make technical corrections and clarifications to the applicability,
definitions, operating, monitoring, and performance testing
requirements.

Details on the proposed rule can be found in the preamble contained in
the public docket for this rulemaking.

The EPA defined the Secondary Aluminum source category in 1992 as any
establishment using clean charge, aluminum scrap, or dross from aluminum
production, as the raw material and performing one or more of the
following processes: scrap shredding, scrap
drying/delacquering/decoating, thermal chip drying, furnace operations
(i.e., melting, holding, sweating, refining, fluxing, or alloying),
recovery of aluminum from dross, in-line fluxing, or dross cooling. The
Secondary Aluminum Production source category includes facilities that
produce aluminum from scrap aluminum material and consists of the
following operations: (1) Preprocessing of scrap aluminum, including
size reduction and removal of oils, coatings, and other contaminants;(2)
Furnace operations including melting, in-furnace refining, fluxing, and
tapping; (3) Additional refining, by means of in-line fluxing; and (4)
Cooling of dross.

Table 1. NESHAP and Industrial Source Categories Affected By This
Proposed Action

Source Category

NESHAP

NAICS code1

Secondary Aluminum Production

Primary aluminum production facilities

Aluminum sheet, plate, and foil manufacturing facilities

Aluminum extruded product manufacturing facilities

Other aluminum rolling and drawing facilities

Aluminum die casting facilities

Aluminum foundry facilities	Secondary Aluminum Production

	331314

331312

331315

331316

331319

331521

331524

1 North American Industry Classification System

2 Maximum Achievable Control Technology

The secondary aluminum industry consists of approximately 161 secondary
aluminum production facilities, of which the EPA estimates 53 to be
major sources of HAP.  Several of the secondary aluminum facilities are
co-located with primary aluminum, coil coating, and possibly other
source category facilities.

The components of the proposal that are expected to have impacts on
costs are the following:

require uncontrolled furnaces to install testing hooding that meets
American Council of Government Industrial Hygienists (ACGIH) guidelines,

require uncontrolled furnaces to test for hydrogen fluoride (HF) in
addition to hydrogen chloride (HCl), and

allow furnaces to switch designations, such as from a controlled Group 1
furnace to uncontrolled Group 2 furnace.

The costs of the rule, and the economic and small business impacts
associated with the proposed rule, can be found in Section 3.  Section 2
below provides a profile for the secondary aluminum industry.

Industry Profile

This section introduces the secondary aluminum industry and provides
aggregate statistics on the amount of secondary aluminum produced and
other economic data about the secondary aluminum industry.

The secondary aluminum industry is based around recovery of aluminum, or
production of aluminum from recycled aluminum (scraps). Recovered
aluminum, along with primary aluminum, is used for: containers (such as
aluminum cans) and packaging (which in 2010 accounted for 22.4 percent
of end-use shipments in the United States and Canada), buildings and
construction (10.2 percent), and transportation (28.2 percent) (Bray,
2011, 5.1).

From 2006 to 2010 secondary recovery of aluminum, on average, accounted
for 64 percent of total aluminum production in the United States. In
2010, 2,800 metric tons of aluminum were recovered in the U.S.
(Table 1-1). Secondary recovery decreased by 36 percent from 2006 to
2010. The annual decreases became progressively severe until the
industry, at least temporarily, stabilized from 2009 to 2010.

Table 2.	Salient Aluminum Statistics (Thousands of Metric Tons)

	2006	2007	2008	2009	2010

Primary Production	2,284	2,554	2,658	1,727	1,726

Secondary Recovery Total:	4,380	4,110	3,630	2,820	2,800

New Scrap 	2,800	2,450	2,130	1,570	1,550

Old Scrap 	1,580	1,660	1,500	1,260	1,250

Note: New Scrap is generated in the manufacturing of primary aluminum
and semi-fabricated aluminum mill, finished industrial and consumer
products (EPA, 1999  XE "U.S. EPA, 1999"  , 6). New scrap that is
recycled by the same company that generated it is generally not counted
in scrap consumption and secondary production data. Old scrap comes from
recycled aluminum products (products recovered after their useful lives)
such as used beverage cans (UBC) (EPA, 1999  XE "U.S. EPA, 1999"  , 7).

Source: Bray, Lee. 2011  XE "Bray, Lee. 2011"  . “Minerals Yearbook:
Aluminum [Advanced Release]” USGS. Table 1.
<http://minerals.usgs.gov/minerals/pubs/commodity/aluminum/myb1-2010-alu
mi.pdf>

Secondary Aluminum is produced by several different types of firms
(Table 3). The principal manufacturers of recovered aluminum are
Secondary Smelters and Independent Mill Fabricators. To simplify, this
industry profile now focuses on firms whose sole purpose is to

Table 3.	U.S. Consumption and Recovery from Purchased New and Old
Aluminum Scrap, by Class (Metric Tons)

Calculated Recoverya

Class	Consumption	Aluminum	Metallic

2009

	Secondary smelters	1,450,000	1,020,000	1,090,000

Independent mill fabricators	1,620,000	1,390,000	1,470,000

Foundries	74,800	61,200	65,400

Other Consumers 	6,870	6,330	6,350

Total 	3,160,000	2,470,000	2,630,000

Estimated full Industry Coverage 	3,390,000	2,650,000	2,820,000

2010

	Secondary Smelters	1,610,000	1,150,000	1,230,000

Independent mill fabricators	1,450,000	1,240,000	1,320,000

Foundries	50,700	41,400	44,200

Other Consumers 	6,290	6,290	6,290

Total 	3,120,000	2,430,000	2,590,000

Estimated full Industry Coverage 	3,370,000	2,620,000	2,800,000

aMetallic Recovery includes both aluminum recovery and alloying metals,
Aluminum Recovery is the aluminum content of the recovered metals.

Source: Bray, Lee. 2011  XE "Bray, Lee. 2011"  . “Minerals Yearbook:
Aluminum [Advanced Release]” USGS. Table 3.
<http://minerals.usgs.gov/minerals/pubs/commodity/aluminum/myb1-2010-alu
mi.pdf>

process aluminum scrap into molten aluminum or aluminum ingot. The
Secondary Smelting and Alloying of Aluminum industry (NAICS 331314)
“comprises establishments primarily engaged in (1) recovering
aluminum and aluminum alloys from scrap and/or dross (i.e., secondary
smelting) and making billet or ingot (except by rolling) and/or
(2) manufacturing alloys, powder, paste, or flake from purchased
aluminum” (U.S. Census Bureau, 2007).  Secondary Smelters were
responsible for 44 percent of total aluminum recovery in 2010.

2.1	Key Statistics

The Secondary Smelting industry’s shipments (output) expanded by
35 percent from 2005 to 2007. Unfortunately, this This expansion not
only stalled but was overwhelmed by a 57 percent decrease in output
from 2007 to 2009, likely due to the overall economic recession during
that period. There was an overall decrease in output of 43 percent from
2005 to 2009 (Table 4). Other indicators (payroll and number of
employees) likewise exhibit this pattern of industry expansion from 2005
to 2007 followed by drastic contraction from 2007 to 2009. Payroll
increased by 10 percent and the number of employees increased by
12 percent from 2005 to 2007 but fell by 46 percent and 43 percent
from 2007 to 2009.

Table 4.	Key Statistics: Secondary Aluminum Manufacturing (North
American Industry Classification [NAICS] 331314) ($2009)

	2005	2007	2009

Shipments ($1,000)	6,037,839	8,149,043	3,440,336

Annual payroll ($1,000)	366,891	404,999	217,198

Employees	6,727	7,524	4,224

Sources: U.S. Census Bureau: generated by RTI International; using
American Factfinder; “Sector 31: Annual Survey of Manufactures:
General Statistics: Statistics for Industry Groups and Industries: 2009
and 2008, 2008 and 2007, 2006 and 2005.”
<http://factfinder.census.gov>; (December 13, 2011  XE "U.S. Census
Bureau\: generated by RTI International\; using American Factfinder\;
\“Sector 31\: Annual Survey of Manufactures\: General Statistics\:
Statistics for Industry Groups and Industries\: 2009 and 2008, 2008 and
2007, 2006 and 2005.\” <http\://factfinder.census.gov>\; (December 13,
2011"  ).

The average shipments per employee and shipments per dollar of payroll
followed the same pattern as the aggregate statistics but the
fluctuations were mostly less extreme. Average shipments per employee
increased from 2005 to 2007 only to fall below the 2005 level by 2009.
There was an overall decrease in average shipments per employee of
9 percent. Average shipments per dollar of payroll expanded by
25 percent from 2005 to 2007 only to fall back to the 2005 level by
2009. The average annual payroll per employee was unique as it did not
increase before decreasing, but rather decreased slightly (1.3 percent)
from 2005 to 2007 and decreased slightly more (4.5 percent) from 2007
to 2009 (Table 5).

Table 5.	Industry Data: Secondary Aluminum (NAICS 331314) ($2009)

Industry Data	2005	2007	2009

Total Shipments ($1,000)	6,037,839	8,149,043	3,440,336

Average Shipments per employee 	898	1,083	814

Average Shipments per $ of payroll	16	20	16

Average Annual payroll per employee	54,540	53,827	51,420

Source: U.S. Census Bureau: generated by RTI International; using
American Factfinder; “Sector 31: Annual Survey of Manufactures:
General Statistics: Statistics for Industry Groups and Industries: 2009
and 2008, 2008 and 2007, 2006 and 2005.”
<http://factfinder.census.gov>; (December 13, 2011  XE "U.S. Census
Bureau\: generated by RTI International\; using American Factfinder\;
\“Sector 31\: Annual Survey of Manufactures\: General Statistics\:
Statistics for Industry Groups and Industries\: 2009 and 2008, 2008 and
2007, 2006 and 2005.\” <http\://factfinder.census.gov>\; (December 13,
2011"  ).

2.2	Supply and Demand Characteristics:

Secondary aluminum demand is determined by the industries that use
secondary aluminum as an input into their manufacturing process.
Historically, data on the use of aluminum in product markets has not
differentiated between the demand of primary and secondary (EPA, 1999
XE "U.S. EPA, 1999"  , 41). Conversely, there is more detailed data
available for the supply and inputs used in secondary production.

2.2.1	Goods and Services Used in Secondary Aluminum

Material cost consistently accounted for the lion’s share (around
80 percent) of the value of shipments in secondary aluminum
manufacturing from 2005 to 2009. This suggests that the cost of aluminum
scrap has a major influence on the cost of secondary aluminum
manufacturing. Total employee compensation took up a much smaller
amount—an average of 7.3 percent of the value of shipments. About
half of total compensation went to production workers’ wages.
Purchased electricity (ranging from 3 to 4.7 percent) and purchased
fuel (1.7 to 3.2 percent) accounted for small but not insignificant
portions of the total value of shipments through the period (Table 6).

2.3	Firm and Market Characteristics

2.3.1	Location

The concentration of the Secondary aluminum industry has been attributed
to the cost of transportation which causes establishments to locate near
scrap supplies and consumers of secondary aluminum. “A cursory look at
the distribution of secondary smelters in the U.S. reveals a heavy
concentration of smelters in the automotive and appliance manufacturing
areas of the country” (EPA, 1999  XE "U.S. EPA, 1999"  , 19). The
secondary aluminum industry was concentrated in the central U.S. in 1997
and remained that way through 2007. In 2007, Indiana had the most
secondary aluminum establishments, followed by Texas, Tennessee,
Michigan, and California. Similarly, Indiana had the highest
concentration of establishments, followed by Tennessee, Kentucky and New
Hampshire (Table 7).

Table 6.	Cost of Goods and Services Used in Secondary Aluminum
Manufacturing (NAICS 331314) ($2009)

Industry Ratios	2005	Share	2007	Share	2009	Share

Total shipments ($1,000)	6,037,839	100.0%	8,149,043	100.0%	3,440,336
100.0%

Total compensation ($1,000)	487,199	8.1%	533,852	6.5%	280,485	8.6%

Annual payroll ($1,000)	366,891	6.1%	404,999	5.0%	217,198	6.3%

Fringe benefits ($1,000)	120,308	2.0%	128,853	1.6%	63,287	1.8%

Total employees	7,390

7,785

4,224

	Total production workers’ wages ($1,000)—2007 nonleased	246,744
4.1%	267,385	3.3%	125,503	3.7%

Average production workers per year	5,513

5,798

3,082

	Total production hours (thousands)	12,603

14,066

6,429

	Total cost of materials ($1,000)	4,793,596	79.4%	6,404,830	78.6%
2,840,494	82.6%

Materials, parts, packaging etc. used ($1,000)	4,360,670	72.0%	5,697,489
70.0%	2,537,663	73.8%

cost of resales ($1,000)

	134,966	1.6%	62,094	1.8%

Purchased electricity ($1,000)	114,150	1.9%	262,814	3.2%	59,873	1.7%

Cost of purchased fuel ($1,000)	260,314	4.3%	241,124	3.0%	162,076	4.7%

Source: U.S. Census Bureau: generated by RTI International; using
American Factfinder; “Sector 31: Annual Survey of Manufactures:
General Statistics: Statistics for Industry Groups and Industries: 2009
and 2008, 2008 and 2007, 2006 and 2005.”
<http://factfinder.census.gov>; (December 13, 2011  XE "U.S. Census
Bureau\: generated by RTI International\; using American Factfinder\;
\“Sector 31\: Annual Survey of Manufactures\: General Statistics\:
Statistics for Industry Groups and Industries\: 2009 and 2008, 2008 and
2007, 2006 and 2005.\” <http\://factfinder.census.gov>\; (December 13,
2011"  ).

Table 7.	Establishment and Employee Concentration in Secondary Aluminum
Manufacturing (NAICS 331314) (2007)

Geography	Number of Establishments	Average Number of Paid Employees per
Pay Period 	Population/ Employees	Average Number of Employees per
Establishment	Population/ Establishments

United States	134	7,468	40,388	56	2,250,904

Alabama	4	—	—	—	1,156,963

Arkansas	2	—	—	—	1,417,399

California	10	473	77,280	47	3,655,322

Florida	6	228	80,049	38	3,041,874

Georgia	3	—	—	—	3,181,583

Illinois	9	369	34,831	41	1,428,061

Indiana	15	898	7,066	60	423,019

Kentucky	7	454	9,342	65	605,925

Michigan	11	515	19,557	47	915,620

Minnesota	1	—	—	—	5,197,621

Missouri	4	165	35,627	41	1,469,604

New Hampshire	2	—	—	—	657,914

New York	6	901	21,418	150	3,216,288

Ohio	9	329	34,854	37	1,274,102

Pennsylvania	4	127	97,896	32	3,108,198

Tennessee	11	—	—	—	559,702

Texas	12	—	—	—	1,992,032

Wisconsin	3	—	—	—	1,867,213

Source: U.S. Census Bureau: generated by RTI International; using
American Factfinder; “Table 1: Selected Industry Statistics for the
U.S. and States: 2007.” <http://factfinder.census.gov>; (December 13,
2011  XE "U.S. Census Bureau\: generated by RTI International\; using
American Factfinder\; \“Table 1\: Selected Industry Statistics for the
U.S. and States\: 2007.\” <http\://factfinder.census.gov>\; (December
13, 2011"  ).

2.3.2	Employment

Secondary aluminum manufacturing employment and the concentration of
employment by state follows that of establishments fairly closely with
the exception of New York which had relatively large amount of employees
per establishment (Table 7). Indiana had the highest concentration of
employees, followed closely by Kentucky, and less closely by Michigan
and New York.

2.3.3	Energy Use

The U.S. Energy Information Administration has not typically published
energy consumption data disaggregated enough to build a time trend of
the secondary aluminum industry’s energy use. However, energy
consumption data specific to the secondary aluminum was published in
2006 (Table 8). This shows that the industry almost entirely uses
natural gas to fuel aluminum production.

Table 8.	Energy Use by Fuel Type, NAICS 331314

Fuel Type (Unit: Trillion Btu)	2006

Total	21

Net electricity 	2

Residual Fuel Oil 	—

Distillate Fuel Oil 	—

Natural Gas 	18

LPG and NGL	—

Coal 	—

Coke and Breeze 	0

Other	—

Source: U.S. Department of Energy, Energy Information Administration.
2009. “First Use of Energy for All Purposes (Fuel and Nonfuel),
2006” <http://www.eia.gov/emeu/mecs/mecs2006/2006tables.html  XE "U.S.
Department of Energy, Energy Information Administration. 2009. \“
First Use of Energy for All Purposes (Fuel and Nonfuel), 2006\”
<http\://www.eia.gov/emeu/mecs/mecs2006/2006tables.html"  >

2.3.4	Size Distribution

The Small Business Administration defines any Secondary Smelting and
Alloying of Aluminum firm with less than 750 employees as small.  As
only 13 of 110 secondary smelting firms had more than 500 employees, it
is fair to say that most firms in the industry will be classified as
small. In spite of the high proportion of firms being classified as
small, only a slight majority (56 percent) of the employees worked for
firms with less than 500 (Table 9).

Table 9.	Distribution of Economic Data by Enterprise Size in Secondary
Aluminum Manufacturing (NAICS 331314)

Enterprises with

Variable	Total	1 to 20 Employees	20 to 99 Employees	100 to 499 Employees
500+ Employees

Firms	110	55	32	10	13

Establishments	133	55	35	14	29

Employment 	4,683	305	1,413	927	2,038

Source: U.S. Census Bureau. 2011. “Number of Firms, Number of
Establishments, Employment, and Annual Payroll by Enterprise Employment
Size for the United States, All Industries: 2009”
<http://www.census.gov/econ/susb/  XE "U.S. Census Bureau. 2011.
\“Number of Firms, Number of Establishments, Employment, and Annual
Payroll by Enterprise Employment Size for the United States, All
Industries\: 2009\” <http\://www.census.gov/econ/susb/"  >

The industry’s Concentration Ratios emphasize the relative dominance
of large companies. While 108 companies were documented in 2007, the
largest 50 companies accounted for 95.9 percent of the total value of
shipments and the largest 4 companies accounted for 54.8 percent
(Table 10). Also shown in Table 1-910 is the Herfindahl-Hirshman Index
(HHI) for NAICS 331314, which is 930.8. This HHI is at the upper end of
the unconcentrated range (HHIs over 1,000 are considered moderately
concentrated).

Table 10.	Secondary Aluminum Manufacturing (NAICS 331314) Concentration
Ratios

	Companies	Total Value

of Shipments	Percent of Total Value of Shipments (5)
Herfindahl-Hirschman Index

All companies	108	7,823,492	100.0	930.8

4 largest companies	—	4,287,274	54.8

	8 largest companies	—	5,132,211	65.6

	20 largest companies 	—	6,470,028	82.7

	50 largest companies	—	7,502,729	95.9

	Source: U.S. Census Bureau; generated by RTI International; using
American FactFinder; “Sector 31: Manufacturing: Subject Series:
Concentration Ratios: Share of Value of Shipments Accounted for by the
4, 8, 20 and 50 Largest Companies for Industries: 2007.”
<http://factfinder.census.gov>: (December 20, 2011  XE "U.S. Census
Bureau\; generated by RTI International\; using American FactFinder\;
\“Sector 31\: Manufacturing\: Subject Series\: Concentration Ratios\:
Share of Value of Shipments Accounted for by the 4, 8, 20 and 50 Largest
Companies for Industries\: 2007.\” <http\://factfinder.census.gov>\:
(December 20, 2011"  ).

2.3.5	Production and Capacity Utilization

Capacity utilization of secondary aluminum manufacturing increased from
2004 until 2007 before starting a steep decline which left the industry
well below the 2004 level by 2010 (Table 11).

Table 11.	Capacity Utilization for Aluminum Manufacturing (NAICS 3313)

	2005	2006	2007	2008	2009	2010

Capacity Utilization	86.7%	83.7%	78.8%	74.1%	59.3%	63.8%

Source: Charles Gilbert, Senior Economist, Federal Reserve Board.
Capacity Utilization data for NAICS 3313. Personal Communication with
Christopher Sichko, RTI International, January 5, 2012.

2.3.6	Profitability

While Total and Business receipts increased slightly from 2006 to 2008,
Net Income, and Profit Margins decreased slightly from 2006 to 2007 then
collapsed in 2008. It should be noted that these statistics are for the
Metal Manufacturing Industry not the secondary aluminum industry
specifically because more disaggregated data is not available
(Table 12).

Table 12.	Corporate Income and Profitability for Secondary Aluminum
Manufacturing (NAICS 331) ($2009)

	2006	2007	2008

Total receipts	298,104,481	305,773,370	312,467,335

Business receipts	286,730,514	292,550,057	302,877,203

Net income 	22,503,070	21,519,223	13,694,559

Before-tax profit margin	7.8%	7.4%	4.5%

After-tax profit margin 	5.6%	5.1%	2.9%

Source: Internal Revenue Service, U.S. Department of Treasury, 2008 (1),
2007 (1), 2006 (1) “Corporation Source Book of Statistics of Income:
Primary Metal Manufacturing” <http://www.irs.gov/taxstats/article/
0,,id=168246,00.html>; (December 14, 2011  XE "Internal Revenue Service,
U.S. Department of Treasury, 2008 (1), 2007 (1), 2006 (1)
\“Corporation Source Book of Statistics of Income\: Primary Metal
Manufacturing\” <http\://www.irs.gov/taxstats/article/
0,,id=168246,00.html>\; (December 14, 2011"  )

2.3.7	International Trade

The U.S. consistently (from 2005–2010) was a net importer of aluminum.
Imports for consumption fell fairly constantly each year for an overall
decrease of 23 percent. Exports increased by 38 percent from 2005 to
2008 before decreasing by 17 percent from 2008 to 2009, then increasing
again in 2010 (Table 13). While imports were more than double the
volume of exports in 2005, imports exceeded exports by a smaller
fraction, about one-third, in 2010.  Note that the international trade
data is for all aluminum production, not just secondary.

Table 13.	U.S. Imports and Exports of Aluminum (Metric Tons)

	2005	2006	2007	2008	2009	2010

Imports for consumption	5,330,000	5,180,000	4,490,000	4,200,000
4,110,000	4,120,000

Exports	2,370,000	2,820,000	2,840,000	3,280,000	2,710,000	3,040,000

Source: Bray, Lee. 2011  XE "Bray, Lee. 2011"  . “Minerals Yearbook:
Aluminum” USGS. 2006 Tables 8 and 11; 2008 Tables 9 and 11; 2010
Tables 10 and 12.
<http://minerals.usgs.gov/minerals/pubs/commodity/aluminum>

2.4	2011 and Future Trends

Fueled by low-cost power contracts and recovering aluminum prices,
productive capacity shut down in 2008 and 2009 was scheduled to restart
in late 2010 and early 2011. Still, this is a small step and capacity
use likely remained low through 2011. “World demand for aluminum in
2011 was expected to remain at levels lower than in 2008 owing to
depressed levels in automobile manufacturing and home construction”
(Bray, 2011, 5.7).

Low demand for aluminum in U.S. domestic industries and other developed
economies is likely to persist for several more years, as these
economies have not recovered from the 2008 downturn. However, the demand
for aluminum in emerging economies is likely to increase more rapidly in
the near future (Bray, 2011, 5.7). Table 13 shows that in 2010 aluminum
exports were heading back towards their 2008 level, and this trend seems
likely to continue.

 Impact Results

Section 2 provides information on the entire Secondary Aluminum
industry.  In this section, we provide the economic and small business
impacts associated with the proposed rule.  This analysis is focused on
those businesses directly impacted bythat will incur costs associated
with this proposal.

Based on information in the cost memo, there are 2928 parent companies
impacted bythat are expected to incur costs associated with this
proposed rule.  TenNine of these companies have fewer than 750
employees, and thus are small businesses according to the Small Business
Administration (SBA) size standards for the predominant NAICS code for
companies affected bysubject to this rule (331314).

The total annualized costs (TAC) of the rule for each parent owner
company, which includes the annualized control, monitoring and
recordkeeping costs as taken from the cost memo prepared for US EPA, are
in Table 2.14.  A negative TAC denotes an estimated cost savings to the
firm associated with the proposed rule.  Small businesses are identified
in the table.  The nationwide total annualized costs of this rule are
$0.6 million.  All costs are in 20102011 dollars, and are based on the
estimates presented in the cost memo for the proposed rule.

Table 14.  TAC for each Parent Owner

Parent Company	TAC per Owner	Small Business? (N= No, Y=Yes)	Number of
Employees in 20102011

Alcoa	$354,000377600	N	59,000

Aleris 	36,80039000	N	6,500

Aluminum Recovery Technologies	-12,00012000	Y	20

Aluminum Shapes, LLC	22,20033600	N

1,100

Reynolds Group Holdings Ltd.

 (owner of Reynolds Foil)	55,00056800	N

25,500

Metal Exchange Corporation (owner of Continental Aluminum and Electro
Cycle)	-24,00024000	Y

201 to 500

Hydro (owner of Hydro Aluminum Wells North America)	22,60022600	N

23,000

J.L. French Corp. 	-12,00012000	N	2,000

Jupiter Aluminum	-35,60036000	Y	200

JW Aluminum	-46,60048000	N	772

Kaiser Aluminum 	-12,00012000	N

2,470

Logan Aluminum	22,20022000	N	1,000

Metalico (owner of Metalico Aluminum Recovery)	-12,00012000	N

800

Toyota Tsusho (owner of Most, Inc.) 	-12,00012000	N

31,081

Quanex (owner of Nichols Aluminum)	-35,60036000	N

2,340

Noranda	79,60079600	N	2,400

Novelis 	20,40019000	N	11,000

Owl's Head Alloys	-12,00012000	Y	50-100

Recycling Services of Ind. (or Newco Metal Processing)	400	Y

50

Rio Tinto (owner of Alcan)	111,600110000	N

77,000

Ritchey Metals	-12,00012000	Y	80

Orkla ASA (owner of Sapa Extrusion) 	55,00056000	N

30,000

Scepter	-48,00048000	Y	250

Smelter Service 	-24,00024000	Y	10

Southwire	21,60022400	N	4,180

Superior Aluminum Alloys	-12,00012000	Y

5-9

Tennessee Aluminum Processors	-24,00024000	Y

180

Tredegar (owner of William L. Bonnell)	33,00033000	N

2,000

Wise Metals Group	20,00020000	N	1,000

           aA negative sign denotes a cost savings to the affectedparent
owner.

	Of the tennine small businesses affected byexpected to incur costs
associated with this rule, nineall of them are expected to experience
negative costs (or cost savings), based on estimates from the cost memo.
 We do not provide impact estimates for these businesses, and the large
businesses with cost savings, since these estimates are positive.  These
cost savings are a result of the change in proposal to allow facilities
to switch furnace designations from Group 1 to Group 2.  In the cost
memo, EPA presumed that one-fourth of the 200 affected furnaces would
switch.  For each of the 50 furnaces that switch, the cost savings is
estimated at $12,000 annually.  This cost savings is a result of
shutting off a furnace that is controlled and the following effects:

Fan power is approximately 50 kW

Control device shut off 4000 hours per year

Electricity cost of 10 cents/kWh.

More information is available in the cost memo for the proposed rule.

This analysis identified the businesses that will be affected by this
rule and provides an analysis at a screening level to assist in
determining whether this rule is likely to impose a significant economic
impact on affected businesses.  The analysis employed here is a “sales
test” that computes the annualized compliance costs as a share of
sales for each company. The annualized cost per sales for a company
represents the maximum price increase in affected product needed for the
company to completely recover the annualized costs imposed by the
regulation.

The “sales test” is the impact methodology EPA employs in economic
impact analysis such as this one as opposed to a “profits test”, in
which annualized compliance costs are calculated as a share of profits.
This is because revenues or sales data is commonly available data for
entities normally impacted by EPA regulations and profits data normally
made available is often not the true profits earned by firms due to
accounting and tax considerations.  Firms and entities often have ways
legally available in the tax code to minimize their reported profits;
thus, using reported profits may lead to a less than accurate estimate
of the economic impact of a regulation to an affected firm or entity and
their consumers.   While screening level analyses are often employed to
estimate impacts to small business or entities as part an analysis in
compliance with the Regulatory Flexibility Act (RFA) as amended by the
Small Business Regulatory Enforcement Fairness Act (SBREFA), a screening
level analysis can also be employed in an economic impact analysis such
as this one whose focus is on the regulated companies.

Economic impact estimates are shown in Table 315 below.  The table lists
the ultimate parent companies impacted by the rule that have positive or
negative costs, the costs of the rule for each company basis, the annual
revenues for these companies, and then the impact to the company on a
cost to sales basis.  Revenues are for the ultimate parent owners, and
are for 20102011 to be consistent with the year for the cost estimates.
Applying such a calculation yields the following results as shown below.
 Impacts are only shown for those companies estimated to experience a
positive cost as a result of the proposed rule.

Table 15.  Economic Impacts to Affected Parent Companies

Parent Company	TAC per Owner (20102011 dollars)	Total Annual Revenues
for Parent Owners in 2010	Small Business? (N= No, Y=Yes)	Impact
Estimates (Annualized Compliance Cost/Revenues in % Terms)	Reference for
Economic Dataa

Alcoa	$372,800377600

$21,013,000,000	N

0.0018	 HYPERLINK
"http://www.sec.gov/Archives/edgar/data/4281/000119312511039230/d10k.htm
"
http://www.sec.gov/Archives/edgar/data/4281/000119312511039230/d10k.htm

 HYPERLINK
"http://www.elkem.com/eway/default.aspx?pid=242&trg=MainLeft_6886&Main_7
127=6886:0:4,4130:1:0:0:::0:0&MainLeft_6886=6271:33029::1:7126:1:::0:0"
http://www.elkem.com/eway/default.aspx?pid=242&trg=MainLeft_6886&Main_71
27=6886:0:4,4130:1:0:0:::0:0&MainLeft_6886=6271:33029::1:7126:1:::0:0

Aleris 	36,80039000

3,000,000,000	N

0.0013	Reference USA

 HYPERLINK "http://www.aleris.com/about-aleris"
http://www.aleris.com/about-aleris  and  HYPERLINK
"http://www.forbes.com/lists/2010/21/private-companies-10_Aleris-Interna
tional_IDN6.html"
http://www.forbes.com/lists/2010/21/private-companies-10_Aleris-Internat
ional_IDN6.html

Aluminum Recovery Technologies	-12,00012000

10,460,000	Y

<0b

Reference USA

Aluminum Shapes, LLC	22,20033600

175,000,000	N

0.013019

Reference USA

Reynolds Group Holdings Ltd. (owner of Reynolds Foil)	55,000

56800

9,972,000,000	N

0.0005500057

 HYPERLINK
"http://www.reynoldsgroupholdings.com/Financials/2011/28Mar2011-RGHL-201
0-Results-Presentation.pdf"
http://www.reynoldsgroupholdings.com/Financials/2011/28Mar2011-RGHL-2010
-Results-Presentation.pdf  , p. 4.

Metal Exchange Corp. 	-24,00024000

99,400,000	Y

<0

 HYPERLINK
"http://www.metalexchangecorp.com/cf/metal/SNA.asp?asm=sna&tmp=C011&x=71
4&sid=714&t=About%20Us"
http://www.metalexchangecorp.com/cf/metal/SNA.asp?asm=sna&tmp=C011&x=714
&sid=714&t=About%20Us  and  HYPERLINK
"http://www.insideview.com/directory/metal-exchange-corporation"
http://www.insideview.com/directory/metal-exchange-corporation

Hydro 	22,60022600

17,977,000,000	N

0.000126	 HYPERLINK
"http://www.hydro.com/en/Investor-relations/Reporting/2010/Key-figures/"
http://www.hydro.com/en/Investor-relations/Reporting/2010/Key-figures/

J.L. French Corp. 	-12,00012000

550,447,000	N

<0

Reference USA

Jupiter Aluminum	-35,60036000

50,000,000	Y

<0

Reference USA

JW Aluminum	-46,60048000

250,000,000 -500,000,000	N

<0	 HYPERLINK
"http://www.zoominfo.com/company/JW+Aluminum+Company-33687486"
http://www.zoominfo.com/company/JW+Aluminum+Company-33687486

Kaiser Aluminum 	-12,00012000

1,079,100,000	N

<0

Reference USA

Logan	22,20022000	1,140,000,000	N	0.0019002	Reference USA

Metalico 	-12,00012000	291,733,000	N	<0	Reference USA

Toyota Tsusho (owner of Most, Inc.)	-12,00012000

54,839,454,000	N

<0

 HYPERLINK
"http://www.toyota-tsusho.com/english/ir/report/annual/uploadfiles/secti
on03_E.pdf"
http://www.toyota-tsusho.com/english/ir/report/annual/uploadfiles/sectio
n03_E.pdf

Quanex	-35,60036000	798,314,000	N	<0	Reference USA

Noranda	79,60079600	1,226,400,000	N	0.0065	Reference USA

Hindalco (owner of Novelis) 	20,400

19000

12,800,000,000	N

0.0001600015

 HYPERLINK
"http://www.hindalco.com/investors/downloads/Hindalco_Annual_Report_2009
-10.pdf"
http://www.hindalco.com/investors/downloads/Hindalco_Annual_Report_2009-
10.pdf

Owl's Head Alloys	-12,00012000

22,550,000	Y

<0

Reference USA

Recycling Services of Ind. (or Newco Metal Processing)

400

26,150,000

Y

0.0015

Reference USA

Rio Tinto (owner of Alcan)	111,600110000

14,324,000,000	N

0.0007800076	 HYPERLINK
"http://www.riotintoalcan.com/ENG/media/media_releases_1717.asp"
http://www.riotintoalcan.com/ENG/media/media_releases_1717.asp

Ritchey Metals	-12,00012000

80,080,000	Y

<0

Reference USA

Orkla ASA  	55,00056000

9,822,000,000	N

0.00056	 HYPERLINK
"http://markets.ft.com/research/Markets/Tearsheets/Financials?s=ORK:OSL&
subview=IncomeStatement&period=a"
http://markets.ft.com/research/Markets/Tearsheets/Financials?s=ORK:OSL&s
ubview=IncomeStatement&period=a

Scepter	-48,00048000	54,700,000	Y	<0	Reference USA

Smelter Service 	-24,00024000

28,100,000	Y

<0

Reference USA

Southwire	21,60022400	1,340,000,000	N	0.00160018	Reference USA

Superior Aluminum Alloys	-12,00012000

7,980,000	Y

<0

Reference USA

Tennessee Aluminum Processors	-24,00024000

81,180,000	Y

<0

Reference USA

Tredegar (owner of William L. Bonnell)	33,00033000

740,000,000	N

0.004

 HYPERLINK "http://www.tredegar.com" http://www.tredegar.com

Wise Metals Group	20,00020000

618,000,000	N

0.0032

 HYPERLINK
"http://www.usatoday.com/printedition/news/20110125/states25_st.art.htm"
http://www.usatoday.com/printedition/news/20110125/states25_st.art.htm

aEconomic data includes revenues and employee size for each affected
firm in 2010.2011.

b<0 = impact of less than zero, since the costs for the firm will be
less than zero (cost savings).

FromAs shown in this table, no affected firm will experience an
annualized compliance cost of greater than 0.02 percent of its sales,
according to this analysis, as a result of this proposed rule.

It should also be noted that this analysis does not presume any
incidence of the costs on the consumers of secondary aluminum and other
products made by these companies.  Thus, no estimate of the impact of
this rule on secondary aluminum consumers, for intermediate or end-use,
is included in this report.  However, it should be noted that available
estimates show that the price elasticity of demand for secondary
aluminum is -1.0, and the price elasticity of supply for secondary
aluminum is 0.6.  Based on this information, one can conclude that
demand will respond 1:1 with a change in secondary lead price, and that
supply is inelastic (i.e., will respond less than 1:1) with a change in
secondary lead price.  Thus, the direct impact of this rule appears
quite minor, and thus it is reasonable to infer that the impact on
secondary aluminum consumers from this rule should also be minor.  The
TAC is taken from the cost memorandum mentioned earlier that was
prepared by U.S. EPA for the proposed rule and in that memorandum can be
found more information on the cost analysis.

 Primary aluminum is produced from alumina/bauxite (EPA 1999, 7)

  U.S. Small Business Administration, Table of Size Standards.  November
5, 2010.  Found on the Internet at  HYPERLINK
"http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_t
ablepdf.pdf"
http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_ta
blepdf.pdf .

 U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards.  “Cost Estimate for January 2012 Proposed Rule Changes
to Secondary Aluminum NESHAP.”  Prepared by RTI, Inc. for Rochelle
Boyd, U.S. Environmental Protection Agency, Office of Air Quality
Planning and Standards.  December 14, 2011.January 25, 2012.

 More information on sales and profit tests as used in analyses done by
U.S. EPA can be found at  HYPERLINK
"http://www.epa.gov/sbrefa/documents/rfaguidance11-00-06.pdf"
http://www.epa.gov/sbrefa/documents/rfaguidance11-00-06.pdf , pp. 32-33.

 Ho, M. S, R. Morgenstern, and J. S. Shih. 2008. “Impact of Carbon
Price Policies on US Industry.” RFF Discussion Paper 08-37).
Http://Www.Rff.Org/Publications/Pages/Publicationdetails.Aspx?.
Publicationid=20680. Accessed August 2009. Table 8.A.6.

 Broda, C., N. Limao, and D. Weinstein. 2008a. “Export Supply
Elasticities.”  HYPERLINK
"http://faculty.chicagobooth.edu/christian.broda/website/research/unrest
ricted/TradeElasticities/TradeElasticities.html"
http://faculty.chicagobooth.edu/christian.broda/website/research/unrestr
icted/TradeElasticities/TradeElasticities.html . Accessed September
2009.

  PAGE   \* MERGEFORMAT  1


[Federal Register Volume 86, Number 62 (Friday, April 2, 2021)]
[Notices]
[Pages 17381-17382]
[FR Doc No: 2021-06864]

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

ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2009-0022; FRL--10022-23-OAR]

Proposed Information Collection Request; Comment Request; Acid
Rain Program (Renewal)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: The Environmental Protection Agency (EPA) is planning to
submit an information collection request (ICR), ``Acid Rain Program
(Renewal)'' (EPA ICR No. 1633.18, OMB Control No. 2060-0258) to the
Office of Management and Budget (OMB) for review and approval in
accordance with the Paperwork Reduction Act. Before doing so, EPA is
soliciting public comments on specific aspects of the proposed
information collection as described below. This is a proposed extension
of the ICR, which is currently approved through December 31, 2021. An
Agency may not conduct or sponsor and a person is not required to
respond to a collection of information unless it displays a currently
valid OMB control number.

DATES: Comments must be submitted on or before June 1, 2021.

ADDRESSES: Submit your comments, referencing Docket ID No. EPA-HQ-OAR-
2009-0022, online using www.regulations.gov (our preferred method), by
email to<EMAIL_ADDRESS>or by mail to: EPA Docket

Center, Environmental Protection Agency, Mail Code 28221T, 1200
Pennsylvania Ave. NW, Washington, DC 20460.
    EPA's policy is that all comments received will be included in the
public docket without change including any personal information
provided, unless the comment includes profanity, threats, information
claimed to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute.

FOR FURTHER INFORMATION CONTACT: Karen VanSickle, Clean Air Markets
Division, Office of Air and Radiation, (6204M), Environmental
Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Supporting documents which explain in detail
the information that the EPA will be collecting are available in the
public docket for this ICR. The docket can be viewed online at
www.regulations.gov or in person at the EPA Docket Center, WJC West,
Room 3334, 1301 Constitution Ave. NW, Washington, DC. The telephone
number for the Docket Center is<PHONE_NUMBER>. For additional
information about EPA's public docket, visit http://www.epa.gov/dockets.
    Pursuant to section 3506(c)(2)(A) of the PRA, EPA is soliciting
comments and information to enable it to: (i) Evaluate whether the
proposed collection of information is necessary for the proper
performance of the functions of the Agency, including whether the
information will have practical utility; (ii) evaluate the accuracy of
the Agency's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (iii) enhance the quality, utility, and clarity of the
information to be collected; and (iv) minimize the burden of the
collection of information on those who are to respond, including
through the use of appropriate automated electronic, mechanical, or
other technological collection techniques or other forms of information
technology, e.g., permitting electronic submission of responses. EPA
will consider the comments received and amend the ICR as appropriate.
The final ICR package will then be submitted to OMB for review and
approval. At that time, EPA will issue another Federal Register notice
to announce the submission of the ICR to OMB and the opportunity to
submit additional comments to OMB.
    Abstract: The Acid Rain Program was established under Title IV of
the 1990 Clean Air Act Amendments to address acid deposition by
reducing emissions of sulfur dioxide (SO2) and nitrogen
oxides (NOX). This information collection extension is
necessary to continue implementation of the Acid Rain Program. It
includes burden and costs associated with developing and modifying
permits, complying with NOX permitting requirements,
monitoring emissions, transferring allowances, participating in the
annual allowance auctions, and participating in the program as an opt-
in source.
    Form Numbers: Agent Notice of Delegation #5900-172, Certificate of
Representation #7610-1, General Account Form #7610-5, Allowance
Transfer Form #7610-6, Retired Unit Exemption #7610-20, Allowance
Deduction #7620-4, Acid Rain Permit Application #7610-16, Acid Rain
NOX Compliance Plan #7610-28, Acid Rain NOX
Averaging Plan #7610-29, New Unit Exemption #7610-19, Opt-In Permit
Application #7610-26, Opt-In Utilization Report #7620-9. Respondents/
affected entities: Electricity generating plants, industrial sources,
and other persons.
    Respondents' obligation to respond: Voluntary and mandatory (Clean
Air Act sections 403, 407, 408, 410, 412, and 416).
    Estimated number of respondents: 1,219 (total); includes 1,169
sources and 50 non-source entities participating in allowance trading
activities.
    Frequency of response: On occasion, quarterly, and annually.
    Total estimated burden: 1,826,133 hours (per year). Burden is
defined at 5 CFR 1320.03(b).
    Total estimated cost: $276,811,849 (per year); includes
$129,450,755 annualized capital or operation & maintenance costs.
    Changes in Estimates: There is a decrease of 47,747 hours in the
total estimated respondent burden compared with the ICR currently
approved by OMB. The decrease is principally due to source retirements,
which have both reduced the estimated overall number of affected
sources and shifted the estimated mix of monitoring methodologies used.
The other factors contributing to the decrease in burden are reductions
in the estimated numbers of allowance transfer and deduction
submissions, expected opt-in sources, and allowance auction bids.

Reid P. Harvey,
Director, Clean Air Markets Division, Office of Atmospheric Programs,
Office of Air and Radiation.
[FR Doc. 2021-06864 Filed 4-1-21; 8:45 am]
BILLING CODE 6560-50-P