August 22, 2000  DRAFT Page 1 1 1. Introduction and Summary EPA's Office of Solid Waste is proposing a rule affecting solvent contaminated wipes, rags, and shop towels, collectively defined as industrial wipers ( new proposed Subpart E at 40 CFR 261.50 et. seq.). The regulation would codify current state policies regarding reusable shop towels and would provide generators who properly manage disposables ( wipes and rags) with an exemption from RCRA Subtitle C provided that they manage rags and wipes in accordance with certain criteria. This report analyzes the economic impact that this regulatory change would have on all entities involved. The investigation focuses on businesses that use wipes, rags, and towels with solvents that are hazardous wastes when spent, and the industrial laundries that wash solvent contaminated shop towels.

The report is divided into two main sections, the first addresses disposable wipes and rags, and the second addresses reusable towels. In both sections the approach is similar: first we describe the current regulatory environment and current practices at facilities handling the wipers ( i. e., the baseline); second, we estimate the number of wipers used and the number of generators; third, we assess the regulatory status of these generators ( large quantity, small quantity, or conditionally exempt); fourth we examine the regulatory options; and finally we estimate the economic impacts of each option relative to the baseline.

The report continues with a summary chapter combining the costs and savings estimates for disposables and reusables to measure the aggregate impact of the proposal. The proposal would result in net savings of between $ 9 million and $ 61 million per year. Generators of both disposables and reusable wipers incur modest incremental compliance costs, but disposal savings for generators of disposable wipes and rags more than offset these incremental costs. Even if we focus on those generators facing the highest costs, no generator facility would bear an incremental cost greater than $ 100 per year. Therefore the proposal would not impose a significant economic impact on any generators, small business or otherwise.

The proposal also provides industrial laundries with significant relief from existing federal RCRA regulations. This relief enables the laundries to continue to benefit from the savings they currently enjoy as a result of state policies that exempt them from full RCRA regulation. August 22, 2000  DRAFT Page 2 1 2. Disposable Wipes and Rags 2.1 Current Regulations and Practices Our analysis of economic impacts resulting from the proposed rule began with a review of the existing regulatory situation for disposable wipers. However, the absence of a clear federal regulatory program governing the management of solvent contaminated wipers made it difficult to identify an obvious baseline from which we should measure the potential impacts of regulatory changes.

Regulatory jurisdiction over solvent contaminated wipes and rags depends on the solvents used. Wipes and rags contaminated with solvents that when spent are listed hazardous wastes ( i. e., hazardous waste codes F001 F005) are also considered to be listed hazardous wastes and must be managed in accordance with all applicable hazardous waste management requirements ( e. g., storage standards, recordkeeping, a hazardous waste manifest for shipments). Wipes and rags contaminated with spent solvents, where the solvents are hazardous wastes because they exhibit one or more of the characteristics of hazardous waste, are hazardous wastes if the resultant mixture ( the solvent contaminated wipe or rag) exhibits one or more of the characteristics of hazardous waste ( e. g., is ignitable). Again, characteristically hazardous wipers must be managed in accordance with all applicable RCRA hazardous waste management standards. An entity that stores, treats, recycles, and/ or disposes of solvent contaminated wipers is subject to the RCRA permitting requirements of 40 CFR Part 270, absent any state regulatory provision providing a regulatory exemption for these activities.

A review of state and federal RCRA compliance requirements for regulated entities ( i. e., small quantity generators or SQGs and large quantity generators or LQGs) helped establish the baseline from which we measured the incremental costs and savings associated with the proposal. Regulated generators who generate and dispose of hazardous waste wipes and rags must:

Store hazardous waste ( including wipes and rags) in containers that comply with RCRA Subtitle C storage requirements ( 40 CFR 265, Subpart I)

Complete a hazardous waste manifest for off site shipments of hazardous waste

Use licensed hazardous waste transporters to pick up hazardous waste shipments and ensure that the waste is managed at a permitted treatment, storage, and disposal facility ( TSD).

No provisions of the proposed rule affecting disposable wipes and rags are more stringent than those required under RCRA Subtitle C. While some individual management requirements described below may impose costs on generators, the total costs are less than are incurred in the current regulatory regime. Therefore, the proposal would result in net savings to generators. 1 To protect the CBI, we have omitted discussion of certain intermediate steps in the calculations.

August 22, 2000  DRAFT Page 2 2 Before estimating these savings, however, Section 2.2 describes the universe of generators affected by the proposed rule.

2.2 Characterizing the Universe of Disposable Wipes and Rags Our general approach was to use aggregate, national information about the sales and uses of disposable wipes and rags and combine it with usage information provided by individual industries and from site visits. The resulting characterization of the regulated universe is less precise than if we had developed data on each generator industry from surveys or other studies, but collecting this detailed information would have been much more burdensome and resource intensive.

The analysis depends on several pieces of information about disposable wipes and rags. The first is the number of wipes and rags used each year in conjunction with solvents. Other parameters are also important such as the weight of the wipes and rags, the amount of solvent on the wipe or rag as it is disposed, the regulatory status of the spent solvents ( hazardous or not), and how the wipes and rags are stored and transported. This information was compiled from a number of different sources, ranging from confidential industry data to our own professional judgement.

2.2.1 Approach EPA requested information on the use of disposable wipes from the Association of the Nonwoven Fabric Industry ( INDA). INDA compiled a confidential survey and distributed it to its members. The results were provided to EPA as confidential business information ( CBI) and will not be disclosed. We were able, however, to use these estimates as a starting point for our analysis and still protect the confidentiality of the data. 1 The INDA data provided estimates of the number of disposable wipes sold by INDA members to industries where solvent use is prevalent. This assessment was made by INDA and the data were reported separately for the printing, automotive, and general manufacturing sectors. According to INDA, its members account for approximately 95 percent of the market for these nonwoven disposable wipes, so we scaled the survey results accordingly.

The second adjustment we made to the INDA data was to include single use cloth rags in the total. These rags are manufactured from discarded and recycled textiles. Based on data provided by the Secondary Materials and Recycled Textiles Association ( SMART), we increased the estimate of total disposables to include the share of the market attributed to cloth rags. 2 Ralph Solarski, Kimberly Clark Corporation, letter to Jim O'Leary, EPA, December 15, 1997.

August 22, 2000  DRAFT Page 2 3 Our estimate of disposable wipes and rags potentially used with solvents is still too large for our purposes because it assumes that all wipe and rag uses in these industries are associated with solvents and that members of the " solvent using industries" use RCRA regulated solvents. Our third and fourth tasks, therefore, adjusted the total for these factors.

The third step was to determine the fraction of wiper uses associated with solvents, as opposed to other materials. Kimberly Clark Corporation, a major manufacturer of wipes, provided EPA with estimates of the percentage of uses associated with solvents in the printing industry and in all other sectors. 2 We applied these percentages to the data and derived an estimate of the number of disposable wipes and rags used each year in conjunction with solvents.

Finally, we investigated the types of solvents used by generators of disposable wipes and rags. Some common solvents, such as mineral spirits with high flash points, are not RCRA regulated because they are not listed as hazardous wastes and do not exhibit a hazardous waste characteristic. In addition, some wipes and rags contaminated with solvents that are hazardous because they exhibit one or more characteristics of hazardous waste may no longer exhibit those characteristics after use. Also, it is possible that wipes and rags contaminated with characteristic solvents are not tested after use but are presumed by the generator to be nonhazardous. All of these scenarios reduce the number of solvent contaminated wipes and rags that are ultimately managed as hazardous waste.

Unfortunately, data on the types of solvents used in these industries are scarce and highly variable. For this analysis, we applied information obtained by EPA about the use of solvents in the printing industry which identified 10 percent of solvents used in the industry as nonhazardous, 80 percent as characteristic hazardous when spent, and 10 percent as listed hazardous wastes. We applied our judgement to assess the ultimate regulatory status of the large portion of spent rags and wipes that are contaminated with solvents that are characteristic waste and assumed that half of the wipes and rags used in conjunction with characteristic solvents ultimately would not be managed as hazardous waste, either because the solvent contaminated wipes and rags no longer exhibit a characteristic, or because the generator does not test the mixture after use and assumes the materials are nonhazardous.

Our final adjustment to the data, therefore, was that 50 percent of disposable wipes and rags used in conjunction with solvents ( 10 percent which are listed hazardous wastes plus half of the 80 percent that exhibit a hazardous waste characteristic) are ultimately managed as hazardous waste, if they are generated in sufficient quantity or by an entity that otherwise is a regulated generator of hazardous waste. ( We address the regulatory status of the facilities in Section 2.3 below.)

We should also note that many individuals we spoke with about this issue told us that generators, especially larger ones, avoid using disposable wipes and rags with hazardous waste. Knowing that hazardous waste disposal adds significantly to the effective cost of using disposables, many August 22, 2000  DRAFT Page 2 4 firms opt for reusable towels instead for applications involving solvents that are hazardous wastes when spent. It may be that the overall use of disposables with solvents that are hazardous wastes are less than we have estimated.

2.2.2 Results We estimate that 166 million disposable wipes and rags are used in conjunction with RCRAregulated solvents each year. Related findings from this research are:

Solvent contaminated wipes and rags are typically stored and transported in 55 gallon containers.

Using the weight and dimensions of commonly used wipes and rags, we estimate that 3,700 wipes and rags will fill a 55 gallon container.

The weight of disposables and solvents in a filled container is approximately 200 pounds. The weight of the waste in the container is roughly evenly split between the wipes and rags and the solvent.

2.3 Characterizing the Generator Universe Wipes and rags used at facilities that are exempt from RCRA regulation ( conditionally exempt SQGs or CESQGs) would be unaffected by the proposal. Further, the potential savings for SQGs and LQGs associated with the proposed regulatory changes would differ because of different baseline regulatory requirements and different quantities of wipes and rags used. The purpose of this step of the analysis was to estimate the fraction of disposables used by each category of generators ( i. e., CESQGs, SQGs, LQGs). We also estimated typical quantities of wipes and rags used by each type of generator.

The information compiled by INDA and described earlier provides a general indication of the level of disposables used with solvents for several broad industry groups. It does not provide any indication of the RCRA regulatory status of facilities within those industries. We examined various sources such as the biennial reporting system, RCRIS, and generator surveys and were unable to find any existing information that would directly answer this question. Instead, we relied on indirect analysis using data compiled from the generator industries and from EPA databases. 3 " Demographics of Solvent Contaminated Wipes/ Shop Towel Users," prepared by Jim O'Leary, EPA/ OSW, June 20, 1999.

4 " Revised Facility Estimates for Towel/ Wipe Analysis," prepared for Mary Wolfe, SAIC and Jim O'Leary, EPA by Kevin Dietly, Northbridge Environmental, April 11, 2000.

August 22, 2000  DRAFT Page 2 5 2.3.1 Facilities Using Disposables With Solvents EPA has collected facility data from site visits and meetings with stakeholders over several years. By supplementing these data with information from the Office of Enforcement and from RCRIS, EPA was able to identify the industries where these wipes are used and describe general characteristics of wiper usage. 3 Northbridge integrated EPA's analysis into the data already compiled on the universe of disposables to develop the information summarized below. 4 Based on the industries where cloths and wipes are used, EPA used Census data to estimate the number of facilities in each industry group ( by SIC code). Within each group, the number of LQGs was derived from the 1995 Biennial Reporting System. The remaining establishments were apportioned between SQG and CESQG status based on employment: those with fewer than 20 employees were assumed to be CESQGs and the remainder were SQGs.

EPA then characterized the prevalence of disposables and reusables by industry group. From these assessments we were able to calculate the number of facilities by industry group and in total that use disposables in conjunction with RCRA regulated solvents. Exhibit 2 1 shows that 81,003 facilities are assumed to use these solvents with disposable wipes or rags. Only 1,337 or 1.7 percent of these generators are LQGs, 12,090 ( 14.9 percent) are SQGs, and the remaining 67,576 are assumed to be CESQGs. Therefore, this proposed rule will have no impact on 83 percent of the facilities where disposables are used in conjunction with RCRA regulated solvents.

2.3.2 Usage per Facility INDA's survey provided us with estimates of typical wiper usage per facility. We supplemented this with anecdotal information compiled by EPA from its site visits and meetings with stakeholders. We also considered the regulatory status of the facilities and the allowable accumulation times for SQGs and LQGs to store these wipes onsite.

SQGs are allowed a 180 day accumulation limit for hazardous waste. We assumed they would ship containers of hazardous wipes and rags off site twice each year and would send one container with each shipment. The wiper use associated with this schedule is 7,400 wipes and rags per year, or about 142 per week. This level of use is consistent with INDA data for generators at the lower end of the usage range. August 22, 2000  DRAFT Page 2 6

LQGs are allowed a 90 day accumulation limit ( before having to obtain a RCRA permit for the storage activities). We assumed shipments of used wipes and rags four times per year and two containers per shipment. This implies wiper usage of 29,600 per year or 569 per week. This level of use is consistent with INDA averages for industries at the upper end of the usage range.

From our estimates of the number of LQGs and the usage per LQG, we computed the total disposables generated by LQGs at nearly 40 million or about one quarter of all disposables used in conjunction with RCRA regulated solvents ( Exhibit 2 1). Similarly, the disposables generated by SQGs total about 90 million per year, leaving 36 million for the CESQGs. Therefore, 78 percent of all disposables used in conjunction with RCRA regulated solvents would be affected by this proposed rule. In short, our analysis suggests that 17 percent of facilities generate 78 percent of the solvent contaminated disposable rags and wipes.

Exhibit 2 1 Disposable Wiper Generation and Regulated Facility Assumptions LQGs SQGs CESQGs Totals Generators of Hazardous Wipes and Rags (% of Total) 1,337 ( 1.7%) 12,090 ( 14.9%) 67,576 ( 83.4%) 81,003 ( 100%)

Solvent Contaminated Wipes and Rags Generated Annually (% of Total) 39.6 million ( 24%) 89.5 million ( 54%) 36.5 million ( 22%) 165.6 million ( 100%)

Weekly Generation per Facility 569 142 10 2.3.3 Potential Shifts in RCRA Regulatory Status A final issue related to the generator universe is whether some generators might be able to avoid Subtitle C regulation entirely if their wipes and rags were declared exempt from RCRA hazardous waste regulation. Given the relatively small quantity of wipes and rags relative to total hazardous waste generation, we assumed it would be very unlikely for a large quantity generator to become a small quantity generator based on deregulation of disposable wipes and rags. The switch is somewhat more plausible for small quantity generators becoming CESQGs as a result of the exemption, but we believe it would affect only a small fraction of SQGs. August 22, 2000  DRAFT Page 2 7 We analyzed this issue by comparing the typical quantity of solvent contaminated wipes and rags at SQGs to other wastes generated. Given our assumption of two waste containers of wipes and rags per year, the solvent and wiper waste generated by a typical SQG would equal roughly 400 pounds of hazardous waste per year or 33 pounds per month. SQGs can generate between 220 pounds ( 100 kg) and 2,200 pounds ( 1,000 kg) of hazardous waste per month and remain regulated as SQGs, so a reduction of 33 pounds would exempt from SQG status only those generators who generated between 220 pounds and 253 pounds. Intuitively, we expect that generators that close to the regulated limit would take measures to stay below the 220 pound threshold. Therefore, we believe relatively few generators would shift out of the SQG category as a result of a regulatory exemption for wipes and rags.

To estimate the percentage of the SQG universe that might become conditionally exempt from RCRA regulation under the proposed rule, we assumed that SQGs are distributed uniformly across the waste generation range of 220 pounds to 2,200 pounds per month. A reduction of 33 pounds for SQGs with disposable wipes and rags would shift less than 2 percent of the generators to CESQG status ( 33 pound reduction divided by the 1,980 pound range for all SQGs ( 2,200 pounds  220 pounds). We estimated that roughly 1.7 percent of SQGs might be able to avoid SQG status ( i. e., become CESQGs), which equals about 200 facilities.

2.4 Overview of the Proposed Rule EPA is proposing to amend its hazardous waste management regulations under RCRA to provide a conditional exemption from the definition of hazardous waste for certain industrial wipers. The Agency is proposing to provide an exemption for these materials on two basic conditions: ( 1) generators accumulate, store, and transport solvent contaminated shop towels, rags and wipes in covered containers; and ( 2) generators ensure that no liquid drips from the wipers when they are hand wrung and that any released solvent is contained. Wipers sent offsite must be labeled " Solvent Contaminated Wipers" and must be packaged either in containers that comply with existing DOT requirements ( 49 CFR 171 180) or that will contain the solvents. Wipers that meet these requirements may be disposed of in a non hazardous waste management facility except a landfill.

Recipients of these non landfilled wipers must store the wipers in a closed container until they are disposed of. If any liquid solvent arrives with the wipers, the recipient must return the shipment to the generator or recover and properly manage the liquid solvent.

In order to be disposed in a landfill, the wipers must be " dry," ( i. e., contain less than five grams of solvent on average). Dry wipers may result from removing excess solvent from the wipers using mechanical extraction equipment such as a wringer or centrifuge, or from low use rates of solvent on the wiper initially. In any event, these wipers may be disposed in a Subtitle D landfill including municipal landfills. Dry wipers are also exempt from any generator, transport, or handling conditions once they are dry. 5 Generators of solvent contaminated wipes and rags will retain the option of managing their disposables in full compliance with Subtitle C management requirements in lieu of in compliance with the proposed exemption.

August 22, 2000  DRAFT Page 2 8 The proposal contains two additional restrictions on disposal for wipers used with certain F listed solvents. Wipers used in conjunction with the following solvents may not be disposed of in a landfill, regardless of how they are managed: 2 nitropropane, nitrobenzene, methyl ethyl ketone ( MEK), methyl isobutyl ketone ( MIK), methylene chloride, pyridine, benzene, cresol ( o, m, p), carbon tetrachloride, chlorobenzene, 1,1,2 trichloroethane, tetrachloroethylene, and trichloroethylene. These wipers may be disposed of in a municipal waste combustor or other nonhazardous non landfill facility. Wipers used in conjunction with 2 nitropropane are not eligible for the exemption in any case; they remain as hazardous waste.

2.5 Unit Costs/ Savings for Generators EPA's proposed rule offers generators significant savings over the current regulations because many wipes and rags would be exempt from Subtitle C regulation. Savings result from avoided manifesting requirements and lower costs associated with non hazardous disposal alternatives. Some offsetting costs are incurred to comply with the conditions for the exemption, but because the costs are modest compared to the potential savings, we assumed generators would take advantage of the proposed exemption. 5 Incremental costs that may be incurred to comply with the conditions include labeling of containers and management of the solvent wrung out of wipes and rags. Even in cases where a generator uses a disposable wipe in conjunction with one of the F listed solvents, the generator would be no worse off than he is under the current regulatory regime.

It is important to note the prerequisites for the conditional exemption. First, wipes and rags must be dry enough that no liquid drips from them when hand wrung. Second, the wipes and rags must be stored and transported in covered containers. Note that because these generators must already comply with RCRA storage and transportation requirements, we assumed that meeting the latter condition would impose no new costs on generators ( i. e., the condition is less restrictive than current practice).

2.5.1 Components of the Proposal <IP_ADDRESS> No Liquid Drips from the Wipers Compliance with this standard is assumed to be through hand wringing of disposables at the point of use. Costs associated with hand wringing were assumed to be negligible because the time required would be very small ( only one or two seconds) and the closed receptacles for storing the wastes are already available at the facility. 6 Pricing information compiled by DPRA and provided in a personal communication with Patricia Overmeyer, SAIC March 20, 1998.

7 Backup for these and other cost estimates are found in the Appendix.

8 " Use and Management Practices of Solvent Contaminated Shop Towels and Wipes," Interim Report, December 27, 1997.

9 Based on the price for 6" X 6" pre printed, vinyl, adhesive labels, Lab Safety Supply, August 1998.

10 " Supporting Statement for Information Collection Request Number 801, ` Requirements for Generators, Transporters, and Waste Management Facilities Under the RCRA Hazardous Waste Management System,'" pp. 7, 21, and 24, July 31, 1996.

August 22, 2000  DRAFT Page 2 9 Once solvents are wrung out of the wipes and rags, the liquids must be managed according to RCRA regulation. This would represent an incremental cost because solvents are currently managed with the wipes and rags. We assumed that all generators would send their solvents to a fuel blender, which is a relatively inexpensive and common management technique, especially for larger volumes of solvent. This costs about 11 ¢ per pound of solvent. 6 7 This estimate would overstate costs for a facility that had a reuse or tolling program in place for solvents, which would be more typical of smaller facilities. To determine the amount of solvent each facility would have to manage, we multiplied the amount of solvent extracted from each wipe or rag by the number of wipes and rags each facility uses. The removal efficiency of hand wringing was determined based on site visits and research conducted by EPA and SAIC staff. 8 <IP_ADDRESS> Covered Containers While the covered container requirement itself imposes no new cost on SQGs and LQGs, the proposal requires a uniform label to be placed on containers of exempt wipers and rags sent offsite. Because the wording is included in the regulation, generators would be required to purchase appropriately worded labels and apply them to containers. The cost of the labels is about $ 0.33 each. 9 Rather than developing an uncertain estimate for the fraction of wipers managed on and offsite, we simply assumed that all containers would be labeled.

<IP_ADDRESS> Waste Management Savings Generators meeting the conditions for the exemption would save on the shipment and management costs for their wipes and rags. First, shipments of wipes and rags would no longer require manifest preparation and retention of records. Manifests must accompany every hazardous waste shipment, so these costs were determined on a per shipment basis, and then multiplied by the number of shipments sent by each LQG or SQG. The savings per shipment is $ 16.93 for LQGs and $ 16.22 for SQGs. 10 11 " Environmental Fact Sheet: Municipal Solid Waste Generation, Recycling and Disposal in the United States: Fact and Figures for 1998," prepared by Franklin Associates for EPA Office of Solid Waste, April 2000.

12 Northbridge conducted a survey of New England waste management companies to estimate pickup, transportation, and disposal cost under the baseline and regulatory options. A summary of our findings is included in the Appendix.

August 22, 2000  DRAFT Page 2 10 If containers of solvent contaminated wipes and rags are no longer required to be managed as hazardous waste, generators will also save on transportation and disposal charges levied by offsite waste managers. The proposal permits disposal in municipal waste combustors and, if dry, municipal waste landfills. These are the least expensive options available for generators and haulers. We did not have information on the fraction of disposables generated in areas with municipal waste combustion, so we simply assumed that it would follow the distribution of all municipal wastes. EPA estimates that 23 percent of all municipal waste disposed goes to combustors, with the remaining 77 percent going to landfills. 11 We assumed that 23 percent of exempt wipes and rags would be shipped to municipal waste combustors at a savings of nearly $ 400 per drum of waste shipped. 12 The remaining 77 percent of the exempt wipes and rags could be shipped to a municipal landfill ( if they are " dry" as defined in the proposal) at a savings of about $ 400 per drum ( see the Appendix). Alternatively, these wipers could be handled as nonhazardous waste at a permitted facility such as a fuel blender, incinerator, or industrial furnace. This latter option would be more costly than landfilling, but substantially cheaper than management as a hazardous waste. Based on the survey data described in the Appendix, the expected savings would be about $ 230 per drum of waste. This range in disposal cost savings is reflected in our results   both on a per facility basis and for the national totals.

Note that generators using disposable wipes with the F listed solvents identified in the proposal would not be able to use the landfill option, but could still save on their disposal costs by using municipal waste combustors or managing the wipers as non hazardous wastes.

Finally, generators that choose to manage exempt wipes in permitted facilities as nonhazardous wastes might be able to increase their savings by rendering their wipes " dry" and disposing of them in a municipal landfill. The most likely way to achieve the five gram standard is to centrifuge the wipers. We analyzed the cost of centrifuging and found that SQGs and LQGs could, in fact, save additional waste management costs by paying to have their wipers centrifuged ( assuming the service is available in their area). This option is discussed further in the results section.

2.5.2 Impact of the Exemption on Regulatory Status Generators qualifying for the exemption would not have to include the weight of exempt wipes and rags when calculating their monthly waste generation quantity. SQGs who would become August 22, 2000  DRAFT Page 2 11 CESQGs as a result of the exemption would realize substantial savings. These generators would not only save manifesting costs ($ 16.22 per shipment), but they would realize additional savings associated with other Subtitle C regulatory requirements:

Recordkeeping and waste analysis ($ 6,958/ facility/ year)

° Store, file and maintain records of any test results, waste analyses, or other determinations ($ 4.80/ facility/ year) ° Conduct waste analysis, document and maintain information ($ 6,455.47/ facility/ year) ° Prepare and maintain contingency plan ($ 497.52/ facility/ year)

Waste pickup, transportation, and disposal ($ 400.46/ shipment)

The total savings for each SQG becoming conditionally exempt would equal $ 7,791 per year ( see Appendix).

2.6 Results 2.6.1 Savings per Facility Exhibit 2 2 summarizes the savings estimates per facility. The exhibit aggregates the costs and savings for each type of generator and each component of the proposal. The savings are significant, especially for the few SQGs that would change regulatory status to conditionally exempt SQGs as a result of not counting solvent contaminated wipes and rags in their hazardous waste total.

For the remaining generators, the exemption from Subtitle C management of the wipers provides a significant savings minimally offset by the solvent management and labeling costs. Net savings range from $ 1,869 to $ 3,259 per year for LQGs and $ 475 to $ 817 per year for SQGs. As noted in Section <IP_ADDRESS>, the range in the savings estimates results from the different options generators have to manage the exempt wipers. Those with access to municipal waste combustors are assumed to dispose of their exempt wipers at those facilities. For other generators, those with " dry" wipes would save the most, since they could use municipal landfills for disposal; their savings define the upper bound of the savings estimates shown. The facilities with smaller savings are those that are assumed to manage the wipers as nonhazardous wastes at permitted facilities. 13 Given the cost of centrifuging, only those generators without access to municipal waste combustors would be likely to centrifuge their wipers. Those that could send their wastes to combustors without centrifuging would already capture the vast majority of the disposal savings and would not have to incur centrifuging costs.

August 22, 2000  DRAFT Page 2 12 Exhibit 2 2 Annual Costs and ( Savings) per Generator Regulatory Element LQGs SQGs No Liquids Hand wringing Solvent management Negligible $ 9.88 Negligible $ 2.47 Covered Containers Containers Labeling $ 0.00 $ 2.64 $ 0.00 $ 0.66 Waste Management Manifesting Transport and disposal ($ 67.72) ($ 1,814  $ 3,204) ($ 32.44) ($ 446  $ 788)

Totals ($ 1,869  $ 3,259) ($ 475  $ 817)

Note: SQGs that become conditionally exempt save ($ 7,791) per year. Source: see Appendix One other issue we examined is whether generators might find it worthwhile to render their wipes " dry" in order to dispose of them in municipal landfills. The most likely way to achieve the fivegram standard is to centrifuge the wipers. The economic advantage of lower disposal costs is offset by the cost of the centrifuging service ( assuming the service is available). Those who elect to manage the wipers as non hazardous wastes at a fuel blender or other permitted facility could save additional money by centrifuging the wipers and landfilling them. 13 Per facility savings would increase from $ 475 per year to $ 511 per year for SQGs and from $ 1,869 per year to $ 2,311 for LQGs. These savings are conditional on the availability of centrifuging service and are not reflected in Exhibit 2 2 or in the national totals reported below.

2.6.2 Total Savings The total annual savings for all generators range from $ 11.1 million to $ 15.6 million as shown in Exhibit 2 3. The difference between these two estimates is due to uncertainty over how many of the generators would be able to send their exempt wipers to municipal landfills ( i. e., how many of August 22, 2000  DRAFT Page 2 13 the wipers used in conjunction with solvents are " dry"). Based on EPA's characterization of solvent use at various types of generators, we believe that more than 80 percent of disposables are used with minimal solvent and would likely meet the five gram standard. This suggests that the actual savings would be nearer to the $ 15.6 million estimate.

Exhibit 2 3 Total ( Savings) and ( Savings) per Wiper Low Savings Estimate High Savings Estimate Large Quantity Generators ($ 2,920,000) ($ 0.074) ($ 4,350,000) ($ 0.110)

Small Quantity Generators ($ 6,570,000) ($ 0.075) ($ 9,700,000) ($ 0.110)

SQGs becoming CESQGs* ($ 1,560,000) ($ 1,560,000)

Total* ($ 11,050,000) ($ 15,610,000)

Note: Does not assume any shift from reusables to disposables. * Savings per wiper not calculated Another way to compute the savings is based on the number of wipes and rags used. Exhibit 2 3 shows the savings per disposable wiper used for SQGs and LQGs. The savings per wiper provide the basis for analyzing potential market impacts of the proposal. Given the base price of a disposable wiper and the cost of a comparable reusable shop towel, we can at least evaluate whether the projected savings for disposables would be large enough to induce some users of reusable shop towels to switch to disposables.

2.6.3 Market Impact Users pay approximately 5 ¢ to 8 ¢ per disposable wiper according to our research. The price of course varies with the type of wiper and the quantity purchased. For example, small quantities of wipes may cost as much as 10 ¢ each. A rough estimate of the price for a reusable shop towel sent to a laundry is 12 ¢ to 15 ¢ per use, which includes leasing the towel and having it cleaned. 14Assumes about $ 400 per drum to dispose as a hazardous waste and 3,700 wipes and rags per drum.

August 22, 2000  DRAFT Page 2 14 If we look at the base price and the potential savings if the wipes and rags could be disposed of in a landfill, we can infer that the effective cost of using a disposable wipe or rag with hazardous waste is 16 ¢ to 19 ¢ ( 5 ¢ to 8 ¢ to purchase + 11 ¢ to dispose as a hazardous waste14), which would make it somewhat more expensive to use disposables with hazardous waste than reusables. This is consistent with the anecdotal information we collected indicating that establishments tend to avoid using disposables with hazardous waste. Presumably, companies that do use disposables with hazardous waste do so because the disposables offer some performance advantages, only a small number of wipes are used with solvents, or they are unable to find laundries able or willing to handle solvent contaminated towels.

From this perspective, the proposal has the potential to cause a significant shift in the relative price of disposables and reusables used in conjunction with hazardous solvents. We do not have sufficient information to estimate the impact on demand for the two competing products, but this limited analysis does show that the savings would be sufficient to change behavior. If the savings averaged 9 ¢ per wipe or rag ( Exhibit 2 3), then the average disposable would cost 7 ¢ to 10 ¢ to purchase and dispose of. This is lower than the cost per use of the average reusable towel ( assuming one to one equivalency in use).

In the end, it is not clear whether disposables would become more popular for use with solvents as a result of the proposal. The primary consideration for most generators is the performance of the wiper on the job. In the applications where heavy solvent use is common ( such as printing), reusables are often the wiper of choice. We do not believe that the cost impact of the proposal would be sufficient to change this. Given the wide range of uses to which generators put the wipes, it is possible that disposables could become more attractive in some applications. 15 " Treatment means any method, technique, or process, including neutralization, designed to change the physical, chemical, or biological character or composition of any hazardous waste so as to neutralize such waste, or so as to recover energy or material resources from the waste, or so as to render such waste non hazardous, or less hazardous; safer to transport, store, or dispose of; or amendable for recovery, amendable for storage, or reduced volume."

August 22, 2000  DRAFT Page 3 1 3. Shop Towels 3.1 Current Regulations and Practices Current federal regulations require any party that engages in the " treatment" of solvent contaminated shop towels that are hazardous wastes to obtain a RCRA permit for the treatment activity. The RCRA definition of treatment provided in 40 CFR 260.10 includes the laundering of solvent contaminated shop towels to remove any solvents and/ or other contaminants from the towels to render them usable. 15 Such an interpretation of the federal regulatory program would result in an assumption that all industrial laundries currently managing solvent contaminated shop towels are required to obtain a RCRA permit for this waste management activity. These laundries would incur expenses to obtain and maintain their RCRA permit as well as ongoing costs to manage sludges produced from the process as hazardous wastes.

EPA's policy with regard to the regulatory status of solvent contaminated shop towels, however, has been to defer jurisdictional decisions to state agencies and/ or the EPA Regions. The majority of states and the EPA Regional offices have established policies that provide an exemption from regulation as a hazardous waste for reusable shop towels that are managed at industrial laundries that discharge to a POTW. Forty six states allow industrial laundries with NPDES permits to launder solvent contaminated shop towels without a RCRA permit. Many impose conditions on the management of reusable shop towels that are similar to the provisions in the current rulemaking being proposed by EPA. In particular, most states require that no free liquids be transported offsite with the shop towels from the generator establishment.

3.1.1 Current Practice Baseline We have identified two baselines from which to measure the economic impact of the proposed rule. The first baseline ( current practice) is defined by the current policies and regulatory interpretations established by most state programs with regard to reusable shop towels contaminated with hazardous waste solvents. Our assumptions about current management practices are outlined below: 16 EPA's Slide Presentation on Categorical Standards from the March 4, 1997 Industrial Laundries Public Meeting. The data, provided on UTSA's web site, were derived from Section 308 questionnaires.

17 [ Need complete citation] EPA's Information Collection Request Number XXX for permitted and interim status facilities; the average is the total annual respondent cost ( Exhibit 8) divided by total facilities ( Table 1).

August 22, 2000  DRAFT Page 3 2

Towels must not contain " free liquids" before being sent to the laundry service. This condition is common among state programs and is considered an existing practice. Wringing or other methods used to remove liquids from shop towels by generators and washing by the industrial laundry are not interpreted as treatment of hazardous waste.

We assume that most towels ( 90 percent) are transported in bags, although some ( 10 percent) currently are transported in drums. This assumption is based on EPA's observation at site visits and anecdotal information.

Generators and industrial laundries do not differentiate between towels contaminated with listed solvents and those contaminated with characteristic solvents. " Heavily soiled" and " printer" towels are managed together, regardless of the type of solvent used.

To clarify our assumptions about current practices, we should note that although federal regulations do not explicitly include the exemption currently provided for solvent contaminated shop towels in most states, the exemption is widespread. The proposed rule has the principal effect of codifying this state based exemption in federal regulation. Therefore, the proposal's impact on generators and industrial laundries will be limited to the incremental costs required to meet the conditions set out in the proposal to qualify for the exemption. These conditions are described in Section 3.3 below.

3.1.2 Federal Standards Baseline The second baseline we examined is defined by the current federal requirements for industrial laundries managing solvent contaminated shop towels that are hazardous wastes. Though virtually all states have granted exemptions, the facilities would still be subject to these standards in the absence of the exemptions. Without the exemptions, the laundries would incur costs to:

Obtain and maintain a Subtitle C permit for treatment and, possibly, storage

Manage sludge from the laundering process as hazardous waste For this analysis, we assumed that these costs would be incurred at least by the 480 laundries managing printer towels and could be incurred by as many as 1,358 laundries which manage printer and/ or shop towels. 16 The annual cost to maintain a RCRA Subtitle C permit averages more than $ 17,300.17 The average annual sludge generation from the 1,358 laundries that manage 18 [ CBI issue?] E mail from John Vierow, SAIC to Jim O'Leary, EPA on August 16, 2000. The data were derived from the Section 308 survey in 1994.

19 Op. cit., note 16.

August 22, 2000  DRAFT Page 3 3 printer or shop towels is 81 tons. 18 Based on consultation with EPA we have assumed that appropriate hazardous waste management costs for these sludges would be about $ 200 per ton for incineration. The annual cost of hazardous waste management for these sludges is therefore $ 16,200 per facility.

The total annual cost of regulation under Subtitle C is estimated at $ 33,500 per laundry or a national total of between $ 16.1 million and $ 45.5 million depending on the number of laundries that would handle solvent contaminated shop towels if they were not exempt from Subtitle C requirements. This estimate is conservatively low because it does not include the cost to acquire a permit initially, nor does it include additional burdens on generators for storage and transportation of hazardous wastes. It is not clear what fraction of this cost would be borne by the laundries themselves and which would be passed on to generators, but the allocation of these costs is not important for the purposes of this analysis.

The estimate of costs to comply with the federal requirements was developed to quantify the significant benefit that the current, state based exemptions confer on industrial laundries and their customers. Without considering this significant avoided cost, the proposed rule appears to impose modest costs on laundries and their customers. In fact, the rule represents relief from a costly federal regulatory program. This relief is measured by the cost savings shown later in the chapter when the relatively small compliance costs are compared to the significant savings.

3.2 Estimating the Universe of Solvent Contaminated Shop Towels 3.2.1 All Shop Towel Uses As with our assessment of disposables, we estimated the universe of reusable towels using national data and combined this with usage information provided by individual industries and from site visits.

Our approach for estimating annual towel usage converted data on the amount of towels that are washed in a year to the total number used. EPA's 1994 survey of the industrial laundry industry study reported that 481 million pounds of shop towels were water washed in 1994.19 Many sources use one ounce as the average shop towel weight, so that implies about 7.7 billion uses in 1994.

The estimate used in this analysis includes two other adjustments. First, approximately 1 percent of shop towels are laundered by solvent (" dry") cleaners, so we increased the total use estimate 20 EPA, " Technical Development Document for Proposed Pretreatment Standards for Existing and New Sources for the Industrial Laundries Point Source Category," 1997.

21 US Census, Service Annual Survey for SIC 7218 at www. census. gov/ svsd/ www/ sas. html.

22 Op. cit., note 16.

23 Op. cit., note 2.

August 22, 2000  DRAFT Page 3 4 upwards to account for that change. 20 Second, we escalated the 1994 sales figures to 1997 ( the base year for the facility data used in the analysis) based on the growth of sales in the industrial laundry sector ( SIC 7218) between 1994 and 1997.21 We assumed that shop towel usage grew 10 percent over this period, about half the real rate of growth experienced by the sector as a whole.

Our estimate of total uses of reusable towels in 1997 was 8.55 billion. Note that this is the number of uses, not the number of towels in use because towels are typically used and laundered an average of 10 to 15 times during their usable life.

3.2.2 Shop Towels Used with RCRA Regulated Solvents We used two different approaches to estimate the number of shop towels that were used in conjunction with RCRA regulated solvents. For printers, we used EPA's Section 308 data on water washed printer towels B a total of 136 million pounds in 1994.22 Using the same adjustment factors described above for all reusables, we computed the number of uses in 1997 to be 2.42 million or 28 percent of all uses ( Exhibit 3 1).

Some shop towels are used with RCRA regulated solvents outside of the printing industry. To compute this portion of the universe, we identified industries that were likely to use RCRA solvents and cross referenced that list with the information on shop towel customers provided in the UTSA Customer Profile Analysis. Kimberly Clark research23 identified five non printing industries out of the 25 included in the UTSA customer profile, as likely to use RCRA solvents with their shop towels: Industrial Machinery and Equipment ( SIC 35), Fabricated Metal Products ( SIC 34), Transportation Equipment ( SIC 37), Chemical and Allied Products ( SIC 28), and Rubber and Miscellaneous Plastics Products ( SIC 30). Together these five industries accounted for just under 20 percent of the total revenue produced from laundering shop towels in 1995. We assumed that this revenue share provided a reasonable proxy for the share of towels used in these industries. Kimberly Clark then estimated that 22 percent of shop towel uses in these industries involved solvents.

We computed non printer total towel usage with solvents at 370 million annually as shown in Exhibit 3 1. Adding this to the 2.42 billion uses in the printing industry yields a total annual estimate of 2.79 billion shop towel uses with solvents. This is substantially greater than the 166 million disposable wipes and rags used with hazardous solvents as estimated in Chapter 2. The August 22, 2000  DRAFT Page 3 5 prevalence of solvent use with reusables is consistent with anecdotal evidence obtained by EPA in its site visits and meetings with various stakeholders.

Exhibit 3 1 Summary of Shop Towel Usage Annual Uses Total Annual Uses ( 1997) 8.55 billion Printer Towels ( assume all used with solvents)

Non printers Towels sold to solvent using industries: 1.68 billion Of which, 22% are used with solvents Total Annual Uses with Solvents 2.42 billion 0.37 billion 2.79 billion Additional data on characteristics of reusables towels are provided below:

Average weight per shop towel: 1 ounce

Solvent to towel weight ratio: 1: 1

Typical weight of 55 gallon drum filled with used towels: 160 pounds

Wet towels per 55 gallon drum: 1,280

Wet towels per 15 gallon drum: 349 3.3 Characterizing the Generator Universe As described in Section 2.3 we were unable to calculate directly the number or regulatory status of generators of solvent contaminated wipers. Instead, we relied on indirect analysis using data compiled from the generator industries and from EPA databases.

3.3.1 Facilities Using Reusables With Solvents 24 Op. cit., note 3.

25 Op. cit., note 4.

August 22, 2000  DRAFT Page 3 6 The approach for characterizing the generator universe parallels that described in Chapter 2 for disposable wipers. EPA combined facility data from site visits and meetings with stakeholders with information from the Office of Enforcement and from RCRIS. 24 Northbridge integrated EPA's analysis into the data already compiled on reusables to develop the information summarized below. 25 Based on the industries where industrial wipers are used, EPA used Census data to estimate the number of facilities in each industry group ( by SIC code). Within each group, the number of LQGs was derived from the 1995 Biennial Reporting System. The remaining establishments were apportioned between SQG and CESQG status based on employment: those with fewer than 20 employees were assumed to be CESQGs and the remainder were SQGs.

EPA then characterized the prevalence of disposables and reusables by industry group. From these assessments we were able to calculate the number of facilities by industry group and in total that use reusables in conjunction with solvents. Exhibit 3 2 shows that 188,421 facilities are assumed to use these solvents with reusable towels. Only 4,384 or 2.3 percent of these generators are LQGs, 59,305 ( 31.5 percent) are SQGs, and the remaining 124,732 are assumed to be CESQGs. Therefore, this proposed rule will have no impact on about two thirds of the facilities where reusables are used in conjunction with solvents. Printers account for 59 percent of all generator facilities and 87 percent of towel uses with solvents.

3.2.2 Usage per Facility Information from the site visits and from EPA's meetings with stakeholders enabled us to estimate typical usage patterns among printers and non printers. Actual usage varies widely, of course, but the typical values ( shown in the last row of Exhibit 3 2) appeared to be consistent with several of our information sources.

The facility counts and typical usage levels were multiplied together to compute the total number of solvent contaminated towels used by LQGs, SQGs, and CESQGs. As shown in Exhibit 3 2, just over half of these towels are generated by SQGs, with CESQGs accounting for 41 percent of generation and LQGs just over 8 percent. Therefore, the 34 percent of facilities affected by the proposal are responsible for 59 percent of the solvent contaminated shop towels generated.

Unlike the analysis of disposables, storage time was not an issue for these facilities since collection of soiled towels for laundering is assumed to be much more frequent than the 90 or 180 day accumulation limits for RCRA regulated generators. August 22, 2000  DRAFT Page 3 7 Exhibit 3 2 Reusable Towel Generation and Regulated Facility Assumptions LQGs SQGs CESQGs Totals Generators of Solvent Contaminated Towels (% of Total) 4,384 ( 2.3%) 59,305 ( 31.5%) 124,732 ( 66.2%) 188,421 ( 100%)

Solvent Contaminated Towels Generated Annually (% of Total) 234 million ( 8.4%) 1,418 million ( 50.9%) 1,136 million ( 40.7%) 2,788 million ( 100%)

Weekly Generation per Facility Printers Non Printers 3,000 750 750 100 260 34 3.3 Overview of Proposed Rule EPA's proposal would amend the hazardous waste management regulations under RCRA and formally codify a conditional exemption from the definition of hazardous waste for certain shop towels. The exemption would be granted if ( 1) generators accumulate, store, and transport solvent contaminated shop towels in covered containers and ( 2) generators ensure that no liquids drip from the towels when they are hand wrung and that any released solvent is contained. Wipers sent offsite must be labeled " Solvent Contaminated Wipers" and must be packaged either in containers that comply with existing DOT requirements ( 49 CFR 171 180) or that will contain the solvents. Wipers that meet these requirements may be sent to an industrial laundry that does not have a RCRA Subtitle C permit.

Recipients of these towels must store the wipers in a closed container until they are washed. If any liquid solvent arrives with the towels, the laundry must return the shipment to the generator or recover and properly manage the liquid solvent.

If towels are " dry," ( i. e., contain less than five grams of solvent), generators do not have to comply with the transportation and storage conditions. Towels may be dry because of low solvent use or because solvents have been extracted from the towel by wringing or a centrifuge.

3.4 Unit Costs for Generators August 22, 2000  DRAFT Page 3 8 As with disposables, the conditions for obtaining the exemption may impose costs on generators and, potentially, industrial laundries. The components of the proposed rule have somewhat different implications for shop towels because of differences in the current practices between generators of reusables and disposables. The requirement to remove excess liquid from used towels is already a prerequisite for the exemption granted to generators of reusable shop towels in the vast majority of states; it is also a condition of doing business with most industrial laundries. The condition therefore represents no incremental cost for generators or laundries. The requirement for covered containers, however, would affect a large portion of generators and laundries. The incremental costs associated with acquiring these containers are analyzed below. Generators would also be required to label containers containing reusable shop towels and this requirement would impose incremental costs as well.

3.4.1 No Liquid Drips from the Wipers To qualify for the exemption under the proposed rule, generators are required to ensure that no liquid solvent drips from the towels when hand wrung. Most of the 46 states with exemptions in place already include this condition as part of an existing regulatory exemption. Therefore the practices employed to wring or otherwise remove free liquids should be part of the current operating practices at generator facilities. It would be inappropriate for us to attribute to the proposal any additional costs for wringing or managing the removed solvents, since these costs are already being incurred.

If industrial laundries receive containers with liquids, they are required to return the shipment to the generator or manage the liquids appropriately themselves. In either case, the cost of this condition would ultimately be borne by the generators. Since laundries currently impose a no free liquids standard, however, we do not expect significant new costs as a result of this condition. If, in fact, generators elect to send dripping towels to laundries, the laundries would either charge the generator for solvent management or discontinue handling the towels. Neither of these outcomes should be attributed to the proposed rule.

3.4.2 Covered Containers Covered containers ( i. e., drums) are used by some generators and industrial laundries for handling heavily soiled shop towels. However, this practice is not common for most generators or laundries, based on information EPA collected during site visits. To comply with this condition, we assumed that generators would use drums to store and ship solvent contaminated reusable shop towels and that this would impose an incremental cost for the purchase of containers and their replacement over time. It is possible that less expensive options may exist, such as use of wheeled carts or other containers, but for simplicity we focused on the use of drums for those who do not currently use them. 26 Op. cit., note 9.

27 A drum handler and plastic drum adaptor was $ 646 on handlingnet. com, August 14, 2000; assuming 7 year life and 10 percent discount rate the annualized cost is $ 133.

Page 3 9 August 22, 2000  DRAFT We obtained pricing information for various sizes and types of drums that would meet the requirement and computed average prices for 55 gallon drums ( assumed to be used by LQGs) and 15 gallon drums ( for SQGs). The number of drums required is keyed to our assumptions about average usage described earlier in Section 3.2; these assumptions are spelled out in the Appendix. Assuming a three year life for the inventory of drums required, the annualized cost per generator ranges from $ 18.52 for a SQG non printer to $ 98.23 for a LQG printer. The derivation of the costs is described in additional detail in the Appendix.

In addition to the container requirement, the proposal includes a requirement that generators label containers with a label containing specific language designating the towels as " Solvent Contaminated Wipers." The cost would be approximately $ 0.33 per label. 26 We should note that we have not included in these costs any modifications to facilities or equipment required to store and handle the drums. For example, some industrial laundries may require equipment to unload and rotate drums which is not already in place. Those with existing hoist and conveyor systems for handling bags could purchase inexpensive slings or other equipment to handle drums. A more elaborate option would be a mechanical drum handler and rotator that attaches to a forklift. The annualized cost of this attachment is about $ 133.27 Even if we assumed that half of the laundries handling printer towels purchased this equipment, the annual cost would be less than $ 32,000 nationally. This is not included in the cost estimates presented below.

3.5 Results 3.5.1 Current Practices Baseline First, we present the incremental costs relative to current practices. In other words, these costs are measured incrementally to the state granted exemptions from Subtitle C compliance for solvent contaminated shop towels.

<IP_ADDRESS> Costs Per Generator The per facility costs of complying with the conditional exemption are summarized in Exhibit 3 3. Note that in some cases the costs are not applicable to all generators. For example, generators who already use drums to store and transport reusable shop towels will not incur any additional cost to comply with the closed container condition. The compliance costs are quite low: the Page 3 10 August 22, 2000  DRAFT maximum estimated cost is less than $ 100 per LQG and less than $ 40 per SQG per year. For generators that already use drums, the incremental cost would be insignificant.

As we have developed and presented the costs, we have assumed that the cost of the drums and labels would be borne by the generator. Depending on competitive conditions, it is possible that a laundry might offer to absorb some of the cost of the drums used to service its customers. In this case, the cost per laundry could be higher than the cost per generator shown here ( however, total costs would be the same).

Exhibit 3 3 Annual Costs per Generator Facility Regulatory Element LQGs SQGs No Dripping Liquids $ 0 $ 0 Closed Containers Drums* Labels $ 32.78  $ 98.34 $ 0.82 $ 18.52  $ 37.04 $ 1.39 * Range captures printers ( high end) and non printers ( low end)

<IP_ADDRESS> Total Costs The total annual costs associated with the proposed exemption for reusable shop towels is $ 2.33 million as shown in Exhibit 3 4. All of the cost results from the use of covered containers and labels. As noted earlier, some laundries might also purchase equipment to handle drums at their facilities, but the aggregate cost would add less than 2 percent to the total shown in Exhibit 3 4.

As in the disposables' analysis, we computed the incremental cost per shop towel ( Exhibit 3 4). The regulatory costs on shop towels alone would have little effect on generators' choice of industrial wipers. Using a low end price of 12 ¢ per shop towel use, the highest impact per towel ( 0.15 ¢ per SQG towel) represents only a 1.3 percent increase in overall shop towel cost. Page 3 11 August 22, 2000  DRAFT Exhibit 3 4 Proposal Annual Costs and Costs per Shop Towel Use  Current Practices Baseline Large Quantity Generators $ 165,000 $ 0.0007 Small Quantity Generators $ 2,166,000 $ 0.0015 Total $ 2,331,000 $ 0.0014 3.5.2 Federal Program Baseline As noted earlier in the chapter, the proposal represents significant relief from federal Subtitle C standards for industrial laundries and their customers. Based on our calculations, firms that generate and launder solvent contaminated shop towels would have to spend ( conservatively) between $ 16.1 million and $ 45.5 million annually to comply with federal permitting and treatment requirements. If the federal standards governed current operations at these laundries, the proposed rule would impose no new incremental costs, except for labeling which costs less than $ 100,000 per year.

The net impact of the proposed rule, therefore, is to produce compliance cost savings of between $ 16.1 million and $ 45.5 million for industrial laundries and their customers relative to the federal program baseline. Page 4 1 August 22, 2000  DRAFT 4. Summary of Costs and Savings The proposed rule will impose modest compliance costs on generators of disposable and reusable industrial wipers used with solvents. These incremental costs result from compliance activity required to meet the conditions for the proposed exemption from hazardous waste management. Where these conditions are already met in the course of current practices, we did not compute any incremental cost.

Generators of disposable wipes and rags will also experience significant savings, primarily as the result of lower waste management costs for disposables contaminated with hazardous waste solvents. As shown in Exhibit 2 2, these savings far outweigh the incremental costs.

Facilities that use and manage reusable shop towels contaminated with hazardous waste already have an exemption from hazardous waste management requirements in 46 states, so they already benefit from the savings that this proposal would confer on generators of disposables. Using the current practices baseline, therefore, the proposal imposes incremental national costs of just over $ 2.3 million ( Exhibit 3 4).

From the perspective of the current federal requirements, the proposal offers generators and laundries regulatory relief in the form of an exemption from RCRA Subtitle C management standards for towels and solvents. The savings associated with this relief are estimated conservatively at between $ 16.1 million and $ 45.5 million ( Section 3.5.2).

4.1 Combined Cost and Savings Estimates The proposal would result in annual cost savings of between $ 8.8 million and $ 61 million; the combined impacts for disposables and reusables are shown in Exhibit 4 1.

Exhibit 4 1 Annual Costs and ( Savings) from the Proposal Current Practices Baseline Federal Program Baseline Disposables ($ 11.1  $ 15.6 million) ($ 11.1  $ 15.6 million)

Reusables $ 2.3 million ($ 16.1  $ 45.5 million)

Net ( Savings) ($ 8.8  $ 13.3 million) ($ 27.2  $ 61.1 million) 28 " Revised Small Business Estimates for Reusables," memorandum from Kevin Dietly and Brad Strowger ( Northbridge) to Mary Wolfe ( SAIC) and Jim O'Leary ( EPA), April 20, 2000. No screening analysis was conducted for disposables since all facilities will experience either no costs or savings.

Page 4 2 August 22, 2000  DRAFT 4.2 Discussion of Economic and Small Business Impacts The principal effect of the proposal is to provide regulatory relief to some facilities that generate and manage industrial wipers that are regulated as hazardous waste under federal RCRA regulations. Despite the de regulatory thrust of the proposal, there is still concern that the proposal might impose burdensome costs on individual facilities or disproportionate costs on small businesses. Our research indicates that

The proposal is not a major rule

Individual generators face a maximum annualized compliance cost of less than $ 100

Many generators save money as a result of the proposal

Those facilities that do incur modest costs are actually being relieved of a serious liability as a result of becoming exempt from regulation under RCRA Subtitle C We have also identified a number of ways in which generators could increase savings ( reduce costs).

The proposal may create an economic incentive for generators to use disposable wipers instead of reusable towels with hazardous solvents. Since reusables account for over 90 percent of all wiper use with solvents, there is a large potential market for the disposables. However, cost of disposal is only one consideration in the selection of an industrial wiper. The wiper's performance characteristics are far more important in determining which product is used and, since the proposal does not affect those characteristics, we expect any shift in use patterns to be limited.

Turning to small business concerns, we recognize that a large fraction of the reusables generators are small businesses. A screening analysis suggested that over 94 percent of the 188,421 generators are small businesses. 28 Yet, with annual compliance costs for most of those facilities of less than $ 40, it was not necessary to conduct any further analysis of adverse impacts on these small businesses. 29 " Pricing for Waste Management Types by Year," compiled by DPRA for SAIC, May 1995.

August 22, 2000  DRAFT Appendix Page A 1 Appendix: Cost Background Document This document supplements the unit cost information provided in the full report. The categories of costs and savings are presented in the order they are discussed in the report. In some cases the information applies to both the disposables and reusables analysis and in others it may apply to only one of them.

A. 1 No Liquids Drip from Wipers When Wrung Compliance costs associated with this requirement, assuming hand wringing of the towels, rags, and wipes, are limited to management of solvents extracted from disposable wipes and rags. The cost of hand wringing to extract free liquids was assumed to be negligible. The solvents removed from disposables would be sent to a fuel blender. The cost of managing liquid wastes at these facilities is relatively low, averaging $ 0.11 per pound. 29 The cost translates into an incremental cost of about $ 1.10 for the solvent extracted ( by hand) from one drum of contaminated wipes and rags. Other options such as solvent tolling or reuse contracts would be a less expensive alternative which we did not factor into our analysis.

A. 2 Covered Containers LQGs and SQGs generating disposable wipes and rags contaminated with solvents are already required to store the wipers in closed containers. The proposal would not impose any incremental costs on these generators.

The situation for shop towel users is different, however. The first step in analyzing the costs of this requirement was to identify how many generators currently use drums versus cloth bags for storage and transportation. Based on site visits and anecdotal information, we assumed that 90 percent of generators have towels picked up in cloth bags with the remaining 10 percent using drums.

Given typical usage estimates for LQG and SQG printers and non printers, we determined the size and number of containers that would be required as shown in Exhibit A. The smaller drum size for SQGs provides a lighter, more manageable container. The next step was to obtain cost data for drums which we collected from several firms and then averaged. The drums are new, open head plastic drums with a locking lid. We assumed that the drums would be ordered in bulk, probably by a laundry for its customers. The drums were assumed to last for three years. Since the drums would be used both for storage and transportation, we assumed that the total inventory 30 Lab Safety Supply, August 1998.

August 22, 2000  DRAFT Appendix Page A 2 of drums would need to be double the number required to be shipped each week. For example, a LQG printer would need six 55 gallon drums B three for storing towels and three for shipment to the laundry; a SQG non printer would need two 15 gallon drums. Finally, we annualized the cost of the drums over the expected three year life using a 10 percent discount rate. The annualized cost per drum is $ 16.39 for 55 gallon drums and $ 9.26 for 15 gallon drums.

Exhibit A Container Costs LQGs SQGs Drum size 55 gallon 15 gallon Drums required Printers Non printers 62 62 Average cost per drum $ 44.82 $ 25.34 Annualized cost per drum $ 16.39 $ 9.26 A. 3 Labeling For disposables, where generators are already using closed containers, the proposal would require the application of pre printed labels designating the wipes and rags as exempt from hazardous waste requirements. We estimated the cost for a 6" x 6" pre printed, vinyl adhesive label at $ 0.33 each. 30 The same label cost was used for drums purchased to store and transport shop towels. Because the drums are reused, however, we assumed that the labels would last for one year before needing to be replaced.

A. 4 Manifesting LQGs and SQGs have three general requirements related to manifesting hazardous waste shipments: manifests, exception reports, and special requirements for exporters. For the purposes 31 Manifest data and information taken from " Supporting Statement for Information Collection Request Number 801, ` Requirements for Generators, Transporters, and Waste Management Facilities Under the RCRA Hazardous Waste Management System,'" pp. 7, 21, and 24, July 31, 1996.

August 22, 2000  DRAFT Appendix Page A 3 of this analysis, we focused on the manifests because the other reports are required for only a small fraction of all generators. The tasks associated with the manifest are:

Manifest completion ( read applicable regulations, complete manifest with the specified data items)

Manifest transmittal and recordkeeping ( read applicable regulations, provide copies of the manifest to the transporter and keep copies)

The costs are shown in Exhibit B. 31 These costs were used to compute savings for generators of disposable wipes and rags who would no longer be required to manifest shipments of solvent contaminated wipers. Because generators of shop towels are already exempt from this requirement in the vast majority of states, we did not compute any savings for them.

Exhibit B Manifest Costs Manifest Procedure Total Cost per Shipment Complete the manifest  SQG $ 16.22 Complete the manifest  LQG $ 16.93 A. 5 Waste Management Costs All of the costs discussed in this section apply to the analysis of disposable wipes and rags. Savings on the management of these wipers, now handled as hazardous waste, constitute the most significant economic impact of the proposal. The first area we review relates to baseline costs of hazardous waste management and the change in those costs if the material collected is no longer deemed to be hazardous waste. The second part of the discussion summarizes alternative disposal costs using municipal facilities. August 22, 2000  DRAFT Appendix Page A 4 A. 5.1 Pickup, Transportation and Disposal Services Northbridge surveyed seven New England waste disposal companies to obtain typical costs for pickup, transportation and disposal of solvent contaminated wipes and rags. The companies included Clean Harbors, Environmental Waste Technology, Inc., ENPRO Services, Inc., and Advanced Environmental Technical Services. We did not receive responses from the remaining firms or received responses that were unusable.

Our survey described two scenarios for which we asked the companies to provide cost estimates. The scenarios were as follows:

The cost to pick up, transport, and dispose of a 55 gallon container full of solvent contaminated rags and wipes at a Subtitle C permitted incinerator or fuel blender.

The cost to pick up, transport, and dispose of a 55 gallon container full of solvent contaminated wipes and rags exempt from hazardous waste regulations; these could be disposed of at a non Subtitle C facility, but not in a municipal facility.

The first scenario represents the current situation and therefore is the " baseline cost" from which we derived cost savings. The second scenario represents the proposed exemption. The results from the survey are summarized in Exhibit C. The savings from the exemption average $ 227 per 55 gallon container.

Exhibit C Survey Data on Pickup, Transportation, and Disposal Costs Scenario Cost Company Average ( A) ( B) ( C) ( D)

Baseline Pickup $ 25 $ 100 $ 150 $ 150 $ 106 Transportation/ Disposal $ 195 $ 440 $ 275 $ 280 $ 298 Total $ 220 $ 540 $ 425 $ 430 $ 404 Exempt from Subtitle C Pickup $ 25 $ 100 $ 62 Transportation/ Disposal $ 79 $ 150 $ 115 Total $ 104 $ 250 NA NA $ 177 32 Letter from Mary McCarty to Jim O'Leary, EPA, February 1998.

August 22, 2000  DRAFT Appendix Page A 5 We also tested several assumptions made in the analysis. For example, we confirmed that a 55 gallon container was a typical storage and transport container for these wastes from print shops and automotive repair stations. We also confirmed the net weight of wastes typically contained in these drums.

A. 5.2 Municipal Disposal Options The proposal permits facilities with access to municipal waste combustors to use those facilities to dispose of waste qualifying for the exemption. Since the materials could presumably be transported with other solid wastes from the facility, no additional transportation cost was assumed. We did measure the costs of disposal in these facilities, based on a national average of tipping fees published in Solid Waste Digest in October 1997. The average municipal waste combustor cost was $ 54 per ton ($ 5.36 per drum), representing a savings of nearly $ 400 per drum compared to the baseline. If municipal landfills could be used, the savings would be even greater as the average landfill cost was estimated at $ 33 per ton ($ 3.28 per drum).

A. 5.3 Centrifuging Costs Centrifuging was evaluated as a way to make disposables " dry" and thereby allow them to be disposed in municipal landfills. Centrifuging is assumed to be performed in a mobile unit which provides the service, but leaves the solvent and wipers for the generator to manage. EPA obtained data from a firm providing this service and found that the price charged varied with the volume of wipers handled. 32 We used our assumed wiper generation rate for SQGs and LQGs to see where in the cost range our " model" facilities would fall. The SQGs are assumed to use about 7,400 wipes and rags with solvents each year. If the wipes and rags were centrifuged prior to shipment offsite ( i. e., every 180 days), the cost would be $ 0.04 per wiper or $ 296 per year plus solvent management ( about $ 15 per year). LQGs, assumed to use almost 30,000 wipes and rags per year, would pay a slightly lower price of about $ 0.03 per wiper and would use the service every 90 days. The annual cost for LQGs would be $ 888 for centrifuging plus about $ 60 for solvent management.

Solvents removed from the wipers would be sent to a fuel blender. The cost of managing liquid wastes at these facilities is relatively low, averaging $ 0.11 per pound as described in A. 1 or about $ 8 for the solvent extracted from one drum of contaminated wipers. 33 Information is from the following except where otherwise noted: " Supporting Statement for EPA Information Collection Request Number 0820.07: ` Hazardous Waste Generator Standards,'" pp. 5, 8, 64, 69, and 74, November 19, 1997.

August 22, 2000  DRAFT Appendix Page A 6 A. 6 Administrative Costs for SQGs: Recordkeeping, Waste Analysis, Contingency Plan33 As part of the analysis of disposable wipes and rags, we assumed that the conditional exemption might permit a small fraction of SQGs to qualify as conditionally exempt SQGs because they would no longer count disposable wipes and rags toward their hazardous waste generation totals. In this instance, the facilities would save administrative costs associated with SQG status.

SQGs are required to conduct waste analysis, document these analyses, and keep records of any test results, waste analysis, or other determination for at least three years. SQGs are also required to formulate and maintain contingency plans. The ICR did not identify costs specific to SQGs, but we used the contingency plan costs described for LQGs and assumed that they provide a reasonable estimate. The costs associated with these activities are shown in the following exhibit.

The total cost for these administrative elements is $ 6,957.79 per generator per year. Costs to implement emergency procedures and to respond to spills and incidents were not included for this analysis, because these incidents occur only rarely. August 22, 2000  DRAFT Appendix Page A 7 Exhibit D Small Quantity Generator Administrative Costs Recordkeeping Procedure Annual Cost per Generator Store, file and maintain records of any test results, waste analysis, or other determinations. $ 4.80 Waste Analysis Procedure Gather information ( initially and annually thereafter) Document information ( initially and annually thereafter) Maintain documentation at the facility Total waste analysis $ 6,395.23 50.20 10.04 $ 6,455.47 Contingency Procedure Collect data required in a contingency plan Document whether authorities decline arrangement Write contingency plan Maintain contingency plan Submit contingency plan to relevant emergency centers Amend contingency plan when appropriate Total contingency $ 73.09 2.51 338.15 2.51 8.07 73.19 $ 497.52 Total Administrative Costs $ 6,957.79


[Federal Register: April 25, 2006 (Volume 71, Number 79)]
[Notices]
[Page 23909]
[DOCID:fr25ap06-52]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP06-251-001]

Gulf South Pipeline Company, LP; Notice of Compliance Filing

April 14, 2006.
    Take notice that on April 10, 2006, Gulf South Pipeline Company, LP
(Gulf South) tendered for filing as part of its Sixth Revised Volume
No. 1 FERC Gas Tariff, the following tariff sheets, to become effective
May 15, 2006.

Substitute Second Revised Sheet No. 304.
Substitute Second Revised Sheet No. 305.
Substitute Original Sheet No. 305A.

    Any person desiring to protest this filing must file in accordance
with Rule 211 of the Commission's Rules of Practice and Procedure (18
CFR 385.211). Protests to this filing will be considered by the
Commission in determining the appropriate action to be taken, but will
not serve to make protestants parties to the proceeding. Such protests
must be filed in accordance with the provisions of section 154.210 of
the Commission's regulations (18 CFR 154.210). Anyone filing a protest
must serve a copy of that document on all the parties to the
proceeding.
    The Commission encourages electronic submission of protests in lieu
of paper using the ``eFiling'' link at http://www.ferc.gov. Persons

unable to file electronically should submit an original and 14 copies
of the protest to the Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
[FR Doc. E6-6167 Filed 4-24-06; 8:45 am]

BILLING CODE 6717-01-P