O

Oil Analysis
Some plants have oil-sample analysis done on oil samples taken from oil drains on
their turbomachinery packages. Metallic particulate content is trended for a clue
as to what problems may occur. For instance, rising content of babitt may
indicate bearing wear and/or incipient bearing failure. The problem of using this
technique with rotating machinery is that most of this machinery turns so fast, the
machine may fail between sampling analyses. Oil analysis has a far better chance
of detecting deterioration in slower reciprocating machines, provided the samples
are analyzed expeditiously.

Oil Sands; Synthetic Crude; Tar Sands; Shale

Oil sands and tar sands are synonyms for the same material. Synthetic crude
results from processing oil sands. Shale is similar to oil sand in that it is a category
of soil/rock that contains oil that can be extracted.
Certain areas of the world have large deposits of oil sands (northern Alberta,
Canada) or shale (China and the United States) that oil can be extracted from,
either by mining the soil and processing it or directing leaching steam into the
ground. The latter process recovers only about 60 percent of the oil. The former
process can recover more oil but is expensive to design and build because of the
high level of corrosion and erosion problems experienced.
This technology is significant to process engineers in that it provides useful
information on what equipment can survive the harshness of this process: such
equipment would be suitable for similarly demanding processes elsewhere. Figure
O-1 is a simplified line diagram of synthetic crude manufacture from processing oil
sands.

Reference and Additional Reading

1. Soares, C. M., Environmental Technology and Economics: Sustainable Development in Industry,
Butterworth-Heinemann, 1999.

Oxygen Analysis
Oxygen analyzers used to have applications in turbine and boiler design; they
monitored fuel/air ratios. Now the zirconium oxide probe for oxygen analysis is
found to have applications in process operations as well, where turbines are
involved. These applications give the probe some predictive solving potential, which
most rotating machinery engineers might depend on other indicators (such as
vibration analysis) for.
O-1

O-2

Oxygen Analysis

FIG. O-1

The production of synthetic crude oil. (Source: Syncrude Canada Limited.)

Oxygen Analysis Produces Profitable Power Plants*

A recent survey of instrument engineers from European power companies has
indicated that many have expanded the utility of the ZrO2 oxygen probe beyond its
traditional use as a tool to optimize fuel/air ratios.
Most operators of large boilers have come to realize that significant stratification
can exist in the ductwork carrying flue gases. (See Fig. O-2.) By installing an array
of O2 probes, and averaging the outputs, an average signal is generated that is
suitable for use in automatically trimming fuel/air ratios.
While averaging for control purposes is increasingly common, many operators
demand a trend display of each individual probe. By watching the relative O2 values,
many operators feel that they can detect problems with fouling at individual
burners, slag accumulation, or even problems with coal fines at a pulverizer. The
O2 measurement is increasingly taking on a predictive maintenance function.


Air heater leakage. An increasing number of customers are utilizing the O2

measurement to detect seal leakage at air preheaters. This is particularly
effective when utilized with rotating units. Air leakage at the preheater is not
only a strong indicator that maintenance is required, it negatively affects thermal
heat rate efficiency. See Fig. O-3.

* Source: Adapted from extracts from Simmers, Oxygen Analysis Produces Profitable Power Plants,
IPG, January 1998.

Oxygen Analysis

O-3

FIG. O-2 Most operators realize that significant stratification can exist in ductwork carrying flue

gases. (Source: Simmers.)

FIG. O-3 Oxygen measurement can be used to detect seal leakage in air heaters. (Source:

Simmers.)

Flue gas recirculation. One NOx reduction strategy is to mix some flue gas into
the combustion air prior to the burner, preventing the formation of thermal NOx.
An O2 analyzer placed downstream of the mixing point can be utilized to maintain
a specific final O2 set-point. (See Fig. O-4.)
It should be noted that the ZrO2 sensing cell is mildly sensitive to pressure
changes, whereby each 10 mm of H2O pressure = 1 percent change in reading
(not a 1 percent change in O2). Some windboxes may experience pressures high
enough to require a pressure balancing accommodation to compensate.

NOx predictor. Thermal NOx is dependent in great part on the amount of O2

available, as well as temperature at the burner. Increasing numbers of stations
are watching O2 levels as an indication of NOx production. (See Fig. O-5.)

O-4

Ozone

FIG. O-4 Using O2 measurement to control NOx formation. (Source: Simmers.)

FIG. O-5 Using O2 to predict NOx formation. (Source: Simmers.)

Ozone*
Industrial activity and motor vehicle emissions produce ozone, a greenhouse gas.
As desired ozone levels are legislated toward, its effects need to be familiar to
process and industrial engineers.
Two problems to be considered are ground-level and stratospheric ozone. (As a
sample country for data comparisons, Canada has been selected.)
It is important not to confuse the problem of ground-level ozone pollution with
* Source: Environment Canada. Adapted with permission.

Ozone

O-5

FIG. O-6 Urban smog. (Source: Environment Canada.)

the thinning of the stratospheric ozone layer. About 90 percent of atmospheric ozone
occurs in the stratosphere, a layer that extends from about 15 to 50 km above the
Earths surface. There it performs the critical function of absorbing harmful
ultraviolet (UV) radiation emitted by the sun. At present the stratospheric ozone is
thinning and providing plants and animals with less protection from the harmful
effects of excess UV radiation than in the past. This is an urgent problem; however,
it is not the topic of the fact sheet.
The ozone problem at the Earths surface is accumulation rather than depletion.
The normal state of affairs at ground level is for ozone to form and almost
immediately break down, at the same rate at which it is being produced, by
releasing one oxygen atom. Figure O-1 shows the chemical cycle involving oxygen
(O2) and two of the nitrogen oxides (NOx) (in this case, nitric oxide and nitrogen
dioxide), sunlight, and high temperatures that governs the formation and
breakdown of ground-level ozone. Problems arise when volatile organic compounds
(VOCs) (see Chemical precursors of ground-level ozone for a description of VOCs)
are added to the mix (Fig. O-6).
Because the buildup of ozone at ground level depends upon the concentration of
other pollutants, as well as temperature and sunlight, ozone levels usually peak in
the late afternoon of hot summer days and can persist into the evening and night.
Just how much ozone builds up varies considerably from year to year and from
region to region, but summers that are hotter than normal generally produce more
episodes of ozone pollution.
Chemical Precursors of Ground-Level Ozone
Ozone is a secondary pollutant in that it is not emitted directly to the atmosphere.
Nitrogen oxides and VOCs, both of which are emitted by natural processes and
human activities, are called ozone precursors because they must be present for
ozone to form (Fig. O-7).
Nitrogen oxides

This group of nitrogen-oxygen compounds includes the gases nitric oxide, nitrogen
dioxide, and nitrous oxide. Natural sources of nitrogen oxides are forest fires, lightning,

O-6

Ozone

FIG. O-7 In unpolluted air, ground-level ozone forms and breaks down in a steady cycle. Scenario b shows one way that
pollutants disrupt the natural equilibrium. (Source: Environment Canada.)

and bacterial action in the soil. About 95 percent of human-caused emissions of

nitrogen oxides come from the combustion of gasoline, diesel fuel, heavy fuel oil,
natural gas, coal, and other fuels, notably in motor vehicles, heavy equipment,
turbines, industrial boilers, and power plants (Fig. O-8).
Volatile organic compounds

The term volatile organic compounds (VOCs) is used to describe carbon-containing

gases and vapors that are present in the air, with the major exceptions of carbon
dioxide, carbon monoxide, methane, and chlorofluorocarbons. VOCs are given off by
trees and other vegetation, particularly in heavily forested areas. The combustion
of fossil fuels, especially in cars and trucks; certain industrial processes; and the
evaporation of some liquid fuels and solvents found in cleaning solvents, oil-based
paints, varnishes, stains, and thinners are important sources of human-caused
VOCs (Fig. O-9). Releases of VOCs lead to ground-level ozone pollution when these
emissions occur in the presence of nitrogen oxides (Fig. O-7).
Effects of Ground-Level Ozone
Effects on human health

Ozone is a very irritating and harmful gas. It adversely affected lung function in
young, normal subjects who exercised for 6 h in concentrations as low as the present
Canadian 1-h objective of 82 parts per billion (ppb). (A part per billion is a unit of
measure used to describe the concentration of atmospheric gases. In this case, the
unit represents one molecule of ozone in one billion molecules of all gases in the

Ozone

O-7

FIG. O-8 Estimates of nitrogen oxide emissions due to human activities in Canada during 19852005. (Source: Environment

Canada.)

FIG. O-9 Estimates of VOC emissions due to human activities in Canada during 19852005. (Source: Environment Canada.)

O-8

Ozone

air.) When lung function is affected, ozone has probably caused inflammation in
the lung.
Scientific studies show that after a few days of continuous exposure to ozone,
respiratory discomfort disappears. However, although little is known of the longterm effects of repeated ozone exposure on humans, recent research on animals
suggests that it may lead to irreversible changes in lung function.
When ozone levels exceed 82 ppb, there is evidence that more people are
admitted to hospitals with acute respiratory diseases. In 1987 it was reported that
high ozone levels coincided with increased admission of patients with acute
respiratory disease to 79 hospitals in southern Ontario. However, it is difficult to
separate the effects of ozone from those of sulfate in these epidemiological studies.
Furthermore, the health effects of individual pollutants may be intensified when
two or more pollutants occur together.
High concentrations of ozone may affect the health of people and vegetation and
corrode materials.
Heavy exercise for 2 hours at an exposure of 120 ppb may lead to coughing,
shortness of breath, and pain on deep inhalation in healthy adults. Exposures above
120 ppb have resulted in dryness of the throat, shortness of breath, chest tightness
and pain, wheezing, fatigue, headache, and nausea.
People working or exercising outdoors inhale larger quantities of air and may
suffer more during episodes of ozone pollution. Children are more susceptible
because they spend more time outside than adults. Studies showed that children
at summer camps in Canada and the United States where they were exposed to a
typical summer mix of pollutants, including ozone, experienced a measurable
decline in lung function.
Ozone causes similar decreases in lung function in people who have asthma as
in those who do not, but the loss is more likely to be serious in those whose lungs
are already unhealthy. In clinical studies, people with asthma do not respond to
ozone differently than any other population. However, there is recent evidence that
when asthmatics are exposed to ozone their sensitivity to allergens is heightened.
Lung function is known to decline with age. Studies of the exposure of human
populations to ozone have noted an increase in the rate at which lung function
declines. Scientists are researching whether long-term exposure is causing changes
in human cells and tissues.
The savings that could be achieved by cutting ground-level ozone pollution are
likely considerable.
Effects on vegetation

Ozone is now viewed as the most important pollutant affecting vegetation.

Canadian research on the impact that ozone is having on farming has focused
mainly on southern Ontario, where ozone levels are typically highest. Estimates of
the cost of reduced yields in southern Ontario range from $17 to $70 million,
depending on the number of ozone events. Ozone damage to crops also occurs in
other regions. Value of lost production in the Fraser Valley has been estimated as
$8.8 million annually.
Ozone damages leaf tissue. Leaves may become mottled with yellow, exhibit small
black or white spots, develop larger bronze-colored, paper-thin areas, or exhibit
other visible symptoms. Inside the leaf, ozone can inhibit metabolic activity, destroy
the walls of cells, damage chlorophyll, and reduce photosynthesis. The plant as a
whole may grow 1040 percent more slowly, age prematurely, lose its leaves during
the growing season, and produce pollen with a shorter life span.

Ozone

O-9

FIG. O-10 Grape leaf with ozone exposure damage. (Source: Environment Canada.)

The effects of ozone on ecosystems are difficult to measure, because species vary
in their susceptibility. In forest ecosystems, exposure to ozone may lead to increased
vulnerability to disease and other stresses, increased mortality of individuals, and
eventually to overall decline of affected species. Both the degree of, and reasons for,
the decline in forest health in eastern North America are still debatable, but ozone
is believed to be partly responsible for the reported decline of red spruce, sugar
maple, and white birch. (See Fig. O-10.)
Damage to materials

Ozone can lead to the development of cracks in products made of rubber or synthetic
rubber, such as tires, boots, gloves, and hoses. Continued exposure to high levels of
ozone can cause these products to disintegrate completely. Ozone accelerates the
fading of dyes; damages cotton, acetate, nylon, polyester, and other textiles; and
accelerates the deterioration of some paints and coatings.
It is difficult to pin down the costs of this type of ozone damage. The economic
impact in the United States has been estimated at $1 billion, but a similar estimate
has yet to be prepared for Canada.
Ambient Air Quality Objective for Ozone
An air quality objective is a statement of the concentration of a specified air
pollutant that should not be exceeded beyond a specified length of time, in order to
provide adequate protection against adverse effects on humans, animals, plants,
and materials. Pollution control agencies routinely monitor the levels of air
pollutants and compare the levels with air quality objectives. This allows them to
measure their progress in controlling air pollution.
The maximum acceptable level for ground-level ozone in Canada is set at 82 ppb
over a 1-h period (see Fig. O-11). An episode occurs when the average ozone
concentration exceeds 82 ppb for 1 h or more. Ozone episodes in Canada typically
last from one to a few days. It is considered that natural levels of ozone in
unpolluted conditions would range between 15 and 25 ppb.

O-10

Ozone

FIG. O-11

Maximum 1-h ozone concentrations for Canadian cities, based on an average of the three highest years during
198390. (Source: Environment Canada.)

The federal government has provisionally adopted the number of days per year
when ozone concentrations exceed the 1-h air quality objective as its indicator for
ground-level ozone (Environment Canada, Indicators Task Force 1991). The
objective of the National Environmental Indicators Project is to develop credible,
understandable indicators of environmental conditions. These numbers will help
decision-makers to make choices consistent with sustainable development and to
evaluate the countrys progress toward that goal.
Emission Control Options
Measures to control ground-level ozone concentrations focus on the reduction of
emissions of nitrogen oxides and VOCs.
Because ground-level ozone is a secondary pollutant, formed by the reaction of
primary pollutants, measures to control ground-level ozone concentrations focus
on the reduction of emissions of nitrogen oxides and VOCs. The amount of ozone
formed depends on the ratio of nitrogen oxides to VOCs in the atmospheric mixture.
Under certain conditions, ozone formation could be limited more effectively by
controlling nitrogen oxides more than VOCs, and under other conditions the reverse
could be true. The complex nature of the problem has made evaluation of control
strategies difficult. Computer models are needed to predict the degree of ozone
formation based on particular atmospheric conditions. As warm temperatures and

Ozone

O-11

sunlight are needed for ozone formation, it is especially important to reduce summer
daytime emissions.
International focus for the control of nitrogen oxides and VOCs

International protocols: In 1988, Canada and 24 other countries signed a protocol

to stabilize emissions of nitrogen oxides at 1987 levels by 1994. Canada, the United
States, and 19 European countries signed another protocol in November 1991 to
reduce the emission of VOCs and their transport across international boundaries.
The protocol commits Canada to a 30 percent reduction in annual VOC emissions
in the Lower Fraser Valley and WindsorQuebec Corridor by 1999 based on 1988
levels. Canada is also committed to a national freeze on VOC emissions at 1988
levels by 1999 (United Nations Economic Commission for Europe 1991).
The CanadaU.S. Air Quality Accord: In March 1991, Canada and the United
States signed an Air Quality Accord. This agreement addresses the acid rain
problem and provides for the study and control of those air pollutants that
commonly move across the CanadaU.S. border. Annexes will be developed to
specifically address urban smog.
International Joint Commission recommendations on air quality in the Detroit
WindsorPort HuronSarnia Region: In March 1992, the International Joint
Commission (IJC) highlighted the need for governments to phase out emissions of
air toxics in the region. Among 19 recommendations, the IJC promoted development
of a joint regional ozone control strategy that includes emission controls for
mobile and stationary sources, including coke ovens. A common ground-level ozone
standard has also been recommended for the region.
Canadas management plan for nitrogen oxides and VOCs

A national plan has been developed for the management of nitrogen oxides and
VOCs.
A national plan for the management of nitrogen oxides and VOCs has been
developed by federal and provincial governments through the Canadian Council
of Ministers of the Environment. Initiated in 1988 as a coordinated approach
to reducing levels of ground-level ozone throughout the country, the plan was
developed in consultation with industry, public interest groups, and environmental
groups. It aims for consistent attainment of the 1-h ground-level ozone air quality
objective of 82 ppb by the year 2005. Implementation is occurring in several phases:
Phase I (in place by 1995):
a. National Prevention Program: The program outlines 31 initiatives that will
reduce emissions of nitrogen oxides and VOCs, including the following:
 Energy-conservation and product-improvement measures:
 Energy efficiency standards in equipment and appliances
 Energy audits by industry
 Reductions in emissions when surface coatings are applied and when
adhesives, sealants, and general solvents are used
 Public education to promote informed consumer choice and an environmentally
responsible lifestyle including:
 Energy-conserving driving habits and alternative transportation modes,
such as cycling, walking, and ridesharing
 Energy conservation
 The use of energy-efficient products
 The construction of energy-efficient homes and businesses
 Improved solvent use and recycling

O-12

Ozone


Source control initiatives:

New emission standards for cars and light trucks
 Caps on emissions of nitrogen oxides from trains
 Emission guidelines for new sources, i.e., power plants, industrial boilers,
and compressor engines, as well as for storage tanks for volatile liquids,
chemical processes used by industry, commercial and industrial coating
applications, printing, degreasing, and dry cleaning.


b. Remedial programs: The plan identifies 27 sample regional initiatives for

reducing ozone, which could be implemented in the three ozone problem areas:
the Lower Fraser Valley, the WindsorQuebec Corridor, the Southern Atlantic
Region. Most initiatives involve the installation, retrofit, or enhancement of
emission-control technologies for existing sources.
c. Study initiatives: The plan outlines 24 research initiatives aimed at determining
the most effective control strategies for limiting the formation of ground-level
ozone. Ambient air monitoring, modeling, and studies of industrial processes and
emission sources will help to determine what controls on emissions of nitrogen
oxides and VOCs will be necessary in Phases II and III of the plan.
d. Federalprovincial agreements: Federalprovincial agreements will establish
the responsibilities of the respective governments for specific remedial actions
required to reduce ground-level ozone concentrations. The agreements will also
set out interim targets for emission reductions.
Phases II and III: Phase II of the management plan will establish emission caps
for problem areas for the years 2000 and 2005. To meet these caps, it is likely that
additional steps, over and above the initiatives laid out in Phase I, will be needed.
Phase III will make final adjustments to emission caps and control programs.
Implementation of Phase I of the NOx/VOC management plan should be a
significant step toward solving the countrys ground-level ozone problem by 2005.
Maximum ground-level ozone concentrations should be reduced by 1535 percent
as a result of predicted Canadian and U.S. emission reductions. In addition, joint
CanadaU.S. emission reductions will lead to a 4060 percent reduction in the time
during which the maximum acceptable ground-level ozone objective (82 ppb) is
exceeded in the regions of greatest concern.

Some regional remedial measures already underway



The Montreal Urban Community has passed regulations that require dry cleaning
and printing facilities, surface-coating applications, and metal degreasing
operations to control emissions. Substantial reductions have been achieved.

The B.C. Motor Vehicle Branch is implementing mandatory vehicle emission

testing starting in late 1992 under the Air Care Program. As a condition of annual
license renewal, all light-duty vehicles in the provinces Lower Mainland will be
inspected for exhaust emissions and emission-control systems. Those not meeting
the standards will undergo repairs.

Global efforts to address stratospheric ozone depletion have been underway since
1981. The Vienna Convention for the Protection of the Ozone Layer entered into
force on September 22, 1988. As of March 1, 1989, thirty-seven countries,
representing the vast majority of the industrialized nations of the world, had
ratified this Convention. The Convention provides the framework for cooperative
activities, including the exchange of data or information related to the ozone layer.
This Convention provides for the subsequent creation of protocols (free-standing

Ozone

O-13

treaties) for matters such as control of specific pollutants or families of pollutants.

The first such protocol created was the Montreal Protocol on Substances that
Deplete the Ozone Layer.
The Montreal Protocol was signed in Montreal, Canada on September 16, 1987.
It is clearly a watershed in cooperative and collaborative international undertakings.
It introduces many new features never before established in international law.
The Montreal Protocol had two requirements for entry into force; namely, 11
signatures of ratification by countries and these countries must represent at least
two-thirds of global consumption of the controlled substances. The Montreal
Protocol entered into force on January 1, 1989, and as of March 1989 had already
attained 33 ratifications, again representing most of the industrialized states of the
world.
On May 1988, Environment Canada published its first Control Options Report,
titled: Preserving the Ozone Layer: a first step. This report set out a series of
options to implement regulations to meet Canadas obligations under the Montreal
Protocol.
The Montreal Protocol calls for a 50 percent cutback in the 1986 levels of
consumption of five chlorofluorocarbons (CFC 11, 12, 113, 114, and 115) and a freeze
at 1986 consumption levels of three brominated fluorocarbons called Halons (Halon
1211, 1301, and 2402). At a series of United Nations Environment Programme
(UNEP) meetings held in The Hague, Netherlands, in October 1988, the worlds
leading scientists expressed the consensus viewpoint that the Antarctic hole will
remain unless the emissions of controlled CFCs are reduced by at least 85 percent
from 1986 levels. The target reductions contained in the Montreal Protocol are
currently undergoing international review. This review is expected to culminate in
amendments that will tighten the Montreal Protocol. Canada contributed to both
the organization and conduct the UNEP meeting in The Hague and fully supports
the notion of reducing consumption further.
On February 20, 1989, the Federal Government of Canada announced that it had
set as its objective the complete elimination of controlled CFCs within the next 10
years. It also called on the rest of the world to set as its common target a reduction
of no less than 85 percent by no later than 1999. The Minister of the Environment
further announced that the following actions would be taken to achieve the
Canadian objective.
1. Implement the protocol

As a first step, regulations will be enacted under the Canadian Environmental

Protection Act to implement the current control requirements set out in the protocol.
These are a freeze in consumption at 1986 levels (CFCs on July 1, 1989, and Halons
on January 1, 1992) and a two-step reduction in annual consumption of CFCs to 50
percent of 1986 levels by 1999.
2. Regulate a reduction in chlorofluorocarbon consumption of at least 85 percent

Draft regulations recently released call for at least an 85 percent reduction of the
controlled CFCs by no later than 1999. Consultation on what is achievable is
expected to increase the percentage reduction and tighten the time frame.
3. Prohibit specific CFC uses

As a third step, draft regulations have been released for discussion purposes that
would prohibit the use of ozone-depleting substances for nonessential uses or where
substitutes are available. For example, the import, manufacture, and sale of aerosol

O-14

Ozone

products containing controlled CFCs (with the exception of certain medical and
industrial applications for which alternatives are not yet available or for which fire
safety is a particular concern); food packaging foam including food and beverage
containers containing or manufactured with controlled CFCs; portable handheld
fire extinguishers for home use containing Halons; and small pressurized canisters
that contain CFCs, including refrigerants, air horns, and party streamers, will be
prohibited by January 1, 1990. As safe alternatives become available, a similar
prohibition will apply to the following aerosol products: release agents for molds
used in the production of plastic and elastomeric materials, cleaners and solvents
for commercial use on electrical or electronic equipment, and products used in
mining applications where fire hazard is critical.

4. Further control measures

As a fourth step, this comprehensive control options report has been prepared to
focus discussion on the earliest possible prohibition dates for remaining CFC uses.
Some examples of prohibition dates proposed in this report are as follows:
1. Rigid foams
a. Insulating foams
 Polyurethane (19921994)
 Polystyrene (19901991)
 Phenolic (19911992)
b. Packaging
 Food (1990)
 Other (19901991)
2. Flexible foams
a. Car seats, furniture cushions, etc. (19901992)
3. Refrigeration
a. New refrigeration and air-conditioning equipment (19941999)
b. Existing equipment maintenance (as replacements are available)
4. Solvents
a. Electronic (19911994)
b. Metal cleaning (19901991)
c. Dry cleaning (19911992)
5. Others
a. Hospital sterilants, optical coatings (19901994)
As these remaining uses are prohibited, the total allowable quantities of controlled
CFCs produced and consumed in Canada will be lowered.
This Control Options Report, Preserving the Ozone Layer: A Step Beyond the
Montreal Protocol, describes the most promising options to control ozone-depleting
substances for each process group and product group including rigid and flexible
foams, refrigeration and air conditioning, solvents, sterilants, aerosols, and fire
suppression systems in which controlled CFCs and Halons are used. The control
options comprise three main categories:


Emission controls

Chemical and process substitutes

Product substitutes

Ozone

O-15

Depletion of Ozone in the Stratosphere

As excess ozone at lower atmospheric levels is a problem, reduced ozone in the
stratosphere is also dangerous to life. Industry is therefore being pressured to take
steps to alleviate this problem. Some background information follows.
Figure O-12* describes effects of ozone on vegetation and health.
Benefits and costs

The benefits of the Montreal Protocol consist of two components. For benefits
associated with reduced damage to materials, reduced damage to agricultural
productivity, and reduced damage to fish stocks, estimates of the dollar amounts of
benefits are shown. For health impacts, including reduced incidence of skin cancers,
reduced fatal skin cancers, and reduced cataract incidence, estimates of averted
health effects are shown. In both cases, the framework for producing the estimates
is the same. Effects are estimated for the scenario in which no controls on the
consumption of ozone-depleting substances are implemented relative to the
alternative scenario represented by the introduction of the Montreal Protocol.
The overall benefits of the Montreal Protocol are shown in summary form in Table
O-1. This table shows quantified dollar benefits of $459 billion plus a reduction in
skin cancer cases of 3.4 million, 129 million fewer cataract cases, and more than
330,000 reduced fatalities.
Montreal Protocol costs are also substantial but small relative to benefits. The
present discounted value of protocol costs over the time period from 1987 to 2060
total $235 billion. Although substantial, these costs are less than the quantifiable
benefits from reduced damages to agriculture, fishing, and materials. The benefits
from averted health effects are extremely large in relation to the costs. If reduced
fatalities from skin cancers alone are considered, the number of cases averted from
1987 to 2060 is 333,500.
Costs of Replacing Ozone-Depleting Substances
Overview and methodology

The methodology for assessing the costs of implementing the Montreal Protocol
focuses on the economic costs of the controls that have been introduced. In the
economics literature, this is frequently referred to as assessing the real resource
costs of the policy. See Table O-2.
As an example, consider refrigeration and air-conditioning services. Assume in
this example that a constant quantity of these services will be producedthat is,
there are no price impacts on this quantity. Prior to the regulation, CFCs are used
as refrigerants throughout this sector. As a result of the introduction of the Montreal
Protocol, a number of changes are made in this sector to reduce and then
eliminate CFCs. The economic cost of the regulation is the difference in the cost
of producing these outputs prior to the control and after it is introduced.
In this cost methodology, the real resource costs that are relevant consist of the
additional quantity of resources needed to produce this constant level of output.
* Source: Environment Canada, Preserving the Ozone Layer: A Step Beyond, April 1989. This report
was written with specific reference to Canada, but provides applications information for readers
anywhere.

Source: Adapted from extracts from Environment Canada, Montreal Protocol 1987 to 1997: Global
Benefits and Costs of the Montreal Protocol on Substances That Deplete the Ozone Layer.

Source: Environment Canada SOE Sheet 92-1, written with specific reference to the U.S.Canada Air
Quality Agreement and Ozone Levels in Canada.

O-16

Ozone

FIG. O-12 Effects of ozone on vegetation and health. (Source: Environment Canada.)

Other private sector costs may be incurred that are not reflected in the economic
costs described above. If the price of CFCs increases, for example, due to regulatory
restrictions on quantity, some private sector users will register this as an increased
cost. This is not a economic cost, however, because no additional input resources
are required to produce the output in question. Viewed somewhat differently, the
price increase is not an economic cost because the additional costs of the purchasers
are exactly offset by the additional revenues of the producers.
In any regulatory scenario, we would expect to observe both real resource cost
impacts and price impacts as described above. Economists refer to the price effects
as transfers in that they involve transfers from one group in society to another. In

Ozone

O-17

TABLE O-1 Benefits and Costs of the Montreal Protocol, 19872060

BENEFITS
Health benefits
Reduced cases of nonmelanoma skin cancer
Reduced cases of melanoma skin cancer
Reduced cases of cataracts*
Reduced skin cancer fatalities*

19,100,000
1,500,000
129,100,000
333,500

Dollar benefits
Reduced fisheries damage
Reduced agricultural damage
Reduced damage to materials

$238 billion
$191 billion
$30 billion

Total dollar benefits

$459 billion

COSTS
Overall costs

$235 billion

NET BENEFITS
Benefits minus costs

$224 billion plus health benefits

* Mean of upper- and lower-bound estimates. Base case discount rate is 5 percent.
Note that overall benefits are the sum of the health effects and the benefits that are expressed in dollar terms.
SOURCE: ARC estimates.

TABLE O-2

Global Consumption of Ozone-Depleting Substances (1986)

ODS
CFCs
HCFCs
Halons

1,211
1,301
2,402
Methyl chloroform
Carbon tetrachloride
(dispersive, nonfeedstock uses)
Methyl bromide
Total units (kt)

Mean ODP

Developed
Countries

Article 5(1)
Countries

Total
Kilotonnes

Total ODP
Units

0.95
0.05
3.00
10.00
6.00
0.11
1.10

1,010.0
169.9
11.0
9.9
10.2
581.6
92.2

111.0
13.4
2.7
1.2
n.a.
27.4
4.4

1,121.0
183.3
13.7
11.1
10.2
609.0
96.6

1,065.0
9.2
41.1
111.0
61.2
67.0
106.3

0.06

42.6

10.8

53.4

32.0

1,927.4

170.9

2,098.3

1,492.8

SOURCE: Estimates by ARC, based on data from U.S. Environmental Protection Agency and UNEP. Note that small quantities of halon
2,402 were used in some Article 5(1) countries.

this case, the transfer is from users of CFCs to producers. Economic costs exclude
transfers and in this way focus on the additional real resource costs associated with
the regulation.
In this way of assessing costs, there are no incremental costs associated with
firms that continue to use CFCs, with no change in their production process. They
may pay higher CFC prices but this is not a real resource cost to society. The clearest
example of costs is the case in which the firm switches to a new HCFC or HFC
refrigerant. The refrigerant itself may be more expensive and it may also involve
system or process changes. If there are capital costs, these must be amortized over
the life of the equipment and in this way, these costs are divided among a range of
current and future end users. This means that firms that convert away from CFCs
will have incremental costs that must be measured. Other firms may try to reduce

O-18

Ozone

the quantity of CFCs used per unit of output. Others may try to recycle or otherwise
capture CFCs that are used. All of these adjustments involve economic costs.

Costs of CFC replacement

Aerosols. In this section we estimate the cost of controls applied on the use of CFCs
in aerosols as a result of the Montreal Protocol for both developed countries and
the Article 5(1) countries.
Prior to the protocol, significant reductions in CFC use in aerosols had taken place
in Canada, the U.S., and a number of European countries following a ban on certain
uses of CFCs in aerosols that became effective in 1979. Following the application
of controls under the Montreal Protocol, consumption has declined steadily in most
developed countries and is now accounted for only by essential uses, primarily in
the medical field.
The consumption of ozone-depleting substances in aerosols for the period 1986 to
1995 is based on estimates provided in the 1994 Report of the Aerosols, Sterilants,
Miscellaneous Uses and Carbon Tetrachloride Technical Options Committee. The
forecast use without controls is based on the observed and expected growth of
aerosol products in general. This market is essentially a mature market that would
grow more slowly than GDP. So an overall growth rate of 1 percent per year was
applied for the No Control scenario for the developed countries. In the Article 5(1)
countries, consumption without controls is assumed to grow at 10 percent per year
until 2005 and then at 5 percent. In the Montreal Protocol controls scenario, some
minimal amount is still used to support certain vital applications, mostly in the
medical field, for which substitutes are only slowly appearing on the market. That
amount is assumed to decline to zero by the year 2010, when CFC use for these
applications is mandated to cease.
From a material cost standpoint, the use of hydrocarbons as a substitute for CFCs
in developed countries has cut the material cost of aerosol propellant material
significantly, in some cases by as much as 80 percent. Overall, we have used an
estimate of two thirds saving across all affected aerosol products. That saving is
reflected as a negative cost differential for each year in our analysis, which extends
to 2060. We assume that pumps and other ODS substitutes generate comparable
cost savings.
The main sources of additional costs as a result of replacing CFCs by
hydrocarbons in aerosols were:


Upgrading of sprinkler systems and ventilation in production and storage

facilities, and extra storage space for segregated storage of flammable materials,
in aerosol manufacturing plants

R&D for new formulations

Changes in labels

New permits

These were all one-time costs. Except for changes in material costs, it does not
appear that operating costs were affected. Industry sources indicated that, once the
appropriate fire protection steps were taken, insurance premiums did not rise
appreciably. Aerosol cans themselves did not have to be changed.
Based on this information, we estimate that the total one-time cost in developed
countries for R&D and the other items listed above will have been more than offset
by operating cost savings from lower propellant costs. We have estimated an actual
saving of $0.88 per kilogram of CFC displaced. That is, the present value of the

Ozone

O-19

reduced cost of propellant exceeds the present value of the costs of converting to
the use of hydrocarbons and other alternatives for developed countries.
The relative ease and low cost of the transition away from CFCs to hydrocarbons,
particularly in the developed countries is closely related to the ban on CFCs as
aerosol propellants in many countries in the late 1970s and early 1980s. This ban
reduced the quantities of CFCs that had to be replaced as a result of the Montreal
Protocol. More importantly, it also provided a firm base of technical knowledge on
the use of hydrocarbon alternatives to CFC propellants.
The area within the aerosol sector in which the conversion process has been most
difficult is in the phase-out of CFCs in metered dose inhalers (MDIs). Although the
global quantities of CFC use are relatively small, the application is a critical one
and has consumed substantial resources in the development of alternatives. In this
study, we assume that development and testing costs for MDIs will total $2.5 billion
in 1997 U.S. dollars. This offsets some of the cost reductions for other aerosol
application areas in developed countries.
For Article 5(1) countries, the picture is somewhat different. In many of these
countries, access to hydrocarbons may be a problem and the small scale of
enterprises will make the up-front conversion costs more of a burden. The available
evidence indicates substantial diversity in control costs in Article 5(1) countries. We
estimate that 35 percent of consumption reduction in these countries will generate
the same cost savings as described for developed countries. Another 35 percent will
have no incremental costs while 30 percent will involve the average cost of $2.68
per kilogram described in the TEAP Replenishment Report (1996). Overall, this
produces a cost per kilogram of $0.50.
Overall, our assessment is that for aerosols, the Montreal Protocol was
responsible for reduced consumption of 29.9 million tonnes of CFCs in the developed
countries and a reduction of 12.5 million tonnes in the Article 5(1) countries for
the time period from 1987 to 2060. The controls and no-controls scenarios for CFCs
in aerosols are shown graphically in Fig. O-13. Due to lower propellant costs
in developed countries, the costs of meeting the protocol requirements translate
into an overall cost saving of $6.5 billion. This figure nets out the R&D costs for
MDIs. In the Article 5(1) countries, the adjustment cost is estimated to be $1.2
billion.
In 1986, consumption of CFCs by the foam plastics
manufacturing industry was extremely varied; however, the dominant volume uses
were in polyurethane and polystyrene foam applications.
Polyurethane foam is produced as the result of a chemical reaction of a polyol,
isocyanate, and blowing agents. In some foam plastics, the resulting cells are closed,
trapping the blowing agent inside, while in others the cells are produced open and
the blowing agent escapes. Used in a large variety of products, polyurethane foams
can be classified into three major categories: rigid (closed cell), flexible (open cell),
and integral skin. Product applications include insulating materials for buildings
and appliances, cushioning products for furnishings and automobiles, packaging for
protection of high-value products, and automobile bumpers and instrument panels.
Extruded polystyrene foam is produced by melting polystyrene resin in an
extruder and injecting a blowing agent into the resin under high pressure.
Dispersed into the molten polystyrene, the blowing agent volatizes as a mixture
leaves the extruder, causing the plastic to foam. There are two distinct forms of
extruded polystyrene: foam sheet, which is typically used in disposable food service
packaging and packing products, and foam boardstock, which is typically used as
an insulation product.
The physical and chemical properties of the blowing agent affect the processability
Flexible and rigid foams.

O-20

Ozone

FIG. O-13 Consumption of CFCs in aerosols under Montreal Protocol and no-controls scenarios.

(Source: Environment Canada.)

of the foam in manufacture and the characteristics of the foam product such as
density and durability. For thermal insulating applications the blowing agent
contributes to the overall insulating capacity of the product.
For flexible and rigid foams, global consumption of CFCs as blowing agents prior
to the Montreal Protocol is estimated as follows (UNEP Foam TOC 1994):


Rigid polyurethane: 149,000

Flexible polyurethane: 60,400

Phenolic: 1,400

Ozone


Extruded polystyrene: 37,600

Polyolefin: 19,000

Total: 267,400 (tonnes in 1986)

O-21

CFC-11 was the auxiliary blowing agent used in the production of soft and lowdensity polyurethane slabstock foam, sometimes augmented by methylene chloride.
Prior to the Montreal Protocol and as late as 1990, this auxiliary blowing agent was
used for approximately 25 percent of the flexible foam slabstock produced globally.
The reduction of the use of CFC-11 in flexible foam was achieved through conversion
to complete water-blowing formulations for molded products, replacement by
methylene chloride in slabstock and a number of other measures including the use
of new polyols and related systems and by the use of liquid carbon dioxide in
slabstock foams.
For the other foam categories, the largest quantities are accounted for by rigid
polyurethane foam, which used CFC-11 as a blowing agent, and extruded
polystyrene, which used CFC-12 as a blowing agent. In developed countries, the
transition out of CFCs was generally completed by 1996. Zero ODP alternatives are
the substitutes of choice for certain rigid thermal insulation foams. However, in
several markets and for certain applications HCFCs are necessary for rigid thermal
insulating foams until zero ODP solutions are proven including high energy
efficiency or properties required for safety.
The interim replacements for CFC-11 and CFC-12 as blowing agents have been
primarily HCFC-141b and HCFC-142b, respectively. Including development and
testing costs plus continuing operating cost differentials, costs are estimated to be
$1.48 per kilogram for replacing CFC-12 in polystyrene and $2.01 per kilogram for
replacing CFC-11 in polyurethane. In other foamed plastic applications, costs are
estimated to be $2.00 per kilogram. For flexible foams, cost increases in some
alternatives have been offset by decreases in others. As a result, no incremental
costs are estimated for this sector.
For the entire foam sector, this report computes a weighted average cost per
kilogram reflecting the costs per kilogram described above and the quantities used
in each application. Overall, this provides an estimate of $1.48 per kilogram
displaced for quantities used in developed countries. For Article 5(1) countries, we
have used the cost per kilogram estimate of $8.31 from the TEAP Replenishment
Report (1996) for 50 percent of foam production and the developed country estimate
of $1.48 per kilogram for the remaining 50 percent. Overall, this produces an
estimate of $4.90 per kilogram.
Global quantities per year are estimated on the basis of data shown in the
1994/1995 TEAP Foam Technical Options Report. The division of these quantities
into developed country consumption and Article 5(1) consumption is on the basis of
estimates by ARC (Applied Research Consultants) using baseline consumption data
from the Multilateral Fund.
Global costs of replacing CFCs in the foam sector are estimated to be $17.9 billion
for the conversion away from CFCs. Costs for converting away from HCFCs are
estimated elsewhere in this report. The global cost estimate breaks down into costs
of $14.8 billion in developed countries and $3.1 billion in Article 5(1) countries. All
costs are present discounted values calculated from 1989 to 2060 and expressed in
1997 dollars. The controls and no controls quantity scenarios for the use of CFCs
in foams are shown in Fig. O-14.
Refrigeration and air conditioning. This section provides estimates of the costs of

implementing the Montreal Protocol in the Refrigeration and Air Conditioning

O-22

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FIG. O-14 Consumption of CFCs in foams under Montreal Protocol and no-controls scenarios.

(Source: Environment Canada.)

sector. The Refrigeration and Air Conditioning sector involves a wide variety of
applications, the vast majority of which use refrigerants that have been targeted
by the Montreal Protocol either in the short term (CFCs) or in the medium term
(HCFCs). We estimate the costs of replacing HCFC refrigerants in a separate
section of the report.
The 1994 Report of the Refrigeration Air Conditioning and Heat Pumps Technical
Options Committee of UNEP provides a detailed review of the various subsectors
that make up the Refrigeration and Air Conditioning sector, the quantities of
various refrigerants used in these subsectors, as well as the options available for
replacing CFCs and HCFCs, the two major refrigerant groups targeted by the
Montreal Protocol.
For a number of refrigeration/air-conditioning applications the implementation

Ozone

O-23

of the protocol will be a two-stage process. The first stage consists of replacing a
CFC by an HCFC and the second stage involves replacing an HCFC by a zero-ODP
refrigerant, usually an HFC. This section considers only the costs of the first stage.
HCFC costs are estimated separately.
The dollar cost per kilogram of displaced ozone-depleting refrigerant is a constant
cost which, when multiplied by the kilograms saved in each year, yields a stream
of payments whose net present value is equal to the net present value of the total
incremental costs of implementing the protocol for this sector. This cost is obtained
by dividing the net present value of all incremental costs by the net present value
of displaced ozone-depleting refrigerant.
For the developed countries, the cost estimation framework for converting away
from CFCs in Refrigeration and Air Conditioning provides an estimate of $4.62 per
kilogram for the developed countries.
For the Article 5(1) countries, the TEAP Replenishment Report (1996) provides
an estimate of the upper bound incremental cost per kilogram of replacing CFCs
in air-conditioning and refrigeration applications. Many lower cost reduction
approaches such as improved service procedures are also available in Article 5(1)
countries. Our overall cost estimate is based on a weighted average cost per
kilogram. In this weighted average, 60 percent of refrigerant consumption is
replaced at the same cost as in developed countries, 10 percent is at a cost premium
of 1.5 relative to developed countries and the remaining 40 percent is at the upper
bound incremental cost of $15.61 per kilogram from TEAP (1996). Using these data,
the cost estimate in this report is that replacing CFCs in this sector in Article 5(1)
countries costs $8.15 per kilogram.
Total costs for this sector are based on the cost per kilogram estimates described
above and on estimates of the gap between consumption of CFC refrigerants with
and without the Montreal Protocol controls. Figure O-15 shows the consumption
patterns in the controls and no-controls scenarios. Based on these data, estimated
costs for replacing CFC refrigerants are $95.4 billion for the global total. This is
broken down into costs of $47.7 billion in the developed countries and $47.7 billion
in the Article 5(1) countries. All costs are measured as a present value over the time
period 1989 to 2060 and are expressed in constant 1997 dollars using a discount
rate of 5 percent.
In the Article 5(1) countries, we use the cost per kilogram estimate for solvents
that is provided in the TEAP Replenishment Report (1996) as a measure of upper
bound incremental costs. The data shown in that report have been weighted by
country type to produce an incremental upper bound cost estimate of $15.84 per
kilogram in the Article 5(1) countries. Improved conservation practices suggest and
the technology transfer practices of multinational firms suggest that half of the
adjustments should occur at the same cost as in developed countries. A further 40
percent of adjustments are costed at 1.5 times the estimated cost in developed
countries and 10 percent of adjustments are costed at the upper bound incremental
cost. These calculations generate an overall cost per kilogram in Article 5(1)
countries of $2.82.
Total costs are based on the costs per kilogram and on estimates of the difference
between consumption with and without controls for CFC-113. The two consumption
scenarios are shown graphically in Fig. O-16. Using these data, this report
estimates global costs for this sector of $18.7 billion. This is the present discounted
value of costs at a discount rate of 5 percent measured over the time period 1989
to 2060 and expressed in 1997 dollars. These costs include $16.5 billion for the
developed countries and $2.2 billion for the Article 5(1) countries.
Prior to the development of the Montreal Protocol controls, CFC-12 was
used extensively as a diluent with ethylene oxide (EO) to produce the sterilant gas
Sterilants.

O-24

Ozone

FIG. O-15 Consumption of CFCs in refrigerants under Montreal Protocol and no-controls

scenarios. (Source: Environment Canada.)

used by hospitals and commercial sterilizers. We estimate that 1989 global

consumption of CFC-12 in this application was approximately 23,000 tonnes, with
only very small quantities used in Article 5(1) countries.
In this application, CFC-12 was used to reduce the flammability of the EO and
accounted for 88 percent of the mixture with EO accounting for 12 percent. The
resulting 12/88 mixture was released to the environment at the end of the
sterilization cycle.
Many options to reduce and then eliminate the consumption of CFC-12 were
pursued in this sector with different costs associated with each. Conservation, for
example, led to significant consumption reductions. Sterilizers that previously had

Ozone

O-25

FIG. O-16

Consumption of CFCs in solvents under Montreal Protocol and no-controls scenarios.

(Source: Environment Canada.)

been run partly full were run only when full. The major advantage of 12/88 units
related to sterilization of medical devices made of polyvinylchloride or polyethylene
compounds that melt or deform at the high temperatures of steam sterilization.
Restricting the use of 12/88 units to only these items accounted for a further
reduction in the use of CFC-12. Large commercial sterilizers were able to convert
to a product that was an EO-nitrogen blend to eliminate the use of CFC-12 entirely
and some hospitals were able to use small units with only EO. In addition, a dropin substitute for 12/88 was developed in which the CFC-12 was replaced with
HCFC-124.
The preceding paragraph suggests that many options with different control costs

O-26

Ozone

contributed to the phase-out of the use of CFC-12 in sterilant gas. In our assessment
of the costs of replacing CFC-12, we have developed a weighted average cost per
kilogram reflecting the different costs of each option. The conservation and steam
sterilization options involve cost reductions in that expensive CFCs and their
replacements did not have to be purchased in the same quantities. The EO
conversion of contract sterilizers and the switch to HCFC-124 involved substantial
costs. In 1986, for example, the cost of CFC-12 in 12/88 units was approximately
$1.50 per kilogram whereas our estimate of the cost of HCFC-124 is approximately
$12.00 per kilogram. However, we estimate that HCFC-124 replaced CFC-12 in only
15 percent of sterilant applications.
Overall, we estimate an average cost per kilogram of $1.43 for replacing the use
of CFC-12 in sterilization. We estimate that in the absence of the Montreal Protocol,
1989 global consumption of approximately 23,000 tonnes of CFC-12 would have
grown at 2 percent per year until 2060. See Fig. O-16. Calculated from the
beginning of the impacts of the Montreal Protocol until 2060, we estimate control
costs of $1.3 billion in discounted 1997 dollars. Since almost all of the 12/88 systems
were found in developed countries, we estimate that $1.2 billion of these costs
should be allocated to developed countries with $0.1 billion to Article 5(1) countries.
Reference and Additional Reading
1. Soares, C. M., Environmental Technology and Economics: Sustainable Development in Industry,
Butterworth-Heinemann, 1999.