OSHA’s Proposed Chrome PEL SFIC Washington Forum Washington, DC May 11, 2005

1. OSHA’s Proposed Chrome PELSFIC Washington ForumWashington, DCMay 11, 2005 Jeff Hannapel Stu Sessions The Policy Group Environomics, Inc. One Thomas Circle, NW, 10th Floor 4405 East-West Highway, Ste 307 Washington, DC 20005 Bethesda, Maryland 20814 202-457-0630 301-657-7762 jhannapel@thepolicygroup.com sessions@environomics.com

2. OSHA Proposed PEL: Background Summary • Litigation by Public Citizen and Unions • Current PEL 52 ug/m3 • Proposed PEL 1ug/m3 • Proposed Action Level 0.5 ug/m3

3. OSHA Regulatory Schedule for Revised Hexavalent Chromium Standard

4. Industry Impacts:Selected Industry Sectors Electroplating Welding Aerospace Shipbuilding Chromate Production Pigments & Catalysts Portland Cement Chemical Distributors Refractory Brick Stainless Steel Industrial Laundries Steel Production Fiberglass Mfg. Defense Supply Chain Electric Utilities Construction

5. Industry Impacts:Key Metal Finishing Operations • Hard Chrome Plating • Decorative Chrome Plating • Chromic Acid Anodizing • Chromate Conversion Coatings (e.g., Zn, Cd & Al) • Plating on Plastics • Passivation • Welding and Fabricating • Polishing and Grinding • Chemical Mixing & Blending

6. Occupational Exposure Limits:Comparison of Selected Countries (2002)

7. Health Studies: Industry Concerns • Chromate Production Facilities – 1930s thru 1970s • Very high exposures, often of short duration • OSHA Uses Linear Model to Extrapolate Past Risks at Very High Levels to Much Lower Current Exposures • Expert review of Cr studies show different results • Crump Study – 23ug/m3 is protective • SBREFA process recommended 23 ug/m3 - Spring 2004 • Uncertainty in OSHA’s Risk Assessment

8. OSHA’s Estimate of the Number of Workers Exposed in Industry Sectors and Health Risk Studies for Each Industry Sector 250,000 242,119 200,000 # of Workers Exposed to CrVI (per OSHA) 150,000 111,439 100,000 25,479 50,000 1,297 52 63 150 Chromate Pigment Production Ferrochromium (Chromium Metal ) Producers Chromate Production Aerospace Other Industries Chrome (VI) Plating Welding Langard & Vigander 1983 Langard & Vigander 1975 Davies 1984 Davies 1979 Hayes et al. 1989 #Sheffet et al. 1982 #Equitable Env. Health 1983,1976 Deschamps et al. 1995 Haguenoer et al. 1981 Langard & Norseth 1975 #Frentzel-Bayme 1983 #Kano et al. 1993 #Axelsson et al. 1980 #Langard et al. 1990 #Moulin et al. 1990 Pokrovskaya & Shabynina *#Alexander et al. 1996 #Boice et al. 1999 Dalager et al. 1980 #Royle 1975 Sorahan et al. 1998 Sorahan et al. 1987 Silverstein et al. 1981 Franchini et al. 1983 #Okubo & Tsuchiya 1977 #Takahashi & Okubo 1990 Sorahan & Harrington 2000 *#Gerin et al. 1993 Moulin 1997 Sjogren et al. 1994 #Simonato et al. 1991 #Moulin et al. 1993 #Hansen et al. 1996 #Lauitsen et al. 1996 #Sjogren et al. 1987 #Kjuus et al. 1986 #Hull et al. 1989 #Polednak et al. 1981 #Becker 1995 #Morgan et al. 1981 #Pippard et al. 1985 #Blot et al. 2000 Rafnsson & Johannesdottier 1986 #Svensson et al. 1989 #Cornell & Landis 1984 #Brinton et al. **Gibb et al. 2000 **Luipold et al. 2003 *Mancuso et al. 1997 *Hayes et al. 1979 Braver et al. 1985 Mancuso et al. 1975 Mancuso & Heuper 1951 Borne & Yee 1950 Davies et al. 1991 #Alderson et al. 1981 Bistrup & Case 1956 Korallus et al. 1993 #Korallus et al. 1982 #Machle & Gregorius 1948 #Baetjer 1950 Key ** In Health Benefits Analysis * In Preliminary Quantitative Risk Analysis # No statistically significant relationship between chrome exposure and lung cancer

9. Technical Feasibility • OSHA recommendations not appropriate • Systems cannot be “tweaked” • Fume suppressants not the answer • Engineering controls identified by OSHA not sufficient • Engineering Controls • OSHA’s data do not demonstrate technical feasibility • Difficult to achieve PEL lower than 10 ug/m3 • Consistent compliance with action level needed • Process and sampling variability concerns • Substitutes and customer specifications limit process options

10. Compliance Cost of Proposed PEL:Metal Finishing Industry($/year, in millions)

11. Annual Compliance Costs

12. Economic Impact Analysis • OSHA – No Significant Impacts • Based on Low Estimated Compliance Costs • Average Costs Compared to Average Ability to Pay • Did not Differentiate Large from Small Facilities • Industry – Proposed PEL Would Close More than Half the Industry • Critique OSHA’s Crude Economic Impact Analysis • Use EPA’s MP&M Economic Impact Analysis • 50% Closure at $61,000/Facility/Year • Detailed Affordability Case Studies for 6 Facilities

13. Summary Results from Electroplating Affordability Case Studies

14. Criteria for a Good Analysis of Economic Feasibility for an Industry

15. Benefit-Cost Assessment:Industry Review • OSHA Asserts Total Benefits from the PEL Exceed Costs by $140 million annually (includes health benefits across all affected sectors) • Industry Analysis Launched to: • Formulate new cost estimates vs. OSHA cost estimates • Review how OSHA arrived at benefits estimates • Evaluate analytical methods and additional health studies and recalculate benefits • Goal: Credibly Compare Costs and Benefits for Alternative PELs • Position – Net benefits should be positive for any final PEL • Conclusion – Even without changing OSHA compliance cost estimates, benefits are much less than costs • Conclusion – OSHA drastically underestimated costs

16. Re-Calculated Benefits • Instead of using cancer slope range estimated from only 2 studies, use average of all 6 studies cited by OSHA • Use best estimate for cancer latency, not OSHA’s range • Apply more accurate Value of Statistical Life estimate • For purposes of this calculation, accept most of OSHA’s other estimates

17. Costs & Benefits – Summary Comparison:Proposed PEL and Alternatives($ millions, 2003)

18. Strategic Approach • Industry Coalition • Dept. of Labor/OSHA • Interagency • Dept of Defense • EPA • Dept of Commerce • Small Business Administration • White House/OMB • Congress