VIII. Summary of the Regulatory Impact Analysis and Regulatory Flexibility Analysis.

General Industry

OSHA examined the following three regulatory alternatives in the analysis: (1) a 20 ppb (0.160 mg/m(3)) PEL with a 10 ppb action level, (2) a 10 ppb (0.08 mg/m(3)) PEL with a 5 ppb action level, and (3) a 1 ppb (0.008 mg/m(3)) PEL with a 0.5 ppb action level. The technological feasibility of implementing a STEL was assumed to be feasible for any of the TWA/PEL alternatives examined, in that the same controls needed to reduce the TWA would also assure that the STEL is met. OSHA's findings are as follows:

* It is technologically feasible for industry to comply with a 10 ppb PEL by installing some readily available engineering controls and incorporating some new work practices. Although it may also be feasible for some industry sectors to achieve 1 ppb as an exposure level, that level is not feasible for major sectors of industry.

* Lowering the PEL from the present levels to 10 ppb, in conjunction with other provisions of the standard, would result in annualized compliance costs of approximately $10 million and save an estimated 1.8 to 18 production workers lives per year of exposure. In addition, compliance with the new standard will cost an estimated $ 0.7 million and save an estimated 0.5 maintenance workers' lives per year of exposure.

* The standard is economically feasible for the sectors studied and will not significantly affect either the competitive structure or the long-term profitability of these sectors.

* The standard is economically feasible and will not result in significant or differential impacts on small business establishments covered under the scope of the standard.

* There are no nonregulatory alternatives that adequately protect most workers from the adverse health effects associated with MDA exposure. A summary of the benefits and costs estimated by the Committee for the recommended PEL of 10 ppb and two other alternative PELs (20 ppb and 1 ppb) is provided in Exhibit 12, OSHA's PRIA.

a. Industry and Exposure Profiles

There are eleven principal industry sectors (maintenance workers for each sector have been separately identified for purposes of analysis) where workers are potentially exposed to MDA. These sectors are: (1) MDA Production for MDI Synthesis/MDA Sale and Import; (2) Reprocessing; (3) Filament Winding; (4) Potting and Encapsulation; (5) Molding/Bonding of Tools and Specialty Small Parts; (6) Wire Coating; (7) Coatings; (8) Intermediate for TGMDA and PACM-20 Production; (9) Polyurethane Curing; (10) Advanced Composite Materials Production; and (11) use of PMR-15 Pre-preg Materials. Further, there are also seven other industrial sectors where MDA was once used and may still be rarely found. These minor sectors are: (1) Coatings (Polybismalimides) of Printed Circuit Boards and Fabrication of Airplanes Parts; (2) Dyes and Pigments; (3) Quiana Yarn; (4) Intermediate for Pharmaceuticals, Herbicides, etc.; (5) Rubber Processing; (6) Anti-Oxidants; and (7) Ketamine Production.

OSHA also finds that MDA is made primarily to serve as an intermediate in the production of methylenediphenylisocyanate (MDI) and MDI is used in a wide variety of products. However, one to two percent of all MDA produced is sold for uses such as epoxy or polyurethane curing, or production of polyamides. In addition, some MDA is imported and used to produce a crude MDI known as PAPI or used for other non-MDI uses such as tetraglycidyl methylenedianiline (TDGMA) or PMR-15 manufacture. Occupational exposure to MDA occurs in the Construction and Maritime industries, as well.

OSHA also finds that there are six firms which produce MDA for MDI production, MDA for sale, or which import MDA. MDA is manufactured by 6 companies at 7 locations in four states. Dow Chemical Co.(LaPorte, Texas); BASF (Geismar, La); E.I. Dupont (Belle, WV); Mobay Chemical (New Martinsville, WV and Baytown, TX); Rubicon Chemical(Geismar, La); and Uniroyal Chemicals division of Avery (Naugtuck, Ct). Three of these companies, Mobay, Rubicon, and Dow, account for over 90 percent of the MDA production. Further, OSHA estimates that approximately 600 million pounds of MDA are produced for MDI conversion, 4,474,000 are produced domestically for sale, and an additional 1.8 million pounds are imported. In addition, it is estimated that the percentage of MDA in the product made domestically ranges from 40-70 percent, while the percentage in the imported product is approximately 98 percent.

Uses of MDI are far reaching and include areas of construction, refrigeration, transportation, tank and pipe insulation, packaging, casting systems for solid products, and systems for microcellular products. Consumer products include polyurethane foams (rigid, and flexible), elastomers, coatings, thermoplastic resins, foundry core binders, adhesives and sealants, and spandex fibers. Thus, because MDA is the reactant chemical in the production of MDI, the significance of and the need for MDA depends upon the need to produce MDI. However, since there are so many products containing MDI and the extent of MDI use is increasing, it can be assumed that MDA use will also continue to increase. In addition, the non-MDI uses of MDA (2 percent of total MDA consumption) are also expected to increase as product demand in the areas of nuclear energy, weapons manufacture, and space exploration increases.

OSHA estimated that the number of exposed production workers is 3,836 in the eleven principal industry sectors and an additional 189 maintenance workers are also exposed in these sectors. The average weighted exposure levels ranged from 1 ppb in PMR-15 use to 19 ppb in Filament Winding. For maintenance workers the estimated average exposure level is 250 ppb. The average days of MDA exposure per year ranged from 47 for Advanced Composite Manufacture to 250 for Production and some of the other sectors.

b. Benefit Analysis

The major benefit of the standard would be a reduction in the occurrence of occupational illnesses. Some aspects of these benefits can be quantified, such as the reduced risk of cancer due to direct exposure to MDA. The number of cancer deaths that may be prevented because of the MDA regulation is based on the model for quantitative assessment of the risk of cancer deaths resulting from occupational exposure to MDA in conjunction with the estimates of the number of workers exposed to MDA levels in various operations. The model and the exposure estimates are generally based on "realistic worst-case" assumptions; yet, in some respects, the use of the model also tends to underestimate the true benefits of the final regulation, because the only benefits quantified in the analysis are those resulting from a reduced incidence of cancer. They do not include an estimate of the reduction in the incidence of other adverse health effects potentially associated with MDA exposure such as liver disease or dermatitis. Because of data limitations, OSHA could not quantify these additional benefits. OSHA's benefit analysis reflects the estimated number of lives saved that will occur when the standards are implemented. OSHA used risk estimates to determine benefits. OSHA is cognizant of the fact that many regulatory agencies, such as EPA, recommend using the surface area scaling factor because application of this factor makes the correlation between dose in animal and dose in man more precise. The application of the surface area scaling factor increases the benefits by one order of magnitude.

OSHA estimates, using "realistic worst case" assumptions, that implementing a 10 ppb PEL and the associated duty provisions may result in 2.3 cancer deaths averted per year of exposure. In addition, if the surface area scaling factor is applied, OSHA estimates that 23 cancer deaths per year could be averted.

c. Technological Feasibility

OSHA has determined that the final standard is technologically feasible. The methods that can be used to reduce employee exposure to MDA include conventional technologies such as general and local exhaust ventilation, pneumatic feed systems, glove boxes, and work practices. Such technologies are commonly known and currently used in the affected industries. In addition, provisions of the standard that are not related to the PEL, such as medical surveillance and training, are judged to be feasible.

d. Costs of Compliance

OSHA made estimates of the compliance costs that would be incurred by employers in the eleven principal industry sectors which handle MDA and would be primarily affected by the standard. Because there are industry-specific differences in exposure characteristics and equipment usage, cost estimates for each sector were developed separately.

A baseline of current industry practice was identified for each sector. This baseline was derived from information on current production methods, exposure levels, and hazard control techniques. The costs of the controls which would be needed to achieve each successively lower PEL were then estimated based on the assumption that new controls could be added to those controls already in place.

It should be noted that the lower the target PELs, the higher the uncertainty associated with estimates of the effectiveness of control technology and housekeeping practices and their related costs. OSHA is confident that a 10 ppb PEL can generally be reached and maintained on an 8-hour TWA basis but is unsure that all industry sectors could generally achieve a 1 ppb PEL.

OSHA has estimated the total annualized compliance cost (for production workers) as $10 million for the 10 ppb permissible exposure limit. The major component of the estimated costs for production workers are the costs of hygiene facilities and practices, which constitute approximately 50 percent of the total estimated costs for the 10 ppb PEL. The second major element of cost is for protective clothing and equipment, which is approximately 30 percent of the total cost of compliance of achieving the 10 ppb PEL. Housekeeping costs constitute approximately 10 percent of the total estimated costs. The estimated costs of engineering controls constitute only a small percentage (4 percent) of the total estimated annualized costs of compliance for production workers.

e. Economic Feasibility Analysis

The overall conclusions reached by OSHA regarding economic impact assessment are: (1) most, if not all, of the affected industries ought to be able to pass the regulation's costs through to product purchasers (because of market and other considerations described below); (2) any price increases required are not likely to be very large, relative to the pre-regulation prices of the products; and (3) to the extent that prices of products do not rise (so that pass-through of these regulatory costs to product purchasers does not occur), the regulatory costs are not large relative to the other production costs and the net income of the companies examined. Consequently, OSHA has concluded that the final regulations will not pose a substantial burden to the affected industries, their employees, or consumers of their products.

Hence, OSHA's conclusion is that it is economically feasible for the eleven principal industry sectors to comply with the provisions of the MDA standard and that none of the sectors studied by OSHA would experience significant economic impacts.

f. Regulatory Flexibility Analysis

Pursuant to the Regulatory Flexibility Act of 1980 (P.L. 96-353, 94 Stat. 1164 [5 U.S.C. 601 et seq.], OSHA has given special consideration to the mitigation of the economic impacts of the final standard on small entities. OSHA does not anticipate that the standard would adversely affect small entities.

In developing a standard for occupational exposure to MDA, OSHA carefully considered size factors such as number of employees, total assets, and gross revenues to ensure that the final standard would minimize the impact on small firms while continuing to protect workers. Furthermore, OSHA determined in the economic feasibility analysis that most, if not all, of the affected industries would be able to pass the regulatory costs through to product purchasers reasonably rapidly. Thus, most of the affected firms probably will not have to bear all of the compliance costs for these regulations.

Finally, OSHA examined the financial conditions of a sample of firms affected by the regulations and determined that even if these firms were to bear the compliance costs of the regulations, these would not impose substantial burdens for these firms. Therefore, OSHA concluded that the regulation will not significantly affect small entities.

g. Assessment of Nonregulatory Alternatives

OSHA believes that there are no nonregulatory alternatives that would adequately protect most workers from the adverse health effects associated with MDA exposure. The tort liability and Workers' Compensation systems do not provide adequate worker protection due to their unpredictability and inconsistency from state to state. Other government regulations do not provide adequate worker protection due to their limited scope. OSHA does not have a current workplace standard for occupational exposure to MDA; thus, no regulatory protection is currently being provided [Note: many employers offer voluntary protection e.g. personal protective equipment, showers, change rooms, etc.].

Summary. In the NPRM OSHA discussed the economic and technological feasibility of implementing the proposed standard for occupational exposure to MDA. OSHA found that the 10 ppb PEL the 100 ppb STEL, and the accompanying standard provisions will substantially reduce the risk to worker health; and that the standard is feasible. OSHA's findings regarding the economic and technological feasibility of implementing the proposed standard were not challenged. In light of the above, OSHA concludes that this final standard is feasible.

Construction Industry

OSHA examined the following three regulatory alternatives in the analysis: (1) a 20 ppb (0.160 mg/m(3)) PEL with a 10 ppb action level, (2) a 10 ppb (0.08 mg/m(3)) PEL with a 5 ppb action level, and (3) a 1 ppb (0.008 mg/m(3)) PEL with a 0.5 ppb action level. Implementing a STEL was assumed to be technologically feasible for any of the TWA/PEL alternatives examined because the controls needed to reduce the TWA would also assure that the STEL is met. OSHA's findings are as follows:

* It is technologically feasible for the construction industry to comply with a 10 ppb PEL by installing some readily available engineering controls and incorporating some new work practices. Although it may also be feasible for some construction applications to achieve lower limits, this is greatly dependent upon the technique for application. The method for achieving the PEL is dependent on the method of application. If roll-on application is being used, it is easier to reduce exposures below the required PELs through use of very limited technology. On the other hand, when application is through spray technique it may be that a respirator, in addition to engineering controls and work practices, would be necessary to achieve compliance with the PEL. Use of a respirator, because the type required for spray application is the most effective, would result in exposures below the required PEL.

* Lowering the PEL from the present exposure levels in the workplace to 10 ppb, in conjunction with other provisions of the standard, would result in annualized compliance costs of approximately $355,428/year.

* The standard is economically feasible for the construction industry and will not significantly affect either the competitive structure or the long-term profitability of these sectors.

* The standard is economically feasible and will not result in significant or differential impacts on small business establishments covered under the scope of the standard.

* There are no nonregulatory alternatives that adequately protect most workers from the adverse health effects associated with MDA exposure. A summary of the benefits and costs estimated for the PEL of 10 ppb and two other alternative PELs (20 ppb and 1 ppb) is provided in Exhibit 12, OSHA's PRIA. The remainder of this discussion summarizes the analyses upon which these findings are based.

a. Industry Profile

For the purposes of estimating costs, risks, and benefits, OSHA made a number of reasonable assumptions in order to estimate the number of potentially exposed employees. These assumptions are based on the amount of MDA which reportedly goes into paints and coatings, the rate (lbs/hr) of paint application under spray and roll-on conditions, and the average hours of work of a typical painter. Assuming that 200,000 lbs of MDA are used yearly in coatings,(1) and that it constitutes 20 percent by weight of the final product, OSHA estimated that one million pounds of MDA-containing coatings are applied each year. Estimates provided to OSHA by the International Brotherhood of Painters and Allied Trades suggest that the average application rate of spray methods is 20 lbs/hr, while that for the roll-on methods is 30 lbs/hr. OSHA combined these estimates with the assumption that a typical painter spends only four hours/day painting,(2) with the rest of the time taken up by preparation, set-up and clean-up of work areas. OSHA assumed, in the absence of any available data, that a typical painter would spend only 10 percent of his work time (25 days) each year using MDA-containing coatings.(3) The result of these assumptions is that a typical painter would spend some 100 hours/year applying MDA coatings.

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  Footnote(1) ICF, Inc. provided this estimate for OSHA in its preliminary
technological and economic analysis.  Thus the Committee made use of the
200,000 lbs. per year figure in its computations.  The International
Brotherhood of Paingers and Allied Trades provided the estimates that the
paint was composed of 20% MDA and 80% other products. (ex.9)
  Footnote(2) The number of hours per day engaged in painting operations
was furnished by Research Triangle Institute in a document prepared for
OSHA in 1980 entitled "Economic Impact Statement for Abrasive Blasting."
(ex.9)
  Footnote(3) Estimated from discussions with representatives of the
International Brotherhood of Painters and Allied Trades.  Since
approximately 1 million pounds of this are MDA coatings, the Committee
conservatively estimated that MDA containing coatings are approximately
10% of the applied coatings and should require 10% of the workers time to
be applied. (ex.9)

For spray applications, each painter would thus apply 2000 lbs/yr; and

for roll-on application, 3000 lbs/yr.(4) Since an estimated 400,000 lbs of MDA paint are consumed each year in spray operations and 600,000 lbs in roll-on operations, the sum of these assumptions yields an estimate of 200 potentially exposed workers (400,000 lbs/yr divided by 2000 lbs/worker year) in spray operations and 200 workers (600,000 lbs/year divided by 3000 lbs/worker-year) in roll-on applications. These estimates are obviously tenuous, but OSHA considers them the best available evidence and a reasonable basis to estimate costs, risks, and benefits. OSHA believes that both spray and roll-on application methods entail risk of airborne and dermal exposure. Spray applications, in the view of OSHA, are especially likely to pose potentially serious hazards. In addition, OSHA is aware of two reported cases involving acute hepatitis after application of MDA-containing coating products, and sources in the scientific literature and at least one trade union have reported that skin problems are common among painters using epoxy paints (52 FR 26847). The latter reports confirm the common occurrence of dermal exposures, and thus the potential for skin absorption of MDA.

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  Footnote(4) The estimate of 2000 lbs/yr for spray painters and 3000
lbs/yr for roll-on application came from the discussions with the
International Brotherhood of Painters representative (ex.9)

For the purpose of risk estimation in spray operations, OSHA assumed that TWA airborne levels of exposure to MDA could reasonably be estimated to be similar to those experienced by maintenance workers, 250 ppb (2 mg/m(3))(5). Dermal exposure levels were also assumed to be 0.50 mg/cm 2-hr for the palms and 0.00134 mg/cm 2-hr for the forearms and upper body. These are twice that expected for maintenance workers. OSHA believes that the spray applications presented twice the potential for skin deposition and absorption as would be expected for maintenance workers. For manual roll-on applications, it is reasonable to assume lower levels of both airborne and dermal exposures. OSHA estimated that airborne and dermal exposures would be comparable to those estimated for the polyurethane curing sector, or 0.160 mg/m(3) (airborne), 0.25 mg/cm 2-hr for the palms, and 0.00067 mg/cm 2-hr for the forearms and upper body.

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  Footnote(5) Support for OSHA's assumptions is provided in a spray
painting evaluation by NIOSH which found that paint mist concentrations
ranged from 2.0-43.3 mg/m.  Assuming 20% MDA by weight, than the mist
would range from 0.4-8.7 mg/m(3) respirable MDA.

OSHA has estimated that 400 workers are exposed to MDA-containing paints and coatings, 200 in spray applications and 200 in roll-on applications. Based on the limited data available, an average of 6 painters per employer or firm was assumed. The total number of potentially affected firms would thus be approximately 66 (400 workers/6 workers per firm). Spray applications were assumed to entail higher exposure, both airborne and dermal, than roll-on applications. Data describing exposure levels, number of employers, or number of employees were not available to OSHA, so that the exposure profiles were constructed with the use of reasonable assumptions.

b. Benefits

In this section, OSHA estimated the potential benefits (in terms of deaths avoided) accruing as a result of its standard for the Construction Industry. The analysis of this section demonstrates that as a result of the standard approximately .042 painters applying MDA containing coatings through spray applications and .019 painters applying MDA containing coatings through roll-on applications will be saved for every year of reduced exposure by establishing a permissible exposure limit of 10 ppb and by establishing requirements to limit dermal exposure to MDA. A significant proportion of the estimated lives saved are the result of the reduction in dermal exposure, whereas the reduction in airborne exposure levels makes a much smaller contribution to the reduction in risk.

While OSHA was able to estimate the benefits from reducing the risks due to occupational cancer, it was unable to quantify the effects that the standard's provisions would have on reducing other occupational risks resulting from MDA exposure (e.g., reduced incidence of dermatitis, liver toxicity, etc.).

c. Technological Feasibility

This section assesses the technological feasibility of achieving the alternative levels. OSHA has reviewed the technological feasibility and believes that while it may be feasible and necessary in some instances to use local or general exhaust ventilation to reduce exposures, these controls alone will not provide adequate protection for painters (applying coatings through spray application). These controls in conjunction with the use of respiratory protection will be necessary to ensure that workers applying paints through a spray technique are adequately protected. In many instances, OSHA believes that it will not be feasible to use local or general exhaust ventilation, and in these cases only respiratory protection will be used. OSHA recognizes that many coating applications in the Construction Industry will be to concrete structures, pipes, flooring, etc. These surfaces may be located inside or outside of buildings but are usually outdoors. It is often times difficult to use traditional control technologies in these instances. However, OSHA acknowledges that some of these construction activities may be conducted inside of facilities or perhaps in confined spaces (e.g., tanks, pipes). In these instances, OSHA expects that employers will provide the usual and necessary engineering controls in addition to the necessary respiratory protection. OSHA also recognizes that the use of engineering controls in these instances is mandated by existing OSHA regulations (e.g. confined spaces, spray painting).

For purposes of feasibility, OSHA believes that compliance will be achieved primarily through the use of the appropriate respiratory equipment and not through the use of engineering controls. OSHA makes these conclusions based on its findings that in the construction sector MDA appears to be used exclusively in coating application. No other use was identified. While workers applying coatings through roll-on techniques were not expected to need respirators, those engaged in spray application would be required to use a respirator.

Based on the analysis discussed above, the following determination of feasibility in these sectors was reached by OSHA:

* It is technologically feasible for the painters applying MDA-containing coatings to achieve compliance with a PEL of 10 ppb or less through the use of the appropriate engineering controls and work practices along with the use of respiratory protective equipment for spray operations.

* It is also considered feasible to limit dermal exposure by the use of appropriate personal protective equipment and clothing, and through other means as required under the final standard.

d. Costs of Compliance

This discussion presents estimates of the compliance costs that would be incurred by employers in the Construction Industry subsequent to the promulgation of a PEL of 10 parts per billion (0.08 mg/m(3)), with an action level of 5 parts per billion. The cost to achieve this PEL would be the result of the use of personal protective equipment, hygiene measures, education, and other measures. The costs of engineering controls are not included in the analysis, since such controls would only occasionally be implemented. The total estimated cost of compliance is $355,428/year for the entire sector to achieve compliance with any of the PELs whether it be 1, 10, or 20 ppb.

e. Economic Feasibility and Regulatory Flexibility Analysis

In accordance with Executive Order No. 12991 (46 FR 13193, February 19, 1981), OSHA has assessed the potential economic impacts of the MDA standard. The final determination is that the regulatory requirement limiting MDA exposure in the workplace, including PEL levels reduced to 10 ppb, will not result in significant adverse economic impact on any of the industry sectors for which detailed financial and compliance data are available.

Pursuant to the Regulatory Flexibility Act of 1980 (P.L. 96-353, 94 Stat. 1164 [5 U.S.C. 601 et seq.]), consideration has been given to the mitigation of the economic impacts of the final standard on small entities. Based on the available data, it is not anticipated that the final standard would significantly affect a substantial number of small entities.

The final standard limiting exposure to MDA in the construction industry affects workers in approximately 66 firms. OSHA conducted an assessment of the economic impact on these 66 firms and has determined that it is minimal based on the nature of the applications involved and the probability that these compliance costs will be passed through to the purchasers of their services. The supporting analysis for this finding is presented below, and is based on the same methodology for determining economic impacts used to assess the impact of the proposed regulations on the producers and primary users of MDA.

The annualized compliance costs faced by the affected construction firms will be approximately $5,450. Several factors suggest that these costs will be passed through to the purchasers of the services of these construction firms. First, the purchasers of these firms' services are large firms and government entities managing large projects (e.g., chemical plants, reactors, and defense-related activities). As such, the incremental costs associated with limiting worker exposure to MDA are likely to be extremely small relative to the economic size of these projects. Second, in many cases, contractual and engineering specifications may require that the MDA-related products be used for their desirable physical properties. In these cases, the incremental compliance cost will certainly be passed through to these purchasers. Given these considerations, it is likely that these compliance costs will be fully passed through in a relatively short period of time.

If these compliance costs are passed through to purchasers of these firms' services, the increase in the price of these services is likely to be extremely small. The annual compliance costs per firm are quite low, and constitute a small portion of each firm's total operating cost. Thus the compliance costs of several thousand dollars per year are unlikely to result in price increases leading to contractor failures or employment contractions.

Finally, if the compliance costs are not passed through to the purchasers of the services of these affected firms, given the size of the incremental costs, it is highly unlikely that these costs would pose a significant burden to the firms involved. Relative to the workers' salaries and other costs of construction activities affected by the regulations, the incremental compliance costs of $5,450 per firm are extremely small.

Based on these considerations OSHA concludes that the final standard will not cause significant economic impacts to the affected construction firms because the compliance costs are small relative to the economic size of the affected firms and the activities into which these construction services are inputs.

Summary. OSHA has reviewed the economic and technological feasibility of implementing the final standard for occupational exposure to MDA in the construction industry. OSHA finds that the 10 ppb PEL, the 100 ppb STEL, and the accompanying standard provisions will substantially reduce the risk to worker health, and it is feasible. OSHA's findings regarding the economic and technological feasibility of implementing the proposed standard were not challenged. In light of the above, OSHA concludes that this final standard is feasible.

[57 FR 35630, Aug. 10, 1992]