[Federal Register Volume 68, Number 248 (Monday, December 29, 2003)]
[Proposed Rules]
[Pages 75068-75105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31867]
[[Page 75067]]
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Part V
Environmental Protection Agency
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40 CFR Part 451
Effluent Limitations Guidelines and New Source Performance Standards
for the Concentrated Aquatic Animal Production Point Source Category;
Notice of Data Availability; Proposed Rule
Federal Register / Vol. 68 , No. 248 / Monday, December 29, 2003 /
Proposed Rules
[[Page 75068]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 451
[FRL-7602-5]
Effluent Limitations Guidelines and New Source Performance
Standards for the Concentrated Aquatic Animal Production Point Source
Category; Notice of Data Availability
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of data availability.
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SUMMARY: In 2002, EPA proposed technology-based effluent limitations
and new source performance standards for the concentrated aquatic
animal production (CAAP) point source category. The proposal applied to
new and existing CAAP facilities that discharge pollutants directly to
waters of the United States.
This notice summarizes the data received since proposal and
describes how the Agency may use the data to address comments and
develop the final rule. The notice also discusses refinements EPA may
make to its methods for estimating costs, load reductions and financial
impacts. It also presents revised results for these analyses reflecting
the refinements and incorporating new data.
DATES: Submit comments on or before February 12, 2004.
ADDRESSES: Public comments regarding this document should be mailed to
Water Docket, Environmental Protection Agency, Mailcode 4101T, 1200
Pennsylvania Avenue, NW., Washington, DC 20460, Attention Docket ID No.
OW-2002-0026 (formerly W-02-01), or submitted electronically at http://www.epa.gov/edocket. For additional information on how to submit
comments, see section B in the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: For technical information concerning
today's proposed rule, contact Ms. Marta Jordan at (202) 566-1049. For
economic information, contact Mr. Christopher Miller at (202) 566-0395.
SUPPLEMENTARY INFORMATION:
A. Regulated Entities
Entities potentially regulated by this action include:
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Examples of regulated Primary NAICS
Category entities codes
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Industry and Government....... Facilities engaged in
concentrated aquatic
animal production,
which may include
these sectors:
Finfish Farming and 112511
Fish Hatcheries.
Other Animal 112519
Aquaculture.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your facility would be regulated by this action, you should carefully
examine the applicability criteria in 40 CFR 451.1, 451.10, 451.20 and
451.30 of the proposed rule. If you have questions regarding the
applicability of this proposed action to a particular entity, contact
the person listed for technical information in the preceding FOR
FURTHER INFORMATION CONTACT section.
B. How Can I Get Copies of This Document and Other Related Information?
1. Docket. EPA has established an official public docket for this
action under Docket ID No. OW-2002-0026. The official public docket
consists of the documents specifically referenced in this action, any
public comments received and other information related to this action.
Although a part of the official docket, the public docket does not
include information as Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. The official
public docket is the collection of materials that is available for
public viewing at the Water Docket in the EPA Docket Center, (EPA/DC)
EPA West, Room B102, 1301 Constitution Avenue, NW., Washington, DC. The
EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding legal holidays. The telephone
number for the Public Reading Room is (202) 566-1744, and the telephone
number for the Water Docket is (202) 566-2426. For access to docket
materials, please call ahead to schedule an appointment. Every user is
entitled to copy 266 pages per day before incurring a charge. The
Docket may charge 15 cents a page for each page over the page limit
plus an administrative fee of $25.00.
2. Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr/.
An electronic version of the public docket is available through
EPA's electronic public docket and comment system, EPA Dockets. You may
use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public
comments, access the index listing of the contents of the official
public docket, and to access those documents in the public docket that
are available electronically. Once in the system, select ``search,''
then key in the appropriate docket identification number.
Certain types of information will not be placed in the EPA Dockets.
Information claimed as CBI and other information whose disclosure is
restricted by statute, which is not included in the official public
docket will not be available for public viewing in EPA's electronic
public docket. EPA's policy is that copyrighted material will not be
placed in EPA's electronic public docket, but will be available only in
printed, paper form in the official public docket. To the extent
feasible, publicly available docket materials will be made available in
EPA's electronic public docket. When a document is selected from the
index list in EPA Dockets, the system will identify whether the
document is available for viewing in EPA's electronic public docket.
Although not all docket materials may be available electronically, you
may still access any of the publicly available docket materials through
the docket facility identified in Section B.1. EPA intends to work
towards providing electronic access to all of the publicly available
docket materials through EPA's electronic public docket.
For public commenters, it is important to note that EPA's policy is
that public comments, whether submitted electronically or in paper,
will be made available for public viewing in EPA's electronic public
docket as EPA receives them and without change, unless the comment
contains copyrighted material, information claimed as CBI, or other
information whose disclosure is
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restricted by statute. When EPA identifies a comment containing
copyrighted material, EPA will provide a reference to that material in
the version of the comment that is placed in EPA's electronic public
docket. The entire printed comment, including the copyrighted material,
will be available in the public docket.
Public comments submitted on computer disks that are mailed or
delivered to the docket will be transferred to EPA's electronic public
docket. Public comments that are mailed or delivered to the Docket will
be scanned and placed in EPA's electronic public docket. Where
practical, physical objects will be photographed, and the photograph
will be placed in EPA's electronic public docket along with a brief
description written by the docket staff.
For additional information about EPA's electronic public docket,
visit EPA Dockets online or see 67 FR 38102, May 31, 2002.
C. How and To Whom Do I Submit Comments?
You may submit comments electronically, by mail, or through hand
delivery/courier. To ensure proper receipt by EPA, identify the
appropriate docket identification number in the subject line on the
first page of your comment. Please ensure that your comments are
submitted within the specified comment period. Comments received after
the close of the comment period will be marked ``late.'' EPA is not
required to consider these late comments. If you wish to submit
information you claim as CBI or information that is otherwise protected
by statute, please follow the instructions in Section D. Do not use EPA
Dockets or e-mail to submit information you claim as CBI or information
protected by statute.
1. Electronically. If you submit an electronic comment as
prescribed below, EPA recommends that you include your name, mailing
address, and an e-mail address or other contact information in the body
of your comment. Also include this contact information on the outside
of any disk or CD ROM you submit, and in any cover letter accompanying
the disk or CD ROM. This ensures that you can be identified as the
submitter of the comment and allows EPA to contact you in case EPA
cannot read your comment due to technical difficulties or needs further
information on the substance of your comment. EPA's policy is that EPA
will not edit your comment, and any identifying or contact information
provided in the body of a comment will be included as part of the
comment that is placed in the official public docket, and made
available in EPA's electronic public docket. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment.
i. EPA Dockets. Your use of EPA's electronic public docket to
submit comments to EPA electronically is EPA's preferred method for
receiving comments. Go directly to EPA Dockets at http://www.epa.gov/edocket, and follow the online instructions for submitting comments. To
access EPA's electronic public docket from the EPA Internet Home Page,
select ``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once
in the system, select ``search,'' and then key in Docket ID No. OW-
2002-0026. The system is an ``anonymous access'' system, which means
EPA will not know your identity, e-mail address, or other contact
information unless you provide it in the body of your comment.
ii. E-mail. Comments may be sent by electronic mail (e-mail) to [email protected], Attention Docket ID No. OW-2002-0026. In contrast to
EPA's electronic public docket, EPA's e-mail system is not an
``anonymous access'' system. If you send an e-mail comment directly to
the Docket without going through EPA's electronic public docket, EPA's
e-mail system automatically captures your e-mail address. E-mail
addresses that are automatically captured by EPA's e-mail system are
included as part of the comment that is placed in the official public
docket, and made available in EPA's electronic public docket.
iii. Disk or CD-ROM. You may submit comments on a disk or CD-ROM
that you mail to the mailing address identified in Section C.2. These
electronic submissions will be accepted in Word Perfect, Microsoft
Word, or ASCII file format. Avoid the use of special characters and any
form of encryption.
2. By Mail. Send an original and three (3) copies of your comments
and enclosures as well as any references cited in your comments to:
Water Docket, Environmental Protection Agency, Mailcode: 4101T, 1200
Pennsylvania Avenue, NW., Washington, DC 20460, Attention Docket ID No.
OW-2002-0026.
3. By Hand Delivery or Courier. Deliver your comments to: Water
Docket, EPA Docket Center, EPA West, Room B102, 1301 Constitution
Avenue, NW., Washington, DC, Attention Docket ID No. OW-2002-0026. Such
deliveries are only accepted during the Docket's normal hours of
operation as identified in Section B.1.
D. How Should I Submit CBI to the Agency?
Do not submit information that you consider to be CBI
electronically through EPA's electronic public docket or by e-mail.
Send information identified as CBI by mail only to the following
address: Engineering and Analysis Division, Mail Code 4303T, U.S.
Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460, Attention: Marta Jordan, Docket ID No. OW-2002-
0026. For hand delivery or courier deliver the information to the
Engineering and Analysis Division, EPA West, Room 6233M, 1301
Constitution Avenue, NW., Washington, DC, Attention: Marta Jordan,
Docket ID No. OW-2002-0026.
You may claim information that you submit to EPA as CBI by marking
any part or all of that information as CBI (if you submit CBI on disk
or CD-ROM, indicate on the outside of the disk or CD-ROM that it
contains information claimed as CBI and then identify electronically
within the disk or CD-ROM the specific information that is CBI).
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
In addition to one complete version of the comment that includes
any information claimed as CBI, a copy of the comment that does not
contain the information claimed as CBI must be submitted for inclusion
in the public docket and EPA's electronic public docket. If you submit
the copy that does not contain CBI on disc or CD-ROM, mark the outside
of the disk or CD-ROM to clearly indicate that it does not contain CBI.
Information not marked as CBI will be included in the public docket and
EPA's electronic public docket without prior notice. If you have any
questions about CBI or the procedures for claiming CBI, please consult
the person identified in the FOR FURTHER INFORMATION CONTACT section.
E. What Should I Consider as I Prepare My Comments for EPA?
You may find the following suggestions helpful for preparing your
comments:
1. Explain your views as clearly as possible.
2. Describe any assumptions that you used.
3. Provide any technical information and/or data you used that
support your views.
4. If you estimate potential burden or costs, explain how you
arrived at your estimate.
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5. Provide specific examples to illustrate your concerns.
6. Offer alternatives.
7. Make sure to submit your comments by the comment period deadline
identified.
8. To ensure proper receipt by EPA, identify the appropriate docket
identification number in the subject line on the first page of your
response. It would also be helpful if you provided the name, date, and
Federal Register citation related to your comments.
Table of Contents
I. Purpose of This Document
II. New Data and Information
A. EPA site visits and sampling episodes
B. Monitoring and permit data from the permitting authorities
C. Information submitted with comments
D. Detailed survey results
E. Literature searches and other information collection
activities
F. Holding time study
III. Summary of Comments and EPA's Preliminary Assessment
A. Representativeness of EPA's sampling database
B. Production systems
C. Drugs and chemicals
D. Non-native species
E. Water quality impacts from TSS, BOD, and nutrients
F. Best management practices
G. Proposed TSS limitations
H. Feed conversion ratios
I. Cost analyses
IV. Regulatory Options Considered for the Proposal and Modifications
Being Considered for the Final Rule
A. Proposed regulatory options
B. Modifications being considered for the final rule
V. Revisions to the Cost, Loadings, Economic, and Benefits Models
A. Revisions to assumptions and methodology used in EPA's cost
analyses
B. Revisions to assumptions and methodology used in loadings
analyses
C. Revisions to assumptions and methodology used in economic
analyses
D. Revisions to assumptions and methodology used in benefits
analyses
VI. Revised Estimates of Costs and Economic Impacts
A. National cost estimates
B. Economic analysis
C. Cost-effectiveness and cost-reasonableness analysis
D. Small business analysis
VII. Solicitation of Comments
A. Alligator production
B. BMPs
C. Disposal of drugs and chemicals
D. Differentiating between warm and cold water species
E. Combining the proposed recirculating and flow-through
subcategories into one subcategory
F. Revised economic impact methodology
G. Factoring unpaid labor charges in the impact analysis
H. Facilities excluded from the economic impact analysis
I. Purpose of This Document
Today's document has several purposes. First, EPA is summarizing
new data and information we received during public comment on the
proposed concentrated aquatic animal production (CAAP) regulations (67
FR 57872, September 12, 2002). The document also describes data EPA
collected since it published the proposed rule. For example, EPA
evaluated the data from detailed industry surveys, EPA's Permit
Compliance System (PCS) database, Discharge Monitoring Reports (DMRs),
National Pollutant Discharge Elimination System (NPDES) permits and the
industry. This notice summarizes major issues raised in comments on the
proposal and how the additional data and comments affect EPA's thinking
on these issues. Finally, this document discusses possible changes in
our methodology for estimating costs, removals, economic impacts, and
benefits associated with the modified options, and includes revised
estimates for costs, removals, and economic impacts.
Today's document includes six main components:
1. Discussion of new data and information.
2. Discussion of comments and EPA's preliminary assessments based
upon these comments.
3. Possible Modifications to the Proposed Options and Technologies.
4. Possible Revisions to Costs, Loadings, Economic, and Benefits
Models.
5. Revised Estimates of Costs, Loadings, and Economic Impacts.
6. Solicitation of Comments.
Through this NODA, EPA seeks further public comment on any and all
aspects of the specific data and issues it has identified here. EPA
continues to review the comments we received on the proposed rule and
will address those comments and the comments submitted in response to
this notice in the final action.
II. New Data and Information
This section provides a brief overview of new data from these
general sources:
[sbull] EPA post-proposal sampling.
[sbull] National Pollutant Discharge Elimination System (NPDES)
permits, permit fact sheets, and Discharge Monitoring Report (DMR) data
for facilities that responded to the detailed survey.
[sbull] Information submitted with comments on the proposed rule.
[sbull] Detailed surveys of aquatic animal production (AAP)
facilities.
[sbull] Literature searches.
[sbull] Data from a study that evaluated the effect of sample
holding times on subsequent chemical analysis.
A. EPA Site Visits and Sampling Episodes
During the comment period and at the public meetings on the
proposal, commenters raised concerns about the representativeness of
the data EPA used as the basis for the proposed rule. In response to
these concerns, EPA undertook additional wastewater sampling at a State
trout hatchery using flow-through system technology (one of the
technology options evaluated for the proposal) and visited 17
additional sites, including flow-through systems raising warm water
species.
1. Sampling Episode
The facility selected for post-proposal wastewater sampling was a
State hatchery in Pennsylvania producing cold water species (trout for
stocking enhancement) using flow-through system technology. EPA
considered this facility a good candidate for sampling because it used
wastewater treatment similar to the treatment systems on which EPA
based the proposed limitations. Those systems rely on primary settling
of solids generated during cleaning of quiescent zones in an offline
settling basin, and secondary settling of the primary effluent, and
full or bulk flow from the raceways. Primary settling generally
involves physical separation of particles through either quiescent
zones and offline settling or a full-flow basin. Secondary settling is
sequential solids removal after primary by using a second settling
basin (i.e., polishing pond) or a technology unit such as a
microscreen. EPA considers this facility to be representative of a well
operated facility with effective wastewater treatment. EPA sampled
wastewater for five days at this facility during a time of year when
the facility approached a maximum stocking density. For more
information, refer to the sampling episode report for this facility
(Document Control Number (DCN) 62386).
2. Site Visits
EPA selected 17 additional sites to visit based, in part, on public
comments regarding specific gaps in the information EPA considered at
proposal. Commenters raised concerns about the production of warm water
aquatic animals and the use of green water production systems and the
ability of these types of production facilities to achieve the proposed
effluent limits. Commenters also raised concerns about EPA's
assumptions concerning the application of
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microscreen treatment to achieve proposed limits for Total Suspended
Solids (TSS).
To address comments about the lack of representation of warm water
and green water systems, EPA visited two facilities that use warm water
culture systems and four facilities that use green water systems. Warm
water culture systems refer to the culture of aquatic animals such as
catfish, tilapia, or shrimp, that normally live in warmer water. These
species can survive water temperatures that exceed 70-75[deg]F for
extended periods. Cold water species, such as salmonids, live and are
cultured in much colder water and would become severely stressed or die
in warmer water. Green water systems contain algae and zooplankton in
the water with the cultured fish. Although most green water systems are
warm water, some may be used for cold water species. Some green water
systems are used to grow species, such as marine fish (e.g., cod or
flounder), crustaceans (e.g., shrimp), and freshwater fish (e.g.,
larval striped bass, walleye or yellow perch) that consume the algae
and/or zooplankton as a major part of their diets. Other facilities use
green water cultures to remove metabolic wastes from the aquatic
animals in the process water. Green water systems could contain
measurable amounts of TSS in effluents, primarily because of the
plankton present in the culture water.
To address public comments about the effectiveness of microscreen
treatment, especially in cold temperatures, EPA visited four facilities
reporting the use of microscreen technology to treat wastewater. We
chose these four facilities from a population of 13 facilities that
reported in their responses to the detailed survey that they used
microscreen technology as a primary or secondary solids removal
treatment system. During the visits to these four facilities, EPA
observed microscreens being used to remove solids from effluent
streams. EPA also evaluated how these facilities incorporated
microscreens into the daily operation and maintenance activities. See
Section III.A. for further discussion of this issue.
Other facilities that EPA visited included several State and
Federal hatcheries in California, Washington, Idaho, Pennsylvania, and
Utah. EPA looked at the differences in mission, operation, and
management of government facilities compared to commercial facilities.
B. Monitoring and Permit Data From the Permitting Authorities
To further assess facilities with NPDES permits, EPA asked the EPA
regional offices for updated copies of permits, fact sheets, and DMR
data for many of the 125 facilities. EPA evaluated NPDES permits and
DMR data for 43 of the 125 facilities identified as having a NPDES
permit. EPA used the detailed surveys and NPDES permit information to
identify discharge points and the nature of discharges (e.g., full flow
from raceways or solids collection decant water) in the DMR data.
To better evaluate the quality of current facility discharges
compared to the proposed limits, EPA used the detailed surveys to
determine the number of facilities reporting NPDES permits. Of the 203
facilities that responded to the detailed survey, EPA found 125
potentially in-scope facilities (i.e., facilities that are subject to
the proposed regulation) with existing NPDES permits. The facilities
with NPDES permits use these systems:
[sbull] 108 flow-through systems.
[sbull] 6 recirculating systems.
[sbull] 8 pond systems.
[sbull] 3 mixed flow-through and recirculating systems.
EPA found that 78 facilities did not report having NPDES permits,
[sbull] 9 facilities that are not discharging or indirectly
discharge.
[sbull] 9 net pen facilities.
[sbull] 25 pond facilities.
[sbull] 4 recirculating system facilities.
[sbull] 31 flow-through system facilities.
Many of these facilities are not subject to existing requirements
for NPDES permits (i.e., ponds that discharge less than 30 days, warm
water facilities producing less than 100,000 pounds, and cold water
facilities producing less than 20,000 pounds).
EPA was primarily interested in getting information on the permit
requirements and effluent monitoring data to better assess the baseline
performance of facilities (i.e., current effluent treatment conditions)
that are in-scope for the proposed regulation. A listing of the NPDES
permit numbers for the facilities identified for additional data
gathering is available in the record (see DCN 70264). See Section
III.G. for discussion of the analysis on the NPDES permits and DMR
data.
EPA was also interested in getting information about best
management practices (BMPs) required in NPDES permits to compare with
the BMPs required in the proposed regulation. For those facilities that
have BMP requirements in the NPDES permit, EPA observed that the
requirements were primarily related to developing overall facility BMP
plans and to practices that addressed drugs and chemicals.
C. Information Submitted With Comments
In the proposal, EPA asked for data and information from
commenters. EPA received about 300 public comments on the proposed
rule. A wide range of stakeholders representing Federal, State, and
local government agencies, industry associations, environmental groups,
individual facilities, and members of the public provided comments.
Comments addressed many aspects of the proposed regulation and EPA's
supporting analysis, including scope of the rule, environmental
impacts, regulatory authority, cost, economic impact, and benefit
analyses. In some cases, commenters submitted supporting materials (in
the form of engineering, economic, scientific, or regulatory reports or
journal articles; data summaries or compilations of engineering,
economic, scientific, or regulatory data; or references to such
information). See Section 7.5 of the Public Docket for this rulemaking
for these materials.
The comments included information on the costs associated with
flow-through systems for the structural, labor, and land components
described in each proposed flow-through option. In preparing this
notice, EPA used this cost information to help fill gaps in the
detailed survey data and to better understand industry diversity. EPA
plans to use this additional cost information in refining its estimates
of compliance costs for the final rule. The Agency included this
information in developing the revised cost estimates presented in this
notice. You can find non-confidential cost information in Section 6.5.3
of the public record. Several comments provided monitoring data, used
in conjunction with the DMR data described in Section II.B.
The Joint Subcommittee on Aquaculture (JSA) has a task force known
as the Aquaculture Effluents Task Force (AETF) that concentrates on the
effluent guidelines efforts. The AETF is a group of interested parties
representing Federal, State and local governments, academia, industry
and environmental organizations. The AETF submitted detailed comments
on aspects of the proposed rule such as the use of drugs and chemicals,
production systems, costs and economic analyses. In response to EPA's
follow-up requests, the AETF provided additional information, primarily
papers that were referenced by their comments, or that supported
statements made in their
[[Page 75072]]
comments. Reviewers can find this additional information at DCN 45232
and we cited it often in this notice.
Additional information included:
[sbull] References documenting the presence of viral hemorrhagic
septicemia in west coast salmonids.
[sbull] Documents on the fate and environmental effects of copper
sulfate as a treatment for catfish ponds.
[sbull] Feed conversion rates including the effect that feed
formulation has on the excretion and discharge of various pollutants.
[sbull] Information on BMPs and permit requirements for net pen
systems.
[sbull] Information on the economic impacts of additional costs for
aquatic animal production to the farm operations and nearby
communities.
This notice also addresses questions and concerns raised during
three public meetings on the proposed rule held in late October to mid-
November of 2002. EPA used the public meetings to update the public on
the status of the CAAP effluent guidelines and to discuss the proposal.
Several attendees submitted comments to EPA after the meetings. DCNs
40520, 40521, 40522 summarize the discussions and comments at those
meetings.
D. Detailed Survey Results
In August 2001, EPA mailed about 6,000 screener surveys to aquatic
animal production facilities. EPA received responses from 4,900
facilities, of which about 2,300 facilities reported that they produce
aquatic animals. EPA based its proposed regulations on the data
collected from the screener questionnaire.
Consistent with EPA's intentions described in the preamble to the
proposed rule, EPA based its analyses for this notice on data collected
from the detailed questionnaire. The preamble described the detailed
questionnaire (DCN 62452) and EPA's plans to recalculate estimates for
costs and benefits associated with the proposed regulatory options. The
preamble also stated that the Agency would describe these data and
analyses in this notice. (67 FR 57881, September 12, 2002). EPA
reviewed the responses from the detailed questionnaire, performed
follow-up activities on the detailed questionnaires resulting from
inconsistencies or questions from an initial review of responses, and
completed analyses of the data contained in these responses. This
section describes the facilities that EPA selected to receive the
detailed questionnaire and those that responded.
EPA used the screener responses to select a stratified random
sample to receive the detailed questionnaire. Sample criteria were
designed to primarily capture facilities that produce aquatic animals
and are likely to be covered by the proposed rule. EPA also developed
sample criteria to capture facilities that are out of scope (based on
information in the screener survey) to validate its assumptions about
the applicability of the proposed regulation. For example, the sample
criteria includes facilities with ponds, which are out of scope in the
proposed regulation, to confirm that additional regulations for ponds
are unnecessary. The Technical Development Document (TDD), page A11,
describes in detail the criteria and includes facilities that are in-
scope and out of scope. The facilities selected met one of these
criteria:
[sbull] Aquariums.
[sbull] Production includes alligators and total biomass exceeds
100,000 pounds.
[sbull] Production includes trout or salmon and total biomass
exceeds 20,000 pounds.
[sbull] Predominant production method is ponds; predominant species
is catfish; and total biomass exceeds 2,200,000 pounds.
[sbull] Predominant production method is ponds; predominant species
is shrimp, tilapia, other finfish, or hybrid striped bass; and total
biomass exceeds 360,000 pounds.
[sbull] Predominant production method is any method except ponds,
and total biomass exceeds 100,000 pounds.
Applying these criteria resulted in 539 facilities from the
screener questionnaire responses with these characteristics. We then
classified the 539 facilities into 44 groups defined by facility type
(commercial, government, research, or tribal), the predominant species,
and predominant production. A sample was drawn from the 539 facilities
ensuring sufficient representation of facilities in each of the 44
groups. The sample drawn consisted of 263 facilities. From these 263
facilities EPA excluded 11 facilities that were duplicates on the
mailing list or, after revising production estimates, did not meet the
production thresholds for a CAAP facility. Detailed questionnaires were
finally sent to 252 facilities.
EPA received responses on 215 of the 252 questionnaires. A few
responses contained information on more than one facility.
Subsequently, EPA separated that information into several
questionnaires so that a single questionnaire represented an individual
facility. EPA also excluded data from 12 facilities that returned
incomplete responses. Because these facilities would not have been
subject to the proposed limitations, EPA did not ask for more
information. After separating multiple responses and excluding
incomplete responses, information is available from 205 facilities.
Table II.D.1, Questionnaire Summary, provides a breakdown of this
information.
Table II.D.1.--Questionnaire Summary
------------------------------------------------------------------------
Number of
Information identifier questionnaires
------------------------------------------------------------------------
Sample frame......................................... 263
Mailed............................................... 252
Received............................................. 215
Incomplete and not followed-up....................... 12
Received and usable.................................. 203
Received and usable + separated...................... 205
------------------------------------------------------------------------
Because we selected the 205 facilities using a statistical design
(see Appendix A of the Technical Development Document for more
information), the responses allowed us to build a database to be used
for estimating population characteristics reflecting the above
criteria. For national (i.e., population) estimates, EPA applied survey
weights to the facility responses that incorporate the statistical
probability of a particular facility being selected to receive the
detailed questionnaire and adjust for non-responses. (The response rate
was about 80 percent for the detailed questionnaire. Appendix A of the
proposed TDD addresses the non-response adjustments for the screener
questionnaire.) In this case, a survey weight of 3 means that the
facility represents itself and two others in the population. EPA will
continue its analysis to refine the survey weights for the detailed
questionnaire.
From the sample for the detailed survey, EPA estimated the
distribution of facilities by: production systems, ownership type,
species produced, and geographic regions. We describe the distribution
here and in Tables II.D.2, II.D.3, II.D.4, and II.D.5.
For production systems, EPA estimates that 14 percent of the
surveyed population use multiple production system types, 70 percent
use flow-through systems, 11 percent use ponds, 3 percent use
recirculating systems, and 2 percent use net pens.
For ownership type, EPA estimates that 34 percent of the surveyed
population are State-owned facilities, 14 percent are Federal
facilities, 1 percent are academic facilities, 2 percent are Tribal
facilities, 1 percent are private non-profit facilities, and 48 percent
are private commercial facilities.
[[Page 75073]]
For species produced, EPA estimates that 78 percent of the surveyed
population grow trout and/or salmon, 11 percent grow catfish, 3 percent
grow tilapia, 2 percent grow striped/hybrid bass, 1 percent grow
shrimp, 5 percent grow ``other'' species such as walleye, sturgeon,
sunfish, ornamentals, baitfish. We estimate that about 16 percent of
the population produce more than one species.
For geographic regions, EPA found that the surveyed population is
widely distributed throughout the United States. We estimate that 10
percent of the population are located in Region 1, 1 percent in Region
2, 6 percent in Region 3, 16 percent in Region 4, 13 percent in Region
5, 8 percent in Region 6, 5 percent in Region 7, 11 percent in Region
8, 11 percent in Region 9, and 19 percent in Region 10.
Table II.D.2.--Production Systems
------------------------------------------------------------------------
Percentage of
Production system facilities
------------------------------------------------------------------------
Flow-through......................................... 70
Recirculating........................................ 3
Ponds................................................ 11
Net Pens............................................. 2
Multiple production systems.......................... 14
------------------------------------------------------------------------
Table II.D.3.--Ownership Type
------------------------------------------------------------------------
Percentage of
Ownership type facilities
------------------------------------------------------------------------
State governments.................................... 34
Federal facilities................................... 14
Academic facilities.................................. 1
Tribal facilities.................................... 2
Private non-profit................................... 1
Private commercial................................... 48
------------------------------------------------------------------------
Table II.D.4.--Species Identified at Facility in Survey Sample
------------------------------------------------------------------------
Percentage of
Species* facilities
------------------------------------------------------------------------
Trout/Salmon......................................... 78
Catfish.............................................. 11
Tilapia.............................................. 3
Hybrid Striped Bass.................................. 2
Shrimp............................................... 1
Other (walleye, sturgeon, sunfish, etc.)............. 5
------------------------------------------------------------------------
* Based on predominant species, facility may produce more than one
species.
Table II.D.5.--Geographical Distribution
------------------------------------------------------------------------
Percentage of
EPA region facilities
------------------------------------------------------------------------
1 (CT, ME, MA, NH, RI, VT)........................... 10
2 (NJ, NY, PR, VI)................................... 1
3 (DE, DC, MD, PA, VA, WV)........................... 6
4 (AL, FL, GA, KY, MS, NC, SC, TN)................... 16
5 (IL, IN, MI, OH, WI)............................... 13
6 (AR, LA, NM, OK, TX)............................... 8
7 (IA, KS, MO, NE)................................... 5
8 (CO, MT, ND, SD, UT, WY)........................... 11
9 (AZ, CA, HI, NV, AS, GU)........................... 11
10 (AK, ID, OR, WA).................................. 19
------------------------------------------------------------------------
Although EPA received and used responses from 205 surveys for
various analyses, we use only a subset to estimate national CAAP costs
for the industry sectors affected by the proposed rule. From the cost
analyses, we excluded eight responses from facilities that discharge
indirectly or do not discharge, because these facilities are not
affected by the rule. For salmon net pens, the detailed questionnaire
responses confirmed our assumptions at proposal (i.e., no costs would
be incurred in eight net pen facilities as a result of the proposed
option). EPA will continue to evaluate cost and impacts for other net
pen systems. We excluded pond data from the costs analyses because
ponds were not within the scope of the proposed rule. However, EPA is
using the pond information from 33 detailed questionnaires to validate
assumptions on the applicability of the proposed regulation to ponds.
EPA generated cost and loadings information for 13 facilities, but we
excluded these from the economic analysis because the facilities
produced less than 20,000 pounds of aquatic animals per year. As a
result of these exclusions, EPA used the data from 143 facilities in
its costs and loading analyses to evaluate economic impacts presented
in this notice.
E. Literature Searches and Other Information Collection Activities
EPA continued to collect technical, scientific, and regulatory
information from many sources on key issues about the CAAP industry,
including those described in the preceding subsections of Section II of
today's notice. In some cases, EPA started targeted literature searches
or other types of investigations to assess issues raised by
stakeholders and commenters (see Section III for a summary of major
issues raised in comments). Several of these efforts are:
1. Net Pens
EPA received several comments about the relative significance of
environmental impacts from net pen operations, as well as whether or
not there is a need to establish requirements to mitigate environmental
impacts (see Section III.B.2. of today's notice). To address these
comments, EPA is updating its literature evaluation for net pen impacts
and current practices and requirements. We placed a draft preliminary
reference list in the public record (DCN 62399). EPA is examining new
and re-examining previously available literature on the environmental
impacts of discharges of solids, nutrients, BOD, and drugs and
chemicals from net pen facilities. This updated literature search will
examine existing permit requirements and other practices used by net
pen facilities. This new information will improve EPA's understanding
of environmental concerns with net pen systems and the actual impacts
of present-day operations in the U.S., in light of existing State
requirements and industry practices. However, current EPA analysis
indicates that practices to minimize solids released at most net pen
facilities are at least as stringent as the requirements we are
considering. EPA does not expect further reductions in solids and
pollutants associated with solids from net pens to result from this
rule.
2. Chemicals, Including Therapeutants, Used at CAAP Facilities
EPA also received comments about the application of chemicals,
including therapeutic substances, at CAAP facilities. These comments
address:
[sbull] Antibiotics (residues in fish, antibiotic resistance,
estimated volumes of antibiotic use in the U.S. CAAP industry).
[sbull] Regulatory authority and need for action (asserting that
EPA should or should not include requirements about the use of
chemicals, including therapeutants, at CAAP facilities; that FDA,
American Veterinary Medical Association, and other entities'
requirements or guidelines already ensure environmental safety of
therapeutant applications).
[sbull] Chemicals in fish feed (including color additives).
These comments are further discussed in Section III.C. In some
cases, supporting materials and referenced literature were also
provided to EPA.
To address these comments, EPA is updating its literature search
about environmental fate and effects studies of chemicals/therapeutic
substances
[[Page 75074]]
reported in the public comments, detailed surveys, and literature as
used at CAAP facilities in the U.S. These chemical/therapeutic
substances include anaesthetics, antibiotics, pesticides, antifungals,
disinfectants, algicides, antifoulants, feed additives, and hormones
used under EPA-approved, FDA-approved, and veterinary prescribed extra-
label use, and FDA's investigational new animal drug (INAD) provisions.
For several of the more commonly used substances, EPA collected
information on quantities used from the detailed survey and industry-
supplied data. EPA also has environmental assessments from the FDA
docket for oxytetracycline, formalin, Romet, and canthaxanthin (see
DCNs 40417, 40477, 40492, 40567). In addition, EPA obtained and is
evaluating studies of the fate and effects of these chemical/
therapeutic substances, when available. We placed a draft preliminary
reference list in the public record (DCN 62454). EPA will work with
appropriate internal and external experts to interpret these studies.
Second, EPA met with FDA to clarify FDA's environmental assessment
requirements for the substances over which FDA has jurisdiction (DCN
31126). EPA met with USDA's Animal and Plant Health Inspection Service
(APHIS) to discuss how the requirements and objective of the CAAP rule
relate to authorities under their jurisdiction (DCN 31123). At the
meeting, USDA discussed the Animal Health Protection Act (``2002 Farm
Bill''), which gives APHIS the authority to develop and implement
aquatic animal health programs. This law gives authority to APHIS for
aquatic farm-raised animal disease management including emergency
responses actions to invasive pathogen outbreaks. APHIS is also
authorized to implement control programs using drugs or chemicals and
biosecurity practices to reduce disease risk and impact on the
industry.
EPA is also reviewing, industry and professional association
guidelines on using antimicrobial agents responsibly (e.g., DCN 70720).
EPA will continue to work closely with the JSA National Aquatic Animal
Health Task Force and other Federal, State, and scientific experts to
better understand the relationships between current technical and
regulatory aspects of chemical applications at CAAP facilities and
EPA's proposed requirements.
3. Non-Native Species
EPA also received comments about non-native species (described in
more detail in Section III.D). Briefly, comments included:
[sbull] Arguments supporting or opposing the establishment of
controls on non-native species.
[sbull] EPA's regulatory involvement with non-native species
issues.
[sbull] Specific scientific information to correct or supplement
data on potential impacts of CAAP non-native species that EPA
considered in developing the proposed rule.
[sbull] Descriptions of specific Federal, State, local, or industry
requirements and programs to reduce or mitigate non-native concerns at
CAAP facilities.
First, EPA is evaluating the comments and the supplementary
literature submitted with them. Second, we continue our dialogue with
Federal agencies that set policy for non-native species to facilitate
coordination among relevant programs. EPA met with the APHIS, which has
a broad mandate to address import and interstate movement of exotic
species under the Federal Plant Pest Act and the Plant Quarantine Act
(DCN 31123). EPA is also communicating with the National Invasive
Species Council (NISC) regarding the non-native species aspects of the
CAAP rule. Third, as some commenters urged, EPA is also more closely
examining State, regional, and other requirements and programs designed
to reduce or mitigate concerns about non-native species and that may
already apply to facilities within the scope of the CAAP rule. One
source of information of which EPA has become aware since proposal is
the Environmental Law Institute's August 2002--Halting the Invasion--
State Tools for Invasive Species Management. This publication analyzes
legal tools available at the State level to address non-native species
(including aquatic invasive species), identifies critical components of
such tools and discusses examples of effective programs. The document
also describes specific legal tools in each State (DCN 40637).
EPA is also considering supplemental information provided by
members of the National Association of State Aquaculture Coordinators
(NASAC). NASAC gave EPA a summary of information from their members
regarding non-native species requirements and State regulating agencies
(DCN 40607). Several States recognize and actively implement measures
to address potential risks about non-native aquatic species. For
example, the California Department of Fish and Game (CDFG) instituted
several requirements to prevent the introduction of non-native species
into bodies of water and to prevent the dissemination of fish diseases
and parasites to wild populations and cultured stocks (DCNS 40593,
40594). A forthcoming report (Non-native Oysters in the Chesapeake Bay)
by the National Research Council (NRC) may also provide insight into
the effectiveness of existing regulations and programs, and
recommendations for more effective approaches to non-native species
issues (DCN 62456). While this study targets an industry sector EPA is
not proposing to regulate (molluscan shellfish), certain discussions
and findings regarding approaches for addressing non-native species
concerns may be informative.
EPA has identified several non-North American species currently
raised at CAAP facilities that might pose an environmental threat if
they were to escape and become established (e.g., several species
commonly referred to as tilapia) (DCN 40649). To identify species of
interest, EPA reviewed the database of facility responses to EPA's 2001
screener survey (DCN 10001). The database includes information on
facility location and species raised for each of over 2,300 respondents
who produce aquatic animals. Although this is a much larger population
than the facilities covered by the proposed rule, EPA used this
information to identify general trends in the production of non-native
fish that could become invasive. EPA compared species and facility
location with a State-by-State list of invasive fish derived from the
United States Geologic Survey (USGS) (Fuller et al., 1999).
We faced several challenges with using this information for our
evaluation. Most of the facilities contained in the screener survey
database did not provide enough taxonomic detail to determine if
cultured species were non-native and potentially invasive. In several
cases where we had enough taxonomic detail, the species being cultured
had already been widely introduced throughout North America. In
addition, several facilities in the database raise fish hybrids, and
evaluating the invasive potential of hybrids poses a unique challenge
because the characteristics may not be a simple blending of parent
species' characteristics. Genetic effects may influence the ecological
niche of a hybrid, making it difficult to predict its possible
geographic distribution. Such genetic effects include dominance,
polygenic inheritance (where traits are influenced by the cumulative
effects of multiple genes), epistasis (where one gene influences the
expression of another), and pleiotropy (where a single gene influences
the multiple traits).
[[Page 75075]]
For several of these species, EPA is using an ecological niche
model (DCN 40650) to predict their possible geographic distributions in
the United States. EPA is also examining the geographic distribution of
CAAP facilities raising these non-North American species, potential
habitat for these species, and existing requirements (e.g., those
contained in State regulations) for reducing escapes of non-natives
that already apply to CAAP facilities producing non-natives. There are
many limitations on data in such an evaluation (e.g., limited
information on escape rates, the likelihood of escapes, and the
consequences of escapement), but this analysis provides some insight
into the scope of non-native species concerns at CAAP facilities. EPA
will consider this analysis as one factor to assess the need, if any,
for reporting, BMP implementation, or other requirements regarding non-
native species in the final regulation. You can find a draft memorandum
describing EPA's preliminary analysis in the record for this notice
(DCN 40649). EPA will continue to collect and evaluate data to assess
concerns associated with escaped non-native aquatic animals from CAAP
facilities and the effectiveness of technologies and management
practices to prevent animals from escaping in the effluents from CAAP
facilities.
Finally, EPA is also performing literature searches to collect
examples of risk and cost-benefit analyses that have been performed for
non-native or invasive species. Such analyses include:
[sbull] Leung, B., D.M. Lodge, D. Finoff, J.F. Shogren, M.A. Lewis,
and G. Lamberti. 2002. ``An ounce of prevention or a pound of cure:
bioeconomic risk analysis of invasive species.'' Proceedings of the
Royal Society of London, Series B 269: 2407-2413. This paper describes
a quantitative modeling framework to analyze risks from non-indigenous
species to economic activity and the environment. The model identifies
the best allocation of resources to prevention vs. control, acceptable
invasion risks and consequences of invasion to optimal investments. The
paper reports on an application of this model to a non-CAAP invasive
species (zebra mussels), but the quantitative and systematic risk
analysis approach may be useful for its examples (DCN 40568).
[sbull] Kolar, C.S. and D.M. Lodge. 2002. ``Ecological predictions
and risk assessment for alien fishes in North America.'' Science 298:
1233-1236. This paper uses a risk assessment approach and statistical
models of fish introductions into the Great Lakes to develop a
quantitative approach for targeting prevention efforts on species most
likely to cause damage (DCN 40569).
[sbull] Federal Register. 2003. Ballast Water Management Program
for U.S. Waters, proposed rule. 68 FR 44691-44696. The U.S. Department
of Homeland Security/Coast Guard recently proposed mandatory ballast
water management practices for vessels equipped with ballast tanks to
address possible threats to marine and freshwater resources, biological
diversity, and coastal infrastructures from unintentional introduction
of nonindigenous species. The Coast Guard performed a regulatory
evaluation including an estimate of the proposed rule's effects on
invasion rates. The regulatory evaluation also included monetized
damages from invasions, but did not attempt to monetize the benefits of
their proposed rule (DCN 40570).
These examples describe tools that could potentially be used to
assess risks and benefits of control options for escapes. Even if EPA
can not conduct assessments of risks and benefits from controls on CAAP
facility escapes, examples such as those mentioned above may provide
useful context for a qualitative discussion and highlight data needs.
4. Water Quality Impacts
At proposal, EPA described data and literature it compiled on water
quality impacts of CAAP facilities in the United States. EPA drew on
several sources to characterize these impacts, including open
literature publications reporting on water quality and biological
observations downstream of CAAP facilities. Another resource EPA
evaluated was the National report of State listings of impaired waters
(TMDL listings or State 303(d) reports). EPA also used a water quality
model (QUAL2E) to simulate potential downstream water quality impacts
under baseline and proposed regulatory scenarios. EPA's proposal
estimated that the regulatory requirements would create pollutant load
reductions at 23 flow-through and recirculating facilities in the scope
of the proposed regulation, leading in turn to water quality
improvements valued at $22,000 to $113,000 annually. Based upon these
sources and its water quality modeling, EPA concluded that some CAAP
facilities may have measurable adverse downstream impacts.
EPA will use materials submitted with public comment on the
proposed rule (see Section III.E. of today's notice) and other data and
literature to improve our characterization of the likelihood for CAAP
facilities to affect water quality and aquatic ecosystems. Key
highlights of this new information include:
First, the National Association of State Aquaculture Coordinators
(NASAC) submitted a report describing NASAC's close examination of the
States' listings of impaired waters that EPA used in analyses
supporting the proposal to help characterize the prevalence of water
quality impairments in the U.S. due to aquaculture (DCN 70583). (See
Section III.E. for details.) NASAC found that of the seven States
listing aquaculture as a possible source of impairment to certain
specific waterbodies within their borders, only two verified that
aquaculture facilities actually were a source of impairment. NASAC also
found that for the two States that did confirm aquaculture as the
source of reported impairments for the listed waterbody, changes at the
facilities had been undertaken to address the source of impairments.
(Refer to Section III.E. for a discussion of the NASAC report.)
Second, EPA received more publications and unpublished technical
reports of which it was not aware at proposal and which describe
studies of downstream water quality and biological impacts of CAAP
facility effluents. Covering a range of facilities and geographic
regions, some of the studies report adverse water quality and
ecological impacts; others report limited or no impacts. These reports
will help characterize the potential range of environmental impacts of
CAAP facilities and we have put them in the record supporting this
action. Examples include:
[sbull] Fries, L.T. and D.E. Bowles. 2002. ``Water quality and
macroinvertebrate community structure associated with a sportfish
hatchery outfall.'' North American Journal of Aquaculture 64: 257-266.
These authors examined aquatic impacts associated with a large CAAP
facility (four million largemouth bass fingerlings, one million channel
catfish fingerlings, 12,000 kg live forage for captive broodstock, and
67,000 rainbow trout (winter only)). Based on the data covering a
period from October 1996 to July 1998, the authors concluded that ``the
hatchery effluent did not substantially affect downstream water quality
and benthic communities, despite the relatively high total suspended
solids and chlorophyll-a levels in the effluent.'' Their data showed
``* * *that sportfish hatchery operations can have negligible effects
on receiving waters, even in environmentally sensitive systems'' (DCN
40621).
[[Page 75076]]
[sbull] Loch, D.D., J.L. West, and D.G. Perlmutter. 1996. ``The
effect of trout farm effluent on the taxa richness of benthic
macroinvertebrates.'' Aquaculture 147: 37-55. These authors studied
three large trout flow-through facilities in North Carolina. Their data
``* * * indicate that trout farm effluent has a definite effect on
stream insect communities, suggesting that water quality is reduced
just below their outfalls, and to a lesser extent, 1.5 km further
downstream. We were able to demonstrate quite clearly that taxa
richness was significantly lower just below the outfalls compared to
the control, and that although richness did increase further
downstream, the recovery was not complete.'' The authors noted that
impacts were seasonal, and that water quality and taxa richness
improved during the winter. The authors also noted that sewage fungus
(which they defined as a community of organisms that consist mainly of
bacteria and ciliated protozoans and is the product of concentrated
organic matter) ``was present in great abundance at Site 2 of each
trout farm'' (DCN 61497).
[sbull] The Virginia Water Resources Research Center. Benthic TMDL
Reports for Six Impaired Stream Segments in the Potomac-Shenandoah and
James River Basins, Submitted by the Virginia Department of
Environmental Quality, (Richmond, VA: Virginia Department of
Conservation and Recreation, 2002), 207 pp. This document reports on a
Total Maximum Daily Load (TMDL) calculation performed for six impaired
stream segments in Virginia (see Section III.E. of today's notice). The
report states that aquaculture effluents were confirmed as the primary
source of the organic solids that impaired these short segments (0.02
to 0.8 miles), constituting from 86 percent to 99 percent of the
organic solids loading in these largely first-order, spring-fed streams
(DCN 40571). You can find this document on the Internet at http://www.deq.state.va.us/tmdl/apptmdls/shenrvr/trout.pdf.
[sbull] Memoranda, correspondence, and discussion with staff of the
South Central Region of the Pennsylvania Department of Environmental
Protection (PA DEP) regarding reports of environmental impacts at
several CAAP facilities (200,000 to 400,000 lbs annual production) in
Pennsylvania. PA DEP provided data and reports documenting adverse
impacts of hatchery effluents in receiving spring-fed streams. The
materials described observations and/or concerns including those about
discharges of carbonaceous BOD and TSS and other pollutants, and
results of aquatic biological surveys showing adverse impacts in
hatchery receiving waters. While recognizing unique characteristics of
these hatcheries (all located on limestone spring creeks and all
capture most, if not all, of the streamflow) and seasonality of these
impacts, staff biologists were concerned about adverse environmental
impacts observed at several sites (DCNS 40596, 40597, 40598, 40599,
40600, 40601, 40602, 40603, 40604, 40605, 40606).
F. Holding Time Study
EPA took samples at aquatic animal facilities for a holding time
study. The holding time study consisted of analyzing samples at
different time intervals prior to analysis (i.e., holding times) to
determine whether varying holding times for the samples yielded
comparable results to samples analyzed within the required time
specified in the analytical method. EPA conducted the holding time
study (1) to evaluate the data collected during sampling episodes at
aquatic animal facilities and (2) for possible revisions to current
holding time requirements. We assessed changes in target bacterial
(total coliforms, fecal coliforms, Escherichia coli, Aeromonas, fecal
streptococcus, and Enterococcus) concentrations over time (between 8
and 48 hours holding time) in wastewater samples.
When EPA designed the holding time study, we considered a range of
model technologies for treating CAAP effluents, including some that
would provide reductions in bacterial concentrations. EPA found the
costs associated with using disinfection technologies at CAAP
facilities to treat effluents are economically burdensome to the
industry. The disinfection cost assessment is described in the preamble
to the proposal (67 FR 57872, September 12, 2002). Because of the cost,
EPA did not include technologies that reduce bacterial concentrations
(such as disinfection) in the technology basis for the proposed rule.
The TSS removal technologies we considered at proposal are not designed
to reduce bacterial concentrations in effluents. Therefore, the
original purposes for the study are no longer relevant for this
rulemaking. However, study results may be useful for facilities, permit
writers, and others. For this reason, this NODA summarizes the results
and DCN 62398 in Section 6.20 of the rule-making record provides the
complete results.
In summary, EPA conducted the study to evaluate sample
concentrations at 8, 24, 30, and 48 hours after sample collection.
Table II in 40 CFR part 136 specifies a maximum holding time of six
hours for fecal coliforms, total coliforms, and fecal streptococci
tests used for compliance with NPDES regulations. As a matter of
practicality, EPA generally considers eight hours acceptable because
the analytical laboratories require some sample preparation time before
a sample can be processed. In addition, Section 9060B (Preservation and
Storage) of Standard Methods, 20th Edition, recommends that nonpotable
water samples be held below 10[deg]C for a maximum of 6 hours transport
plus 2 hours to begin analysis for bacterial analyses performed for
compliance purposes.
As holding times increase, we expect that bacteria concentrations
will change. Many CAAP facilities are remotely located and would have
difficulty meeting the required 6 hour transport time to a laboratory.
In conducting the study, EPA hoped to gain insight into the length of
time that would still give comparable results to samples held for eight
hours.
The study results for Aeromonas and fecal coliforms indicate that
holding times over 8 hours did not provide comparable results to
results at 8 hour holding times. For total coliforms, E. coli, fecal
streptococcus, and Enterococcus holding times of 30 hours or less
provided results comparable to results at 8 hour holding times.
III. Summary of Comments and EPA's Preliminary Assessment
In these sections, we discuss some of the major comments received
on the proposed rule and EPA's current thinking on the issues.
A. Representativeness of EPA's Sampling Database
During the comment period and at the public meetings on the
proposal, commenters raised concerns over the representativeness of the
sampling and DMR data (EPA's sampling database) used to evaluate
options and determine limits.
Some of the commenters were concerned about the lack of
representation of green water systems that produce warm water species,
which they claim have very different water characteristics, especially
regarding the effluent concentrations of TSS. Commenters were concerned
about the ability of both green water and warm water types of
production systems to be able to comply with the proposed limitations
for TSS. With assistance from industry representatives and detailed
survey responses, EPA identified and visited six warm water or green
water production facilities. To assess these concerns, EPA obtained and
examined DMR data for two of the six
[[Page 75077]]
warm water facilities we visited, data for the remaining four
facilities was not available. For both facilities, the data indicate
that the discharges are lower than the proposed limits when evaluating
TSS on a net basis (i.e., which accounts for the concentrations in the
source water). These discharges are consistent with the facilities'
current NPDES permits. The second warm water facility also consistently
meets its NPDES permit limits for phosphorus. Although these two warm
water species production facilities differ in many ways from facilities
engaged in the production of cold water species, the data confirms that
these facilities can achieve the proposed effluent TSS concentrations.
Thus, the proposed limits for recirculating systems may be achievable
for green water/warm water facilities generally. Therefore, based on
current data, there is no basis for differentiating between warm water
and cold water production systems for any limitations for TSS in the
final rule. (See the site visit reports DCNs 62393, 62394, 62395 and
DMR data DCNs 31093, 30850). EPA seeks comment on this issue and
requests any additional data for these types of systems to supplement
EPA's current data set.
Other commenters questioned whether the database we used is
sufficiently representative to evaluate the effectiveness of
microscreen treatment, especially in cold temperatures. (Microscreens
are one component of the Option 3 technology that was the basis for the
proposed limitations and standards for certain subcategories.) EPA
identified 13 facilities from the detailed surveys that reported using
microscreen technology as a primary or secondary solids removal system.
To observe the operation of the microscreen, EPA also made site visits
to five facilities (three with recirculating systems and two with flow-
through systems) that use microscreens. We visited facilities in areas
that experience freezing temperatures in winter and concluded that
operating a microscreen filter year round is possible because the
facilities demonstrated satisfactory performance.
However, unlike our assumptions for the proposal, these facilities
operate the microscreen filters in indoor spaces that are protected
from freezing. Their microscreens are installed in existing heated
spaces or, in one case, in a recently-constructed building that houses
other effluent treatment system components. The facilities using
microscreens were satisfied with their performance and at least one was
planning renovations that included additional microscreens (see site
visit reports DCN 62388, 62389, 62390, 62391, 62392). For the NODA and
in its evaluation of the costs of second stage solids removal
technology, EPA adjusted costing to include either full-flow settling
basins where appropriate or microscreens in heated spaces of existing
buildings. Our analysis shows that, based on available data, either of
these technologies, the full-flow settling basin or microscreen, can
achieve the proposed limits so we used the lower cost option for each
facility in our analysis.
B. Production Systems
1. Flow-Through and Recirculating Systems
Based on comments, EPA may combine the two separate subcategories
for flow-through and recirculating systems into a single subcategory.
We received comments with engineering descriptions for identifying
recirculating systems, including assertions that EPA had not adequately
evaluated green water systems; however, the commenters did not give a
specific regulatory definition that EPA could use. While we found that
a widely-accepted formal definition for recirculating systems does not
exist, these systems are generally distinguished by some form of
engineered biological treatment, that allows for extended water reuse.
(EPA uses the term ``engineered'' biological treatment to distinguish a
recirculating system from a pond, having a ``natural'' biological
treatment process that allows for extended water reuse.) A green water
system, in turn, takes advantage of the algae's and bacteria's ability
to improve water quality. The commenters based the distinction between
the categories on hydraulic residence time or cumulative feed burden,
which they define as the feed application rate divided by the flushing
rate. Based on comments, we realize that the distinction between the
two systems is less obvious than we assumed for the proposal. Further,
some facilities may commingle components of both systems. Therefore,
EPA may combine the two subcategories into a single subcategory and we
seek comment on this approach.
Regardless of whether the subcategories are combined, EPA is
considering the same modified BMP plan for both systems (Section III.F
describes this BMP plan and Section III.G. presents potential TSS
limitations.
2. Net Pens
EPA proposed best management practices, rather than numeric limits,
for facilities raising fish in net pens. At proposal, we stated that
net pen facilities discharged pollutants into receiving waters. We also
noted that researchers had documented environmental impacts due to
discharges in limited areas near and beneath some U.S. net pen
facilities. EPA found reports documenting rapid recoveries of benthic
areas impacted by net pen operations. We are also aware that State
regulatory programs have addressed a number of concerns associated with
these discharges and require regular benthic monitoring at sites to
identify problems early so they can be corrected. Public comments on
the proposal also asserted that State regulatory programs effectively
address environmental concerns associated with pollutant discharges
from net pen operations and no further environmental benefits from
additional effluent guideline requirements are likely (DCN 70236,
70283, 70104). However, we also received comments that asserted the
proposed requirements were not adequate or reflective of scientific
understanding of environmental impacts (including impacts from solids
deposition and from the use of drugs and chemicals). These comments
also suggested how such impacts might be managed (e.g., DCNs 70253,
70269, and 70270).
In light of these comments, EPA tried to collect more information
to support evaluation of regulatory options for controlling pollutant
discharges from net pen systems. EPA updated its literature search on
the environmental effects of discharges of solids, nutrients, BOD, and
drugs and chemicals from net pen facilities. The search included
examining existing permit requirements and other practices currently
used by net pen facilities. It also involved recognizing modeling tools
that were developed and described in research literature that may be
useful in translating pollutant load reductions into environmental
responses. We do not expect to use these models to estimate
environmental benefits for the net pen subcategory because our analysis
suggests that practices relating to minimizing releases of solids at
most net pen facilities would already meet the requirements we are
considering (see Section II.E and DCN 62399).
EPA is also aware of a recently-updated major scientific review of
non-native Atlantic salmon at net pen farms in the Pacific Northwest.
This review updates an assessment that was considered at proposal (DCN
40149) and appears in a group of six articles published in Volume 62
(2003) of the journal, Fisheries Research. The updated information
helps EPA better
[[Page 75078]]
understand environmental concerns with net pen systems and the actual
impacts of current operations in the U.S. in the context of existing
State and other requirements. At present, EPA concludes that net pens
should continue to be included in the CAAP rule. Again, it appears that
most net pen operations potentially in the scope of the regulation are
already using practices and technologies at least as stringent as those
EPA is considering for this subcategory.
One commenter questioned the need for a national regulation when
the extent and size of the net pen industry is small. Data regarding
in-scope facilities indicate that net pen facilities are used to raise
salmon in three States (Alaska, Maine and Washington). A limited number
of net pen facilities also produce other fish species as well. While
net pen systems in Maine and Washington raise salmon to harvestable
weights, net pen systems in Alaska also rear salmon before their
release in the ocean.
Offshore aquatic animal production is another new area under
development. The National Marine Fisheries Service (NMFS) proposed
codes of conduct for these offshore operations announced in an August
2002 Federal Register notice (67 FR 54644). NMFS held six regional
workshops in the fall of 2000 to discuss the codes of conduct for these
types of operations. In 2002, NMFS published Current and Future
Regulation of Marine Aquaculture, which describes best management
practices similar to those we are considering in this rule. These
include feed management to minimize waste, minimizing escapes, and
minimizing negative effects of escapees on wild populations. The NMFS
report also states that disease prevention through vaccinations is
preferred over using antibiotics. NMFS has five research stations of
which three have aquatic animals. Demonstration projects include sea
cages in Puerto Rico, Hawaii, Gulf of Mexico, and eastern Gulf of
Maine. EPA did not identify quantitative estimates of future U.S.
mariculture activity. However, as research efforts move forward,
offshore aquatic animal production may be of greater interest and
provide opportunities for future industry growth in this area (see DCN
20428 for information about programs and future prospects). EPA is
considering whether to identify as new sources subject to these
requirements new offshore production facilities located in the
territorial seas (e.g., three to eight miles from shore) that use open
water net-like structures.
3. Molluscan Shellfish Operations
EPA did not propose to include certain categories or types of
facilities within the scope of the proposed rule. Floating or bottom
culture molluscan shellfish operations were among the production
systems not within the scope of the proposal. Although these operations
were excluded, the proposed regulation did not specifically address
nursery operations for molluscan shellfish, whose shellfish nurseries
tend to be flow-through systems. We received requests to clarify the
scope of the proposal and exclude shellfish nurseries from the
regulation. We reviewed the information provided in the comments on
this issue (see DCNs 70147, 70218, 70236, 70238, and 70268). Based on
our review, EPA determined that these operations (e.g., shellfish
hatcheries, nursery operations, shore based wet storage (live holding)
facilities and depuration (cleaning shellfish of impurities)
facilities) discharge or add very little, if any pollutants to the
receiving water. In some cases, they may remove some of the materials
in source water. Some of these comments (DCNs 70147 and 70236) also
indicated that shellfish hatcheries and nurseries produce less than
100,000 pounds annually and thus would not be subject to the proposed
regulations.
Two comments indicated that adverse environmental effects,
primarily accumulation of silt and solids, of excessively large and
densely seeded molluscan shellfish operations were reported in the
scientific literature (e.g., DCN 70270, 70511). However, these sources
acknowledge that adverse impacts are unusual and have not been reported
in the United States.
EPA is, however, aware of concerns about deliberately introducing
non-native shellfish into coastal waters of the United States. For
example, there is ongoing debate about the comparison of possible
benefits compared to the possible risks of introducing non-native
pacific oysters (Crassostrea ariakensis) in the Chesapeake Bay. The
National Academy of Sciences (NAS) issued a report (DCN 62456)
summarizing the potential risks and benefits of introducing C.
ariakensis in the Chesapeake Bay. The NAS report also recommends that
States and regional authorities develop protocols to reduce the
possibility of release of reproductively viable non-native oysters into
the bay, including hatchery biosecurity. Although the National Academy
of Sciences concludes that there is not an adequate group of laws and
regulations in the United States to address the introduction of non-
native shellfish into marine waters, the Academy does recommend that
the Chesapeake Bay Program be evaluated as a model for
interjurisdictional decision-making system with binding authority over
introductions that might affect the coastal areas of several States.
C. Drugs and Chemicals
EPA's proposal and technical literature in the record identified
several human and aquatic life health and environmental issues of
potential concern related to using drugs and chemicals at AAP
facilities. These issues included evidence of drug and/or chemical
residues in sediments in the receiving waters of AAP facilities or in
non-target organisms in the receiving waters (e.g., DCN 20141). The
Agency proposed limited reporting requirements for certain types of
drug applications. It also proposed establishment and implementation of
BMP plans that would help reduce the unintended release of covered
drugs and chemicals. EPA could not, however, quantify either baseline
loadings of drugs and chemicals, or expected reductions in these
loadings due to proposed requirements. Consequently, we did not try to
quantify environmental benefits for measures addressing drugs and
chemicals.
Some comments asserted that those who apply drugs and chemicals at
CAAP facilities consider environmental safety in their decision-making
process (DCNs 70236 and 70263). Other commenters added that EPA did not
provide evidence that drugs and chemicals used at aquatic animal
production facilities lead to environmental problems. They also argued
that FDA is the appropriate Federal agency to assess the environmental
safety of drugs used in aquatic animal culture (DCNs 70165, 70192,
70216, 70228, 70230, 70236, 70239, 70262, 70263, 70273, 70286). EPA
also received other comments arguing that the proposed reporting and
BMP requirements relating to drugs and chemicals should be more
stringent (DCN 70145).
In addition to drugs and chemicals used as therapeutants or to
maintain process water quality, some commenters believe that EPA should
regulate the discharge of feeds that contain pigments (such as
astaxanthin or canthaxanthin). They believe that these color additives
are harmful to humans, especially in the fish flesh of cultured fish
that consume the feed. Astaxanthin and canthaxanthin, two widely used
color additives in fish feed, are approved by FDA as color additives in
fish feed when used in accordance with
[[Page 75079]]
prescribed conditions on the label. FDA found that these additives
would not have a significant impact on human health and the environment
(DCN 40417 and 40421).
EPA also collected more information about CAAP drugs and chemicals
(see Section II.E of today's notice). EPA has met with other Federal
authorities such as USDA/APHIS and FDA to clarify and coordinate
regulatory and program goals. EPA will work closely with Federal,
State, and other appropriate scientific experts to fully consider the
available information described here.
Based on our consideration of public comments and information
described in Section II.E relating to chemicals applied at CAAP
facilities, EPA believes that further evaluation is needed to fully
understand the potential for adverse environmental impacts from
discharges of chemicals, including therapeutants, applied at CAAP
facilities. However, the information we have reviewed to date suggests
that the FDA environmental assessment process and site-specific
regulatory, professional, or industrial requirements or practices
address adverse impacts to a significant degree. We will continue to
evaluate this information and consult with relevant authorities.
In addition, EPA and FDA are working on a formal agreement that
would address environmental concerns about the discharge of drugs used
at aquatic animal production facilities. This agreement, which might
help protect the aquatic environment from harm, would facilitate
information sharing about effluent concentrations of active drug
ingredients. When appropriate, FDA would include in the labeling of
approved new animal drugs, effluent concentrations of the active drug
ingredient which should not be exceeded in wastewater discharges. EPA
would notify permitting authorities who would incorporate these
effluent concentrations into the NPDES permits as enforceable
requirements. EPA seeks comments on including these labeling
concentrations into NPDES permits.
EPA identified research on the use of activated carbon filtration
to treat and remove active ingredients in drug and pesticides from CAAP
facility wastewater. We also estimated the cost of applying this
treatment at facilities (DCN 62451). Based on the information we
collected, EPA estimated the cost of applying wastewater treatment to
remove drugs and chemicals from CAAP effluent before discharge. EPA
considers these costs to be economically unachievable, (see Section
V.C. of this notice). However, management practices intended to ensure
proper storage, use and disposal of drugs and chemicals and to minimize
the need for their use may be an effective approach for minimizing
their discharge. To address this issue, EPA is evaluating an additional
option (Option A) that would be similar to Option 1 but would
substitute a drugs and chemicals BMP plan for the solids control BMP
plan proposed in Option 1. The Option A BMP plan would also have to
address potential escapes of non-native species.
In developing this option, EPA evaluated practices that involve the
early identification of health problems, recordkeeping, and proper use
and storage of drugs and chemicals by employees. In addition, EPA found
that biosecurity practices that contain and prevent the spread of
disease throughout the facility are effective at reducing the use of
drugs at CAAP facilities. Health screening involves observing the
normal behavior of aquatic animals at a facility (e.g., feeding
behavior and abnormal activities). EPA recognizes that more intensive
screening activities, such as diagnostic tests for specific pathogens,
may not be technologically feasible or economically achievable.
Recordkeeping and the regular review of the records should help
facilities evaluate the effectiveness of health management and modify
their practices to further reduce health problems in the aquatic
animals that may lead to greater use and disposal of drugs and
chemicals.
D. Non-Native Species
EPA received comments presenting discussions about CAAP as a
pathway for the introduction of non-native species. Some commenters
feel that existing State and local permitting programs and regulations
provide adequate protection. Several State agencies commented that
while they concur that measures to address potential risks associated
with aquatic nuisance or invasive species are important, such measures
are most appropriately and effectively developed at a State or Tribal
level and that in many cases, specific requirements and policies
already exist. Some of these States briefly described their relevant
programs and regulations. We also received comments from States
suggesting that proposed new national requirements might threaten
existing State efforts addressing invasive species.
However, a State permitting authority (DCN 70067) and a State
coastal resources agency (DCN 70225) commented that EPA should require
CAAPs to report escapes of non-native species to the permitting
authority. They gave their rationale for this requirement, including
arguing that timely notification of escapes would allow State natural
resource and environmental agencies to evaluate and, if necessary,
control the spread of the non-natives. These agencies also recommended
that EPA prohibit the intentional release from CAAPs of non-native
species that might harm wild species. One of these agencies suggested
that facilities should be equipped with physical barriers to prevent
the incidental discharge of all life stages of non-native species. One
agency supported a Federal regulation corresponding to existing State
rules that would prohibit unauthorized release of harmful or
potentially harmful exotic and non-native species.
Other commenters urged more coverage (e.g., ponds, molluscan
shellfish) and control for escapes. They identified several specific
concerns: escapes of the cultured organisms themselves (e.g., Atlantic
salmon in the Pacific Northwest), including genetically modified
species, and escapes of pathogens and parasites potentially associated
with the cultured organisms. Commenters also proposed potential control
requirements (e.g., prohibitions on reproductively viable non-native
species; containment requirements). Some commenters believe that
current practices to minimize or prevent the release or escape of non-
native species are effective.
EPA also received comments questioning our interpretations of
technical literature about non-native species concerns. The JSA pointed
out that EPA cited a comprehensive 2001 NOAA technical memorandum on
the net pen salmon farming industry in the Pacific Northwest in its
discussions on possible concerns with escapes of non-native species
(DCN 40149) but that EPA did not also cite the conclusions of the
report regarding the ``very low or no'' risk of interactions or
problems from accidental releases of Atlantic salmon in the Pacific
Northwest. That report states that the escape of Atlantic salmon, a
non-native species, is ``deemed to carry very little or no risk'' with
respect to potential for hybridization with other salmonids,
colonization of salmonid habitat, competition with native species for
forage, predation on indigenous species, and serving as vectors for the
introduction of exotic pathogens. The report reviews and discusses
scientific evidence and reasoning to support this conclusion. The
report also states that ``[t]he possible negative consequences of such
[accidental escape] events have
[[Page 75080]]
been limited in part by implementation of pre-prepared recovery plans,
some of which have included deregulating catch limits for public
fishing on escaped farm fish, and by programs to monitor the background
populations of fish in nearby watersheds. These responses will continue
to be effective management practices to minimize impact, together with
further advances in the technology. Improvements in the design and
engineering of net pens and their anchorages, and the use of new net
materials, are continuing to reduce the incidents of loss following
structural failure or damage from large predators.''
In addition, JSA gave references updating information contained in
earlier sources we cited in developing the proposed rule addressing
viral hemorrhagic septicemia (VHS) on the West Coast. In contrast to
that earlier information, the more recent references provided by JSA
demonstrate that VHS was a pre-existing condition in marine fish
throughout the Pacific Northwest. These references are:
[sbull] Amos, K.H., J. Thomas, B. Stewart, and C.J. Rodgers. 2001.
``Pathogen transmission between wild and cultured salmonids: risk
avoidance in Washington State, United States of America.'' Risk
Analysis in Aquatic Health: Proceedings of an International Conference,
Paris, France, 8-10 February, 2001:83-89 (DCN 40609).
[sbull] Amos, K.A., J. Thomas, and K. Hopper. 1998. ``A case
history of adaptive management strategies for viral hemorrhagic
septicemia virus (VHSV) in Washington State.'' Journal of Aquatic
Animal Health 10:152-159. (DCN 70732)
[sbull] Meyers, T.R. and J.W. Winton. 1995. ``Viral hemorrhagic
septicemia virus in North America.'' Annual Review of Fish Diseases
5:3-24. (DCN 40592)
Some commenters urged EPA to more effectively and appropriately
align any considerations about invasive species with existing Federal
(e.g., the National Invasive Species Council), State, and other
authorities and requirements. Other comments asserted that EPA should
not regulate non-native species because they are already regulated by
other agencies.
Commenters further stated that EPA should better define some of the
terms we used in the proposal (such as ``non-native species'' and
``biological pollutants''). The proposed non-natives definition applies
to an individual, group or population of a species that is introduced
into an area or ecosystem outside its historic or native geographic
range and that was identified by the appropriate authority as non-
native or invasive. Most States have, by statute or regulation,
identified certain species of plants and animals as non-native,
invasive or exotic species that could threaten native aquatic biota.
The term excludes species raised for stocking by public agencies in a
given State. EPA excluded these species because the action of stocking
a species in public waters provides a sanctioned opportunity for the
species to become established. In any given State, if an aquatic animal
species that is otherwise defined as non-native is raised to be stocked
in public waters, then any commercial facilities producing the same
species, by definition, would not be producing a non-native species.
EPA defers to the States to determine what species are considered non-
native in their State.
EPA recognizes that non-native species do not always present a
problem. The problem lies in a species becoming invasive or established
in an area to the point where it creates adverse human health, economic
or ecological/environmental impacts. EPA is evaluating the information
described in Section II.E.3 of today's notice and comments on the
proposal and will assess whether the requirements for minimizing and/or
reporting on escapes of non-native species are appropriate. EPA is
particularly interested to learn about prevention measures that reduce
the likelihood that species or pathogens will become invasive or
established (e.g., regular inspection and maintenance of escape
prevention devices). For the final rule, EPA will also consider costs,
economic impacts, effectiveness, and possible benefits, and existing
relevant Federal, State, Tribal, and other requirements or practices.
E. Water Quality Impacts From TSS, BOD, and Nutrients
EPA received several comments about water quality impacts from CAAP
facilities. (This section addresses comments on discharges from flow-
through and recirculating facilities. Section III.B.2 discusses
comments on water quality impacts at net pen systems. Elsewhere in
Section III. you will find discussions on impacts from other
discharges.) As discussed in Section II.E.4, some information indicated
that CAAP facilities may be a significant part of local water quality
impacts. Commenters were especially concerned with one source of
information EPA considered in developing the proposed rule (State CWA
section 303(d) reports on the causes and status of impaired water
bodies) and questioned whether water quality impacts from CAAP
facilities were of sufficient national scope to warrant a national
effluent guideline.
Commenters also discussed situations where CAAP effluents might
contribute to positive water quality impacts. In addition, commenters
reviewed existing regulatory structures that, they asserted, provided
adequate water quality protection. Following public comment, EPA
received materials from a State agency drawing attention to what they
characterized as serious adverse water quality impacts at several CAAP
facilities in their jurisdiction (Section II.E.4. describes additional
information about water quality EPA compiled since proposal).
Two stakeholder groups (JSA and NASAC) argued that there is no
evidence that CAAP is a ``significant threat to our Nation's waters.''
They asserted that ``[t]o justify promulgating national effluent rules
for the U.S. aquaculture industry, EPA must provide scientific
documents irrefutably identifying that most of the U.S. aquaculture
facilities are compromising the water quality of the receiving waters
from aquaculture facilities.'' These groups offered the results of a
NASAC study documenting that a far smaller number of States (two) than
discussed in EPA's proposal documents (seven) identified aquaculture as
a major source of impairment in the 1998 and 2000 303(d) lists they
submitted to EPA (DCN 70583).
EPA reviewed this information and concurs with several key findings
of the NASAC 303(d) report. First, NASAC's analysis correctly shows
that although seven States listed aquaculture as a possible source of
impairment to water bodies within their borders, only two of these
States (North Carolina and Virginia), when contacted by NASAC, verified
that aquaculture facilities were a source of impairment. The remaining
States indicated to NASAC that aquaculture was not a known source of
impairment on the impaired stream segments reported to EPA. However,
one of the States noted that aquaculture had subsequently been
identified as a possible source of impairment on a different stream
segment. EPA also concurs that, for the reported aquaculture-related
water body impairments, local authorities reported that impairments are
being addressed by site-specific solutions. In the case of North
Carolina, according to the NASAC report, the State addressed water
quality impairment in the affected arm of Santeetlah Lake by
structuring a buy out that will remove the trout farms contributing to
the impairment. In the case of the six stream segments that Virginia
reported impaired due to trout
[[Page 75081]]
farm effluents, a 2001 benthic macroinvertebrate survey confirmed that
all six streams were still impaired. In 2002, the State prepared a TMDL
for these six stream segments. The State affirmed that aquaculture
effluents were the primary source of organic solids that impaired these
short stream segments (ranging from 0.02 to 0.8 miles). They constitute
from 86 to 99 percent of the organic solids loading in these largely
first-order, spring-fed streams (DCN 40571).
F. Best Management Practices
Many commenters stated that EPA did not have enough information to
develop best management practices that would apply to all CAAP
facilities alike. Commenters also did not want the BMPs to be
prescriptive. They wanted language changes to allow for flexibility and
innovative technologies. Commenters asked EPA to consider alternatives
to the preferred options selected for the proposal for certain
subcategories. As a result, EPA is considering several changes to the
BMP requirements in the proposed rule.
Among the comments received on BMPs are:
[sbull] Commenters preferred BMPs over direct monitoring to comply
with numerical limits. One commenter reported that testing (including
shipping) took about 600 employee hours and $40,000 per year. The
commenter also stated that reliance on BMPs would ease the burden and
allow them to shift the hours and dollars spent on testing to
implementing BMPs.
[sbull] Other concerns should be addressed in developing a BMP
plan, but the appropriate personnel at the facility should identify the
selected practices or control options, subject to regional or State
review. Commenters also stated that the BMPs should not be prescriptive
due to regional and State variations in aquatic animal production
operations as well as possible misinterpretation by permit writers.
[sbull] EPA should better define the term ``BMPs'' and the
requirements of a BMP plan.
[sbull] EPA underestimated time and costs for development of BMPs.
[sbull] Some commenters supported BMPs but did not believe that EPA
should issue a final guidance document (an updated version of the
proposal document). Instead, EPA should give references to other
sources such as land grant universities that have researched this area.
[sbull] The proposed BMPs would control effluent discharges poorly.
Some commenters indicated that BMPs should not be used as a replacement
for discharge limitations but as an added tool to achieve discharge
reductions.
Based on comments, EPA is considering a simplified guidance
document to identify recommended components of a BMP plan. In EPA's
view, a list of these components may help guide producers in developing
their own BMP plans. Such guidance might also help reduce the burden on
producers of developing a plan and allow flexibility in meeting the
facility's specific goals. (Section IV.C. describes these components)
G. Proposed TSS Limitations
EPA received comments stating that it lacked information to develop
numerical limitations relevant to all CAAP facilities. Commenters
stated that regional differences (among facilities) and effluent
characteristic differences (between cold water and warm water species)
would make it impractical for all facilities to meet the proposed
limits.
The National Association of State Aquaculture Coordinators (see DCN
62387) asserted that there is no evidence to show that using best
professional judgment to develop limitations associated with NPDES
permits is not already protecting water quality effectively and that a
national effluent guidelines regulation is not necessary. They later
provided information on recent developments in some State programs on
the use of BMPs in NPDES permits for CAAP facilities. EPA will consider
this information with other information the Agency collected to further
evaluate current wastewater treatment practices in the industry.
In response to these comments, EPA performed a preliminary
assessment of the TSS limitations and found that most flow through
facilities already have relatively low discharges of TSS in full flow
or recombined flow effluents. The BMP approach will provide an
additional control of TSS discharges. Thus, EPA is reconsidering
whether monitoring of TSS concentrations is necessary for this
industry. EPA seeks comment on this issue.
EPA proposed that, in the case of flow-through systems, TSS
limitations would apply on a net basis (67 FR 57927). That is, the
discharge limitation would apply to the amount of TSS added by the
production system. This approach is consistent with the NPDES general
permit conditions for CAAP facilities in at least one State (Idaho).
For recirculating systems, by contrast, EPA proposed that TSS
limitations would apply on a gross basis, without accounting for TSS in
the source water. EPA's supporting documentation for the proposal shows
that the data used to establish the proposed limitations for both
subcategories was based on gross TSS concentrations.
The NPDES permit regulation provides a procedure for adjusting
limitations to reflect credit for pollutants in intake source water in
certain circumstances. These include a demonstration that a
discharger's control system would meet the applicable limitations in
the absence of pollutants in the intake water (see 40 CFR 122.45(g)).
EPA is now considering whether to promulgate limitations for both
subcategories that leave the decision of establishing permit limits on
a net or gross basis to the permit writer. A requirement to establish
limitations on a net basis could be interpreted to require all CAAP
facilities to collect samples from both their effluent and influent,
thus doubling the number of samples required and the analytical costs,
which may be unnecessary under many circumstances. For example,
facilities whose source water is spring fed may have very little TSS in
the source water. Likewise, some recirculating facilities may use
public water supplies that also have low TSS concentrations in their
source water. Another approach would require monitoring of influent
only where effluent monitoring shows a possible exceedence of the
limit.
EPA asked for updated copies of NPDES permits, fact sheets, and DMR
data for 125 permitted facilities from the EPA regional offices. EPA
was able to get NPDES permits for 49 facilities in the detailed survey.
EPA also obtained DMR data directly from facilities and PCS for 47
facilities. EPA got DMR data and permits for 43 facilities. There were
six facilities for which EPA had NPDES permits but not DMR data and
four facilities for which EPA had DMR data but not NPDES permits.
EPA used the detailed surveys and NPDES permit information to
identify discharge points and the nature of discharges (e.g., full flow
from raceways or solids collection decant water) in the DMR data. EPA
found reported TSS data in the DMR set from 31 of the 47 facilities for
which it had DMR data. Sixteen facilities in the DMR set did not have
TSS data. EPA concluded that 28 of the 31 facilities with TSS data use
at least primary settling treatment. Two of the 31 facilities indicated
that they have no treatment, and EPA was not able to verify in-place
treatment for one facility.
To determine the ability of facilities to meet the primary
treatment option, EPA then compared the reported TSS concentration data
with the limits proposed for flow-through facilities that produce
100,000 to 475,000 pounds of
[[Page 75082]]
aquatic animals a year and for recirculating systems that produce more
than 100,000 pounds of aquatic animals a year. For the 31 facilities
with TSS data, the number of effluent measurements per facility ranged
from 424 to 2, with the average for all 31 facilities being 68
measurements. EPA compared facility TSS monitoring data with the
proposed limits for similar types of discharges and found:
[sbull] Recombined effluent--Two of the three facilities in this
category exceeded the proposed daily maximum limit of 11 mg/L in 28 of
178 reported measurements. We did not find monthly average measurements
for this group
[sbull] Full flow settling basin discharges--Two of six facilities
exceeded the proposed daily maximum limit of 11 mg/L in 15 of 110
reported measurements, and exceeded the proposed monthly average
limitation of 6 mg/L in 10 of 113 reported measurements
[sbull] Bulk flow effluent--One of three facilities exceeded the
proposed daily maximum limit of 11 mg/L in four of 104 reported
measurements and exceeded the proposed monthly average limitation of 6
mg/L in six of 104 reported measurements
[sbull] Offline settling basins--Neither of the two facilities with
TSS data exceeded the proposed daily maximum limit of 87 mg/L or the
proposed monthly average limitation of 67 mg/L in 81 reported
measurements
[sbull] Recirculating system combined effluent--The one facility
with reported TSS data exceeded in one of nine reported measurements
the proposed daily maximum limit of 50 mg/L, and they exceeded in three
of 87 reported measurements the proposed monthly average limitation of
30 mg/L.
EPA found that all of the reported TSS measurements that exceeded
the proposed limits occurred in the earlier data reported by an
individual facility. The time periods varied by facility from 1990
through 2001 for the data used to compare proposed limits with reported
monitoring data. Facility data in the most recent year were all within
the proposed TSS limits for the corresponding outfall type. The record
discusses the analysis in these data (see DCNs 62641 and 31137).
EPA also compared sampling data from the four sampling episodes
with the proposed daily maximum limits and found:
[sbull] Full flow settling basin discharges--Neither of the two
facilities with full flow discharges exceeded the proposed daily
maximum limit of 11 mg/L in any of the 10 sample measurements.
[sbull] Bulk flow effluent--One facility with a bulk discharge did
not exceed the proposed daily maximum limit of 11 mg/L in any of five
sample measurements.
[sbull] Offline settling basins--One of three facilities with
offline settling basins exceeded the proposed daily maximum limit of 87
mg/L in four of the total 21 sample measurements taken at the three
facilities.
[sbull] Recirculating system combined effluent--The one facility
sampled exceeded the proposed daily maximum limit of 50 mg/L in one of
five reported measurements.
H. Feed Conversion Ratios
Improving the conversion of feed to live weight positively affects
water quality, generating less wastes by reducing the amount of uneaten
feed. Some commenters raised a concern about the feed conversion ratios
(FCRs) EPA assumed in the cost model and the frequency factor
adjustment (see Section III.I.). The FCR is the weight of feed used to
produce a unit weight of aquatic animals. Commenters said the FCRs we
used for proposal were too high, and most facilities are achieving
better feed conversion ratios than assumed.
Many facilities responding to the detailed survey estimated their
FCR or submitted detailed information on feed use and production. EPA
found reported FCRs to be quite variable, even among facilities with
similar systems, ownership-types, and species. EPA calculated FCRs
facility-by-facility from the detailed survey to estimate possible load
reductions. For the purpose of estimating costs and pollutant load
reductions, EPA assigned target FCRs as the 25th percentile value for
facilities in each combination of species, production system, and
ownership type group. EPA does not currently plan to establish any
limits on FCRs. We used facility-specific FCRs to estimate baseline
loads and compare them to the target FCR to estimate possible load
reductions from implementation of solids control BMPs.
In comparing FCRs with effluent concentration data on a facility
basis, EPA found that the raw wastewater pollutant loading at a
facility is still largely linked with feed inputs. To address comments
about the impact of the FCR values, EPA will perform sensitivity
analyses to compare the target FCR and resulting pollutant load
reduction estimates.
I. Cost Analyses
Comments stated that the proposed model facility approach used was
not adequate. Many of the comments suggested that EPA's cost estimates
were not accurate, but only a few commenters (e.g., JSA AETF, NASAC,
and the U.S. Trout Growers Association) provided detailed cost data.
These commenters also suggested that EPA's model facilities were an
inaccurate representation of the industry because the model facilities
do not capture the diversity of actual facilities. One commenter stated
that the labor rates for managers and laborers were too low. To address
these concerns, EPA used facility-specific information from the
detailed survey to perform the analyses for the NODA. See Section
V.A.2.
Commenters also criticized our use at proposal of the frequency
factor approach to major national estimates. For this approach, EPA
applied a ``frequency factor'' to the cost for each model facility to
estimate the national cost for all facilities represented by the single
model facility. EPA estimated frequency factors based on these sources:
EPA site visits, screener surveys, observations by industry experts,
USDA's 1998 Aquaculture Census, USDA APHIS National Animal Health
Monitoring System, and State regulatory programs. Commenters argued
that the frequency factors underestimated compliance costs, so EPA may
have underestimated impacts.
For the NODA, EPA changed its approach by using data from the
detailed survey to estimate facility-level compliance costs and
associated loads. Instead of applying the frequency factors used at
proposal, we applied statistically-derived weights from the survey
design to scale detailed survey facility estimates to national
estimates based on the probability that a facility was selected for the
detailed survey sample. Because not all sampled facilities would be
within the scope of the rule, we used a subset of the detailed survey
sample to estimate national CAAP costs for industry sectors affected by
the proposed rule (see Section II.D. for a description of the survey
weights and the subset).
IV. Regulatory Options Considered for the Proposal and Modifications
Being Considered for the Final Rule
A. Proposed Regulatory Options
In subcategorizing the industry for the proposal, EPA considered
several factors (e.g., age of the equipment and facilities, location,
processes employed, and the available types of treatment technology.)
We identified the types of production systems (e.g., flow-through
systems, recirculating systems, net pens) to create subcategories with
similar operating practices, quality and quantity
[[Page 75083]]
of effluent type and discharge frequency.
We then proposed limitations based on these CAAP subcategories:
flow-through, recirculating, and net pen systems. Flow-through systems
tend to have high effluent flows that can exceed a complete system
volume exchange per hour. Some flow-through facilities may treat two
discharges: a bulk discharge and a discharge from a settling basin
referred to as off-line settling. The bulk discharge is large volume
and flows directly from the areas where the animals are confined. The
off-line settling discharge is water drawn from, without disturbing,
the solids collected from the production process that are treated in a
basin through settling. Compared to the bulk flow discharge, the volume
of discharge from the off-line settling basin is small but more
concentrated in pollutants such as TSS, BOD, or nutrients. Other flow-
through facilities choose to treat their entire discharge through a
single treatment system (full-flow settling) that includes the solids
generated from the production process and the entire production volume
of water. Facilities that use full-flow settling with a single
discharge point usually have relatively low concentrations of TSS, BOD,
and nutrients.
Some recirculating systems have single discharges with relatively
small volumes (often a fraction of the system volume per day) of
treated effluent with concentrations of TSS, BOD, and nutrients
comparable to the off-line settling basin discharge at some flow-
through facilities. Other recirculating systems (called dual discharge)
may have two discharges, one from a solids treatment process and one
often described as ``overtopping'' water. Overtopping water is process
water that drains from production tanks or process water treatment
units as a result of continually adding a small amount of water to the
recirculating system. This practice provides make-up water that offsets
losses and some dilution for a ``margin of safety'' that ensures
adequate process water quality. The overtopping water effluent TSS,
BOD, and nutrients are typically less concentrated than solids
treatment system effluent, but they are more concentrated than bulk
discharges from flow-through systems. Solids treatment effluents from a
dual discharge recirculating system are similar in concentration to
flow-through offline settling basin and single discharge recirculating
systems. Net pen systems release TSS, BOD, and nutrients directly to
receiving waters.
EPA then divided the subcategories by facility size (i.e., the
amount of aquatic animals produced) because of differences in economic
factors related to production size. The proposal did not include
facilities with annual production below 100,000 pounds due to economic
achievability concerns. We also proposed less stringent requirements
for flow-through facilities with production between 100,000 and 475,000
pounds a year (again based on concerns about economic achievability).
EPA based its proposed conclusions on economic achievability of
limitations based on the model technology and model facility analysis.
The proposed model facilities represented specific size ranges in
pounds produced. Pounds produced were derived from annual revenue
ranges and price data from the 1998 Census of Aquaculture. Most of the
impacts that EPA identified would adversely affect trout producers
below an annual threshold of 94,000 pounds production. Therefore, EPA
proposed to establish the applicability threshold for the effluent
guideline at 100,000 pounds a year to avoid projected impacts in the
trout sector. Production of other species also faced similar economic
stress at lower production levels. EPA proposed the same applicability
threshold for other species because doing otherwise would add needless
complexity to the regulation, with little corresponding environmental
benefit.
EPA identified technology options for each of the system/size
subcategories based on technologies and practices found at facilities
in the subcategory. We evaluated the options in order of increasing
stringency, both in the degree of pollutant reduction achieved as well
as in cost. Each successive option incorporates the technologies and
practices of the previous option.
Option 1 for flow-through systems includes primary settling (e.g.,
quiescent zones and settling basins) and developing and implementing a
BMP plan for solids control. Option 1 for recirculating systems
includes similar technologies/practices to those for flow-through
systems. Option 1 for net pens includes feed management and BMP plan
development for solids control.
Option 2 for all subcategories combined the Option 1 requirements
with identifying and implementing BMPs to control discharges of drugs,
chemicals, and non-native species. Option 2 also included a reporting
requirement for the use of Investigational New Animal Drug (INAD) and
extra-label use drugs. Option 3 combines Option 2 requirements with
solids polishing (e.g., microscreen filtration) for flow-through and
recirculating systems and active feed monitoring for net pens.
EPA selected the proposed regulatory options for each subcategory
based, in part, on the costs and economic impacts of installing and
implementing these options. The proposed regulation for flow-through
systems applied a two-tiered approach reflecting economic achievability
concerns. For facilities that produce between 100,000 and 475,000
pounds of aquatic animals a year, EPA proposed to base BPT, BCT, BAT
and NSPS on Option 1. For facilities that produce more than 475,000
pounds of aquatic animals per year, we proposed BPT, BCT, BAT and NSPS
requirements on Option 3. For recirculating systems, EPA proposed
Option 3 as the basis for the BPT, BCT, BAT and NSPS requirements. For
net pen systems, EPA also proposed Option 3 as the basis for BPT, BCT,
BAT and NSPS. The components for each option for flow-through and
recirculating systems are summarized in Table IV.B.1.
EPA is still considering a no further regulation option. EPA
received many comments supporting a no rule option for this industry.
Comments referred to programs within the Federal and State governments
such as the NPDES permitting process and TMDLs, indicating that these
programs are better equipped to address local problems than national
guidelines. They also argued that the baseline discharge loadings do
not warrant national guidelines. The Agency will fully consider this
option and the comments when it issues the final action.
B. Modifications Being Considered for the Final Rule
The following sections discuss several alternatives EPA is
considering. We present the revised costs, pollutant reductions, and
economic impact estimates for both the proposed options (1 to 3) and
two new options (A&B) (see Section VI of today's notice). These revised
estimates reflect:
[sbull] Data from EPA's detailed surveys.
[sbull] Data received with comments to the proposed rule.
[sbull] Effluent monitoring (DMR) data received from EPA regional
and State permitting authorities.
[sbull] Changes resulting from methodological revisions to EPA's
analytical approach. Before final action, EPA will consider these and
any further revisions resulting from comment on today's notice. The
following sections describe alternatives we are considering for the
different regulatory levels of control (e.g., BPT, BCT, BAT, NSPS).
[[Page 75084]]
1. Description of Modified Options--Flow-through and Recirculating
System Subcategories
As a result of the facility-level analysis from detailed surveys
and comments, EPA re-evaluated the flow-through and recirculating
system technology options for BPT, BCT, BAT, and NSPS limitations or
standards from proposal. In addition to the three proposal options, EPA
is considering two new options that represent changes to the proposed
options. We will also continue to consider a no further regulation
option.
The first new option (Option A) would, like Option 1, include
primary settling. It would also include the requirement to develop and
implement a BMP plan that minimizes both the discharge of drugs and
chemicals and the possible escape of non-native species. Option A would
also include the requirement for reporting Investigational New Animal
Drugs (INADs) and extra-label use drugs as included in the proposed
Option 2. The only difference between Option A and the proposed Option
2 is that Option A does not require the development and implementation
of BMPs to address solids control.
Like Option 1, Option A would ensure that all covered facilities
remove solids by primary settling. Based on the detailed survey data,
primary settling is used at 468 out of 506 (92.5%) of all flow-through
and recirculating CAAP facilities. However, where Option 1 would
require using BMPs to control solids, Option A does not. Option A would
instead require BMPs to (1) address the use, storage, and disposal of
drugs and chemicals and (2) minimize or prevent the release or escape
of non-native species. This substitution may be appropriate for two
reasons. First, many facilities have already established these
practices. The detailed survey indicates that drug and chemical
management practices are in use at 44% of flow-through and
recirculating CAAP facilities. The practices are also used at 46% of
flow-through facilities with annual production between 100,000 and
475,000 pounds. Over 90 percent of facilities producing species that
would be considered non-native use escape prevention practices. Second,
EPA thinks this change may be appropriate because it addresses the
environmental effects that most concerned commenters. Therefore, EPA
will consider Option A as the basis for BPT, BCT, BAT, and NSPS for the
flow-through and recirculating subcategories with annual production
greater than 100,000 pounds in the final rule. Option A would identify
aspects of the facility operation that must be addressed with
appropriate management practices but not specify the particular
practices.
The proposed Option 3 specified additional solids removal
requirements that could be accomplished through secondary solids
removal treatment technologies such as microscreen filtration or a
solids polishing pond. Option 3 included a numeric TSS concentration
limit of 10 mg/L maximum daily and 6 mg/L monthly average for full-
flow, flow-through facilities; 69 mg/L maximum daily and 55 mg/L
monthly average for offline settling at flow-through facilities; and 50
mg/L maximum daily and 30 mg/L monthly average for recirculating
facilities. EPA estimates that solids polishing technologies (or some
equivalent) are currently used at 264 of 506 (52.2%) of all flow-
through and recirculating CAAP facilities.
The second modified option (Option B) being considered is similar
to the proposed Option 3 in that it would require a greater degree of
solids removal than achieved under Option A. However, Option B would
offer facilities the choice to develop and implement a solids control
BMP as included in Option 1 in lieu of installing secondary solids
control technology, such as a second stage settling pond or a
microscreen filter, and meeting numeric TSS limits. Facilities could
still choose to install solids polishing technology and monitor TSS to
achieve a numeric limit, but they could alternatively choose to instead
implement solids control BMPs such as feed management.
Table IV.B.1 identifies the components or technologies we are
considering for the proposed and modified options for flow-through and
recirculating systems.
Table IV.B.1.--Technologies or Practices Considered for the Proposed and Modified Options
--------------------------------------------------------------------------------------------------------------------------------------------------------
Technologies or practices
------------------------------------------------------------------------------------
Options Primary Solids control Drugs and Escape Secondary
settling BMPs chemicals BMPs prevention solids removal
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................. [radic] [radic] ............... ............... ...............
2.................................................................. [radic] [radic] [radic] [radic] ...............
3.................................................................. [radic] [radic] [radic] [radic] [radic]
A.................................................................. [radic] ............... [radic] [radic] ...............
B *................................................................ [radic] [radic] [radic] [radic] [radic]
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Option B would include primary settling, drugs and chemicals BMPs, escape prevention, and a choice between solids control BMPs or secondary solids
removal technology.
EPA seeks comment on establishing BPT, BCT, BAT, and NSPS based on
any one of these options for both flow-through and recirculating
systems. We also seek comment on whether EPA should establish
limitations and associated BMPs.
2. Continual Discharge Subcategory
Public comment (DCNs 70137 and 70236) suggests that EPA's proposal
did not clearly define recirculating systems. A variety of systems are
used to produce aquatic animals spanning a continuum from completely
flow-through (single pass of water through culture tanks) to nearly
complete recirculating (only small amounts of make-up water are added
to offset evaporation and other losses). Closed ponds (i.e., systems
that do not regularly discharge) and net pens (systems located directly
in the receiving water), are outside of this continuum. Many facilities
operate flow-through systems with multiple uses of the water before
discharge. Oxygen may be added and solids collected between uses to
provide better quality of reused water. Some facilities operate flow-
through systems with process treatments that are similar to some used
in recirculating systems (e.g., enhanced solids removal, extensive
oxygenation, and carbon dioxide stripping).
Recirculating systems may have concentrated solids effluents from
solids removal processes that require additional treatment prior to
discharge.
[[Page 75085]]
These concentrated solids effluents from recirculating systems may be
similar in quality to those discharged from quiescent zones in flow-
through systems. Many recirculating systems also have an overflow or
overtopping water discharge that is combined with the solids treatment
effluent. Overtopping water quality is essentially the same as that of
the process water in the recirculating system. The quality of the
overtopping water is usually more concentrated in constituents (such as
TSS, BOD, nitrogen, and phosphorus) than flow-through system bulk
discharges. However, it is less concentrated in these constituents than
effluents from solids treatment processes such as offline settling
basins. Daily volume of discharged overtopping water is also typically
less than 10% of the system volume compared to the multiple system
volume exchanges per day in typical flow-through systems. Our proposal
did not clearly state how the rule would cover overtopping water from
recirculating systems. EPA intended overtopping water discharges to be
treated like solids treatment water or combined effluents. That is, all
discharges from recirculating systems would be subject to the same
proposed effluent limits.
EPA may revise its proposed subcategorization scheme by combining
the flow-through and recirculating subcategories into a single
subcategory, called the ``continual discharge'' subcategory (see
Section III.B.1). Both proposed subcategories operate with a continuous
or frequent discharge of wastewater containing similar wastewater
pollutants. The recirculating system wastewater discharge typically
comes from two sources, backwash from solids removal and overflow water
from production tanks, and has similar pollutant concentrations as
offline treatment system effluents from flow-through systems. Combined
recirculating system discharges (backwash from solids removal and
overflow water from production tanks) are also like the wastewater
discharged from offline treatment at a flow-through system.
The detailed survey data indicate that nationally 11 facilities use
both flow-through and recirculating system technologies. Depending on
the facility layout, wastewater from both systems may be commingled for
discharge in a single effluent stream. Under the proposal, facilities
that commingle recirculating and flow-through system wastewater would
be subject to the recombined effluent limits that are the same as the
full flow requirements for primary settling.
By combining the flow-through and recirculating systems into a
single subcategory, EPA would basically apply two sets of effluent
limits. One set would apply to the discharge of full flow effluents,
and the other would apply to offline treatment or recirculating system
effluents. The flow-through facilities would be subject to the proposed
requirements (i.e., remain unaffected by combining the separate
subcategories into one), whereas the recirculating systems would be
subject to offline treatment requirements. Offline treatment
requirements had higher (less stringent) effluent concentration-based
limits than the proposed recirculating system limits. They operate with
a frequent continual discharge that contain similar wastewater
characteristics.
EPA is also considering the same modified options (A & B) for the
continual subcategory as for the separate flow-through and
recirculating subcategories. Because the continual subcategory would
include limits from the separate flow-through and recirculating
systems, the results of the analyses for the continual subcategory
would be similar to those presented for the separate subcategories. EPA
would apply the same requirement for TSS in a continual discharge
subcategory to discharges from stand-alone recirculating facilities and
offline settling basins. EPA seeks comment on combining these two
subcategories into a single subcategory.
3. Net Pen Subcategory
EPA is not considering changes to the proposed options for the net
pen subcategory. For facilities that produce more than 100,000 pounds
of aquatic animals per year, EPA proposed BPT limits based on:
[sbull] Option 3 active feed monitoring (i.e., additional solids
removal).
[sbull] Developing a BMP plan for solids control.
[sbull] General reporting requirements for use of certain drugs and
chemicals for facilities.
EPA also proposed to establish BAT equal to BPT because no more
stringent options representing BAT were available. EPA proposed to
establish BCT equal to BPT because EPA did not identify any more
stringent technologies representing BCT were available. Finally, EPA
proposed NSPS equal to BAT because the proposed effluent limitations
guidelines would be affordable and would not pose a barrier to entry
for new source net pens.
V. Revisions to the Cost, Loadings, Economic, and Benefits Models
A. Revisions to Assumptions and Methodology Used in EPA's Cost Analyses
1. Proposed Costing Approach
At proposal, EPA used a model facility approach to estimate the
cost of installing or upgrading wastewater treatment to achieve the
proposed requirements. As described in the preamble to the proposed
regulation (67 FR 57872), EPA developed 21 model facilities (based on
the USDA's Census of Aquaculture and EPA's screener survey)
characterized by different combinations of production systems, size
categories, species and ownership types. We developed regulatory
technology options based on screener survey responses, site visits,
industry and other stakeholder input, and existing permit requirements.
EPA estimated the cost for each option component for each model
facility. We then calculated costs for each regulatory option at each
model facility based on model facility characteristics and the costs of
the option's technologies or practices corresponding to the option.
EPA estimated frequency factors for treatment technologies and
existing BMPs based on screener survey responses, site visits, and
sampling visits (see Section III.1). Baseline frequency factors
represented the portion of the operations that would not incur costs to
comply with the proposed requirements because they were already using
the technology or practice. EPA adjusted the component cost for each
model facility represented by the model to account for those facilities
then EPA derived national estimates of costs by aggregating the
component costs applicable to each model facility across all model
facilities.
2. Revised Costing Approach
EPA's detailed surveys captured information on the treatment in-
place at the facility and other site-specific information (such as
labor rates). EPA got additional cost information from data supplied
from public comments and site visits. With the new data, EPA revised
the method to estimate compliance costs. Instead of a model facility
approach, EPA is presenting facility-level costs based on the available
facility-specific data contained in the detailed survey responses. We
then apply statistically-derived survey weights instead of the
frequency factors used at proposal to estimate costs to the CAAP
industry as a whole.
[[Page 75086]]
On the detailed survey, facilities operating flow-through and
recirculating production systems reported a variety of BMPs that are
used today. These BMPs include:
[sbull] Feed management.
[sbull] Cleaning of quiescent zones.
[sbull] Inventory control.
[sbull] Health screening.
[sbull] Cleaning screens in tanks or raceways.
[sbull] Mortality removal.
[sbull] Use of dam boards.
[sbull] Flow diversion during harvest and cleaning activities.
The detailed survey did not ask for detailed descriptions of the steps
in the BMPs. Therefore, except for the feed management practice (see
below), when a facility indicated a particular BMP in place, EPA
assumed no additional cost to the facility for implementing that BMP.
The costs associated with BMP plan development include a one-time
labor cost of 40 hours to develop and write the plan. The plan that EPA
costed included (1) identifying all waste streams, wastewater
structures, and wastewater and manure treatment structures at the site,
(2) identifying and documenting standard operating procedures for all
BMPs used at the facility, and (3) management and staff
responsibilities for implementing the plan. We included an annual cost
for four hours of management labor to maintain the plan and eight hours
of management labor for an annual review of BMP performance. We
included the cost of developing a solids control and drugs and
chemicals BMP plan in the estimates for all facilities, except those in
Idaho and Washington. (Facilities in Idaho and Washington would not
incur this cost because NPDES permits in these States already require
solids control and drugs and chemicals BMP plans.) EPA found that the
components of the BMP plans required in Idaho and Washington are
similar to those being considered for the final rule.
In evaluating facilities for solids controls, EPA first checked for
evidence of a good feed management program. If the facility reported
they practice feed management, EPA looked for evidence of solids
management and good operation of the physical plant, including regular
cleaning and maintenance of feed equipment and solids collection
devices (e.g., quiescent zones, sedimentation basins, screens, etc.).
To evaluate the effectiveness of a facility's solids control practices,
we calculated feed conversion ratios (FCRs) using pounds of feed per
pound of live product (as reported in the detailed survey) and
considered existing solids control equipment. We assumed facilities
lacking evidence of good feed management or solids control programs
would incur additional costs to improve or establish them.
EPA estimated FCRs from data in the detailed survey and follow-up
with some facilities and compared FCRs for groups of facilities (i.e.,
combinations of ownership, species and production system types such as
commercial trout flow-through facilities or government salmon flow-
through facilities). We found a wide range of FCRs (reported by
facilities in their detailed surveys, which were validated by call
backs to the facility) among apparently similar facilities within
ownership-species-production system groupings.
For example, we had good data for 24 of 60 government trout
producers using flow-through systems. They reported a range of FCRs of
0.79 to 1.80 with a median FCR of 1.30. If an individual facility's
reported FCR was significantly greater than the median, EPA further
evaluated the facility to ascertain the reason for the higher FCR.
Facilities that produce larger fish, such as broodstock, might have
higher FCRs because the larger fish produce less flesh per unit of
food. Facilities with fluctuating water temperatures could also be less
efficient than facilities with constant water temperatures. We did not
apply costs for solids control BMPs for facilities with reasonable
explanations for the higher FCRs. We evaluated facilities that did not
report FCRs or provide enough data for an estimate using the
methodology described in section III.H.
Costs for the solids control BMP component include staff time for
recordkeeping for feed delivery and daily feeding observations.
Management activities associated with the solids control plan were
weekly data reviews of feeding records, regular estimates of changes to
feeding regimes for each group of aquatic animals, and staff
consultations about feeding. For facilities with no solids control
equipment, we also estimated the costs for primary and secondary solids
control. EPA evaluated each facility to identify the configuration of
the existing treatment units and what upgrades would be required. We
found that most flow-through systems not having any treatment
structures can comply with Option 1 by adding a combination of
quiescent zones and off-line settling basins. We assume quiescent zones
can be retrofitted into existing raceways without expanding them and
without impacting production levels in the raceways.
EPA also used industry cost information provided through public
comment and the detailed survey to estimate costs for design and
installation of primary settling equipment for effective settling of
suspended solids. For example, we used the facility-level data included
in the detailed survey responses to place and size the off-line
settling basins on the facility site. For facilities that use earthen
flow-through technologies, EPA estimated costs to construct and operate
full flow settling structures rather than quiescent zones and off-line
settling.
EPA classified each facility's wastewater treatment system based on
the description provided in its survey response and available
monitoring data, including DMR data. We assumed that treatment
technologies indicated by a facility on the detailed survey are
properly sized, installed, and maintained. EPA estimated facility-
specific costs for each of the responding direct dischargers and used
these estimates as the basis for national estimates. Because the survey
did not collect information about many specific parameters used in
individual facilities' production processes and treatment systems, EPA
supplemented the facility-specific information with typical
specifications or parameters from literature, survey results, and
industry comments. For example, EPA assumed that facilities have pipes
of typical sizes for their operations.
As a consequence of such assumptions, a particular facility might
need a different engineering configuration from those modeled if it
installed equipment that varies from the equipment or specifications we
used to estimate costs. EPA nonetheless considers that costs for these
facilities are generally accurate and representative, especially
industry-wide. EPA applied typical specifications and parameters
representative of the industry to a range of processes and treatment
systems. We contacted facilities to get site-specific configuration
information where possible.
In revising cost estimates, EPA paid particular attention to:
[sbull] Size of tanks, raceways, and culture units.
[sbull] Labor rates.
[sbull] Treatment components in place.
[sbull] BMPs and plans in place.
[sbull] Daily operations at the facility.
Site visits and analysis of the detailed surveys indicated that
raceways and quiescent zones are cleaned as necessary to maintain
system process water quality.
[[Page 75087]]
The effective operation of microscreen filters require that they be
enclosed in heated buildings to prevent freezing when located in cold
climates. EPA's revised estimates of costs for Option 3 are not based
on the application of microscreen filters unless the detailed survey
response indicated that such a structure existed at the site. When the
detailed survey did not indicate a structure at the site, EPA estimated
costs for a second stage settling structure rather than a microscreen
filter. Based on data from two of EPA's sampling episodes at CAAP
facilities, this technology will achieve the proposed limits for Option
3.
EPA agrees with concerns raised in comments that the cost
associated with enclosing the filter in a heated structure would be
prohibitive. Option B would allow facilities to choose between solids
polishing treatment (e.g., second stage settling) and solids control
BMPs. For estimating compliance costs, EPA assumes that facilities will
choose the least costly method which, in all cases, proved to be using
the BMPs. Thus, EPA based Option B costs on the application of solids
control BMPs.
To estimate costs for the drugs and chemical component of the BMP
plan, EPA first looked at the detailed survey to determine if the
facility reported using drugs, chemicals, or medicated feed. The
detailed survey also asked if the facility has adopted health
management BMPs. Although responses indicated that nearly half of the
regulated population has some form of health management practices, we
do not have information on the specific activities associated with
these practices. Therefore, EPA assumed that all facilities reporting
drugs and chemicals would incur additional costs to implement
management practices (except in Idaho and Washington). These States
have already issued NPDES permits that include requirements for drug
and chemical management BMPs similar to those in our cost estimates.
(EPA found evidence of other states with similar requirements, but no
facilities in these states were in the group of in-scope facilities
that responded to the detailed survey.) Costs include staff time for:
[sbull] Initial and annual plan review.
[sbull] Weekly inspections of storage facility.
[sbull] Completion of an application program worksheet
(recordkeeping).
[sbull] Completion of a disposal worksheet (for out-of-date drugs
or chemicals).
[sbull] Marking of production units being treated.
[sbull] Annual training sessions.
Management activities include:
[sbull] Initial plan development.
[sbull] Annual review and update of plan.
[sbull] Review of application worksheets.
[sbull] Leading facility training sessions.
[sbull] Quarterly inspections of entire facility.
[sbull] Management of veterinary assistance (e.g., implementing vet
recommendations).
[sbull] Biweekly review of drug and chemical records.
[sbull] Staff management consults.
Because therapeutic treatments vary considerably at a facility from
year-to-year and also among facilities, EPA estimated the BMP costs
based on monthly drug applications throughout the year. We estimated
costs for a few hatcheries that produce only eggs and larvae for
regular treatments to control fungus during the egg incubation period.
We also considered the use of activated carbon filtration to treat
and remove drug or pesticide active ingredients from wastewater.
Research indicates that this technology is effective at treating these
compounds, and at least one aquatic animal production facility
installed this technology. EPA estimated the costs for activated carbon
treatment as a stand-alone technology. We estimated costs on a site-
specific basis for facilities which reported using drugs and then added
these costs for options A, B, 2, and 3 (see Section V.C.) to assess the
economic achievability of this technology.
EPA estimated the costs to develop and implement escape management
practices at facilities where (1) the cultured species was not commonly
produced or regarded as native in the State, (2) the facility was a
direct discharger, and (3) the species was expected to survive if
released. (In contrast, producers of a warm water species in a cold
climate, such as tilapia producers in Minnesota or Idaho, would not
incur costs for this practice.) Costs for escape prevention include
staff time for production unit and discharge point inspections and
maintenance of escape prevention devices. We applied these costs to
facilities that installed equipment conforming with State requirements
for facilities producing non-native species (identified by the State).
Management time includes quarterly production unit and discharge point
inspections, eight hours a year to review applicable State and Federal
regulations, and quarterly staff consultations.
EPA revised estimates for all labor costs using the employee and
wage information supplied in the detailed surveys. For those facilities
indicating they use unpaid labor for all or part of the facility
operation or did not supply useable wage information, we used average
State or regional wages.
B. Revisions to Assumptions and Methodology Used in Loadings Analyses
1. Proposed Approach
To estimate the baseline discharge loadings and load reductions for
the proposal, EPA used the same model approach described in Section
V.A.1. for the costing analyses. We first estimated pollutant loadings
for untreated wastewater based on several factors for each model
facility. Feed offered to the CAAP species contributed to pollutant
discharges in three ways: feces, urine-contributing dissolved ammonia,
and uneaten feed (dissolved and particulate forms). These byproducts of
feed contribute to the pollutant load in the untreated culture water.
EPA used typical efficiency rates of removing specific pollutants from
water for the technology options and BMPs we are considering. Using the
same frequency factors for technologies in place that were used to
estimate costs, we estimated the baseline pollutant loads discharged.
We then calculated load reductions for the options.
2. Revised Loadings Approach
Rather than using the proposed model approach, EPA revised the
loadings approach to incorporate a facility-level approach using data
primarily from the detailed surveys, but also taking into account
suggestions concerning appropriate feed conversion ratios (FCRs)
provided by commenters. EPA also applied statistically-derived survey
weights to get national estimates.
Since pollutant loads are proportional to feed inputs, improving
feeding efficiency and reducing wasted (uneaten) feed will reduce
pollutants discharged from CAAP facilities. EPA expects that using feed
management BMPs will reduce pollutant loads by improving the efficiency
of converting feed to the final product (i.e., less feces and uneaten
feed). EPA determined pollutant loadings from revised estimates of
pollutant loads for a unit of feed input. EPA's re-evaluation of the
baseline or current practices changed the loading estimates, reflecting
survey responses on practices or treatment-in-place at facilities. The
revised results also reflect the estimated FCRs we used in the
facility-level analyses (see Section III.H).
In its evaluation of data from the facilities responding to the
detailed survey, EPA found no apparent relationships that explain why
some
[[Page 75088]]
facilities use drugs or medicated feeds and others do not. EPA also
evaluated the amounts of drugs and medicated feed reported in the
detailed survey as used at facilities and found no basis for predicting
how much drugs or medicated feed would be used at a given facility.
Information reported by facilities did not provide enough detail for
EPA to estimate pollutant reductions associated with drug and chemical
BMPs.
C. Revisions to Assumptions and Methodology Used in Economic Analyses
Due to new information and comments, EPA is considering several
changes in the approaches for economic analysis. EPA seeks comments on
the changes. Section VI describes new data and results for the revised
economic analyses.
1. Economic Analysis Approach for the Proposed Rule
For the proposed rule, EPA evaluated projected economic impacts
using screener questionnaire data which did not include financial or
economic information beyond revenues and limited firm-level production
data. As a consequence, the impact analysis was based on compliance
costs for model facilities, frequency factors for extrapolating costs
to a group of facilities represented by a model, and sales or revenue
tests. Revenue tests involve simple comparisons of compliance costs
with facility revenues. For non-commercial facilities, in lieu of
revenues, we imputed a value to their production based on annual
harvest and commercial prices. Similar revenues tests were applied to
both commercial and non-commercial facilities. We estimated the number
of small businesses from a special tabulation of the United States
Department of Agriculture (USDA) Census of Aquaculture (1998) (for
details, see ``Economic and Environmental Impact Analysis of the
Proposed Effluent Limitations Guidelines and Standards for the
Concentrated Aquatic Animal Production Industry,'' EPA-821-R-02-015,
September 2002, DCN 20141).
2. Clarifications Regarding Baseline Assumptions for Economic Analysis
Treatment in Place. In the proposed rule and this notice, EPA
characterizes baseline conditions using existing compliance levels and
treatment in place. This approach is consistent with past effluent
guidelines and EPA's Guidelines for Preparing Economic Analyses (EPA
240-R-00-003, September 2003, DCN 20435) and Office of Management and
Budget (OMB) guidelines. OMB guidelines state that `` * * * the
baseline should be the best assessment of the way the world would look
absent the regulation * * * You may often find it reasonable to
forecast the world absent the regulation will resemble the present.''
(OMB. 2002. ``Guidelines to Standardize Measures of Costs and Benefits
and the Format of Accounting Statements,'' memorandum from Jacob J.
Lew, Director to Heads of Departments and Agencies, M-00-08, March 22,
DCN 20385). Thus, EPA does not agree with some commenters' suggestions
that baseline conditions for impact analysis should assume no treatment
in place.
Consideration of Market Conditions, Market Forecasts, and
International Competition. EPA assumed in the proposed rule that CAAP
producers cannot pass cost increases through to consumers. We do not
expect to change this assumption for the final rule (foreign
competition is so strong that the domestic market cannot raise prices
at all). EPA used the 1999-2001 data from the detailed questionnaire to
reflect current market conditions. We also used several publicly-
available data sources to develop market forecasts, ranging from
pessimistic to slightly optimistic, for future prices (see Section
V.C.3.b.i). This approach addresses comments suggesting the need to
account for foreign competition and sluggish market outlooks for U.S.
aquaculture in the economic analysis for this rule.
3. Revisions of the Approaches and Assumptions Used in the Economic
Analysis
Data collected from the detailed questionnaire will form the basis
for the economic analysis supporting the final rule. These financial
analyses use the standard methodology for developing effluent
limitations guidelines with some changes to address impacts to non-
commercial (e.g., State, Tribal or Federal government) facilities.
Comments recommended changes to the proposed methodology. The following
sections describe the revisions, based on comments and the availability
of detailed questionnaire responses, to the economic analyses we are
considering.
a. Revisions to Estimates of Numbers of Small Business. EPA
received several comments questioning the number of facilities
identified as small businesses in the proposed rule. EPA revised its
estimates of affected small businesses based on the results of the
detailed survey and designed the detailed questionnaire to collect
revenue information for both individual facilities and the companies
that own the facilities. We compared these data to Small Business
Administration size standards for the industry (up to $750,000 annual
revenues). If a facility earned more than the size standard, we did not
consider it a small business. If a facility did not earn more than the
size standards, EPA examined company revenues to determine whether the
company was a small business as defined by SBA. EPA collected public
information on company ownership and revenues as needed to complete
each determination. At this time, EPA identified 117 facilities out of
522 facilities within the scope of the rule that are owned by small
businesses, seven that belong to small organizations, and one that is
an academic/research facility.
b. Revisions to Economic Analyses for Commercial Facilities. For
the final rule, EPA intends to use (1) facility-specific data supplied
by the detailed questionnaire, (2) results from forecasting methods
(see Section V.C.3.b.i) to improve cost and price estimates, and (3)
several economic impact measures that were not used in the proposal. In
particular, the detailed questionnaire data should help us address
comments suggesting that we underestimated costs and overestimated
prices and that our extrapolation of impacts based on model facilities
misstated the impacts on many facilities.
i. Measures of Economic Impacts for Commercial Facilities. For the
final rule, EPA will use several measures to evaluate possible impacts
on commercial facilities that we did not use for the proposed rule due
to lack of data. These measures examine the possibility of closure,
direct impacts on employment and communities, indirect and national
impacts, and changes in financial health and borrowing capacity.
Closure Analysis. The closure analysis compares costs from 2005 to
2015 to earnings during the same period. We used two methods to
estimate earnings: (1) cash flow and (2) net income. We discounted both
costs and earnings with a 7 percent real discount rate to account for
the time value of money and place earnings and costs on a comparable
basis. To be considered a closure as a result of this rule, a facility
must show for two out of three forecasting scenarios (1) positive
discounted cash flow (or net income) without the rule and (2) negative
discounted cash flow (or net income) with the rule. In the detailed
questionnaire, EPA asked commercial respondents whether their facility
did more than raise fish. If they did, the questionnaire asked them to
report the financial performance of both the
[[Page 75089]]
aquaculture enterprise and the entire farm/company. EPA will perform
the closure analysis for the enterprise, facility, and company levels.
These analyses involve several complexities (e.g., what to consider as
earnings, what costs are included, and the number and type of
forecasting methods used). Section V.C.3.b.ii contains our detailed
responses to comments on these and other aspects of the closure
analysis.
Closure Analysis--Forecasting methods. EPA examines the possibility
of closure under three forecasting methods to project future earnings.
The first method uses U.S. Department of Agriculture (USDA) long-run
baseline projections for the Consumer Price Index, Food at Home, Fish
and Seafood Sector for 2004 through 2012 (USDA Agricultural Baseline
Projections to 2012, Staff Report WAOB-2003-1. February, DCN 20363).
This projection reflects the current industry downturn which then
changes to a long-run annual increase of 1.5 percent. This index is
used to adjust the revenue information in the detailed questionnaire to
project revenue in future years.
The second method uses historic time-series data collected and
published by several government agencies to estimate price trends and
project them into the future. For trout, EPA uses USDA trout price data
for 1994-2002 (Trout Production, Sales of fish 12'' or longer, U.S.
Average price per pound). For all other fish, EPA uses U.S. Department
of Labor, Bureau of Labor Statistics, Fish PPI, Producer Price Index--
Unprocessed and packaged fish, not seasonally adjusted, (Series ID:
WPU0223) from January 1980 through February 2003. EPA examined Series
ID: WPU-223-1-3 (salmon) not seasonally adjusted but could find no
trend in the data. EPA converts the data to constant dollars where
needed. For time series with monthly observations, EPA converts the
series to a 12-month centered moving average to smooth seasonal
variations. We performed a regression analysis using this price data to
derive kinked trend lines for prices (e.g., Chow Breakpoint Test, see
DCN 20366 and DCN 20371 for details). This type of regression allows
the slope of the price line to differ before and after suggested
breakpoints in time. Both data sets (trout and all fish) show downward
trends for prices. We converted price level forecasts into an index
using 2001 as the base period (this is the most recent year for which
data were collected in the detailed questionnaire). We also applied
this index to base year (2001) data from the detailed survey to project
future revenues. The third forecasting method assumes constant future
revenues using the average of 1999-2001 earnings collected in the
detailed questionnaire.
For this notice, EPA projected impacts only when the same impacts
occurred using two of the three forecasting methods. EPA seeks comment
on basing its closure analysis for the final rule on impacts that occur
using one of the three methods.
The forecasting methods give a range of trends (i.e., upward
(USDA), downward (estimated price indices), and no change (survey
earnings average)). However, EPA expects to adjust the forecasts to
reflect more recent data for the final rule, so this range of trends
may change (see DCN 20450).
Closure Analysis--Baseline Industry Conditions. We can not analyze
facilities with negative net earnings under 2 or 3 of the forecasting
methods before they incur pollution control costs with the methodology
used for the facility closure analysis. EPA seeks comment on omitting
such facilities from the closure analysis. Such facilities represent
situations such as:
[sbull] Start-ups (where the first year of income is negative but
does not indicate future earnings)
[sbull] Cost centers (that transfer production to other facilities
under the same ownership at no cost, or the cost is set to the
operating costs)
[sbull] Facilities where the company does not record income
statement information at the facility level.
[sbull] Facilities that are likely to fail with or without the
rule.
Direct and Community Impacts. When the analysis projects that a
facility will close as a result of the rule, EPA then tracks the direct
and indirect impacts from that closure. We consider all associated
revenues, production wages, and employment (both paid and unpaid labor
and management) lost. We will also examine the increase in local
unemployment resulting from the facility closure. These approaches
respond to comments that suggested the need to determine how the CAAP
industry impacts communities (e.g., employment) in several areas of the
country.
Indirect and National Impacts. Impacts on the CAAP industry are
known as direct effects. Impacts due to lost CAAP output and employment
in sectors that directly support the CAAP industry are known as
indirect effects. Induced effects are overall changes in household and
business spending due to direct and indirect effects. The U.S.
Department of Commerce's Bureau of Economic Analysis (BEA) tracks these
effects both nationally and regionally in large ``input-output''
tables, published as the Regional Input-Output Modeling System (RIMS
II) multipliers (DCN 20386). EPA used the multipliers for the RIMS II
industry number 1.0302 (miscellaneous livestock) because it includes
all of SIC code 0273. EPA used national final demand multipliers for
output (3.7163) and employment (45.2228) because they include direct,
indirect, and induced effects. For example, for every $1 million in
output lost due to the projected closure of a CAAP facility, nearly
$3.8 million in output and 45 jobs are lost nationwide. When a facility
is projected to fail as a result of the rule, EPA may estimate the loss
in output associated with facility closure and then use the RIMS II
multipliers to estimate national level impacts.
Impact on Financial Health. EPA will calculate impacts on financial
health at the company level using USDA's four-state categorization of
financial health based on a combination of net cash income and debt/
asset ratio (i.e., favorable, marginal solvency, marginal income, and
vulnerable). EPA calculates the financial state of each company before
and after incremental pollution control costs. EPA considers any change
in categorization an impact of the rule.
Impact on Borrowing Capacity (``Credit Test''). Commenters
suggested that impacts on borrowing capacity should be considered.
Based on several measures used by USDA, EPA developed a method to
examine whether a bank would lend a farm/company the amount needed to
cover the costs of incremental pollution control. According to the
USDA, ``Lenders generally require that no more than 80 percent of a
loan applicant's available income be used for repayment of principle
and interest on loans'' (DCN 20395, p. 19). EPA considered the income
available for debt coverage as after-tax cash flow for 2001 for the
farm or company (typically, the worst year represented in the
questionnaire data). For sole proprietors, EPA collected data for
aquatic animal production from Schedule F or Schedule C from the IRS
tax forms submitted with a proprietor's Form 1040. EPA intentionally
did not request information from the proprietor's Form 1040 (the Agency
specifically excluded the collection of off-farm income data). We
multiplied the after-tax cash flow by 80 percent to obtain a proxy for
USDA's ``maximum feasible loan payment'' (MFLP). We then calculated the
ratio of the pre-tax annualized cost of an option and the after-tax
MFLP. We assumed that a bank would compare the pre-tax cost to the
[[Page 75090]]
MFLP to be conservative. To be more conservative, EPA identified any
company with a ratio exceeding 80 percent of MFLP being impacted under
this test (i.e., the test threshold is actually 64 percent of the
after-tax cash flow).
ii. Economic Topics Raised in Comments to the Proposed Rule.
Commenters raised several issues about assumptions for closure analysis
including (1) the definition of what constitutes earnings for the
discounted cash flow analysis (including questions about how to
incorporate depreciation, cash flow, net income, sunk costs, capital
replacement, and unpaid labor), (2) forecasting methods used to project
earnings, and (3) assumptions EPA makes to address trade impacts.
Cash Flow. In projecting closures, EPA estimated earnings using (1)
cash flow and (2) net income. We calculated the difference between
gross revenues and total expenses reported in the detailed
questionnaire and reduced the value by the estimated federal and State
taxes to calculate net income. We then added the non-cash expense of
depreciation (when it was reported in the questionnaire) to net income
to calculate cash flow. The difference between cash flow and net income
is, therefore, depreciation, consistent with the guidance from the Farm
Financial Standards Council (FFSC; Financial Guidelines for
Agricultural Producers, DCN 20095) and several business financial
references (DCNs, 20378, 20382, and 20388).
Some commenters were concerned about using cash flow analysis
because of how earnings are calculated, the extent of the fixed costs,
and, in older facilities, sunk costs. These comments are covered in the
following discussions of: (1) Depreciation, (2) sunk costs, (3) capital
replacement, and (4) unpaid family labor and management.
Depreciation. Depreciation is an annual allowance for the
exhaustion, wear, and tear of a firm's fixed assets. Depreciation
reflects a previous expenditure for a fixed asset to which the entity
makes no payments in the current period. Although depreciation
theoretically reflects wear and tear spread out evenly over the useful
life of an asset, depreciation (as calculated for tax purposes) does
not. First, the recovery period for costs is shorter than the asset
lifetime and, second, accelerated recovery factors are skewed to the
initial years of useful life. EPA identified information (e.g.,
Financial Accounting Standards Board, DCN 20382, DCN 20378, DCN 20388)
suggesting that cash flow may be appropriate for some types of economic
analyses. EPA seeks comment on the appropriateness of cash flow and net
income analyses as they apply to this rulemaking. Because depreciation
reported on an accounting statement may or may not correspond to true
``economic'' depreciation, EPA estimated closure impacts with
depreciation as an expense (i.e., net income analysis) and without
depreciation (i.e., cash flow).
Sunk costs. Some commenters argued that the analysis should
consider sunk costs. Comments characterized cash flow analysis as
inappropriate because it does not account for sunk costs, particularly
in older facilities. Sunk costs paid out of capital (as opposed to
financing) already occurred and, therefore, are not incremental cash
flows. They should not affect future investment or the economic
viability of the firm. Therefore, EPA excludes this category of sunk
costs from the closure analysis. Sunk costs that are financed have
interest, and this interest is included in interest payments reported
in the income statements. Unpaid principle from previously financed
sunk costs is reflected in a farm's debt/asset ratio, and EPA will
include it in our evaluation of farm financial health and the ability
of facilities (or companies) to carry additional debt (see Section
V.C.3.b.i).
Capital replacement. EPA received comments that the facility
financial analysis should include an allowance for capital replacement.
EPA evaluated data on capital expenditures and capital replacement. The
Census Bureau collects data on annual capital expenditures including
forestry, fishing, and agricultural services (U.S. Census Bureau,
Annual Capital Expenditures Survey 1999, DCN 20384). However, Census
Bureau capital expenditure data includes intra-company transfers of
capital equipment and ownership changes (see DCN 20384, Appendix D-10,
Instructions, Definitions, and Codes List).
As a consequence, it is difficult to know whether capital
expenditures help maintain existing production or whether they support
expanded production. Capital expenditures for an industry undergoing
consolidation, such as salmon, include acquisitions reflecting
transfers of capital rather than purchases of new or replacement
capital. Further, the Census data includes expansion in productive
capacity, whether in new plants or in existing plants. Aggregate
industry data on capital expenditures cannot be used to specify the
level of capital expenditure that is necessary to maintain productive
capacity at an individual facility.
EPA includes costs for capital replacement as they occur within the
depreciation and interest payments reported on income statement. When
EPA relies on net income calculations, capital replacement costs (as
approximated by financial depreciation, in addition to interest
payments captured in cash flow) are considered in the closure analysis.
Capital replacement costs that are capitalized and not expensed are
reflected in the asset, debt, and equity components of the balance
sheet as appropriate. Past capital replacement costs are represented in
the farm financial health measures and credit tests that are based on
balance sheet data. When estimating compliance costs, EPA includes
replacement costs for pollution control capital. EPA's cost estimates
include all capital expenditures (whether initial or replacement) that
are projected to occur within the 10-year analytical time frame.
Unpaid family labor and management. EPA received suggestions that
the financial analysis of aquatic animal production should include a
``proxy'' cost to reflect unpaid family labor and management. Unpaid
family labor and management is ``unpaid'' only with respect to the
income statement. Distributions from the business to cover family
living and other personal expenses are generally referred to as
``family living withdrawals'' or ``owner withdrawals.'' These
withdrawals are shown in the statement of owner equity in the balance
sheet and not the income statement. As a consequence, the financial
health and credit tests incorporate any withdrawals from equity for
unpaid labor and management, because these tests are based on balance
sheet data. Note that EPA includes estimates for labor costs when
estimating compliance costs in order to include the effects of the
additional labor and management in closure analysis. EPA also includes
unpaid labor and management as lost jobs in the total count of lost
employment from facilities projected to close as a result of the rule.
EPA reviewed USDA Economic Research Service data on off-farm income
by farm category (USDA, 2003. Economic Research Service. Agriculture
Income and Finance Outlook. AIS-80. March, DCN 20396). USDA data
indicate that farm operation's contribution to total household income
ranges from a substantial amount for ``Very Large Farms'' to a negative
contribution that is subsidized by off-farm income for limited resource
and
[[Page 75091]]
``small low-sales farms.'' These data indicate that it is possible for
labor to earn a zero or negative return in the short run. EPA
recognizes that, under standard economic theory, an enterprise in which
labor is earning no return, either as wages or profit, is unlikely to
be viable in the long run. The Farm Financial Standards Council also
discusses the issue of unpaid labor (DNC 20095, pp. II-3 and II-22).
EPA does not estimate a charge for unpaid labor when calculating farm
income under discounted cash flow or net income analysis for this NODA.
However, EPA seeks comment on whether it should impute a cost for
unpaid labor and management in the closure analysis and, if so, on what
data and methods the wage should be based.
c. Revisions to Economic Analyses for Non-commercial Facilities.
EPA uses a methodology for non-commercial facilities where pre-tax
annualized costs are compared with the operating budgets for Federal,
State, Tribal (owned and operated by Tribal governments), and research
facilities. For Alaskan non-profit facilities, EPA compares pre-tax
annualized costs to reported salmon revenues. EPA is also considering
calculations, such as the increased need for taxes or fees to cover the
additional costs, that can be made as detailed questionnaire data
permit. EPA seeks comment on methodologies for investigating impacts on
non-commercial operations, including methods for characterizing the
implications or consequences of percent reductions in facility budgets.
D. Revisions to Assumptions and Methodology Used in Benefits Analyses
The proposal established limits for total suspended solids (TSS)
loads from flow-through and recirculating systems and required
practices to minimize accumulation of excess feed from net pen systems.
These requirements, according to EPA loadings calculations, would
reduce facility discharges of TSS, total nitrogen (TN), total
phosphorus (TP), and biochemical oxygen demand (BOD). The proposal also
required facility operators to minimize releases of non-native species,
pathogens, and therapeutants. At proposal, EPA did not quantify
baseline or regulated loads for these latter parameters.
Reductions in these loadings (TSS, TN, TP, BOD, non-native species,
pathogens, and therapeutants) could affect water quality, the uses
supported by varying levels of water quality, and other aquatic
environmental variables (e.g., primary production and populations or
assemblages of native organisms in the receiving waters of regulated
facilities). EPA discussed several of these possible responses to
loading reductions qualitatively at proposal. The proposal also
estimated the monetized benefits based on changes in the recreational
use value of freshwater streams affected by the rule.
EPA anticipates that its overall approach for characterizing
benefits for the final rule will be similar to that used for the
proposed rule. The proposal approach involved three efforts. First, EPA
developed an estimate of national monetized benefits of the rule. We
derived the monetized benefit estimate by applying (1) the QUAL2E (a
water quality model) to a range of model facilities and receiving water
conditions and (2) an economic monetization method that related water
quality improvements to monetized benefits. Second, EPA discussed the
possible impacts from rule-related reductions in BOD, TN, TP, and TSS
loads on stream water quality relative to national water quality
criteria. This discussion was primarily qualitative. Third, EPA
included qualitative discussions of possible benefits of the rule that
could not be quantified. Examples of such possible benefits include
those that might arise from reductions in releases of non-native
species or reductions in inadvertent spills of drugs and chemicals used
at CAAP facilities. Again, these were qualitative discussions only, and
EPA neither quantified nor monetized these possible benefit areas.
While we expect to retain this overall approach, the Agency may revise
inputs, methods, or information in each of these areas. Sections V.D.1-
V.D.3 discuss these improvements further.
EPA's analysis of possible benefits of the final rule will address
public comments about the proposal benefits analysis. We received some
comments addressing the Agency's water quality-based monetized benefit
estimate. One commenter criticized EPA's monetized benefit estimate as
insufficiently reflecting the value of water quality. Other commenters
asserted that EPA overestimated environmental benefits of the
regulation. One of these commenters argued that EPA's use of frequency
factors led to overestimation of benefits. Another commenter questioned
whether EPA should extrapolate estimates of freshwater benefits for
reductions in pollutant discharges to Alaska facilities that are
discharging to marine environments. This commenter also asserted that,
in many nutrient-poor streams where salmonid fish are found, hatchery-
related nutrients lead to improved downstream fishing, and that a rule-
related reduction in these nutrient inputs should be subtracted from
EPA's benefits estimate.
In addition to comments on EPA's monetized benefit estimate, EPA
received some comments on whether and how to characterize benefits from
rule-related reductions in discharges of non-native species, pathogens,
antibiotics or other therapeutants, and other chemicals. One commenter
argued that it is extremely complex and controversial to make
statements about benefits as a result of controlling non-native
species, pathogens, antibiotics, or chemical releases is extremely
complex and controversial.
1. Revisions to Monetized Benefits Estimate
At proposal, EPA used an approach for estimating national benefits
from rule-related improvements in water quality that relied on (1)
simulating improvements in downstream water quality parameters for
model facilities, and (2) applying a monetization method that related
changes in water quality to ``willingness to pay'' (WTP) values for
water quality improvements. For the monetization method, we combined
four simulated water quality parameters to generate a water quality
index (WQI-4). The parameters were dissolved oxygen (DO), biochemical
oxygen demand (BOD), total suspended solids (TSS), and fecal coliform
(FC). Because we do not expect loadings for FC to be discharged from
CAAP facilities, we assumed that background levels of this parameter
remain unchanged. The WQI is a 0-100 scale that weighs each water
quality parameter to reflect its significance for determining the
suitability of water for progressively more demanding uses. We
converted changes in the WQI-4 to monetary values based on a contingent
valuation survey (Carson and Mitchell, 1993, DCN 20157).
At proposal, data were not available for site-specific estimates of
water quality responses to reduced pollutant loadings. Neither were
they available for facility-specific estimates of pollutant loadings
and loading reductions nor individual facility locations for all
potentially regulated facilities. Therefore, to simulate possible
ranges in downstream water quality improvements for regulated
facilities, we used estimates of pollutant loadings and loading
reductions for representative (``model'') facilities and a hypothetical
receiving water with a wide range of assumed background water quality
and flow conditions. We used the Enhanced Stream Water Quality (QUAL2E)
model to perform these simulations. We then applied the
[[Page 75092]]
monetization method described above to calculate WTP values for the
simulated water quality improvements for each model facility. Finally,
we estimated and summed WTP values for other potentially regulated
facilities of that model facility type to produce a national benefit
estimate. (For more details of the methodology, see DCN 20141).
We expect to apply a similar water quality modeling and
monetization approach for estimating water quality-related benefits.
However, we expect that the final methodology will address certain
limitations that we did not recognize at proposal. We will take
advantage of refined estimates of facility loads. That is, we will
improve the water quality-related benefits analysis using:
[sbull] Significantly improved facility-specific loadings estimates
based on new data from the detailed surveys and new information on feed
conversion ratios (FCRs). These improved loadings estimates help us
evaluate contributions of specific facilities to improved water quality
(see Section V.B).
[sbull] Site-specific water quality simulations using new
information from the survey on the geographical distribution of
facilities. EPA intends to use specific facility receiving water
simulations when data are available, and model receiving water
conditions when data are unavailable, for an individual site.
[sbull] A more refined method for selecting a subset of QUAL2E
application sites from which we can develop a national benefits
estimate. Sites will be selected based on the availability of data
(e.g., water quality and discharge data) for model calibration. The
sites should represent geographic regions and environmental conditions
where most of the facilities are located. We expect to select between
five to ten QUAL2E application sites.
[sbull] An improved method for calculating the WQI that better
reflects water quality changes associated with CAAP discharges. The WQI
that EPA used previously included four water quality parameters (WQI-
4). EPA more recently developed a six-parameter WQI (``WQI-6'') based
on TSS, BOD, DO, FC, plus nitrate (NO3) and phosphate
(PO4). The new index more completely reflects the type of
water quality changes that will result from loading reductions for TSS,
total nitrogen (TN), total phosphorus (TP), and BOD. We may present
results from both the WQI-4 and WQI-6 indices in the final benefits
analysis for the CAAP rule.
[sbull] An improved method for monetizing water quality benefits.
We based the water quality benefits monetization method we used for the
proposed rule on results from a stated-preference survey conducted by
Carson and Mitchell (1993) (DCN 20157). We divided household
willingness-to-pay (WTP) values for changes in recreational water ``use
classes'' by the number of WQI-4 points in each use class. We assigned
a portion of the value for each unit change to achieving the whole
step. Recently, EPA developed an alternative approach, also based on
Mitchell and Carson's work. The authors also expressed their results as
an equation relating a household's WTP for improved water quality to
the change in the water quality index and household income. An
important feature of this approach is that it is less sensitive to the
baseline use of the water body. This approach is also consistent with
economic theory in that it exhibits a declining marginal WTP for water
quality. (See more information on this approach in DCNS 40138 and
40595.) Caution must be used in manipulating valuations derived from
stated preference surveys, but this valuation function approach helps
address some concerns about earlier applications of the water quality
benefits monetization method. (See DCN 40595 for a more detailed
discussion.)
2. Other Revisions to Benefits Analysis About Reductions in BOD, TN,
TP, and TSS Loads
At proposal, EPA examined additional ways of characterizing
environmental benefits from rule-related reductions in BOD, TN, TP, and
TSS loads using the same QUAL2E modeling results from the proposal
monetized benefits estimate. Specifically, we compared water quality in
receiving streams simulated by QUAL2E modeling with national water
quality criteria for DO, ammonia, TN, and TP. EPA discussed this
comparison in light of the possibility for rule-related reductions in
exceedences of these criteria. We did not monetize the results of that
evaluation. They were intended to illustrate an alternate indicator of
possible rule-related changes in water quality (Section 10.5.1., DCN
20141).
For the final benefits analysis, EPA may update this evaluation in
several ways. First, we expect to use the improved site-specific water
quality modeling results described in Section V.D.1. for the comparison
with national water quality criteria. We are also evaluating the
possibility of using an aquatic ecosystem model to further translate
load reductions and water quality changes at a subset of facilities
into other ecosystem changes (e.g., effects on benthic fauna, fish
populations, and other ecosystem variables). The model, AQUATOX (http://www.epa.gov/waterscience/models/aquatox/), represents stream, river,
lake, reservoir, and pond ecosystems by modeling:
[sbull] Periphyton.
[sbull] Moss.
[sbull] Macrophytes.
[sbull] Major guilds and taxonomic groups of invertebrates and
fish, as well as phytoplankton.
The model can also simulate constant or time-varying discharges of BOD,
nutrients, and TSS like those that might be discharged by a CAAP
facility. Finally, we expect to update our discussions of research
literature that describes water quality impacts. We will consider
literature that we have compiled since the proposal as well as
information from stakeholder comments (see Sections II.E and III.E). As
at proposal, the purpose of these analyses is to provide supplemental
information of possible rule-related benefits to receiving waters.
3. Other Revisions to Benefits Analysis
EPA concurs with one commenter's assertion that determining
benefits of non-native species, pathogens, antibiotics, or chemical
releases from facilities is complex and controversial. Ideally, an
analysis of benefits from mandated reductions in such discharges would
draw from an understanding of environmental impacts from each
discharge; quantitative estimates of both baseline discharges and
reductions in discharges under any regulatory regime; and the
relationship between changes in discharges and environmental response.
In some cases, economic valuation techniques can then be applied to
monetize the environmental responses. In the case of water quality
improvements due to reductions in TSS, BOD, and nutrients from flow-
through and recirculating systems, this information is available for
estimates of quantitative and monetized benefits of the rule.
In most other cases, EPA will not estimate monetized or even
quantitative benefits. Rather, we will discuss qualitative benefit
areas including:
[sbull] Possible benefits from reducing escapes of non-native
species, recognizing existing State and other requirements for escapes
and mitigation (see Section II.E.3), and
[sbull] Possible benefits from reducing inadvertent releases of
applied chemicals (including therapeutic substances) from CAAP
facilities (see Sections II.E.2 and III.C).
[[Page 75093]]
VI. Revised Estimates of Costs and Economic Impacts
EPA revised estimates of costs and economic impacts based on the
detailed survey results, comments, information from States, and
methodological changes (see Section V). In the tables presented in
Section VI, the options labeled ``Option 1'', ``Option 2'', and
``Option 3'' correspond to the options presented in the proposal, but
the revised costs are based on detailed questionnaire data and other
factors. EPA also considered two additional sets of requirements listed
as ``Option A'' and ``Option B'' in the economic analysis. These
analyses incorporate costs and loadings that reflect assumptions for
feed conversion ratios (FCR) and production for those facilities that
did not report these in the detailed questionnaire (see Section V.A.2).
For cost annualization and the closure analysis, we used a 7 percent
discount rate. Results are in 2001 dollars. Additional details about
costs and impacts are provided in the record (DCN 20446). EPA will
consider these revised results for all options in its decisions for the
final rule.
Table VI.1 summarizes the types of public and private organizations
that operate facilities represented in the national population of in
scope facilities (i.e., after applying the survey weights). Facilities
that might incur costs include all facilities in the proposed
subcategories that are large enough to meet the current CAAP
definition. At proposal, EPA proposed to exclude facilities with less
than 100,000 pounds of annual production; however, for information
purposes, we included these facilities in the Tables in this Section.
At proposal, EPA indicated that it would continue to analyze the costs
and impacts associated with including such facilities (meeting the CAAP
definition) within the scope of the rule. Facilities listed in the
tables as not incurring costs would still be within the scope of the
rule if they exceed the final production thresholds; however, EPA does
not expect that these facilities would have to do anything more to meet
the requirements of the regulation.
Table VI.1.--Estimated Number and Type of Organizations
------------------------------------------------------------------------
Estimated number of facilities
--------------------------------------
Organization Would incur Would not
costs incur costs Total
------------------------------------------------------------------------
Commercial....................... 181 15 196
Academic/Research................ 1 0 1
Government....................... 302 1 303
Tribal........................... 14 0 14
Alaska Non-profits............... 7 0 7
--------------
Total........................ 506 16 522
------------------------------------------------------------------------
Note: We calculated the national estimates with survey weights
and rounded them to whole numbers in each cell. Numbers may,
therefore, not sum due to rounding.
Table VI.2 provides more detailed information on the facilities
estimated to incur costs under the rule. There are 141 unweighted
facilities (questionnaire respondents) that correspond to a national
estimate of 506 facilities (see Section II.D). Table VI.2 further
differentiates facilities by production system, size (in terms of lbs/
yr production), owner, and the number of facilities that are projected
to be baseline closures (assuming cash flow analysis), before we
include compliance costs (see Section V.C.3.b.i). Table VI.2 also shows
the number of facilities we used to derive cost and facility closure
results, assuming discounted cash flow analysis. EPA proposed different
requirements for the size of facilities. You will find the proposed
option for each category in the right-hand column in Table VI.2.
Table VI.2.--Number and Type of Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated number of facilities
-------------------------------------------------------
Production system Size (lbs/yr) Owner Baseline In cost In closure Options at proposal
Potentially Incur closures totals analysis
in scope costs \1\ \2\ \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Flow-Through..................... 20,000 to 100,000 Commercial......... 75 75 25 50 45
\4\.
Non-commercial..... 135 135 0 135 NA
Alaska Non-profit.. 7 7 0 7 NA
100,000 to 475,000.. Commercial......... 62 62 8 54 54 Option 1.
Non-commercial..... 121 121 0 121 NA Option 1.
475,000+............ Commercial......... 26 26 15 11 11 Option 3.
Non-commercial..... 46 46 0 46 NA Option 3.
Recirculating.................... 20,000 to 100,000 Commercial \4\..... 6 6 n.d. n.d. n.d.
\4\.
Non-commercial..... n.d. n.d. n.d. n.d. n.d.
100,000 to 475,000.. Commercial......... 7 7 1 6 6 Option 3.
475,000+............ Commercial......... n.d. n.d. n.d. n.d. n.d. Option 3.
Non-commercial..... n.d. n.d. n.d. n.d. n.d. Option 3.
Mixed Flow-Through Recirculating. 20,000 to 100,000... Non-commercial..... 11 11 0 11 NA
Net Pen.......................... 20,000 to 100,000... Non-commercial..... 1 0 0 n.d. NA
100,000 to 475,000.. Commercial......... n.d. n.d. n.d. n.d. n.d. Option 3
475,000+............ Commercial......... 15 0 0 0 0 Option 3
----------------------------------------------------------------------------------------------------------------------
[[Page 75094]]
Total........................ .................... ................... 522 506 59 452 447 ...................
--------------------------------------------------------------------------------------------------------------------------------------------------------
n.d. Not disclosed for reasons of confidentiality.
NA not applicable.
\1\ Numbers of commercial facilities that are projected baseline closures assuming cash flow analysis. Section VI.B.1.a discusses baseline closures
using net income.
\2\ Facilities used to derive values in Table VI.A.1. Excludes baseline closures (based on cash flow analysis) which we assume will close before
promulgation and, thus, incur no costs under the rule.
\3\ Facilities used to derive values in Table VI.B.1. Excludes baseline closures (based on cash flow analysis), start-ups, and other facilities where we
did not have enough information to conduct closure analysis.
\4\ Facilities with less than 100,000 pounds annual production were not within the scope of the proposed rule.
Table VI.3 breaks out the estimated 181 commercial facilities with
costs by financial organization. Slightly over half (55 percent) of the
commercial facilities are organized as corporations. C and S
corporations are named after the Subchapters in the IRS code under
which they are organized and are taxed in different ways. C corporation
earnings are taxed at the corporate rate. S corporation earnings are
paid to individuals, who then pay taxes at the personal rate on those
earnings.
Table VI.3.--Commercial Facilities With Costs by Financial Organization
------------------------------------------------------------------------
Estimated
Financial organization number of
facilities
------------------------------------------------------------------------
C Corporation.............................................. 42
S Corporation.............................................. 58
Sole Proprietorship........................................ 49
Limited Partnership........................................ 24
General Partnership........................................ 5
Other...................................................... 5
------------
Total.................................................. 181
------------------------------------------------------------------------
Note: Numbers do not sum due to rounding.
A. National Cost Estimates
Table VI.A.1 summarizes the cost of the rule by subcategory. We
estimated national costs on the number of facilities we expect to incur
compliance costs if they exceed the production threshold in the final
rule. We assume that possible compliance costs will occur in all
facilities that are not baseline closures. This includes some
facilities for which EPA could not make baseline closure determinations
(e.g., start-up operations, facilities with insufficient data) that we
excluded from the closure analysis. The number of baseline closures
increases under net income analysis, implying that national costs
decrease when we use net income analysis (see Table VI.B.2). Table VI.2
indicates that non-commercial flow-through facilities make up about
two-thirds of the facilities projected to incur costs. They incur about
80 to 83 percent of the total cost for each option.
Table VI.A.1.--National Costs--Total by Subcategory and Option \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pre-tax annualized costs \4\ (thousands, 2001
dollars)
Production system \2\ Owner -------------------------------------------------
Option Option Option Option Option
A B 1 2 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Flow-through........................... Commercial 20-100K production................................ $45 $50 $22 $50 $89
Commercial 100-475K production............................... 151 371 315 362 779
Commercial 475K production........................ 17 17 7 17 53
Non-commercial............................................... 1,351 2,796 2,528 2,794 5,612
Alaska Non-profit............................................ 141 172 165 176 188
Recirculating.......................... Commercial \3\............................................... 8 8 3 8 8
Non-commercial............................................... 18 55 44 60 81
Alaska Non-profit............................................ 0 0 0 0 0
Net Pen................................ Commercial................................................... 0 0 0 0 0
Non-commercial............................................... 0 0 0 0 0
Alaska Non-profit............................................ 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Total.............................. Pre-Tax...................................................... 1,731 3,469 3,084 3,466 6,809
Post-Tax..................................................... 1,693 3,375 3,004 3,372 6,695
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Does not include costs for facilities projected to close before implementation of the rule, where baseline closures are determined using cash flow.
Number of baseline closures increases if net income is used, implying decreased costs.
\2\ Costs for facilities that use both flow-through and recirculating technologies were divided according to production and placed in the appropriate
category. For example, for a facility that splits production equally between flow-through and recirculating, we would split costs equally and add to
flow-through and recirculating costs.
\3\ All costs for the recirculating commercial category in the table are incurred by facilities producing between 20,000 and 475,000 lbs. Due to the
small number of facilities (i.e., confidentiality) in the recirculating category, costs are not presented by size.
\4\ Cost equaling zero ($0) in the table indicate that facilities already meet the requirements of the option. Zero cost does not imply that facilities
are exempt.
[[Page 75095]]
Note: Numbers do not sum due to rounding.
Due to differences in option requirements for the various
subcategories, as well as differences in facility counts between the
proposed rule and this notice, it is difficult to compare costs in
Table VI.A.1 directly to costs for the proposal (67 FR 57908). As a
consequence, Table VI.A.2 facilitates comparisons between costs at
proposal and costs summarized in this notice.
Table VI.A.2.--Comparison of Costs--Proposal and Notice of Data
Availability (NODA)
------------------------------------------------------------------------
Total pre-tax annual costs (2001$)
Production system -----------------------------------------
Proposal NODA
------------------------------------------------------------------------
Flow-through.................. $1,032,942 $2,076,456
Recirculating................. 46,354 5,409
Net Pens...................... 35,322 0
------------------------------------------------------------------------
Note: Proposal costs, taken from Table IX.G.1 (67 FR 57908) of
the preamble from the proposed rule, were inflated to 2001 dollars.
For closest comparison to proposal results, NODA results in this
table do not include costs for facilities that produce 20,000 to
100,000 lbs/year. We assume Option 1 for flow-through facilities in
the size category 100,000 to 475,000 lbs/yr, and we assume Option 3
for all other flow-through and recirculating facilities.
B. Economic Analysis
Sections VI.B.1 and VI.B.2 provide details about the impact
analysis for commercial and non-commercial facilities.
1. Economic Results for Commercial Facilities
EPA projects economic impacts based on two procedures for
estimating earnings: (1) cash flow analysis and (2) net income
analysis. Table VI.B.1 summarizes the economic impacts for commercial
facilities based on cash flow analysis, and Table VI.B.2 summarizes
results based on net income analysis. All impacts fall on flow-through
systems: no impacts fall on recirculating or net pen systems. No
impacts fall on facilities with flow-through systems that produce more
than 475,000 lbs per year.
Table VI.B.1.--Impacts for Commercial Flow-Through Facilities (Cash Flow Basis) \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Option
Analysis level \2\ Impact Size (1,000 lbs/yr) entities in --------------------------------------------
analysis \3\ A B 1 2 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facility..................... Closure........................... 100-475 54 5 5 5 5 11
Direct Employment Loss (lost jobs) 100-475 54 5 5 5 5 24
Increase in County Unemployment 100-475 54 <0.2 <0.2 <0.2 <0.2 <1
Rate (%).
National Employment Loss.......... 100-475 54 20 20 20 20 90
National Loss in Output ($ 100-475 54 $1.6 $1.6 $1.6 $1.6 $7.4
millions).
Sales test: 1 percent.. 20-100 50 15 15 5 15 25
100-475 54 13 23 21 23 29
Sales test: 3 percent.. 20-100 50 10 10 0 10 10
100-475 54 5 11 11 11 16
Company...................... Closure........................... ..................... 32 1 1 1 1 2
Farm Financial Health \4\......... ..................... 43 1A 1A 1A 1A 1A
1B
Credit Test....................... ..................... 32 1 1 1 1 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ All impacts fall on flow-through systems; recirculating or net pen systems display no impacts. In addition, facilities with flow-through systems
that produce more than 475,000 lbs per year display no impacts.
\2\ Rows are shown only when there are impacts. The 20,000 to 100,000 size category shows impacts only under the 1 percent and 3 percent sales test. No
impacts at enterprise level or for 475,000 lb/yr or more size category (see DCN 20446 for details); no closure analysis at the enterprise level was
conducted for facilities that are projected to close.
\3\ Number of entities projected to incur compliance costs and are not baseline closures, assuming cash flow analysis, and for which enough data were
available. For closure analysis, this is the number of weighted facilities or the unweighted number of companies. The statistical procedure used to
draw the sample and develop the facility survey weights do not allow us to make inferences about company characteristics at the national level. Of the
facilities projected to incur costs in this NODA, more than 90 percent are single facility companies.
\4\ 1A: one company shifts from marginal solvency to vulnerable.
1B: one company shifts from favorable to vulnerable.
Table VI.B.2.--Impacts for Commercial Facilities (Net Income Basis) \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Option
Analysis level \2\ Impact Size (1,000 lbs/yr) entities in --------------------------------------------
analysis \3\ A B 1 2 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facility..................... Closure........................... 20-100 45 5 5 0 5 5 \6\
100-475 50 5 5 5 5 11
Direct Employment Loss (lost jobs) 20-100 45 14 14 0 14 14
100-475 50 5 5 5 5 24
[[Page 75096]]
Increase in County Unemployment 20-100 45 <0.1 <0.1 0 <0.1 <0.1
Rate (%).
100-475 50 <0.2 <0.2 <0.2 <0.2 <1
National Employment Loss.......... 20-100 45 26 26 0 26 26
100-475 50 20 20 20 20 90
National Loss in Output ($ 20-100 45 $2.1 $2.1 $0.0 $2.1 $2.1
millions).
100-475 50 $1.6 $1.6 $1.6 $1.6 $7.4
Sales test: 1 percent.. 20-100 50 15 15 5 15 25
100-475 54 13 23 21 23 29
Sales test: 3 percent.. 20-100 50 10 10 0 10 10
100-475 54 5 11 11 11 16
Company \5\.................. Closure........................... ..................... 26 2 2 1 2 3
Farm Financial Health \4\......... ..................... ................. 2A 2A 2A 2A 2A
..................... 43 1B
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ All impacts fall on flow-through systems; recirculating or net pen systems display no impacts. In addition, facilities with flow-through systems
that produce more than 475,000 lbs per year display no impacts.
\2\ Rows are shown only when there are impacts. No impacts at enterprise level, recirculating, or net pen systems, or for flow-through facilities in the
475,000 lb/yr or more size category; we did not conduct closure analysis at the enterprise level for facilities that are projected to close.
\3\ Number of entities projected to incur costs and are not baseline closures, assuming net income analysis, and for which enough data were available.
For the closure analysis, this is the weighted number of facilities or the unweighted number of companies. The statistical procedures we used to draw
the sample and develop the facility survey weights do not support inferences on a national level about company characteristics. Of the facilities
projected to incur costs in this NODA, more than 90 percent are single facility companies.
\4\ 2A: two companies shift from marginal solvency to vulnerable. 1B: one company shifts from favorable to vulnerable.
\5\ Credit test not performed on net income basis because USDA methodology specifies maximum feasible loan payment (MFLP) be calculated from borrower's
cash flow, without deducting depreciation.
\6\ Due to rounding of survey weights, the total number of facilities (20,000 to 475,000 size categories) projected to close under Option 3 is 15, not
16.
a. Closure Analysis Results. For commercial facilities, EPA
examined the possibility of closure on several levels: enterprise,
facility, and company. Sixteen respondents to the detailed survey
supplied enterprise level financial information in Question C9 of the
detailed survey. EPA based the facility closure analysis on the
facility financial data supplied in Question C.6 of the detailed
survey. The company level analysis differs from the facility analysis
in that it reflects costs for all aquatic animal production facilities
owned by the company. To identify all sites belonging to each company,
we compiled a list of companies from the costed facilities (45
companies) and examined the screener survey data and responses to
Question 2. Where EPA did not have detailed survey data for a
particular facility, we assigned the average cost for the other
facilities owned by that company.
Section V.C.3.b describes the forecasting methods and closure
methodology. The analysis predicts that about one-third of the
facilities (e.g., 64 of 181 commercial facilities) fall into the
closure category under baseline conditions (i.e., they show negative
long-term earnings before the rule). This is consistent with comments
indicating the industry has gone through difficult times in the recent
past. We could analyze all sixteen enterprises for impacts (i.e., none
failed in the baseline). We did not conduct closure analysis at the
enterprise level when the facility was projected to close. No impacts
are estimated to occur at the enterprise level under any of the
regulatory options. Thirteen of the 45 companies are projected as
baseline failures.
Based on cash flow analysis, five flow-through facilities close as
a result of the added costs under Options A, B, 1, and 2, (Table
VI.B.1). We do not expect any other types of facilities to close under
these options. The closures result in the direct loss of five jobs and
an increase in the county unemployment rate of less than 0.2%. We
estimate national impacts to be a loss of 20 jobs (includes the five
jobs lost from facility closure) and $1.6 million in output (calculated
with the Commerce Department, Bureau of Economic Analysis, Regional
Input-Output Modeling System (RIMS II) final demand multipliers for the
miscellaneous livestock industry (industry code 1.0302).
The analysis also shows that, under Option 3, eleven flow-through
facilities close as a result of the added costs. We do not expect any
other types of facilities to close under this option. These closures
result in the direct loss of 24 jobs and an increase in the county
unemployment rate of up to 1 percent, depending on the location. We
estimate National level impacts to be a loss of 90 jobs and $7.4
million in output.
EPA also conducted a facility level closure analysis using net
income rather than cash flow (Table VI.B.2). The difference between the
two is depreciation, a non-cash charge theoretically representing the
capital ``used up'' during operation. Cash flow is calculated as net
income plus depreciation (see Section V.C.3.b for comparison of cash
flow and net income). We predict 84 of the 181 facilities to be
baseline closures before incurring incremental pollution control cost,
representing 46% of the population. We estimate 35% of facilities to be
baseline closures under the discounted cash flow analysis. The results
are the same for Option 1 for net income analysis: five facilities are
still projected to fail. A single unweighted facility represents the
five facilities that fail under Option 1. This facility uses cash basis
accounting and does not record depreciation as a cost. That is, the
earnings estimate is the same for the cash flow and net income versions
of the closure analysis. Under Options A, B, and 2, we project ten
facilities to close (as opposed to five closures projected using
discounted cash flow) with an associated loss of 19 jobs. The increase
in the number of projected failures using net income is due to a
[[Page 75097]]
single unweighted facility failing the closure analysis. Under Option
3, we project that 15 facilities will close with an associated loss of
38 jobs. Using discounted cash flow analysis, we project that 11
facilities will close.
b. Financial Health Results. EPA uses the USDA farm financial
health test (see Section V.C.3.b.i) that categorizes farms into four
categories:
[sbull] Favorable (positive income and debt/asset ratio no more
than 40 percent)
[sbull] Marginal income (negative income and debt/asset ratio no
more than 40 percent)
[sbull] Marginal solvency (positive income and debt/asset ratio
more than 40 percent)
[sbull] Vulnerable (negative income and debt/asset ratio more than
40 percent)
Two of the 45 companies did not supply complete balance sheet
information in the detailed survey and were not analyzed using the farm
financial health test. Under Options A, B, 1, and 2, one company shifts
from marginal solvency to vulnerable. Baseline closures, based on the
discounted cash flow and net income analyses, were not excluded from
the financial health test. Under Option 3, a second company shifts from
favorable to vulnerable under the cash flow analysis (Table VI.B.1). We
conducted this analysis at the company level. Both companies that shift
categories are small and produce between 100,000 and 475,000 lbs/yr.
Financial health results under net income analysis (Table VI.B.2) are
similar, except that two companies shift from ``marginal solvency'' to
``vulnerable'' instead of the one company under cash flow analysis.
c. Credit Test Results. EPA examined whether commercial companies
would be unable to get credit for expenses associated with compliance
(see Section V.C.3.b.i above), assuming cash flow analysis. We did not
use the credit test under net income analysis as noted in Table VI.B.2.
All 45 companies provided the data needed for the credit test. One
company/facility fails the credit test under Options A, B, 1, and 2.
Under Option 3, a second company fails the credit test. We also
conducted this analysis at the company level. Both companies that fail
the credit test are small and produce between 100,000 and 475,000 lbs/
yr.
d. Sales or Revenue Test Results. The sales or revenue test is
calculated on a facility basis. This test corresponds to the sales test
performed at proposal but is calculated on the basis of detailed survey
information for the facility. Impact results under the sales test,
using cash flow analysis, are the same as sales test results using net
income analysis. For the 20,000 to 100,000 lb/year category, five
facilities ``fail'' the one percent sales test (i.e., compliance costs
that exceed one percent of sales) under Option 1 (see Table VI.B.2).
Fifteen facilities fail under Options A, B, and 2, and 25 facilities
fail under Option 3. For the 3 percent sales test for this size group,
ten facilities ``fail'' (i.e., compliance costs that exceed 3 percent
of sales) under Options A, B, 2 and 3. No facilities fail under Option
1. For the 100,000 to 475,000 lb/year category, 13 facilities fail the
1 percent test under Option A, 21 facilities fail test under Option1,
23 facilities fail under Options B and 2, and 29 facilities fail under
Option 3. For the 3 percent sales test for this size group, 5
facilities fail under Option A, 11 facilities fail under Options B, 1,
and 2, and 16 fail under Option 3.
Due to differences in option requirements for the subcategories and
differences in facility counts between the proposed rule and this NODA,
it is difficult to compare sales test results in Table VI.B.1 with
results in the proposed rule (67 FR 57906, Table IX.E.1). As a
consequence, we present Table VI.B.3 to facilitate comparisons between
proposal and NODA. The only test in both the proposal and NODA analyses
is the 3 percent revenue test. Even this is not strictly comparable for
non-commercial facilities because the denominator in the ratio changed
from imputed revenues at proposal to operating budget for the NODA.
The threshold levels shown in Table VI.B.1 (i.e., 1% and 3%) do not
necessarily reflect the threshold levels that EPA will use to measure
regulatory impacts for the final rule using a revenue test. For the
Agency's final regulatory analysis, EPA anticipates using the same
revenue test thresholds that were used to evaluate impacts for the
proposed rule: greater than 3 percent, greater than 5 percent, and
greater than 10 percent. EPA solicits comment on these thresholds.
Table VI.B.3.--Comparison of 3% Revenue Test, NODA and Proposal Results
----------------------------------------------------------------------------------------------------------------
Facilities incurring
Size Facilities regulated costs greater than 3%
of revenue or budget
----------------------------------------------------------------------------------------------------------------
Proposal:
Commercial.................................................... 78 25
Non-Commercial................................................ 57 0
NODA:
Commercial.................................................... 71 11
Non-Commercial................................................ 169 30
----------------------------------------------------------------------------------------------------------------
Notes: To allow for closest comparison to results at proposal,
NODA results in this table do not include costs or loads for
facilities that produce 20,000 to 100,000 lbs/year. We assume Option
1 for flow-through facilities in the size category 100,000 to
475,000 lbs/yr and Option 3 for all other flow-through and
recirculating facilities. Alaska non-profit facilities that we
previously thought produce greater than 100,000 pounds actually
produce less than 100,000 pounds annually. They are, therefore, not
included in the Table.
e. Sensitivity Analysis for Commercial Impacts. EPA estimated
ranges of impacts (DCN 20430) based on minimum, mean, and maximum
values for operating and maintenance (O&M) costs for Options B, 1, 2,
and 3 (see Section V.A.2 for cost estimates and estimation procedures),
assuming earnings based on cash flow analysis. There are no differences
in impacts for commercial facilities between the minimum and mean O&M
costs. Under maximum O&M costs, we project that another five facilities
(weighted) will close under Options B, 2, and 3. Under the maximum O&M,
weighted employment losses total 5 under Options A and 1, 22 under
Options B and 2, and 40 under Option 3. There is no difference in the
change in local unemployment rate among the minimum, mean, and maximum
O&M costs.
EPA also examined other technology options, using activated carbon,
for removing drugs. As part of sensitivity
[[Page 75098]]
analysis, EPA also examined the economic impacts for Options A, B, 2,
and 3 with and without activated carbon costs (DCN 20443), assuming
earnings based on cash flow analysis. These options include BMPs, but
not treatment for drugs and chemicals. Activated carbon could be used
to treat CAAP effluent for drugs. We estimated the costs for activated
carbon treatment to analyze the impacts of requiring treatment as well.
When we add activated carbon costs (costs for drug and chemical BMPs
subtracted to avoid double-counting costs), direct employment losses
are about four times higher, and company closure and financial health
impacts are roughly double. About one in four companies would have
difficulty raising the capital to meet the activated carbon costs
(e.g., six to nine companies fail the credit test with the activated
carbon costs).
2. Economic Results for Non-commercial Facilities
The non-commercial category includes four types of facilities:
Federal and State hatcheries, tribal operations, academic or research
facilities, and Alaska non-profit organizations. We performed the
economic analysis on 302 Federal and State facilities, 14 Tribal
operations, one academic/research, and seven Alaska non-profits. These
facilities are not operated commercially, and the types of tests used
to examine impacts on commercial facilities are not applicable. Each
group is slightly different, and we will discuss the economic tests
performed on each group within each section.
a. Federal and State Facilities. For Federal and State facilities,
EPA compared the pre-tax annualized costs to the 2001 operating budget
(``budget test''). Table VI.B.4 summarizes the results by production
system, test threshold, and size. Of the 302 Federal and State
facilities, 39 have Option A costs that we project will exceed one
percent of the budget (35 flow-through and four mixed flow-through and
recirculating facilities). We project that 27 of these 39 facilities
have costs that will exceed 3 percent of budget. For Option B, 120 have
costs that we project will exceed one percent of the budget. We project
that 75 of these 120 facilities have costs that will exceed three
percent of budget. For Option 1, we project that 112 have costs that
will exceed one percent of the budget. Fifty-nine of these 112
facilities have costs that we project will exceed three percent of
budget. For Option 2, 123 have costs that we project will exceed one
percent of the budget. We project that 71 of these 123 facilities have
costs that will exceed three percent of budget. For Option 3, 223
(nearly three-fourths of the population) have costs that we project
will exceed one percent of the budget. Of these 223 facilities, 108
have costs that we project will exceed three percent of budget.
The threshold levels shown in Table VI.B.4 (i.e., 1% and 3%) do not
necessarily reflect the threshold levels that EPA will use to measure
regulatory impacts for the final rule using a budget test. For the
Agency's final analysis, EPA anticipates using the same thresholds that
are used to evaluate impacts a revenue test: greater than 3 percent,
greater than 5 percent, and greater than 10 percent. EPA solicits
comment on these threshold levels.
Table VI.B.4.--Budget Test Non-Commercial Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of facilities estimated to exceed
Estimated number budget threshold by option \1\
Production technology Budget threshold Size (1,000 lbs/yr) of facilities in --------------------------------------------
analysis A B 1 2 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Flow Through................. 1%................................ 20-100 135 20 55 51 55 89
100-475 121 15 49 46 49 88
475+ 46 0 8 11 11 39
3%................................ 20-100 135 16 40 32 40 48
100-475 121 12 27 19 23 45
475+ 46 0 4 4 4 11
Recirculating................ 1%................................ 20-100 n.d. 0 0 0 0 0
475+ n.d. 0 0 0 0 0
3%................................ 20-100 n.d. 0 0 0 0 0
475+ n.d. 0 0 0 0 0
Mixed........................ 1%................................ 20-100 11 4 8 4 8 8
3%................................ 20-100 11 0 4 4 4 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
n.d. not disclosed to protect confidentiality.
\1\ Numbers in Table may not sum to numbers in text due to rounding
Part C of the detailed survey asked the respondent for the portion
of the budget due from user fees, such as angler licenses, commercial
fishing licenses, car vanity plates, and special purpose stamps. EPA
examined the number of facilities that could pass through increased
costs to the public by increasing user fees. Where user fees were
already in place, we estimated the size of the increase they would need
to cover the incremental costs (``User Fee'' analysis, see Section
V.C.3.c) (see Table VI.B.5). Costs for thirty-nine facilities exceed
one percent of the operating budget under Option A (20 flow-through
facilities that produce between 20,000 and 100,000 lb/yr, 15 flow-
through facilities that produce between 100,000 and 475,000 l/yr, and 4
mixed facilities producing between 20,000 and 100,000 lb/yr, shown in
Table VI.B.4). Twenty-three of the 39 facilities do not have user fees.
Of the remaining 16 facilities, eight can offset the increased costs by
increasing user fees by less than five percent. The other eight
facilities would need more than a five percent increase in user fees to
offset the incremental costs incurred under Option A. Between 60
percent and 70 percent of the facilities that have costs that exceed
one percent of budget do not have user fees through which to offset
increased pollution control costs.
[[Page 75099]]
Table VI.B.5.--User Fee Analysis for Non-commercial Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated number of facilities that have costs exceeding threshold
-----------------------------------------------------------------------------------------------
Percent of budget
User Fee Increase -----------------------------------------------------------------------------------------------
1 Percent 3 Percent
-----------------------------------------------------------------------------------------------
All 20 to 100 100 to 475 475+ All 20 to 100 100 to 475 475+
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option A:
All................................................. 39 23 15 0 27 16 12 0
No Fee \1\.......................................... 23 12 12 0 23 12 12 0
5 Percent \2\............................ 8 8 0 0 4 4 0 0
<5 Percent \2\...................................... 8 4 4 0 0 0 0 0
Option B:
All................................................. 120 63 49 8 75 44 27 4
No Fee \1\.......................................... 76 34 34 8 50 27 19 4
5 Percent \2\............................ 28 20 8 0 24 16 8 0
<5 Percent \2\...................................... 16 9 7 0 1 1 0 0
Option 1:
All................................................. 112 55 46 11 59 36 19 4
No Fee \1\.......................................... 76 34 31 11 35 19 12 4
5 Percent \2\............................ 24 16 8 0 24 16 8 0
<5 Percent \2\...................................... 12 5 7 0 0 0 0 0
Option 2:
All................................................. 123 63 49 11 71 44 23 4
No Fee \1\.......................................... 80 34 34 11 46 27 15 4
5 Percent \2\............................ 28 20 8 0 24 16 8 0
<5 Percent \2\...................................... 16 9 7 0 1 1 0 0
Option 3:
All................................................. 223 96 88 39 108 51 45 11
No Fee \1\.......................................... 143 57 52 35 77 34 32 11
5 Percent \2\............................ 41 24 17 0 30 16 13 0
<5 Percent \2\...................................... 38 16 19 3 1 1 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Facilities that exceed threshold and do not rely on user fees.
\2\ Facilities that must raise fees by more/less than 5% (5%/<5%) to cover compliance costs.
b. Tribal Facilities. Tribal operations that returned detailed
surveys are all owned and operated by the tribal government and operate
on a non-commercial basis. EPA performed a budget test and determined
that no Tribal facility incurs costs in excess of three percent of
budget under any Option. Five of 14 facilities have costs that exceed
one percent of their budgets under Option 3. No Tribal facility fails
the one percent budget test under Options A, B, 1, and 2. For
additional information about analyses for Tribal facilities, see DCN
20447.
c. Academic/Research Facilities. Of the academic/research
facilities that returned a detailed survey, only one met the criteria
of being a CAAP within the scope of the rule, and might incur costs
under the rule. EPA performed the budget test and determined that the
facility would not incur costs in excess of one percent of budget.
d. Alaska Non-profit Facilities. EPA analyzed the impact of
possible costs on Alaska non-profit facilities by comparing the pre-tax
annualized cost to reported salmon revenues. Alaska non-profits may
harvest and market salmon that return to their release areas. We
excluded grants, enhancement tax revenue, and income from miscellaneous
sources such as visitor centers from the comparison. Fiscal Year 2000
had an unusually high salmon return (i.e., large harvest). Therefore,
we used Fiscal Year 2001 data from Alaska (2002, DCN 20074). For Option
A, costs range from 0.97 to 1.8 percent of salmon revenues for 1998,
1999, and 2001 and 0.6 percent of salmon revenues for 2000. For Options
B, 1, and 2, costs range from 1.2 to 2.3 percent of salmon revenues for
1998, 1999, and 2001 and 0.6 to 0.7 percent of salmon revenues for
2000. For Option 3, costs range from 1.3 to 2.4 percent of salmon
revenues for 1998, 1999, and 2001 and 0.7 percent of salmon revenues
for 2000.
e. Sensitivity Analysis for Non-commercial Facilities. EPA
estimated ranges of impacts (DCN 20430) based on minimum, mean, and
maximum value for operating and maintenance (O&M) costs (see Section
V.A.2 for costing methods) for Options B, 1, 2, and 3. Table VI.B.6
summarizes the results for the sensitivity analysis for non-commercial
facilities. For the one percent budget test, the impacts based on the
mean values would not increase markedly if maximum O&M values were
assumed. On the other hand, if evidence appears that the O&M costs
resemble the minimum values, the impacts would drop by about half
compared to impacts under mean O&M costs for Options B, 1, and 2. For
the three percent budget test, the impacts associated with the maximum
O&M costs are approximately three times higher than the impacts
associated with minimum costs for Options B, 1, and 2. There is less
than a two-fold spread for Option 3.
[[Page 75100]]
Table VI.B.6.--Number of Non-commercial Facilities That Have Costs Exceeding Budget Thresholds
[O&M sensitivity analysis]
----------------------------------------------------------------------------------------------------------------
Option
Budget test O&M cost assumption --------------------------------------------
A B 1 2 3
----------------------------------------------------------------------------------------------------------------
1 Percent............................ Minimum..................... 39 61 49 61 199
Mean........................ 39 120 112 123 223
Maximum..................... 39 134 126 134 223
3 Percent............................ Minimum..................... 27 42 38 42 83
Mean........................ 27 75 59 71 108
Maximum..................... 27 112 112 112 134
----------------------------------------------------------------------------------------------------------------
EPA also examined alternative technology options for removing
drugs, using activated carbon. As part of sensitivity analysis, EPA
also examined the economic impacts for Options A, B, 2, and 3 with and
without activated carbon costs (DCN 20443), assuming earnings based on
cash flow analysis. Activated carbon could be used to treat CAAP
effluent for drugs. These options include BMPs, but not treatment for
drugs and chemicals. By estimating the costs for activated carbon
treatment, EPA analyzed the impacts of requiring treatment as well.
When activated carbon costs are added (costs for drug and chemical BMPs
were subtracted to avoid double-counting costs), direct employment
losses are about four times higher, and company closure and financial
health impacts are roughly double. About one in four companies would
have difficulty raising the capital needed to meet the activated carbon
costs (e.g., six to nine companies fail the credit test with the
activated carbon costs).
C. Cost-effectiveness and Cost-reasonableness Analysis
EPA performed a revised nutrient cost-effectiveness (CE) and cost
reasonableness (CR) analysis based on revised estimates of costs,
loadings and removals (see Development Document for details). We do not
expect benchmarks or thresholds for assessing CE/CR results to differ
from those used in the proposed rule (that is, $4/lb for nitrogen, $10/
lb for phosphorus cost-effectiveness and $0.73/lb for cost-
reasonableness (see 68 FR 7249-7250 for discussion of benchmarks)).
Option costs include costs for BMP components that address invasive
species, drugs, and chemicals that have no effect on nutrients, BOD, or
TSS. That is, cost-effectiveness and cost-reasonableness values are
overstated.
1. Nutrient Cost-effectiveness Results
The tables in this section provide the nutrient cost-effectiveness
values for nitrogen and phosphorus. Table VI.C.1 presents the results
for nitrogen by production system, commercial and non-commercial
sector, and option. For commercial flow-through facilities, the average
cost-effectiveness for nitrogen is $24/lb for Option A and ranges from
$11/lb to $14/lb for the other options. Incrementally, the effects of
the different BMP requirements result in Options B, 1, and 2 having the
same removals but different costs. The incremental calculations are
based on the option with the lowest of the three costs (e.g., Option 1)
and ranges from $6/lb to $12/lb. Nutrient cost-effectiveness values are
higher for non-commercial facilities. The average cost-effectiveness
for nitrogen is $1,096/lb for Option A, and cost-effectiveness ranges
from $30/lb to $49/lb for the other options. Again, we base the
incremental calculations on the option with the lowest of the three
costs with the same removals and ranges from $20/lb to $23/lb.
For commercial recirculating facilities, the table shows no average
and incremental cost-effectiveness value for nitrogen because no
nitrogen is removed. For non-commercial recirculating facilities, no
nitrogen removals are seen for Option A. For the remaining options,
average cost effectiveness ranges from $183/lb to $518/lb, and
incremental cost-effectiveness ranges from $112/lb to $232/lb.
Table VI.C.1.--Nutrient Cost-Effectiveness: Nitrogen
----------------------------------------------------------------------------------------------------------------
Cost-effectiveness ($2001/
Pre-tax Nitrogen pound)
Subcategory, sector, and option annualized costs removals (lb) -------------------------------
($2001) Average Incremental
----------------------------------------------------------------------------------------------------------------
Commercial Flow-Through
----------------------------------------------------------------------------------------------------------------
Option A.................................... $213,030 8,970 $24 \1\ $24
Option 1.................................... 344,350 30,998 11 6
Option 2.................................... 429,441 30,998 14 NA
Option B.................................... 438,443 30,998 14 NA
Option 3.................................... 920,663 79,960 12 12
----------------------------------------------------------------------------------------------------------------
Non-Commercial Flow-Through
----------------------------------------------------------------------------------------------------------------
Option A.................................... $1,492,671 1,362 $1,096 \1\ $1,096
Option 1.................................... 2,692,963 60,203 45 20
Option B.................................... 2,968,001 60,203 49 NA
Option 2.................................... 2,969,498 60,203 49 NA
Option 3.................................... 5,799,459 194,534 30 23
----------------------------------------------------------------------------------------------------------------
[[Page 75101]]
Commercial Recirculating
----------------------------------------------------------------------------------------------------------------
Option 1.................................... $2,784 0 \2\ \2\
Option A.................................... 7,744 0 \2\ \2\
Option B.................................... 7,744 0 \2\ \2\
Option 2.................................... 7,744 0 \2\ \2\
Option 3.................................... 7,744 0 \2\ \2\
----------------------------------------------------------------------------------------------------------------
Non-Commercial Recirculating
----------------------------------------------------------------------------------------------------------------
Option A.................................... $17,594 0 \2\ \2\
Option 1.................................... 44,268 115 385 232
Option B.................................... 55,107 115 480 NA
Option 2.................................... 59,558 115 518 NA
Option 3.................................... 80,965 443 183 112
----------------------------------------------------------------------------------------------------------------
NA: The option higher costs, not related to nutrient removal, and equal removals compared to previous options.
\1\ Option A is incremental to baseline, so the average and incremental values are the same.
\2\ Undefined: Option costs are costs for BMP components that address invasive species, drugs, and chemicals
that have no effect on nutrients, or facilities in these groups have adequate treatment to achieve
requirements for pollutants in this table (i.e., no incremental removals are estimated).
Table VI.C.2 presents the results for phosphorus by production
system, commercial and non-commercial sector, and option. For
commercial flow-through facilities, the average cost-effectiveness for
phosphorus is $131/lb for Option A; the average cost-effectiveness
ranges from $41/lb to $81/lb for the other options. Incrementally, the
effects of the different BMP requirements result in Options B, 1, and 2
having the same removals but different costs. The incremental
calculations are based on the option with the lowest of the three costs
(e.g., Option 1), and the incremental cost-effectiveness is estimated
to be roughly $34/lb to $35/lb. Nutrient cost-effectiveness values are
higher for non-commercial facilities. The average cost-effectiveness
for phosphorus is $925/lb for Option A and ranges from $112/lb to $258/
lb for the other options. Again, the incremental calculations are based
on the option with the lowest of the three costs (e.g., Option 1) with
the same removals and ranges from $77/lb to $121/lb.
For commercial recirculating facilities, the average and
incremental cost-effectiveness for phosphorus is undefined for
commercial because no phosphorus is removed. For non-commercial
recirculating facilities, no phosphorus removals are seen for Option A.
For the remaining options, average cost effectiveness ranges from $481/
lb to $2,987/lb and incremental cost-effectiveness ranges from $247/lb
to $1,338/lb.
Table VI.C.2.--Nutrient Cost-Effectiveness: Phosphorus
----------------------------------------------------------------------------------------------------------------
Cost-effectiveness ($2001/
Pre-tax Phosphorus pound)
Subcategory, sector, and option annualized costs removals (lb) -------------------------------
($2001) Average Incremental
----------------------------------------------------------------------------------------------------------------
Commercial Flow-Through
----------------------------------------------------------------------------------------------------------------
Option A.................................... $213,030 1,631 $131 $131\1\
Option 1.................................... 344,350 5,396 64 35
Option 2.................................... 429,441 5,396 80 NA
Option B.................................... 438,443 5,396 81 NA
Option 3.................................... 920,663 22,290 41 34
----------------------------------------------------------------------------------------------------------------
Non-Commercial Flow-Through
----------------------------------------------------------------------------------------------------------------
Option A.................................... $1,492,671 1,614 $925 $925\1\
Option 1.................................... 2,692,963 11,510 234 121
Option B.................................... 2,968,001 11,510 258 NA
Option 2.................................... 2,969,498 11,510 258 NA
Option 3.................................... 5,799,459 51,976 112 77
----------------------------------------------------------------------------------------------------------------
Commercial Recirculating
----------------------------------------------------------------------------------------------------------------
Option 1.................................... $2,784 0 \2\ \2\
Option A.................................... 7,744 0 \2\ \2\
Option B.................................... 7,744 0 \2\ \2\
Option 2.................................... 7,744 0 \2\ \2\
Option 3.................................... 7,744 0 \2\ \2\
----------------------------------------------------------------------------------------------------------------
[[Page 75102]]
Non-commercial Recirculating
----------------------------------------------------------------------------------------------------------------
Option A.................................... $17,594 0 \2\ \2\
Option 1.................................... 44,268 20 2,220 1,338
Option B.................................... 55,107 20 2,764 NA
Option 2.................................... 59,558 20 2,987 NA
Option 3.................................... 80,965 168 481 247
----------------------------------------------------------------------------------------------------------------
NA: The option higher costs, not related to nutrient removal, and equal removals compared to previous options.
\1\ Option A is incremental to baseline, so the average and incremental values are listed as being the same.
\2\ Undefined: Option costs are costs for BMP components that address invasive species, drugs, and chemicals
that have no effect on nutrients, or facilities in these groups have adequate treatment in place to achieve
requirements for pollutants in this table (i.e., no incremental removals are estimated).
Due to differences in option requirements for the subcategories, as
well as differences in facility counts between the proposed rule and
this NODA, it is difficult to compare cost-effectiveness values in
Tables VI.C.1 and VI.C.2 directly to cost effectiveness values for the
proposed rule. As a consequence, Table VI.C.3 facilitates comparisons
between proposal and this NODA.
Table VI.C.3.--Comparison of Nutrient Results--Proposal and NODA
----------------------------------------------------------------------------------------------------------------
Average nutrient Average nutrient Average nutrient
cost effectiveness cost effectiveness cost
Total pre-tax (TN+TP) (TN) effectiveness
Production system annual costs ---------------------------------------- (TP)
($2001) ------------------
Removals $/lb Removals $/lb Removals $/lb
----------------------------------------------------------------------------------------------------------------
Proposal
----------------------------------------------------------------------------------------------------------------
Flow-Through....................... 1,032,942 66,103 15.63 50,273 20.55 15,830 65.25
Recirculating...................... 46,354 32,453 1.43 25,090 1.85 7,363 6.30
Net Pens........................... 35,322 86,890 0.41 74,477 0.47 12,413 2.85
----------------------------------------------------------------------------------------------------------------
NODA
----------------------------------------------------------------------------------------------------------------
Flow-Through....................... 2,076,456 114,933 18.07 92,026 22.56 22,907 90.65
Recirculating...................... 5,409 0 \1\ 0 \1\ 0 \1\
Net Pens........................... 0 0 \1\ 0 \1\ 0 \1\
----------------------------------------------------------------------------------------------------------------
Note: Proposal costs, taken from Table IX.G.3 of the preamble from the proposed rule, were inflated to 2001
dollars. NODA results do not include costs or loads for facilities that produce 20,000 to 100,000 lbs/year.
Option 1 is assumed for flow-through facilities in the size category 100,000 to 475,000 lbs/yr; Option 3 is
assumed for all other flow-through and recirculating facilities.
\1\ Undefined.
2. Cost-reasonableness Results
Table VI.C.4 shows the cost-reasonableness values for conventional
pollutants. EPA estimated BOD and TSS removals for each facility for
each option. Because BOD can be correlated with TSS, EPA selected the
higher of the two values (not the sum) to avoid possible double-
counting of removals. In general, TSS is the more frequently the higher
of the two. In Option 3 for example, TSS is higher than BOD in nearly
four out of five facilities. For commercial flow-through facilities,
cost-reasonableness ranges from $1.53/lb to $1.94/lb for Options A, B,
1, and 2. Option 3 shows a lower cost-reasonableness value than for the
other options--$0.64/lb. For non-commercial flow-through facilities,
cost-reasonableness is $1.01/lb for option A and ranges from $1.18/lb
to $1.70/lb for the other options. While cost-reasonableness is less
than $2/lb for all options for flow-through facilities, it is undefined
for commercial recirculating facilities and ranges from $5/lb to $100/
lb for non-commercial recirculating facilities.
Table VI.C.4.--Cost-reasonableness: BOD and TSS
----------------------------------------------------------------------------------------------------------------
Pre-tax annualized BOD and TSS Cost-reasonableness
Subcategory, sector, and option costs ($2001) Removals (lb) \1\ ($2001/pound)
----------------------------------------------------------------------------------------------------------------
Commercial Flow-Through
----------------------------------------------------------------------------------------------------------------
Option A......................................... 213,030 114,162 1.87
Option 1......................................... 344,350 225,797 1.53
Option 2......................................... 429,441 225,797 1.90
[[Page 75103]]
Option B......................................... 438,443 225,797 1.94
Option 3......................................... 920,663 1,447,954 0.64
----------------------------------------------------------------------------------------------------------------
Non-commercial Flow-Through
----------------------------------------------------------------------------------------------------------------
Option A......................................... 1,492,671 1,480,192 $1.01
Option 1......................................... 2,692,963 1,743,075 1.54
Option B......................................... 2,968,001 1,743,075 1.70
Option 2......................................... 2,969,498 1,743,075 1.70
Option 3......................................... 5,799,459 4,925,784 1.18
----------------------------------------------------------------------------------------------------------------
Commercial Recirculating
----------------------------------------------------------------------------------------------------------------
Option 1......................................... 2,784 0 \2\
Option A......................................... 7,744 0 \2\
Option B......................................... 7,744 0 \2\
Option 2......................................... 7,744 0 \2\
Option 3......................................... 7,744 0 \2\
----------------------------------------------------------------------------------------------------------------
Non-commercial Recirculating
----------------------------------------------------------------------------------------------------------------
Option A......................................... 17,594 0 \2\
Option 1......................................... 44,268 598 73.98
Option B......................................... 55,107 598 92.09
Option 2......................................... 59,558 598 99.53
Option 3......................................... 80,965 16,150 5.01
----------------------------------------------------------------------------------------------------------------
\1\ EPA determines the higher of BOD or TSS mass removal for each facility and then aggregates pounds across
facilities.
\2\ Undefined: Option costs are costs for BMP components that address invasive species, drugs, and chemicals
that have no effect on BOD or TSS, or facilities in these groups have adequate treatment to achieve
requirements for pollutants in this table (i.e., no incremental removals are estimated).
Due to differences in option requirements for the subcategories and
differences in facility counts between the proposed rule and this NODA,
it is difficult to compare results in Table VI.C.4 directly to values
in the proposed rule. As a consequence, Table VI.C.5 facilitates
comparisons between proposal and this NODA.
Table VI.C.5.--Comparison of Cost-Reasonableness Results--Proposal and NODA
----------------------------------------------------------------------------------------------------------------
Proposal NODA
----------------------------------------------------------------------------------------------------------------
Total pre- Average Total pre-
tax annual Conventional cost per tax annual Conventional Average cost
Production system costs pollutant pound ($/ costs pollutant per pound ($/
($2001) removals lb) ($2001) removals lb)
----------------------------------------------------------------------------------------------------------------
Flow-Through................. 1,032,942 4,450,465 0.23 2,076,456 2,524,102 0.82
Recirculating................ 46,354 638,365 0.07 5,409 0 \1\
Net Pens..................... 35,322 868,899 0.04 0 0 \1\
----------------------------------------------------------------------------------------------------------------
Note: Proposal costs, taken from Table IX.G.1 of the preamble from the proposed rule, were inflated to 2001
dollars. NODA results do not include costs or loads for facilities that produce 20,000 to 100,000 lbs/year.
Option 1 is assumed for flow-through facilities in the size category 100,000 to 475,000 lbs/yr; option 3 is
assumed for all other flow-through and recirculating facilities.
\1\ Undefined.
D. Small Business Analysis
EPA evaluates the economic impacts of proposed and final rules on
small entities where required by the Regulatory Flexibility Act (RFA)
as amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA). The RFA/SBREFA defines several types of small entities,
including small governmental jurisdictions (population less than
50,000), small organizations (not-profit organization that is
independently owned and operated and is not dominant in its field), and
small businesses. The CAAP industry includes sites that fall within the
North American Industry Classification codes 112511 (finfish farming
and fish hatcheries). The Small Business Administration size standard
for this code is $0.75 million. A facility is owned by a small business
if its corporate parent earns $750,000 or less in annual revenues.
For the purposes of the RFA, Federal, State, and Tribal governments
are not considered small governmental jurisdictions (EPA, 1999, DCN
20121). Thus, facilities owned by these governments are not considered
small entities, regardless of their production levels. EPA identified
no public facilities owned by small local governments in the analysis.
For the purpose of this rulemaking, EPA considers many of the non-
profit organizations that produce salmon for the State of Alaska to be
``small.'' These non-profit facilities have assumed a public function:
to raise fish (in this case salmon) in hatcheries to be released into
the wild to supplement wild populations and sustain the Alaska
[[Page 75104]]
commercial and recreational fishing industries.
Among the costed facilities, EPA identified 117 facilities
belonging to small businesses, seven belonging to small organizations,
and one academic/research facility. For commercial facilities, the
small business results for the facility closure analysis and associated
loss in jobs and increase in local unemployment rates, financial
health, credit test, and the sales test results for 20,000 to 100,000
lb/yr category are the same as those presented in Table VI.B.1 (see DCN
20448 for details about small business analysis), assuming cash flow
analysis. That is, all these impacts fall on small businesses. The only
difference from Table VI.B.1 is in the one percent sales test for the
100,000 to 475,000 lb/yr category, where the number of facilities
exceeding the test threshold drops from 54 to 53 when restricted to
small businesses.
VII. Solicitation of Comments
A. Alligator Production
As discussed in the proposal, alligator production is not subject
to Part 451. As ascertained through contacts with industry experts,
alligator production facilities do not discharge effluents from their
production systems. Instead, effluents are treated in one-or two-stage
lagoons and then applied to crop or forested land. EPA verified the
information by reviewing the data from the detailed survey. Alligator
producers do not meet the definition of a CAAP because they do not
exceed the minimum threshold of discharging 30 days annually. In EPA's
view, after having reviewed detailed data, these operations are not
CAAPs and are similarly operated to CAFOs. EPA may recommend to permit
writers that they consider applying requirements similar to CAFOs when
permitting alligator production facilities. EPA seeks comment on
whether this would be an appropriate approach for these operations.
B. BMPs
EPA also seeks comment on BMP language that might be included in
the final rule or accompanying guidance. For example, in Idaho's
general permit, these practices by CAAP facilities are prohibited to
ensure protection of State Water Quality Standards for hazardous
materials, deleterious materials, and floating, suspended or submerged
matter.
[sbull] Discharging hazardous materials is prohibited.
[sbull] Discharging sludge, grit, and accumulated solid residues
associated with CAAP operations and fish processing is prohibited.
[sbull] Practices (e.g., the removal of dam boards in raceways or
ponds) which allow accumulated solids to be discharged to waters of the
United States is prohibited.
[sbull] Discharging untreated cleaning wastewater (e.g., obtained
from a vacuum or standpipe bottom drain system or rearing/holding unit
disinfection) to waters of the United States is prohibited.
[sbull] Sweeping, raking, or intentionally discharging accumulated
solids from raceways or ponds to waters of the United States is
prohibited.
[sbull] Containing, growing or holding fish within an offline or
full-flow settling basin is prohibited.
EPA seeks comments on whether these prohibitions, or any other
specific requirements for BMP plans, should be included in the final
rule or accompanying guidance.
EPA also seeks comment on whether it should modify the structure of
the proposed BMP provisions so that the regulation would require
specific best management practices and, separately, require sources to
develop a BMP plan describing how they intend to meet those
requirements. For example, EPA proposed that the BMP plan for flow-
through systems must minimize excess feed entering the aquatic animal
production system. (See proposal at 40 CFR 451.15(a); see also proposal
at 40 CFR 451.25(a) (recirculating systems).) EPA may restructure the
regulation so that a source would be required by its NPDES permit to
minimize excess feed and, separately, to develop a BMP plan to describe
how the source intends to comply with that requirement. Under this
approach, the BMP plan, while required by permit, would simply be a
tool to help the source implement the substantive permit requirement:
minimizing excess feed. EPA also seeks comment on whether to require
review of BMP plans by the permitting authority and, if so, how such a
requirement should be expressed.
C. Disposal of Drugs and Chemicals
Information on practices for the disposal of drugs and chemicals is
limited. EPA seeks comment on existing practices for the disposal of
expired drugs and chemicals.
D. Differentiating Between Warm and Cold Water Species
Data from two warm water facilities indicated that they appear to
comply with the proposed limits, but EPA recognizes that such
facilities can have different wastewater characteristics than cold
water species production facilities. EPA seeks comments and data
regarding the ability or inability of warm water facilities to achieve
the proposed limits for either flow-through or recirculating system
effluents, as appropriate.
E. Combining the Proposed Recirculating and Flow-Through Subcategories
Into One Subcategory
EPA may combine flow-through production systems and recirculating
systems under a single subcategory with two sets of effluent limits:
one that would apply to the discharge of full flow effluents and one
that would apply to off-line treatment or recirculating system
effluents. We received several comments indicating that there is not a
clear distinction between recirculating and flow-through systems. EPA
seeks comments on the establishment of a continuous discharge
subcategory which would apply to wastewater discharges from both
recirculating and flow-through systems.
F. Revised Economic Impact Methodology
For this notice, EPA projected impacts only when they occur using
two out of the three forecasting methods. EPA seeks comment on basing
its closure analysis for the final rule on impacts that occur using one
of the three methods.
G. Factoring Unpaid Labor Charges in the Impact Analysis
EPA is not estimating a charge for unpaid labor reported by CAAP
facilities when conducting its economic impact analysis. EPA seeks
comment on methods and data that support the estimation of charges for
unpaid labor and management in cash flow and net income analyses.
H. Facilities Excluded From the Economic Impact Analysis
Facilities that are excluded from closure analysis include:
[sbull] Start-ups (where the first year of income is negative yet
this is not indicative of future earnings).
[sbull] Cost centers (that transfer production to other facilities
under the same ownership at no cost or the cost is set to the operating
costs).
[sbull] Facilities where the company does not record income
statement information at the facility level.
[sbull] Facilities that are likely to close under baseline
conditions without regard to the rule.
EPA seeks comment on omitting such facilities from the closure
analysis.
[[Page 75105]]
Dated: December 19, 2003.
G. Tracy Mehan, III,
Assistant Administrator, Office of Water.
[FR Doc. 03-31867 Filed 12-24-03; 8:45 am]
BILLING CODE 6560-50-P