Armco Inc.: The Bubble Policy

13 Pages Posted: 21 Oct 2008

See all articles by Samuel E. Bodily

Samuel E. Bodily

University of Virginia - Darden School of Business

Sherwood C. Frey

University of Virginia - Darden School of Business

H. Landis Gabel

INSEAD

W. Sessoms

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Abstract

This case considers the EPA's bubble policy, which allows pollution to be managed on a plantwide basis rather than stack by stack. A pollution constraint is added to a linear-programming model that may be used to plan production and the control of pollution.

Excerpt

UVA-QA-0227

Rev. Mar. 25, 2014

ARMCO INC.: THE BUBBLE POLICY

Middletown, Ohio, October l0, l979. Bruce Steiner, senior project engineer at Armco Steel, got back from lunch and found a pile of paper left for him by John Barker, director of Environmental Engineering. Steiner knew that Barker had spent a good deal of time in the past year promoting the new “bubble” method of determining air pollution emissions compliance for industrial plants. The bubble method restricted the total pollution output of a plant (as if it were under a bubble) rather than the pollution from each individual point source (smokestacks, vents, etc.). According to Barker, this new method promised both capital spending reductions and energy savings to industry while giving the same pollution emissions performance because industry would be left to meet a goal in the most cost-effective way.

As Steiner sat down at his desk, Barker stopped by and brought him up to date:

I've been trying to come up with some hard data on the comparative costs of the bubble method and to get some way of showing how industry could use the method—both to get other industries on the bandwagon and to convince the EPA that the bubble policy is good for everyone. So I took advantage of an opportunity to get an MBA student at the University of Virginia to work up a simplified linear program (LP) modeling steelmaking here at Middletown. Since we know how much air pollution each process puts out, we ought to be able to add the bubble to the model. For a first cut, airborne particulates can be put in, but the model ought to be flexible enough to add other pollutants later. The LP model and the basic data you need are right here. I'm hoping we'll be able to put some price on the value of adding pollution equipment as opposed to changing our production in some way.

. . .

Keywords: business and society, corporate strategy, environmental issues, pollution, production planning, sustainability

Suggested Citation

Bodily, Samuel E. and Frey, Sherwood C. and Gabel, H. Landis and Sessoms, W., Armco Inc.: The Bubble Policy. Darden Case No. UVA-QA-0227. Available at SSRN: https://ssrn.com/abstract=911831

Samuel E. Bodily (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4813 (Phone)
434-293-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/bodily.htm

Sherwood C. Frey

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/frey.htm

H. Landis Gabel

INSEAD ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
France
(33) (0)1 60 72 42 76 (Phone)
(33) (0)1 60 74 55 00/01 (Fax)

W. Sessoms

affiliation not provided to SSRN

No Address Available

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