MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, MAY 25, 2000 9:30 A.M. Vicki L. Ogelvie, C.S.R. License No. 7871 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT Alan C. Lloyd, Ph.D., Chairman Dee Dee D'Adamo Dr. William A. Burke Joseph C. Calhoun Mark DeSaulnier Dr. William Friedman C. Hugh Friedman Matthew McKinnon Barbara Patrick Barbara Riordan Staff: Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Lynn Terry, Deputy Executive Officer Kathleen Walsh, General Counsel Kathleen Tschogl, Ombudsman PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X --o0o-- Page Proceedings 1 Call to Order 1 Pledge of Allegiance 1 Roll Call 1 Opening remarks by Chairman Lloyd 1 AGENDA ITEMS: 00-5-1 Public Meeting to Consider Adoption of Proposed Amendments to the California Consumer Products Regulation Relating to Aerosol Adhesives Introductory remarks by Chairman Lloyd 5 Staff Presentation: Tom Scheible 6 Erik White 7 Public Comment: Jim Beardsley 25 00-5-2 Public Meeting to Consider Modifications to the On-Road Mobile Source Emissions Inventory EMFAC 2000 Introductory remarks by Chairman Lloyd 31 Staff Presentation: Tom Cackette 31 Dilip Patel 33 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv I N D E X (Continued) --o0o-- Page Public Comment: Tom Darlington 84 Steven Douglas 97 Jim Lombardo, Sr. 100 Michael Block 101 Afternoon Session 113 00-5-3 Public Meeting to Consider an Informational Report on Air Pollution Trends: Past Progress and Future Challenges Introductory remarks by Chairman Lloyd 113 Staff Presentation: Mike Scheible 114 Leon Dolislager 115 Public Comment: Curtis Moore 130 Paul Guthrie 137 00-5-4 Proposed Grant Awards for Rice Straw Demonstration Projects Introductory remarks by Chairman Lloyd 155 Staff Presentation: Lynn Terry 156 Bruce Oulrey 156 Public Comment: Kurt Rasmussen 169 00-5-5 Recommendations for Funding Proposals Received under the Innovative Clean Air Technologies Program PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v I N D E X (Continued) --o0o-- Page Introductory remarks by Chairman Lloyd 175 Staff presentation: Mike Scheible 175 Ralph Propper 176 Open Session to Provide an Opportunity for Members of the Public to Address the Board on Subject Matters within the Jurisdiction of the Board 190 Adjournment 190 Certificate of Reporter 191 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN LLOYD: Good morning. 4 The May 25, 2000 Public Meeting of the Air 5 Resources Board has now come to order. 6 I will start again. Good morning. 7 The May 25, 2000 Public Meeting of the Air 8 Resources Board will now come to order. 9 Will you please join with me in the leading of 10 the Pledge of Allegiance. 11 (Thereupon the Pledge of Allegiance was recited.) 12 CHAIRMAN LLOYD: Thank you. 13 Will the Clerk of the Board please call the 14 roll. 15 MS. HUTCHENS: Professor Burke. 16 BOARD MEMBER PATRICK: 17 BOARD MEMBER BURKE: Here. 18 MS. HUTCHENS: Calhoun. 19 BOARD MEMBER CALHOUN: Here. 20 MS. HUTCHENS: D'Adamo. 21 DeSaulnier. 22 BOARD MEMBER DeSAULNIER: Here. 23 MS. HUTCHENS: Dr. Friedman. 24 BOARD MEMBER FRIEDMAN: Here. 25 MS. HUTCHENS: Professor Friedman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD MEMBER C.H. FRIEDMAN: Here. 2 MS. HUTCHENS: McKinnon. 3 BOARD MEMBER McKINNON: Here. 4 MS. HUTCHENS: Patrick. 5 BOARD MEMBER PATRICK: Here. 6 MS. HUTCHENS: Riordan. 7 BOARD MEMBER RIORDAN: Here. 8 MS. HUTCHENS: Roberts. 9 Chairman Lloyd. 10 CHAIRMAN LLOYD: Here. 11 Thank you very much. 12 Before we start, all the Board Members will 13 notice, we have a prominent absence in the front row, 14 although we are also delighted to see the Deputies here 15 as well, but those of you who don't know, the last we 16 heard of Mike Kenny, the Executive Officer, was that, 17 according to Mike Scheible, he was at 14,000 feet and 18 climbing at Mt. McKinley. 19 So, we gave Mike a send off. We certainly 20 miss him here, but we wish him all the very best. 21 You can see, he will spare nothing to get to 22 clean air. 23 We are also hoping that -- and he is doing 24 this, by the way, without oxygen. But we are also 25 hoping that he is on another mission, because the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 person he's with Erik Washburn, who is the Chief with 2 Senator Dashill. 3 If he can't come back this time without an 4 agreement on the waiver, nothing else will work. 5 Anyway, our thoughts are with him. We think 6 he has tremendous courage there. It is great to see 7 Mike in that endeavor, as only Mike would do those 8 things, the same person who cycled across Death Valley 9 in mid August. 10 I guess he likes challenges. That is why we 11 like him as Executive Officer here. 12 I would like to comment on an excellent 13 conference we had of local government officials, May 18 14 and 19, down in San Diego. I thought it went very 15 well, and I really appreciate Barbara Hugh and Matt for 16 all the help there and the staff putting it together, 17 Sandra Pochard, Brent Takimoto, Terryl Ferrera and 18 Linda, was very helpful. 19 We did not have a large audience, but I 20 thought we had an excellent presentation, and I thought 21 it went off very well in terms of the topics that we 22 covered. 23 We hope that we can build on that for next 24 year, maybe give it a slightly different slant. I 25 thought it was a good chance to mix and air some of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 issues there. 2 Two other items that the Board may be 3 interested in, Board Members, May 31 and June 1, next 4 week, we have the Air Workshop in Diamond Bar, at Dr. 5 Burke's building, the South Coast QAMD. 6 I think that should be very interesting. We 7 expect two full days of that, including an evening 8 session on the first day. 9 I think you will see in the LA Times article 10 today that there is going to be an interesting debate 11 as we come up to September. 12 Also, June the eighth, we have a Forum on Air 13 Quality and Agriculture, in Tulare, which I think is 14 going to be very interesting, with Supervisor Patrick 15 and Ms. D'Adamo basically on their home territory, but 16 I think it is a very important issue as we look at the 17 relationship between air quality and agriculture. 18 As we may see as we go through today, there is 19 a direct relationship between air quality and 20 agriculture production work. 21 We look forward to going down to Tulare. We 22 go down there twice in one week, to Fresno, for the 23 kick-off of some of the SECOS experimental study and 24 that one, so I think I am looking forward to that, and 25 Board Members are very welcome to that meeting. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 As we move into Agenda Item 00-5-1, I would 2 like to remind anyone in the audience who wishes to 3 testify on today's agenda items to please sign up with 4 the Clerk of the Board. 5 Also, if you have a written statement, please 6 give 30 copies, if you can, to the Clerk. 7 The first item on the Agenda today, as I 8 mentioned, is 00-5-1, and this is a Public Hearing to 9 Consider Proposed Amendments to the California Consumer 10 Products Regulation relating to Aerosol Adhesives. 11 The Aerosol Adhesive Standards were adopted in 12 1992 as part of the Phase 2 Standards for Consumer 13 Products. 14 The Board was optimistic at that time, but 15 left open the possibility that it might need to revisit 16 the targets at a future date. As it turns out, that 17 time is now. 18 Again, I understand the staff has worked 19 diligently with the affected industry and that those 20 discussions continued past the release of the staff 21 report. We may hear a few more changes today. 22 At this time, I would like to turn it over to 23 our Deputy Executive Officer, Mr. Scheible, to 24 introduce the item. 25 MR. SCHEIBLE: Thank you, Chairman Lloyd and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 Members of the Board. 2 State law specifies several criteria for 3 establishing emission limits for consumer products. 4 The limits must achieve the maximum feasible 5 reduction in emissions, be technologically and 6 commercially feasible, be based on adequate data and 7 not result in the elimination of a product form. 8 In addition, there is one requirement that is 9 specific to today's item. 10 The law states that the Board is to review the 11 Aerosol Adhesives Rule by July 2000. So, this item is 12 very timely. 13 In 1992, the Board anticipated that a future 14 25 percent VOC Standard for Aerosol Adhesives would be 15 feasible within five years. However, the Board 16 acknowledged that the difficulties in meeting this low 17 level and committed to review this limit. 18 In 1996, the Board reassessed the 25 percent 19 Standard and determined that more time was needed to 20 develop complying products. 21 Therefore, the Board postponed the Standard 22 until January 2002. 23 Also, in 1996, legislation was passed that 24 directed the Board to conduct a public hearing before 25 July 2000 to determine the need for and feasibility of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 establishing more stringent standards. 2 The staff has conducted a technical assessment 3 on the feasibility of meeting the 25 percent Standard 4 and on the feasibility of meeting alternative, but less 5 stringent limits. 6 Based on this evaluation, we have concluded 7 that, although products are feasible at limits lower 8 than the existing 75 percent Standard, the 25 percent 9 Standard is not technologically or commercially 10 feasible and is unlikely to be so by 2002. 11 Accordingly, we are proposing alternative 12 standards today. The staff is also proposing to 13 prohibit the use of methylene chloride, 14 perchloroethylene and trichloroethylene, which are 15 toxic air contaminants in the formulation of aerosol 16 adhesives. 17 These compounds are not necessary, and there 18 are alternatives to these solvents, and this seems 19 consistent with several Board actions that have been 20 taken with respect to toxic air contaminants in 21 consumer products in the past. 22 Mr. Erik White, of our Stationary Source 23 Division will present the proposed amendments. 24 Mr. White. 25 MR. WHITE: Thank you, Mr. Scheible. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 Good morning, Mr. Chairman and Members of the 2 Board. 3 Today I will present to you the staff's 4 proposed amendments to the California Consumer Products 5 Regulation relating to aerosol adhesives, which will 6 both establish a new set of VOC limits for aerosol 7 adhesives, as well as prohibit the use of toxic 8 compounds in these products. 9 I will provide a brief background leading up 10 to these proposed amendments, including the findings 11 from staff's technical assessment, and I will discuss 12 the proposed amendments and present the staff's 13 recommendation. 14 Enacted in 1988, the California Clean Air Act 15 gave the ARB statewide authority to regulate consumer 16 products. 17 This authority is contained in the Health and 18 Safety Code, which requires the ARB to achieve the 19 maximum emissions reductions of volatile organic 20 compounds, or VOCs, that are technologically and 21 commercially feasible and do not eliminate any existing 22 product forms. 23 One category of consumer products is aerosol 24 adhesives. 25 Aerosol adhesives are sold in hand-held PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 aerosol cans and are primarily sold through retail home 2 improvement stores. 3 In California, about 90 percent of the aerosol 4 adhesives sold are for commercial and household 5 consumer use and 10 percent are for use in industrial 6 settings. 7 As shown here, aerosol adhesives serve a 8 variety of uses. 9 In 1992, the Board established VOC standards 10 for ten new categories of consumer products, including 11 aerosol adhesives used in consumer and institutional 12 applications. 13 The aerosol adhesive VOC standards approved by 14 the Board were a 75 standard effective in 1995 and a 25 15 standard effective in 1997. 16 To provide more consistency in the 17 marketplace, the Legislature passed Assembly Bill 1849 18 in 1996, which gave the ARB sole authority to set 19 standards for all uses of aerosol adhesives, 20 establishing the 75 percent VOC standard to cover all 21 aerosol adhesive applications until the year 2000. 22 After that date, local districts would be free 23 to adopt more stringent standards. 24 Another provision of AB 1849 required ARB to 25 prepare a study and conduct a hearing by July 2000, on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 the need for, and the feasibility of, establishing a 2 more stringent VOC standard than 75 percent. 3 This hearing is to comply with that provision. 4 Also in 1996, based on industry's technical 5 concern on meeting the 25 percent VOC standard by 1997, 6 the Board extended the compliance date for the standard 7 to 2002, to allow more time for manufacturers to comply 8 with the standard without using methylene chloride, a 9 toxic compound. 10 The Board also made amendments to the 11 regulation to require manufacturers to report their 12 1998 product sales and composition data, as well as 13 their research and development efforts towards meeting 14 the 25 percent VOC standard. 15 The Board also directed staff, prior to June 16 of 2000, to review and consider any appropriate 17 modifications to the standards for aerosol adhesives. 18 While the Board has approved numerous 19 regulations to control VOC emissions from a variety of 20 sources, the Board also has a long history of 21 regulating emissions of toxic air contaminants, or 22 TACs. 23 Since 1988, the Board has identified over 240 24 substances as TACs, including methylene chloride in 25 1989, trichlorethylene in 1990 and perchloroethylene in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 1991. 2 These compounds are currently used in some 3 aerosol adhesive products. 4 Following the requirements of AB 1849, staff 5 performed a technology assessment to evaluate the 6 feasibility of establishing a more stringent VOC 7 standard than the current 75 percent, as well as the 8 feasibility of the existing future effective 25 percent 9 VOC standard. 10 In conducting the technology assessment, staff 11 surveyed manufacturers to collect 1998 product sales 12 and formulation information and gathered information on 13 their research and development efforts to achieve the 14 future effective 25 percent VOC standard. 15 In response to the survey, 47 companies 16 submitted product sales data on a total of 136 products 17 representing over 90 percent of the California aerosol 18 adhesive market. 19 In addition to the 1998 product survey, 20 staff's technology assessment also included a review of 21 previous consumer product surveys, retail shelf surveys 22 and Internet searches, facility visits and meetings 23 with manufacturers. 24 From the 1998 product survey, staff estimates 25 that the statewide 1998 VOC inventory from aerosol PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 adhesives is about 1.9 tons per day. 2 The survey also shows that about 20 percent of 3 the products, or three percent of the marketshare, are 4 formulated with TACs, mainly methylene chloride. 5 The survey also shows that alternative 6 products are currently available that are not 7 formulated with TACs. 8 In evaluating the 1998 survey, staff was able 9 to categorize products into three distinct categories 10 of aerosol adhesives. 11 Two general purpose categories, mist sprays 12 and web sprays, are characterized by their unique spray 13 patterns. 14 Mist sprays provide a stream of fine atomized 15 particles necessary for applications such as 16 photographic mounting that require a smooth appearance 17 and a uniform adhesion layer. 18 In contrast, web sprays provide a lace-like 19 stream for applications such as repairing tabletops 20 that require high strength bonds. 21 The third category, special purpose aerosol 22 adhesives, is comprised of both web and mist sprays 23 that are designed to meet unique performance and 24 application needs, such as resistance to high 25 temperatures. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 In evaluating research and development efforts 2 to comply with the future effective 25 percent VOC 3 standard, the product survey contained information on 4 several potential VOC reduction strategies, such as the 5 use of water-based technology, the use of exempt and 6 non-VOC compounds, hardware modifications and 7 increasing the solids content of the product. 8 However, there are technical issues which are 9 associated with each of these VOC reduction strategies, 10 including freeze-thaw instability and slow dry time for 11 water-based technology, issues with resin solubility, 12 solvent attack of the substrate and toxicity of exempt 13 or non-VOC compounds and limited applicability and the 14 need to further develop hardware modifications or high 15 solids technologies. 16 Based on staff's technology assessment, staff 17 concludes that manufacturers will not be able to meet 18 the future effective 25 percent VOC standard without 19 reformulating with toxic compounds. 20 However, staff finds that it is 21 technologically and commercially feasible to 22 reformulate existing products to lower levels than the 23 75 percent VOC standard without the use of toxic 24 compounds. 25 Therefore, staff is proposing the following PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 amendments to the aerosol adhesive provisions in the 2 consumer products regulations. 3 First, staff is proposing to eliminate the 4 future effective 25 percent VOC standard and replace it 5 with new limits that are technologically and 6 commercially feasible. 7 In addition, staff is proposing to prohibit 8 the use of methylene chloride, perchloroethylene and 9 trichloroethylene in aerosol adhesives. 10 Staff is also proposing new labeling 11 requirements, as well as other minor housekeeping 12 amendments. 13 Finally, staff is proposing to retain the 14 existing January first, 2002 effective date. 15 In respect to the new VOC limits, staff 16 proposes three general categories of standards, mist 17 sprays, web sprays and special purpose spray adhesives, 18 which are further subcategorized. 19 Because mist sprays need a higher VOC content 20 to maintain the proper atomization of the product, 21 staff is proposing a 65 percent VOC limit. 22 This category represents about half of the 23 statewide sales and emissions of aerosol adhesives. 24 Web sprays can generally be reformulated to 25 lower VOC levels because they do not require fine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 atomization. 2 Staff is proposing a 55 percent VOC limit for 3 web sprays. This category represents about 30 percent 4 of the statewide aerosol adhesives sales and emissions. 5 In terms of special purpose spray adhesives, 6 the ability to meet lower VOC levels is dependent on 7 the performance needs and application of the product. 8 Thus, staff is proposing three subcategories 9 of standards at 70 percent, 65 percent and 60 percent 10 VOC to address these adhesives. 11 The products that fall under the special 12 purpose category make-up about 20 percent of the 13 statewide aerosol adhesive sales and emissions. 14 Finally, it should be noted that the staff 15 proposal would result in the reformulation of about 80 16 percent of the aerosol adhesive market. 17 In addition to establishing new VOC limits, 18 staff is proposing to prohibit the use of methylene 19 chloride, perchloroethylene and trichloroethylene from 20 aerosol adhesives. 21 Staff has found that alternative products 22 formulated without these compounds are currently 23 available and suitable for all categories of aerosol 24 adhesives. 25 Staff is also proposing new labeling PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 requirements for aerosol adhesives that will require 2 the adhesive category and the applicable VOC limit to 3 be identified on the can. 4 In addition, for special purpose adhesives, 5 the label must display the substrate or type of 6 application for which the product is formulated. 7 Staff is also proposing that the definition of 8 consumer product be expanded to include all uses of 9 aerosol adhesives, including industrial uses. 10 Finally, staff is proposing to extend the 11 reporting requirements to 2004, to allow for a future 12 technology assessment and is proposing other minor 13 revisions to facilitate incorporation of the proposal 14 into the consumer products regulation. 15 After release of the staff report, staff 16 conducted another public workshop to obtain further 17 comments on staff's original proposal. 18 Based on comments received at this workshop, 19 staff is proposing some minor modifications to clarify 20 and streamline the proposal. 21 These changes are included in the modified 22 proposed regulatory language that is now before you and 23 also available on the table outside of the Hearing 24 Room. 25 The proposed modifications would clarify the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 definition of high pressure laminates and flexible 2 vinyl, allow manufacturers to code or abbreviate the 3 labeling requirements and add a new definition for 4 automotive engine-compartment adhesives within the 5 special purpose category. 6 Staff also proposes to clarify the three year 7 sell-through period to allow products manufactured 8 before the effective date to be distributed and sold. 9 The proposed amendments would reduce VOCs 10 emissions from aerosol adhesives by 0.2 tons per day 11 from the present 75 percent VOC standard. 12 In addition, emissions of methylene chloride, 13 trichloroethylene and percholoethylene would be 14 eliminated from the use of aerosol adhesives. 15 Since the proposed amendments relax the future 16 effective 25 percent VOC standard contained in the 17 State Implementation Plan, or SIP, there would be a SIP 18 shortfall of slightly over a tenth of a ton per day in 19 the South Coast Air Basin in 2010. 20 However, this shortfall will be addressed when 21 the statewide VOC control strategy is revised 2001. 22 Staff does not expect any significance impacts 23 on businesses or individuals since the proposed 24 amendments provide an overall cost savings to 25 manufacturers in relation to the future effective 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 percent standard. 2 However, based on the fact that most products 3 will have to be reformulated to meet the proposed VOC 4 standards, staff estimates that the cost effectiveness 5 of the anticipated VOC reductions would be about six 6 dollars per pound of VOC reduced, which is consistent 7 with other amendments to the consumer products 8 regulation and would increase the average cost of 9 aerosol adhesives by about 30 cents a can. 10 Staff recommends the Board adopt the proposed 11 amendments to the California Consumer Products 12 Regulation regarding aerosol adhesives. 13 This concludes my presentation. 14 CHAIRMAN LLOYD: Thank you very much. 15 It is clear that staff has conducted a 16 significant outreach effort with industry and worked 17 hard to develop a proposal that satisfies all parties. 18 Madam Ombudsman, would you please address the 19 public participation process that occurred while this 20 item was being developed and share any concerns or 21 comments that you may have with the Board on the 22 process. 23 OMBUDSMAN TSCHOGL: Mr. Chairman and Members 24 of the Board, I'm pleased to discuss the outreach 25 activities for the aerosol adhesives control measure. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 In December of 1998, staff began an effort to 2 revise the aerosol adhesive standards in the Consumer 3 Products Regulation. 4 At the outset, staff conducted a technical 5 assessment, as you heard, of existing products and the 6 feasibility of the industry's ability to achieve the 25 7 percent VOC standard by 2002. 8 The assessment revealed that the 25 percent 9 limit without the use of toxic compounds would not be 10 attained by the compliance date but products with lower 11 than the existing 75 percent VOC limits were 12 achievable. 13 From April through August of 1999, staff had 14 several meetings with industry representatives to 15 discuss the survey and other concerns. 16 Staff also visited a number of businesses to 17 observe the products in use. 18 After many months of meeting with 19 stakeholders, staff held a public meeting in November 20 of 1999. This was followed by two additional workshops 21 in February and April of this year. 22 At one public workshop, industry 23 representatives demonstrated their products. Five 24 companies and the NPCA were very active in the 25 development of this control measure. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 Finally, staff made telephone calls to all 2 formulators who produced products containing TACs to 3 discuss the proposed ban on perchloroethylene, 4 methylene chloride and trichloroethylene. 5 Staff had ongoing meetings with the air 6 district personnel throughout the development of the 7 control measure. 8 In addition, staff presented the proposed 9 regulation to CAPCOA for input, to obtain their input. 10 On April 7 of this year, ARB staff mailed the 11 notice of this hearing and the availability of the 12 staff report to approximately 175 people. These 13 documents were also posted on the ARB's Website. 14 As you can see, the outreach was extensive and 15 obviously productive. 16 That concludes my comments. 17 CHAIRMAN LLOYD: Thank you very much. 18 Also, good morning, Ms. D'Adamo. 19 Do the Board Members have any questions at 20 this time? 21 Yes, Professor Friedman. 22 BOARD MEMBER C.H. FRIEDMAN: I gather it was 23 the Board some years ago that set the 25 percent, of 24 the reduction to 25 percent? 25 MR. SIMEROTH: Professor Friedman, that is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 correct. 2 BOARD MEMBER C.H. FRIEDMAN: So, I guess we, 3 on behalf of our predecessors, should express our 4 disappointment that technology couldn't deliver. 5 I guess the only comment I have or question I 6 have is whether it wouldn't be a good idea to build 7 into the action that we are asked to take today a 8 continued oversight and a technological review 9 sometime, say July, by July, on or before July 1, 2004. 10 I just plucked that date, but some period, 11 because technology may just be able to deliver some 12 more. 13 We may be able to have further reductions in 14 VOCs that would be feasible commercially. We ought to 15 continue to look at that, even though we are not 16 reducing officially the target. 17 So, I guess what I am wondering and would 18 propose, if it is not a screwy idea, is that we add to 19 our action a technological review on or before July 20 first, 2004, to determine the extent to which further 21 reductions in VOCs are feasible and attainable. 22 MR. SCHEIBLE: We think that is appropriate. 23 CHAIRMAN LLOYD: Can we do it any sooner? 24 MR. SCHEIBLE: We could do it sooner. 25 I don't know whether, in this category the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 emissions are fairly small, so we are going to watch 2 what is happening out there in the industry. 3 If we found earlier that there were new 4 products coming on board that offered additional 5 reductions, we would speed it up. 6 CHAIRMAN LLOYD: So, I would agree with 7 Professor Friedman, maybe what we put is no later than. 8 MR. SCHEIBLE: Yes, that's good. 9 CHAIRMAN LLOYD: Dr. Friedman. 10 BOARD MEMBER FRIEDMAN: I just want to get 11 some clarification. 12 2002, no more halogenated hydrocarbons are 13 going to be in the aerosols, so the toxic air 14 contaminants will not be added to aerosols, but then 15 you want three years later, you are giving people three 16 years to clear their shelves. 17 So, there is five years from now to then to 18 get rid of the toxic air contaminants. It's the same 19 issue that we discussed last time. 20 Why should it take so long from the time of 21 cessation of adding toxics to a product to get the 22 product off the shelves? 23 I can't quite grasp that time table. 24 MR. SCHEIBLE: The three-year window is 25 actually in law for consumer products, to the extent we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 regulate the products under our consumer product 2 authority. 3 We could use the authority provided by 1807 4 for toxic air contaminants to accelerate that. 5 In reality, very little of the product will be 6 left out there after six months or a year. The vast 7 majority of it passes through the system much more 8 quickly than that. 9 BOARD MEMBER FRIEDMAN: We're not getting a 10 big bang in the VOCs, so the reason we're doing this is 11 because of the toxic air contaminants. 12 MR. SCHEIBLE: Well, we have to modify the 25 13 percent limit, otherwise we won't have products out 14 there on the shelves at all. 15 BOARD MEMBER FRIEDMAN: That I understand. 16 So, if no one is concerned, I am not going to 17 be alarmed about it, but it does seem to me that the 18 name of the game is to get toxics out of the air 19 quickly. 20 That's a heck of a long window. 21 MR. SCHEIBLE: If the Board likes, there are 22 relatively small percentage of the products that use 23 that, and we could actually go and work with the 24 manufacturers to try to get them to accelerate the 25 removal of materials on a quicker schedule, and if that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 doesn't look like it's going to occur, we can return 2 with a proposal to speed it up. 3 BOARD MEMBER FRIEDMAN: I think that would be 4 a valuable addition to our considerations. 5 CHAIRMAN LLOYD: I think that is a very 6 valuable point. 7 You say maybe a small number, but on the other 8 hand, if people use it in a confined area in some 9 cases, then it is, you know, an average doesn't mean 10 much. 11 MR. SCHEIBLE: The individual user who is 12 using the product could get a substantial exposure, 13 yes. 14 CHAIRMAN LLOYD: So, I like that approach, 15 basically what you are saying, go to the manufacturer 16 and try to get them to accelerate things on a voluntary 17 basis, and if that doesn't work, then you bring the 18 stick afterwards. 19 Any other comments or questions from the 20 Board? 21 Mr. Calhoun. 22 BOARD MEMBER CALHOUN: I would like to ask the 23 staff one question relative to the submission by 24 Sherwin Williams. 25 They pointed out several suggested changes in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 the language. 2 Are these incorporated in the additions that 3 you made to the regs? 4 I know one of them is. 5 MR. SIMEROTH: Mr. Calhoun, they are basically 6 all incorporated into the suggested revisions that you 7 have in front of you. 8 BOARD MEMBER CALHOUN: Thank you. 9 CHAIRMAN LLOYD: Any other questions from the 10 Board? 11 Yes, Professor Friedman. 12 BOARD MEMBER C.H. FRIEDMAN: I think we'll 13 have some public testimony? 14 CHAIRMAN LLOYD: Yes, we have one. 15 I was going to say, we have -- if that's the 16 case, we will call our first and only witness. 17 This is Jim Beardsley, from 3M. 18 MR. BEARDSLEY: Good morning. 19 I am Jim Beardsley. I am a Product 20 Responsibility Specialist, for the 3M Adhesives 21 Division, and I'm here very briefly just to say that 22 the adhesives industry supports these proposals. 23 We have worked very hard and diligently with 24 staff to come up with something that we thought was 25 acceptable. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 Therefore, we accept the proposal, including 2 the restrictions on methylene chloride, TCE and 3 perchloroethylene in aerosol adhesives. 4 I also want to thank staff, particularly Gary 5 Yee, Linda Lee, Kim Wen and Erik White for their 6 diligence and understanding, their cooperation and 7 professionalism during this time. 8 Aerosol adhesives are a very unique blend of 9 ingredients and technology, and they are very difficult 10 to sometimes understand what goes on, and I know the 11 staff worked very hard and diligently with industry to 12 come up with a proposal that is acceptable to all. 13 I also want to tell you that the National 14 Paint and Coating Association, which is an industry 15 group, was represented very well on this negotiation, 16 and they support this proposal. 17 On behalf of industry, again, I want to thank 18 the staff and tell the Board that we accept the 19 proposal. We will do everything possible within our 20 technology to meet the 2002 deadline, and we are 21 committed to come back to staff in 2004 with a 22 technology assessment to see if we can go even lower 23 with VOCs. 24 With that, I thank you. 25 CHAIRMAN LLOYD: Thank you very much indeed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 Yes, Mr. Calhoun, question. 2 BOARD MEMBER CALHOUN: What do you think of 3 the suggestion by Dr. Friedman about accelerating the 4 or shortening the sell-through period? 5 MR. BEARDSLEY: I guess I'd have to say, I 6 don't care, mainly because 3M reduced all their use of 7 those three compounds in 1988 and 1989. 8 So, I really don't have any reason to ask for 9 an extension or have any opinion on that. 10 I know there are other smaller companies that 11 have these products, and it probably is a little more 12 difficult for them to do the R and D than a company the 13 size of 3M has done. 14 I really can't say. I don't feel one way or 15 the other. 16 BOARD MEMBER CALHOUN: Thank you. 17 CHAIRMAN LLOYD: Thank you. 18 Ms. D'Adamo. 19 BOARD MEMBER D'ADAMO: Just based on your 20 experience, how long would it take your company for the 21 sell-through period? 22 MR. BEARDSLEY: Typically in consumer products 23 it is a lot longer than industrial products, we have 24 found up to three years to get products out of the 25 market, only because of the distribution system. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 They are manufactured. They go to a 2 manufacturing distribution site. From there they go to 3 many different outlets. 4 We have found products on hardware store 5 shelves that are five to seven years old. We recently 6 had product, we went out and surveyed and found stuff 7 that was that old. 8 It all depends on the material. Aerosol 9 adhesives tend to stick around the shelves a long time. 10 CHAIRMAN LLOYD: No pun intended? 11 MR. BEARDSLEY: No pun intended. 12 So, yes, three years is not unreasonable for 13 aerosol adhesives and in the consumer market. 14 In the industrial setting, that's not going to 15 happen. 16 CHAIRMAN LLOYD: Thank you. 17 Thank you very much. 18 I guess, if there are no more questions -- oh, 19 there is. 20 BOARD MEMBER C.H. FRIEDMAN: Do they become 21 more toxic the longer the shelf-life? 22 MR. BEARDSLEY: Do they become more toxic the 23 longer the shelf-life? 24 BOARD MEMBER C.H. FRIEDMAN: Yes. 25 MR. BEARDSLEY: No. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 What happens is the stability of the product 2 gets to the point where you can't get it out of the 3 can; so you don't have a toxicity development, you 4 actually have a stability -- the solution breaks down, 5 or you get a plugging of material in the dip tube, so 6 you actually can't get the product out. 7 So, you really just get a product 8 performance -- it is a delivery system that's the 9 problem. 10 BOARD MEMBER C.H. FRIEDMAN: Thank you. 11 I would move adoption of the Resolution. 12 CHAIRMAN LLOYD: Yes, I have to go through it 13 legally. 14 I will now close the record on this Agenda 15 Item, however, the record will be reopened when the 16 15-day Notice of public availability is issued. 17 Written or oral comments received after this 18 hearing date but before the 15-day Notice is issued 19 will not be accepted as part of the official record on 20 this Agenda Item. 21 When the record is reopened for a 15-day 22 comment period, the public may submit written comments 23 on the proposed changes, which will be considered and 24 responded to in the Final Statement of Reasons for the 25 regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 Again, just a reminder to Board Members of our 2 policy concerning ex parte communications, while we may 3 communicate off the record with outside persons 4 regarding Board rulemaking, we must disclose the names 5 of our contacts and the nature of the contents on the 6 record. 7 This requirement applies specifically to 8 communications which take place after Notice of the 9 Board Hearing has been published. 10 Are there any communications which you need to 11 disclose? 12 Seeing none, now we are ready, Professor 13 Friedman, to entertain a motion. 14 BOARD MEMBER C.H. FRIEDMAN: So moved. 15 BOARD MEMBER DeSAULNIER: Second. 16 CHAIRMAN LLOYD: So, we have the additions to 17 the Resolution here, we have additional with the dates, 18 we have the technology review, and then we have 19 basically the staff working, trying to work with the 20 manufacturers on a voluntary basis to expedite things. 21 So, with that, all in favor, say aye. 22 Any negatives? 23 No. 24 Thank you very much. 25 Thank you staff. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 Just take a moment while we change over staff 2 before we go to our next Agenda Item. 3 The next item on the Agenda today is 00-5-2, 4 Public Meeting to consider modifications to EMFAC 2000, 5 the On-Road Mobile Source Emissions Model. 6 This emissions inventory is an estimate of the 7 total amount of pollutants emitted from various 8 sources. 9 Portions of the inventory are brought to the 10 Board, periodically, for our review and approval. 11 Today, staff will present an update to the 12 On-Road Mobile Source Emissions Inventory. Because 13 these estimates serve as the foundation for the 14 assessment of the effectiveness of regulatory 15 strategies, cost-effectiveness and progress toward 16 attainment, the accuracy of the inventory is critically 17 important. 18 So, this item has major ramifications for many 19 of the things we do, and I would also recognize how 20 hard staff has worked on this very complex issue. 21 We are delighted today for you, Mr. Cackette, 22 to lead off on this item. 23 MR. CACKETTE: Thank you, Chairman Lloyd, good 24 morning, Members of the Board. 25 For more than 25 years, ARB has been assessing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 the emissions from on-road sources of emissions. This 2 task has been accomplished through vehicle testing and 3 research, much of it done in our El Monte Laboratory. 4 To characterize how cars and truck respond to 5 changes in emission standards, how emission control 6 devices work in use, how durable they are, etcetera, in 7 addition, the need to project future emissions beyond 8 the current year, requires us to use estimation models. 9 Today, the staff will present to you a revised 10 inventory for on-road motor vehicles, basically cars 11 and heavy-duty trucks and motorcycles, and things like 12 that, which is based on the latest of a series of 13 estimation models which we call EMFAC 2000. 14 The new model and the extensive data upon 15 which it is based tell us that there is a significant 16 increase in the emission inventory of on-road motor 17 vehicles, and staff in their presentation will describe 18 to you the reasons for why the emission inventory has 19 become larger than we had previously believed. 20 Emission inventory and the associated EMFAC 21 2000 model have been developed over two years. They 22 have undergone extensive review, and we are confident 23 that the emissions inventory is the most complete and 24 accurate and up-to-date estimate that we can provide 25 for your consideration. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 However, we also recognize that emission 2 inventory development is an ongoing process, and as 3 usual, we are committed to continuing to gather data, 4 address issues that come up and continue our research 5 in an effort to improve the inventory and the 6 associated EMFAC 2000 and whatever it will be, 7 2000-and-X, the next version of the model. 8 So, I would like to now turn over the 9 presentation to Mr. Dilip Patel, who will provide you 10 with an overview of the staff's findings and 11 recommendations. 12 MR. PATEL: Thank you, Mr. Cackette. 13 Good morning, Chairman Lloyd and Members of 14 the Board. 15 We will now present the revisions to the 16 State's On-Road Mobile Source Emissions Inventory for 17 your review and approval. 18 Prior to seeking approval of the revised 19 emissions inventory for on-road mobile sources, I will 20 provide a brief overview of the development and use of 21 the inventory, discuss what changes were made to the 22 methodology which affected our estimates and show the 23 effect of standards which were recently adopted by the 24 Board will have on the future inventory. 25 Finally, I will discuss the comments received PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 by stakeholders and the further enhancements planned 2 for the emissions inventory model. 3 California's emissions inventory is an 4 accounting of the pollutants emanating from four broad 5 categories. 6 The On-Road Mobile Source Inventory includes 7 emissions from all mobile sources operating on the 8 State's streets and highways. 9 The Off-Road Mobile Source Inventory includes 10 emissions from every equipment type with an internal 11 combustion engine, from weed eaters to bulldozers. 12 The Stationary Sources Inventory includes 13 emissions from factories and refineries, while Area 14 Wide Sources include emissions from various sources, 15 like paints and consumer products. 16 As can be seen in this graphic, on-road mobile 17 sources dominate the emissions inventories of 18 hydrocarbon, carbon monoxide and oxides of nitrogen. 19 Although on-road mobile sources are not major 20 contributors to the overall particulate matter 21 inventory, the toxicity of diesel exhaust, coupled with 22 the risk of exposure, make the assessment and control 23 of this portion of the inventory a priority. 24 Portions of the inventory are brought before 25 the Board periodically for review and approval. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 The approved inventory is used to support 2 plans, including the development of the State 3 Implementation Plan, development of regulations to 4 reduce emissions, such as Phase II of the Low Emission 5 Vehicle Program, assessments of conformity and analyses 6 of how changes in emissions effect ambient air quality. 7 Test data of vehicles in service serve as the 8 foundation of the on-road inventory model. Ideally, 9 the inventory would be based solely on direct 10 measurements of emissions from all vehicles. 11 However, at best, this approach would provide 12 an inventory of the current fleet. The need to project 13 to future years, and to conditions outside of the range 14 of laboratory testing, requires the development and use 15 of emission inventory models. 16 Although the Federal Environmental Protection 17 Agency maintains such a model, called MOBILE, the 18 unique emission standards, driving and ambient 19 conditions of the State, require the use of a model 20 specific to California. 21 In its simplest form, the on-road inventory is 22 the product of the measured emissions in grams per 23 event, such as grams per mile for running exhaust or 24 grams per hour for evaporative emissions and vehicle 25 activity resulting in a tons per day estimate. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 Vehicle activity is further disaggregated into 2 the population of vehicles by vehicle class, fuel, age 3 and technology groups and the number of miles traveled 4 per day at different speeds. 5 The current model estimates the tons per day 6 inventories of the criteria pollutants plus carbon 7 dioxide as a green house gas. 8 Carbon dioxide is also used as a gauge of fuel 9 consumption. 10 The Air Resources Board has maintained an 11 on-road emissions inventory model for many years, the 12 last version of which was approved in October of 1996. 13 The proposed inventory presented to you today 14 was developed using the latest in this series of 15 models, called EMFAC 2000. 16 The development of EMFAC 2000 is the 17 culmination of a multi-year effort, during which time 18 workshops were held in both Northern and Southern 19 California. 20 During these workshops, the underlying 21 concepts were presented to the public. Comments 22 received during the December 1999 workshop, in Southern 23 California, prompted a delay in the presentation of the 24 revised inventory to the Board. 25 During this time, we met with representatives PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 from industry, government and academia to resolve any 2 remaining issues. 3 Based on technical input from industry 4 representatives, the inventory presented today is lower 5 than that presented during the December workshop. 6 The major changes to the methodology included 7 modifications to the heavy-duty emission rates and the 8 reassessment of evaporative emissions. 9 The changes in EMFAC 2000 are data driven. 10 Since the adoption of MVEI7G, the ARB has added more 11 than 5,000 vehicles to the inventory database. 12 This has more than doubled the data used to 13 develop the previous inventory, improving our 14 understanding of how emissions change as a function of 15 age, mileage and driving habits. 16 This graphic illustrates the basic structure 17 of the EMFAC 2000 model. 18 The basic emission rates are modified in the 19 I/M module, simulating the effect that smog check 20 programs have on lowering emissions. 21 These rates are then combined with fleet data 22 to calculate composite emission rates for each vehicle 23 class. These rates are then adjusted for speed, 24 temperature, humidity, altitude and fuel corrections in 25 the adjustment factors module. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 The adjusted rates are then multiplied by 2 vehicle activity to obtain the tons per day estimates. 3 As a result of these changes, the model has 4 become more complex; however, EMFAC 2000 also employs a 5 user-friendly graphical interface to assist in the 6 execution of the model. 7 For the current calendar year, the 8 modifications to the on-road inventory proposed by 9 staff would increase the statewide estimated emissions 10 of hydrocarbons by 56 percent, carbon monoxide by 54 11 percent, oxides of nitrogen by 18 percent and 12 particulate matter by 26 percent. 13 It should be noted that CO inventory is 14 divided by 10 and the exhaust PM inventory is 15 multiplied by 10 in this chart to present all of the 16 pollutants on the same scale. 17 In developing a new model, we performed a 18 comprehensive review and revision of the modeling 19 process. The changes which had the most significant 20 impact on the inventory are presented in this slide. 21 This includes the effects of recently adopted 22 regulations, revisions to the basic emission rates, use 23 of more representative driving cycles and the addition 24 of liquid leakers for evaporative emissions. 25 This slide lists additional modifications PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 included in EMFAC 2000. These effects were 2 significant, however, their impact was less compared to 3 those from the major changes. 4 I will discuss the major changes and their 5 effect on the total on-road vehicle emissions inventory 6 in the upcoming slides. 7 Before discussing the major changes, I will 8 show a few pie charts that illustrate the relative 9 contribution that light- and heavy-duty vehicles have 10 on the total inventory for each pollutant. 11 This graphic shows the contribution of exhaust 12 and evaporative hydrocarbons emissions from light-duty 13 vehicles and heavy-duty trucks. 14 As can be seen, hydrocarbon emissions are 15 mainly from light-duty vehicles, with 53 percent from 16 exhaust and another 41 percent from evaporative 17 emissions. 18 This graphic shows that light-duty vehicles 19 are also responsible for the majority of the carbon 20 monoxide emissions. 21 This graphic shows that 61 percent of the 22 oxides of nitrogen emissions are from light-duty 23 vehicles. 24 The remaining 39 percent of the emissions are 25 from heavy-duty trucks, which have a relatively small PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 population. 2 Heavy-duty vehicles have a high per vehicle 3 NOx emissions. 4 Finally, the particulate matter inventory is 5 equally represented by emissions from both light- and 6 heavy-duty vehicles. This also illustrates the high 7 per vehicle PM emissions from heavy-duty vehicles. 8 I will now talk about the major changes that 9 effect the inventory for light-duty vehicles. 10 Exhaust emissions from light-duty vehicles are 11 measured in grams per mile during tests performed on a 12 chassis dynamometer. 13 Every vehicle procured for emissions inventory 14 testing is driven over several different cycles, 15 including the Federal Test Procedure, which is the 16 standardized certification cycle, the Unified Cycle, or 17 the LA92, which is a more contemporary representation 18 of how light-duty vehicles are driven, and the ASM and 19 IM240 cycles to simulate how vehicles are inspected 20 during a smog check. 21 In addition, a subset of vehicles are also 22 tested over 13 different driving cycles of varying 23 average speed. This information is used in developing 24 a relationship that describes how emissions change as a 25 function of speed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 From the current calendar year, the proposed 2 revisions to the inventory would increase the on-road, 3 light-duty exhaust emissions by 47 percent for 4 hydrocarbons, 87 percent for carbon monoxide, 19 5 percent for oxides of nitrogen and nearly double for 6 exhaust particulate matter in the South Coast Air 7 Basin. 8 It is important to note that because the 9 inventory is county specific, regional variations in 10 vehicle population, fleet age and ambient conditions 11 may result in percentage changes in other areas that 12 are different than those depicted here. 13 Three changes to the estimation methodology 14 are responsible for the majority of the differences 15 between the current and proposed inventory for exhaust 16 emissions from light-duty vehicles. 17 These include modifications to the basic 18 emission rates, adjustments to the driving cycle and 19 the development of new speed adjustment factors. 20 The changes in the basic emission rates can be 21 attributable to the doubling of vehicle database. 22 Since MVEI7G, data from approximately 3,000 23 vehicles has been added to our database. This has 24 increased our understanding of how newer technology 25 vehicles deteriorate, resulting in higher basic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 emission rates. 2 The data has also been used to update emission 3 rates for older vehicles and how they deteriorate. 4 In general, these new data indicate that 5 vehicle emissions are higher than we had projected in 6 the previous version of the inventory model. 7 This slide illustrates the range of speeds and 8 accelerations covered by the FTP and the LA92 test 9 cycles. 10 The FTP, shown here in red, was developed in 11 the 1970's to be representative of a typical trip in an 12 urban area. 13 However, acceleration, deceleration and top 14 speeds were adjusted downwards to make the cycle 15 testable on the dynamometers available at that time. 16 The top speed of the FTP speed 62 mph, with 17 acceleration artificially limited to 3.3 mph per 18 second. 19 As the name implies, the LA92, shown here in 20 black, was developed in the early 1990's from following 21 randomly selected vehicles over frequently traveled 22 routes. 23 As can be seen, the LA92 covers a wider range 24 of speeds and accelerations than does the FTP, and 25 vehicles can be tested using this cycle with the modern PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 dynamometers. 2 The top speed of the LA92 cycle is more than 3 75 mph, with acceleration rates of 6.9 mph per second. 4 This cycle represents how people currently 5 drive and is used in EMFAC 2000 as the basis for 6 establishing emission rates during average driving. 7 Over a thousand vehicles have been tested on 8 both the FTP and LA92, and the results are included in 9 EMFAC 2000. 10 The higher speeds and acceleration of the new 11 test cycle result in higher emissions for all 12 pollutants. 13 Emissions vary as a function of speed. 14 Consequently, it is very important to properly 15 characterize this relationship in modeling the 16 inventory. 17 Thirteen cycles, ranging in speed from 5 to 65 18 miles per hour, are used to develop this relationship. 19 In MVEI7G, many of these speed adjustment 20 cycles were created by manipulating other cycles and, 21 therefore, did not realistically represent actual 22 driving. 23 In the development of the EMFAC 2000 model, 24 140 vehicles were tested over the 13 new speed 25 adjustment cycles created from subsets of the LA92 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 chase car data. 2 This increased our understanding of the 3 relationship of emissions to speed. 4 As can be seen in this graphic, higher 5 hydrocarbon emissions occur at all speeds less than 65 6 miles per hour, compared to MVEI7G. 7 CHAIRMAN LLOYD: Does that just reflect 8 tailpipe emission or evap as well? 9 MR. PATEL: Tailpipe. 10 CHAIRMAN LLOYD: If you looked at evap, what 11 would that do in terms of say running losses or what? 12 Are you coming to that? 13 MR. PATEL: That's coming up later on. 14 CHAIRMAN LLOYD: Okay. 15 MR. PATEL: Now I will discuss which changes 16 effect the evaporative emission inventory of light-duty 17 vehicles. 18 Evaporative emissions are modeled as four 19 distinct processes. 20 Running losses are evaporative emissions which 21 occur while the vehicle is being operated when the 22 vapor generation of hot fuel exceeds the capacity of 23 the engine to consume them. 24 Hot soak emissions are vapor losses which 25 occur immediately after a trip. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 Diurnal emissions occur as a result of vapor 2 generation from ambient temperature increases. 3 Finally, resting losses occur as a result of 4 vapor permeation losses when the ambient temperature is 5 either stable or decreasing. 6 Changes to the evaporative emissions inventory 7 for light-duty vehicles are shown in this graphic. 8 While significant changes are projected for 9 all evaporative processes, the most substantial change 10 is to the running loss emissions inventory. 11 The evaporative inventory increase can be 12 attributed to the inclusion of liquid leakers, which 13 are now accounted for in all four processes. 14 The running loss emissions increased as a 15 result of new data and changes in how running losses 16 were modeled. 17 Running losses now account for the fact that 18 longer trips incur more emissions and that the running 19 loss rate increases with the length of the trip. 20 Evaporative hydrocarbon emissions are modeled 21 as -- next slide. 22 During the running loss certification test, 23 vehicles are driven on a dynamometer within an air 24 tight enclosure for one hour at an ambient temperature 25 of 105 degrees Fahrenheit. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 Upon completion of this test, the vehicle's 2 engine is turned off and the emissions are collected 3 for an additional hour. This is the hot soak portion 4 of the test. 5 The temperature is the enclosure is then 6 lowered to 65 degrees and cycled between 65 and 105 7 degrees for three days. This is the multi-day diurnal 8 test. 9 For modeling purposes, these emissions are 10 separated into diurnal and resting losses, depending on 11 rising or falling temperatures. 12 CHAIRMAN LLOYD: I just have a question here. 13 When you, the fuel that you use in that case, 14 is existing fuel, and as you move ahead, do you look at 15 future fuels? 16 What fuels are used for this testing? 17 MR. PATEL: The vehicles are tested as brought 18 into the lab. 19 We also have in-tank fuel. 20 This graphic shows how running losses 21 emissions vary with time. 22 In EMFAC 2000, the cumulative emissions are a 23 function of trip length. This increase is caused by 24 the increase in fuel temperature. 25 Although MVEI7G used a similar gram per mile PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 emission rate, this rate did not vary by trip length or 2 time. 3 While the former methodology would slightly 4 overestimate the emissions of trips with short 5 duration, it would severely underestimate the emissions 6 from longer trips. 7 Liquid leakers are vehicles which literally 8 drip fuel while the vehicle is running, parked or both. 9 These evaporative gross polluters were not 10 included in the previous inventory estimates because 11 these vehicles were either rejected from test projects 12 for safety reasons or repaired prior to testing. 13 Although the population of these vehicles is 14 small, their emissions can be as high as 40 grams per 15 mile. 16 This is over 50 times higher than the 17 hydrocarbon tailpipe emissions of the average vehicle 18 in the current fleet. 19 From 20 to 40 percent of all evaporative 20 emissions in the proposed inventory for the South Coast 21 Air Basin are attributable to liquid leakers in the 22 year 2000. 23 Although recently adopted standards are 24 expected to significantly reduce evaporative emissions, 25 no program is currently in place to identify and repair PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 vehicles with liquid leaks. 2 As such, the contribution of liquid leakers is 3 in projected to increase in the future. 4 I will now discuss those major changes 5 effecting the heavy-duty vehicle emissions inventory. 6 The proposed inventory for heavy-duty vehicles 7 increases the hydrocarbon emissions by 47 percent, the 8 carbon monoxide emissions by 78 percent and oxides of 9 nitrogen by 58 percent. 10 The revised inventory is 24 percent less for 11 exhaust emissions of particulate matter. 12 This will be explained in the upcoming slides. 13 Two major changes are responsible for those 14 differences, the use of chassis rather than engine test 15 data, and the inclusion of off-cycle operating 16 conditions. 17 The use of chassis data effected both NOx and 18 PM emission rates used in EMFAC 2000. 19 Unlike light-duty vehicles, heavy-duty 20 engines, rather than complete vehicles, are tested 21 during certification. 22 These emissions have traditionally been 23 expressed as grams of pollutant per unit of work 24 performed. 25 Conversion factors are used to convert these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 measurements into units or grams per mile. In EMFAC 2 2000, the heavy-duty inventory is based on direct 3 measurement of emissions in grams per mile. 4 This was accomplished by testing heavy-duty 5 vehicles on a chassis dynamometer. 6 Three cycles were used in development of the 7 inventory to describe real world operation of differing 8 weight classes of trucks and buses. 9 Many heavy-duty diesel engines manufactured 10 between 1988 and 1998 defaulted to a fuel saving mode 11 during highway driving conditions. 12 While in this mode, emission of NOx increased 13 considerably. 14 Because highway driving was not well 15 represented in the engine certification test, these 16 emissions are referred to as off-cycle emissions. 17 Since EMFAC 2000 uses chassis rather than 18 engine test data, off-cycle emissions are better 19 reflected in the basic emission rates. 20 An agreement reached between U.S. EPA, the 21 State of California and the engine manufacturers has 22 ended this practice of operating vehicles in a lean 23 mode. 24 However, the NOx emissions of older trucks 25 will remain high until they are retired or rebuilt. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 For diesel fueled vehicles, there is an 2 inverse relationship between the emissions of oxides of 3 nitrogen and particulate matter. 4 While the diesel fuel saving strategy 5 increased oxides of nitrogen, it lowered particulate 6 matter emissions from this group of older vehicles. 7 I will now discuss vehicle activity. 8 Accurate estimates of vehicle activity are as 9 important as accurate estimates of emission factors in 10 estimating the total inventory. 11 Each estimate of emissions has a related 12 activity in the emissions inventory model. 13 Among the most important activity parameters 14 incorporated in the model are vehicle population, the 15 miles traveled by the fleet each day and the speed at 16 which these miles are driven. 17 Vehicle activity also includes measures of 18 inactivity or soaks which influence both evaporative 19 and starting emissions. 20 In EMFAC 2000, all of the activity measures 21 listed in this graphic were revisited and, if 22 necessary, revised using the latest data. 23 Vehicle activity data is gathered from several 24 sources which provide the data to the ARB or otherwise 25 collect useful data for other purposes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 For large urban areas, the vehicle miles 2 traveled per day are obtained from the Council of 3 Governments and Metropolitan Planning Organizations. 4 The VMT data from other areas is calculated by 5 the model using estimates of vehicle population and 6 mileage accrual rates. 7 The Air Resources Board uses data from the 8 California Department of Motor Vehicles for determining 9 the vehicle population by age in each geographic area. 10 The number of miles driven per year, as a 11 function of age, is derived from smog check data 12 collected by the Bureau of Automotive Repair. 13 The Air Resources Board also conducts 14 instrumented vehicle surveys to determine when driving 15 events occur during the day. This information is 16 combined with CalTrans travel survey data to determine 17 the number of vehicle starts per day. 18 CHAIRMAN LLOYD: I do not think that you 19 mentioned unregistered vehicles. 20 There was a bullet. 21 What was the implication there? 22 MR. PATEL: Unregistered vehicles, some of the 23 vehicles are unregistered -- up to seven percent of the 24 vehicles are unregistered. 25 However, they're actually in the process of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 being registered. So, a previous version of the model 2 did not account for the seven percent of the 3 unregistered vehicles. 4 They were in the process of being 5 unregistered, and we also have chronically unregistered 6 vehicles, that makes up about less than half a percent 7 of the population. 8 These chronically unregistered vehicles remain 9 unregistered for a period of more than two years. 10 CHAIRMAN LLOYD: So, do you expect that 7 11 percent and the half percent to go down as we look 12 ahead to 2010 and what confidence do we have that they 13 will go down? 14 MR. PATEL: Actually, we are in the process of 15 doing more unregistered vehicle surveys to try to 16 determine what is the fraction of vehicles that are 17 chronically unregistered. 18 MR. CACKETTE: I would like to make clear that 19 the seven percent unregistered vehicles, what the issue 20 is, is that in the past we went and counted vehicles 21 that were in DMV's registered database, and it turned 22 out that there were vehicles in the process of 23 registration that were not in that database. 24 That seven percent is just a question of, we 25 didn't, in the past we didn't come up with the right PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 number of cars and that' used in the model. 2 The half percent are the one's that are 3 escaping the system somehow, and we've not accounted 4 for those before, and now we have an estimate. 5 I didn't want you to go away with the idea 6 that seven percent of the cars are running around 7 unregistered all the time in California. 8 BOARD MEMBER BURKE: That's confusing to me. 9 Then how do you describe what the cars that 10 are unregistered for two years, the chronically 11 unregistered, what do those represent? 12 MR. CARLOCK: Those are cars that are 13 actually, we assumed that they don't benefit from a 14 smog check program, given that the compelling reason to 15 get a smog check is for reregistration. 16 We have to assume that the vehicle is being 17 driven, and has not been registered for two years, that 18 they don't get it in and fixed. 19 CHAIRMAN LLOYD: Sorry. 20 For the court reporter, if you could identify 21 yourself. 22 MR. CARLOCK: Mark Carlock. 23 BOARD MEMBER CALHOUN: Would you repeat what 24 you said, Mark? 25 MR. CARLOCK: Yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 We keep track of two measures of 2 unregistration. 3 The seven percent are those people that maybe 4 they sent in their registration but they forgot to sign 5 their check or they didn't have the proof of insurance 6 or did not get the smog check. 7 We keep track of those vehicles that we call 8 chronically unregistered, or vehicles that go for more 9 than two years without reregistering. 10 If a vehicle has gone more than two years, and 11 we can assume that these vehicles benefit from a smog 12 check program, and it is really that percent of the 13 unregistration that we like to keep an eye on as to 14 whether that grows as smog check become more stringent. 15 MR. CROSS: This is Bob Cross. 16 Let me add one other thing. I think that part 17 of the question was how do you figure out how many are 18 unregistered, and basically the primary way is that 19 they drop out of the registration system. 20 So, you can watch and see vehicles which are 21 in the system which then drop out of the system, and 22 then you can try and track those. 23 CHAIRMAN LLOYD: Yes. 24 Dr. Burke. 25 BOARD MEMBER BURKE: Number one, I would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 assume that if there are cars that drop out of the 2 system, there are also cars that never were put into 3 the system. 4 Number two, I would think that there would be 5 an inverse proportion to the cars that are not in the 6 system and chronically not in the system to the amount 7 of pollution that you can expect from those vehicles. 8 So, you know, the question becomes were your 9 numbers adjusted to some kind of formula based on an 10 assumption of that type? 11 MR. CROSS: I'll do half. 12 Mark's earlier answer was that it was assumed 13 that the vehicles have emission rates of vehicles which 14 are outside of the smog check system, which is a higher 15 emission rate than all of the one's that are in the 16 system. 17 BOARD MEMBER BURKE: I heard that, but it 18 would seem to me if I kept a car out of the system for 19 two years, it would probably be polluting more, the 20 reason that I did not take it in to get it registered 21 was one, I didn't have the money -- 22 MR. CROSS: It is assumed to be very high. 23 BOARD MEMBER BURKE: So, there's got to be 24 some geometric, you know, it's not like I just pulled 25 it out of the system because -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 MR. CROSS: No, no. 2 It is assumed to be very high, because the 3 smog check, basically the smog check is both a 4 deterrent to tampering and also an incentive to 5 maintain the vehicle's emission control system. 6 So, by saying that the vehicle drops out of 7 the smog check system, what we are saying is that the 8 vehicles get tampered and aren't maintained properly, 9 and the longer they are out of the system, the more 10 that happens. 11 BOARD MEMBER BURKE: What do we do about cars 12 that never got into the system? 13 Do we believe that they exist? 14 MR. CROSS: Oh, yeah, they exist. 15 I'm not sure how well we can estimate. 16 We have all seen them. 17 BOARD MEMBER BURKE: Right. 18 But they are producing, but they just become 19 some kind of ephemeral -- 20 MR. CROSS: Well, Mark, is the half percent 21 just DMV, or is there some backup that we -- 22 MR. CARLOCK: The half a percent is determined 23 through observation. 24 The study that referred to is actually going 25 out to every county in the State of California and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 looking at major places of businesses, shopping 2 centers, malls and so forth, and by observation, coming 3 up with what is the percent unregistered and how long 4 have they been unregistered. 5 What we can tell from this is not only that 6 the chronics don't benefit from I/M, as Mr. Cross 7 stated, but we also have found that there is a strong 8 relationship between the age and the economic 9 background of the vehicle owner and the probability of 10 going unregistered for more than two years. 11 BOARD MEMBER BURKE: I sure would like to see 12 that information, if you have it, and I also would like 13 to see where these observations, especially in the 14 South Coast District, were made, because I have a 15 feeling that where it is the worst, your inspectors 16 wouldn't go. 17 MR. CARLOCK: They have actually hired me to 18 ride along in some areas. 19 BOARD MEMBER BURKE: Well, you wouldn't go in 20 some of those areas either. 21 BOARD MEMBER CALHOUN: This is an issue that 22 keeps coming up. 23 There was once a Member of this Board who was 24 the Commissioner of the California Highway Patrol, 25 named Harold Sullivan, and I have a very distinct PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 memory of a statement that he made that approximately 2 15 percent of the vehicles that the CHP's stop were 3 unregistered. 4 I don't know what kind of numbers exist today, 5 but I wanted to throw that out, for what it's worth, 6 but there certainly, apparently, there are a lot of 7 vehicles that are running around that are not 8 registered. 9 MR. CACKETTE: I think we have to be careful 10 on those numbers, because the survey that Mark was 11 describing shows that at any one time the number of 12 unregistered vehicles is something like close to 10 13 percent, but a lot of those are because people haven't 14 completed the process, and you find it drops off 15 radically, so that at one month over due it is 16 something like 7 or 10 percent, and then it is more 17 like 1 or 2 percent at the end of one year. 18 So, people either follow through and get 19 registered, or they get a ticket from the local police 20 department for having the wrong sticker on it, and in 21 some cases, the one's that Dr. Burke was referring to, 22 CHP keeps an eye on cars that have out-of-state plates. 23 If you buy a new car, it automatically gets, I 24 mean, it gets registered automatically in California. 25 So, the only one's entering the system that don't get PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 registered are typically one's that drive with an 2 out-of-state plate, and they pay pretty close attention 3 to that, because that means lost revenues to the DMV, 4 and they don't like to lose those revenues. 5 So, there is some degree of enforcement going 6 on. 7 CHAIRMAN LLOYD: Thank you. 8 I apologize for the question, but it is a good 9 thing to bring up as we come across some of those 10 issues. 11 MR. PATEL: This slide graphically illustrates 12 the magnitude of the effect that the major changes have 13 on the overall inventory. 14 For exhaust hydrocarbons, the greatest impact 15 on the inventory is due to small changes which are 16 grouped into the other category. 17 For carbon monoxide, the major change was due 18 to the revision of the basic emission rates. 19 The oxides of nitrogen increases are 20 attributable to the inclusion of off-cycle operation, 21 and the change in particulate matter is equally divided 22 between changes between emissions and activity. 23 Since MVEI7G was adopted, the Board enacted 24 numerous new emission regulations for on-road vehicles. 25 Most of these regulations go into effect after PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 2000, and thus, their effect is reflected in future 2 year inventories. 3 Although these regulations will greatly reduce 4 emissions, the proposed inventory for 2010 is still 5 higher than had been projected by the previous model, 6 MVEI7G. 7 In calendar year 2010, the proposed emissions 8 inventory for on-road mobile sources is 63 percent 9 higher for hydrocarbon, 13 percent higher for carbon 10 monoxide and 71 percent higher for particulate matter 11 exhaust. 12 The oxides of nitrogen are 10 percent lower 13 than previously estimated, due in large part to the 14 adoption of the Low Emission Vehicle, or LEV II, 15 standards and the two gram NOx standards for heavy-duty 16 vehicles, which were not reflected in the previous 17 inventory. 18 Since the release of the draft EMFAC 2000 19 model, comments have been received related to the 20 methodology used to estimate the proposed inventory and 21 the implications that the approved inventory may have 22 on conformity. 23 Staff have contacted each organization and 24 have made corrections where deemed appropriate. 25 A final version of the model reflecting these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 changes will be released upon approval by the Board. 2 Regarding the issue of conformity, approval of 3 the EMFAC 2000 model does not imply that it must be 4 immediately used for conformity analyses. 5 Agencies will be allowed to use the previous 6 model until all conformity issues are resolved. 7 As with the adoption of MVEI7G, approval of 8 EMFAC 2000 model will trigger no modification to the 9 existing micro-scale CO models. 10 A recent critique of the MOBILE model was 11 released by the National Academy of Sciences. 12 The major suggestions for improving the 13 Federal model are listed in this graphic. 14 It is important to note that these issues have 15 all been addressed in EMFAC 2000 or are included in our 16 plans for future model improvements. 17 Staff has committed to a process of continuous 18 improvements of the on-road emissions inventory. 19 First and foremost, we will continue to 20 collect new test data and incorporate it into the 21 model. 22 As an example, a heavy-duty working group has 23 been formed to address test cycle development and 24 testing of heavy-duty vehicles. 25 This group includes representatives of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 Engine Manufacturers Association and the Coordinating 2 Research Council. 3 CalTrans and the Air Resources Board are also 4 working jointly to develop specific estimates of 5 emissions for individual road types which are better 6 suited to address conformity issues. 7 Light-duty vehicle manufacturers have proposed 8 a joint venture to better understand vehicle owner's 9 response to the "check engine" light. 10 This is important in quantifying when vehicles 11 are repaired after the "check engine" light is 12 illuminated. 13 A dialogue has begun with the Council of 14 Governments and Metropolitan Planning Organizations 15 regarding the inclusion of alternative activity 16 estimates within the model. 17 Finally, a technical advisory committee will 18 be formed to advise staff regarding future model 19 revisions. 20 If these activities lead to substantial 21 changes to the inventory, staff will bring them to you 22 for your approval. 23 It is recommended that the Board approve the 24 proposed on-road mobile source emissions inventory with 25 staff's suggested changes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 This concludes my presentation. 2 I will be happy to address any questions you 3 may have. 4 CHAIRMAN LLOYD: Thank you very much. 5 Any questions from Members of the Board? 6 Supervisor DeSaulnier. 7 BOARD MEMBER DeSAULNIER: Tom or staff, help 8 me with how you worked through the process first on 9 starts per vehicle, in terms of the concerns raised by 10 a letter from MTC and CalTrans? 11 So, we have the starts per vehicle based on 12 the methodology from U.S. EPA for Baltimore, Spokane 13 and Atlanta, and the difference, how will you work 14 through that to get to the regional concerns that it is 15 going to be different for the different regions? 16 MR. CARLOCK: What we had proposed originally 17 was the use of instrumented vehicle data exclusively in 18 estimating starts per vehicle per day, and that is 19 where the U.S. EPA three city data came into play. 20 The concern was that the start emission, the 21 start rate, the starts per vehicle per day, did not 22 decline as a function of vehicle age, where CalTrans 23 survey data suggested that there was a decline as 24 vehicles become less useful. 25 In the final analysis, we have used a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 combination of the instrumented vehicle data and 2 CalTrans survey data to come up with a declining 3 function of starts per vehicle per day but elevated 4 over what the survey data says on its own. 5 It is really simply carrying over the 6 methodology from the previous model. 7 BOARD MEMBER DeSAULNIER: Okay. 8 Then in regard to the VMT, how do you work 9 through that? 10 MR. CARLOCK: We do use the VMT that is 11 provided by the Council of Governments and the 12 Metropolitan Planning Organizations, where for the 13 areas of their jurisdiction. 14 In areas that are not covered by MPOs or COGs, 15 the model does calculate the VMT but the overall state 16 VMT is still constrained by CalTrans' statewide 17 estimate. 18 BOARD MEMBER DeSAULNIER: So the concerns for 19 different regions being different as sociological 20 dynamics come in, how do we deal with that? 21 Do you have to just keep reviewing it? 22 MS. TERRY: I would like to comment on that, 23 because we do, in the planning shop, we work very 24 closely with the COGs, and as you can see from today's 25 discussion, we have sort of an extraordinary peer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 review process for the EMFAC piece of the picture, and 2 the transportation models that are run by the COGs 3 really don't have the same level of peer review. 4 So, we have tried to begin the dialogue with 5 the COGs and with local government officials to enhance 6 the technical review of those transportation models 7 because they are the source of the VMT that is used in 8 conjunction with our emission rates and plans and so 9 on. 10 So, we think that is an important follow-up 11 activity to pursue. 12 BOARD MEMBER DeSAULNIER: Thank you, Mr. 13 Chairman. 14 CHAIRMAN LLOYD: Questions? 15 Mr. Calhoun. 16 BOARD MEMBER CALHOUN: EPA has a model, also, 17 MOBILE 6, 7, 8, or whatever it is today. 18 How does this compare, the model that we use, 19 compare with the EPA model? 20 Of course, I would think -- well, I will let 21 you answer the question. 22 MR. CACKETTE: It's hard to answer that 23 quantitatively, because the models get reviewed on 24 different time frames. 25 Their model is now at least three or four PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 years old, I believe, as old or older than our previous 2 model, and they're not going to have their revision 3 done, I think, for another year. 4 I don't have a contemporaneous way of 5 comparing our model, which we think is current as of 6 now, to something that is three or four years old from 7 EPA. 8 They are undergoing a process of review and 9 revision of the model, just like we are. They have an 10 advisory committee. They are going through the same 11 process we are, and we are in constant communication 12 with them. 13 I can't tell you -- I can't predict what they 14 are going to do, if they will reach all the same 15 conclusions as us. 16 One of the examples would be these starts per 17 day, because they feel strongly that the data that they 18 collected in Baltimore, Spokane and Atlanta is good 19 data, and it suggests that older cars take as many 20 trips as new cars, but they must just take shorter 21 one's on each trip, and our data conflicts with that, 22 and we ended up with sort of a hybrid version from this 23 model, but it something that we definitely want to look 24 at in the future. 25 This is one example where we may disagree. In PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 other cases we are using the same database, it's like 2 the increase in running loss emissions, which was that 3 300 percent increase, that came from the 4 industry-sponsored, one of their research arms did a 5 lot of testing, so we had a big database, and they are 6 using that data just like we are. 7 So, I am sure they will come to the same 8 conclusion on running losses that we have. 9 BOARD MEMBER CALHOUN: Upon our next SIP 10 revision, assume this inventory or the current 11 inventory will be used for the basis for that -- 12 MR. CACKETTE: Yes. 13 BOARD MEMBER CALHOUN: Seems to me that they 14 have to kind of buy into it in order for them to 15 approve or disapprove the SIP. 16 MR. CACKETTE: That is true. 17 Although, I am sure they would object if they 18 found something that they thought was egregiously wrong 19 or inappropriate in our model, but because we 20 coordinate, I don't think they would find that. 21 They do get some deference due to the fact 22 that this model is specific to California vehicles, 23 California data, California weather, all those kinds of 24 things which ultimately does cause it to be different 25 than theirs to some degree. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 For example, they did not have any problem 2 approving the current SIPs, based on the use EMFAC 3 rather than the Federal MOBILE model. 4 BOARD MEMBER CALHOUN: Okay. 5 One last question. 6 I think that the staff mentioned comments 7 received from Toyota relative to the ZEV, and I also 8 thought I heard you say that, that the concern 9 expressed by Toyota is incorporated in the proposal for 10 today? 11 MR. CARLOCK: Toyota or a representative from 12 Toyota will give a presentation. 13 BOARD MEMBER CALHOUN: That will be the 14 appropriate time to discuss it. 15 CHAIRMAN LLOYD: Any other questions from the 16 Board? 17 BOARD MEMBER C.H. FRIEDMAN: Can I assume that 18 you have pretty much accommodated the concerns and 19 questions presented by the Department of Transportation 20 in their communication? 21 MS. TERRY: Yes. 22 I think the comment letter is one that 23 reflects the partnership with our two agencies, and we 24 have agreed to work very closely on the implementation 25 issues, and letter was signed by Allen Hendricks, as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 sort of my counter-part at CalTrans. 2 They are assured that we will not submit this 3 model for conformity purposes until those issues are 4 resolved with EPA. 5 CHAIRMAN LLOYD: Okay. I have several 6 questions. 7 The last slide indicated that one of the 8 updates that we take into account that says that for 9 the current version grade is not taken into account; is 10 that correct? 11 MR. CARLOCK: That's correct. 12 CHAIRMAN LLOYD: So, if we look -- what will 13 be the impact of including grade on the NOx inventory? 14 MR. CARLOCK: We believe that the inventory 15 will increase when we do move to a non-flat or 16 assumption of inventory. 17 However, for every uphill, there is a 18 downhill. So, there may be some balancing effects. 19 CHAIRMAN LLOYD: I understand, but we should 20 be able to quantify that a little bit better than that. 21 Getting to the bottom of what I am looking at, 22 Mark, is the -- I would say the rosy picture we have 23 for 2010, particularly for NOx, are we saying it from 24 the earlier version that it has actually gone down. 25 History tells us that that is typically never PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 the case. We always end up with more emissions than we 2 expect. 3 I just wonder, when we take these other 4 refinements into account, are we going to find that in 5 fact we -- it was significantly underestimated the NOx 6 emissions, and that also ties into the other issue 7 where I think we talked about these trucks which are 8 operating with a defeat device. 9 How do we know they are going to be phased 10 out, and what assurance do we have that they are not 11 going to continue to operate and continue to emit 12 excess NOx emissions over a period of time? 13 MR. CARLOCK: Let me answer that in two parts. 14 For the modern fuel injected vehicles, we have 15 found that they are impervious to changes in grade 16 unless the grade is severe. 17 So, you are talking very localized effects on 18 severe grade. 19 So, for the most part, we don't -- 20 CHAIRMAN LLOYD: How do you define severe? 21 MR. CARLOCK: Tejon Pass. 22 MR. CROSS: Well, Mark, what do the speed 23 correction factors look like for NOx? 24 Because as you go to a higher speed, you would 25 expect -- and does that occur? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 MR. CARLOCK: Yes, but you would have maybe 2 some synergism between high speed and grade at the same 3 time. 4 MR. CROSS: Which could make it even -- 5 MR. CARLOCK: Right. 6 What we are attempting to do is dynamically 7 vary load on the dynamometer so that we can drive these 8 typical cycles but then add load as a simulation of 9 grade. 10 So, again, it is the technology trying to 11 catch up with the reality. 12 MR. CACKETTE: Let me answer the heavy-duty 13 one. 14 The consent decree that we have with the 15 engine manufacturers that deals with eliminating the 16 past practice of having good fuel economy on the 17 highway which created high NOx on the highway, there is 18 an element in there that includes in-use testing of 19 those vehicles. 20 So, when that practice was eliminated, it has 21 been phased out roughly in this contemporaneous time 22 frame, those vehicles will be tested to make sure that 23 they -- that there isn't any other occurrence of 24 abnormal off-cycle emissions. 25 CHAIRMAN LLOYD: So, what is the consequence PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 if they continue to operate in that mode? 2 MR. CACKETTE: They would be in violation of 3 the consent decree, and they would be taken to court or 4 fined heavily. 5 I do want to disclose though, we have 6 presented point estimates of all of this, and obviously 7 anyone who has dealt with models and data knows that 8 there is an error band and an uncertainty band around 9 all of these points. 10 On this one point, one of the issues with 11 heavy-duty vehicles and shifting to this chassis test, 12 was that we probably did not account for all of the 13 off-cycle NOx emissions, because some of the tests that 14 we ran did not seem to show this off-cycle effect when 15 we know it was there. 16 Other tests did. 17 We wrestled with this, because it seemed to be 18 understating NOx emission on one hand, but the advisory 19 committee that we put together strongly recommended 20 that it was more important to shift from this reliance 21 on the engine test, which requires some correction 22 factor in order to get into inventory terms, and go 23 directly to testing vehicles. 24 So, we decided it was best to do that. 25 As one example, we probably have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 underestimated the NOx emissions a little bit, and we 2 are going to be doing a lot more testing here over the 3 next couple of years to make sure that -- well, as you 4 saw in the data we got roughly 5,000 car tests, and we 5 have 50 heavy-duty tests. 6 By the way, that is three times more than we 7 had engine tests before. Because of the complexity and 8 the expense of testing heavy-duty engines, we always 9 end up with less data. 10 This is going to be a major focus now to try 11 to get that sample up and make sure we fully 12 characterize the emissions for heavy-duty diesels. 13 CHAIRMAN LLOYD: Which means, Tom, you 14 mentioned there, when are we likely to get the next 15 update? 16 Or I guess that comes under Lynn? 17 MR. CACKETTE: We are supposed to bring the 18 model to you by statute every three years. 19 That doesn't necessarily mean that we will 20 wait three years to make changes, but the data comes in 21 all the time, but the one's that we control, it is 22 typically a year type time frame, we will have a better 23 sense of some of the different emissions in the year, 24 whether or not that will require us to revise the 25 inventory or not, we're not sure, but it depends on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 magnitude of the changes. 2 CHAIRMAN LLOYD: But no later than 2003. 3 MR. CACKETTE: No later than that. 4 CHAIRMAN LLOYD: You are the one who talked 5 about the NAS that in fact one of the areas that in the 6 National Academy review of the EPA MOBILE model 7 indicated that high emitters should be better 8 quantified, and that was indicated that we are already 9 doing that, but how are we doing in identifying the 10 high emitters? 11 MR. CARLOCK: What the NAS report suggested is 12 that EPA employ road-side type analyses that could be 13 used to gauge against the model as to whether we have 14 the proper quantity and the amount of emissions from 15 these vehicles, which are not numerous in the fleet, 16 but are -- emit more than their population would 17 suggest. 18 CHAIRMAN LLOYD: But these road-side tests, 19 how would they be -- specifically, what would you use 20 to actually identify the high emitters? 21 MR. CARLOCK: The report suggests using both 22 remote sensing and road-side type -- 23 CHAIRMAN LLOYD: The most difficult thing to 24 get that remote sensing out. 25 I was trying to pull it out of you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 MR. CACKETTE: If you look at one of the 2 bullets up there where we said things that would happen 3 in the future was incorporation of smog check 4 evaluations. 5 One of the things that we get out of smog 6 check evaluations is we do have a random, road-side 7 pull-over. 8 For example, in the current evaluation, we 9 pulled 27,000 cars over at the road. CHP pulled them 10 over for us. 11 There was a very high participation rate, over 12 90 percent, and each one of those vehicles was then 13 tested on a portable road-side dynomometer, and that 14 gave us a real good feel for the real dirty cars, you 15 know, if I asked someone to borrow their car like we 16 often do at the lab, we're never sure if we get all the 17 dirty one's because we offer to fix them while we are 18 there, or we get only the clean one's because the 19 people that have dirty cars think they've done 20 something wrong and won't loan it to government. 21 So, this road-side approach is a very good way 22 of getting a sense of whether we've incorporated the 23 high emitting vehicles or the gross emitting vehicles. 24 In fact, the model, EMFAC 2000 does quite 25 closely match the emissions that we saw on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 road-side based on this pull-over. 2 CHAIRMAN LLOYD: Yeah, I understand the 3 complexity of the problem. 4 I am a big believer in using all the totals we 5 can to address this issue. So, the pull-over, the 6 remote sensor, and anything we can use, I agree that 7 they all make-up that component. 8 We also realize that we've learned something 9 that these tools can be helpful. 10 If you look at the profiles, for example, in 11 terms of the emissions from the tailpipe and from evap, 12 and you put them in terms of mass, if you in fact 13 looked at the proposal in terms of the UC ozone 14 reactivity type thing, how would that line up? 15 Have you looked at what the percentage would 16 be in that case? 17 MR. CACKETTE: The model does not include any 18 direct reactivity correction. 19 The hydrocarbons are treated basically the 20 same. We do know that evaporative emissions would tend 21 to have lower reactivity per gram than I think the 22 exhaust emissions would. 23 So, when you see that split that said roughly, 24 you know, 40-some percent is evap and 50-some percent 25 is tailpipe hydrocarbons, that would probably be a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 little bit more biased toward exhaust if you included 2 an ozone forming potential in there, which I think is 3 what you were getting at. 4 CHAIRMAN LLOYD: Yeah. 5 I'm not sure I would agree with that, but I 6 would be interested to see that part of it. 7 What I was trying to get at there is that it 8 would be something worth looking at, because there 9 would be a difference. 10 MR. CACKETTE: That has stuff in it, like 11 butane and stuff, which I think generally has lower 12 reactivity than the exhaust, and even though we've 13 decreased the mass of emissions from the tailpipe, the 14 overall reactivity hasn't dropped radically, so it is 15 still somewhat more reactive. 16 CHAIRMAN LLOYD: The last question I had was, 17 when we look to the future in terms of ozone emissions 18 and we look at future fuels, and maybe this is one for 19 you there, Mike, are we reasonably confident that we 20 understand the VOC emissions here, vis-a-vis, if we go 21 to ethanol and that type of thing. 22 MR. SCHEIBLE: Well, we clearly don't 23 understand the permeation impacts of ethanol. We 24 started to work to improve that aspect of our inventory 25 and to be able to calculate that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 I think from a reactivity standpoint, we 2 understand it. We don't understand fully as LEV II and 3 SULEV vehicles come on the role of sulfur in gasoline, 4 and we have to look at that, and reactivity, we looked 5 at extensively as part of the predictive model and the 6 incorporation of evap credits, and there, it is about a 7 ton of emissions of evap is equals to about 60 percent 8 of a ton of exhaust, and both have gone down in 9 reactivity with fuel changes. 10 Fuel changes have helped a lot with 11 reactivity. 12 MR. CROSS: I guess the only thing I was going 13 to add, also, in talking to Mark, is that the evap and 14 exhaust numbers are kept separate as they are fed into 15 the model, and appropriate reactivity profile is 16 plotted close, so it's not just a big lump that goes -- 17 CHAIRMAN LLOYD: I guess my last question was, 18 how will we check that this emissions inventory is 19 correct? 20 MR. CACKETTE: Let me start by saying that we 21 have a group -- the reason for the slow answer, and we 22 are all looking at each other, wasn't that we haven't 23 thought of this, but it was the fact that we have a -- 24 CHAIRMAN LLOYD: Nice try. 25 BOARD MEMBER DeSAULNIER: Now, we know why Mr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 Kenny is on leave. 2 MR. CACKETTE: He didn't want that question 3 either. 4 We have put together in the past and we still 5 have working a multi-divisional group, which is our 6 Research people, our Mobile Source people, our Planning 7 people, our Technical Support Division people, and the 8 idea was to take various looks at the inventory, could 9 we find some way of finding out if we are accurate, 10 because we have these numbers out there are, and there 11 is no reference point. 12 So, people have looked at, like tunnel 13 studies, for example, in which they measure the 14 concentration of pollutants inside the Van Nuys Tunnel, 15 and you can actually figure out what the emission rates 16 are of the vehicles going through that tunnel, and you 17 compare to what this model says that it should be. 18 In the past, it indicated the models was way 19 underestimating emissions. The direction that you saw 20 here, which is the same direction that occurred on the 21 previous version of the model was, we found more 22 sources of emissions, and those things are coming 23 closer into agreement. 24 I don't know if we know what -- we haven't 25 compared this one yet to the latest model studies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 But there are those kinds of activities. 2 We've looked at speciation of the atmosphere. You find 3 some interesting things. 4 You find that often hydrocarbons in the 5 atmosphere, what they look most like is gasoline. They 6 don't look like consumer products. They don't look 7 like certain solvents. 8 They look like gasoline. 9 So, that has always raised the issue of have 10 we properly found evaporative sources versus maybe 11 tailpipe and other sources of hydrocarbons. 12 One of the directional things you see here is 13 really more evaporative emissions. That big increase 14 in running loss emissions is something that in two 15 versions of the model before, we didn't have running 16 loss emissions. 17 We didn't even know they existed, and then we 18 found them, based on some limited testing, and now we 19 have done much more testing, and you see that they have 20 gone up substantially. 21 Of course, also at the same time, the Board 22 has adopted regulations that assure that those numbers 23 in the future will be very, very low. 24 So, that is the way that we look at it. We've 25 got people that try to look at the various other sets PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 of data we have and see, does it look like we are on 2 target, or are we low or are we high. 3 We don't have any tool, I think, that is the 4 same magnitude that can quantify as the model does that 5 emissions are 1.2 grams per mile, and then we use this 6 other tool that says they are 1.1. 7 So, we have to look at other measurements and 8 just give us a relatively warm or unwarm feeling that 9 we're doing the right thing. 10 MS. TERRY: I would just add that beyond our 11 internal working group, as was mentioned in the staff 12 presentation, we will create a new technical advisory 13 committee, and certainly we will have fuels and 14 automotive and a variety of experts so that this issue 15 of validating the model can be addressed with that 16 forum as well. 17 CHAIRMAN LLOYD: I really applaud that step, 18 what you've done in this case working with the industry 19 here on the continuum, having them involved, both the 20 industry and some of the academic people from the 21 private sector, I think that's great. 22 Dr. Burke. 23 BOARD MEMBER BURKE: First of all, I want to 24 express my appreciation to the staff, because this is a 25 compilation of years of effort to deal with this very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 complex inventory. 2 South Coast especially welcomes this revision, 3 because we believe it represents an important 4 acknowledgment by the State of California, to us in the 5 metropolitan Los Angeles, ARB is finally looking at the 6 real extent of the mobile source emission problem. 7 Simply said, the mobile source component is 8 sharply higher than previously estimated. Although we 9 have long recognized this problem in concept, ARB's 10 revision can allow us to recognize issues during the 11 actual process of attainment planning. 12 Specifically, EMFAC 2000 should be a sounding 13 call for action to all of us here today. ARB must more 14 aggressively address mobile source emission to fulfill 15 our SIP commitment, a commitment to Californians and 16 the rest of the country, to achieve clean air standards 17 in this generation. 18 EMFAC 2000 makes it clear that lowering 19 on-road air emissions is not a luxury. It is a 20 linchpin to any successful attainment strategy in South 21 Coast and many other areas of the State. 22 While I support the approval of this revised 23 inventory, I would ask that the motion that we are 24 approving today would recommend to staff to contain the 25 following, that ARB staff will return to this Board in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 60 days to submit an outline of additional state 2 measures to reduce on-road mobile source emissions over 3 and above the current rule schedules. 4 The proposed frame work of the measures should 5 achieve sufficient on-road emission reductions to make 6 up for the heretofore significant underestimations of 7 the motor vehicle emissions. 8 Staff outline should also address the looming 9 transportation conformity issues faced in Sacramento 10 and in South Coast. 11 To meet the on-road challenge, we must all 12 work together to earnestly consider what technologies 13 are feasible, what incentives and support mechanisms 14 can help make transition toward zero emissions more 15 practicable and affordable, and finally, we need to 16 find a way to bring our residents an equal or better 17 quality of life using vehicles, products and fuels that 18 don't negatively impact their health. 19 Together I believe we can continue a careful 20 balance of steadily cleaning the air and a strong 21 economy, and I look forward to seeing the staff, what 22 the staff recommends in near term solutions to the 23 shortfall in the mobile source emission reductions. 24 I was asked to make that statement by the 25 Board of the South Coast District to reflect its PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 position on this item. 2 Thank you. 3 CHAIRMAN LLOYD: Thank you, Dr. Burke. 4 Any more questions or comments? 5 We have four witnesses signed up. First is 6 Tom Darlington, then is Steven Douglas and Jim Lombardo 7 and Michael Block. 8 Tom is with the Alliance of Auto 9 Manufacturers. 10 MR. DARLINGTON: Good morning, Mr. Chairman 11 and Board Members, staff. 12 My name is Tom Darlington. I work for a 13 company called Air Improvement Resource, in Detroit. 14 We have evaluated the EMFAC 2000 model and 15 have been involved in the process of evaluating over 16 the last two years for both automobile manufacturers, 17 both the Alliance and the Association of International 18 Automobile Manufacturers and also the engine 19 manufacturers in Chicago, the heavy-duty truck 20 manufacturers. 21 I would like to give you some comments today 22 on the light-duty part of this, not the heavy-duty. 23 Michael Block will be talking about that. 24 Our company has been involved or I have been 25 involved in evaluating these types of models for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 past 20 years. I worked on the MOBILE model at EPA. 2 So, we have a wealth of experience with us. I 3 should also say that my presentation does include a 4 couple of slides from, that were provided by Toyota 5 Motor Company. 6 Over the last couple of years, they have 7 developed quite an expertise in Japan in evaluating and 8 using these models, and their assistance in this review 9 was very valuable. 10 I can safely say that this EMFAC 2000, at the 11 risk of being slightly patronizing here, the EMFAC 2000 12 is the most robust emissions model, I believe, 13 certainly in the United States if not the world. 14 It contains so many new features in terms of 15 things that we understood before were not included in 16 the model and now are, and I think the staff has done a 17 great job, again, addressing all of those, trying to 18 address all those technical issues and getting them in. 19 I would like to sort of focus my comments on 20 an analysis of the inventories. First of all, it is 21 bad news when inventories, when we discover that 22 inventories went up, emissions went up. 23 But there are a couple of pieces of good news 24 related to that, that I think I want to try to 25 emphasize in this quick analysis of inventories that I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 want to cover a couple of issues that we have uncovered 2 that we would like to see changed in the model. 3 This particular slide shows vehicle miles 4 traveled for cars and light-duty trucks, from 1990 to 5 2020, for both the current model, which is the bold 6 line, and the new model, which is the dashed line. 7 What you see is a growth in vehicle miles 8 traveled, of course, in statewide here, and actually 9 this is the South Coast Air Basin, and that there is 10 some increase in overall vehicle miles traveled or 11 activity for cars and light-duty trucks from one model 12 to the next. 13 This next slide shows CO emissions over that 14 same period. In spite of a 40 percent growth, this is 15 part of the good news, I guess, in spite of the 40 16 percent growth in VMT from 1990 to 2020, carbon 17 monoxide emissions will drop from somewhere around 18 8,000 tons in 1990, down to under 1,000 tons in 2020. 19 I should state also that both of these models 20 are being compared on the same basis here. I did 21 include the LEV II program starting in 2003 into the 22 MVEI7G model so that both control programs or both 23 models properly reflect that particular program. 24 What you do see is that in 2020, CO emissions 25 are a little bit higher in the new model than the old PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 model. I will explain why in a bit. 2 The next chart shows NOx emissions for cars 3 and light-duty trucks. They are kind of higher in 1990 4 and just slightly higher in 2020, but in the 5 intervening years, it is about the same, a wash between 6 the two models. 7 Again, you see extremely significant 8 reductions in NOx emissions from 1990 and even 2000 out 9 to 2020, in spite of the growth of vehicle miles 10 traveled. 11 The next slide shows ROG emission, and this, 12 or hydrocarbon emissions of both exhaust and 13 evaporative, and here we do see increases in emissions 14 all the way along, but again, very significant 15 reductions from 900 per day in 1990 down to under 100 16 tons per day in 2020, and that line is still trending 17 down. 18 So the question is, what part of the fleet is 19 really causing the increases in the future inventories, 20 because that has important implications for what you do 21 in terms of controlling the inventory. 22 To address this question, we divided the fleet 23 into two groups. The LEV II regulations, which were 24 passed by the Board a little over a year ago, they 25 start in 2003. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 So, we took that latest technology fleet, and 2 we divided the fleet into 2003 and before 2003 and 3 estimated vehicle miles traveled and inventories for 4 both of those, and those are shown in the next three 5 bar charts. 6 CHAIRMAN LLOYD: Tom, if I'd known you were 7 going to be on so long, I probably would have put you 8 on a time frame. 9 So, try to work through relatively 10 expeditiously. 11 MR. DARLINGTON: Okay. 12 I'm going to say then, the next three charts 13 are in front of you, basically show that the majority 14 of the emissions increase in this model comes from the 15 pre-2003 vehicles. Those vehicles that are on the road 16 today and that are not subject to the LEV II 17 regulations. 18 Therefore, if you're thinking in terms of 19 controlling emissions, then we need to think about 20 improving in-use fuel more, improved I/M and 21 implementing checks for leaking vehicles. 22 You can take some time to look at that. 23 There are a couple of issues with the model 24 that we would like to discuss. There are some problems 25 with estimating the benefits of ZEVs. I would like to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 discuss the OBD response rate, and finally, evaporative 2 emission of LEV II vehicles. 3 On the benefits of electric vehicles, this is 4 something that I can probably skip over, because the 5 staff is going to address these problems, which were 6 discovered by industry and by Toyota. 7 To make a long story short here, the model 8 currently loses electric vehicles. They basically drop 9 out of the fleet, but there are changes that the staff 10 is doing to make sure that that doesn't happen. 11 CHAIRMAN LLOYD: I don't think that was 12 staff's intention. 13 MR. DARLINGTON: They are going to take care 14 of that. 15 On OBD response rates, when vehicles with OBD 16 exceed one and a half times the standard, that is when 17 the light comes on. The model includes an assumption 18 about owners' response to OBD light when it comes on. 19 Under 70,000 miles, the response rate is 20 assumed to be 95 percent, and the vehicles are assumed 21 to be fixed immediately. 22 Above that mileage though, the rate is assumed 23 to be zero. We think the zero response rate above 24 70,000 is unnecessarily pessimistic. We believe people 25 will respond to those lights. Those cars still have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 value, and people will want to get them repaired, maybe 2 not everybody will, but more than zero percent. 3 We've talked to the staff about this. Their 4 response is they don't have the data, and we haven't 5 been able to find the data yet. 6 We are supportive of an ARB or industry or a 7 joint research program on the OBD response. 8 Finally, on evaporative emissions of 0.5 LEV 9 II vehicles, this is -- the LEV II 0.5 evap durability 10 is 150,000 miles. The staff report basically said that 11 the extended durability proposal to require 12 manufacturers to demonstrate that evap emissions are 13 durable on older vehicle; however, EMFAC 2000 model 14 assumes vehicles are ten times -- the average vehicle 15 is 10 times their standard at 150,000 miles. 16 It's 5 grams instead of 0.5 grams. So, if the 17 standard is intended to improve durability, I guess our 18 question is, why are emissions being assumed to be 10 19 times the standard? 20 The next chart shows this pretty clearly, that 21 enhanced evap vehicles do meet their two gram standard 22 at 100,000 miles, but the new LEV II evap vehicles 23 don't come close to meeting their standard of 150,000 24 miles, in spite of the fact that manufacturers have to 25 demonstrate that they will, and that is due to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 assumption of leaking vehicles among these vehicles, 2 and so, we believe that this, that the emission rates 3 for 0.5 vehicles should be revised to come closer to 4 the standards of 150,000 prior to approving the model. 5 Those that our recommendations, that the staff 6 fix the ZEV and the population problem, which they have 7 committed to doing, that the evaporative emission of 8 0.5 LEV II vehicles be taken care of. 9 CHAIRMAN LLOYD: Thank you very much, Tom. 10 Questions or comments from the Board. 11 Yes, Ms. D'Adamo. 12 BOARD MEMBER D'ADAMO: I would like to know if 13 the staff recommendations include the research program 14 for OBD response as suggested. 15 MR. CACKETTE: Yes. 16 We suggested to do this. 17 Let me just give you a brief summary of what 18 the issue was. 19 This issue was raised very early in the 20 process. But OBD II vehicles have just occurred since 21 the 1996 model year. So, there aren't any of them out 22 there at that high mileage. 23 We seriously considered, should we change our 24 assumption, which right now is an either or assumption. 25 Is either when it is under warranty, they all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 get fixed, and when it's out of the warranty, none of 2 them get fixed. 3 We tried to say, should we have a slope that 4 links those together? 5 But we have no data. So, what we decided to 6 do was to keep with the assumption rather than adding 7 another assumption on top of it and do some kind of a 8 study as these cars get a little bit more miles on 9 them. 10 So, I think the next version of the model will 11 have more database, data-driven assumption about OBD 12 response. 13 I don't think that it affects the overall 14 inventory, per se, because what happens is the one's 15 that don't get fixed, they basically get caught in the 16 I/M program. 17 So the I/M program takes credit for reducing 18 their emissions, and we are moving the I/M program 19 towards an OBD-based program. 20 To some extent, the uncertainty is who gets 21 credit for the lower emissions, or for correcting the 22 high emissions. 23 BOARD MEMBER D'ADAMO: I'd be curious as to 24 conclusions of that research. 25 Is that something that would be coming before PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 the Board anyway? Do we have an OBD report coming 2 before us any time soon? 3 MR. CACKETTE: We have been reporting on OBD 4 annually to the Board and its direction, and there is 5 one coming up, but the results of this study, to some 6 extent, depend on a fairly large number of cars with 7 high mileages on them being out there, so we can see, 8 you know, beyond 70,000 miles so that we can see what 9 the owner response is, and right now those cars are at 10 most four years old, which on average means they are 11 about 50,000 or 60,000. 12 So, it may take a little while before we have 13 enough data to come back to you, but we would certainly 14 want to report that to you in our OBD updates. 15 CHAIRMAN LLOYD: I agree. 16 I think it is a very important issue. I also 17 understood, and this is from Bob Sawyer, Tom, in 18 Wisconsin, that in some cases there, they have done 19 some of the studies where in fact they failed smog 20 check but the light didn't go on. 21 So, I guess it's a complicated issue. 22 MR. CACKETTE: In order to use OBD as a 23 cheaper and better way of doing smog checks for these 24 vehicles that are so equipped, there is number of 25 studies going on in California and around the country PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 looking at these cars as they go through smog check 2 programs. 3 In California, you know, we don't smog check 4 them until they are five years old to start off with. 5 So, these cars really haven't been in smog check, but 6 in other states, they start at two years old, and 7 Wisconsin is using that information to see how well 8 they work. 9 I think the conclusion on OBD is that, I just 10 listened to Dr. Norbeck present this, because he's 11 doing a study for us, just yesterday, is that most of 12 the cars that have problems are found by OBD, way more 13 than the I/M exhaust test does. 14 So, it is a more sophisticated, more sensitive 15 test, but you do find cars that have relatively minor 16 emission increases, and that is the way it's designed, 17 and the question has always become, do we have to fix 18 those, especially if the cost is high. 19 That is one of the issues that is kind of 20 being tossed around right now. 21 CHAIRMAN LLOYD: Mr. Calhoun. 22 BOARD MEMBER CALHOUN: This recommendation is 23 for a research program, but I sort of envisioned 24 looking at a lot of other issues that will come up and 25 it may not just be OBD. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 I think that we are committed to looking at 2 problems that are identified here today, and my guess 3 is that the staff will continue to work on these things 4 as time passes. 5 MR. CACKETTE: As an example of that, when we 6 find a new source of emissions, like liquid leakers, 7 you know, on one hand you go like, why didn't we figure 8 that out before? 9 On the other hand you sort of salivate, 10 because here are some real emissions that maybe we can 11 do something about, and while the model didn't have 12 them in them, the air did. 13 If we can get them out, that is beneficial. 14 Already there is the program under way of the Bureau of 15 Automotive repair to develop a way of inspecting for 16 liquid leakers in the smog check program, and we're 17 going to pilot that and try to implement it as soon as 18 we can in smog check. 19 They may use a sniffer or a special test to 20 get at some of these leaks, because these leaks, by the 21 way, are not like gasoline pouring on the ground. 22 They are leaks that occur around fittings, and 23 because the engine systems are hot, they often just 24 evaporate right away, so you don't see a pool of 25 liquid, but there are ways of finding them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 CHAIRMAN LLOYD: When they do to evaporate, 2 apparently they get into the groundwater, soil, 3 etcetera and so on. 4 Professor Friedman. 5 BOARD MEMBER C.H. FRIEDMAN: I just wondered 6 how do you planned to address the evaporative emissions 7 of the 0.5 LEV II? 8 MR. CACKETTE: That illustrates one of the 9 dilemmas of these emission models, is that we rely on 10 them for projecting to the future, but of course, we 11 don't know anything about the future, so we make to 12 make estimates and use engineering judgments and some 13 people would say guesses. 14 This has been an issue. As a result of the 15 process between December and now, we actually did lower 16 the emission rates of these newer vehicles, meaning we 17 programed the model to be more optimistic as to how 18 many will deteriorate, but whether they will stay in 19 place and just meet their standard for 150,000 miles, 20 which is what the reg requires, or whether they'll end 21 up being dirtier in use is kind of an unknown question 22 right now. 23 I guess this one example, we have, unlike the 24 heavy-duty one, for example, I gave, we probably sided 25 on the pessimistic side, but I can tell you that if I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 had estimated that every car was going to meet every 2 standard we ever adopted, I would have been wrong 99 3 percent of the time. 4 That is why we've had to go back. That's why 5 we have smog check. That's why we have programs that 6 have to find some way to cleanup some of the problems 7 that occur when the cars are actually in people's 8 hands. 9 So, I don't know of a way of revolving it, per 10 say, because we don't have a factual basis until some 11 of these cars have got 150,000 miles on them, which is 12 going to be literally 10 years from now. 13 CHAIRMAN LLOYD: Thank you. 14 Any other comments or questions for this 15 witness? 16 Next is Steven Douglas, from the Alliance of 17 Automobile Manufacturers. 18 MR. DOUGLAS: Good morning, Mr. Chairman, 19 Members of the Board. 20 I'm Steven Douglas, the Director of 21 Environmental Affairs for the Alliance of Automobile 22 Manufacturers. 23 We're a trade association of 14 car and 24 light-truck manufacturers, representing approximately 25 90 percent of the new vehicle market in California. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 Mr. Darlington presented a lot of the 2 information that I was going to summarize before he 3 presented it but -- so, I will just hit the highlights. 4 First, I would like to echo his or express the 5 appreciation from the Alliance and the automakers. 6 You truly have a gifted staff. They have 7 worked very hard on this model. 8 It is extremely complex. It's comprehensive. 9 It is robust, and we certainly applaud their efforts. 10 They have worked closely with us on a 11 historical basis for a number of years. We have 12 actively participated in each revision of the model 13 from 7F and 7G and EMFAC 2000, and the manufacturers 14 have also provided a lot of information through direct 15 individual manufacturer testing as well as through 16 organizations that we sponsor, such as the Coordinating 17 Research Council or the Auto Oil Program. 18 So, I think we have quite a bit of history. 19 So, just to hit the highlights, the one 20 observation that I would like to make about EMFAC 2000 21 and the emissions increase that you see, and I think 22 this gets to Dr. Burke's question, is that if you look 23 at where these emission increases are coming from, they 24 are coming from pre-2003 vehicles. 25 They are setting aside the liquid leaker, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 which I think it's acknowledged that's a guess, and we 2 can dispute that. 3 But setting aside that, the overwhelming 4 majority of increases are coming from non LEV II 5 vehicles. 6 So, what does that say? 7 To me it says that we're headed in the right 8 direction. We have made the right decisions. The 9 regulations that we put in place in 1998, as far as LEV 10 II, they are headed in the right direction. 11 They are taking care of real world problems. 12 So, I think that is worth observing, and I wanted to 13 make that observation. 14 Second are the two issues that we have, and 15 the first is the electric vehicles and how the benefits 16 for those are calculated, and the second is the 17 evaporative emissions. 18 The evaporative emissions, assuming that it's 19 10 times the standard, not only does -- would that 20 ignore the regulation that was passed in LEV II, the 21 technology that's being developed to meet that 22 regulation, advances in On-Board-Diagnostics, which 23 will come out in 2003 for the evap system. 24 It also is inconsistent with other similar 25 emissions where the exhaust emissions are assumed to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 very close to their, the standard of the durability, 2 but it is also inconsistent with the enhanced evap 3 assumptions that are made in the model. 4 Those are my comments on this. 5 CHAIRMAN LLOYD: Thank you very much, Steven. 6 Any questions or comments from the Board? 7 Thank you very much. 8 Next is Jim Lombardo, from the California 9 Motorcycle Dealers. 10 MR. LOMBARDO: Thank you, Mr. Chairman, Board 11 Members. 12 You may be happy, I will probably be your 13 shortest witness. 14 John Paliwoda, our Executive Director, who is 15 the technician who understands this kind of stuff, was 16 not able to be here today. 17 We did not get our, the information until 18 Friday and Saturday, so we didn't have a lot of time to 19 look into it. 20 So, I have a written statement here from Mr. 21 Paliwoda on our position. 22 Thank you for your time. 23 CHAIRMAN LLOYD: Can you just give us the 24 gist, is it supportive, not supportive, concerns? 25 MR. LOMBARDO: Not supportive and kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 questioning the numbers, because last year we did go 2 through our on-road issues on motorcycles and how much 3 pollutants that they put in, etcetera, and I believe 4 that when John reviewed it, he thought that the numbers 5 were a little high. 6 CHAIRMAN LLOYD: I trust staff will continue 7 to work with them? 8 MR. LOMBARDO: We work with Bob frequently. 9 Thank you, again. 10 CHAIRMAN LLOYD: Thank you. 11 Our last witness here is Michael Block, with 12 the Engine Manufacturers Association. 13 MR. BLOCK: Good morning. I'm Michael Block, 14 and I am speaking today on behalf the Engine 15 Manufacturers Association. 16 EMA is the national trade association of 17 worldwide manufacturers of engines. Our members 18 include Caterpillar, Cummins, Detroit Diesel 19 Corporation, International, Mack and others who 20 manufacture the majority of the heavy-duty 21 compression-ignition engines that are used in 22 on-highway applications. 23 EMA is aware of the importance of an accurate 24 emissions inventory model as the basis for effective 25 regulation and has long supported and participated in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 efforts to improve inventory projections. 2 In fact, it wasn't too long ago that I stood 3 before you and echoed similar sentiments when the Board 4 approved the large compression-ignition portion of 5 ARB's Off-Road emissions inventory model at the January 6 2000 hearing. 7 As Tom Darlington's comments today 8 specifically addressed the heavy-duty component, the 9 heavy-duty emissions inventory of ARB's EMFAC 200 10 on-highway model, being brought before the Board today, 11 is the result of a unique working relationship that was 12 formed between ARB, EMA, EPA, New York DEP, other 13 industry specialists and academics who were challenged 14 to identify a test cycle and assist in the development 15 of an appropriate heavy-duty on-highway emissions 16 model. 17 I would like to step back for a moment and 18 briefly describe that process from the engine industry 19 perspective, for I think it underscores the 20 achievements that can be made when all affected parties 21 sit down, roll up their sleeves and work towards a 22 technically valid solution. 23 As most of you are aware, ARB's current 24 on-highway emissions inventory model, MVEI7G, has been 25 in use for quite some time. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 EMA supports periodic review and, if 2 necessary, revision to emission inventory models as new 3 modeling techniques and new input data becomes 4 available, and MVEI7G was no exception. 5 A key component for an accurate emissions 6 inventory model is the determination of vehicle Base 7 Emission Rates, or BERs. 8 BERs are the vehicle emission data needed to 9 calculate California's emissions inventory in units of 10 tons per day. 11 The current MVEI7G model uses an engine 12 dynomometer-based test cycle in conjunction with a 13 multiplier to convert heavy-duty engine emissions into 14 vehicle emissions. 15 Due to the uncertainty of this 16 engine-to-vehicle conversion multiplier, ARB rightly 17 questioned this methodology and suggested that direct 18 use of a chassis-dynamometer test would be more 19 reflective of real-world conditions. 20 ARB staff selected the West Virginia 21 University chassis-based five-mile test cycle for the 22 version of EMFAC 2000 that was released late in 1999. 23 At ARB's EMFAC 2000 workshop in December 1999, 24 EMA expressed concern that the five-mile cycle was not 25 representative of in-use operation and had not been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 adequately reviewed. 2 EMA also expressed concerns regarding engine 3 deterioration methodology as well as the methodology 4 used to estimate emissions from earlier vehicles and 5 project emissions from future vehicles. 6 Based on these and other stakeholder comments, 7 ARB postponed a decision on EMFAC from an earlier Board 8 Hearing that was going to be held in December and 9 provided more time to identify an appropriate 10 heavy-duty test cycle. 11 Stakeholders consisting of industry, state and 12 federal government regulators, independent modeling 13 experts, academia and environmental groups were invited 14 to be part of a unique working group whose goal was to 15 consider an appropriate test cycle that could be used 16 to determine BERs for heavy-duty vehicles. 17 The group realized the enormity of the task of 18 trying to develop a new cycle and collect data over 19 that cycle in a comparatively short timeframe and 20 instead decided to use available data on previously 21 developed tests and select an existing chassis-based 22 cycle that would be the most representative of 23 real-world operating conditions. 24 After numerous meetings and conference calls 25 through as recently as the early part of this month, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 the group recommended the Urban Dynamometer Driving 2 Schedule, UDDS, in large part due to the comparatively 3 large amount of validated data from vehicles tested on 4 the cycle. 5 The UDDS ameliorates many of EMA's issues 6 brought up at the December workshop. It is more 7 representative of real-world driving conditions, has 8 undergone considerable review by the working group and 9 has been validated through test measurements of 10 on-going trucks, all essential ingredients in a robust 11 test cycle selection. 12 This is the chassis-dynamometer test cycle 13 being proposed by the staff today. 14 The working group approach has resulted in a 15 more accurate heavy-duty on-highway emissions inventory 16 model. 17 By participating in the working group, 18 stakeholders of varying backgrounds and expertise were 19 able to provide their input. 20 This has resulted in a better heavy-duty test 21 cycle for the calculation of base emission rates and 22 resultant emissions inventory projections. 23 The group also addressed other heavy-duty 24 modeling issues, and working closely with ARB staff, 25 made recommendations for changes to other critical PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 areas of the model, including deterioration rate 2 calculations and the methods used to estimate emissions 3 from older vehicles as well as project emissions from 4 future vehicles. 5 With our knowledge of the industry, EMA 6 provided technical expertise during this process, and 7 it has resulted in a model that best reflects the 8 emissions inventory for California, based upon the best 9 information currently available. 10 EMA is proud to have served on this working 11 group, participating in the process of striving to 12 develop a more accurate emissions inventory model in a 13 comparatively short timeframe, for it is through this 14 process that realistic regulations reflecting 15 real-world driving cycles can ultimately be 16 promulgated. 17 We realize that our work is far from complete. 18 A longer term effort is in the planning stages that 19 proposes a collaborative effort such as the one 20 outlined above to start work on a new heavy-duty cycle, 21 that would be specifically geared towards emission 22 inventory modeling. 23 EMA has expressed interest in participating in 24 this process. As that process comes to fruition, I 25 would once again look forward to appearing before this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 Board to support the work group approach for a robust 2 emissions inventory for California. 3 I wanted to make one personal observation that 4 is not in the prepared comments. I, too, appreciate 5 the work that ARB staff has done in moving forward on 6 the work group process. There was a huge amount of new 7 information and data that we discovered subsequent to 8 the 1999 workshop that we had to work through and 9 process and reprocess and run through the models and 10 schedule the conference calls, and Mark Carlock's staff 11 did an outstanding job of moving that forward. 12 Thank you for the opportunity to comment. 13 I would be pleased to answer any questions you 14 may have. 15 CHAIRMAN LLOYD: Thank you, Michael. 16 Any questions from the Board? 17 BOARD MEMBER RIORDAN: Mine isn't a question 18 but a comment. 19 Often times we have opportunities to work 20 together and make some corrections or compromises with 21 groups like yours, and I am very pleased that the staff 22 took additional time to work with you on this. 23 It makes it easier for the Board to deal with 24 the final recommendation, and I also want to 25 congratulate the staff on what I assume have been many, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 many hours to produce the product that we have before 2 us today. 3 I do appreciate the work that you have done. 4 CHAIRMAN LLOYD: Thank you. 5 Clearly the EMA can continue to help us when 6 we try to estimate emissions in the future so we do not 7 have to tackle some of the tough issues as in the past. 8 Professor Friedman. 9 BOARD MEMBER C.H. FRIEDMAN: Not a question 10 for you, sir. 11 Before we -- 12 CHAIRMAN LLOYD: May we release Michael? 13 BOARD MEMBER C.H. FRIEDMAN: Yes. 14 CHAIRMAN LLOYD: Thank you very much. 15 BOARD MEMBER C.H. FRIEDMAN: I do have a 16 question of the prior speaker and the points made in 17 the letter from the Motorcycle Dealers Association. 18 Does staff have any comments on their comments 19 and to what extent they will be addressed? 20 MR. CARLOCK: We still want to look at the 21 letter. 22 I am afraid what is being done is a comparison 23 of the inventory that we did last just which is just 24 exhaust, not what we are proposing today. 25 It appears that we have increased the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 inventory dramatically, looking at all hydrocarbon -- 2 BOARD MEMBER C.H. FRIEDMAN: You will respond 3 to them? 4 MR. CARLOCK: Yes. 5 We will work with them. 6 CHAIRMAN LLOYD: Do you do a shed test for 7 motorcycles? 8 MR. CARLOCK: Yes, we do. 9 CHAIRMAN LLOYD: Any or questions or comments 10 from the Board? 11 BOARD MEMBER CALHOUN: Yes. 12 I guess I would like to congratulate the staff 13 also, Mark in particular. I notice his hair is grayer 14 every day. 15 Coming out with an inventory is not an easy 16 task. There will always be questions, and one thing 17 that happens as a result of the inventory is 18 identification of the emissions that we have overlooked 19 in the past. 20 I think that the statements that Dr. Burke 21 made is something that the staff has given some thought 22 to. There are more motor vehicle emissions out there 23 than we heretofore have come up with, and it's 24 incumbent upon us now to come up with something, and 25 the request of the South Coast District for staff to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 come back in two months, I do not know if that is an 2 appropriate time, but it is something to take into 3 consideration. 4 CHAIRMAN LLOYD: I would like more discussion 5 on that issue. 6 I would also like to commend staff. I know 7 Mark has gone through a lot. 8 Linking the NAS report and MOBILE on a 9 recommendation that ARB and EPA and DOT get together 10 and try to harmonize the model. 11 Do you feel that is something that is a 12 reasonable thing to expect, and in what time frame, or 13 is it impossible to bring the models together in the 14 next five years? 15 MR. CACKETTE: Technically, we will find more 16 and more similarity, because we are looking for broader 17 sources of data and not just sources in California. 18 There are fewer and fewer disagreements 19 between the model, and the California model is that we 20 have cleaner cars and due to standards and other 21 things, but the downside of one option is why not rely 22 on the MOBILE model, let it predict, and this review 23 process might not be timed to match the State 24 Implementation Plan requirement, and ours is. 25 The reason we do it now is the upcoming need PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 in the South Coast and San Joaquin Valley to revise the 2 SIP. If we were to rely on EPA's current schedule 3 based on national needs, that model may not be 4 available in time. 5 There will be a need to have a separate one 6 for a long time. 7 CHAIRMAN LLOYD: Okay. Any more discussion on 8 the item here? 9 One of the things, Mr. Calhoun and Dr. Burke's 10 suggestion, we are trying to approve this model, and 11 then the additional thing that Dr. Burke said, we will 12 come back and look at the MOBILE issues. 13 I should ask staff, who is already doing the 14 work, and maybe we should talk to Dr. Burke and explain 15 what is going on here so that we try not to confuse 16 this issue with the ongoing programs related to the SIP 17 and others. 18 I agree, we need to look, but on the other 19 hand, my experience with emissions inventory is we will 20 find more. 21 The more we look, the more we find. 22 MR. CACKETTE: That is why we look. 23 CHAIRMAN LLOYD: So, I do not know if the 24 Board is comfortable to make it a clean issue of 25 approval and try to get the staff to work with Dr. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 Burke, and if there is no satisfaction, then coming 2 back. 3 Dr. Burke, is that okay? 4 BOARD MEMBER BURKE: That is all right. 5 Or better yet, I should say, if we could ask 6 the staff to work with Dr. Walenstein and see if they 7 can't craft something that would be satisfactory and 8 not impact the item. 9 CHAIRMAN LLOYD: I think that is a great idea. 10 In fact, get the staff together with Dr. 11 Walenstein to make sure he is fully convinced that we 12 are doing what we can to meet the goals. 13 That is a great way we can keep this one clean 14 here. 15 With that, do I have a motion to approve? 16 BOARD MEMBER McKINNON: I so move. 17 BOARD MEMBER RIORDAN: Second. 18 CHAIRMAN LLOYD: All in favor, say aye. 19 Any negatives? 20 Thank you very much. 21 Again, thank you. I do realize this was a 22 tough item, and I agree that staff overall, and Mark in 23 particular, put a lot of work in on it, and we look 24 forward as the Board pushes forward to more 25 comprehensive linkage from the stationary side and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 mobile side with Ms. Terry and Tom involved. 2 This external group and internal group will 3 help in the future as we move ahead. 4 With that, we will take a lunch break. Let's 5 resume at 12:30 6 (Thereupon the lunch recess was taken.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 A F T E R N O O N S E S S I O N 2 --o0o-- 3 CHAIRMAN LLOYD: The next item on the Agenda 4 today is 00-5-3, Public Meeting to consider an 5 informational report on air pollution trends, past 6 progress and future challenges. 7 This Board has worked hard over the years to 8 improve air quality for Californians. In most cases, 9 we have either achieved or greatly advanced our quest 10 for healthful air quality. 11 However, in several cases, we still have much 12 to do to attain standards or to help address broader 13 air pollution issues, such as the indoor air quality 14 problems we talked about last time, or new issues of 15 concern, like emissions of global warming gases. 16 The staff's presentation today should help us 17 better understand the issue we will face as we continue 18 our quest for clean air. 19 Mr. Scheible. 20 MR. SCHEIBLE: Thank you, Mr. Chairman. 21 You are correct. We have made great progress, 22 notwithstanding large growth in population and the 23 growth in the economy of California. 24 The Board has adopted dozens of rules that 25 have prompted technology that dramatically reduced PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 pollution from single sources and provided cleaner 2 vehicles and fuels. 3 The local air pollution districts and the 4 Board have reduced pollutants in almost every category 5 of large and small sources of pollution. 6 However, as we work to achieve our goals in 7 reducing remaining emissions and meet the standards, 8 there are global issues that will affect the progress. 9 Today's presentation will provide information 10 about how air pollution has changed in the last 20 11 years and forecast what issues we can expect during the 12 first 20 years of the twenty-first century. 13 There is one issue that we won't be addressing 14 today, because we talked about it last month, and that 15 is indoor air quality. We will take a pass on that. 16 We will present part of the issues in the next 17 20 years that are facing us. 18 To begin the presentation, let me introduce 19 Leon Dolislager. 20 MR. DOLISLAGER: To begin, it is a good time 21 to celebrate the successes and look ahead to the 22 remaining challenges and plan for the future. 23 During the presentation, we will look at the 24 past progress and identify the future challenges. 25 Specifically, we will note how the Board and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 local districts have reduced pollution and improved the 2 air we breathe. We will identify the challenges ahead 3 in air quality standard. 4 Last, we will address how the changes we make 5 impact air quality globally and address the work we 6 still have to do. 7 The air we breathe is significantly cleaner 8 than 20 years ago. We have set ambient standards to 9 protect the vulnerable population, and we have been 10 successful. 11 As result of regulations on emissions, cars 12 are 95 percent cleaner and smoke stacks are less than 13 90 percent polluting as a result of reformulated fuels, 14 the removal of lead, as well as the reduction of sulfur 15 and other changes. 16 As you can see on the slide, reductions of 17 these emissions have declined significantly over the 18 past 20 years. 19 Projections indicate that in spite of 20 increased population and industrialization, these 21 downward trends will continue over the next 15 to 20 22 years. 23 Carbon dioxide, a gas, is not subject to 24 control under the Clean Air Act, whose growth is 25 unchecked, the main source is burning, fossil fuels. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 Since the industrial revolution, ambient 2 concentrations increased and forecasts indicate growth 3 well into the next century. 4 You will hear more about CO 2 later in the 5 presentation. 6 The significant decline in related compounds 7 occurred in a period of remarkable growth, growth of 8 economy, population and number of vehicle miles 9 traveled. 10 While it bodes well for the State's economy, 11 it is a demand for goods and services along with the 12 pressure on the environment. 13 Technology has improved, so anticipated growth 14 will demand design of control measures by necessity and 15 target smaller as well as already controlled sources. 16 Ambient standards identify what can be present 17 in outdoor air without a threat to health or 18 environment. 19 California standards are more stringent than 20 the Federal levels of criteria set for particulates, 21 lead and sulfates, nitrogen dioxide and sulfur dioxide 22 are below Federal and State standards. 23 Levels of carbon dioxide in two areas of the 24 state are in violation of health standards. Attainment 25 of CO standards is in sight for the entire state. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 Significant strides have been made in 2 controlling pollutants. Although ozone, particulate 3 matter and toxic air contaminants, the peak is lower 4 than 20 years ago, despite improvements that we have 5 seen in 20 years, we have a long way to go. 6 Ozone, particulate matter still present health 7 and environmental challenges, and global issues impact 8 all aspects in the State. 9 Ozone is a primary component of urban smog and 10 represents the biggest health risk, damage to lung 11 tissue and can reduce lung capacity up to 20 percent. 12 Children and people with asthma or other 13 respiratory problems are more vulnerable. 14 Ozone has reduced 50 percent since 1980. Most 15 areas have days above the state standard. 16 As a result of aggressive actions, they have 17 declined in the South Coast, what is undisputed the 18 smog capital of the United States. 19 Ozone concentrations in other areas of the 20 State, some areas, such as San Joaquin Valley, have 21 shown only modest improvement. 22 Additional reductions in emissions beyond 23 those produced by fully adopted regulatory measures 24 will be needed to counteract effects of growth. 25 A second but no less serious issue is control PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 of particulate matter, or PM. PM is now the most 2 harmful of all pollutants with exposure, 8,000 to 3 18,000 premature deaths in California, annual State 4 related cost of $4- to $16-billion. 5 The particles of most concern, PM 10, have a 6 diameter of 10 micrometers and pass into the lung, 7 contributing to the lung cancer, lung damage and 8 worsened heart function and asthma and other 9 respiratory diseases. 10 Levels of PM has varied over 20 years and is 11 on the decline in the State. However, additional work 12 is needed to develop control measures capable of 13 achieving the State ambient standard. 14 PM is linked to the concern about toxic air 15 contaminants that threaten the State's population. 16 Diesel PM recently identified as contributing 17 70 percent of the statewide risk. Benzene and 18 1,2-Butadiene contribute 20 percent. All other TACs 19 are at 16 percent, such as perchloroethylene, used in 20 dry cleaning, and asbestos, make up the total of other 21 cancer risks. 22 This slide is based on cancer risks attributed 23 to toxic air contaminants. Overall, PM risk rose in 24 heavy-duty trucks, increased by early 1990, and then 25 the implementation of the reformulated diesel fuel and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 reduction of sulfur and aromatics in fuel, with 2 identification and control of other contaminants, these 3 emission have reduced in level of risk. 4 California does not exist in a vacuum. 5 Pollutants in other nations and continents affect our 6 air quality. 7 Changes in global climate make the job of 8 developing control strategies that more challenging. 9 In 1989, the Board was presented with an 10 overview of projected impacts on California. In 11 response, staff was directed to consider these 12 potential concerns in the total analysis of any future 13 control measures. 14 Impacts from global climate change is more 15 apparent. Global industrialization is increasing the 16 concentration of pollution. 17 We are controlling ozone in North America, 18 which increased 20 to 30 parts a billion in the last 19 century. Background concentration is one-half of the 20 State standard. 21 The background of PM 10 is approximately 22 one-third of the State standard. 23 As these background pollutant levels increase, 24 they make up a larger fraction of the total pollution 25 allowed before the ambient air standards are exceeded. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 These increases result in the need to gain 2 controllable reductions. For example, if an area's 3 background ozone increased 10 parts a billion from, 4 say, 40 to 50 parts a billion, emission reduction 5 needed to attain the State standard would increase 10 6 percent or more. 7 The changes in global climate are expected to 8 create regional changes in temperature humidity, 9 affecting future controls. 10 Changes in temperature, the atmosphere and 11 transport patterns into California, as this slide 12 shows, global dust and smoke can be far reaching and 13 have direct effects in California. 14 Within 7 days of a dust storm in northwestern 15 China, significant increases in PM levels are detected, 16 with a doubling of PM levels in Northern California. 17 Concerns about global warming must be taken 18 seriously. Most scientists acknowledge that global 19 change is related. 20 The only remaining issue is how much, how 21 soon. The overall warming trend has been recognized 22 since the late nineteenth century, with it being the 23 most rampant in the past two decades, the 10 warmest 24 years of the last century all occurred in 15 years. 25 1998 was the warmest year on record. Global PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 temperature is forecast by scientists at Massachusetts 2 Institute of Technology to increase over the next 100 3 years. Confirmation is further substantiated by the 4 rise of sea level of 4 to 10 inches and a decrease in 5 the snow cover and glacial ice. 6 Unseasonable weather is becoming common place 7 and is increasing. Continued temperature rise is 8 likely to accelerate the rate of climate change. 9 The concentration of carbon dioxide has risen 10 25 percent since pre-industrial times and is continuing 11 to increase by one-half percent per year. 12 Analysis of ice correlates to being the 13 highest in the past 160,000 years and show a close 14 correlation with global temperatures. 15 Carbon dioxide is heating surrounding air and 16 trapping in the surface, like the air in a car is 17 trapped and heated. 18 Since it is not evenly distributed, regional 19 triggers change with weather. 20 Projected climate changes impact the air 21 quality of all public health and environment. The 22 result in changing conditions may influence smog and 23 the amount of pollution that remains in the air. 24 For example, variation in temperature of land, 25 sea or air affect air current types and duration of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 precipitation. 2 Pollutant levels will vary in a given area. 3 Population growth patterns and vehicle usage fluctuate. 4 These changes impact and affect control strategies in 5 attainment of air quality standards. 6 Agricultural may be affected by regional 7 climate changes, which alters growing patterns, new 8 pest problems or erratic temperatures or rainfall, and 9 these have a negative effect on plants ability to 10 withstand climatic assault. 11 Ground level ozone is damaging to plants in 12 their uptake of CO 2. 13 We do not have time to go into the details of 14 all climatic changes, but you should have a copy of the 15 report of the Union of Concerned Scientists in your 16 briefing package. 17 Change in weather patterns influence the 18 development of high concentrations. For example, 19 during 1997, the El Nino year, there was one stage smog 20 alert in Los Angeles. El Nina resulted in 12 alerts, 21 even though the emission levels were lower. 22 Such extremes in weather is expected in the 23 future, with higher ambient temperatures and secondary 24 production of ozone. 25 Weather impacts many things. High PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 temperature, strong and stable air mass are the ideal 2 conditions for ozone. Higher temperatures cause 3 increase in emissions, more fuel evaporation and demand 4 on power plants increases. 5 Air pollution is made worse by increases of 6 hydrocarbon. As the temperature rises, air quality 7 diminishes. There is additional exposure to ozone and 8 incidents of heat-related problems increase. 9 This next slide shows the major gases that 10 contribute, methane is 10 percent, carbon dioxide 11 represents 88 percent, and nitrous oxide is about 2 12 percent. 13 Gases vary greatly in total mass in 14 relationship to one another. CO 2 is used as a common 15 denominator and the value of other gases are expressed 16 in CO 2 equivalent. 17 The principal source of CO 2 is fossil fuel 18 and the burning of forests and plants. 19 Agriculture and landfills are the source for 20 methane. 21 Catalytic converters contribute to the level 22 of nitrous oxide. 23 The increase in carbon dioxide is the result 24 of human activity. In 1996, the US was responsible for 25 one-quarter of the gas emissions worldwide. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 Europe and Asia contributed 24 percent, and 2 Russia and Eastern Europe was about 14 percent, with 3 China producing 13 percent of CO 2, with the remaining 4 25 percent coming from the rest of the developing 5 world. 6 If we look at the distribution of emissions 7 per capita, we find that the United States contributes 8 more greenhouse gas emissions per person. 9 California emissions are lower than the 10 national average, due to less polluting with natural 11 gas to run the power plants. We have a favorable 12 climate that decreases the use of coal and fewer high 13 energy industries in California. 14 However, we buy a sizable amount of 15 electricity that is produced by coal from electrical 16 generators, and these are noted on the slide. 17 Per capita total, we may produce less than the 18 U.S. average, California citizens, on average, per 19 capita, than individuals in other parts of the world. 20 We need to find ways now to significantly 21 decrease carbon dioxide at the current rate by 2020. 22 Greenhouse emissions will parallel CO 2, 23 because of the dominance compared to methane and 24 nitrous oxide, and more than half is related to 25 transportation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 Half of the carbon dioxide comes from 2 transportation, and this has continued. 3 ARB regulations and control strategies have 4 moderated the growth to some extent, but the impact of 5 greenhouse gas emission is global, and a global 6 regulatory process has just begun. 7 The Kyoto protocol is the first identification 8 of specific measures to stabilize greenhouse gases and 9 targets an overall reduction of 25 percent below the 10 1990 baseline level. 11 This is to be achieved in 12 years. Specific 12 reductions vary by country. The United States is to 13 reduce overall by seven percent. 14 These reductions apply to 38 industrialized 15 countries, not developing countries. 16 U.S. standards for carbon dioxide or Federal 17 regulations to reduce greenhouse gases are not yet 18 established. 19 Instead, voluntary actions, such as Energy 20 Star Buildings and State and local agencies are 21 targeting these on a regional basis. Several states 22 have reduced greenhouse gases voluntarily. 23 For example, Oregon has established carbon 24 oxide standards in power plants that are efficient in 25 operation. Maryland offers tax breaks through a clean PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 air incentive, and New Hampshire has incorporated 2 reductions through a Registry Bill. 3 In California, Senate Bill 1771 is currently 4 being considered by the State Legislature. This bill 5 requires the Resources Agency and Cal EPA to establish 6 a Registry that allows California businesses to record 7 voluntary greenhouse gas emissions made after 1990. 8 The bill includes updating greenhouse gas 9 inventory, acquiring data and information on global 10 changes and provides information on the cost, technical 11 feasibility and effectiveness of ways to mitigate or 12 reduce the gases from in-state sources. 13 The growth of greenhouse gases in California 14 is less than it would have been due to efforts to 15 reduce the levels of ozone, particulate matter and 16 other pollutants and the promotion of low and zero 17 emission vehicles and cleaner smoke stacks, which offer 18 dual benefits of reduced pollutants and carbon dioxide 19 emissions. 20 Legislation directed the California Energy 21 Commission to study the global changes in the US and 22 the results from the analysis were a strong support for 23 battery powered electric, zero emission vehicles, use 24 of ZEVs with less emissions over gasoline powered 25 vehicles. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 This is due to use of a variety of less 2 polluting energy, such as wind, hydro and nuclear, 3 natural gas electricity generation in the State. 4 This slide is based on the assumption of 5 implementation of ZEV to reduce but does not stop the 6 increase of CO 2 in the atmosphere. 7 Using the same assumption, carbon dioxide will 8 be held constant by year 2003, 40 percent of new 9 vehicles, ZEVs. 10 Results of the joint research contract by the 11 Energy Commission and ARB should be available in the 12 next month or so and allow more refinement of the 13 benefits of the ZEV. 14 In summary, California has made significant 15 progress in improving the air quality. The standards 16 that we set are often held as an example for the rest 17 of the nation. 18 We have a ways to go for the health of the 19 citizens. In addition to traditional problems, is it 20 clear that pollution and weather patterns have 21 implications on air quality and make progress that much 22 more difficult. 23 Transportation related emissions account for 24 50 percent of the carbon dioxide in the State as stated 25 in the Energy Commission study. California needs to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 develop transportation that will reduce traffic 2 congestion, pollution and carbon dioxide emissions. 3 For the solution to be successful, California 4 needs to reduce dependency on the use fossil fuel 5 through more efficient vehicles and placing greater 6 emphasis on renewable sources. 7 The future holds many challenges, toxic risk 8 reduction and other issues related to climate, 9 population and demands on the global community. 10 This concludes the presentation. 11 Are there any questions? 12 CHAIRMAN LLOYD: Thank you for the overview. 13 It demonstrates the interaction of one that 14 effects the others. 15 I know you did not address what is persistent, 16 organic pollutants, but you talked about the ozone 17 levels increasing. 18 We look at reactivity worldwide, and some of 19 that is very complex. 20 Thank you very much indeed. I think it 21 teaches us ways we have to look at our actions more, as 22 we have in the past, the same way we are looking at 23 multi-disciplinary approaches and multi-media effects, 24 and this is why we provide the inter-pollutant issues 25 and climate, air quality plays a role, and then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 productivity, ag and health comes into that. 2 Thank you very much. 3 Questions for comments from the Board? 4 Thank you. 5 We have two witnesses signed up here. 6 Curtis Moore, Global Alliance for Clean Air, 7 and Paul Guthrie. 8 MR. MOORE: Thank you, Mr. Chairman, Members 9 of the Board. 10 Let me hand these to the facilitator. 11 I am Curtis Moore. I wear a number of hats. 12 I'm the Volunteer Director of International 13 Program for the American Lung Association, Executive 14 Director for the Global Alliance, and I do other 15 things, but I am here today as Curtis Moore, none of 16 those things. 17 To give you a sense of my background, I worked 18 many years with the Committee on Environment and Public 19 Works and worked in one degree or another on every 20 environmental law we have in the United States, the 21 Clean Air Act. 22 In 1999, the Senator for whom I worked left 23 the Committee, and it was inconsistent for me to be a 24 Washington lawyer and lobbyist, so I developed a career 25 as a writer and consultant specializing in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 international technology and policy issues with air 2 pollution. 3 I will leave here tomorrow to go to Kyoto 4 regarding sustainability, then on to Madrid for a clean 5 air seminar for all of the major non-governmental 6 organizations in Europe. 7 With that preface, I will tell you why I am 8 here, and that is to tell you, you may not think that 9 you have a dog in this fight, but everything that you 10 did to date is all for not, because of global warming. 11 I know you have not heard that before, because 12 there are linkages between global warming that are 13 unrecognized, and they are being ignored at the global 14 and international level, and they have the potential to 15 essentially offset the work that you have done. 16 I will go quickly. I understand that I have 17 three and a half minutes left. 18 CHAIRMAN LLOYD: We have two witnesses. We 19 will give you more liberty. 20 MR. MOORE: I am accompanied by Paul Guthrie, 21 a consultant on global temperature and ozone. 22 Let me first begin with the simple 23 explanation. Nuclear radiation from the sun arrives at 24 the earth, the atmosphere is transparent to that, and 25 comes in, impacts, hits the soil, where it is converted PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 to infrared when you are outdoors. 2 In Chile, they have burners that is infrared, 3 and it is transparent as incoming, and it is not to 4 outgoing infrared. 5 The most powerful is water vapor, because of 6 water vapor, the temperature is decreased but other 7 substances trap this outgoing radiation, however. 8 They're called greenhouse gases. The 9 temperature at the earth is maintained and, to be 10 crude, the equilibrium is here, and global warming may 11 move it here, if I were standing in water, the 12 temperature is slight, but it could be fatal. 13 If it has impact with conventional air 14 pollutants, it is linked, because they have common 15 sources, principally, power plants and motor vehicles. 16 Globally, 77 percent carbon, 97 sulfur, 94 17 nitrogen and 95 percent of fine particulate matter, 18 which means that the control option for all of the 19 pollutants can be the same. 20 They are linked by chemistry. 21 I forgot to tell you that I put up a list of 22 greenhouse gases, and I am going to go back to that in 23 a minute. 24 There is a question as to whether global 25 warming is occurring, and what the prediction says, if PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 it were happening, and if they are, land, sea, air 2 temperature and ocean temperature is up, glaciers are 3 melting, sea ice is melting. 4 I'm 56. I cannot read it from here, and all 5 those other things are happening. 6 Go back. 7 CHAIRMAN LLOYD: We now have glasses. 8 MR. MOORE: There you go. 9 Some of these are greenhouse gases. Two 10 pollutants, one is tropospheric and another is methane, 11 act to form ozone. 12 Next overhead, please. 13 These substances are also linked by chemistry. 14 Do not ask me to explain this chart, because I cannot 15 conceivably do it. 16 The Chairman probably could, but this is here 17 to illustrate that the chemistry of the atmosphere is 18 complex, and you cannot tease out one of these 19 constituents or oxides or the hydrocarbons and expect 20 not to have consequences of this dynamic situation. 21 Next slide, please. 22 So, this is just -- one more -- we will get to 23 effect on ozone in a minute, but it is important, I 24 wanted to remind you that ozone causes mortality but 25 this is a study done by George Thurston, New York PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 University. 2 There are approximately 75 ozone deaths a year 3 in New York City, and under that is two million adverse 4 effects. 5 If you have an increase in ozone, you have 6 mortality, and you have the other consequences. 7 Next slide, please. 8 Now, globally, policy is moving in a direction 9 to make it difficult for boards like the California Air 10 Resources Board. 11 I will back up. Everyone in California on 12 Monday and especially in Sacramento, it was hot. 13 What else was it? 14 It was lousy ozone. You violated the 15 standards. 16 One of the things in the formation of ozone is 17 the temperature, and at the same time, meteorology 18 gives rise to fine particulate matter, increases ozone, 19 and Paul Guthrie will explain, the temperature increase 20 with doubling of carbon dioxide in Los Angeles is 21 virtually a code red condition. 22 I will tell you that there are policies being 23 developed right now that address global warming and 24 make it more difficult to do something about the ozone 25 and particulate increases that result from temperature PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 increase. 2 You have one century of greenhouse gases air 3 pollution in the pipeline already causing global 4 warming. If we did not emit another molecule of 5 greenhouse gas, we have still one century of warming. 6 So, you are going to see ozone and particulate 7 matter rise. When that happens, there are only two 8 things that you can do. 9 You cannot stop the temperature, but you can 10 then attack the pollutants that lead to the increase in 11 ozone, and those are oxides of nitrogen and VOCs. 12 About half of the VOC, I do not know what it 13 is here, are nationally occurring, and you cannot do 14 that unless you cut down trees, precursors to oxides of 15 oxygen and ammonia. 16 You can't control oxides of ammonia, which 17 comes from dairy farms, from fertilizer, sewage 18 treatment plants. There is little that you can do with 19 that. 20 As a result of temperature rises, the only 21 thing that you can do is reduce oxides of nitrogen and 22 sulfur. 23 How do you go about doing that? 24 That is not the direction that the global 25 community is heading. They are aiming at greenhouse PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 gases and ignoring, seeking only a modest 7 percent. 2 You can build a new coal power plant and buy 3 yourself a million acres of forest in trees to offset. 4 SOC will go up. NOx will go up as will particulate 5 matter, and there won't be an offset. 6 All of that goes up but no offset. The only 7 offset is for greenhouse gases. 8 Next slide. 9 Again, they are not reducing emissions, only 10 aiming to reduce ambient levels of greenhouse gases. 11 You see this movement manifested in the 12 actions of American businesses. The American electric 13 utilities are selling their power plants here and 14 buying, believe it or not, coal-fired power plants 15 outside of the United States. 16 California Southern Edison has one diesel 17 station on Catalina Island. 18 It has built or bought most of them with no 19 pollution controls in Australia, the United Kingdom, 20 Mexico, Indonesia and Thailand and other places. 21 The U.S. automakers are moving business and 22 Europe is responding with diesel. 23 The green car developed by the Clinton 24 Administration by U.S. auto industry is a diesel 25 automobile. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 They are good for maybe 15 percent, but what 2 else do you get? Higher levels of NOx. Higher levels 3 of particulate matter and toxic substances. 4 CHAIRMAN LLOYD: I admired your optimism in 5 getting this done in five minutes. 6 MR. MOORE: I did my best. 7 A couple years ago, six or seven other 8 consultants, like myself, we put together a list of 9 harmonized solutions, not just carbon dioxide. 10 If you went to natural gas, you do that, or 11 fuel cells, you did that, but you go to getting the 12 goods out of the trucks and on to railroad cars and so 13 on. 14 You have a list of 30 or 40, and now I will 15 yield to -- 16 CHAIRMAN LLOYD: Will you take questions now 17 or prefer later? 18 MR. MOORE: Let's hear from Paul. 19 CHAIRMAN LLOYD: Thank you for the handout. 20 MR. GUTHRIE: Thank you, Mr. Chairman and 21 Members of the Board. 22 My name is Paul Guthrie. I have 22 years of 23 experience as a researcher in atmospheric science and 24 particularly in problems involving the chemistry of the 25 atmosphere. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 I would like to talk to you about an effort to 2 quantify the question of the impact of global change on 3 air quality, and in particular on the human health 4 consequence of impaired air quality. 5 This is a report based on a study done for 6 U.S. EPA two years ago. It is emphasized as 7 preliminary and it is instructive. 8 You already heard that higher temperatures 9 lead to more smog. IPPC reported there is strong 10 correlation between ozone when the temperature is above 11 32 degrees centigrade in the U.S. with high ozone and 12 high temperature. 13 I doubt it is different anywhere else, but the 14 data is better. 15 You heard this in the staff report, and I 16 would like to take a few minutes to emphasize this. 17 There are basically three reasons. First is 18 simple stagnation and trapping of pollutants that stay 19 in the same place and accumulate emissions that enter 20 at the ground. 21 Secondly, the chemistry that makes ozone runs 22 faster. All of the emissions of precursors go up with 23 the temperature, that is hydrocarbons, or whether they 24 are hydrocarbons, out gassing, like evaporation from 25 gasoline from cars and NOx goes up, people run the air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 conditioners at home and they drive, and the power 2 plants produce more power and that makes the automobile 3 less efficient. 4 We have heard that we think that the 5 temperature is going up, and it will go up. 6 I will pose a direct question. Will the 7 changes in weather due to increased greenhouse gases 8 lead to more frequent air pollution episodes with 9 adverse consequences for human health? 10 The pyramid from George Thurston indicated 11 that the health consequences are elevated and quite 12 serious. 13 The approach that we took in the study was to 14 ask first what meteorological conditions associated 15 with pure air quality. 16 It is difficult to predict the consequences in 17 a numerical model associated with changes of weather. 18 In the past, how has temperature been 19 associated with ozone concentrations? 20 How do we expect that the temperature will 21 change as greenhouse gases increase? 22 For the first question, we used ozone 23 available and a second model was a control that doubled 24 CO 2 produced by the standard of atmospheric research. 25 Now, I have to pause and introduce the slide PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 which, I am sorry is not easy to read, there are two 2 colors up there. For the analysis of the past ozone, 3 what we did was for several cities -- I will show you 4 two cities, Chicago and Los Angeles, each of several 5 cities we looked at for eight years for data and 6 divided that into four bins. 7 The lowest is 70 percent. Different in every 8 city. 9 Next bin, number two is next, 20 percent, next 10 higher 20 percent of ozone, and three, the higher, 7, 11 and bin 4 is top, 4 percent. 12 We have four bins, and for each city we went 13 into the historical data and identified the temperature 14 range associated with those days. 15 It is a relationship between temperature and 16 ozone for the entire range of ozone. We took the two 17 climate models, run controls and CO 2 and asked what 18 the temperatures were on the runs each of the days, 19 five year runs. 20 We had five years of temperature from the two 21 climatic model runs. We mapped those temperatures to 22 the temperatures associated with each of the ozone 23 bins. 24 What is shown here is a change of distribution 25 among the bins. You cannot see it, but the bar on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 left is lighter colored on each bar that represents the 2 control climate, and this is doubled -- there is a 3 clear and significant consistency of distribution away 4 from the conditions associated with low ozone and 5 toward the conditions associated with high ozone. 6 This is robust. I cannot show you more than 7 two given the time available. 8 Well, okay. We have an increase in 9 temperatures. 10 How significant is that increase? 11 This essentially collapses the bins for two 12 cities. We will divide this, and conditions associated 13 with ozone above 120 parts a billion and look at how 14 many days for that occurred for each city in the models 15 run. 16 The threshold we used, because of the bin 17 structure, and historically there was average of 11 18 days per year in Chicago that exceeded the threshold in 19 the model run, there was 12 a year and the model was 46 20 days a year over the five years. 21 In Los Angeles, we used a higher threshold 22 because it has in general higher ozone historically, 23 113 days, and the model base, we saw 128, and doubled, 24 so 222 on the average per year. 25 Well, using EPA methodology, we translate the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 changes into estimates of monetized impact on human 2 health. 3 It is hard to read, but the numbers are 4 dominated by a premature mortality. This would predict 5 that annually this is something over $2.5-billion 6 increase from health impacts in the City of Los 7 Angeles. 8 If changes like those predicted by the models 9 were to occur, in Chicago you have a lower number 10 because the ozone numbers are lower, but it is a 11 billion dollars. 12 These are not small numbers. There are 13 clearly uncertainties about them, but it says we have 14 serious impact as the climate warms. 15 CHAIRMAN LLOYD: Thank you. 16 The numbers that you talk about, is that an 17 increase here? 18 MR. GUTHRIE: Yes. 19 CHAIRMAN LLOYD: Delta? 20 MR. GUTHRIE: Yes. 21 CHAIRMAN LLOYD: Do we have questions from the 22 Board? 23 Maybe both of you, to wrap up here? 24 BOARD MEMBER RIORDAN: Let me ask, Mr. Moore, 25 a brief question, how would the Clean Air Act treat PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 this problem of global warming as it relates to our 2 development of the State Implementation Plans? 3 MR. MOORE: Carbon dioxide is not a pollutant 4 required to take into account factors that affect the 5 levels of criteria pollutants. 6 If you are developing a SIP for particulate 7 matter, you have to take into account wind blown dust, 8 even though it is natural. 9 No one brought it up legally, but I suspect it 10 will be in a year or two. You are obliged in the 11 development of SIP to take into account these 12 influences. 13 If you don't, you could be sued, and they 14 might win, and Congress might repeal the provisions in 15 the law. 16 CHAIRMAN LLOYD: Is anyone else looking at 17 that seriously, the relationship between the 18 temperature and the -- 19 MR. MOORE: No. 20 It is a concern. EPA paid for the study, but 21 you know, the issue is so politicized in Washington, 22 with the Republican Congress and Senator Stafford with 23 the Republicans forbidding EPA to work on any of these 24 issues. 25 CHAIRMAN LLOYD: Any other questions from the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 Board? 2 BOARD MEMBER BURKE: I have a question. 3 I was not clear what you said about Catalina 4 Island purchasing some -- 5 MR. MOORE: All I was saying is the utility, 6 many of the utility industries of the United States, 7 recognizing that if a trading program is adopted, they 8 have the right to pollute in the future if they are 9 polluting now. 10 If you pollute now, you have the right to 11 pollute in the future. 12 They have gone out and bought a lot of air 13 pollution. Southern California Edison sold all their 14 thermal plants, with the exception of the diesel 15 generator on Catalina Island, and they've taken the 16 money and bought coal-fired electric plants globally. 17 I suspect it is one of the top 10 greenhouse 18 gas emitters in the world now. 19 CHAIRMAN LLOYD: All right. 20 Dr. Friedman. 21 BOARD MEMBER FRIEDMAN: You showed a slide 22 that you had a policy direction and a list of issues 23 including no mandate and stated no consideration of 24 health and environmental impact -- to whom were you 25 pointing the finger? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 MR. MOORE: Those are the global negotiators. 2 BOARD MEMBER FRIEDMAN: That is what I want to 3 ask you about. 4 That is not a decision made here. 5 It does not have a basis and consideration of 6 human health, and you have been traveling the world and 7 so forth, and the issue is, are these negotiators 8 taking into account the human health issues? 9 MR. MOORE: No, they are not. 10 I can't tell you why they are not. 11 These are what we shared with you, the EPA 12 study, so EPA knows this stuff. 13 It is not new to say that global warming will 14 increase levels of ozone. We know that will happen. 15 If you go to a trading program, you will see 16 increases in other criteria pollutants. These 17 relationships are all being ignored. 18 I suspect that, speaking as a person who is 19 product of the political system, it is politically 20 easier to do that. You do not have to ask anyone to 21 keep making the same car and run the same power plants. 22 This organization knows better than anyone 23 else that to solve the problem requires hard choices 24 and a lot of people prefer not to make the choices and 25 that is what is going on here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 CHAIRMAN LLOYD: Curtis, I will ask you, as we 2 address the criteria pollutants, in some cases, what 3 you suggest, and we are cognizant of the climate 4 changes, but if we were to look at that, not do not 5 have the regulatory power, but if we looked at trying 6 to accomplish both on a voluntary basis, what would be 7 the increase in costs? 8 MR. MOORE: Most of these harmonized solutions 9 that I gave you a list of have a very modest 10 incremental cost, and in some cases, they reduce costs. 11 All you have to do is change the 12 specifications, like for concrete, that the highway 13 guys have. 14 You if you look at the list, they are all just 15 like that. 16 CHAIRMAN LLOYD: Thank you. Any other 17 questions? 18 BOARD MEMBER D'ADAMO: I have an observation, 19 and if either of you or staff would be willing to 20 comment on it, it seems to me on this issue you have 21 raised issues in my mind about the connection between 22 global warming and increase in ozone, there is a 23 disconnect here with the public. 24 When we have regulations before us and we see 25 that there is a direct impact on air quality, I know I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 speak for everyone on the Board here, that I hope that 2 the public buys into it, because they see there is a 3 direct impact, but on global warming, it seems that the 4 public is not there yet. 5 Maybe it is because the information about the 6 direct impact perhaps is a little less direct than some 7 of the measures that we typically see before us. 8 Perhaps the public is not aware of that, and I 9 do not know what is being done to get the information 10 out. 11 Global warming does not mean that we will have 12 just warm days but it impacts the public health and air 13 quality. 14 CHAIRMAN LLOYD: Go ahead. 15 MR. MOORE: That is why we are here. 16 BOARD MEMBER D'ADAMO: I realize that, and I 17 appreciate that. 18 I am saying that there is a disconnect on the 19 subject. In particular, it does not fall in the mix of 20 environmental issues that the public is so willing to 21 embrace. 22 We want clean water, clean air, global 23 warming, there is a disconnect. 24 MR. MOORE: There is a huge amount of money 25 being spent by the coal and oil industries to create PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 the confusion here. 2 The other thing is that the community that 3 works on global warming is different. 4 If I wanted somebody to tell me what you do to 5 reduce carbon dioxide, well, I go to Mike Walsh, or Tom 6 Cackette, none of whom work on global warming issues. 7 Planning people, like here in air resources, 8 do not work in global warming. This does not get 9 translated into terms that people understand. 10 This is a very serious problem. Janet 11 Hathaway does not do global. Someone else does global 12 warming. 13 Ken Smith is here, and as much as I admire the 14 Lung Association, when I go into the Lung Association 15 Office in Washington, and I say global warming, they do 16 not want to hear it. 17 People have so many other problems, they do 18 not want this on their plate. 19 The point here and the reason we are in 20 California, the one place in the world that has 21 consistently demonstrated willingness to confront tough 22 problems more than anywhere else in the world, half a 23 century you've recognized these things and we all 24 benefit from it. 25 You have the world's first fuel cell engine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 production plant, you had the largest wind turbine 2 facility. 3 BOARD MEMBER McKINNON: We have done well in 4 the zero emission vehicle. 5 One of the things that you could comment on, 6 and time and time again comes up for me, that is that 7 we continue in this state more so than the country, and 8 in this country more so than any place in the world, to 9 make the tough decisions and move forward and make 10 progress. 11 Simultaneously, we are exporting the jobs and 12 factories, and some of the conditions that create the 13 problem. 14 Yesterday, we made a decision in this country 15 to export a lot of work to another country. 16 It seems to me that the two things are 17 happening simultaneously. If we don't get a hold of 18 both of them, the back lash will be in the places that 19 have done the right thing environmentally and that will 20 come, and the consequence is the loss of jobs and that 21 kind of thing. 22 MR. MOORE: I could not disagree more. 23 The United States has gone from the industrial 24 manufacturing facility to exporting commodities now. 25 Those are the biggest exports. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 That premise is that you build a strong 2 economy on a lousy environment. 3 BOARD MEMBER McKINNON: That is not what I 4 said. 5 CHAIRMAN LLOYD: That is not what he said. 6 MR. MOORE: I do not agree that California has 7 lost jobs because of environmental protection. 8 I see the reverse. I can tell that you the 9 United States is not in the forefront of these issues 10 that you are well ahead of us on in environmental 11 stuff. 12 California is. 13 California is the environmental leader. With 14 the exception of the ZEV program, your motor vehicle 15 standards are not as stringent as those in Germany. 16 CHAIRMAN LLOYD: We might disagree. 17 MR. MOORE: The mere fact that we can have an 18 argument makes the point. 19 CHAIRMAN LLOYD: Discussion. 20 MR. MOORE: If you wanted to disagree in terms 21 of motor vehicles, I know, you would not build a coal 22 fired power plant. 23 Your stationary source is not as stringent. 24 But you are the undisputed leader. 25 The real question is does the future lie in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 manufacturing dirty products in a dirty way? 2 BOARD MEMBER McKINNON: That is not close to 3 the question. 4 That is not close to the question. 5 I get really irritated when things are pitted 6 that way. The comparison that I made today is between 7 China and the United States and exporting of work to 8 China. 9 Maybe we don't need to cover that in this 10 Board meeting, but I am clear that the way that energy 11 is produced in China and the way that it will be 12 produced in the future, the way that workers are 13 treated on down will not be a standard anywhere close 14 to the United States. 15 The thing that I keep seeing happen is not 16 export of work to, in your opinion, where they are. I 17 think they are ahead of us on diesel. We are getting 18 there. 19 What continues to happen is we talk about 20 doing things with global solutions, but we are not 21 dealing global solutions. We are taking things, 22 whether Europe or California, where we do things a 23 little better environmentally, we are taking those 24 places and pushing hard in those places, and we have 25 not fully grappled with the fact that as we do that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 there are places that are getting dirtier and dirtier 2 in the way that they are producing things. 3 So, I am not expecting that you and I could 4 solve a global problem tonight, tomorrow or the next 5 day, but we have to talk about that. 6 It is a global problem. Pollution or bad 7 working conditions for workers move to the places where 8 it is allowed. 9 We can move things around better here. I 10 think we have voted to do that time and time again. 11 It may not be to the maximum standard on every 12 one, but the motion is forward and not backwards. 13 If you put that in comparison to what is 14 happening in other places, where the motion is 15 backwards and work is going to those places and 16 population is growing in those places, how do you get a 17 hold of the whole thing? 18 MR. MOORE: I'm sorry. 19 I misunderstood what you said. 20 The way that you rearticulated, I agree 21 completely. 22 The problem is that usually people make the 23 statement and that becomes the premise for weakening 24 requirements here rather than strengthening them in 25 other places. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 Often these nations -- these are not choices 2 that they make. I did not like the China trade 3 agreement either. 4 I will give an example, and this is a 5 California example. 6 I recently wrote a magazine article on coal 7 and health effects of coal. 8 For that purpose, I went to Thailand, because 9 I know they had serious problems in Thailand and that 10 it was not going to have pollution controls. 11 I went to a rural province. People fish and 12 farm. They have no airports, two train stops, one main 13 north-south highway. They have no roads to speak of. 14 There is going to be a new coal-fired power 15 plant built. One of those is going to be built right 16 on the beach. 17 I have a photograph. You look one direction 18 as far as you can see, and then in the other direction, 19 and you see no buildings. There is no development 20 there. 21 The people who sold the property for this 22 power plant were told that it was going to be a resort 23 with condominiums and a golf course. 24 There are no controls for oxides of nitrogen. 25 The people were so upset and demanded that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 government have a public hearing. 2 The government did not. Over 10,000 took to 3 the streets, seized control of the highway, and the 4 government brought in the armed troops. 5 The builder of the power plant is Southern 6 California Edison, which says, I have it on tape, that 7 they could build that plant in California, because it 8 is so clean. 9 Now, what happens is exactly as you described, 10 but it is not them doing it. It is companies like 11 that. 12 These people do not want the power plant, and 13 they slowed it down enough so that the Ambassador of 14 the United States made a call to the Prime Minister to 15 express his concern over the delay in the construction 16 of the plant and instilled fear that it might chill the 17 investment climate in Thailand. 18 Surprisingly, the Chairman of the Board is 19 Warren Christopher. So, I agree with you completely. 20 Why should that be built? 21 That is not the people of Thailand. It is not 22 the government doing that. 23 I'm sorry. I spent five days with these 24 people. I have a lot of sympathy. 25 CHAIRMAN LLOYD: Thank you for the far-ranging PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 discussion. 2 With that, unless there are more comments, 3 thank you and staff for that and for the presentation 4 on the item. 5 CHAIRMAN LLOYD: The next item on the Agenda 6 today is 00-5-4, Proposed Grand Awards for Rice Straw 7 Demonstration Projects. 8 During the first two years of the Rice Straw 9 Demonstration Program, the Board awarded nearly 10 $5-million to seven projects. 11 Two of those projects, Louisiana-Pacific and 12 Agriboard Industries were not able to go forward as 13 planned. 14 That freed up a little more than$1.2-million 15 for funding additional projects. 16 This year's solicitation was open to all 17 project proponents, but expressed particular interest 18 in ethanol production, given the fact that we have the 19 MTBE phase out. 20 That will lead to an expected increase in 21 demand for ethanol. 22 If we can make some of that ethanol from rice 23 straw in the Central Valley, that will be better. 24 I am delighted that the Board has had the 25 opportunity to be part of this very positive program, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 investing public money to seek alternative solutions to 2 rice straw burning. 3 Ms. Terry, would you introduce the item and 4 begin the staff's presentation. 5 MS. TERRY: Thank you, Mr. Chairman. 6 As the Chairman stated, this item reflects 7 several months of work where we invited and worked with 8 applicants and evaluated, according to criteria adopted 9 by the Board in 1998, and an evaluation team consisting 10 of three parties in business and economics, four in 11 technology and one rice straw expert and two of the 12 team were ARB staff. 13 The latter round of the proposal solicitation 14 resulted in seven grant requests, and staff is 15 recommending that five of the projects be funded. 16 We believe that these projects meet the 17 criteria of the program and the mix of projects to 18 successfully create markets for Sacramento rice straw. 19 Bruce Oulrey, of the Planning and Technical 20 Support Division, will present the item. 21 MR. OULREY: Chairman Lloyd and Members of the 22 Board, I will present the staff recommendation for this 23 fiscal year's grant awards for the Rice Straw 24 Demonstration Project Fund. 25 An outline of the presentation is as follows. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 First, I will present some background information about 2 the rice fund program, including the program genesis, 3 application review and brief description of prior grant 4 awards, and then I will discuss the projects and 5 finally, give the staff recommendation for this year's 6 grant awards. 7 First, a brief background. Since 1992, State 8 Legislation has required a phase down of the burning of 9 rice straw in the Sacramento Valley. 10 Starting September 2001, the maximum burned is 11 25 percent of planted acreage under burn permit for 12 disease control. 13 1997, the State Legislature created the Rice 14 Straw Demonstration Project Fund Program with the goal 15 to create uses for one million tons of rice straw for 16 Sacramento Valley rice straw each year. 17 The program was funded for two years. Last 18 year the Legislature extended the program for an 19 additional $1.23-million for grants this year. 20 We have worked closely with Robert Barry of 21 the Department of Food and Agriculture. They and the 22 rice industry have been extremely helpful in 23 implementing the program. 24 The application review process by the Board, 25 on January 29, 1998, the criteria established as to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 technical and business merit program goals and policy 2 objectives. 3 The criteria included a minimum 50 percent 4 requirement. The review process included eight members 5 and rice straw experts, representing the rice industry, 6 California Energy Commission, trade and consumer 7 agencies, Department of Food and Ag, university of 8 California and ARB staff. 9 Project proponents submitted applications in 10 March this year. After the screening process, the 11 remaining proponents made a presentation at a public 12 meeting, followed by a clarification meeting with the 13 reviewers. 14 The reviewers of the proposal recommended 15 ratings for the proposals in the reviewers areas of 16 expertise. They consolidated their results, which lead 17 to the recommendation. 18 Over the last two years, ARB has funded rice 19 straw fund projects totaling $3.1-million. 20 Fiber Tech, $750,000, this completed particle 21 board manufacturing project has succeeded and is in 22 commercial operation. 23 Fiber Tech without the Rice Fund could not 24 have gotten off the ground. 25 Anderson Hay and Grain was funded $500,000. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 This developed a rice straw infrastructure for cattle 2 feed export, another rapidly developing success story. 3 ARB is funding Arkenol Holdings for $519,000, 4 for ethanol and citric acid production, with some 5 successes and some setbacks. 6 They have applied for the current round of 7 grants, and we are talking later about R and D. 8 Enviroboard, another rice straw fiber board 9 type of project, funded at $500,000, and to date the 10 project has experienced a number of setbacks in the 11 manufacturing of equipment; however, the project hopes 12 to begin construction by August. 13 The largest grant is to MBI International for 14 $820,000. This was expected to replace 95 percent of 15 alfalfa feed. Feeding trials and rough 16 cost-effectiveness has been demonstrated. 17 As you will see from the next slide, we 18 received an application from MBI but are not 19 recommending more funding. 20 For this year's awards, we received seven 21 grant requests as shown on the slide. There is not 22 money to fund all requests proposed and two of the 23 projects are not recommended. 24 I will discuss the recommendation for each of 25 the projects on the next several slides. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 First, I will talk about the two projects we 2 are not recommending for funding. The first proposal 3 is MBI International's project. This dairy cattle feed 4 project to do additional feed trials and to continue 5 evaluation of reducing production cost, reviewers did 6 note lack of progress on the previous grants and it 7 appears that the project will go forward with or 8 without the funding. 9 The second was Sierra Economic Development, 10 who proposed viability of biomass for ethanol, and 11 reviewers did not feel it met the objectives of the 12 grant criteria and did not use any rice straw and 13 commercialization plans were unclear. 14 Next I will provide detail about the projects 15 we are recommending for funding. 16 Rice Straw Coop proposes to deliver rice straw 17 in support of DVI Gridley project. It will store straw 18 for making ethanol. That is a substantial supply of 19 rice straw to be readily for start-up and continued 20 operation of the plant. 21 The project will use 75,000 tons of straw to 22 300,000 tons of straw a year after five years. The 23 original proposal asked for $780,000, but that was 24 reduced to $380,000, as reviewers thought the same 25 could be attained with half the funding. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 Rice Straw Coop contributed $380,000 to the 2 project. We recommend that the Rice Straw Coop be 3 awarded a matching grant for the project of two years 4 duration. 5 The Broken Box Ranch Project, in Colusa 6 County, proposes production of rice straw compost, and 7 they've requested $297,589, and we recommend $297,589. 8 They will use 50,000 to 100,000 tons of straw a year 9 after five years. 10 If successful the project could result in 11 plants in other locations. 12 Broken Box Ranch is using $297,000 of their 13 own resources. 14 We recommend awarding the full amount 15 requested to the Broken Box Ranch Project. The project 16 duration is two years. 17 Kuhn Hay is to open a market in Japan for 18 export of California rice straw. The key barrier is 19 Japan's concern that pests might be imported with the 20 rice straw. 21 Kuhn Hay will work with their associates in 22 the U.S. and Japanese Ag, Forestry and Fisheries to 23 develop a treatment protocol to satisfy the Japanese 24 government. 25 One protocol seems to be heat, microwave and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 fumigation. 2 The project will use 100,000 tons of straw a 3 year after five years. 4 Kuhn Hay requested $588,170, and the 5 recommended grant is $402,311. 6 The Arkenol Holdings project is to continue to 7 work to demonstrate economic production of ethanol from 8 rice straw. 9 As a starting point, this project uses 10 projected data gathered from work in the rice grant. 11 It will help refine procurement of straw stream to 12 produce the ethanol on a commercial scale. 13 Approximately 130,000 tons of rice straw will 14 be used during the one-year program. Arkenol is 15 located in Sacramento Valley. 16 They requested $629,000. Although the 17 reviewers thought it had substantial merit, they felt 18 that the project was too far from commercialization, 19 and ARB has already funded Arkenol $519,000. 20 For these reasons, reviewers thought a scaled 21 down project was appropriate at this stage in the 22 project development. We are recommending award of 23 $100,000 for the duration. 24 Arkenol will provide matching funds of 25 $100,000 for the project. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 The Smith Ranches Project is converting rice 2 straw silage to animal feed and will use 20,000 tons of 3 straw a year after five years. 4 The experience of the project team with the 5 resources that the project has to offer make it a 6 reasonably leveraged proposal. Smith Ranches are using 7 $477,200 matching funds and resources. 8 We recommend a full grant of $50,100 for the 9 one year duration project. 10 In conclusion, we believe that the five 11 projects presented for you are appropriate and have the 12 ability to use significant volumes of rice straw. 13 We recommend that the Board award the grants 14 to these five projects. 15 This concludes the presentation. 16 Thank you. 17 CHAIRMAN LLOYD: Thank you very much. 18 Questions from the Board? 19 BOARD MEMBER RIORDAN: I have a question, that 20 is if staff could help me remember, on the Broken Box 21 Ranches project, as I recall, one of the problems that 22 you could not continue to plow back into the ground 23 because there were problems, the ranchers testified, 24 what happens that makes this different when we do the 25 composting that may not lead us to the same problems PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 that the ranchers had in just plowing that back into 2 the ground? 3 MS. HRYNCHUK: The composting process brings 4 the temperatures high enough degrees long enough to 5 kill the pathogens that are in the raw materials. 6 You do not have the disease problem that you 7 have, and you are right, the rice growers were 8 concerned because of the increase levels of diseases. 9 BOARD MEMBER RIORDAN: If you were to reverse 10 that, is there something to be learned from this that 11 might allow the rice growers to change maybe the way of 12 plowing it into the ground and do something like this 13 that we are talking about? 14 In other words, reverse the process? 15 MS. HRYNCHUK: That is one of the encouraging 16 things about supporting the project is that it may be 17 able to help the rice growers in the long-term to have 18 better growing conditions, not just the disposal but 19 help them in the main, growing of their crops, correct. 20 BOARD MEMBER RIORDAN: That is an interesting 21 byproduct of this project. 22 Thank you very much. 23 CHAIRMAN LLOYD: Yes. 24 Ms. D'Adamo. 25 BOARD MEMBER D'ADAMO: I was just wondering PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 about what occurs, what process you go through with the 2 applicants when they come in with a request that is 3 higher than the actual recommendation? 4 For example, the Rice Straw Cooperative and 5 Arkenol Holdings, what sort of assurance do we have 6 from the applicant if they are given a smaller amount 7 that it is really going to be used and not just going 8 to sit in the fund because they don't have the matching 9 amount or the project is scaled down to the point of 10 funding. 11 MR. OULREY: After the review process, the 12 reviewers wanted it funded at a lesser rate, we went 13 back to the applicants and asked them if they could 14 offer a reduced budget for their project, and in each 15 case, they were able to give us a revised budget. 16 BOARD MEMBER D'ADAMO: Did that go back to the 17 committee for review, the committee who did the initial 18 evaluation? 19 MR. OULREY: The reviewers determined that in 20 their opinion it thought each of the reduced funded 21 projects could go forward at that time. 22 BOARD MEMBER D'ADAMO: On Arkenol, where are 23 they going to get the other amounts that they need? 24 Are you requiring that they have matching? 25 MR. OULREY: They have to do minimum matching PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 of 50 percent matching, that is what they provided that 2 they can do, giving us the matching. 3 MR. FLETCHER: They will scale back the 4 project so that they do not need 682,000 or whatever. 5 They scale it down in the budget allocation 6 that we have established, like Arkenol. 7 BOARD MEMBER D'ADAMO: The other question that 8 I had, could someone compare the Kuhn Hay and Smith 9 Ranches projects with the MBI, which was not 10 recommended for funding, as they have cattle feed as 11 components. 12 MR. OULREY: One is exported to Japan for 13 beef cattle market. 14 It is different market, different type of 15 product. It is $100 a pound beef market, and we do not 16 have that market in California. 17 The Smith Ranches project is looking at 18 feeding brood cows, cows that are dry for reproduction, 19 and that is a fermentation type of process. 20 It is treating the straw, and they are looking 21 at making the straw more palatable to the animals. 22 That is more of a research type of project. 23 The MBI was taking ammonia and treating the straw under 24 pressure and trying to make it more nutritive to the 25 animals, and that is for the dairy cow type of market. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 Each case, it is different animals that they 2 are feeding, too. 3 CHAIRMAN LLOYD: Okay. 4 Dr. Friedman. 5 BOARD MEMBER FRIEDMAN: I was going to, on 6 negotiating grant amounts, Arkenol has $600,000 of our 7 dollars already. 8 MBI has 800 something and has not performed as 9 well, if you like, and that is how you judge if you are 10 going to fund somebody. 11 I wanted to congratulate the panel for picking 12 the right projects and staff for negotiating this. 13 It is a good example of grant negotiations. I 14 have been watching this project since that Senate bill 15 got passed, and it is a commendable investment. 16 It is not a lot of money for a potential 17 wonderful yield in dealing with a very prominent 18 problem in this part of the country. We were doing 19 some arithmetic over the phone, and if all of the 20 projects actually succeeded and five years later you 21 would wind up assessing the yield of what straw that 22 they were utilizing, they were utilizing more than we 23 could produce, even if half of that is utilized at 24 $5-million. 25 I think it is creative use of California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 funding, for a very good purpose. 2 I am pleased with the latest go-around. 3 CHAIRMAN LLOYD: Any other comments from the 4 Board? 5 I had one suggestion to staff. Given the way 6 that you have really been precise on the numbers, could 7 you round them? 8 MR. OULREY: I do not think that the 9 applicants will object. 10 BOARD MEMBER DeSAULNIER: One of them will. 11 CHAIRMAN LLOYD: I have no vested interest in 12 this. 13 I think Broken Box is getting what they asked 14 for. Kuhn Hay is not. 15 MS. TERRY: I wanted to make a brief comment 16 to follow-up on Dr. Friedman's comments. 17 I would like to acknowledge that Lesha 18 Hrynchuk has worked for the duration of the program and 19 is retiring to open a flower shop, and I want to say 20 thank you for all your hard work and congratulate Bruce 21 for stepping in. 22 BOARD MEMBER RIORDAN: Lesha will find a use 23 for rice straw in the flower business. 24 We look forward to seeing some projects. 25 MS. HRYNCHUK: I was not thinking of applying PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 for a grant. 2 CHAIRMAN LLOYD: Well, if there is no more 3 discussion, I would like -- we have one witness here, 4 I think we have all seen Mr. Rasmussen before. 5 Yes, we recognize him, here is from Effective 6 Microorganisms. 7 We have a time limit. We will give you five 8 minutes, as several Board Members need to leave. 9 MR. RASMUSSEN: We have started two 10 demonstrations, and we're going to make one this fall 11 of what amounts to -- we should be able to treat the 12 rice straw and incorporate it into the soil. 13 This is used in eight countries, it grows 30 14 percent more rice. 15 CHAIRMAN LLOYD: You have a demonstration? 16 MR. RASMUSSEN: We are trying to make a -- 17 BOARD MEMBER DeSAULNIER: Remember last time? 18 How come I have to sit here? 19 What do you have to do to sit over there? 20 CHAIRMAN LLOYD: Last time there was an item 21 demonstrated and it was sprayed on the Board Members on 22 that side. 23 MR. RASMUSSEN: This product is totally 24 organic. 25 It is comprised of 80 microbes, and I can't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 tell you why it works. You were talking about 2 composting the rice straw. 3 If you want to take it, we can make it into 4 this stuff here. First of all, if you feed it to cows, 5 you take care of the odor. No more smell. 6 If you use the product in with the cow feed 7 and put it in the drinking water, you kill the diseases 8 and all of the odor problems, and if you have a pig 9 farmer. 10 Alfalfa fields, he grows 50 percent more 11 alfalfa. We are working on more projects. 12 Another thing you can do with the rice straw, 13 you make its into animal feeds by fermentation. 14 You use it for compost. I grow tomatoes that 15 do not rot for four weeks out on the counter. 16 That we can prove to you. 17 You can use it to sweep the floors and pick up 18 oil slicks, and other things grow more. 19 The City of Redding, that I have a report on 20 what they are doing with wind row, the green waste, and 21 they have the better product using this product here 22 and very inexpensive to do. 23 I would like to give this to staff. You can 24 do better with this stuff here. We cannot participate 25 in the grant, and we are volunteers, and we have no PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 money, and we have no staff to write proposals, so I'm 2 limit to what I can do. 3 I would like to feed the information to 4 anybody, and we will give this out, because we can 5 solve any pollution problems. 6 Asia, they've taken care of things and are 7 cleaning up the pollution, and this is an example here. 8 You go to the septic and put this much for 9 many gallons septic, and you get this water. 10 I drink it. What is left, you have a super 11 good fertilizer, totally organic. 12 I grow verified organic vegetables, and if you 13 use this as part of the watering system, all of the 14 vegetables, the tomatoes you get more anti-oxidant than 15 if you just put them in soil. 16 They are found in the soil, like there. You 17 get better results and healthy plants and less disease. 18 CHAIRMAN LLOYD: If this has so many uses, how 19 come you have no money? 20 MR. RASMUSSEN: Our founder wanted to help the 21 world and all of that and did not want anyone to make 22 big money. 23 He has it in eight countries, and we have an 24 office in Tucson. We make it up, and it's spread by 25 word of mouth. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 We had enough last year to make a video, which 2 I gave staff. Nobody looked at it. 3 That is why I am here now. 4 CHAIRMAN LLOYD: I do not know if you were 5 here, but we have a meeting down in Tulare, and there 6 will be ag people there that would be interested in 7 learning of your product. 8 That is June 8. 9 BOARD MEMBER BURKE: The lady in the black 10 suit, give her something, she'd from South Coast, and 11 we'd be interested in your product. 12 I don't think that I've ever admitted it in 13 public since I've lived in California, but my family 14 was pig farmers in Ohio, and my Uncle Will still works 15 with pigs. 16 If it works on pigs, I will send it to Uncle 17 Will. 18 MR. RASMUSSEN: We have Mr. Long, and he put 19 it on all four barns. 20 He started with one barn where he tested the 21 mortality and rate of growth, and was pleased and is 22 going to all four barns. 23 BOARD MEMBER BURKE: One of the colleagues up 24 here asked, what do you think is the effect on you if 25 you keep drinking that stuff? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 BOARD MEMBER DeSAULNIER: He smells great. 2 MR. RASMUSSEN: I do not have an odor problem. 3 Over in Denmark, I have a friend of mine, and 4 they are actually selling this to people there to take 5 for stomach. 6 CHAIRMAN LLOYD: To create or solve. 7 BOARD MEMBER McKINNON: Since you were here 8 last, I called a friend of mine who had given me 9 something similar, and he is from Oregon, and he came 10 through and gave me a couple of bottles, and this is 11 made from the microbes from the cow's stomach. 12 So, I had two bottles of concentrate that I 13 have used one in my vegetable garden, and I did this in 14 San Diego, and I had the biggest vegetables. 15 Anyone from the Board can come by the house. 16 It is looking good. 17 It is microbes from a cow's stomach. Things 18 grow. 19 MR. RASMUSSEN: If you feed it in drinking 20 water to chickens, you reduce the cost of the feed and 21 the odor. That is what they are doing in Japan. 22 BOARD MEMBER McKINNON: You can make compost 23 quickly. 24 I am not going to drink it any time soon, 25 though. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 MR. RASMUSSEN: Mr. Chairman, I have one 2 request from you. 3 If there is a way to get the staff to help 4 study this and make a recommendation to people to use 5 it, I will be glad to participate. 6 CHAIRMAN LLOYD: The Board would like you to 7 participate. 8 BOARD MEMBER D'ADAMO: I was going to suggest 9 that you contact, if you have not done so, the 10 California Poultry Federation organization. 11 MR. RASMUSSEN: We are working with the 12 poulters out of Demoines. 13 Poultry producers I have run up against, 14 nobody wants to believe it. They get more money for 15 the eggs in Japan and for the chickens because it is 16 better meat. 17 I have been running the research project on my 18 own, and it is helping even with pigeon disease. 19 CHAIRMAN LLOYD: One thing I suggest, talk to 20 our Ombudsman, who is always willing to help people 21 with unusual products. 22 She would be ideal. 23 MR. RASMUSSEN: I appreciate the help. 24 Like before, I'll keep you informed of the 25 rice project. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 Thank you. 2 CHAIRMAN LLOYD: Thank you. See you next year 3 or in Tulare. 4 BOARD MEMBER RIORDAN: Do you need a motion to 5 approve? 6 I so move with the rounded dollars. 7 BOARD MEMBER FRIEDMAN: Second. 8 CHAIRMAN LLOYD: All in favor, aye. 9 Negatives? 10 The final Agenda Item today is 00-5-5, 11 recommendations for funding proposals received under 12 the Innovative Clean Air Technologies Program. 13 This is the sixth year for the ICAT program, 14 which supports technologies that not only have high 15 potential for improving air quality in California but 16 also offer great promise for stimulating the State's 17 economy though significant commercialization 18 opportunities. 19 I think it is a tremendously important 20 program, and my only regret is that we do not have more 21 resources to invest in these efforts. 22 We are continuing to try to do that. That is 23 one of my goals during my tenure. 24 MR. SCHEIBLE: Thank you, Chairman Lloyd. 25 The ICAT program provides seed money for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 projects from research and development phase to 2 commercialization. 3 Proponents submit resources and outside 4 sources. This year we received 82 proposals. After 5 reviewing those, staff narrowed down the recommendation 6 to the Board to approve five for funding. 7 After executive review, Mike Kenny and the 8 three Deputies believe that these projects would help 9 meet the Board's goals, and each proposal meets the 10 requirement of the program, they have potential to 11 create California jobs, and with that, I would like to 12 have Ralph Propper present the item. 13 MR. PROPPER: Thank you, Mr. Scheible. 14 Good afternoon, Chairman lloyd and Members of 15 the Board. 16 This presentation will include four parts. 17 First, I will summarize the ICAT program, and next I 18 will discuss from the contract to grant process and the 19 five ICAT proposals that we recommend for funding. 20 Finally, I will have a previous contractor 21 describe the status of technology that was developed 22 through ICAT co-funding. 23 This is the sixth year of the ICAT program, a 24 program that's provided funds for development of air 25 pollution and control technology. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 It is broad-based technology that is meant to 2 prevent, as shown on the slide, projects that help 3 decrease existing air pollution and develop control 4 technology and increase the cost-effectiveness or new 5 cost-effective alternatives. 6 These must have the potential for creating 7 jobs in California. ICAT funding must be used for 8 pilot prototype-item stage of development. 9 However, most of the funding available for 10 technology available is basic research or 11 commercialization after full demonstration. 12 As shown by steps 1, 2 and 6 on the slide, 13 once through the first two stages, projects can die for 14 lack of funding or may be commercialized elsewhere. 15 These shown in 3, 4 and 5, we call the valley 16 of death. 17 The ICAT funds help bridge the valley of 18 death. 19 ICAT provides 50 percent of the total cost, 20 with the applicant and any partners providing 21 additional funding. 22 As a result of cost sharing is a multiple 23 effort of partners funding the project. 24 The first pie chart shows that ICAT funding 25 has provided a quarter of the total cost of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 projects. 2 Next pie chart, if you approve the 3 recommendations for this fiscal year, ICAT will 4 contribute 30 percent of the projects. 5 The process to which we solicit is two steps. 6 First is a pre-proposal, which we score as pass or 7 fail. 8 We invite those that pass to submit a full 9 proposal with a project description and description of 10 personnel, a schedule and detailed forms for financial 11 status and budget. 12 This two-step process makes it easier for 13 people to submit ideas to us. We have information for 14 those we have a reasonable chance of funding. 15 The full proposal is reviewed by ARB staff and 16 nine business and technical experts from California 17 University. 18 In addition, staff from the South Coast AQMD 19 and the California Energy Commission review most of the 20 proposals. 21 To introduce more requests in the program and 22 attract proposals, we have increased outreach efforts. 23 We have made the presentation at public 24 events, such as conferences and meetings and increased 25 the mailing list and ICAT web page. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 We have an annual submittal process. I will 2 discuss the conversion to the grant process starting 3 with the advantages up front, because the contract is 4 often revises plans, and this necessitates a formal 5 contract amendment that requires administrative steps 6 that takes two months. 7 However, due to the need to coordinate with 8 the various partners and co-funding, delays can create 9 problems, where a grant process, amendments can be 10 processed at ARB in less than two weeks. 11 The grant process is an advantage for 12 businesses that receive awards, such as the one you 13 heard benefit from the flexibility of the grant 14 process. 15 The success of ICAT is due in large part to 16 the stringent oversight and review. We maintain 17 standards and accountability that we are extensive, and 18 will continue, and the ICAT program will continue to 19 assure that applicants are committed to their projects. 20 We will continue to administer an accounting 21 of the fiscal requirements, ICAT will continue to go 22 before the Board for approval. 23 I will now describes the five proposals 24 recommended for approval. 25 This shows short titles. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 Institute of Gas Technology, IGT, and BOC 2 Gases, which are designed to control NOx from 3 industrial furnaces. 4 Success could help local air districts justify 5 NOx control regulations for industrial furnaces. 6 The first of these two proposals, oscillating 7 combustion on the furnace, IGT, located in Illinois, 8 has developed the formation of NOx and high 9 temperature. 10 The flow of natural gas in a special valve 11 treating in a pulsed flow, reduces NOx. They propose 12 to demonstrate oscillating combustion on furnaces in 13 Los Angeles County. 14 Additional funding is from Southern California 15 Gas, with support from Shultz Steel. 16 This slide shows an example of a forging 17 furnace. 18 This technology promises to be a relative 19 inexpensive to get NOx reduction from this source 20 category. 21 Next, low temperature oxidation was submitted 22 by BOC Gases, located in the City of Industry. 23 BOC proposes to demonstrate the feasibility of 24 scrubbing NOx emissions at a California 25 aluminum-melting furnace, changing ozone to oxide NO to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 NO2. NO2 is scrubbed with an alkaline solution. 2 This project will use recovered heat in the 3 plant. This means further NOx reduction and cost 4 savings. 5 This slide shows the BOC boiler in Los 6 Angeles, a successful demonstration of furnace use. 7 This slide slows short titles for the 8 remaining ICAT proposals, Hydrogen Burner Technology, a 9 hydrogen refueling station; Electric Transportation 10 Engineering, used for fast charging at airports; Goal 11 Line Technologies, SCONOx on diesel engines. 12 The first of these proposals, Hydrogen Burner 13 Technology is located in Long Beach. 14 HBT proposes to construct a system for use on 15 semi-transit buses in the Coachella Valley. 16 HBT's system should reduce the cost of 17 hydrogen for fuel-cell powered vehicles. 18 Additional funding is provided from the South 19 Coast Air Management District and SunLine. 20 This slide shows hydrogen production unit, 21 similar to what is used at SunLine. 22 ARB is a member of the fuel-cell partnership, 23 and one of the goals is to help propel use of fuel-cell 24 powered vehicles. Successful demonstration of the 25 project would help support this goal. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 The next proposal for fast-charging of 2 electric transportation of ground support at airports 3 located in Arizona, for ground support, such as for 4 baggage carriers, and is responsible for ground support 5 in California airports. 6 Airports are willing to switch from diesel to 7 electric if they obtain the serviceability. Fast 8 charging will achieve the goal, but it can require 9 upgrading of the infrastructure. 10 This project is demonstrated at Sacramento 11 International Airport. This technology charges each 12 tractor in one hour of the electrical system. 13 Additional funding is from the Sacramento 14 Municipal Utility District, Southwest Airlines and 15 Sacramento County, Department of Airports. 16 This slide shows an artist's rendering of the 17 charging station that would be used in Sacramento. 18 Successful demonstration of that could encourage the 19 use of electric vehicles from diesel and will save on 20 emissions. 21 The last proposal, SCONOx, SCOSOx was 22 submitted by Goal Line, located in Tennessee. 23 Stationary diesel engines are widely used by industry 24 for the State's agricultural sector for water pumping. 25 They are responsible for a fifth of non-mobile PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 sources of NOx, and air districts limit their 2 operation. 3 SCONOx will reduce NOx on natural gas engines 4 and SCOSOx will protect SCONOx catalyst from sulfur in 5 diesel fuel. 6 This slide shows the prototype of Goal Line. 7 Several previous ICAT projects are 8 commercialized or near the stage of commercialization. 9 We have an update on a project that we helped 10 fund two years ago, and I am pleased to present Mr. 11 James Shannon, the Chairman of Adhesive Coatings 12 Company. 13 He was a participating partner in developing 14 and demonstrating an industrial metal coating with no 15 VOCs. 16 MR. SHANNON: Thank you, Ralph. 17 Mr. Chairman, Board Members of CARB, CARB 18 staff and members of the public, as you heard, I'm 19 James Shannon. 20 I'm the Chairman and Managing Director of 21 Adhesive Coatings. 22 I'm here and pleased to be here to discuss 23 briefly the innovative clean air technology specific 24 project on no VOC. 25 The project participants in this one were PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 Aerovironment Environmental Services, which is an 2 environmental consultant firm specializing in research 3 and control technology based in southern California. 4 The other participant was my company, Adhesive 5 Coatings in the development of no VOC coatings, and we 6 are based in the Bay Area. 7 Manufacturers need to be compliance with these 8 to be in or stay in business. Once in business and 9 with VOC levels high enough, it is cost and 10 performance, and my company wholeheartedly endorses the 11 CARB Chairman when he said that zero VOC technology is 12 used now and exists in the State, and our goal is for 13 the future, which is now in the paint business. 14 ICAT funding, that was $220,000 from mid 1996 15 to June 1998, and the first two tasks were coating 16 reformulation, performed in company labs in Oakland. 17 Secondly, the field demonstrations were a 18 combination of Aerovironmental and Adhesive Coatings 19 for a cost and impact analysis. 20 That demonstrated the coating one company is 21 using on metal, a metal coating at a lower unit cost. 22 Second, we invested heavily before the demonstration on 23 add-on controls, and they are not using the product 24 much to their chagrin. 25 They could have saved money on capital PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 improvements in a continuing effort to lower costs on a 2 per point basis. 3 The status before ICAT, the company had 4 patented technologies. It was pure research and 5 development effort, and did not have a licensing 6 agreement. 7 It had no production capability of resin or 8 paint, and basically had no sales. It was funded by 9 what you call investors, angel investors. 10 The status after the ICAT funding was proven 11 technologies for both the resin and paint. It has sold 12 the patents to worldwide producers of resin. 13 It entered into a license agreement with the 14 coating company and made it subject to sale of the 15 patent. Now we have full production capacity and 16 capability for resin and paint. 17 The status after the ICAT funding, again, full 18 line of paint products using the resins. Selling 19 product in California, Washington, Oregon, Washington, 20 Colorado, Iowa, Wisconsin, and we are pushing east. 21 These products have commonality, no odor, no 22 VOC and no HAPs, that is the key. 23 Product performance, it does exactly what it 24 is supposed to do. We are selling to paint stores. It 25 is in chains. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 We are selling into the OEM, original 2 equipment manufacturers, and industrial accounts. 3 Number one, it is a high visibility project. 4 There is no competitive paint product that makes the 5 claims that this one does. On the label of the 6 license, it says, no VOC, no HAPs. 7 Job creation, administrative, plant and sales, 8 by licensee and purchaser of the patents of the both of 9 the companies, and VOC emission reduction 450 tons per 10 facility per year. 11 Based on a production facility, a paint plant 12 that produces 300,000 gallons a year, that is not a big 13 paint plant. Another thing, no hazardous air pollution 14 emissions, and regulatory compliance without add-on 15 controls. 16 Some of the benefits from the ICAT project, it 17 is applicable to many markets, not just metal but 18 concrete, automotive, only as primary, not as wear 19 coat, traffic and wood. 20 In wood, there is a stain, sand and seal layer 21 and top coat, all with zero VOC. No odor, because 22 there are no solvents. Water is our solvent. 23 It has shown excellent performance. Scrub 24 performance is fantastic. A normal paint gets 600. 25 Our's gets 2500. You wash the wall and the paint does PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 not come off. 2 It is also competitively priced. That is the 3 bottomline. 4 The future direction, we have entered into 5 strategic alliance with a large resin manufacturer with 6 $2-billion in annual sales, and they are virtually in 7 every continent, and they want to convert the plants in 8 the U.S. and abroad to produce the resin. 9 They will sell millions of pounds of resine 10 monthly for paint and fabric sizing markets, so VOC and 11 HAPs levels will continue to be reduced. 12 Make no mistake, the paint industry will not 13 voluntarily reduce, but they will respond and comply 14 with the rules and regulations for lowering VOCs, 15 because you go to the paint manufacturer, and they say 16 we are compliant with 50 VOC, why use one with zero? 17 The new paint products are based on technology 18 that we are working on for direct to metal, one coat, 19 no primary. The top coat is direct to metal and 20 reduces rust. 21 Also, we are working with a single use the 22 resin as opposed to two compounds. 23 With this, I conclude the presentation and 24 encourage you to continue to fund worthwhile projects 25 that make a difference. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 Thank you very much. 2 CHAIRMAN LLOYD: Thank you very much. 3 MR. PROPPER: Thank you, Mr. Shannon. 4 To summarize, ICAT is funding projects that 5 reduce air pollution in California and help the 6 economy. 7 A successful commercialization of zero VOC 8 coating can play a role with the help of research and 9 commercialization. 10 We believe that we have five promising 11 projects to help us meet the goal of healthier air 12 while strengthening California's economy. 13 This completes my presentation. I will be 14 happy to answer any questions that you may have. 15 CHAIRMAN LLOYD: Thank you. 16 Any questions or comments from the Board? 17 BOARD MEMBER BURKE: Is there any latitude -- 18 we discussed in the last meeting, we invest in the 19 program, some licensing arrangements so that ICAT funds 20 can be relinquished or more funds available, I mean, it 21 seems like talking angels, those are investors, that is 22 what ICAT is, and the angel gets the money back and a 23 little piece of the company. 24 I know government is not in business to make a 25 profit but looking for money in budgets and a way to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 help more people, some of these projects, maybe not 2 ICAT, some of the other grants that we have, I would 3 love for us to explore having an arrangement that if we 4 invest that we get something back that makes common 5 sense to me. 6 CHAIRMAN LLOYD: Dr. Burke, as you recall in 7 the South Coast in running the TAO -- 8 BOARD MEMBER BURKE: I was the guy who kept 9 bringing it up. 10 CHAIRMAN LLOYD: It came up before, and during 11 your time as well, my personal opinion, we looked and 12 talked to the Energy Commission, and my opinion is that 13 once you look at the need to track that, when companies 14 are profitable, it basically is not worth the effort, 15 and when you have companies investing their own, it is 16 a deterrent to track the paperwork. 17 To me, the downside outweighed the potential 18 upside. I agree with you in principle, and we explored 19 it. 20 I cannot tell you how many staff hours and how 21 many people we talked to and found, particularly if you 22 look at Mr. Shannon's experience here, I think the fact 23 that he was able to do what he has done and it is a 24 tremendous success story, and if you do that tracking, 25 I could not quantify that, but the feeling is that it PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 is a detriment. 2 BOARD MEMBER BURKE: When you find that Mr. 3 Rasmussen's is a success story, you'll wish you'd 4 gotten stock in the company. 5 CHAIRMAN LLOYD: Since you are going to refer 6 him -- 7 BOARD MEMBER DeSAULNIER: But can you drink 8 it. 9 CHAIRMAN LLOYD: Any other comments? 10 BOARD MEMBER McKINNON: I would like to move 11 it, Resolution 0017 through 00021. 12 BOARD MEMBER PATRICK: Second. 13 CHAIRMAN LLOYD: Thank you staff for an 14 excellent presentation, and thank you staff for the 15 excellent work that they have done, and I hope in fact 16 we have many more applicants and more dollars to be 17 divided up. 18 Thank you. I like the fact that you are in 19 fact working with South Coast on the project. 20 We have no one for open comments. 21 With that, I will bring the May 25, 2000, 22 Board Meeting to a close. 23 (Thereupon the Air Resources Board meeting was 24 adjourned at 3:10 p.m.) 25 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, VICKI L. OGELVIE, a Certified Shorthand 4 Reporter of the State of California, do hereby certify: 5 That I am a disinterested person herein; that 6 the foregoing hearing was reported in shorthand by me, 7 Vicki L. Ogelvie, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in 12 any way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my 14 hand this fourth day of June, 2000. 15 16 17 VICKI L. OGELVIE 18 Certified Shorthand Reporter License No. 7871 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345