PPSI LCA/CBA Update December 10, 2009 Portland, OR

Background “Fate of 1000 gallons”/15 different environmental impact measures Six “Pure” Methods for Managing Leftover Paint 1.Consumer-based Re-use 2.Consumer-based “Dry and Dispose” 3.Collection-based Re-use (Swap Shops) 4.Collection-based CONSOLDATION 5.Collection-based REPROCESSING 6.Collection-based Landfill/Incineration Six “Modified Methods” that were to reflect (to the extent possible) likely conditions “in the field” when pursuing one of the above

Background Original LCA proposal and contractual efforts were “in dispute” between PPSI industry and government participants Numerous issues including –Existing/Expanded Infrastructure –“Percent Suitable” –Virgin Paint Offset –Export Markets –“Hard-wired” Elements vs. “True Model”

Resolution Discussion Contractor “On-hold” Pending Issues Resolution Numerous PPSI Facilitated Discussions Numerous “Caucus” Meetings “One Full Day in Portland, OR” (SS/DA) Revised “Scope of Work” –Development of LCA “Model” (Flexible Inputs and Expanded Sensitivity Analyses) –New Price (Individual Company Contributions) Re-launched Project, April-May 2008 –Contractor integrated many consensus positions on key inputs –Remaining issues left to “professional judgment of contractor” –Waiting ever since

December 2, 2009 ERG has provided revised draft (still a bit incomplete), some data tables, and some charts are still pending Still awaiting CBA recommendation as well DRAFT sent to industry sponsors on December 7, 2009 to compare to “scope of work”, conditions in “letter of authorization”, and verify contractor obligations have been met. –Wider review and comments by PPSI dialog will occur late this year, early next year LCA Comments CBA Planning (If it moves forward, and on what basis)

Summary of LCA Draft Report General points –Not much difference between “existing” and “expanded” infrastructure. To be sure there is some “higher impacts” with expanded infrastructure, but marginally so –Application of “Virgin Paint Offset” changes which Pure or Modified Method has greatest impact on LCA measures

LCA Assessments 1.Global warming potential (GWP); 2.Acidification potential (Acid); 3.Human health cancer potential (HH-C); 4.Human health noncancer potential (HH-NC); 5.Respiratory effects potential (Resp); 6.Eutrophication potential (Eutro); 7.Ozone depletion potential (Oz Depl); 8.Ecotoxicity potential (Ecotox); 9.Smog formation potential (Smog); 10.Total water use (Water); 11.Fossil fuel depletion (FF Depl); 12.Total energy (Energy); 13.Total fuel energy (Fuel En); 14.Mineral extraction (MinExt); 15.Total unspecified VOCs (VOC).

“Hard-wired” Assumptions in Modified Methods

Summary of Results For PURE METHODS (Limited Infrastructure) –As “Virgin Paint Offset” increases from 0% (industry position) to 100% (view expressed by others), using “Rank Sum of Indicators”: Consumer-based “Dry and Dispose” moves from “Best Environmental Profile” (1) to 5 th “Best Environmental Profile” (5) Collection-based CONSOLIDATION moves from 5 to 3 Collection-based RE-USE moves from 4-1

Summary of Results For MODIFIED METHODS (Limited Infrastructure) –As “Virgin Paint Offset” increases from 0% (industry position) to 100% (view expressed by others), using “Rank Sum of Indicators”: Consumer-based Re-use moves from 1 to 2 Consumer-based “Dry and Dispose” movers from 2 to 4 Collection-based CONSOLIDATION movers from 5 to 1

Sample Graphs in Report Consumer-based “Dry and Dispose” PURE METHOD NO Virgin Paint Offset Collection-based REPROCESSING PURE METHOD NO Virgin Paint Offset

Sample Graphs in Report Consumer-based “Dry and Dispose” MODIFIED METHOD 100% Virgin Paint Offset Collection-based REPROCESSING MODIFIED METHOD 100% Virgin Paint Offset

GLOBAL WARMING Comparative Chart of all modified methods, existing (left) and expanded (right) infrastructure – Shows “two things”!!! 1.Effect of “Virgin Paint Offset” PURPLE (0) to GREEN (100) 2.Shows marginal changes from greater use of export market for recovered and expanded infrastructure

Next Steps DRAFT sent to industry sponsors on December 7, 2009 to compare to “scope of work”, conditions in “letter of authorization”, and verify contractor obligations have been met (very short time frame, a week) Wider review and comments by PPSI dialog will occur late this year, early next year –LCA Comments –CBA Planning (which methods, and on what basis – OR Project Data???)