"Christian Richter" <crichter@thepolicygroup.com> 
10/09/2007 12:00 PM	To
Conrad Chin/RTP/USEPA/US@EPA
cc
<jhannapel@thepolicygroup.com>, <jradia@mcwane.com>, Steve 
Fruh/RTP/USEPA/US@EPA
bcc

Subject
Brief summary items re Mercury Switch foundry concerns
	
	
	History:	
This message has been replied to and forwarded.


Conrad - good talking with you this am.  Since you're obviously faced
with a time constraint this AM, we have put together some items that
should at least be a start for you.  We will also be in contact with Ms.
Minnick this week to confirm our concerns and answer any questions.
We're certain we can work out a reasonable solution - we appreciate that
the Agency knows that we are soliciting feedback from professionals in
the industry re scrap purchasing matters.  While we have not been able
to fully quantify the potential impacts, we have sufficient qualitative
input from our industry discussions (through the work of Jeet Radia, Ray
Ostrowski and others with whom you've spoken) to validate these concerns
at this time.

Let us know if we can be of further assistance.

* The mercury switch removal requirement will be very burdensome,
particularly in light of the tight scrap market and since foundries have
little or no leverage on scrap suppliers. 

* Our current understanding from discussions with scrap purchasing
professionals in the foundry industry is that the scrap suppliers that
provide scrap to foundries do not widely participate in EPA-approved
programs. A foundry would typically purchase scrap from potentially
numerous scrap suppliers.  Finding scrap suppliers who participate in
such a program appears to be difficult at this time and this will
restrict the ability to purchase scrap at a competitive price. 

Examples of potentially significant financial impacts to foundries
(preliminary estimates) are now being assembled by specific companies. 

* Because the MS requirements will be implemented by the steelmakers,
which have much greater scrap consuming capacity than the iron and steel
industry, the scrap market will respond to new MS demands from the steel
industry, but there will be a transition period.

* Allowing 2-3 additonal years for foundries to comply with this
provision would help alleviate the problem of foundries' lack of market
leverage at the present time.

* MS restrictions should not be imposed on auto components other than
shredded auto (these would include brake rotors, cylinder heads, etc.)
These components comprise different scrap classes, do not contain
mercury and should not be resticted.

Best regards,

Christian

The Policy Group
(202) 257-0250 Direct (Mobile)
(202) 457-0630 Washington Office
(703) 992-0083 Virginia Office
crichter@thepolicygroup.com


