Regulations (Preambles to Final Rules) - Table of Contents|
| Record Type:||Coke Oven Emissions and Inorganic Arsenic|
| Title:||Section 4 - IV. Summary of the Final Economic Analysis|
IV. Summary of the Final Economic Analysis Introduction
Based on the record of this rulemaking, this final rule eliminates a number of provisions in OSHA standards that are duplicative, unnecessary, or potentially in conflict with the rules of other Federal agencies. All of the changes OSHA is making are expected to benefit the regulated community by making the rules clearer, simple and easier to understand and apply. Quantifiable economic benefits can be estimated only for four of these changes, however.2 By eliminating these "problem provisions" from its standards, this Standards Improvement rule will lessen the burden employers currently experience, and will, in turn, generate cost savings. No commenters disputed these findings, reported by OSHA in the Preliminary Economic Analysis that accompanied the proposed rule. The following paragraphs discuss the Final Economic Analysis in detail.
First Aid Kits
The final rule eliminates the requirements in § 1910.151(b) and § 1926.50(d)(1) that employers must have certain first aid supplies approved by a consulting physician before they are used. This requirement applied only in cases where no infirmary, clinic, or hospital was in close proximity to the worksite and the employer intended to treat first aid injuries at the site. Although the number of establishments meeting these criteria is not known, the Agency believes that its estimate of 10 percent of establishments is reasonable, and no commenter disagreed with this estimate. The provisions being eliminated did not specify how the physician was to provide this consultation, but OSHA assumed that, at most, five minutes of a physician's time, valued at $100/ hr,3 would be required to approve the contents of the first aid kit at these establishments. For purposes of this analysis, OSHA also assumed that the physician provided five minutes of his or her time at an hourly wage rate, i.e., at a cost of $8.33.
The analysis further assumed that the physician would need to approve the first aid supplies once every 10 years, after which time the development of new kinds of medical supplies and the possibility of new hazards at the worksite would make a new consultation necessary. The cost of five minutes of a physician's time annualized over 10 years is $1.19 per year.
The Agency estimates that approximately 6.4 million employers fall under OSHA jurisdiction and will be affected by this change [County Business Patterns, 1993]. Of these, 10% would be affected by the change; the annualized cost for employers to comply with these provisions in the past was approximately $761,600 ((6.4 million x 10% ) x $1.19). By eliminating the requirement for a physician's approval of an establishment's first aid kit, OSHA will eliminate this burden.
Coke Oven Emissions
The final rule will eliminate the requirement at § 1910.1029(j) for employers to conduct semiannual sputum cytology tests and will reduce the frequency at which they must supply chest x-rays from twice a year to once a year for workers who are 45 years of age or older or who have five or more years of employment in areas defined by the standard as regulated areas. Regulated areas encompass the coke oven battery, including topside and its machinery, pushside and its machinery, cokeside and its machinery, and battery ends; the wharf; the screening station; and the beehive oven and its machinery.
The Inflationary Impact Statement developed by OSHA in support of the Coke Oven standard (§ 1910.1029), [Inflationary Impact Statement: Coke Oven Emissions, 1976] estimated total employment in coke ovens at 29,600 workers. The same analysis estimated that 75 percent of these employees worked in regulated areas. The 1992 Census of Manufacturers (Industry Series) indicated total employment for SIC 33121 (Coke Oven and Blast Furnace Products) at 8,600 and total production person-hours at 15.7 million. A separate Census Industry Series count specific to coke ovens indicates a total of 11.2 million production person-hours, which constitutes approximately 71 percent of SIC 3312's productive person-hours, suggesting a current total number of 6,135 coke oven workers.
Assuming that the proportion of coke oven employees working in regulated areas has remained constant, approximately 4,600 coke oven employees currently work in regulated areas. Approximately 30 percent of the workforce in 1994 was over 45 years of age [BLS data presented in Statistical Abstract of the United States, 1995, p. 402]. Turnover rates in SIC 33, which includes coke ovens, are estimated at 5 percent annually [National Occupational Exposure Survey: Analysis of Management Interview Responses, 1988]. Thus, approximately 77 percent of the current regulated area workforce will have been exposed to coke oven emissions for five years or more.4 Adjusting this percentage to reflect the assumption that 30 percent of employees are over 45 years of age yields an estimate of 84 percent 5 of coke oven employees (3,864 workers) potentially affected by the revocation or revision of these requirements.
Data for 1994 obtained from the Physician Payment Review Commission [E-mail from Christopher Hogan, PPRC, to Tom Mockler, OSHA] indicate that the average x-ray charge nationally is $54.40 and the average lab charge for cytological examination of bodily fluids is $51.90. (OSHA assumes that the additional average charge of $19.00 for sputum specimen collection is included in the fee for the medical exam required by the standard.) Therefore the savings associated with the elimination of one chest x-ray and two sputum cytologies annually is $158.20 per worker ($54.40 for one x-ray, and $103.80 for two sputum cytology tests). For the group of 3,864 employees, the annual savings is thus $611,285.
The American Iron and Steel Institute (AISI) [Ex. 4-22] agreed with the Preliminary Economic Analysis's finding that this change would save employers money. AISI's analysis, which assumed higher wage rates and a larger affected population than OSHA's analysis, estimated a cost savings of $925,000 per year. Thus, the Agency's cost savings estimate for this regulatory action may be understated.
As in the case of the coke oven standard, OSHA is eliminating the
requirement for sputum cytology and reducing the frequency of chest x-
ray exams from semi-annual to annual for workers exposed above the
inorganic arsenic action level of 5
The Federal Register notice for the inorganic arsenic rulemaking
[May 5, 1978, p. 19585] indicated that, of 660,000 workers exposed to
inorganic arsenic, 7,400 were exposed above an 8-hour TWA 4
At the time of the original rulemaking, the Inflationary Impact Statement [Inflationary Impact Statement: Inorganic Arsenic, 1976] estimated that 50% of employees exposed above the action level would need the semi-annual x-ray exams, based on OSHA's analysis of age, job tenure and turnover. Using the same assumptions, the Agency estimates that approximately 3,700 workers will be affected by the final rule's revision to this provision. This change will eliminate the need for x- ray and sputum cytology testing valued at $158.20 (see the explanation above for coke ovens for cost details) for 3,700 employees, for an annual cost savings of $584,340.
Pulp and Paper
OSHA's existing pulp and paper standard, § 1910.261, contains paragraph (b)(5), "vessel entering," which states:
Lifelines and safety harness shall be worn by anyone entering closed vessels, tanks, chip bins, and similar equipment, and a person shall be stationed outside in a position to handle the line and to summon assistance in the case of emergency.
Paragraph (b)(5) also prescribes other safety precautions for similar confined spaces in pulp and paper mills.
OSHA is eliminating these specific separate requirements for confined space entry in pulp and paper mills and instead is cross- referencing § 1910.146, OSHA's generic permit-required confined space standard. In other words, employers in the pulp and paper industry will no longer have to comply with § 1910.261(b)(5) but will instead be required to comply with § 1910.146. § 1910.146 requires employers to assess the hazards associated with their confined spaces and take appropriate safety precautions to deal with those hazards. Although § 1910.146 may require employers under certain circumstances to complete additional checklists, conduct training, and plan for rescue, depending on the hazard(s) present, pulp and paper mill employers will in some cases no longer need to require employees to wear lifelines or provide for outside "attendants", 7 as was required by § 1910.261.
The costs of complying with § 1910.146 in the pulp and paper industry were included in OSHA's supporting Regulatory Impact Analysis [Final Regulatory Impact Analysis and Regulatory Flexibility Analysis of the Final Permit-Required Confined Spaces Standard, December 1992]. They were estimated to be approximately $4 million. No economic or technological feasibility problems were identified.
By deleting the more rigid confined space requirements of the pulp and paper industry-specific standard and requiring employers to comply with the more performance-oriented requirement for attendants and lifelines of the permit-required confined spaces standard, OSHA is simultaneously relieving a burden and enhancing safety. Based on the underlying analysis used by OSHA in producing the RIA for § 1910.146, a comparison of the costs associated with the requirement that an attendant be present (§ 1910.261 (b)(5)) with the more flexible requirements in § 1910.146 indicates a savings to employers of approximately 450,000 person-hours annually. Given the hourly compensation rate of $17 used in the RIA, this represents an annual savings of $7.7 million.
In summary, by revoking or revising these four unnecessary or duplicative requirements, the Agency is reducing annual employer burdens related to first aid kits by $761,000, to medical surveillance for coke oven emission workers by $611,285 and inorganic arsenic workers $584,340, and to confined space entry in pulp and paper mills by $7.7 million, for a total annualized employer savings of $9,656,625.
OSHA could not identify any provision of the final rule that raised technological feasibility problems for employers. OSHA therefore concludes that technological feasibility is not an issue for the changes made to these standards in this regulatory action.
Footnote (2) For example, the Duke Power Company [Ex. 4-2] applauded OSHA's elimination of a provision (§ 1926.152) on storage cans for flammable and combustible liquids that conflicts with a DOT requirement on the same topic. Unfortunately, the Agency does not have sufficient data to estimate the apparent cost savings from this change. (Back to Text)
|Regulations (Preambles to Final Rules) - Table of Contents|