NOJC is perhaps the national group most concerned with this matter because "although operation and ownership of bulk plants includes cooperatives and salaried employees, the independent jobber and commissioned agent are the predominant types." ("Final Report Economic Analysis Of Vapor Recovery Systems On Small Bulk Plants" - Pacific Environmental Services, September 1976.)

It is for this reason that NOJC actively supported the Pacific Environmental Services study which is the first attempt to review the functions, ownership and trends in the bulk plant industry. More than half of the association representatives interviewed for this study were representatives of either NOJC or one of its forty-two state and regional member associations. Additionally, most of the bulk plant operators interviewed were NOJC members as well.

The average NOJC member is small, selling less than two millon gallons of petroleum products annually, rural, serving most of the country's agricultural needs, and has limited financial capabilities. The function they serve in their market areas is vital, supplying energy to hard to reach small farms, small businesses and small communities at the distant end of a very long distribution system.

The dependence of these areas on NOJC's membership is growing because there is a "larger decline in major oil company owned bulk plants than the over all decline." (PES Study 3-8). This is due to many factors but primarily due to the increasing difficulity in keeping bulk plant operations economically viable, in great part because of costly government regulations.

The mix of customers served is varied "some plants claim to have 100% agriculture accounts, others claim 100% commercial accounts. However, the large proportion of survey respondants indicated that plants have a varying mixture of account type." (PES study 5-12). The fact that the combination of OSHA, EPA and other governmentally mandated expenses place small independent marketers in a terrible cost squeeze which threatens their viability is demonstrated by the results of the Pacific Environmental Services survey which found "it appears that at least half of the small bulk plants in the country would not be able to continue to operate if this burden were to be placed on them." (PES 2-2). This study only examined the viability of bulk plants vis a vis this proposed regulation. Add to this the cost of other EPA mandated expenses including Spill Control Contingency regulations and Stage II Vapor Recovery regulations and we find that many of the small marketers may incur costs equaling or exceeding their net worth. Thus, the PES data which shows the drastic impact Stage I Vapor Recovery will have on small bulk plant owners, even if SBA financing is available, is an understatement.

The current profitability situation in gasoline marketing makes this burden even worse. (See "Economic Impact of Stage II Vapor Recovery Regulations Working Memorandum", EPA - 4503-76-042 November 1976). The unanimous response of medium size bulk plant operators that they would have to close if required to expend $30,000 for Vapor Recovery is therefore not surprising.

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The effect of these closures on the marketers is obvious "most operators ... said they would go into some other petroleum industry such as selling gasoline at retail or continue to sell other petroleum products wholesale. A few said they would retire." (PES 5-8) The impact on the customers of these bulk plants is also obvious "their customers would have to find new supplies on their own initiative." (PES 5-8)

The threat to continued supply of vitally need gasoline is particularly severe to the agricultural community. Farmers often need immediate supply of fuel to respond to weather indicated shifts in harvesting schedules. The crop loss which might be incurred because of unavailabilty of this supply could be very great.

NOJC RECOMMENDATIONS

For all of the above reasons NOJC believes the current temporary suspension of the Stage I regulations for existing small bulk plants (20,000 gallons per day) should be made permanent. The relatively modest increment of hydrocarbons lost to the environment will become even less of a problem as new facilities are built to replace the existing ones. The trend to fewer, larger bulk plants noted in the PES study will also tend to lessen the environmental impact of the exclusion. The exclusion will allow these changes to occur naturally giving marketers and customers alike time to find alternate supply. The changes will come, the only questions is the timing.

NOJC also believes that the varied nature of gasoline marketing requires additional EPA flexibility in the area of the agricultural and consumer account tank size exclusions from the Phase I Vapor Recovery requirements. The current regulations should for example allow for some consideration of throughput in addition to tank size. This is because in some areas of the country larger tanks (say 5,000 gallons) have been installed, due to their relatively insignificant incremental purchase and installation costs over smaller tanics. This development has caused these larger tanks to be installed in situations where usage normally had indicated the installation of a much smaller tank. Requiring the Stage I for one tank dispensing 1,000 gallons per month because it is a large tank while not requiring such installation for a smaller tank with a higher throughput is illogical. The initial exception was created because small throughputs do not contribute as many hydrocarbons to the atmosphere and because small throughputs can not support the investment for the required equipment. We therefore request the agency to amend its minimum size requirement for Stage I Vapor Recovery by using as a measuring stick not only tank size but throughput as well. We would be most happy to assist the agency in determining an appropriate tank size-throughput ratio number.

E-77-42

Distribution: 1,2,5,6,18,19,20,21,28.

The Clean Air Act of 1970, in light of present realities, poses some profound consequences for the paint and coatings industry.1 NPCA2 wants to explain these consequences and in so doing hopes to clearly demonstrate the need for some basic changes to the Clean Air Act amendments of 1970.

Our industry's principal concern is with respect to attainment of the National Ambient Air Quality Standard for photochemical oxidants through control of hydrocarbon emissions from stationary sources. To fully appreciate this concern, it is necessary to briefly review the relevant provisions of the Act in two ways: First, how the Act would have affected existing and new sources of the paint and coatings industry if implemented in accordance with the present letter of the law, and second, how

1 This term is used herein to cover both manufacturing and industrial application operations such as automotive assembly plants, can manufacturing, furniture factories and other industrial users of coatings.

2 The National Paint & Coatings Association, Inc. (hereinafter referred to as NPCA, and headquartered at 1500 Rhode Island Avenue, N.W., Washington, D.C.), is a voluntary, non-profit industry association originally organized in 1888 and comprising today more than 900 members, who are engaged in the manufacture and distribution of paint, varnish, lacquer, and allied products, or of the materials used in such manufacture. The membership of NPCA collectively produces about 90% of the total dollar volume of paint, varnish, lacquer and allied products produced in the United States.

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EPA's actual implementation of the Act is affecting existing and

new sources of our industry.

The uniqueness of control of hydrocarbons needs also to be considered. They differ in that hydrocarbons are not controlled

per se. Instead they are controlled as precursors to

photochemical oxidant formation.

Further we want to direct your attention to the

photochemical oxidant standard itself. Serious questions are now being raised as to whether the attainment of the present National Ambient Air Quality Standard for photochemical oxidants is

necessary to protect public health.

Control of Existing and New Sources

in Accordance with the Present
Letter of the Law

To review the present situation for just a moment, the Clean Air Act Amendments of 1970 gave the EPA primary authority to establish national quality standards for the ambient air. It left with the States the primary authority to develop the necessary emission limitations to meet the national standards. Under the 1970 Amendments, however, the States were no longer given any choice. They were required to attain air quality of specified standards, and to do so within a specified period of time (basically 3 years after approval of a State Implementation