Costs and Benefits of Reducing Lead in Gasoline Final Regulatory Impact Analysis COSTS and BENEFITS of REDUCING LEAD in GASOLINE
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United States Office of February 1985 Environmental Protection Policy Analysis EPA-230-05-85-006 Agency Washington DC 20460 Costs and Benefits of Reducing Lead in Gasoline Final Regulatory Impact Analysis COSTS AND BENEFITS OF REDUCING LEAD IN GASOLINE: FINAL REGULATORY IMPACT ANALYSIS February 1985 Authors: Joel Schwartz Hugh Pitcher Ronnie Levin Bart Ostro Albert L. Nichols Economic Analysis Division Office of Policy Analysis Office of Policy, Planning and Evaluation U.S. Environmental Protection Agency Washington, D C 20460 ACKNOWLEDGEMENTS Contributors : Jane Leggett Albert McGartland George Sugiyama The authors thank their colleagues Lane Krahl, Robert Fegley, and June Taylor Wolcott for their help and expertise. For technical assistance, often under very tight deadlines, the authors thank Terry Higgins, Bill Johnson, and Steve Sobotka of Sobotka and Company; Chris Weaver and Craig Miller of Energy and Resource Consultants; Asa Janney and Jim Duffey of ICF; and Ed Fu. Many individuals have provided excellent secretarial support, in particular Saundra Womack, Georgia Jackson, Hallie Baldwin, Sylvia Anderson, Michelle Smith, Leslie Hanney, and Yvette Carter. The authors also are grateful to the many colleagues who provided helpful comments on earlier drafts of this document and its predecessors. TABLE OF CONTENTS PAGE EXECUTIVE SUMMARY E-1 CHAPTER I: INTRODUCTION I.A. Background Information I-2 I.A.l. Previous Rulemakings I-3 I.A.2. Continuing Problems I-4 I.A.3. The August 1984 Proposal I-8 I.A.4. Information Received After August 1984 Proposal I-9 I.B. Need for Government Intervention I-13 I.C. Alternatives to New Regulations I-14 I.C.1. No Change in Policy I-14 I.C.2. Public Education I-15 I.C.3. Stepped-Up Enforcement I-16 I.D. Market-Oriented Alternatives I-18 I.D.l. Marketable Permits I-19 I.D.2. Pollution Charges I-21 I.E. Alternative Standards I-23 Table of Contents, page 2 PAGE CHAPTER II: COSTS OF REDUCING LEAD IN GASOLINE II.A. Price versus Cost Differences II-2 II.B. The Refinery Model II-6 II.B.1. Introduction to the DOE Model II-6 II.B.2. Overview of Refining Processes II-7 II.C. Base-Case Assumptions and Cost Estimates II-18 II.C.1. Base-Case Parameter Values II-19 II.C.l.a. Gasoline Demand II-19 II.C.l.b. Assumptions About Refinery Operations II-24 II.C.2. Base-Case Results II-34 II.D. Sensitivity Analyses II-39 II.D.1. Level of Aggregation II-40 II.D.2. Other Parameters II-42 II.D.2.a. Assumptions Varied II-44 II.D.2.b. Results of Sensitivity Analyses II-48 II.E. Impact of Banking on Costs II-60 II.E.1. Base-Case Banking Results II-61 II.E.2. Sensitivity Analyses with Ranking II-68 Table of Contents, page 3 PAGE CHAPTER III: HUMAN EXPOSURE TO LEAD FROM GASOLINE III.A. The Relationship between Lead in Gasoline and Lead in Blood III-2 III.A.1. Recent Studies III-2 III.A.2. Available Data Sets III-5 III.A.2.a. Gasoline-Use Data III-6 III.A.2.b. The NHANES II III-6 III.A.2.c. The CDC Screening Program for III-10 Lead Poisoning III.A.2.d. Chicago, New York, and Louisville, III-10 Kentucky Data III.A.3. Statistical Analyses of Exposure III-10 III.B. The Question of Causality III-21 III.B.1. Experimental Evidence III-22 III.B.2. Does Cause Precede Effect? III-23 III.B.3. Replicability and Consistency III-24 III.B.4. Does a Dose-Response Relationship Exist? III-25 III.B.5. Biological Plausibility III-26 III.B.6. Control of Confounding Factors III-26 III.B.6.a. External Validation III-27 III.R.6.b. Seasonality III-30 III.B.6.c. Other Time Trends III-31 III.B.6.d. Geographic Sampling Pattern III-31 III.B.6.e. Subgroup Analysis III-33 III.C. Impact of Rule on Numbers of Children Above III-34 Various Blood-Lead Levels III.C.1. Estimation Procedure III-35 III.C.2. Incidence Versus Prevalence III-39 Table of Contents, page 4 PAGE CHAPTER IV: BENEFITS OF REDUCING CHILDREN’S EXPOSURE TO LEAD IV.A. Pathophysiological Effects IV-3 IV.A.l. Effects of Lead on Pyrimidine Metabolism IV-7 IV.A.2 Effects on Heme Synthesis and Related Hematological IV-8 Processes IV.A.2.a. Mitochondrial Effects IV-8 IV.A.2.b. Heme Synthesis Effects IV-8 IV.A.2.c. Impact of Lead on Red Blood Cell Abnormalities IV-10 IV.A.2.c.I. Effects of Lead Exposure on Blood Cell IV-11 Volume and Hemoglobin Content IV.A.2.c.2. The Relationship Between Blood Lead IV-18 and FEP IV.A.2.c.3. The Relationship Between FEP Levels and IV-21 Anemia IV.A.3. Lead’s Interference with Vitamin D Metabolism IV-24 and Associated Physiolqical Processes IV.B. Neurotoxic Effects of Lead Exposure IV-28 IV.B.1. Neurotoxicity at Elevated Blood-Lead Levels IV-28 IV.B.2. Neurotoxicity at Lower Blood-Lead Levels IV-30 IV.B.2.a. Cognitive Effects of Moerate Blood-Lead Levels IV-33 IV.B.3. The Magnitude Impact of Lead on IO IV-41 IV.C. Fetal Effects IV-42 IV.D. Monetized Estimates of Children’s Health Benefits IV-47 IV.D.l. Reduced Medical Costs IV-47 IV.D.2. Reduced Costs of Compensatory Education IV-52 IV.D.3. Summary of Estimated Benefits IV-53 Table of Contents, page 5 PAGE CHAPTER V: HEALTH BENEFITS OF REDUCING LEAD: ADULT ILLNESSES RELATED TO BLOOD PRESSURE V.A. The Relationship Between Blood Lead and Blood Pressure V-2 V.A.l. Earlier Studies V-2 V.A.2. Analysis of NHANES II Data V-5 V.A.2.a. Blood Pressure Measurements V-7 V.A.2.b. Initial Analysis V-7 V.A.3. Tests of Robustness V-9 V.A.3.a. Nutritional and Biochemical Variables V-9 V.A.3.b. Interaction Terms V-15 V.A.3.c. Marginally Insignificant Variables V-18 V.A.3.d. Nonnutrition Variables V-19 V.A.3.e. Other Age Groups V-23 V.A.4. Summary of Blood Lead - Blood Pressure Results V-23 V.B. Benefits of Reduced Cardiovascular Disease V-26 V.B.1. Reductions in Hypertension and Related Morbidity and Mortality V-26 V.B.l.a. Hypertension V-27 V.B.l.b. Myocardial Infarctions, Strokes, and Deaths V-29 V.B.2. Monetized Benefit Estimates V-35 V.B.2.a. Hypertension V-35 V.B.2.b. Myocardial Infarctions V-37 V.B.2.c. Strokes V-40 V.B.2.d. Mortality V-42 V.B.3. Summary of Blood Pressure Benefits V-44 Table of Contents, page 6 PAGE CHAPTER VI: BENEFITS OF REDUCING POLLUTANTS OTHER THAN LEAD VI.A. Emissions Associated with Misfueling VI-4 VI.B. Health and Welfare Effects Associated with Ozone VI-9 VI.B.1. Effects of a 1 Percent Reduction in Ozone VI-11 VI.B.1.a. Health Effects of Reducing Ozone VI-11 VI.B.1.b. Ozone Agricultural Effects VI-22 VI.B.1.c. Ozone Effects on Nonagricultural Vegetation VI-26 VI.B.1.d. Ozone Materials Damage VI-28 VI.B.1.e. Summary of Benefits of a 1 Percent VI-29 Change in Ozone VI.B.2. Linking NOx and HC Reductions to Ozone Effects VI-31 VI.B.2.a. The Process of Ozone Formation VI-31 VI.B.2.b. Quantitative Estimates of Impacts of VI-33 HC and NOx on Ozone VI.B.2.c. Ozone-Related Effects Per Ton of HC and VI-39 NOx Controlled VI.C. Health and Welfare Effects Not Related to Ozone VI-43 VI.C.1. Hydrocarbons VI-43 VI.C.1.a. Impact on Sulfates VI-43 VI.C.1.b. Impact on Benzene and Other Aromatics VI-44 VI.C.2. Nitrogen Oxides VI-47 VI.C.2.a. Visibility Benefits from Reduced NOx VI-48 VI.C.2.b. Health Benefits of Reducing NOx VI-50 VI.C.2.c. NOx Effects on Vegetation VI-52 VI.C.2.d. NOx Effects on Materials VI-53 VI.C.2.e. Acid Deposition Benefits VI-54 Table of Contents, page 7 PAGE VI.C.3. Carbon Monoxide VI-55 VI.C.3.a. Health Effects of CO VI-56 VI.C.3.b. Change in Numbers of People Above 2.9 Percent COHb VI-59 VI.C.4. Ethylene Dibromide Emissions VI-64 VI.D. Monetized Benefit Estimates VI-66 VI.D.1. Value of Quantified Health and Welfare Benefits VI-66 VI.D.2. Implicit Value Based on Cost of Control Equipment VI-68 VI.D.3. Summary of Benefits of Controlling Conventional Pollutants Other than Lead VI-71 Table of Contents, page 8 PAGE CHAPTER VII: VEHICLE MAINTENANCE, FUEL ECONOMY, AND ENGINE DURABILITY BENEFITS VII.A. Maintenance Benefits VII-3 VII.A.1. Exhaust Systems VII-3 VII.A.2. Reduced Fouling and Corrosion of Spark Plugs VII-9 VII.A.3. Extended Oil Change Intervals VII-11 VII.A.4. Summary of Maintenance Benefits VII-14 VII.B. Improved Fuel Economy VII-18 VII.B.1. Energy Content VII-18 VII.B.2. Reduced Fouling of Oxygen Sensors VII-19 VII.B.3. Summary of Fuel Economy Benefits VII-20 VII.C. Engine Durability VII-20 VII.C.1.