PARADIGM SHIFTS IN REFRIGERANT MANAGEMENT

KEY QUESTIONS TO ASK SYSTEM OWNERS 1.Do you have an existing environmental responsibility program? 2.Are your used refrigerants included in your environmental responsibility program? 3.Do you know where your mechanical contractor purchases the refrigerants to put into your system AND do you know what happens to those refrigerants when they are taken out of your systems? 4.Did you know that it is possible to track your refrigerants’ carbon footprint? 5.Did you know that your refrigerant needs can be managed in a way that will lower your costs and make you more environmentally responsible?

TWO SIGNIFICANT REGULATORY PARADIGM SHIFTS Regulatory Paradigm Shift Production Paradigm Shift

THE REGULATORY PARADIGM SHIFT November 15, 1995: The Clean Air Act (Section 608)

15 YEARS LATER

WHO’S GOING TO PAY?

ENTER CALIFORNIA

AGGRESSIVE COMPLIANCE & REPORTING System registration Leak rate monitoring Annual reporting Management accountability Refrigerant tracking Lower leak maximum rates Recycled refrigerants Only EPA-certified technicians

FEDERAL PROGRAM 2012?

NATIONWIDE INITIATIVES

WESTERN CLIMATE INITIATIVE

THE PRODUCTION PARADIGM SHIFT

HCFC PRODUCTION & IMPORTATION TO BE CUT BY 90% Montreal Protocol

MANDATED PRODUCTION & CONSUMPTION REDUCTION Implementation Year% Production & Consumption Reduction Year implemented % % % % %2030

UNINTENDED CONSEQUENCES R-401a R-402a R-404a R-409a

WHAT DOES THIS MEAN? Scrap: Incur new capital expense & purchase units that use R-410 Sell-off existing units Currently…robust aftermarket for used R-22 units

WHAT DOES THIS MEAN? Scrap: Incur new capital expense & purchase units that use R-410 Sell-off existing units Currently…robust aftermarket for used R-22 units Keep: Availability of R-22 for service and maintenance will be dramatically curtailed Significant price increases Stockpile R-22 for future needs

SYSTEM OWNER DECISION MAKING PROCESS… Average PTAC (Packaged Terminal Air Conditioner) uses 1.25 lbs. of refrigerant (between 7,000 & 18,000 BTUs) Average leak rate = 20% Annual need to maintain refrigerant levels = 1.5 lbs./unit Emergency back-up: 10% Total refrigerant needs = 1.65 lbs./unit For every 1,000 units = 1,650 lbs./year Average installed price of R-22 = $50/lb. - $75/lb.

COST TO PLAY - $50/lb. = $82,500/year/1,000 $75/lb. = $123,750/year/1,000 units

@ 25% PROJECTED ANNUAL PRICE INCREASE: Base: $50/lb.Base: $75/lb (per 1,000 units)$82,500$123, “$103,125$154, “$128,906$193, “$161,325$241,720

ANY OPTIONS? Budget now for shortages & increased cost of maintenance Start a reclaim program now and bank existing refrigerants Create a new bank and begin purchasing R-22 for future needs Lower cost by buying direct Guaranteed availability

SO… Quantifiable data Manage cost Lower risk on Carbon accountability No cost increased and enhanced environmental stewardship Managed cost and available refrigerant Procurement Clean & Return