MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, JUNE 24, 1999 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 JOSEPH C. CALHOUN MARK DESAULNIER MATTHEW MCKINNON BARBARA PATRICK BARBARA RIORDAN RON ROBERTS STAFF: MICHAEL KENNY, EXECUTIVE DIRECTOR TOM CACKETTE, CHIEF DEPUTY EXECUTIVE OFFICER MIKE SCHEIBLE, DEPUTY EXECUTIVE OFFICER LYNN TERRY, DEPUTY EXECUTIVE OFFICER KATHLEEN WALSH, GENERAL COUNSEL BRUCE OULREY, 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: 99-5-1 PUBLIC HEARING TO CONSIDER AMENDMENTS TO THE CALIFORNIA REFORMULATED GASOLINE REGULATIONS REGARDING WINTER OXYGEN REQUIREMENTS IN THE LAKE TAHOE AIR BASIN AND LABELING PUMPS DISPENSING GASOLINE CONTAINING MTBE INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 3 STAFF PRESENTATION: MIKE KENNY 4 ERIK WHITE 5 99-5-2 PUBLIC HEARING TO CONSIDER THE ADOPTION, AMENDMENT AND REPEAL OF REGULATIONS REGARDING CERTIFICATION PROCEDURES AND TEST PROCEDURES FOR GASOLINE VAPOR RECOVERY SYSTEMS INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 103 STAFF PRESENTATION: MIKE KENNY 104 CINDY CASTRONOVO 104 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv I N D E X (CONTINUED) --O0O-- PAGE 99-5-3 PUBLIC MEETING TO CONSIDER AN UPDATE ON CALIFORNIA'S AIR TOXICS PROGRAM AND RELATED COMMUNITY HEALTH ISSUES INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 132 STAFF PRESENTATION: MIKE KENNY 133 BOB FLETCHER 134 99-5-4 PUBLIC MEETING TO CONSIDER RESEARCH PROPOSALS INTRODUCTORY REMARKS BY CHAIRMAN LLOYD 159 STAFF PRESENTATION: DR. JOHN HOLMES 159 OPEN SESSION TO PROVIDE AN OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO ADDRESS THE BOARD ON SUBJECT MATTERS WITHIN THE JURISDICTION OF THE BOARD 161 ADJOURNMENT 161 CERTIFICATE OF REPORTER 162 --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 I WOULD LIKE TO OPEN THE JUNE 24, 1999 PUBLIC 5 MEETING OF THE AIR RESOURCES BOARD, WOULD PLEASE NOW COME TO 6 ORDER. 7 FIRST OF ALL, I WOULD LIKE TO ASK SUPERVISOR 8 DESAULNIER TO LEAD US IN THE PLEDGE OF ALLEGIANCE. 9 (THEREUPON THE PLEDGE OF ALLEGIANCE WAS RECITED.) 10 CHAIRMAN LLOYD: WOULD THE CLERK PLEASE CONDUCT THE 11 ROLL CALL. 12 MS. HUTCHENS: CALHOUN. 13 BOARD MEMBER CALHOUN: HERE. 14 MS. HUTCHENS: DESAULNIER. 15 BOARD MEMBER DESAULNIER: HERE. 16 MS. HUTCHENS: EDGERTON. 17 HUGH FRIEDMAN. 18 DR. FRIEDMAN. 19 MCKINNON. 20 BOARD MEMBER MCKINNON: HERE. 21 MS. HUTCHENS: PATRICK. 22 BOARD MEMBER PATRICK: HERE. 23 MS. HUTCHENS: RIORDAN. 24 BOARD MEMBER RIORDAN: HERE. 25 MS. HUTCHENS: ROBERTS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD MEMBER ROBERTS: HERE. 2 MS. HUTCHENS: CHAIRMAN LLOYD. 3 CHAIRMAN LLOYD: HERE. 4 THANK YOU VERY MUCH. 5 IT GIVES ME PLEASURE THIS MORNING TO WELCOME 6 MATTHEW MCKINNON TO OUR BOARD. HE WAS APPOINTED BY THE 7 GOVERNOR WITHIN THE LAST WEEK. 8 WE ARE DELIGHTED TO HAVE MATT JOIN US. 9 I WILL LET HIM DESCRIBE A LITTLE BIT OF HIS 10 BACKGROUND. I THINK HE WILL BRING A VERY VALUABLE ADDED 11 DIMENSION TO OUR BOARD, LOOKING AT SOME OF THE LABOR ISSUES, 12 AND LIVING IN SACRAMENTO, ALSO, WE HAVE THE PLEASURE, HE WILL 13 BE WORKING VERY CLOSE WITH US, SO IT IS A DELIGHT THAT THE 14 GOVERNOR HAS MADE THIS APPOINTMENT. 15 A LITTLE FORWARD, SO WE ARE VERY HAPPY TO BE 16 WORKING WITH YOU, MATT. 17 BOARD MEMBER MCKINNON: THANK YOU, CHAIRMAN LLOYD. 18 AND FIRST OF ALL IT IS A BIT HUMBLING, THIS IS MY 19 FIRST APPOINTMENT TO STATE OFFICE. 20 I WANT TO START OUT BY TELLING YOU THAT I 21 APPRECIATE THAT JUST IN A FEW SHORT DAYS YOUR EFFORTS TO 22 BRING ME UP TO SPEED, AND MR. KENNY'S AND ALL THE STAFF HAS 23 WORKED REAL HARD, I THINK, FOR YEARS AND YEARS, BUT I REALLY 24 APPRECIATE THE LAST FEW DAYS OF WORK TO BRIEF ME AND BRING ME 25 UP TO SPEED WITH YOUR WORK. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 IN TERMS OF MY BACKGROUND, I CLEARLY HAVE A LONG 2 RECORD WITHIN THE LABOR MOVEMENT, BOTH IN THE AREA OF 3 REPRESENTING WORKERS, ACTUALLY IN A FACTORY, IN THE 4 LEGISLATIVE ARENA, AND ALSO IN THE HEALTH AND SAFETY ARENA. 5 I HOPE TO SERVE CALIFORNIA WITH SOME BALANCE IN 6 TERMS OF CONSIDERING HEALTH AND SAFETY AND THE NEED FOR JOBS 7 IN CALIFORNIA. 8 I THANK YOU VERY MUCH FOR THE INTRODUCTION AND LOOK 9 FORWARD TO WORKING WITH YOU. 10 CHAIRMAN LLOYD: THANK YOU VERY MUCH, MATT. 11 I WOULD LIKE TO REMIND EVERYONE IN THE AUDIENCE 12 THAT WISHES TO TESTIFY ON TODAY'S AGENDA ITEMS TO SIGN UP 13 WITH THE CLERK OF THE BOARD. 14 IF YOU HAVE A WRITTEN STATEMENT, PLEASE PROVIDE 20 15 COPIES ALSO TO THE BOARD CLERK. 16 THE FIRST ITEM ON THE AGENDA IS 99-5-1, WHICH 17 CONCERNS AMENDMENTS TO CALIFORNIA REFORMULATED GASOLINE 18 REGULATIONS REGARDING WINTER OXYGEN REQUIREMENTS IN THE LAKE 19 TAHOE AIR BASIN AND LABELING FOR GASOLINE CONTAINING METHYL 20 TERTIARY BUTYL ETHER, OR MTBE. 21 AS YOU KNOW, THESE ARE THE FIRST TWO ACTIONS THIS 22 BOARD WAS DIRECTED TO TAKE UNDER THE GOVERNOR'S EXECUTIVE 23 ORDER PHASING OUT MTBE. 24 LATER THIS YEAR, IN FACT, AT OUR DECEMBER MEETING, 25 WE WILL BE LOOKING AT MORE COMPREHENSIVE REGULATORY CHANGES PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 TO ACHIEVE THE SAME OBJECTIVE. 2 IN FACT, THE WORKSHOPS ON THOSE CHANGES HAVE 3 ALREADY BEGUN. THAT IS ON THE PHASE 3 CLEANER BURNING 4 GASOLINE. 5 TODAY'S ITEM IS A SMALL BUT VERY IMPORTANT START OF 6 THIS WHOLE PROCESS. 7 LET ME JUST SAY THAT I APPRECIATE HOW RESPONSIVE 8 STAFF HAS BEEN IN GETTING THIS REGULATORY ITEM DONE BY THE 9 GOVERNOR'S JULY 1 DEADLINE. 10 THERE WAS A SIGNIFICANT AMOUNT OF WORK INVOLVED. 11 AGAIN, YOUR EFFORTS DID NOT GO UNNOTICED, AND I REALIZE IT IS 12 A TREMENDOUS CHANGE, AGAIN THE SHORT PERIOD BETWEEN THE 13 EXECUTIVE ORDER AND THIS DEADLINE. 14 SO, I THINK WE ALL APPRECIATE THAT, AND AS FAR AS I 15 CAN SEE, I ALSO APPRECIATE THE WAY YOU HAVE TRIED YOUR BEST 16 TO WORK WITH THE INDUSTRY IN THE LEGISLATIVE BRANCH OF THIS 17 AREA. 18 WITH THAT, I WOULD LIKE TO ASK MR. KENNY TO BEGIN 19 THE STAFF'S PRESENTATION. 20 MR. KENNY: THANK YOU, MR. CHAIRMAN AND MEMBERS OF 21 THE BOARD. 22 AS YOU STATED, IN RESPONSE TO CONCERNS OVER 23 ENVIRONMENTAL IMPACT OF MTBE, GOVERNOR DAVIS ISSUED EXECUTIVE 24 ORDER D599 THAT DIRECTED THE PHASE OUT OF MTBE BY NO LATER 25 THEN DECEMBER 31 OF 2002. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 THIS EXECUTIVE ORDER ALSO DIRECTED THE BOARD TO 2 TAKE CERTAIN SPECIFIC ACTIONS, ONE OF THOSE WAS TO EVALUATE 3 THE NECESSITY OF WINTER OXYGENATED GASOLINE IN THE LAKE TAHOE 4 AIR BASIN. 5 LAST AUGUST, THE BOARD TOOK ACTION TO RESCIND THE 6 WINTER TIME OXYGENATE STATE REQUIREMENT IN THE LAKE TAHOE AIR 7 BASIN, EFFECTIVE JANUARY 31 OF THE YEAR 2000. 8 TODAY'S PROPOSAL WOULD END THE WINTER TIME 9 OXYGENATE REQUIREMENT IN LAKE TAHOE ONE YEAR EARLY. THIS 10 WOULD FACILITATE NON-MTBE GASOLINE IN THIS REGION. 11 THE GOVERNOR'S EXECUTIVE ORDER ALSO DIRECTED THE 12 BOARD TO DEVELOP REGULATIONS THAT WOULD REQUIRE THE PROMINENT 13 IDENTIFICATION ON DISPENSING PUMPS OF GASOLINE CONTAINING 14 MTBE. 15 THIS WILL ALLOW CONSUMERS TO MAKE AN INFORMED 16 CHOICE OF THE TYPE OF GASOLINE THAT THEY PURCHASE. 17 THE TWO PROPOSALS BEFORE YOU TODAY WOULD SATISFY 18 THESE DIRECTIONS CONTAINING THE GOVERNOR'S EXECUTIVE ORDER. 19 I WOULD NOW LIKE TO ASK MR. ERIK WHITE TO BEGIN THE 20 STAFF PRESENTATION. 21 ERIK. 22 MR. WHITE: THANK YOU, MR. KENNY. 23 GOOD MORNING, MR. CHAIRMAN AND MEMBERS OF THE 24 BOARD. 25 TODAY I WILL PRESENT TO YOU THE STAFF'S PROPOSED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 AMENDMENTS TO THE CALIFORNIA REFORMULATED GASOLINE 2 REGULATIONS WHICH WOULD RESCIND THE WINTERTIME OXYGEN 3 REQUIREMENT IN THE LAKE TAHOE AIR BASIN AND WOULD REQUIRE THE 4 STATEWIDE LABELING OF PUMPS DISPENSING GASOLINE CONTAINING 5 METHYL TERTIARY BUTYL ETHER, OR MTBE. 6 I WILL PROVIDE A BRIEF BACKGROUND LEADING UP TO 7 THESE PROPOSED AMENDMENTS TO THE REFORMULATING GASOLINE 8 REGULATIONS. I WILL DISCUSS EACH OF THE PROPOSED AMENDMENTS 9 IN DETAIL, AND I WILL PRESENT THE STAFF'S RECOMMENDATION ON 10 THE PROPOSED AMENDMENTS. 11 IN 1990, AMENDMENTS TO THE FEDERAL CLEAN AIR ACT 12 WAS PASSED BY CONGRESS. THESE AMENDMENTS REQUIRED THE STATES 13 TO DEVELOP A WINTERTIME OXYGENATED GASOLINE PROGRAM AND 14 FEDERAL CARBON MONOXIDE, OR CO, NONATTAINMENT AREAS. 15 IN ADDITION, THE 1990 AMENDMENTS REQUIRED THE U.S. 16 EPA TO DEVELOP A FEDERAL REFORMULATED GASOLINE PROGRAM FOR 17 THE NINE FEDERAL OZONE NONATTAINMENT AREAS IN THE COUNTRY 18 WITH THE WORST AIR QUALITY. 19 THESE DESIGNATED NONATTAINMENT AREAS INCLUDED 20 REGIONS WITHIN CALIFORNIA. 21 IN RESPONSE TO THE CLEAN AIR ACT AMENDMENTS, THE 22 BOARD ADOPTED REGULATIONS IN NOVEMBER 1991 TO REQUIRE 23 OXYGENATED GASOLINE IN CO NONATTAINMENT AREAS FROM OCTOBER TO 24 FEBRUARY, BEGINNING IN 1992. 25 CALIFORNIA'S WINTERTIME OXYGENATED PROGRAM WAS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 IMPLEMENTED STATEWIDE AND WAS DESIGNED SO THAT GASOLINE WOULD 2 HAVE AN AVERAGE OXYGEN CONTENT OF 2.0 PERCENT BY WEIGHT. 3 HOWEVER, IN ESTABLISHING A MINIMUM OXYGEN CONTENT 4 REQUIREMENT, THE BOARD DID NOT SPECIFY WHICH TYPE OF 5 OXYGENATE GASOLINE PRODUCERS HAD TO USE. 6 AS STATED EARLIER, THE FEDERAL CLEAN AIR ACT 7 REQUIRED THE U.S. EPA TO DEVELOP REGULATIONS FOR FEDERAL 8 REFORMULATED GASOLINE. 9 THESE REGULATIONS APPLY IN ALL FEDERAL OZONE 10 NONATTAINMENT AREAS WHICH ARE DESIGNATED AS SEVERE OR 11 EXTREME. 12 IN CALIFORNIA, THESE AREAS ARE THE GREATER LOS 13 ANGELES AREA, AND SAN DIEGO COUNTY, STARTING IN 1995, AND THE 14 SACRAMENTO METROPOLITAN AREA, BEGINNING IN 1996. 15 THE FEDERAL RFG REGULATIONS ARE BASED ON EMISSION 16 PERFORMANCE STANDARDS, AND PER THE CLEAN AIR ACT, CONTAIN A 17 MINIMUM OXYGEN CONTENT SPECIFICATION OF AT LEAST TWO PERCENT 18 OXYGEN BY WEIGHT YEAR-ROUND. 19 IN MARCH 1996, THE ARB IMPLEMENTED ON A STATEWIDE 20 BASIS THE CALIFORNIA REFORMULATED GASOLINE REGULATIONS. 21 THESE REGULATIONS PUT LIMITS ON EIGHT FUEL PARAMETERS, 22 INCLUDING A MINIMUM OXYGEN CONTENT, THE REQUIREMENT FOR 23 OXYGEN WAS INCLUDED TO ASSURE THAT THE CALIFORNIA 24 REFORMULATED GASOLINE REGULATIONS MET THE REQUIREMENTS OF 25 FEDERAL RFG IN THOSE AREAS REQUIRING THE USE OF THAT FUEL. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 SIMILAR TO THE WINTERTIME OXYGEN CONTENT 2 REQUIREMENT, THE REGULATIONS DO NOT SPECIFY THE TYPE OF 3 OXYGENATE GASOLINE PRODUCERS MUST USE. 4 THE REGULATIONS ALSO REQUIRE REFINERS TO PRODUCE 5 GASOLINE THROUGH THE USE OF A PREDICTED MODEL. THE PREDICTED 6 MODEL PROVIDES ADDITIONAL FLEXIBILITY BY ALLOWING REFINERS TO 7 VARY THE FUEL PARAMETERS INCLUDING OXYGEN CONTENT BUT 8 PROVIDES SAME EMISSION BENEFITS UNDER THE REGULATIONS. 9 HOWEVER, IN FEDERAL RFG AND WINTERTIME CO 10 NONATTAINMENT AREAS, GASOLINE MUST STILL CONTAIN A MINIMUM 11 OXYGEN CONTENT. 12 AS YOU CAN SEE FROM THE SLIDE, THE FEDERAL RFG 13 AREAS INCLUDE ALMOST ALL OF SOUTHERN CALIFORNIA AND THE 14 GREATER SACRAMENTO METROPOLITAN AREA. 15 THESE AREAS MUST USE OXYGENATED GASOLINE AT ALL 16 TIMES, AND ACCOUNTS FOR 70 PERCENT OF THE GASOLINE SOLD IN 17 CALIFORNIA. 18 IN PRODUCING GASOLINE, REFINERS ARE FREE UNDER BOTH 19 THE FEDERAL AND STATE REFORMULATED GASOLINE REGULATIONS TO 20 CHOOSE THE TYPES OF OXYGENATES TO BLEND INTO THEIR GASOLINE. 21 REFINERS HAVE CHOSEN MTBE AS THEIR OXYGENATE OF 22 CHOICE. IN 1998, APPROXIMATELY 34 MILLION BARRELS OF MTBE 23 WERE USED IN CALIFORNIA GASOLINE. THIS REPRESENTS OVER 90 24 PERCENT OF THE GASOLINE SOLD IN THE STATE. 25 NATIONALLY, OVER 40 PERCENT OF ALL GASOLINE SOLD IN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 1998 CONTAINED OXYGENATES, AND OF THAT, OVER 80 PERCENT 2 CONTAINED MTBE. 3 RECENTLY THERE HAS BEEN INCREASED CONCERN REGARDING 4 THE ENVIRONMENTAL RISKS ASSOCIATED WITH THE USE OF MTBE. 5 GOVERNOR DAVIS FOUND, BASED ON A REPORT BY THE 6 UNIVERSITY OF CALIFORNIA, PUBLIC HEARINGS AND OTHER RELEVANT 7 INFORMATION THAT MTBE PRESENTS A THREAT TO GROUNDWATER, 8 SURFACE WATER AND DRINKING WATER. 9 IN MAKING THIS FINDING, THE GOVERNOR DETERMINED 10 THAT UNDERGROUND GASOLINE STORAGE TANKS ARE NOT LEAK PROOF, 11 THAT MTBE IS HIGHLY SOLUBLE IN WATER AND TRANSFERS TO GROUND 12 WATER FASTER THAN OTHER GASOLINE COMPONENTS, AND THAT MTBE 13 EVEN IN SMALL AMOUNTS RENDERS DRINKING WATER UNUSABLE. 14 THE GOVERNOR ALSO FOUND THAT MTBE HAS POTENTIAL BUT 15 NOT PROVEN HEALTH PROBLEMS AND THAT MTBE IS NOT ESSENTIAL TO 16 REFORMULATED GASOLINE. 17 BASED ON THESE FINDINGS, THE GOVERNOR ISSUED 18 EXECUTIVE ORDER ON MARCH 26. IN HIS EXECUTIVE ORDER, THE 19 GOVERNOR CALLED FOR THE PHASE OUT OF MTBE IN THE CALIFORNIA 20 GASOLINE POOL NO LATER THAN DECEMBER 31, 2002. 21 THE EXECUTIVE ORDER ALSO DIRECTED, AMONG OTHER 22 THINGS, THAT THE BOARD EVALUATE THE NEED FOR WINTERTIME 23 OXYGENATED GASOLINE IN THE LAKE TAHOE AIR BASIN AND THAT THE 24 BOARD ADOPT STATEWIDE REGULATIONS REQUIRING THE PROMINENT 25 LABELING OF PUMPS DISPENSING GASOLINE CONTAINING MTBE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 THE PROPOSED AMENDMENTS TO THE CALIFORNIA 2 REFORMULATED GASOLINE REGULATIONS BEFORE YOU TODAY WOULD 3 IMPLEMENT THESE TWO ELEMENTS OF THE GOVERNOR'S EXECUTIVE 4 ORDER. 5 IN DEVELOPING THE PROPOSED AMENDMENTS, STAFF HELD A 6 PUBLIC WORKSHOP ON MAY 11. THIS WORKSHOP WAS ATTENDED BY 7 STAKEHOLDERS OF THE PETROLEUM INDUSTRY AND ENVIRONMENTAL 8 ORGANIZATIONS AND LOCAL GOVERNMENT. 9 THE WORKSHOP NOTICE WAS MAILED TO OVER 8,000 10 INDIVIDUALS AND COMPANIES, WHICH INCLUDED REFINERS, PETROLEUM 11 ASSOCIATIONS AND THE INDIVIDUAL RETAIL SERVICE STATIONS IN 12 THE STATE. 13 IN EXPEDITING THE IMPLEMENTATION OF THE GOVERNOR'S 14 EXECUTIVE ORDER, STAFF HAS HAD CONSIDERABLE INFORMAL 15 DISCUSSIONS WITH EFFECTED INDUSTRY, BOTH BEFORE AND AFTER THE 16 RELEASE OF THE ORIGINAL PROPOSAL. 17 THIS WAS TO FURTHER DEVELOP THE PROPOSED AMENDMENTS 18 WITHOUT DELAYING THE PUBLIC HEARING. 19 NOW WE TURN TO THE PROPOSED AMENDMENTS THAT WOULD 20 RESCIND THE WINTERTIME OXYGEN REQUIREMENT IN LAKE TAHOE AIR 21 BASIN. 22 AT THE BOARD'S REQUEST, IN MARCH OF 1998, THE U.S. 23 EPA REDESIGNATED MOST OF CALIFORNIA WITH THE EXCEPTION OF THE 24 GREATER LOS ANGELES AREA AND IMPERIAL COUNTY IN ATTAINMENT 25 FOR THE FEDERAL CO AND THE CLEAN AIR QUALITY STANDARD. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 IN ADDITION, BY SEPTEMBER OF 1998, THESE SAME 2 AREAS, INCLUDING THE LAKE TAHOE AIR BASIN, WERE REDESIGNATED 3 BY THE BOARD IN ATTAINMENT FOR THE STATE STANDARD FOR CO. 4 IN RESPONSE TO THE U.S. EPA CO REDESIGNATION, THE 5 BOARD RESCINDED THE WINTERTIME OXYGEN REQUIREMENT IN 6 CALIFORNIA FOR ALL AREAS OF THE STATE, EXCEPT FOR GREATER LOS 7 ANGELES AND IMPERIAL COUNTY. 8 HOWEVER, IN RESCINDING THE WINTERTIME OXYGEN 9 REQUIREMENT IN THE LAKE TAHOE AIR BASIN AND THE FRESNO AREA, 10 THE BOARD REQUIRED A TWO-YEAR DELAY IN ORDER TO ENSURE THAT 11 THE FEDERAL AND STATE CO STANDARDS WOULD BE PROTECTED AND 12 MAINTAINED. 13 BASED ON RECENT AIR QUALITY DATA FROM THE LAKE 14 TAHOE AREA, STAFF NOW BELIEVES THAT IT IS APPROPRIATE TO 15 RESCIND THE WINTERTIME OXYGEN REQUIREMENT IN THE LAKE TAHOE 16 AIR BASIN, EFFECTIVE THIS YEAR, WHICH IS A YEAR EARLY. 17 IN RESCINDING THIS REQUIREMENT, GASOLINE SUPPLIERS 18 WOULD IMMEDIATELY BE ABLE TO DISTRIBUTE AND SELL 19 NON-OXYGENATED GASOLINE YEAR-ROUND. 20 RESCINDING THE WINTERTIME OXYGEN REQUIREMENT IN THE 21 LAKE TAHOE AREA WOULD IMPLEMENT ITEM 5 OF THE GOVERNOR'S 22 EXECUTIVE ORDER THAT REQUIRES THE BOARD TO EVALUATE THE NEED 23 FOR OXYGENATED GASOLINE IN THE LAKE TAHOE AIR BASIN. 24 SINCE 1990, CO EMISSIONS FOR MOTOR VEHICLES HAS 25 STEADILY DECREASED IN THE LAKE TAHOE AIR BASIN. THESE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 DECREASES HAVE RESULTED IN MAXIMUM EIGHT-HOUR AMBIENT CO 2 CONCENTRATIONS IN THE LAKE TAHOE AREA IN LESS THAN 5 PPM 3 DURING THE 1996 THROUGH 1998 PERIOD. 4 THIS IS BELOW BOTH THE STATE CO AMBIENT AIR QUALITY 5 STANDARD FOR LAKE TAHOE OF 6 PPM, AND THE FEDERAL CO STANDARD 6 OF 9 PPM. 7 THE DECREASE IN VEHICULAR CO EMISSIONS IS PRIMARILY 8 DUE TO TWO FACTORS. FIRST, THE ADDITION OF OXYGENATES TO 9 GASOLINE TYPICALLY PROVIDES A 5 TO 10 PERCENT REDUCTION IN CO 10 EMISSIONS FROM MOTOR VEHICLES. 11 IN ADDITION, VEHICULAR CO EMISSIONS ARE FURTHER 12 REDUCED BY 4 TO 8 PERCENT ANNUALLY, DUE TO THE TURNOVER THAT 13 THE LIGHT-DUTY VEHICLE FLEET TO NEWER EMISSION CONTROL 14 TECHNOLOGIES. 15 THE NEXT TWO SLIDES GRAPHICALLY ILLUSTRATE THESE 16 EFFECTS. 17 THIS SLIDE SHOWS THE MAXIMUM AMBIENT CO 18 CONCENTRATION SINCE 1990 FOR TWO MONITORING SITES IN THE LAKE 19 TAHOE AIR BASIN. 20 AS YOU CAN SEE FROM THE ORANGE LINE IN THIS GRAPH, 21 MAXIMUM CO CONCENTRATIONS AT THE MONITORING SITE WITH THE 22 HIGHEST READINGS HAVE DECREASED FROM A HIGH OF 10.1 PPM IN 23 1990 TO 4.3 PPM IN 1998. 24 FOLLOWING THIS TREND, CO EMISSIONS IN LAKE TAHOE 25 AIR BASIN HAVE ALSO DECREASED SINCE 1990, 123 TONS PER DAY, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 TO LESS THAN 90 TONS PER DAY IN 1997. 2 IN EVALUATING THE AIR QUALITY IMPACTS OF RESCINDING 3 THE WINTERTIME OXYGEN REQUIREMENT, STAFF ESTIMATES THAT THE 4 ELIMINATION OF OXYGENATED GASOLINE DURING THE WINTER MONTHS 5 COULD TEMPORARILY INCREASE CO EMISSIONS BY UP TO 6 PERCENT. 6 THIS RESULTS FROM THE NET IMPACT OF INCREASED CO 7 EMISSIONS FROM NOT USING OXYGENATED GASOLINE AND THE CO 8 DECREASE DUE TO FLEET TURNOVER. 9 HOWEVER, THE TEMPORARY INCREASE IN CO EMISSIONS IS 10 NOT EXPECTED TO RESULT IN ANY VIOLATION OF EITHER THE STATE 11 OR NATIONAL CO STANDARDS. 12 AMBIENT CO CONCENTRATIONS ARE EXPECTED TO DECREASE 13 BELOW CURRENT LEVELS WITHIN TWO YEARS DUE TO FURTHER FLEET 14 TURNOVER. 15 THE PROPOSED DECISION WILL PROVIDE INCREASED 16 FLEXIBILITY TO REFINERS DURING THE WINTER MONTHS AND IS NOT 17 EXPECTED TO RESULT IN ANY SIGNIFICANT ADVERSE IMPACTS. 18 WE WILL NOW TURN TO STAFF'S PROPOSED STATEWIDE 19 LABELING REQUIREMENTS FOR PUMPS DISPENSING GASOLINE 20 CONTAINING MTBE. PLEASE NOTE THAT STAFF IS RECOMMENDING 21 CHANGES TO THE ORIGINAL PROPOSAL AS PRESENTED IN STAFF 22 REPORT. 23 THESE CHANGES WILL BE DISCUSSED IN THIS 24 PRESENTATION AND ARE INCLUDED IN THE MODIFIED PROPOSED 25 REGULATORY LANGUAGE THAT IS NOW BEFORE YOU AND ALSO AVAILABLE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 ON THE TABLE OUTSIDE THE HEARING ROOM. 2 STAFF IS PROPOSING TO REQUIRE RETAIL SERVICE 3 STATION OPERATORS IN CALIFORNIA TO AFFIX LABELS TO THEIR 4 PUMPS THAT DISPENSE GASOLINE CONTAINING MTBE IN ADDITION TO 5 ASSIST STATION OPERATORS IN PROPERLY LABELING THEIR PUMPS. 6 STAFF IS ALSO PROPOSING TO REQUIRE GASOLINE 7 DISTRIBUTORS TO IDENTIFY ON THE BILL OF LADING OR OTHER 8 DOCUMENTATION THE PRESENCE OF MTBE IN THE GASOLINE THAT THEY 9 ARE DELIVERING. 10 THE STATEWIDE LABELING REQUIREMENTS ARE PROPOSED TO 11 IMPLEMENT ITEM 7 OF THE GOVERNOR'S EXECUTIVE ORDER. 12 IN DETERMINING IF LABELS ARE REQUIRED, IT IS 13 NECESSARY TO DEFINE WHAT IS MEANT BY NON-MTBE GASOLINE. 14 UNTIL THE USE OF MTBE IS PHASED OUT IN CALIFORNIA 15 AND BECAUSE OF MTBE EXTENSIVE USE, GASOLINE THAT HAS NOT BEEN 16 PRODUCED WITH MTBE CAN BE INADVERTENTLY CONTAMINATED WITH 17 RESIDUALS FROM PREVIOUS GASOLINE BATCHES AND DELIVERIES. 18 THIS CAN OCCUR DURING ITS PRODUCTION AT THE 19 REFINERY, TRANSPORTATION IN THE PIPELINE, DISTRIBUTION AND 20 STORAGE AT GASOLINE TERMINALS AND SERVICE STATIONS. 21 IN RECOGNITION OF THE VARIOUS POTENTIAL SOURCES OF 22 MTBE CONTAMINATION, STAFF IS PROPOSING A LEVEL OF 0.6 VOLUME 23 PERCENT MTBE TO DEFINE NON-MTBE GASOLINE. 24 THIS REPRESENTS A FUEL THAT HAS NOT BEEN 25 INTENTIONALLY PRODUCED WITH MTBE, AND IT IS THE LOWEST LEVEL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 THAT CAN REASONABLY BE ACHIEVED IN THE GASOLINE DISTRIBUTION 2 SYSTEM. 3 IT IS ALSO THE LEVEL OF MTBE CONTAMINATION THAT 4 U.S. EPA ALLOWS IN FEDERAL RFG NOT PRODUCED WITH MTBE. 5 STAFF HAD ORIGINALLY CONSIDERED THE MTBE LEVEL OF 6 0.3 VOLUME PERCENT. HOWEVER, AFTER DISCUSSIONS WITH PIPELINE 7 OPERATORS AND REFINERS, IT WAS CONCLUDED THAT THE HIGHER 8 DIMINIMOUS LEVEL IS MORE APPROPRIATE. 9 HERE YOU CAN SEE AN EXAMPLE OF HOW THE PROPOSED 10 LABEL WOULD LOOK. 11 THE LABEL WOULD BE APPROXIMATELY TWO AND A HALF 12 INCHES HIGH BY FOUR AND A HALF INCHES LONG, AND PROMINENTLY 13 STATE THE GASOLINE CONTAINS MTBE. 14 YOU SHOULD HAVE AN ACTUAL SIZE COPY BEFORE YOU, AND 15 ADDITIONAL COPIES ARE AVAILABLE ON THE BACK TABLE OUTSIDE THE 16 HEARING ROOM. 17 THE PROPOSED LABEL WILL ALSO CARRY A STATEMENT THAT 18 WOULD REFLECT THE FINDINGS OF THE GOVERNOR'S EXECUTIVE ORDER. 19 IT WOULD CONFORM TO THE WORDING OF THE PROPOSED PUMP LABEL IN 20 SENATE BILL 192, BY SENATOR PERATA, WHICH IS CURRENTLY 21 PENDING IN THE LEGISLATURE. 22 THE LABEL BEING PROPOSED BY STAFF WOULD ALSO HAVE 23 TO MEET CRITERIA THAT INCLUDES REQUIREMENTS FOR DURABILITY 24 AND A CONTRASTING BACKGROUND COLOR. 25 STAFF IS ALSO PROPOSING CRITERIA FOR THE MINIMUM PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 SIZE OF ALL THE LETTERING. STAFF IS ALSO PROPOSING THAT THE 2 LABEL BE PLACED ON THE FRONT SIDE OF THE PUMP AND VISIBLE 3 FROM THE DRIVER'S SEAT OF THE VEHICLE. 4 THIS PROVIDES MORE FLEXIBILITY THAN ORIGINALLY 5 PROPOSED. 6 STAFF IS ALSO PROPOSING VARIOUS METHODS TO ASSIST 7 SERVICE STATION OPERATORS DETERMINE THE MTBE CONTENT OF THEIR 8 GASOLINE. 9 THE FIRST IS A SIMPLE TABLE THAT SPECIFIES THE 10 NUMBER OF TIMES A TANK MUST BE DRAINED AND REFILLED BASED ON 11 HOW MUCH THE TANK IS EMPTIED PRIOR TO EACH GASOLINE DELIVERY. 12 THE USE OF THIS TABLE WOULD REQUIRE NO CALCULATIONS. 13 STATION OPERATORS MAY ALSO USE COMPUTER SOFTWARE 14 PROVIDED BY THE ARB THAT WILL ENABLE THEM TO ENTER 15 INFORMATION ABOUT EACH GASOLINE DELIVERY AND HAVE THE 16 COMPUTER DETERMINE WHAT THE MTBE CONTENT IS AND WHETHER A 17 LABEL IS NECESSARY. 18 STATION OPERATORS MAY ALSO TEST THEIR GASOLINE 19 USING A STANDARDIZED TEST METHOD. 20 FINALLY. A NEW PROVISION IS PROPOSED TO ALLOW 21 STATION OPERATORS TO SUBMIT AN ALTERNATIVE COMPLIANCE PLAN TO 22 THE EXECUTIVE OFFICER FOR APPROVAL THAT WOULD PROVIDE THE 23 SAME ASSURANCES OF THE GASOLINE MTBE CONTENT THAT ARE 24 ACHIEVED WITH OTHER PROPOSED COMPLIANCE METHODS. 25 TO FURTHER ASSIST STATION OPERATORS TO DETERMINE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 THE MTBE CONTENT OF THEIR GASOLINE, STAFF IS ALSO PROPOSING 2 TO REQUIRE THAT GASOLINE DISTRIBUTORS DOCUMENT THE PRESENCE 3 OF MTBE IN THE GASOLINE THEY DELIVER. 4 THEY MAY DOCUMENT EITHER THE ACTUAL MTBE CONTENT OR 5 THEY MAY INDICATE THE MAXIMUM AMOUNT OF 15 VOLUME PERCENT 6 MTBE IS CONTAINED IN THE GASOLINE. 7 FOR NON-MTBE GASOLINE, THEY MAY INDICATE THAT THERE 8 IS LESS THAN 0.6 VOLUME PERCENT MTBE IN THE FUEL. SINCE 9 INFORMATION ON THE MTBE CONTENT IS ALREADY AVAILABLE AT THE 10 GASOLINE TERMINAL, NO ADDITIONAL TESTING BY THE DISTRIBUTOR 11 IS ANTICIPATED. 12 IN ADDITION, TO HELP ASSURE THAT NO MISS-DELIVERIES 13 OF GASOLINE CONTAINING MTBE, STAFF IS NOW PROPOSING TO 14 REQUIRE THAT GASOLINE DISTRIBUTORS MAY NOT DELIVER GASOLINE 15 THAT CONTAINS MTBE UNLESS THE PUMP IS LABELED. 16 TO FACILITATE THIS, STAFF IS ALSO PROPOSING TO 17 ALLOW STATION OPERATORS AND DISTRIBUTORS MAINTAIN WRITTEN 18 RECORDS THAT SPECIFY THE GRADE AND PUMPS THAT ARE REQUIRED TO 19 BE LABELED. 20 THE PROPOSED STATEWIDE LABELING REQUIREMENTS DO NOT 21 IMPOSE ANY NEW RECORD KEEPING REQUIREMENTS ON SERVICE STATION 22 OPERATORS, AND THERE ARE NO SPECIAL REQUIREMENTS FOR PUMPS 23 THAT ARE LABELED. 24 HOWEVER, SERVICE STATION OPERATORS WHO CHOOSE NOT 25 TO LABEL THEIR PUMPS MAY PRODUCE THE DELIVERY RECORDS AS A PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 PROACTIVE DEFENSE OF POTENTIAL LABELING VIOLATIONS. 2 THESE RECORDS MAY BE OBTAINED EITHER ON OR OFF 3 SITE, DEPENDING ON THE RECORDKEEPING OR THE OPERATOR'S NORMAL 4 RECORDKEEPING PROCEDURES. 5 THE ANNUAL COST ASSOCIATED WITH THE PROPOSED 6 STATEWIDE LABELING REQUIREMENTS ARE EXPECTED TO BE MINIMAL, 7 LESS THEN $25 PER RETAIL SERVICE STATION. 8 NO ADDITIONAL TESTING WILL BE REQUIRED BY REFINERS 9 OR TERMINAL OPERATORS, BECAUSE TESTING IS ALREADY CONDUCTED 10 TO DETERMINE THE OXYGEN CONTENT OF GASOLINE PRODUCED AND 11 SHIPPED. 12 COST TO DISTRIBUTORS ARE ALSO NOT EXPECTED TO 13 INCREASE, BECAUSE THE INFORMATION THEY ARE REQUIRED TO 14 PROVIDE TO SERVICE STATION OPERATORS IS ALREADY AVAILABLE AT 15 THE TERMINAL, AND NO ADDITIONAL TESTING WILL BE REQUIRED ON 16 THEIR PART. 17 TO CONCLUDE, THE PROPOSED AMENDMENT TO THE 18 CALIFORNIA REFORMULATED GASOLINE REGULATIONS WILL IMPLEMENT 19 SPECIFIC PROVISIONS OF THE GOVERNOR'S EXECUTIVE ORDER. 20 SPECIFICALLY, RESCINDING THE WINTERTIME OXYGEN REQUIREMENT IN 21 THE LAKE TAHOE AIR BASIN WILL PROVIDE ADDITIONAL FLEXIBILITY 22 TO REFINERS TO PRODUCE GASOLINE WITHOUT OXYGENATES DURING THE 23 WINTER MONTHS, AND THE PROPOSED STATEWIDE LABELING 24 REQUIREMENTS WILL ALLOW CONSUMERS TO MAKE AN INFORMED CHOICE 25 AS TO THE TYPE OF GASOLINE THEY PURCHASE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 THE STAFF RECOMMENDS THAT THE BOARD ADOPT BY 2 RESOLUTION PROPOSED AMENDMENTS TO THE CALIFORNIA REFORMULATED 3 GASOLINE REGULATIONS, SPECIFICALLY THAT THE BOARD RESCIND THE 4 WINTERTIME OXYGEN REQUIREMENT IN THE LAKE TAHOE AIR BASIN AND 5 THAT THE BOARD REQUIRE THE STATEWIDE LABELING OF PUMPS 6 DISPENSING GASOLINE CONTAINING MTBE WITH STAFF'S PROPOSED 7 MODIFICATIONS. 8 THIS CONCLUDES MY PRESENTATION. 9 CHAIRMAN LLOYD: THANK YOU VERY MUCH, MR. WHITE. 10 MR. OMBUDSMAN, WOULD YOU PLEASE DESCRIBE THE 11 PROCESS BY WHICH THE STAFF FOLLOWED THIS ITEM FOR US AND 12 WHETHER DUE PROCESS WAS FOLLOWED. 13 THANK YOU. 14 MR. OULREY: SURE. 15 GOOD MORNING, MR. CHAIRMAN, MEMBERS OF THE BOARD. 16 AS YOU JUST HEARD FROM STAFF, THE REGULATIONS 17 BEFORE YOU WERE DEVELOPED IN RESPONSE TO GOVERNOR DAVIS'S 18 MARCH 25, 1999 EXECUTIVE ORDER D-5-99 ON MTBE. 19 MY ROLE IS TO EVALUATE WHETHER THE PROCESS USED IN 20 THE DEVELOPMENT OF THE REGULATIONS WAS OPEN AND FAIR TO ALL 21 PARTIES. 22 ARB INVITED OVER 8,000 INDIVIDUALS, INCLUDING 23 SERVICE STATION OWNERS, TO PARTICIPATE IN A MAY 6, 1999 24 WORKSHOP IN SACRAMENTO. 25 THE 20 OR SO INDIVIDUALS WHO PARTICIPATED INCLUDED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 REPRESENTATIVES FROM REFINERIES, INCLUDING EXXON, CHEVRON, 2 TOSCO, ARCO AND MOBIL, REPRESENTATIVES FROM THE SOUTH TAHOE 3 PUBLIC UTILITIES DISTRICT AND REPRESENTATIVES FROM THE 4 OXYGENATES INDUSTRY, INCLUDING THE AMERICAN METHANOL 5 INSTITUTE. 6 ADDITIONALLY, STAFF HAD TELEPHONE COMMUNICATIONS 7 AND ONE-ON-ONE MEETINGS WITH NUMEROUS STAKEHOLDERS, INCLUDING 8 THE CALIFORNIA INDEPENDENT OIL MARKETERS ASSOCIATION, EL 9 DORADO AND PLACER COUNTY AIR DISTRICTS AND THE AMERICAN LUNG 10 ASSOCIATION OF CALIFORNIA. 11 STAFF ALSO WORKED WITH SENATOR PERATA'S OFFICE TO 12 DEVELOP LABEL REQUIREMENTS THAT CONFORMED WITH THE BILL THAT 13 HE IS SPONSORING. 14 FINALLY, ON MAY 7, 1999, STAFF MAILED COPIES OF THE 15 STAFF REPORT AND NOTICES OF THIS HEARING TO 8,000 INDIVIDUALS 16 REFERRED TO ABOVE. 17 THE STAFF REPORT WAS ALSO PLACED ON THE WEB AT THAT 18 TIME. 19 SINCE MAY 7, STAFF HAS REVISED THE REPORT IN 20 RESPONSE TO STAKEHOLDER COMMENTS. JUNE 21, STAFF SENT 21 ELECTRONIC COPIES OF THE REVISIONS TO THE INDIVIDUALS WHO 22 ATTENDED THE MAY 6 WORKSHOP AND TO APPROXIMATELY 160 OTHER 23 SHAKEHOLDERS THAT ARE ON ARB'S FUELS MAILING LIST. 24 IF THE BOARD APPROVES THE REPORT TODAY, BECAUSE OF 25 THE CHANGES REFERRED TO SINCE THE ITEM WAS PUBLICLY NOTICED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 ON MAY 7, THERE WILL BE A LEGALLY REQUIRED 15-DAY EXTENSION 2 PERIOD FOR PUBLIC NOTICE AND COMMENT. 3 STAFF INTENDS TO USE THE 8,000 PERSON MAILING LIST 4 REFERRED TO ABOVE FOR THE PURPOSES OF THIS NOTIFICATION. 5 THE STAFF HAS REACHED OUT TO STAKEHOLDERS AND 6 AFFECTED PARTIES AND HAS INVOLVED THEM IN A DELIBERATIVE AND 7 MEANINGFUL PUBLIC PROCESS ON A DIFFICULT SUBJECT, UNDER 8 CHALLENGING TIME CONSTRAINTS. 9 THAT CONCLUDES MY COMMENTS. 10 CHAIRMAN LLOYD: THANK YOU VERY MUCH. BOARD 11 MEMBERS, ANY QUESTIONS? 12 SUPERVISOR DESAULNIER. 13 BOARD MEMBER DESAULNIER: THANKS, ALLAN. 14 I HAVE A QUESTION ABOUT THIS, MAYBE FOR KATHLEEN, 15 IS THERE A LEGAL DEFINITION OF WHAT IS MTBE-FREE? 16 DOES IT HAVE TO BE ZERO? 17 MS. WALSH: NO. 18 THE REGULATION ITSELF INCLUDES LANGUAGE DEFINING 19 WHAT WOULD BE CONSIDERED MTBE-CONTAINING GASOLINE, THAT 20 REQUIRES THE NOTIFICATION, AND PERHAPS ONE OF THE FOLKS FROM 21 THE PROGRAM COULD GIVE YOU A LITTLE BIT MORE INFORMATION 22 ABOUT THAT. 23 BOARD MEMBER DESAULNIER: MAYBE IT WOULD BE HELPFUL 24 TO EXPLAIN WHERE I AM GOING. 25 IN THE BAY AREA, TOSCO, THROUGH THEIR UNOCAL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 STATIONS, FOR THEIR MTBE-FREE GASOLINE, THEY PUT SIGNS UP, 2 MTBE-FREE, AND IT RELATES TO ME POTENTIAL FOR CONFUSION FOR 3 THOSE GASOLINE STATIONS THAT ACTUALLY DO NOT REQUIRE THIS 4 LABELING, WHAT KIND OF LABELING THEY WILL PUT UP 5 UNILATERALLY. 6 SO, IF IT SAYS MTBE-FREE, MAYBE THERE IS SOME 7 CONFUSION THAT THERE IS STILL SOME ELEMENT IN THERE FOR THE 8 ORDINARY CONSUMER. 9 ALSO, ALONG THOSE LINES, IS THERE SOME INCENTIVE 10 TO, OR WHAT KIND OF LABELING, THOSE KIND OF PUMPS WOULD BE 11 ALLOWED TO PUT ON SAYING BASICALLY, WE ARE MTBE FREE, IF THAT 12 IS THE LEGAL DEFINITION. 13 SO, FOR THOSE STATIONS THAT ACTUALLY DO NOT HAVE 14 MTBE, HOW DO WE GIVE THEM INCENTIVE TO COMMUNICATE THAT AND 15 TO DO IT CORRECTLY? 16 MR. VENTURINI: SUPERVISOR, I THINK ONCE THE BOARD 17 ENACTS THIS REGULATION, THEN IF RESIDUAL AMOUNT OF MTBE THAT 18 IS IN A TANK IS NOT LESS THAN 6 VOLUME PERCENT OR IS GREATER 19 THAN THAT, THEY WILL HAVE TO PUT THE LABEL ON THE PUMP. 20 MY SENSE IS THAT EVEN THOUGH THOSE STATIONS MAY 21 HAVE PUT A SIGN UP THAT IS MTBE-FREE, THERE IS PROBABLY SOME 22 RESIDUAL AMOUNT IN THERE, I WOULD HAVE NO WAY OF KNOWING WHAT 23 THAT AMOUNT WOULD BE. 24 BUT ONCE THIS ACTION IS TAKEN, IT WOULD BASICALLY 25 DEFINE WHEN YOU CAN PUT OR NOT HAVE THE LABEL THERE, AND THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 DEFINITION IS THAT STAFF HAS PROPOSED WOULD HAVE TO LESS THAN 2 .6 VOLUME PERCENT, WHICH BASICALLY ASSURES THAT MTBE HAS NOT 3 BEEN INTENTIONALLY ADDED AND RECOGNIZED AS THE REALITIES OF 4 THE DISTRIBUTION SYSTEM. 5 OVER TIME, AS MTBE HAS PHASED OUT FURTHER, AND 6 PARTICULARLY ONCE THE GOVERNOR'S EXECUTIVE ORDER IS FULLY 7 IMPLEMENTED WITH THE COMPLETE PHASE OUT, WE WOULD EXPECT, AND 8 RESIDUAL LEVELS TO GO DOWN DRAMATICALLY FROM WHAT WE WOULD BE 9 SEEING IN THIS TRANSITION PERIOD. 10 BOARD MEMBER DESAULNIER: INDEED ON THOSE PUMPS, 11 SAY AT THOSE UNOCAL STATIONS, BASICALLY THERE JUST WOULD BE, 12 THERE WOULD NOT BE THIS LABELING, BUT ON THE OTHER SIDE, 13 WOULD THERE BE AN OPPORTUNITY FOR THEM TO BE ABLE TO 14 COMMUNICATE TO THE PUBLIC THAT THEY ARE DOING THE RIGHT 15 THING? 16 MR. VENTURINI: YES. 17 BOARD MEMBER DESAULNIER: BUT THAT IS PRETTY MUCH 18 LEFT UP TO THEM? 19 MR. VENTURINI: CORRECT. 20 BOARD MEMBER DESAULNIER: OKAY. THANK YOU. 21 MR. KENNY: IF I COULD ADD REAL QUICKLY, WHAT WE 22 TRIED TO DO HERE WAS BASICALLY PROVIDE THE DISINCENTIVE, AND 23 THE DISINCENTIVE ESSENTIALLY COMES FROM THE LABEL, AND THEN 24 WE DEFINE ESSENTIALLY WHAT VOLUME LEVEL IS ESSENTIALLY 25 REQUIRED, THAT DISINCENTIVE TO BE APPLIED, IF YOU GET BELOW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 THAT VOLUME LEVEL, THE .6 PERCENT, AND THEN IF YOU WANT TO 2 ESSENTIALLY COUNT THE FACT THAT YOU ARE MTBE-FREE, YOU CAN. 3 BUT WE HAVE NOT REALLY GONE TO THE NEXT STEP OF 4 SORT OF DEFINING WHAT KIND OF LABELS PEOPLE WILL PUT OUT FOR 5 THAT PURPOSE, EXCEPT WE TRIED TO PROVIDE THE DISINCENTIVE 6 ASPECT. 7 BOARD MEMBER DESAULNIER: WHAT MIGHT BE HELPFUL AT 8 SOME POINT IN THE FUTURE TO SEE IF THERE IS A WAY TO GIVE AN 9 INCENTIVE BEYOND JUST THE GOOD PUBLIC RELATIONS, BECAUSE IT 10 SEEMS TO WORK AT LEAST IN THE BAY AREA. 11 CHAIRMAN LLOYD: OTHER QUESTIONS FROM THE BOARD? 12 YES, SUPERVISOR ROBERTS? 13 BOARD MEMBER ROBERTS: THANK YOU, MR. CHAIRMAN. 14 FIRST OF ALL, I THINK IT WAS A VERY GOOD 15 PRESENTATION, BUT THERE IS ONE THING THAT SEEMS TO BE 16 MISSING, AND THERE WAS AN ABSENCE, A DISCUSSION OF WHAT THE 17 OPTIONS ARE AND WHAT IMPACTS, IF ANYTHING, WE MIGHT EXPECT 18 FROM THOSE THINGS THAT ARE LIKELY OPTIONS FOR THE USE OF 19 MTBE. 20 COULD YOU SPEAK TO THAT FOR A LITTLE BIT? 21 MR. SIMEROTH: YES, SUPERVISOR ROBERTS. 22 THE OPTIONS THAT ARE ACTUALLY BEING EXERCISED IN 23 LAKE TAHOE, OR BASICALLY, GASOLINE THAT CONTAINS ETHANOL, IT 24 IS THE SAME GASOLINE AS BEING DISTRIBUTED IN THE BAY AREA AT 25 THE MTBE-FREE STATIONS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 THE SECOND OPTION IS GASOLINE THAT CONTAINS NO 2 OXYGENATES. 3 IN BOTH CASES -- 4 BOARD MEMBER ROBERTS: BUT THAT IS NOT AN OPTION IN 5 SACRAMENTO, LOS ANGELES AND SAN DIEGO, AS I UNDERSTAND IT. 6 MR. SIMEROTH: THAT IS CORRECT. 7 IN THOSE AREAS, THE OPTIONS WOULD BE BASICALLY 8 SWITCHING OVER TO THE USE OF ETHANOL. 9 BOARD MEMBER ROBERTS: THE USE OF ETHANOL, AND CAN 10 YOU TELL ME ABOUT ANY IMPACTS WITH ETHANOL? 11 MR. SIMEROTH: OKAY. THE USE OF ETHANOL WOULD HAVE 12 TO BE DONE IN A WAY THAT FULLY COMPLIES WITH OUR REQUIREMENTS 13 AND REGULATIONS, SO THERE WOULD BE NO LOSS OF BENEFITS IN THE 14 USE OF ETHANOL. 15 WHAT THAT MEANS TO THE REFINERY INDUSTRY IS THAT 16 THEY HAVE TO BASICALLY FURTHER REDUCE THE VOLATILITY THAT 17 THESE GASOLINE, THE ETHANOL IS BEING BLENDED INTO, TO 18 PRESERVE THE BENEFITS. 19 THERE ALSO HAS TO BE OTHER ADJUSTMENTS IF ETHANOL 20 IS USED AT HIGHER LEVELS THAN 5.7 PERCENT ETHANOL, WHICH IS 21 EQUIVALENT TO TWO PERCENT MTBE, BUT THAT WOULD BE THE SAME 22 ADJUSTMENT, SO IT WOULD BE USED IF USING MTBE AT HIGHER 23 LEVELS. 24 BOARD MEMBER ROBERTS: WHEN WE DID OUR PRETTY 25 EXTENSIVE TESTING ON CARB 2, I DO NOT KNOW TO WHAT EXTENT WE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 LOOKED AT ETHANOL AND TO WHAT EXTENT WE MIGHT NOW IN TERMS OF 2 PERFORMANCE, PERFORMANCE NOT RELATED TO THE ENVIRONMENTAL 3 IMPROVEMENT BUT PERFORMANCE RELATED TO THE MILEAGE, IF WE 4 HAVE ANY DATA ON THAT. 5 MR. SIMEROTH: OKAY. IF THE USE ETHANOL AT THE 6 SAME OXYGEN CONTENT THAT MTBE IS CURRENTLY BEING USED AT 5.7 7 PERCENT ETHANOL, THE MILEAGE IMPACT WOULD BE APPROXIMATELY 8 THE SAME AS TODAY'S PRESENT GASOLINE. 9 IF THEY USE ETHANOL AT THE 10 PERCENT LEVEL, THERE 10 MAY BE A SLIGHT ADDITIONAL DECREASE, BUT IT WOULD BE LESS 11 THAN ONE PERCENT IN THE MILEAGE. 12 AGAIN, WE HAVE CONDUCTED STUDIES THAT WERE THE 13 SUBJECT OF HEARINGS LAST DECEMBER, AND THE BOARD'S DECISION 14 AT THAT TIME WAS TO NOT ALLOW ETHANOL, ACCESS RVP WAIVER, SO 15 ANY USE OF ETHANOL IS GOING TO HAVE BE IN FULL COMPLIANCE 16 WITH ALL OF OUR REQUIREMENTS AND ALL BENEFITS WOULD BE 17 RESERVED. 18 BOARD MEMBER ROBERTS: WELL, I GUESS ONE OF MY 19 OTHER CONCERNS, THIS IS A VERY UNSCIENTIFIC TEST, BUT HAVING 20 JUST DRIVEN ACROSS THE COUNTY FROM BOSTON TO SAN DIEGO, AS WE 21 WERE GOING THROUGH OHIO AND NEBRASKA, WE USED A COUPLE OF 22 TANKFULS OF ETHANOL, AND THOSE WERE THE VERY WORST MILEAGE WE 23 GOT ON THE WHOLE TRIP, AND VERY FLAT, VERY FLAT, AND IT WAS 24 SIGNIFICANTLY DIFFERENT. 25 IF SOMETHING LIKE THAT IS GOING TO BE AT THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 RESULT, I THINK WE ALSO WANT TO KNOW ABOUT THAT. SO, I HOPE 2 THAT YOU WILL TAKE A GOOD LOOK AT THOSE STUDIES AND FACTOR 3 THAT IN. 4 I DO NOT WANT TO GET A LOT OF PHONE CALLS ALL OF A 5 SUDDEN AND SAYING, WHAT HAVE YOU DONE TO OUR GAS MILEAGE, 6 BECAUSE I WILL TELL YOU, IT WAS SIGNIFICANTLY LESS THAN WE 7 GOT ON ANY OTHER TANKS, AND IT WAS NOT BECAUSE OF THE TERRAIN 8 OR THE WIND OR ANYTHING ELSE. 9 MR. KENNY: SUPERVISOR ROBERTS, IF I COULD ADD ONE 10 THING TO THAT, THE GOVERNOR'S EXECUTIVE ORDER ALSO DIRECTED 11 THE STAFF TO LOOK AT WORKING WITH THE U.S. GOVERNMENT TO TRY 12 TO ELIMINATE THE TWO PERCENT OXYGENATE REQUIREMENT, AND WE 13 ARE WORKING ON THAT. 14 TO THE EXTENT THAT WE ARE SUCCESSFUL -- 15 BOARD MEMBER ROBERTS: SO, THAT MIGHT BE POSSIBLE 16 IN THESE OTHER NONATTAINMENT AREAS? 17 MR. KENNY: YES. 18 BUT TO THE EXTENT THAT WE WERE UNSUCCESSFUL AT 19 ACHIEVING SOME KIND OF MODIFICATION, THAT TWO PERCENT 20 OXYGENATE REQUIREMENT, IT IS LIKELY THAT THE OXYGENATE OF 21 CHOICE WILL BE ETHANOL. 22 BOARD MEMBER ROBERTS: IS THERE ANY OTHER OPTIONS 23 TO THAT? 24 MR. KENNY: WELL, THERE ARE. 25 THERE ARE OPTIONS THAT COULD BE USED, BUT THEY ARE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 IN EITHER FAMILY, AND IT WOULD HAVE SOME OF THE SAME CONCERNS 2 AND SOME OF THE SAME PROBLEMS THAT WE HAVE WITH MTBE. 3 MR. SCHEIBLE: OKAY. SUPERVISOR ROBERTS, I WOULD 4 ALSO LIKE TO ADD THAT ANOTHER PROVISION OF THE GOVERNOR'S 5 ORDER DIRECTED THE AIR RESOURCES BOARD, THE STATE WATER 6 RESOURCES CONTROL BOARD AND THE OFFICE OF ENVIRONMENTAL 7 HEALTH HAZARDS ASSESSMENT TO LOOK AT SPECIFICALLY WHAT 8 HAPPENS TO THE ENVIRONMENT IN CALIFORNIA IF THERE IS A LARGE 9 SWITCH TO ETHANOL. 10 SO, THAT EFFORT HAS STARTED, IS GOING TO COMPLETE 11 BY THE END OF THE YEAR, AND WE WILL LOOK AT THE POTENTIAL 12 IMPACTS ON WATER, POTENTIAL IMPACTS ON AIR AND TOXICS AND 13 THINGS THAT ARE NOT REGULATED IN THE FUEL, AND THAT WILL BE 14 ACCOMPLISHED BY THAT MECHANISM. 15 BOARD MEMBER ROBERTS: THAT IS PART OF WHAT I WAS 16 ASKING. 17 BECAUSE SOMETIMES WE THINK WE HAVE TO CHANGE 18 SOMETHING, AND WE FIND OUT WHAT WE CHANGE TO WAS WORSE THAN 19 WHAT WE HAD, AND THAT IS WHAT I WAS ASKING. 20 WOULD YOU TELL ME THAT THOSE STUDIES ARE AT LEAST 21 INCONCLUSIVE AT THIS POINT? 22 MR. KENNY: UNDER WAY. 23 CHAIRMAN LLOYD: MR. CALHOUN. 24 BOARD MEMBER CALHOUN: I WOULD STILL LIKE TO GO 25 BACK TO THE LABELING REQUIREMENT AT THE SERVICE STATION. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 AS I UNDERSTAND THE STAFF PROPOSAL, THE RETAIL 2 OPERATOR WOULD BE REQUIRED TO CERTIFY THAT THE GASOLINE DOES 3 NOT CONTAIN MORE THAN X-PERCENTAGES OF MTBE; IS THAT CORRECT? 4 MR. SIMEROTH: YOU CANNOT REMOVE THE LABEL UNLESS 5 THE GASOLINE CONTAINS LESS THEN 0.6 PERCENT. 6 I AM SORT OF SAYING THE SAME THING. 7 BOARD MEMBER ROBERTS: HE SAID YES. 8 BOARD MEMBER CALHOUN: THE CONCERN THAT I HAVE, IS 9 A FELLOW OPERATING THE SERVICE STATION AND UPSTREAM OF THAT 10 SOMEONE HAS SUPPLIED THE FUEL, AND HE MAY OR MAY NOT KNOW THE 11 CONTENT OF THE GASOLINE, HE MAY NOT KNOW THE MTBE, HE COULD 12 BUY IT FROM JOE CALHOUN, AND HE WOULD JUST COME OUT AND SELL 13 IT TO YOU, SO WHAT KIND OF ASSURANCE DOES THAT, HE WOULD HAVE 14 OR THAT STATE WOULD HAVE THAT THE FUEL, IT DOES IN FACT 15 CONTAIN MTBE, THE FIXED AMOUNT, WHATEVER IT IS. 16 MR. SIMEROTH: MR. CALHOUN, WHAT IS THE REGULATION 17 THAT ALSO REQUIRES THAT THE BILL OF LADING FOR THE TRANSFER 18 OF GASOLINE FROM THE REFINER TO THE PIPELINE FROM THE 19 PIPELINE TO THE DISTRIBUTOR INDICATE WHETHER THE, AT A 20 MINIMUM, WHETHER THE GASOLINE CONTAINS MTBE OR NOT. 21 IF THE BILL OF LADING SAYS IT CONTAINS MTBE, THEN 22 THE ASSUMPTION IS THAT IT CONTAINS MTBE AT THE MAXIMUM AMOUNT 23 ALLOWED IN OUR REGULATIONS, 15 PERCENT BY VOLUME. 24 IF CONVERSELY IF THE GASOLINE DOES NOT CONTAIN 25 MTBE, IT MEETS OUR DEFINITION TODAY, THEN THE LABEL WILL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 STATE THAT AS WELL. 2 SO, THE SERVICE STATION OPERATOR WILL HAVE THE BILL 3 WAITING FROM THE DISTRIBUTORS WITH THIS INFORMATION. 4 IF HE RETAINS THOSE RECORDS AND WE TEST AND FIND 5 BETWEEN .6 AND 3 PERCENT BY VOLUME, AND HE HAS ALL THE 6 RECORDS TO SHOW AS FAR AS HE KNOWS ALL THE GASOLINE MET THE 7 DEFINITION OF MTBE-FREE, THEN THAT WOULD BE AN AFFIRMATIVE 8 DEFENSE THAT HE IS OKAY, WE SHOULD GO LOOK SOMEPLACE ELSE FOR 9 US. 10 BOARD MEMBER CALHOUN: IS THAT WRITTEN IN THE 11 REGULATION? 12 MR. SIMEROTH: YES, IT IS. 13 CHAIRMAN LLOYD: ANY OTHER QUESTIONS? 14 JUST, AGAIN, I WOULD LIKE TO JUST MAKE THE COMMENT 15 ON THE ETHANOL, SUPERVISOR ROBERTS, AND THINK THAT STAFF 16 MENTIONED THEY ARE REALLY VERY MUCH INVOLVED WITH THIS WHOLE 17 PROCESS TO LOOK AT THE ROLE OF ETHANOL AND ALSO TO FOLLOW THE 18 GOVERNOR'S EXECUTIVE ORDER IN TERMS OF LOOKING AT SOME OF THE 19 BIOMASS ETHANOL PRODUCTION IN THE STATE OF CALIFORNIA, SO I 20 THINK IT IS GETTING A LOT OF ATTENTION, BOTH ECONOMICAL 21 GENERATION AS WELL AS THE ENVIRONMENTAL ISSUES THERE. 22 BUT AGAIN, I THINK THAT MR. KENNY AND SECRETARY 23 HICKOX WILL BE GOING TO WASHINGTON REGULARLY TO TRY TO GET US 24 SOME RELIEF ON THE OXYGENATE REQUIREMENT, BUT WE ARE NOT 25 BETTING ON THEIR SUCCESS THERE, SO WE ARE ALSO LOOKING AT THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 OTHER FORMS OF USING ETHANOL IN A MUCH LARGER WAY IN 2 CALIFORNIA. 3 THE SURETY ON THE CO ATTAINMENT ISSUE, I KNOW YOU 4 DID SOME MODELING THERE, AND SAY EVEN IF WE ARE OFF 10 5 PERCENT, WE ARE OKAY. 6 WHEN YOU LOOK AT THE MODELING, DO WE KNOW IN 10 7 PERCENT, DO WE HAVE THAT CONFIDENCE? 8 MS. POPJOY: WE ACTUALLY HAVE NOT DONE ANY 9 MODELING, BUT WE DID DO A DATA ANALYSIS. WE IMPLEMENTED THE 10 WINTER OXYGENATED PROGRAM. WE DID AN AIR QUALITY ANALYSIS 11 WHERE WE LOOKED AT CO AND NOX RATIOS IN ORDER TO MINIMIZE THE 12 EFFECT OF METEOROLOGY TO SEE WHAT KIND OF BENEFIT WE HAD, AND 13 THAT BENEFIT WAS BETWEEN 5 AND 10 PERCENT ACROSS THE STATE. 14 SO, WE USED THE CONVERSE OF THAT TO DETERMINE WHAT 15 THE DISBENEFIT WOULD BE IF WE ADDED BACK OR WE TOOK AWAY THE 16 WINTERTIME OXYGENATE, AND SO WE ASSUMED THAT THE WORST CASE 17 SCENARIO OF REMOVING THE WINTERTIME OXYGENATE WOULD BE A 10 18 PERCENT, JUST BASED ON THAT, AND THEN BECAUSE OF THE FLEET 19 TURNOVER, WE HAVE A BENEFIT, SO THAT WHEN YOU ADD THEM 20 TOGETHER, WE GET ABOUT 6 PERCENT. 21 THAT WOULD BE WORST CASE. UNDER REALLY GOOD 22 CONDITIONS, WE MIGHT NOT SEE ANY DISBENEFIT FROM REMOVING THE 23 WINTERTIME OXYGENATED PROGRAM. 24 SO, THE 6 PERCENT, WE WOULD ASSUME IS THE WORST 25 CASE SCENARIO OF REMOVING THE WINTERTIME OXYGENATE PROGRAM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 CHAIRMAN LLOYD: WHEN YOU ASSUME FLEET TURNOVER, 2 THE FLEET TURNOVER YOU SEE IN LAKE TAHOE PROBABLY IS THE 3 REPLACEMENT OF THE LIGHT-DUTY VEHICLES WITH SPORT UTILITY 4 VEHICLES. 5 IT IS A DIFFERENT TYPE. 6 MS. POPJOY: THAT IS A WRINKLE WE HAD NOT 7 CONSIDERED. 8 CHAIRMAN LLOYD: I GUESS WE WILL FIND OUT SOON 9 ENOUGH WHETHER WE GET THAT THEN. 10 AS I LISTENED CAREFULLY TO THE STAFF PRESENTATION, 11 WHICH I THOUGHT WAS VERY GOOD, I THOUGHT A LOT OF THE 12 SUGGESTIONS IN SOME OF THE LETTERS I READ HAVE BEEN ROLLED IN 13 THERE. 14 YOU HAVE BEEN RESPONSIVE TO THAT, I AM SURE NOT ALL 15 OF THEM, BUT I SAW A LOT OF THAT REFLECTED IN THAT, SO I 16 THINK THAT IS PRETTY GOOD. 17 I GUESS IF WE HAVE NO MORE QUESTIONS FROM THE BOARD 18 I WOULD LIKE TO CALL THE FIRST WITNESS WHO HAS SIGNED UP, AND 19 THIS IS GORDON SCHREMP, FROM THE CALIFORNIA ENERGY 20 COMMISSION, AND AGAIN, GORDON PLAYED A VERY IMPORTANT ROLE 21 FOR THE ENERGY COMMISSION ON THE GOVERNOR'S EXECUTIVE ORDER 22 LOOKING AT MTBE. 23 WELCOME. 24 MR. KENNY: MR. CHAIRMAN, IF I MIGHT, BEFORE GORDON 25 SPEAKS. I DO JUST WANT TO BASICALLY EXTEND STAFF'S PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 APPRECIATION AND THANKS TO GORDON AND TO THE ENERGY 2 COMMISSION. 3 THEY HAVE BEEN EXTREMELY HELPFUL THROUGHOUT THIS 4 PROCESS. THEY HAVE ALWAYS BEEN THERE WHEN WE NEEDED THEM. 5 IT HAS REALLY BEEN A TRUE COLLABORATION AND 6 PARTNERSHIP. 7 SO, THANKS, GORDON. 8 MR. SCHREMP: THANK YOU, CHAIRMAN LLOYD AND FELLOW 9 BOARD MEMBERS. 10 TODAY I AM GOING TO GIVE YOU AN OVERVIEW OF WHAT 11 WAS PRESENTED IN OUR PUBLIC WORKSHOP ON JUNE 18. IT DOES 12 CONCERN THE LAKE TAHOE MTBE-FREE GASOLINE DELIVERY. 13 NEXT SLIDE, PLEASE. 14 I WILL SPEND A FEW MINUTES THIS MORNING TO GO OVER 15 SOME OF THE BACKGROUND INFORMATION THAT HAS ALREADY BEEN 16 COVERED BY ERIK THIS MORNING. IT WILL CONCERN THE EXECUTIVE 17 ORDER WITH LAKE TAHOE REGION, CONSIST OF WHAT ACTIONS WE AND 18 THE AIR RESOURCES BOARD AND COLLABORATION HAVE TAKEN TO DATE 19 AND AS WELL AS THE SITES THAT THEY ARE COMPLYING OR INTEND TO 20 COMPLY BY JULY FIRST OF THIS YEAR AND THE SITES NOT YET IN 21 COMPLIANCE. 22 NEXT SLIDE, PLEASE. 23 ITEM 5 OF THE GOVERNOR'S EXECUTIVE ORDER DOES 24 INCLUDE BESIDES THE REDESIGNATION OF THE LAKE TAHOE REGION IN 25 CARBON MONOXIDE ATTAINMENT, IT DOES INCLUDE THE AIR BOARD AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 THE CALIFORNIA ENERGY COMMISSION WORKING TOGETHER WITH 2 PETROLEUM INDUSTRY TO PROVIDE MTBE-FREE GASOLINE TO THE LAKE 3 TAHOE REGION AS SOON AS POSSIBLE. 4 NEXT SLIDE, PLEASE. 5 THAT BEGS THE QUESTION, WHAT IS THE LAKE TAHOE 6 REGION? 7 I THINK THE COLLABORATIVE INTERPRETATION OF THAT IS 8 THE AIR BASIN, LAKE TAHOE BASIN, ON THE CALIFORNIA SIDE, AND 9 THAT DOES CONSIST OF THE ELEVEN COMMUNITIES, THE THREE 10 LARGEST COMMUNITIES ARE MYERS, SOUTH LAKE TAHOE AND TAHOE 11 CITY IN THE NORTHERN PART OF THE AIR BASIN. 12 WELL, TO BE ABLE TO DETERMINE WHAT LEVEL OF SUCCESS 13 YOU WILL HAVE WITH THE INTRODUCTION OF THIS EXECUTIVE ORDER 14 AND THE COMPLETION OF THE EXECUTIVE ORDER, WE HAD TO FIND OUT 15 WHAT STATIONS DO DISPENSE GASOLINE AS WELL AS OTHER PRIVATE 16 AND LOCAL STATE UTILITIES THAT HAVE GASOLINE IN TANKS FOR 17 OTHER NON-PUBLIC PURPOSES. 18 WE HAD A DATABASE THAT WE FEEL TO VERIFY ADDRESSES 19 AND LOCATIONS AND OPERATIONS, WE DID LOOK AT THE NEED FOR 20 ADDITIONAL INFORMATION CONCERNING THE AMOUNT OF THROUGH-PUT 21 OF GASOLINE TO SEE WHICH STATIONS ARE COMPLYING AND LEVEL OF 22 VOLUME THAT DOES REPRESENT. 23 WE ALSO MET WITH SOME LOCAL AGENCIES UP THERE THAT 24 WOULD BE THE SOUTH TAHOE PUBLIC UTILITIES DISTRICT, THE TAHOE 25 WATER BOARD, EL DORADO COUNTY, AND THE CITY OF SOUTH LAKE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 TAHOE, AND WE DISCUSSED THEIR CONCERNS ABOUT THE PRESENCE OF 2 GASOLINE CONTAINING MTBE IN THE REGION AND WHAT RISK IT DOES 3 PUT IN THEIR DRINKING WATER RESOURCES. 4 JUST AS AN ASIDE, LAKE TAHOE REGION IS DRAWING ITS 5 DRINKING WATER SOURCES AT LEAST IN THE SOUTH LAKE TAHOE 6 REGION, FROM SHALLOW AQUIFERS. THOSE ARE THE SAME AQUIFERS 7 THAT IF THERE IS A LEAK OF GASOLINE INTO THE ENVIRONMENT, IT 8 CAN QUICKLY IMPACT A DRINKING WATER RESOURCE, AND THAT IS 9 WHAT HAS HAPPENED TO DATE, ABOUT 13 OF 35 WELLS HAVE BEEN 10 CLOSED BECAUSE OF EITHER THE PRESENCE OF MTBE OR THE THREAT 11 OF CONTAMINATION TO THE WELL, MTBE, OF PUMPING AND THESE ARE 12 FROM GASOLINE PLUMES ALREADY IN EXISTENCE. 13 WE ALSO IMPOSED A LIST OF THE INCLINED STATIONS OR 14 THE ONES WHO INTEND TO SUPPLY MTBE-FREE GASOLINE BY JULY 15 FIRST. THAT IS ON OUR WEBSITE, AND ALSO BEFORE YOU HERE 16 TODAY. 17 AND WE HAVE ALSO IDENTIFIED A LIST OF THOSE NOT YET 18 COMPLYING BUT WILLING TO COMPLY. THEY HAVE JUST NOT 19 COMPLETED THAT YET. 20 BRIEFLY ON THE COMPLIANCE LIST, THERE ARE OVER 40 21 LOCATIONS, AND BY OUR CALCULATIONS, THEY REPRESENT BETWEEN 85 22 AND 90 PERCENT OF THE TOTAL THROUGH-PUT OF GASOLINE IN THIS 23 LAKE TAHOE REGION. 24 THE MAJORITY OF THEM ARE RETAIL OUTLETS, AND 15 OF 25 THOSE 19 LOCATIONS ARE BRANDED OUTLETS AND THE LION'S SHARE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 OF THE MARINAS AS WELL. 2 NEXT SLIDE, PLEASE. 3 WE STILL HAVE SOME OTHER STATIONS AND OTHER 4 LOCATIONS NOT YET COMMITTED TO DISPENSING MTBE-FREE GASOLINE. 5 THEY ARE CERTAINLY ALL WORKING DILIGENTLY TO TRY TO ARRANGE 6 THE SUPPLY OF THAT GASOLINE, BUT IT IS A LITTLE BIT MORE 7 DIFFICULT TO COME BY THE SUPPLIERS AS WERE MENTIONED EARLIER, 8 ARE A COUPLE OF REFINERIES IN THE SAN FRANCISCO BAY AREA. 9 THE TWO OUTLETS OF LOCAL AGENCIES ON THE BOTTOM ARE 10 EL DORADO COUNTY DEPARTMENT OF TRANSPORTATION, AND ONCE THEIR 11 CONTRACTS ARE UP, THEY SHOULD BE DISPENSING MTBE-FREE 12 GASOLINE BY AUGUST FIRST, SO THAT IS GOOD NEWS. 13 IF YOU COULD STAND ON YOUR HEAD FOR JUST A MOMENT, 14 WE CAN SHOW YOU THE SLIDE. 15 THERE WE GO. THANK YOU. 16 THIS IS NEAR THE CALIFORNIA-NEVADA BORDER IN SOUTH 17 LAKE TAHOE, AND IF YOU LOOK ON THE LOWER RIGHT-HAND CORNER, 18 WHERE THE DARK SHADED AREA IS, THERE IS A BLUE DOT THAT 19 REPRESENTS ONE OF THE STATIONS NOT YET COMMITTED TO 20 DISPENSING MTBE-FREE GASOLINE, AND THE YELLOW, ORANGE DOTS 21 ARE EXISTING PLUMES OF GASOLINE CONTAINING MTBE. 22 A LITTLE FARTHER TOWARDS THE LAKE ARE SOME DRINKING 23 WATER RESOURCES THAT COULD BE IMPACTED. 24 NOW, THE REASON I SHOW THIS, IT IS TO GRAPHICALLY 25 ILLUSTRATE THE RISK OF CURRENT PLUMES AND POTENTIAL NEW PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 PLUMES TO THE DRINKING WATER WELLS THAT ARE STILL OPERATING, 2 AND ROUGHLY THE GROUNDWATER AQUIFER DOES SLOPE AT A DOWNWARD 3 GRADIENT TOWARDS LAKE TAHOE, SO AS YOU CAN SEE, THOSE PLUMES 4 ARE GENERALLY MOVING TOWARDS THE LAKE FROM A LEAK SOURCE. 5 NEXT SLIDE, PLEASE. 6 MOVE FARTHER TO THE WEST, NEAR THE Y, AS PEOPLE 7 REFER TO IN LAKE TAHOE, AND YOU CAN SEE THAT THERE ARE A 8 COUPLE OF OTHER DOTS OF SERVICE STATIONS THAT ARE NOT YET 9 DISPENSING MTBE-FREE GASOLINE. 10 NEXT SLIDE, PLEASE. 11 THE FINAL MAP SHOWS THE MEYERS AREA. THERE ARE A 12 NUMBER OF LOCATIONS NOT YET DISPENSING, BUT CERTAINLY TRYING 13 TO DISPENSE, AND TWO OF THOSE COLORED DOTS UP THERE ARE ONE 14 IS EL DORADO COUNTY DEPARTMENT OF TRANSPORTATION, THEY WILL 15 BE BY AUGUST FIRST, AND THE OTHER IS CALTRANS, NOT YET 16 COMMITTED. 17 CHAIRMAN LLOYD: WHAT DO YOU MEAN NOT YET 18 COMMITTED? 19 MR. SCHREMP: THEY HAVE NOT BEEN ABLE TO MAKE 20 ARRANGEMENTS TO OBTAIN MTBE-FREE GASOLINE SUPPLIES TO DATE. 21 THEY ARE ALL TRYING TO DO THAT. 22 BUT SOME OF THEM HAVE A PROBLEM. THEY ARE UNDER 23 CONTRACT, AND THEY CANNOT YET BREAK, THEY HAVE TO WAIT UNTIL 24 THE TERMS OF THE CONTRACT EXPIRE, AND THEN THEY CAN SEEK A 25 NEW SUPPLIER WHO WILL BE ABLE TO BRING THEM MTBE-FREE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 GASOLINE TO THEIR LOCATION. 2 CHAIRMAN LLOYD: SO, THEY ARE ALL TRYING, BUT 3 PERHAPS HAVE SOME ISSUES. 4 MR. SCHREMP: CORRECT. 5 ALL OF THE PEOPLE ON THAT LIST OF 19 THAT WE HAD 6 DISCUSSIONS WITH OVER THE PHONE WERE ACTIVELY TRYING TO 7 COMPLY AT THIS POINT, BUT THEY HAVE NOT YET BEEN SUCCESSFUL, 8 AND I HOPE THEY WILL BE IN THE VERY NEAR FUTURE. 9 CHAIRMAN LLOYD: IS THE ENERGY COMMISSION PLAYING 10 ANY ROLE IN TRYING TO FACILITATE THEM GETTING THE FUEL? 11 MR. SCHREMP: ONLY IN TERMS OF IDENTIFYING WHICH 12 REFINERS ARE PRODUCING SOME MTBE-FREE GASOLINE, AND WE DO 13 OFFER TO PUT THEM IN TOUCH WITH THOSE FACILITIES, AND THEY 14 ALREADY HAVE CONTACTS FOR THAT PURPOSE. 15 SO, I THINK THAT IS TO THE EXTENT AS WELL AS 16 IDENTIFYING ON OUR WEBSITE WHICH ONE'S ARE COMPLYING, IN AN 17 EFFORT TO GIVE INFORMATION TO THE PUBLIC AND TO THE LOCAL 18 DISTRICTS WHO HAVE REQUESTED, WE POST THIS INFORMATION IN A 19 PUBLIC SETTING. 20 OKAY. SOME CLOSING REMARKS. 21 I WOULD JUST LIKE TO REITERATE THAT ALL OF THE 22 ONE'S WHO ARE NOT YET DISPENSING ARE ACTIVELY TRYING TO DO 23 SO. 24 IT IS VERY ENCOURAGING, BUT THERE ARE SOME 25 CONTRACTUAL ARRANGEMENTS THAT HAVE TO BE OVERCOME. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 WE EXPECT THAT EVERYONE SHOULD BE COMPLYING, 2 HOPEFULLY, WITHIN THE NEXT SEVERAL MONTHS, BUT YOU KNOW 3 CERTAINLY STATE AGENCIES AND THE LOCALS AND THE UTILITIES ARE 4 TRYING TO DO SO. 5 THERE ARE SIX SERVICE STATIONS, ONE BRANDED AND 6 FIVE UNBRANDED, THEY ARE TRYING TO COMPLY, BUT COMPARED TO 7 OTHER SERVICE STATIONS, THEIR VOLUME THROUGH-PUT IS FAR LESS. 8 SO, REALLY THE LION'S SHARE OF THROUGH-PUT AT THE 9 RETAIL STATIONS AT LEAST IS ALREADY GOING TO BE COMPLIED BY 10 JULY FIRST. 11 SO, I THINK THAT IS REALLY GOOD NEWS. 12 I WOULD JUST LIKE TO REITERATE THAT ALL THE PARTIES 13 THAT ARE INVOLVED, AND THAT INCLUDES THE STAFF OF THE AIR 14 RESOURCES BOARD AND INDUSTRY CONTACTS AND ALL THE LOCAL 15 AGENCIES UP THERE HAVE BEEN EXTREMELY COOPERATIVE, AND I 16 THINK EVERYONE SHOULD BE COMMENDED ON THEIR INVOLVEMENT AND 17 THEIR QUICK RESPONSE TO THIS. 18 THAT CONCLUDES MY REMARKS FOR THIS MORNING, AND I 19 APPRECIATE CHAIRMAN LLOYD'S TIME AND THE FELLOW BOARD 20 MEMBERS. 21 THANK YOU VERY MUCH. 22 CHAIRMAN LLOYD: THANK YOU VERY MUCH, MR. SCHREMP. 23 ANY QUESTIONS FROM THE BOARD MEMBERS? 24 I THINK IT IS WORTH REITERATING, TO ANSWER MY 25 QUESTION HERE, OBVIOUSLY WE ARE IMPOSING SIGNIFICANT BURDENS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 ON THE PRIVATE SECTOR HERE, AND THEY ARE COOPERATING. 2 AGAIN, IF YOU HAVE SOMEONE LIKE CALTRANS PRESUMABLY 3 THEY ARE ALSO MAKING EVERY EFFORT TO DO THE SAME TO SET AN 4 EXAMPLE. 5 MR. SCHREMP: YES. 6 THANK YOU VERY MUCH. 7 CHAIRMAN LLOYD: THANK YOU. NEXT SPEAKER IS 8 APPROPRIATELY ROBERT BAER, THE GENERAL MANAGER FROM SOUTH 9 TAHOE PUBLIC UTILITY DISTRICT. 10 WELCOME. 11 MR. BAER: THANK YOU. 12 GOOD MORNING. THANK YOU, CHAIRMAN LLOYD, BOARD 13 MEMBERS. 14 AS YOU SAID, MY NAME IS BOB BAER. I AM THE GENERAL 15 MANAGER OF THE SOUTH TAHOE PUBLIC UTILITY DISTRICT. 16 THE SOUTH TAHOE PUBLIC UTILITY DISTRICT, WITH SOME 17 MINOR MISGIVING, AND I THINK THE BOARD MEMBERS ALREADY 18 POINTED THOSE OUT, URGES THE AIR BOARD TO ADOPT THE PROPOSED 19 REGULATIONS AS PRESENTED BY THE STAFF. 20 WE FULLY SUPPORT LIFTING THE WINTERTIME OXYGENATE 21 REQUIREMENT FOR LAKE TAHOE BASIN. 22 ACCORDING TO THE CARB STAFF, TAHOE'S AIR MEETS 23 STATE AND FEDERAL AIR QUALITY STANDARDS. WE BELIEVE THE 24 TAHOE REGIONAL PLANNING AGENCY, WITH COOPERATION FROM OTHER 25 AGENCIES, CAN ASSURE THAT AIR STANDARDS WILL CONTINUE TO BE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 MET. 2 ONE OF THE QUESTIONS THAT YOU TALKED ABOUT WAS THE 3 WINTERTIME OXYGENATE REQUIREMENTS, AND JUST AN OBSERVATION 4 FROM SOMEONE WHO LIVES, FOR EXAMPLE, YOUR NEW SUPERVISOR 5 MATTHEW WAS GOING TO COME SKIING FOR THE WINTER, HE WOULD 6 PROBABLY FILL UP HIS TANK HERE, BECAUSE IT IS CHEAPER FOR 7 ONE, AND HE COULD GO TO TAHOE AND RETURN. 8 SO, NOT -- I DO NOT KNOW HOW THE MODEL OR THE 9 ESTIMATE WAS MADE, BUT NOT ALL THE GASOLINE SOLD IN THE TAHOE 10 BASIN OR USED THERE WOULD BE SOLD IN THE TAHOE BASIN, SO THAT 11 MIGHT EASE YOUR COMFORT LEVELS A LITTLE BIT. 12 OUR SUPPORT FOR THE LABELING REQUIREMENTS ARE MORE 13 CONDITIONAL. WELL, WE FULLY SUPPORT LABELING, PER SE, WE 14 BELIEVE THAT ALLOWING GASOLINE CONTAINING UP TO .6 VOLUME 15 MTBE TO BE EXEMPT FROM LABELING IS MISLEADING TO GASOLINE 16 CONSUMING PUBLIC. 17 THE ABSENCE OF THE LABEL MIGHT BE CONSTRUED AS 18 INDICATING GASOLINE AS MTBE-FREE. 19 WE JOKINGLY CALL IT MTBE-LIGHT. 20 SO, MORE IMPORTANTLY, AS A WATER SUPPLIER THAT HAS 21 EXPERIENCED TREMENDOUS HARM FROM MTBE CONTAMINATION OF 22 GROUNDWATER RESOURCES, WE BELIEVE THAT MTBE-FREE GASOLINE 23 SHOULD BE JUST THAT, TOTALLY MTBE-FREE. 24 WE UNDERSTAND THAT THE AIR RESOURCES BOARD NEEDS TO 25 WORK WITH REALITIES OF THE CHEMICAL LAW AND THE DISTRIBUTION PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 PROCESS. 2 IF CROSS-CONTAMINATION BY MTBE IS A FACT OF LIFE, 3 THEN GASOLINE SHOULD BE LABELED TO REFLECT THAT. MORE 4 APPROPRIATELY, MAYBE IT SHOULD SAY, GASOLINE CONTAINS MORE 5 THAN X-PERCENT MTBE. 6 WE HAVE EXPERIENCED THE REAL LIFE PROBLEMS OF 7 CROSS-CONTAMINATION WITH MTBE IN GETTING INTO OUR SEWER 8 SYSTEM, OUR RECYCLED WATER AND OUR AIR. 9 ONCE MTBE IS OUT OF THE GASOLINE, IT CONTAMINATES 10 WHATEVER IT TOUCHES. 11 REALIZING THAT IF THIS BOARD ALLOWS UP TO .6 12 PERCENT VOLUME MTBE IN NON LABELED PUMPS, SOUTH TAHOE UTILITY 13 DISTRICT WILL ASSUME THAT ALL GASOLINE RELEASES CONTAIN MTBE 14 AND WILL CONTINUE TO RESPOND TO RELEASES ACCORDINGLY. 15 WE HOPE THAT OTHER WATER AGENCIES AND PUBLIC WILL 16 NOT GET INVOLVED IN A FALSE SENSE OF SECURITY ASSUMING THAT 17 THE RISK OF MTBE CONTAMINATION NO LONGER EXISTS IN THE PUMPS 18 THAT ARE NOT LABELED. 19 WHATEVER THE BOARD DECIDES REGARDING ALLOWING THE 20 LIMITS OF CROSS-CONTAMINATION TODAY, THOSE LIMITS SHOULD BE 21 LOWERED AS THE USE OF MTBE IN THE STATE IS CUT BACK. 22 WE FULLY EXPECT WHEN THE GOVERNOR'S EXECUTIVE ORDER 23 IS FULLY IMPLEMENTED, MTBE CEASES TO EXIST AS AN ADVOCATE TO 24 CALIFORNIA'S GASOLINE AT THE END OF 2002, THAT MTBE-FREE WILL 25 REALLY BE MTBE-FREE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 WE ENCOURAGE THE BOARD TO ACT QUICKLY. WE HAVE 2 ALREADY EXPERIENCED MISINFORMATION BEING DISTRIBUTED TO TAHOE 3 CITIZENS ON WHETHER CERTAIN GASOLINE SUPPLIERS HAVE MTBE HERE 4 OR NOT, AND THE STATE ENFORCEMENT ON LABELING IS ABSOLUTELY 5 ESSENTIAL. 6 TO FILL THE GAP WHILE THIS REGULATION IS BEING 7 DEVELOPED, OUR DISTRICT HAS BEGUN RANDOM TESTING OF GASOLINE 8 PURCHASED AT THE PUMP AND WILL CONTINUE UNTIL THESE 9 REGULATIONS ARE IN PLACE. 10 I ALSO WANTED TO FOLLOW-UP ON WHAT CHAIRMAN LLOYD 11 SAID ABOUT YOUR STAFF RIGHT AFTER THE GOVERNOR'S ORDER WAS 12 WRITTEN. I HAD A MEETING WITH MR. KENNY AND HIS STAFF, AND 13 HE SAID, THIS IS WHAT WE ARE GOING TO DO, AND THIS IS WHEN WE 14 ARE GOING TO DO IT BY, AND THEY HAVE MET EVERY COMMITMENT, 15 AND WE CERTAINLY, AS A WATER SUPPLIER, APPRECIATE THAT. 16 SO, YOU HAVE A GREAT STAFF. 17 AGAIN, WE THANK YOU FOR YOUR CONSIDERATION AND YOUR 18 ACTION TODAY AND SUPPORT AND FOR ANY SUPPORT YOU GAVE THE 19 LAKE TAHOE REGION AS WE WOULD LIKE TO PROTECT OUR WATER 20 RESOURCES FROM FUTURE CONTAMINATION. 21 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 22 ARE YOU ONE OF THE UTILITY DISTRICTS WHO IS TRYING 23 TO GET MTBE-FREE GASOLINE BUT CANNOT GET IT YET? 24 MR. BAER: WE GET OUR GASOLINE FROM A LOCAL 25 DISTRIBUTOR WHO'S COMMITTED BY JULY FIRST TO HAVE THAT, A PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 CHEVRON DISTRIBUTOR. 2 CHAIRMAN LLOYD: OKAY. GREAT. 3 THE COMMENT I WANT TO MAKE IS THAT YOU INDICATE THE 4 MTBE, I GUESS WE SHOULD NOT FORGET THAT THE GASOLINE IS 5 LEAKING, THERE ARE LOTS OF OTHER COMPONENTS COMING OUT IN 6 ADDITION TO MTBE. 7 WE SHOULD NOT HAVE A FALSE SENSE OF SECURITY IF THE 8 TANKS ARE LEAKING. THEY NEED TO BE FIXED, WHETHER THEY'VE 9 GOT MTBE OR OTHER GASOLINE IN THERE. 10 ANY QUESTIONS FROM THE BOARD? 11 BOARD MEMBER CALHOUN: I JUST HAD ONE QUESTION. 12 I WOULD LIKE YOU TO GO BACK TO THE LABELING WITH 13 THIS DIMINIMOUS AMOUNT OF .6 VOLUME PERCENT MTBE. 14 AGAIN, THE PUBLIC MAY BELIEVE THAT MTBE IS NOT 15 REALLY FREE THROUGH THIS .6 VOLUME PERCENT BASED ON THIS 16 TESTIMONY. 17 NOW, CAN WE DEFINE THAT AWAY LEGALLY AS BEING ONE 18 WAY AROUND THAT PROBLEM, OR WHAT DO WE DO ABOUT THAT? 19 MR. KENNY: WELL, WHAT WE ARE TRYING TO DO IS 20 RECOGNIZE IN EFFECT AS WE MOVE THROUGH THIS TRANSITION PERIOD 21 RIGHT NOW TO THE END OF 2002, WHEN WE ARE SWITCHING MTBE OUT 22 OF THE GASOLINE, THAT THERE WILL BE CONTAMINATION OF MTBE IN 23 NON-MTBE GASOLINE, JUST BECAUSE OF THE DISTRIBUTION NETWORK. 24 SO, WHAT WE NEEDED TO DO WAS COME UP WITH A WAY OF 25 PROVIDING FOR LABELING, AND AT THE SAME TIME, RECOGNIZE THOSE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 SORT OF PRAGMATIC CONDITIONS THAT WE ARE GOING TO BE FACED 2 WITH. 3 WE DO HAVE THE ABILITY BASICALLY TO DEFINE WHAT 4 MTBE NON-LABELED GASOLINE IS GOING TO BE, AND THAT IS WHAT WE 5 TRIED TO DO HERE. 6 SO AGAIN, THE WAY WE TRIED TO APPROACH THIS WAS A 7 WAY IN WHICH, WE KNEW WE HAD A THREE-YEAR TRANSITION PERIOD. 8 WE KNEW THAT THERE WOULD BE DISTRIBUTION ISSUES ASSOCIATED 9 WITHIN THAT THE THREE-YEAR TRANSITION PERIOD. 10 WE KNEW WE WANTED TO PROVIDE A DISINCENTIVE TO 11 PEOPLE USING MTBE IN THE GASOLINE, AND YET AT THE SAME TIME 12 WE ALSO KNEW WE COULD NOT GET ZERO DURING THE TRANSITION 13 PERIOD, AND SO WE TRIED TO GO UP WITH A NUMBER, TO .6 14 PERCENT, THAT WOULD BE ONE THAT WOULD BE AS REFLECTIVE OF 15 GETTING MTBE DOWN AS LOW AS POSSIBLE, SO THAT WAS KIND OF THE 16 GENERAL THOUGHT PROCESS THAT WE PURSUED IN WHAT YOU SEE 17 BEFORE YOU TODAY. 18 CHAIRMAN LLOYD: ANY OTHER QUESTIONS OF THE 19 WITNESS? 20 THANK YOU VERY MUCH FOR COMING DOWN. 21 I WOULD LIKE TO TAKE THIS OPPORTUNITY TO JUST TAKE 22 A SHORT BREAK. 23 IT IS MY GREAT PLEASURE TO INTRODUCE THE SECRETARY 24 OF EPA, MY BOSS, WINSTON HICKOX. 25 IT IS IRONIC THAT WINSTON SAID DURING HIS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 CONFIRMATION HEARING, HE HAD MTBE ACROSS HIS FOREHEAD, AND 2 SURE ENOUGH, IT IS ON OUR AGENDA, AND IT APPEARS, SO IT IS MY 3 GREAT PLEASURE TO INTRODUCE WINSTON. 4 IF YOU WOULD LIKE TO SAY A FEW WORDS, WINSTON, 5 PLEASE. 6 MR. HICKOX: I WOULD LIKE TO SAY SOMETHING AFTER 7 THE FACT, IT WILL HAVE TO BE SOMETHING LIKE, THANK YOU. 8 CHAIRMAN LLOYD: WELL, I THINK BEFORE I ARRIVED, 9 MR. SECRETARY, WE REALLY DID YOUR ONGOING EFFORTS WITH MR. 10 KENNY GOING BACK TO WASHINGTON, AND TRYING TO WORK WITH 11 SENATOR FEINSTEIN TO TRY AND WORK THIS VERY DIFFICULT ISSUE. 12 SO, WE APPRECIATE ALL YOUR TIME AND EFFORT. 13 MR. HICKOX: THANK YOU AS WELL. 14 CHAIRMAN LLOYD: THE NEXT WITNESS IS MR. THOMAS 15 ROBINSON, WITH THE ROBINSON OIL COMPANY. 16 MR. ROBINSON: GOOD MORNING. I AM THOMAS ROBINSON, 17 THE PRESIDENT OF ROBINSON OIL COMPANY. 18 OUR COMPANY OWNS AND OPERATES 28 ROTTEN ROBBIE 19 RETAIL GASOLINE OUTLETS LOCATED IN THE BAY AREA. 20 THANK YOU FOR THE OPPORTUNITY TO TESTIFY. 21 CHAIRMAN LLOYD: THAT IS A REAL NAME? 22 MR. ROBINSON: IT IS. 23 THANK YOU FOR THE OPPORTUNITY TO TESTIFY TODAY ON 24 THE PROPOSED REQUIREMENT TO LABEL RETAIL PUMPS DISPENSING 25 GASOLINE WITH MTBE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 WHILE I UNDERSTAND THE WELL INTENTIONED OBJECTIVE 2 TO HASTEN THE DEMISE OF MTBE IN THIS STATE, THIS REQUIREMENT 3 FALLS VERY HEAVILY AND VERY UNFAIRLY ON UNBRANDED INDEPENDENT 4 MARKETERS. 5 UNBRANDED INDEPENDENTS TRADITIONALLY HAVE BEEN 6 RECOGNIZED AS THE MOST COST-COMPETITIVE SEGMENT OF THE MOTOR 7 FUELS INDUSTRY. 8 THE NUMBER OF CALIFORNIA UNBRANDED INDEPENDENTS HAS 9 ALREADY SHRUNK SIGNIFICANTLY. THIS REQUIREMENT AS CURRENTLY 10 PROPOSED WILL HAVE A SIGNIFICANT NEGATIVE IMPACT ON THE MOST 11 COST-COMPETITIVE SEGMENT OF THE MARKETING INDUSTRY, IF THE 12 LABELING REQUIREMENT IS AS EFFECTIVE AS YOU HOPE IT WILL BE. 13 COMPANIES LIKE OURS WILL BE THE LAST TO BE ABLE TO 14 TAKE DOWN THESE CONSUMER RED FLAGS, BECAUSE WE BUY FROM 15 MULTIPLE SUPPLIERS, AND BECAUSE MOST OF THE GASOLINE WE BUY 16 COMES FROM COMMUNITY TANKAGE. 17 WE DO NOT REFINE GASOLINE, SO WE DO NOT CONTROL HOW 18 IT IS MADE OR WHAT IS MADE. WE BUY FROM MULTIPLE SUPPLIERS 19 IN AN ATTEMPT TO PURCHASE AS COMPETITIVELY AS POSSIBLE SO WE 20 CAN PRICE TO THE CONSUMER AS COMPETITIVELY AS POSSIBLE. 21 AS LONG AS ONE OF OUR SUPPLIER SELLS GASOLINE WITH 22 MTBE, THE REGULATION WILL REQUIRE US TO HAVE THE LABEL MTBE 23 ON OUR PUMP. 24 NOW, CERTAINLY WE COULD DECIDE NOT TO PURCHASE FROM 25 ANY MTBE GASOLINE SUPPLIERS, BUT EVEN THEN WE WILL NOT BE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 ABLE TO GUARANTEE MTBE-FREE GASOLINE TO OUR CUSTOMERS. 2 THIS IS BECAUSE MOST OF THE GASOLINE WE PURCHASE 3 COMES FROM COMMON CARRIER TERMINAL COMPANIES, COMMUNITY 4 TANKAGE. 5 WHAT THIS MEANS IS THAT IF WE ELECT NOT TO PURCHASE 6 FROM A MTBE GAS SUPPLIER, BUT THOSE SUPPLIERS PUT GASOLINE 7 WITH MTBE IN THE SAME TANKAGE AS OUR MTBE-FREE SUPPLIERS, WE 8 HAVE TAINTED GASOLINE, WHICH MEANS THE REGULATION WILL 9 REQUIRE US TO LABEL OUR PUMPS, EVEN IF WE PURCHASE ONLY FROM 10 MTBE-FREE SUPPLIERS. 11 MANY OF OUR SUPPLIERS REFINE AND SELL BOTH BRANDED 12 AND UNBRANDED GASOLINE. I SUSPECT ELIMINATING MTBE FROM THE 13 GASOLINE WILL BE A SIGNIFICANT CHALLENGE TO THEM, AND I ALSO 14 SUSPECT THEY MAY ELIMINATE IT FIRST FROM THE BRANDED 15 GASOLINE, SO THEY CAN TAKE THE LABELS OFF OF THEIR PUMPS 16 WHILE THEY ARE SELLING WITH MTBE TO UNBRANDED INDEPENDENTS. 17 THIS MAY ALLOW A MORE COST-EFFECTIVE TRANSITION 18 FOR THEM, WHILE AT THE SAME TIME GIVING THEIR BRANDED 19 STATIONS A COMPETITIVE ADVANTAGE. 20 POSSIBLY NONE OF THIS WILL HAPPEN. POSSIBLY 21 CONSUMERS WILL IGNORE THE LABELS. POSSIBLY ALL SUPPLIERS 22 WILL CONVERT TO MTBE-FREE GASOLINE AT THE SAME TIME, AND 23 POSSIBLY THE TERMINAL COMPANIES WILL INSTALL PROPERLY 24 SEGREGATED COMMUNITY STORAGE. 25 POSSIBLY OIL COMPANIES WILL TREAT THEIR UNBRANDED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 AND BRANDED CUSTOMERS THE SAME. MAYBE WE ARE WORRYING 2 UNNECESSARILY, BUT AS AN UNBRANDED INDEPENDENT, WE USUALLY 3 TEND TO WORRY. 4 MAYBE THE BEST COURSE OF ACTION FOR THE UNBRANDED 5 INDEPENDENT IS TO SIGN UP WITH A MAJOR COMPANY WHO CAN 6 GUARANTEE MTBE-FREE GASOLINE, BUT I REALLY DOUBT THAT IS THE 7 BEST FOR THE CALIFORNIA CONSUMER. 8 WHAT DO YOU THINK? 9 I HOPE THAT YOUR INTENTION IS TO NOT ENCOURAGE US 10 TO BE MAJOR BRANDED. I PERSONALLY THINK IT WOULD BE A GOOD 11 IDEA TO RETHINK THESE LABELING REQUIREMENTS AND NOT INSTITUTE 12 THEM. 13 THE LACK OF LABELING MANDATE WILL STILL ENABLE 14 MARKET MECHANISMS TO WORK. 15 IF A COMPANY HAS MTBE-FREE GASOLINE, THEY CAN 16 CERTAINLY ADVERTISE THIS FACT TO THEIR ADVANTAGE. ALTHOUGH 17 THIS ADVANTAGE MAY NOT BE AVAILABLE TO UNBRANDED 18 INDEPENDENTS, AT LEAST WE WILL NOT BE PUNISHED WITH THE RED 19 FLAG LABELS. 20 THOSE ARE MY COMMENTS. THEY ARE FOCUSED ON MY 21 COMPANY. 22 IF I COULD ANSWER ANY QUESTIONS, I WILL BE HAPPY 23 TO. 24 CHAIRMAN LLOYD: I WANT TO ASK STAFF WHAT 25 ASSURANCE, THAT IF THINGS HAPPEN IN THIS AREA, THE MOST PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 ADVERSE SCENARIO FOR THE INDEPENDENTS, DO WE HAVE ANY 2 SAFEGUARDS THERE? 3 MR. SIMEROTH: WE CAN GIVE YOU SOME THOUGHTS, 4 CHAIRMAN LLOYD. 5 SEVENTY PERCENT OF THE STATE'S GASOLINE STILL FALLS 6 UNDER THE FEDERAL RFG REQUIREMENTS AND IS GOING TO HAVE TO 7 HAVE THE TWO PERCENT OXYGEN. 8 WHERE IT LOOKS AT THIS TIME, WE DO NOT EXPECT THAT 9 TO CHANGE OVER TO ETHANOL UNTIL THE END OF 2002 WHEN WE MAKE 10 THE CHANGE. 11 THE REMAINING 30 PERCENT, TAHOE AND SAN FRANCISCO 12 BAY AREA, AREAS WHERE NON-OXYGENATED GASOLINE IS MOST LIKELY 13 TO BE BECAUSE OF THE DISTRIBUTION SYSTEM, WE HAVE TALKED TO 14 KINDER MORGAN, WHO IS THE PRIMARY PIPELINE DISTRIBUTOR IN 15 CALIFORNIA, AND THEY ARE EVALUATING THE ECONOMICS OF HAVING 16 SEGREGATED STORAGE IN THEIR TERMINALS THAT COULD DO THIS IN 17 AREAS WHERE MTBE OR OXYGENATE FREE GASOLINE COULD BE USED. 18 SO, WE DO NOT HAVE ALL THE ANSWERS YET, BUT WE ARE 19 TRYING TO SORT THROUGH AND MAKE SURE IT IS IMPLEMENTED AS FAR 20 AS POSSIBLE. THE EXPECTATION IS LOOKING AT THE CHANGES THAT 21 HAVE TO BE MADE TO THE DISTRIBUTION SYSTEM, THE CHANGES THAT 22 HAVE TO BE TO THE REFINERIES TO EFFECT THE TRANSITION, IT IS 23 GOING TO HAPPEN ALL AT ONCE, WE WOULD LIKE TO CONSIDER, BUT 24 IT LOOKS LIKE IT IS GOING TO HAPPEN ALL AT ONCE WITHIN A VERY 25 SHORT TIME PERIOD. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 MR. SCHEIBLE: I WOULD SAY THAT IT IS VERY, VERY 2 DIFFICULT TO PREDICT EXACTLY HOW THOSE LABELING REQUIREMENTS 3 WILL WORK ITS WAY THROUGH THE MARKETPLACE AND HOW POWERFUL IT 4 WILL BECOME IN TERMS OF ACCELERATING THE SWITCH-OVER FROM 5 GASOLINE WITH MTBE TO GASOLINE WITHOUT MTBE. 6 IN THE BEGINNING, THERE WILL BE RELATIVELY FEW 7 SMALL VOLUMES OF GASOLINE AVAILABLE WITHOUT MTBE, SO THE 8 INDEPENDENTS WITH IT WILL NOT WILL BE IN A POOL WITH MANY 9 OTHER PEOPLE. 10 ONCE IT BECOMES WIDELY AVAILABLE IN GENERAL, THE 11 INDEPENDENTS, I THINK, WILL HAVE TO MAKE A CHOICE, ARE THE 12 ECONOMIC ADVANTAGES OF STAYING WITH ONLY THOSE SUPPLIERS THAT 13 WILL GIVE YOU MTBE-FREE GREAT ENOUGH TO MAKE THAT THEIR 14 ATTRACTIVE OPTION, AND MAKE THE BUSINESS DECISION THAT WAY. 15 IN AREAS WITH COMMUNITY TANKS, STAFF CAN CORRECT ME 16 IF I AM WRONG, BUT I THINK VIRTUALLY ALL THE SUPPLIERS COME 17 OUT OF THE COMMUNITY TANKS, SO, AGAIN, THE INDEPENDENTS ARE 18 IN THE SAME BALL AS THE BRANDED STATIONS THAT ALSO DRAW THEIR 19 FUEL FROM THOSE COMMUNITY TANKS, AND IF THEY DO NOT WANT TO 20 DO THE LOCAL TANKS, THEY WILL HAVE TO SAY, WHAT ARE THE VALUE 21 OF ECONOMICS OF GOING FURTHER AND GETTING A TANKER CARGO FROM 22 A MORE DISTANT TERMINAL? 23 SO, IT IS, I WOULD THINK, THAT THE SWITCH-OVER IS 24 GOING TO BE SLOW AT FIRST. SO, SIMPLY THE ABILITY FOR THE 25 REFINERS TO PRODUCE LARGE VOLUMES OF MTBE FUEL WILL NOT BE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 THERE FOR QUITE SOMETIME. 2 CHAIRMAN LLOYD: QUESTIONS FROM THE BOARD? 3 BOARD MEMBER CALHOUN: WOULD YOU LIKE TO COMMENT ON 4 THE STATEMENT JUST MADE BY MR. SCHIEBLE? 5 MR. ROBINSON: WELL, OUR COMPANY DOES SHIP IN LARGE 6 BULK, AND WE COULD DO THAT. 7 THE MAJORS DO HAVE PRIORITY STORAGE. SOME OF IT 8 DOES GO THOUGH COMMUNITY STORAGE, BUT FOR EXAMPLE, PICK A 9 MAJOR, EXXON, LET'S SAY, AND IN SAN JOSE, THEY MAY AS WELL 10 HAVE THEIR OWN PRIORITY TANKAGE. 11 THEY COULD BRING DOWN MTBE-FREE GASOLINE. 12 WE MIGHT EVEN BUY FROM EXXON. THEY MIGHT PROVIDE 13 US MTBE-FREE GASOLINE. WE MIGHT BUY 25,000 BARRELS OF IT. 14 WE PUT IT IN THAT TANK, BUT ANYONE ELSE IN THAT 15 COMMUNITY TANK HAS MTBE, IT DOES NOT REALLY MATTER HOW 16 RESPONSIBLE WE ARE. 17 THE WAY IT IS GOING TO WORK IS THAT EVERYBODY HAS 18 TO PUT IT ON INITIALLY. WE WILL TAKE IT DOWN THE LAST, JUST 19 BECAUSE WE DO NOT HAVE THE ABILITY TO CONTROL IT UNLESS YOU 20 WANT US TO BE A BRANDED MAJOR. 21 CHAIRMAN LLOYD: ANY OTHER QUESTIONS FROM THE 22 BOARD? 23 THANK YOU. 24 BOARD MEMBER DESAULNIER: MR. CHAIRMAN, MAYBE IF WE 25 COULD ASK STAFF TO WORK WITH THE INDEPENDENTS, THEN MY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 CONCERN IS, I HEAR YOU DESCRIBE US ALLOWING FREE MARKET TO DO 2 AND KNOWING THE LIMITATIONS WE HAVE ON THAT, IS THAT NOT THAT 3 WE DISTRUST THE MAJOR REFINERS, BUT IF THEY MIGHT TAKE UP AN 4 OPPORTUNITY TO PUT THE INDEPENDENTS AT AN UNFAIR 5 DISADVANTAGE, DURING THE LAST PERIOD -- 6 SO, IF THEY ARE GOING TO BE TOUT THE FACT THAT THEY 7 ARE MTBE-FREE AT YOUR EXPENSE, BECAUSE PEOPLE ARE GOING TO 8 THEIR PUMPS, MAYBE THERE IS JUST A WAY THAT STAFF AND THE 9 OMBUDSMAN PERSON CAN CONTINUE TO WORK WITH THE INDEPENDENTS 10 TO MAKE SURE THAT DOES NOT HAPPEN. 11 MR. ROBINSON: THAT WAS WHAT MY POINT WAS, I THINK 12 THE MARKET MECHANICS HAVE THE RIGHT TO ADVERTISE IT. 13 CHAIRMAN LLOYD: SO, WE CAN SPECIFICALLY ASK STAFF. 14 MR. VENTURINI: WE WOULD BE HAPPY FOLLOW AS WE SEE 15 HOW THIS PLAYS OUT IN THE REAL MARKETPLACE. 16 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 17 THE NEXT PERSON TO TESTIFY IS MR. JAMES WHITE, WITH 18 WHITE ENVIRONMENTAL ASSOCIATES. 19 I KNOW MR. WHITE HAS BEEN VERY ACTIVE IN THIS 20 ISSUE, PARTICIPATING SIGNIFICANTLY IN THE MTBE HEARINGS. 21 MR. WHITE: GOOD MORNING, MR. CHAIRMAN, MEMBERS OF 22 THE BOARD. 23 MY NAME IS JIM WHITE. I AM THE PRINCIPAL WITH 24 WHITE ENVIRONMENTAL ASSOCIATES, A GOVERNMENTAL RELATIONS 25 CONSULTANT DEPARTMENT, LOCATED RIGHT IN CALIFORNIA. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 AS DR. LLOYD SAID, I HAVE BEEN QUITE INVOLVED IN 2 THE MTBE ISSUE, CONSIDERED AN UNDERGROUND TANK EXPERT IN THE 3 INDUSTRY AFTER WORKING 23 YEARS WITH ARCO. 4 I AM UP HERE ON MY OWN BEHALF, ALTHOUGH I DO HAVE 5 CLIENTS THAT HAVE DIRECT INTEREST IN MTBE AS WELL AS THE 6 DISPENSERS OUT THERE. 7 I WANTED TO SPECIFICALLY ADDRESS THE LABEL ISSUE. 8 THERE ARE TWO TYPES OF MESSAGES OUT THERE ON THE GASOLINE 9 DISPENSERS. 10 ONE TYPE OF MESSAGE IS INTENDED TO PROVIDE THE 11 CONSUMER WITH INFORMATION RELATIVE TO A CHOICE OF PRODUCT 12 RELATED TO PURCHASE. 13 THAT IS WHERE I WOULD CLASSIFY THIS LABEL ISSUE. 14 THE MTBE LABEL IS SPECIFICALLY INTENDED ACCORDING TO THE 15 EXECUTIVE ORDER TO LET THE CONSUMER BE ABLE TO MAKE A CHOICE. 16 THE OTHER KIND OF LABEL AND OR MESSAGE IN THE 17 DISPENSING AREA IS RELATED TO THE HAZARDS ASSOCIATED WITH 18 GASOLINE TO LET THE CONSUMER KNOW THAT THERE ARE HAZARDS 19 ASSOCIATED WITH DISPENSING THIS PRODUCT, LIKE NO SMOKING 20 SIGNS, ENVIRONMENTAL HEALTH WARNINGS, DISPENSING 21 INSTRUCTIONS, WHICH ARE VERY CRITICAL TO THIS BOARD. 22 MY POINT IS, THIS LABEL AS POSED TODAY, HAS SOME 23 SUPERFLUOUS LANGUAGE, WHICH I DO NOT BELIEVE IS REALLY 24 NECESSARY FOR THE CONSUMER. IT IS NOT NECESSARY TO SATISFY 25 THE GOVERNOR'S ORDER, AND I WOULD RECOMMEND TO THIS BOARD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 THAT THEY NOT GO ALONG WITH SUPERFLUOUS LANGUAGE. 2 NOW, JUST WHAT IS THE PURPOSE OF THIS ADDITIONAL 3 LANGUAGE? ONE MIGHT BE TO MOTIVATE THE MORE RAPID CONVERSION 4 TO ALTERNATIVES OTHER THEN MTBE, BUT WE HAVE ALL HEARD FROM 5 THE CALIFORNIA ENERGY COMMISSION, WE HAVE HEARD FROM THE UC 6 STUDY THAT THERE IS NOT GOING TO BE ANY RAPID TURNAROUND. 7 IT IS JUST NOT POSSIBLE, AND THE GOVERNOR SET A 8 DEADLINE DATE THAT HE FELT WOULD BE PROBABLY THE MOST RAPID 9 PERIOD FOR SUCH A TURNOVER. 10 THE REFINERS, IN ADDITION, HAVE PROVEN THAT THEY 11 ARE WILLING TO BEND OVER AS MUCH AS THEY CAN TO SATISFY 12 SPECIFIC REQUESTS, ESPECIALLY UP IN LAKE TAHOE, TO PROVIDE 13 MTBE-FREE GASOLINE ON A SHORT-TERM BASIS. 14 ANOTHER REASON FOR HAVING THIS ADDITIONAL LANGUAGE 15 IS TO WARN OF ENVIRONMENTAL DAMAGE, THIS BEING THE MTBE 16 CONTENT. BUT WE ALL KNOW THAT THE BOTTOM LINE THREAT TO THE 17 ENVIRONMENT FROM MTBE IS FROM THE UNDERGROUND STORAGE TANKS. 18 IT IS NOT FROM THE MTBE. 19 THE MTBE IS NOT A THREAT UNTIL IT GETS TO THE 20 OUTSIDE OF THOSE TANKS, AND AS DR. LLOYD POINTED OUT, WE HAVE 21 TO GET THOSE TANKS FIXED. 22 THE OTHER POSSIBLE PURPOSE WOULD BE POLITICAL. I 23 THINK THAT THIS IS THE ONLY REMAINING REASON FOR THIS 24 ADDITIONAL LANGUAGE. 25 SO, WHY AM I SO CONCERNED ABOUT THIS ADDITIONAL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 LANGUAGE? 2 WELL, THE AREAS SURROUNDING THE GASOLINE DISPENSER 3 AREA IS ALREADY AN INFORMATION OVERLOAD, AND I HAVE GIVEN YOU 4 A GRAPHIC REPRESENTATION OF THAT. 5 THERE IS A LOT OF RELEVANT HEALTH AND SAFETY 6 MESSAGES THAT ARE VERY IMPORTANT TO CONSUMER. THEY MAY BE 7 JUST LOOKING PAST THAT LANGUAGE, BUT IN FACT, SOME OTHER 8 LANGUAGE IN THE AREA OF THE DISPENSING ISLANDS IS NOT REALLY 9 NECESSARY. 10 ONE MESSAGE OF PARTICULAR INTEREST TO THIS 11 GOVERNING BODY, AS I MENTIONED BEFORE, IS THE DECAL 12 DEMONSTRATING THE FUEL DISPENSING PROCEDURE. 13 NOW, THIS IS NOT ONLY IMPORTANT TO THIS BODY, BUT 14 IT IS ALSO IMPORTANT TO THE WATER BOARD. THEY HAVE 15 DOCUMENTED THAT SOME OF THESE MTBE GASOLINE RELEASES ARE FROM 16 PEOPLE NOT PROPERLY DISPENSING THE GASOLINE. 17 WE OUGHT TO DRAW MORE ATTENTION TO THAT LABEL. 18 NOW, THE GOVERNOR'S EXECUTIVE ORDER SIMPLY DIRECTS 19 THIS BOARD TO DEVELOP REGULATIONS THAT WOULD REQUIRE 20 PROMINENT IDENTIFICATION AT THE PUMP OF GASOLINE CONTAINING 21 MTBE. 22 NOW, IF YOU WERE GOING TO TAKE THIS ORDER 23 SPECIFICALLY, THESE LABELS WOULD END UP FOR THE MOST PART 24 INSIDE SUMPS, WHICH ARE LOCATED OVER THE TANKS UNDERGROUND, 25 BECAUSE THE PUMPS ARE UNDERGROUND. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 WE ARE TALKING ABOUT DISPENSERS FOR THE MOST PART. 2 SO, I AM NOT SAYING WE OUGHT TO LITERALLY FOLLOW THE 3 GOVERNOR'S ORDER, BUT I AM SAYING WE OUGHT TO MEET THE 4 INTENT. 5 THE INTENT IS TO PERHAPS PROVIDE A LABEL FOR EACH 6 HOSE OR PRODUCT DESIGNATION BUTTON THAT IS LOCATED ON THESE 7 DISPENSERS, AND AS YOU WILL SEE FROM THE BACK SIDE OF THIS 8 HANDOUT I GAVE YOU, THERE ARE A LOT OF DISPENSER 9 CONFIGURATIONS TO BE CONCERNED ABOUT. 10 HOW BIG SHOULD THE LABEL BE, AND WHERE SHOULD IT BE 11 APPLIED? 12 IT SHOULD BE BIG AND DISTINCTIVE ENOUGH FOR A 13 PERSON SITTING IN THEIR CAR TO BE ABLE TO SEE IT. I THINK 14 THE CALIFORNIA AIR RESOURCES BOARD HAS A PRETTY GOOD LABEL 15 THAT DOES THAT. 16 IT SHOULD BE, AND I WOULD RECOMMEND THAT IF YOU 17 FOLLOW THE FORMAT OF THE OCTANE LABEL, AND I THINK CARB HAS 18 KIND OF APPROACHED THAT RECOMMENDATION, HOWEVER, I WOULD 19 RECOMMEND THAT THE CONTENTS PERHAPS BE IN LETTERS WHICH IS A 20 LOT EASIER TO READ FROM A DISTANCE AND NO SMALLER THAN 16 21 POINT. 22 MTBE, NO SMALLER THAN 7.2 POINT, AND I HAVE AN 23 EXAMPLE OF WHAT I WOULD RECOMMEND IN YOUR HANDOUT. 24 THE AIR RESOURCES BOARD SHOULD REALLY TRY TO RESIST 25 THE WHIMS OF SOME LEGISLATORS AND OTHERS THAT HAVE JUMPED ON PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 A POLITICALLY POPULAR BAND WAGON TO DELIVER A MESSAGE THAT 2 THE CONSUMER COULD CARE LESS ABOUT AND MAY DETRACT FROM MORE 3 IMPORTANT MESSAGES. 4 I RECOMMEND THAT THE BOARD TAKE A RESPONSIBLE 5 APPROACH REQUIRING A SIMPLE LABEL IN TOTAL COMPLIANCE WITH 6 THE GOVERNOR'S EXECUTIVE ORDER. 7 THANK YOU FOR YOUR ATTENTION AND YOUR 8 CONSIDERATION. 9 ANY QUESTIONS? 10 CHAIRMAN LLOYD: ANY QUESTIONS FROM THE BOARD? 11 ONE COMMENT THAT I WOULD HAVE, PEOPLE COMING FROM 12 OUT OF STATE NEVER HEARD OF MTBE, THEY SEE THAT LABEL, THEY 13 SAY, OH, THIS MUST BE A GREAT THING. 14 HOW DO YOU ADDRESS THAT? 15 MR. WHITE: THE LABEL IS INTENDED TO PROVIDE A 16 CHOICE FOR THE CONSUMER, AND WHATEVER THE CONSUMER READS ON 17 THAT LABEL PROVIDES THEM WITH A CHOICE. 18 I MEAN, MTBE IS NOT A BIG ISSUE IN SOUTHERN 19 CALIFORNIA. I DO NOT THINK THAT ADDITIONAL LANGUAGE REALLY 20 PROVIDES THAT MUCH ADDITIONAL INFORMATION TO THE CONSUMER 21 REGARDING THEIR PURCHASE CHOICE. 22 CHAIRMAN LLOYD: SO, IT BEGS THE QUESTION FROM 23 PEOPLE, WHAT DOES IT MEAN? 24 MR. WHITE: WELL, I COULD POINT OUT QUITE A FEW 25 LABELS THAT ARE OUT THERE RIGHT NOW WHERE PEOPLE ARE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 WONDERING WHAT DOES THAT MEAN, MOSTLY PROP. 65 WARNING 2 LABELS. 3 CHAIRMAN LLOYD: I DO NOT THINK WE WANT TO GET INTO 4 THAT ISSUE. 5 MR. WHITE: I DO NOT THINK WE WANT TO EITHER, BUT 6 YOUR POINT IS WELL TAKEN, THERE ARE A LOT OF LABELS OUT 7 THERE. 8 WE ARE LABEL HAPPY OUT HERE IN CALIFORNIA, 9 ESPECIALLY WITH PROP. 65, BUT TO ADD ADDITIONAL LANGUAGE TO 10 TRY TO EXPLAIN ALL OF THESE LABELS, WE ARE GOING TO HAVE 11 NOTHING BUT LABELS OUT THERE ALL OVER THESE DISPENSERS. 12 CHAIRMAN LLOYD: STAFF, ARE THERE ANY COMMENTS? 13 MR. VENTURINI. 14 MR. VENTURINI: JUST ONE BRIEF COMMENT, AND I THINK 15 WE WOULD AGREE WITH YOU, CHAIRMAN LLOYD, WITH ADDING THAT 16 LANGUAGE DOES PUT IT INTO CONTEXT, AND IT DOES REFLECT THE 17 FINDINGS MADE IN THE GOVERNOR'S EXECUTIVE ORDER, AND IT IS 18 ALSO CONSISTENT WITH THE LANGUAGE THAT IS INCLUDED IN SENATOR 19 PERATA'S BILL. 20 CHAIRMAN LLOYD: WELL, THANK YOU VERY MUCH. 21 MR. WHITE: THANK YOU, DR. LLOYD. 22 CHAIRMAN LLOYD: NEXT PERSON TESTIFYING IS AL 23 JESSEL, TESTIFYING ON BEHALF OF THE WESTERN STATES PETROLEUM 24 ASSOCIATION. 25 MR. JESSEL: THANK YOU VERY MUCH, CHAIRMAN LLOYD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 AND MEMBERS OF THE BOARD. 2 IT IS OUR PLEASURE TO COME BEFORE YOU THIS MORNING 3 AND SPEAK ON THE TWO MATTERS, HERE BOTH IS -- OXY RECISION 4 AND THE LEGAL REQUIREMENT AND I BELIEVE THAT YOU HAVE OUR 5 WRITTEN TESTIMONY. 6 I WANT TO MAKE SURE THAT YOU DO BECAUSE I WANT TO 7 MAKE OUR COMMENTS AS BRIEF AS POSSIBLE REFERRING TO THAT 8 TESTIMONY AND WHAT HAS CHANGED IN THE STAFFS PROPOSALS. 9 CHAIRMAN LLOYD: THIS IS THE WESTERN STATE 10 PETROLEUM ASSOCIATION TESTIMONY FROM GINA? 11 MR. JESSEL: YES, I AM REPRESENTING THE WESTERN 12 STATES PETROLEUM ASSOCIATION. 13 THE FIRST ISSUE IS ON THE LAKE TAHOE WINTER 14 OXYGENATE RECISION, WHICH WAS WE SUPPORT, AND ANY TIME A 15 CONTROL MEASURE IS DEEMED NOT TO BE NECESSARY, IT OBVIOUSLY 16 SHOULD BE REMOVED AS QUICKLY AS POSSIBLE. 17 THE ONLY THING WE WOULD LIKE TO ADD, AND I THINK 18 THAT THE STAFF HAS RESPONDED IN THE RESOLUTION, THAT SOME 19 ACTION NEEDS TO BE TAKEN WITH THE FEDERAL ENVIRONMENTAL 20 PROTECTION AGENCY TO MAKE THIS EFFECTIVELY APPLICABLE, THAT 21 SPECIFIC APPROVAL NEEDS TO BE GAINED FROM THEM OR SOME KIND 22 OF NON-ENFORCEMENT NEEDS TO BE GAINED IN ORDER FOR US TO 23 ACTUALLY BE ABLE TO SELL NON-OXY GASOLINE IN THE TAHOE AREA 24 THIS WINTER. 25 CHAIRMAN LLOYD: I THINK THAT IS WRITTEN WITHIN THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 RESOLUTION. 2 MR. JESSEL: IT IS IN THE RESOLUTION. 3 I JUST WANT TO HIGHLIGHT THAT THE STAFF WAS 4 RESPONSIVE IN PUTTING THAT IN THERE, AND I WANT TO HIGHLIGHT 5 THE EFFORTS THEY MADE LAST YEAR WHEN A SIMILAR ISSUE CAME UP 6 IN THE OTHER EIGHT AREAS THAT WERE RESCINDED LAST YEAR AND 7 HOW QUICKLY STAFF GOT TO WORK, AND WE GOT THE KIND OF 8 NON-ENFORCEMENT LETTER WE NEEDED FROM EPA. 9 WE JUST NEED TO GO DOWN THAT PATH AGAIN. 10 RECOGNIZING THAT TIME IS VERY TIGHT, WE HAVE ABOUT ANOTHER 11 MONTH AND A HALF BEFORE THE REFINERS REALLY HAVE TO MAKE 12 DECISIONS CONCERNING THE USE OF OXY IN THE LAKE TAHOE REGION. 13 SO, WE HAVE THAT AMOUNT OF TIME TO GET EPA TO ACT, 14 AND HOPEFULLY SINCE THE SKIDS WERE GREASED LAST TIME AROUND, 15 IT SHOULD NOT BE A BIG ISSUE, AND WE ARE CERTAINLY WILLING TO 16 WORK WITH STAFF AS NECESSARY TO MAKE THAT HAPPEN QUICKLY. 17 ON TO THE LABELING ISSUE. OUR TESTIMONY 18 NECESSARILY COMMENTED ON THE ORIGINAL STAFF PROPOSAL, AND IT 19 IS ONLY NOW THAT WE HAVE WHAT IS BEFORE YOU TODAY THAT WE 20 KNOW EXACTLY WHAT IS BEING PROPOSED. 21 SO, A LOT OF WHAT WE HAVE IN OUR TESTIMONY HERE IS 22 TO A LARGE EXTENT, BECAUSE OF MANY OF THE SUGGESTIONS THAT WE 23 MADE IN THE WORKSHOP AND IN OTHER MEETINGS, HAVE BEEN 24 INCORPORATED HERE, SO WE WANT TO THANK THE STAFF FOR 25 LISTENING TO US THIS TIME AROUND. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 WE WILL BE BACK IN DECEMBER. 2 WE HAVE A COUPLE OF COMMENTS, ONE ON THE 3 REQUIREMENTS, THE INTERACTING REQUIREMENTS OF THE LABEL BEING 4 CONSPICUOUSLY LEGIBLE, AND THEN THE SPECIFICITY OF THE SIZE 5 OF THE LETTERING AND SO ON, WE ARE CONCERNED IT MAY BE AN 6 ENFORCEMENT ISSUE HERE AND THAT THINGS MAY BE A LITTLE BIT 7 OVER SPECIFIED, HAVING THE LABEL SPECIFIED IN SIZE WITH THE 8 SIZE OF THE LETTERING CAREFULLY SPECIFIED, AND THEN REQUIRING 9 IT TO BE CONSPICUOUS, BUT THEN ALSO TO BE LEGIBLE TO THE 10 DRIVER IN A CAR. 11 WE ARE NOT CERTAIN AS TO WHETHER YOU WILL BE ABLE 12 TO ACHIEVE ALL OF THOSE THINGS AT THE SAME TIME. LEGIBILITY, 13 I THINK, IS COVERED BY THE SIZE OF THE LABEL, AND THE SIZE OF 14 THE TYPE, HAVING IT BE CONSPICUOUS MEANS CAN BE SEEN BY A 15 DRIVER. 16 BUT HAVING IT ALSO BE LEGIBLE TO THE DRIVER WHO IS 17 IN THE CAR WITHOUT KNOWING WHERE THE CAR IS AND WHAT THE 18 STATE OF THE EYE SIGHT OF THE PERSON IS, SEEMS TO BE A 19 POTENTIAL ENFORCEMENT PROBLEM. I AM NOT GOING TO STAND HERE 20 AND POUND THE TABLE ON IT. 21 ONE OTHER COMMENT WE NEED TO MAKE IS ON THE 22 DIMINIMOUS LEVEL. WE NEED TO SAY THAT OUR INDUSTRY DOES NOT 23 HAVE A LOT OF EXPERIENCE IN TRYING TO TRANSPORT NON OXY 24 GASOLINE TO THE DISTRIBUTION SYSTEM HERE IN CALIFORNIA. 25 SOME COMPANIES HAVE DONE SOME WORK AND HAD BEEN PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 ABLE TO DO THAT UNDER THE CURRENT PIPELINE SPECIFICATION, 2 WHICH IS ESSENTIALLY WHAT YOU ARE ADOPTING HERE TODAY. 3 IF YOU HAVE SOME SUCCESS, BUT IT IS NOT TO BE DONE 4 ON A WIDE SCALE, AND WE JUST NEED TO POINT OUT THAT 5 EXPERIENCE MAY HAVE US BACK HERE LETTING YOU KNOW WHETHER IT 6 WORKED OR NOT. 7 I ASSUME THERE WILL BE AMPLE OPPORTUNITY FOR US TO 8 INPUT ANY DIFFICULTIES WE HAVE WITH THAT DIMINIMOUS LEVEL IN 9 THIS INTERIM PERIOD. 10 IT MAY ALSO BEAR ON THE DIMINIMOUS LEVEL SHOULD IT 11 CHANGE IN THE ULTIMATE PHASE OUT. THAT IS THE EXTENT OF THE 12 COMMENTARY I HAVE. 13 EVERYTHING ELSE THAT WAS IN THE WRITTEN TESTIMONY I 14 THINK WAS COVERED FAIRLY WELL BY STAFF, AND SO WE ARE IN 15 SUPPORT OF THE RESOLUTION WITH THOSE TWO POTENTIAL 16 EXCEPTIONS, AND WITH THAT, I AM WILLING TO ANSWER ANY 17 QUESTIONS. 18 CHAIRMAN LLOYD: SO, YOU ARE HAPPY WITH THE CONTENT 19 OF THE LABEL? 20 MR. JESSEL: WE CAN LIVE WITH THE CONTENT OF THE 21 LABEL. 22 CHAIRMAN LLOYD: ANY QUESTIONS? 23 MAYBE I COULD ASK YOU A QUESTION. I DO NOT KNOW 24 WHETHER YOU CAN OR CANNOT ANSWER, BUT I GUESS YOU ARE 25 REPRESENTING THE WESTERN STATES PETROLEUM ASSOCIATION, SO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 PRESUMABLY ONE OF THOSE COMPANIES HAS A CONTRACT WITH 2 CALTRANS TO PROVIDE GASOLINE FOR LAKE TAHOE? 3 MR. JESSEL: THAT IS SAFE TO PRESUME, AND MAYBE 4 THROUGH A THIRD PARTY, I DO NOT KNOW THE ANSWER TO YOUR 5 QUESTION, SO YOU MAY NOT BE ABLE TO PRESUME THAT. 6 CHAIRMAN LLOYD: OKAY. 7 SO, THE QUESTION WAS, WHAT SORT OF BARRIERS DO YOU 8 SEE TO PROVIDING MTBE-FREE GASOLINE TO CALTRANS UP THERE? 9 MR. JESSEL: IF I COULD PUT MY CHEVRON HAT ON, AND 10 SPEAK TO THE BARRIERS WE SEE PROVIDING MTBE-FREE GASOLINE TO 11 ANYONE, AND IT REALLY HAS TO DO WITH THE NATURE OF THE 12 DISTRIBUTION SYSTEM HERE IN CALIFORNIA THAT IS A FUNCTIONABLE 13 SYSTEM THAT ALL REFINERS HAVE TO USE, AND ANY ONE REFINER WHO 14 HAS EMPTIED MTBE WITH THE NON-MTBE GASOLINE IS GOING TO MAKE 15 IT DIFFICULT FOR ANYONE PICKING UP THAT COMPANY PRODUCT 16 STICKER FROM THE PUMP. 17 SO, AT CHEVRON WE HAVE A SPECIFIC CHALLENGE, EVEN 18 THOUGH WE MADE A GREAT DEAL OF NON-MTBE ADDED TO BE CAREFUL 19 NOW HOW WE SAY THIS, THE AIR RICH REFINERY. 20 IT IS VERY DIFFICULT FOR US TO ACTUALLY PROMISE 21 ANY ONE CONSUMER AT ANY ONE STATION THAT THEY CAN 22 CONSISTENTLY GET THAT GASOLINE AT THAT STATION, BECAUSE 23 BATCHES OF GASOLINE GO OUT OF THE REFINERY, AND ONE DAY THEY 24 GO ONE WAY, AND THE NEXT DAY WE MAY BE TRADING GASOLINE WITH 25 ANOTHER SUPPLIER THAT HAS MTBE IN THEIR GASOLINE, AND THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 GASOLINE MAY WIND UP AT PARTICULAR SERVICE STATION. 2 SO, IN AS MUCH AS ALL REFINERS HAVE THAT KIND OF 3 DIFFICULTY, WE ARE ALL FACED WITH THE KIND OF SITUATION THAT 4 MR. ROBINSON POINTED OUT. 5 IT IS NOT JUST AN ISSUE OF INDEPENDENTS. IT IS AN 6 ISSUE WITH ALL OF US IN BEING ABLE TO DETERMINE AND GUARANTEE 7 THAT ANY ONE RETAIL OUTLET HAS MTBE-FREE GASOLINE. 8 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 9 NEXT PERSON TO TESTIFY IS NICK ECONOMIDES, FROM THE 10 OXYGEN FUEL ASSOCIATION. 11 MR. ECONOMIDES: GOOD MORNING, MEMBERS OF THE 12 BOARD. I AM NICK ECONOMIDES. 13 I AM THE TECHNICAL DIRECTOR OF PROGRAMS AT THE 14 OXYGENATED FUELS ASSOCIATION. OUR MEMBER COMPANIES PRODUCE 15 AND MARKET MTBE WORLDWIDE. 16 OXYGENATES, SUCH AS MTBE, HAVE HELPED IMPROVE THE 17 AIR QUALITY IN CALIFORNIA AND AROUND THE WORLD, AND WE 18 APPRECIATE THE OPPORTUNITY TO COMMENT TODAY ON THE PROPOSED 19 CHANGE TO THE LAKE TAHOE WINTER OXYGENATE PROGRAM AND ON 20 THEIR REQUIREMENT TO LABEL PUMPS DISPENSING GASOLINE WITH 21 MTBE. 22 WE UNDERSTAND THAT BOTH OF THESE ACTIONS ARE 23 INTENDED TO SATISFY SPECIFIC PROVISIONS OF THE GOVERNOR'S 24 EXECUTIVE ORDER. OUR COMMENTS TODAY WILL FOCUS PRIMARILY ON 25 THE GASOLINE PUMP LABEL REQUIREMENT AND MORE SPECIFICALLY THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 LANGUAGE AND THE THRESHOLD THAT WILL REQUIRE THE LABEL. 2 BUT FIRST A FEW COMMENTS CONCERNING THE FUEL 3 REQUIREMENTS IN THE LAKE TAHOE AREA. WE ARE HAPPY THAT LAKE 4 TAHOE IS JOINING THE GROWING LIST OF COMMUNITIES THAT HAVE 5 COME INTO ATTAINMENT FOR CARBON MONOXIDE. 6 WE ARE PLEASED THAT OXYGENATES HAVE CONTRIBUTED, AT 7 LEAST, IN PART, TO THE ACHIEVEMENT OF THIS IMPORTANT AIR 8 QUALITY MILESTONE. BASED UPON THE AMBIENT CARBON MONOXIDE 9 CONCENTRATIONS OF 3 TO 5 PARTS REPORTED FOR THE LAKE TAHOE 10 AREA, WE CONCUR WITH STAFF'S ASSESSMENT THAT THE RISK OF LAKE 11 TAHOE SLIPPING BACK INTO NON ATTAINABLE CARBON MONOXIDE IS 12 RATHER SMALL. 13 MOVING ON, REGARDING THE PROPOSED GASOLINE PUMP 14 LABELING REQUIREMENTS, WE STRONGLY DISAGREE WITH THE FINDINGS 15 STATED IN THE PROPOSED LABEL THAT, QUOTE, THE STATE HAS 16 DETERMINED THAT THE USE OF THIS CHEMICAL PRESENTS A 17 SIGNIFICANT RISK TO THE ENVIRONMENT, UNQUOTE. 18 WE UNDERSTAND THAT THE SPECIFIC LANGUAGE BEING 19 PROPOSED BY STAFF IS INTENDED TO SATISFY THE LANGUAGE 20 ADVOCATED BY SENATOR PERATA. 21 HOWEVER, WE BELIEVE THAT THIS LANGUAGE IS FACTUALLY 22 INACCURATE. IT COULD BE MISLEADING TO THE PUBLIC AND 23 CERTAINLY MISREPRESENTS THE DIRECTION, AS WE INTERPRET THEM, 24 OF THE GOVERNOR'S EXECUTIVE ORDER. 25 USE OF MTBE AS INTENDED AS PART OF THE COMPLEX PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 HYDROCARBON MIXTURE THAT WE CALL GASOLINE DOES NOT POSE A 2 THREAT TO THE ENVIRONMENT. 3 AS A MATTER OF FACT, THE USE MTBE HAS BENEFITTED 4 THE ENVIRONMENT BY CONTRIBUTING SUBSTANTIALLY TO THE LARGE 5 AIR QUALITY BENEFITS SEEN WITH REFORMULATED GASOLINE. 6 LEAKING UNDERGROUND STORAGE TANKS AND UNITED WITH 7 MONITORING AND ENFORCEMENT PRACTICES ARE THE PRIMARY REASONS 8 FOR GASOLINE CONTAMINATION OF SOIL AND WATER. 9 IT IS INACCURATE TO DESCRIBE THE THREAT TO 10 GROUNDWATER RESOURCES POSED BY LEAKING TANKS AS ONE 11 ATTRIBUTABLE, QUOTE, TO THE USE OF MTBE, UNQUOTE. 12 FURTHERMORE, IT IS INACCURATE TO POSTULATE THAT 13 MTBE, QUOTE, IS A SIGNIFICANT RISK TO THE ENVIRONMENT, 14 UNQUOTE. 15 MTBE HAS BEEN DETECTED IN VARYING CONCENTRATIONS 16 AND FREQUENTLY THROUGHOUT THE STATE, HOWEVER, THE OVER 17 WHELMING MAJORITY OF THE MTBE DETECTIONS ARE BELOW THE 18 STATE'S SECONDARY STANDARD OF 5 PARTS PER BILLION, WHICH IS 19 BASED ON TASTE AND ODOR CONSIDERATIONS. 20 MANY OF THEIR REPORTED INCIDENTS OF CONTAMINATION 21 ARE NO MORE THAN DIMINIMOUS DETECTIONS AND SUBSTANTIAL 22 PORTIONS OF REMAINING REPORTS ARE ASSOCIATED WITH MONITORING 23 WELLS, WELLS SPECIFICALLY AND INTENTIONALLY DRILLED TO 24 MONITOR THE CONDITION OF UNDERGROUND STORAGE TANKS OF THIS 25 AROUSING ENVIRONMENT. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 NEVERTHELESS, SUCH REPORTS HAVE BEEN USED TO 2 EXAGGERATE THE EXTENT OF THE GROUNDWATER CONTAMINATION 3 ATTRIBUTED TO MTBE. EXAGGERATED REPORTS OF WIDESPREAD MTBE 4 CONTAMINATION HAVE BEEN COMBINED WITH INFORMATION ON THE 5 DIFFERENCES BETWEEN THE PHYSICAL AND CHEMICAL PROPERTIES OF 6 THIS MATERIAL VERSUS OTHER HYDROCARBONS SUCH AS BENZENE AND 7 TOLUENE. 8 THIS HAS LEAD MANY TO CONCLUDE THAT MTBE IS MORE 9 PERVASIVE IN THE WATER ENVIRONMENT THAN ARE OTHER GASOLINE 10 CONSTITUENTS OR OTHER HIGH PRODUCTION VOLUME CHEMICALS. THIS 11 INFERENCE IS INACCURATE. 12 IN LOW DETECTION LEVELS, LESS THAN PPB USE FOR 13 MTBE, WIDESPREAD OCCURRENCE OF MTBE, MANY SOURCES WILL BE 14 DOCUMENTED. HOWEVER, DESPITE THE DETECTION OF MTBE AT THESE 15 LOW LEVELS IN MANY PLACES ACROSS THE STATE, MTBE IS STILL 16 MUCH LESS UBIQUITOUS AT LOW CONCENTRATIONS THAN ARE 17 PESTICIDES. 18 FURTHERMORE, ONE PART IS AT A CONCENTRATION BELOW 19 WHICH ANY HEALTH OR ESTHETIC CONCERNS EXIST. 20 CURRENTLY, ONLY A SMALL PERCENTAGE OF CALIFORNIA'S 21 WATER WELLS TESTED, APPROXIMATELY 1.3 PERCENT, REPORT MTBE 22 DETECTIONS AT ANY LEVEL. 23 THIS SMALL PERCENTAGE OF IMPACTED WELLS 24 COMMERCIALLY DEMONSTRATED TECHNOLOGY EXISTS QUICKLY AND 25 EFFECTIVELY TO REMOVE MTBE FROM THE WATER DOWN TO NO DETECT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 LEVELS. 2 IF ANYTHING, THE KEY SHOULD WHETHER THE OCCURRENCE 3 OF MTBE AT THESE LOW LEVELS OUTWEIGHS THE BENEFITS BROUGHT BY 4 IMPROVED AIR QUALITY. 5 WE SUGGEST THAT MORE CAREFUL MANAGEMENT OF FUEL IN 6 THE FUTURE WILL FURTHER LIMIT THE OCCURRENCE OF HIGHER 7 CONCENTRATION OF MTBE IN GROUNDWATER AND THE WATER 8 ENVIRONMENT. 9 THIS WILL FURTHER REDUCE THE PERCENTAGE OF DRINKING 10 WATER WELLS IMPACTED BY MTBE. THEREFORE, BASED ON OUR REVIEW 11 OF THE CURRENT EXTENT OF MTBE'S PRESENCE IN CALIFORNIA'S 12 WATER, THE LEVEL OF REPORTED DETECTIONS VERSUS THE LEVEL AT 13 WHICH HEALTH CONCERNS ARISE, THE STATUS OF CURRENT TREATMENT 14 AND REMEDIATION TECHNOLOGY AND THE PROSPECTS FOR AN IMPROVED 15 PREVENTION POSTURE IN THE FUTURE, WE STRONGLY DISAGREE WITH 16 THE FINDING THAT MTBE PRESENTS A SIGNIFICANT RISK TO THE 17 ENVIRONMENT AND WOULD DESCRIBE THE APPLICATION OF AN OPEN 18 LABEL CONTAINING SUCH LANGUAGE AS ARBITRARY AND CAPRICIOUS. 19 IN ADDITION TO THE EXTENT THAT LEAKING UNDERGROUND 20 STORAGE TANKS PRESENT A THREAT TO CALIFORNIA'S WATER 21 RESOURCES, THE PROPOSED PUMP LABEL APPEARS TO BE MISDIRECTED. 22 THE CONSUMER AT THE PUMP HAS NOT CAUSED THE THREAT THAT 23 MISMANAGEMENT OF UNDERGROUND STORAGE TANKS PRESENTS. 24 INDEED, HIS USE OF MTBE HELPS THE ENVIRONMENT. ANY 25 REGULATORY INITIATIVE SHOULD ADDRESS THE ACTUAL PROBLEM AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 THUS BE DIRECTED TO THOSE ASSOCIATED WITH INADEQUATE 2 CONSTRUCTION, MAINTENANCE, USE AND MONITORING OF USTS. 3 THE PROPOSED LABELING IS AN UNREASONABLE 4 REQUIREMENT THAT CANNOT ACCOMPLISH ANY GOAL RELATED TO THE 5 PURPORTED THREAT TO THE ENVIRONMENT, BECAUSE CONSUMERS 6 READING THE STATEMENT HAVE NO CONTROL OVER THE STORAGE TANKS. 7 FINALLY, WE BELIEVE THAT THE WARNING LANGUAGE 8 PROPOSED BY THE LABEL EXCEEDS THE INTENT AND DIRECTION OF THE 9 GOVERNOR'S ORDER. 10 LET ME RESTATE THE ORDER THAT IS PROVISION 7, . 11 "IN ORDER THAT CUSTOMERS MAKE AN INFORMED CHOICE OF 12 THE TYPE OF GASOLINE THEY PURCHASE, I AM DIRECTING THE ARB TO 13 DEVELOP REGULATIONS THAT WOULD REQUIRE PROMINENT 14 IDENTIFICATION AT THE PUMP OF GASOLINE CONTAINING MTBE. 15 OBVIOUSLY, THIS PROVISION OF THE ORDER DOES NOT 16 DIRECT THE BOARD TO ADOPT ANY SPECIFIC PUMP WARNING LANGUAGE. 17 THE LABEL MUST SIMPLY STATE, CONTAINS MTBE. THIS 18 WAS IN FACT STAFF'S ORIGINAL PROPOSAL AS YOU HEARD EARLIER. 19 FOR THE PUMP LABEL AND, BASED ON OUR REVIEW OF THE 20 ENTIRE CONTENT OF THE EXECUTIVE ORDER, WE DO NOT BELIEVE THAT 21 ANY ADDITIONAL WARNING LANGUAGE OR OTHERWISE IS WARRANTED. 22 IN FACT, WE FIND THE FOLLOWING PASSAGE EARLIER IN THE 23 EXECUTIVE ORDER. 24 "WHEREAS, THE FINDINGS OF THE U.C. REPORT, PUBLIC 25 TESTIMONY AND REGULATORY AGENCIES ARE THAT, WHILE MTBE HAS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 PROVIDED CALIFORNIA WITH CLEAN AIR BENEFITS, BECAUSE OF 2 LEAKING UNDERGROUND FUEL STORAGE TANKS, MTBE POSES AN 3 ENVIRONMENTAL THREAT TO GROUNDWATER AND DRINKING WATER. 4 THIS LANGUAGE CLEARLY IDENTIFIES THE PERCEIVED 5 THREAT AS ONE ASSOCIATED DIRECTLY WITH LEAKING UNDERGROUND 6 STORAGE TANKS AND NOT DERIVING MERELY FROM THE USE OF MTBE AS 7 SUGGESTED BY THE PROPOSED LABEL LANGUAGE. 8 FURTHERMORE, IT CLARIFIES THAT THE CONCERN IS 9 SPECIFICALLY WITH GROUNDWATER AND OR DRINKING WATER AND NOT 10 THE ENVIRONMENT OVERALL, AS STATED BROADLY IN THE PROPOSED 11 LABEL. 12 WE URGE THE BOARD TO CONSIDER AMENDING THE PROPOSED 13 PUMP LANGUAGE TO MORE SPECIFICALLY AND ACCURATELY ADDRESS THE 14 FACTS ABOUT MTBE, AND TO AVOID MISREPRESENTING THE GOVERNOR'S 15 INTENT REGARDING THE LABEL. 16 WE ENCOURAGE YOU TO ADOPT THE SIMPLE LANGUAGE AND 17 BE CONSISTENT WITH THE UNIFORM REGULATION ADOPTED BY THE 18 NATIONAL CONFERENCE OF WEIGHTS AND MEASURES HANDBOOK 130. 19 IF YOU FEEL, DR. LLOYD, YOU ASKED THIS QUESTION 20 EARLIER, THAT EXPANDING THE LABEL IS NECESSARY, WE PROPOSE 21 THE ALTERNATIVE. 22 CONTAINS MTBE. SPILLS MUST BE CLEANED PROMPTLY TO 23 PROTECT CALIFORNIA'S WATER. 24 WE BELIEVE THAT THIS A FAR MORE ACCURATE 25 REPRESENTATION OF THE FACTS REGARDING MTBE THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 SIMULTANEOUSLY SATISFIES THE GOVERNOR'S DIRECTIVE AND 2 PROVIDES USEFUL INFORMATION AND INSTRUCTIONS TO THE PUBLIC. 3 WE RECOGNIZE THAT EVEN IF THE BOARD AGREES WITH OUR 4 SUGGESTION, THE CALIFORNIA LEGISLATURE MAY PREEMPT THE ISSUE 5 AND ADOPT THE PERATA LANGUAGE. 6 REGARDLESS, LABEL LANGUAGE ADOPTED BY THE BOARD 7 SHOULD NOT MISREPRESENT THE FACTS ABOUT MTBE. 8 FINALLY, REGARDING THE PRACTICAL MATTER OF WHEN TO 9 APPLY THE LABEL, WE BELIEVE THAT IN USE CONSIDERATIONS AND 10 REQUIREMENTS OF THE FUEL DISTRIBUTION SYSTEM SHOULD GUIDE THE 11 BOARD'S DECISION. 12 WE ARE HAPPY THAT STAFF HAS REVISED THE PROPOSAL 13 AFTERWARD. HOWEVER, OUR REVIEW OF THE CONSTRAINTS OF THE 14 DISTRIBUTION SYSTEM SUPPORTS A THRESHOLD FOR REQUIRING THE 15 LABEL CLOSER OR NO LESS THEN 1 VOLUME PERCENT MTBE, WHICH IS 16 APPROXIMATELY .2 WEIGHT PERCENT OXYGEN. 17 OUR RATIONALE IS NOW BASED ON A NUMBER OF SUBPOINTS 18 WHICH I WOULD LIKE TO MAKE FOR YOU VERY QUICKLY. 19 FIRST, AND ONE THAT HAS NOT BEEN MADE SO FAR, 20 CALIFORNIA SHOULD NOT OVERLY RESTRICT ALTERNATIVE SOURCES OF 21 GASOLINE, I.E., IMPORTS, PARTICULARLY DURING CALIFORNIA 22 REFINERY OUTAGES. 23 WE HAVE RECENTLY EXPERIENCED HOW FRAGILE THE 24 GASOLINE SUPPLY SYSTEM IS, AND WE HAVE SEEN THE ABRUPT PRICE 25 DISRUPTIONS THAT CAN OCCUR WITHOUT WARNING. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 TO CLOSE THE SUPPLY GAP CREATED DURING SUCH TIMES, 2 CALIFORNIA NEEDS TO BE ABLE TO IMPORT CARGOES ON SHORT NOTICE 3 FROM PLACES SUCH AS THE U.S. GULF COAST. 4 THEREFORE, IT IS IMPORTANT THAT OUR FUEL 5 REQUIREMENTS, ALREADY THE STRICTEST IN THE WORLD, DO NOT 6 BECOME ANY MORE UNIQUE. 7 IF WE IMPLEMENT AN OVERLY RESTRICTIVE CAP FOR 8 MTBE-FREE GASOLINE, GULF COAST REFINERS MAY NOT BE ABLE TO 9 RESPOND TO CALIFORNIA WITHOUT SACRIFICING THEIR FEDERAL RFG 10 BUSINESS. 11 FURTHERMORE, THE SHEER LIMITATIONS OF GULF EXPORT 12 REFINERY TANK STORAGE AND PRODUCT SEGREGATION CAPABILITIES 13 MAY PRECLUDE AVAILABLE BARRELS OF OTHERWISE CARB COMPLIANT 14 GASOLINE FROM REACHING CALIFORNIA BECAUSE OF A FEW TENTHS OF 15 A PERCENT MTBE. 16 SECOND POINT, THE U.S. EPA ALLOWS UP TO 2 VOLUME 17 PERCENT MTBE IN CLEAR GASOLINE AND IN COMMINGLING WITH 18 ETHANOL BLENDED GASOLINE. SEVERAL OF THE EXISTING PIPELINES, 19 NOT IN CALIFORNIA, APPLY WAIVER POLICIES THAT ARE PREDICATED 20 UPON THIS EPA DIMINIMOUS STANDARD. 21 EPA'S 2 VOLUME PERCENT GUIDANCE IS PRIMARILY BASED 22 ON SOME OF THEIR REVIEW OF PRACTICAL DISTRIBUTION SYSTEM 23 CONSIDERATIONS, SUCH AS TANK BOTTOMS AND LINE FLUSHES. WHAT 24 DO I MEAN BY THAT? 25 REFINER SHIPPING TANKS ARE NOT COMPLETELY EMPTIED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 FOLLOWING A SHIPMENT INTO THE PIPELINE SYSTEM. AS MUCH AS 10 2 OR 15 PERCENT OF THE TANK VOLUME REMAINS IN WHAT WE CALL A 3 HEEL, AND FOR MANY REFINERS, THE LEVEL OF THAT HEEL IN TANK 4 BOTTOMS IS A SAFETY OR AN ENVIRONMENTAL ISSUE. 5 THEY DO NOT WANT TO LET THE FLOATING ROOFS THAT 6 REDUCE AIR POLLUTION THAT ARE ON THESE TANKS TO REST ON THEIR 7 LEGS TO GO ALL THE WAY DOWN. TOO RAPID A DRAW DOWN COULD 8 PUNCH HOLES IN THE BOTTOMS OF THE TANKS OR CAUSE A LEG TO 9 COLLAPSE. 10 GIVEN A TYPICAL HEEL OF ABOUT 10 PERCENT MEANS THE 11 NON OXYGENATED GASOLINE BLENDED OVER TYPICAL REFORMULATED 12 GASOLINE TANK BOTTOMS WILL CONTAIN ONE PERCENT. 13 IF YOU DIVIDE 11 PERCENT TO 15 PERCENT BY 10, YOU 14 WILL GET 1.1 TO 1.5. 15 DEPENDING UPON THE REFINER, ALSO THE DISTANCE 16 BETWEEN THE BLENDING TANK AND THE DOCK OR THE PIPELINE 17 SHIPPING POINT MAY BE CONSIDERABLE. IF THE CONNECTING 18 PIPELINE IS FULL OF OXYGENATED GASOLINE, THE NON OXYGENATED 19 GASOLINE ENTERING COMMERCE WILL CONTAIN OXYGENATES. 20 THESE ARE ALL THE REAL WORLD IMPACTS THAT YOU REFER 21 TO, BUT NOBODY HAS BROKEN THESE OUT OR YOU HAVE NOT REALLY 22 CONSIDERED THE CUMULATIVE IMPACT, AND I THINK WHEN YOU DO 23 THOSE, AND THAT IS WHY YOU HEAR SOME RESERVATIONS AND 24 POINTERS BEING PRESENTED, THAT WILL APPLY TO .6, I WOULD 25 SUGGEST THAT WE TRY CLOSER TO .1 TO 1 PERCENT, AND WE WOULD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 HAVE A MUCH BETTER CHANCE OF AVOIDING DISTRIBUTION PROBLEMS. 2 I HAVE NOT GONE INTO THE RETAIL SYSTEM YET, BUT TO 3 TURN OVER TANKS IN A REASONABLE AMOUNT OF TIME, WE ALSO HAVE 4 CONCERNS THERE. 5 YOU WOULD LIKE TO BE ABLE TO TURN OVER YOUR TANKS 6 QUICKLY. YOU DO NOT WANT TO GET TO TWO TO THREE REFILLS 7 BEFORE YOU GET DOWN TO THE BOTTOM LEVEL THAT IS REQUIRED. 8 IF WE ARE FORCED TO GET DOWN TO .6 VOLUME PERCENT, 9 WE WILL HAVE TO DO A VERY CLOSE REEXAMINATION OF THE CURRENT 10 APPROACH THAT WE USE TO TURN OVER RETAIL SYSTEMS. 11 THEN WE WILL HAVE TO, IN OTHER WORDS, TAKE A 12 PROACTIVE APPROACH AND GO IN AND START PUMPING OUT TANKS, AND 13 THAT IS A VERY EXPENSIVE UNDERTAKING, IN WHICH THERE IS NO 14 DEMONSTRATED INCREMENTAL BENEFIT OF IT, AT LEAST ONE THAT WE 15 CAN IDENTIFY. 16 IN FACT, IF KEEPING TRACK OF RETAIL STATION LABEL 17 COMPLIANCE BECOMES TOO BURDENSOME, AND YOU HEARD SOME OF THE 18 CONCERNS EARLIER AS MAY BE THE CASE FOR A STATION THAT MAY 19 RECEIVE GASOLINE WITH OXYGENATED, WITH MTBE ONE WEEK, AND NON 20 OXYGENATED GASOLINE THE NEXT, STATION OPERATORS MAY SIMPLY 21 OPT TO LEAVE THE PUMP LABELS ON FULL TIME, AND THAT IS 22 DEFEATING THE INTENT OF THE REGULATION. 23 I HAD SOME COMMENTS, ALSO, PRIMARILY GEARED AT THE 24 ANALYTICAL ISSUES OF ENFORCEMENT, PARTICULARLY WITH PORTABLE, 25 OVERSIZED ANALYZERS THAT WE USE IN THE INDUSTRY. THESE WERE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 MUCH MORE IN PLAY WHEN THE STAFF WAS PROPOSING .3, BUT I 2 THINK THAT EVEN THERE YOU NEED TO BE LOOKING AT AN INSTRUMENT 3 THAT SHOULD NOT REALLY BE RELIED FOR MUCH LESS THEN .5 TO .6, 4 AND WHEN YOU ADD SOME TEST REPRODUCIBILITY, THAT INSTRUMENT 5 WILL READ FOR YOU FOR OVERSIGHT AT TERMINALS, AND SO ON, YOU 6 ARE AGAIN GETTING PUSHED BEYOND WHAT THE STAFF IS 7 RECOMMENDING. 8 IN SUMMARY, TO PREVENT UNREASONABLE HURDLES FOR 9 IMPORTS INTO CALIFORNIA, TO ACCOMMODATE THE COMMON INDUSTRY 10 PRACTICES FOR TANK BOTTOMS, LINE FLUSHES AND RETAIL SYSTEM 11 CONVERSION, AND TO COMPREHEND REASONABLE ANALYTICAL 12 ENFORCEMENT PRACTICES, RECOGNIZE ESTABLISHED INDUSTRY WAIVER 13 PRECEDENTS BASED ON EPA DIMINIMOUS GUIDANCE, WE RECOMMEND A 14 VOLUME THRESHOLD FOR THE LABELING NO LESS THAN ONE PERCENT. 15 I HAVE ATTACHED IN MY WRITTEN COPY ADDITIONAL 16 COMMENTS ADDRESSING LEGAL ISSUES RELATED TO THE NEW STAFF 17 PROPOSAL FOR THE LABELING STATEMENT THAT WOULD BE REQUIRED 18 FOR GASOLINE CONTAINING MTBE, AND THOSE ARE IN ATTACHMENT A. 19 WE WOULD LIKE THOSE ENTERED INTO THE RECORD, AND WE 20 WOULD LIKE TO BE ABLE TO SUBMIT ADDITIONAL COMMENTS AND MORE 21 DETAILED COMMENTS ON THOSE ISSUES. 22 I REALLY THANK YOU FOR THE OPPORTUNITY TO PRESENT 23 OUR VIEWS ON THIS MATTER, AND I WILL BE HAPPY TO ANSWER ANY 24 QUESTIONS THAT YOU MAY HAVE. 25 CHAIRMAN LLOYD: THANK YOU VERY MUCH. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 DOES THE BOARD HAVE ANY QUESTIONS? 2 YES, MR. CALHOUN. 3 BOARD MEMBER CALHOUN: MR. ECONOMIDES, I WOULD LIKE 4 TO SUMMARIZE WHAT I RECEIVED FROM YOUR TESTIMONY, AND THE 5 IMPRESSION THAT I HAVE GOTTEN IS THE OXYGENATED FUELS AGREES 6 WITH WHAT THE STAFF RECOMMENDED; IS THAT AN ACCURATE 7 ASSESSMENT? 8 MR. ECONOMIDES: WE UNDERSTAND THE DIRECTION, AND 9 WE ARE NOT HERE TO DEBATE THE DIRECTION OF THE GOVERNOR'S 10 EXECUTIVE ORDER. 11 WE BELIEVE THAT THE STATEMENT ON THE LABEL, THAT 12 REVISIONS TO THE ORIGINAL PROPOSAL OF STAFF, WHICH CONTAINS 13 MTBE, THE STATEMENT THAT ITS USE PRESENTS A SIGNIFICANT 14 THREAT TO THE ENVIRONMENT IS, AS I SAID, MISREPRESENTING THE 15 FACTS, AND WE DISAGREE WITH THE COMMENT MADE EARLIER THAT IT 16 IS CONSISTENT WITH THE GOVERNOR'S INTENT IN HIS EXECUTIVE 17 ORDER. 18 WE THINK THAT IT CAN BE RECTIFIED. I MEAN THIS IS 19 THE OPPORTUNITY, AND THAT IS WHAT THE COMPLIMENTARY COMMENTS 20 ACCOMPLISHES. 21 BOARD MEMBER CALHOUN: LET ME ASK THIS ONE OTHER 22 QUESTION RELATED TO THE FUEL TANK, I THINK YOU MENTIONED THE 23 FACT THAT THE PROBLEM WITH MTBE IS CAUSED BY LEAKING FUEL 24 TANKS. 25 DO YOU THINK THAT SOME BENEFIT WOULD COME FROM NOT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 PUTTING FUEL THAT CONTAINS MTBE IN THE TANK, THAT IS SOME 2 ACTION THAT YOU TAKE UPSTREAM? 3 MR. ECONOMIDES: WELL, WE HAVE GONE AROUND THIS 4 PARTICULAR ITEM, AND IN THE DEBATE FOR MTBE, MANY, MANY 5 TIMES, AND FOR THEM, AS WE SAID IN THE PAST, THE ISSUE OF 6 LEAKING GASOLINE INTO GROUNDWATER IS A VERY BIG ISSUE THAT WE 7 NEED TO ADDRESS. 8 WE THINK THAT IF WE TAKE THE PROPER PROACTIVE 9 STANCE AND BEEF UP OUR ENFORCEMENT IN THOSE AREAS, OR IF WE 10 HAD DONE THAT A LONG TIME AGO, WE WOULD NOT BE HERE TODAY. 11 WE UNDERSTAND THE SPECIFIC UNIQUE PHYSICAL AND 12 CHEMICAL PROPERTIES OF MTBE AND WHAT THEY MEAN. BUT I THINK 13 WE HAVE NOT PROPERLY ASSESSED THE FUTURE RISK FROM MTBE 14 CONTAINING GASOLINE NOT FROM WHAT HAS TRANSPIRED IN THE PAST 15 BUT FROM WHAT WE COULD EXPECT GOING FORWARD INTO THE FUTURE 16 IF WE HAD PROPERLY UPGRADED USTS AND PROPER MONITORING AND 17 ENFORCEMENT PROGRAM. 18 I THINK WE WOULD HAVE A LOT LOWER THAN THIS, QUOTE, 19 UNQUOTE, SIGNIFICANT RISK THAN WE ARE FACING NOW IN THE 20 OPINION OF MANY. 21 BOARD MEMBER CALHOUN: STAFF, ANY ADDITIONAL 22 COMMENTS? 23 MR. KENNY: I THINK THE ONE COMMENT THAT NEEDS TO 24 MADE IS THAT THE SIGNIFICANT RISK TO THE ENVIRONMENT LANGUAGE 25 IS TAKEN FROM THE GOVERNOR'S EXECUTIVE ORDER, AND THAT IS WHY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 THERE IS EXPLANATORY, AND IT IS A STATEMENT OF THE GOVERNOR. 2 CHAIRMAN LLOYD: NICK, I AM SYMPATHETIC FROM WHERE 3 YOU ARE COMING FROM. 4 THESE DEBATE ISSUES, AS YOU KNOW, WHEN DELIBERATED 5 AS PART OF THE HEARING, MANY OF THE ISSUES THAT I RAISED WERE 6 RAISED AT THAT TIME, AND THEY ARE VALID ISSUES, BUT THE 7 WEIGHT OF EVIDENCE WITH SECRETARY HICKOX AND THOSE TO THE 8 GOVERNOR, AGAIN YOU MAKE VALID POINTS, BUT WHEN YOU PUT THE 9 WHOLE THING TODAY AND FOLLOWING THROUGH ON THE ORDERS, WE 10 TRIED TO BE AS RESPONSIVE AS WE CAN. 11 IT IS JUST A TOUGH ISSUE. AGAIN, AS MR. KENNY 12 SAID, I THINK THE ISSUE OF LABELING, I UNDERSTAND WHERE YOU 13 ARE COMING, BUT I HAVE A CONCERN IF IT IS TOO PLAIN, IT IS 14 EQUALLY MISLEADING. 15 MR. ECONOMIDES: I OFFERED THE ALTERNATIVE, AND I 16 AGREED THAT IS AN EXACT QUOTE, BUT I QUOTED YOU OTHER 17 PASSAGES MORE SPECIFIC AND MORE APPROPRIATE IN DISCUSSING THE 18 USE. 19 THE THREAT IS MORE DEFINED CLOSELY TO GROUNDWATER 20 THAN THE ENVIRONMENT AS A WHOLE. YOU HAVE THE LATITUDE TO 21 MAKE SURE THAT THE LABEL IS FACTUAL, CORRECT. 22 WE CAN DO THAT WHILE STILL SATISFYING THE 23 DIRECTIVE, AND THAT IS WHAT I WAS TRYING TO COMMUNICATE 24 TODAY. 25 MY OFFER OF ALTERNATIVE LANGUAGE, ONE THAT YOU PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 COULD MODIFY OR CONSIDER, CONTAINS, MTBE SPILLS CLEANED TO 2 PROTECT CALIFORNIA WATER, I THINK THAT IS CLOSER TO BEING A 3 VALUABLE LABEL TO OUT OF STATE, TO CUSTOMER TO CONSUMER AND 4 IDENTIFIES THE MATERIALS AS THE GOVERNOR'S DIRECTIVE AND 5 GIVES SOME REALISTIC PRACTICAL INFORMATION TO THE USER AS TO 6 WHAT IS INVOLVED. 7 CHAIRMAN LLOYD: WAS THIS COMMUNICATED TO STAFF? 8 MR. ECONOMIDES: TO GO BEYOND THE LANGUAGE THAT 9 THEY HAVE PROPOSED AT THIS POINT, SO MY ONLY RECOURSE WAS TO 10 BRING IT UP HERE TODAY. 11 CHAIRMAN LLOYD: WELL, THANK YOU AGAIN. 12 I THINK WE AGREE WITH YOUR COMMENTS, AND I THINK WE 13 WILL ALSO AGREE WITH THE COMMENTS THAT LEAKING TANKS HAVE TO 14 BE FIXED THERE, AND THAT IS IN PROGRESS, THAT AGAIN IS IN THE 15 GOVERNOR'S ORDER. 16 THE LAST PERSON I KNOW TO TESTIFY IS JAY MCKEEMAN, 17 FROM THE CALIFORNIA INDEPENDENT OIL MARKETERS. 18 MR. MCKEEMAN: GOOD MORNING. MY NAME IS JAY 19 MCKEEMAN. 20 I AM EXECUTIVE PRESIDENT FOR THE CALIFORNIA 21 INDEPENDENT OIL MARKETERS ASSOCIATION. OUR ORGANIZATION 22 REPRESENTS APPROXIMATELY 400 BUSINESSES DIRECTLY OR 23 INDIRECTLY INVOLVED WITH THE TRANSPORTATION OF MARKETING OF 24 PETROLEUM PRODUCTS IN CALIFORNIA, APPROXIMATELY 250 OF OUR 25 MEMBERS WILL BE DIRECTLY EFFECTED BY TODAY'S REGULATIONS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 WE HAVE PROVIDED WRITTEN COMMENTS UNDER SEPARATE 2 COVER, AND I AM JUST SUMMARIZING OUR CONCERNS TODAY IN MY 3 VERBAL TESTIMONY. THIS SET OF REGULATIONS REPRESENTS A WELL 4 INTENTIONED IDEA WHICH UNDER SCRUTINY SHOULD BE DISCARDED OR 5 COMPLETELY REVISED. 6 WE UNDERSTAND THE PUBLIC CONCERN OVER MTBE AND 7 SUPPORT THE GOVERNOR'S EXECUTIVE ORDER EXCEPT THE LABELING 8 PROVISION. 9 WHEN THE LABELING REQUIREMENT IS CLOSELY ANALYZED, 10 IT DOES NOT REPRESENT GOOD PUBLIC POLICY, AND HERE ARE THE 11 REASONS. 12 NUMBER ONE, IT DOES NOT PROVIDE CONSUMER PROTECTION 13 OR CONSUMER CHOICE. AS WE UNDERSTAND THE PURPOSE OF THE 14 REGULATIONS, THEY ARE DESIGNED TO PROVIDE CONSUMERS WITH THE 15 ABILITY TO SELECTIVELY PURCHASE MTBE-FREE FUELS. 16 THE REGULATIONS DO NOT ACCOMPLISH THIS. 17 THEY WILL REQUIRE THE LABELING OF 90 PERCENT OR 18 MORE OF CALIFORNIA FUEL PUMPS WITH THE LABEL THAT WILL NOT 19 REFLECT ACTUAL KNOWLEDGE OF WHAT IS BEING DISPENSED. 20 THE NATURE OF THE FUEL DELIVERY SYSTEM IN THIS 21 STATE PROHIBITS ANYONE BUT THE MANUFACTURER OF THE ORIGINAL 22 BATCH TO ACTUALLY KNOW THE OXYGENATED TYPE AND CONTENT OF A 23 PARTICULAR PRODUCT OF THE PARTICULAR BATCH. 24 BATCHES GET MIXED NUMEROUS TIMES BEFORE FINAL 25 DELIVERY, AND THERE IS NO PRACTICAL ABILITY TO MEASURE FOR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 MTBE CONTENT AS IT PASSES THROUGH ITS DELIVERY PHASES. 2 JUST A COUPLE OF WEEKS AGO WE TALKED TO 3 KINDER-MORGAN, WHO RUNS THE PIPELINE THAT HAS BEEN DISCUSSED 4 THIS MORNING, AND IT IS IMPORTANT TO UNDERSTAND WHAT THEY 5 HAVE SAID TO US. 6 THEY HAVE TOLD US THAT THE BILL OF LADING THAT THEY 7 WILL PROVIDE WILL NOT INDICATE WHICH TYPE OF OXYGENATE IS IN 8 THE FUEL. IT WILL INDICATE WHETHER IT IS MORE THAN .6 9 PERCENT OR LESS THAN .6 PERCENT OXYGENATE, BUT NO INDICATION 10 OF THE SPECIFIC OXYGENATE THAT IS INVOLVED. 11 SO, WHAT THAT LEADS US TO IS A LABELING REQUIREMENT 12 IT WILL BE BASED ON IGNORANCE OF WHAT IS IN A PARTICULAR TANK 13 NOT ACTUAL KNOWLEDGE. 14 CONSUMERS WILL BE RESPONDING TO A NOTICE WHICH IS 15 HIGHLY LIKELY TO BE INACCURATE, AND THIS DOES NOT INFORM 16 PUBLIC POLICY. IT IS NOT PROVIDING THE TYPE OF INFORMATION 17 CONSUMERS NEED TO MAKE INFORMED CHOICES. 18 SECONDLY, IT PROVIDES A COMPETITIVE ADVANTAGE FOR 19 MAJOR OIL COMPANIES. TOM ROBBINS IS ONE OF OUR MEMBERS. HE, 20 I THINK, VERY CLEARLY AND ARTICULATELY STATED WHAT THE 21 PROBLEM IS. 22 THE MAJOR OIL COMPANIES ARE THE ONLY ONES THAT HAVE 23 THE MEANS AND THE ABILITY TO PROVIDE MTBE-FREE GASOLINE ON A 24 CONSISTENT BASIS. WSPA SUPPORTS THIS MEASURE. 25 ANOTHER ISSUE I THINK THAT KIND OF CAME UP DURING PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 THE TAHOE DISCUSSION, WHICH I WAS NOT REALLY GOING TO ADDRESS 2 TODAY, IS THE, WHAT WE FEEL IS THE BALKINIZATION OF FUEL 3 DELIVERY IN THE STATE. AS INDIVIDUAL COMMUNITIES START 4 OPTING OUT OF WANTING MTBE GASOLINE IN THEIR COMMUNITIES, IT 5 SETS UP A PROCESS WHERE THE MAJOR OIL COMPANIES HAVE THE 6 ABILITY TO MAKE DELIVERIES TO THOSE COMMUNITIES, INTRUDING 7 INTO OUR MEMBERS TRADITIONAL MARKETS. 8 TODAY YOU HEARD THAT THE LAST PEOPLE WHO ARE ABLE 9 TO MAKE DELIVERIES UP TO LAKE TAHOE ARE UNBRANDED INDEPENDENT 10 OIL MARKETERS. THEY ARE THE LAST ONES TO HAVE ACCESS. THEY 11 ARE THE ONES WHO ARE GOING TO HAVE THE MOST DIFFICULTY TO GET 12 ACCESS TO MTBE-FREE FUEL. 13 SO, THESE REQUIREMENTS, THE BALKINIZATION, THE 14 LABELING, IT ALL ADDS UP TO A POINT WHERE INDEPENDENT OIL 15 MARKETERS ARE NOT PLAYING ON A LEVEL PLAYING FIELD. IT 16 PUNISHES INDEPENDENT OIL MARKETERS AND RETAILERS WHO HAVE NO 17 SAY OR ABILITY TO CONTROL FUEL ADDITIVES. 18 THE LABELING REQUIREMENT WILL PUNISH PEOPLE IN 19 BUSINESSES WITH THE LEAST CONTROL REGARDING FUEL CONTENT 20 THROUGH APPLYING A SCARLET LETTER TO THEIR PUMPS. IT PUTS 21 THEM AT A COMPETITIVE DISADVANTAGE TO SELL BAD GASOLINE AND 22 FORCES THEM TO PROVIDE MISINFORMATION TO THE PUBLIC AND 23 SUBJECTS THEM TO LAWSUITS. 24 OUR MEMBERS ARE STRUGGLING TO STAY ECONOMICALLY 25 VIABLE. THESE REGULATIONS ADD ONE MORE OBSTACLE IN OUR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 ABILITY TO STAY COMPETITIVE IN AN INCREASINGLY CENTRALIZED 2 PETROLEUM RETAILING ENVIRONMENT. 3 IN SEVERAL COMMUNICATIONS WITH ARB'S STAFF, CAL EPA 4 AND THE GOVERNOR'S OFFICE, WE HAVE RECOMMENDED THAT THIS 5 REGULATION BE SCRAPED AND RETOLD. 6 WE SUGGEST THE ONLY EFFECTIVE WAY TO ENACT LABELING 7 REQUIREMENTS IS TO ESTABLISH REGULATIONS FOR THE SALE OF 8 MTBE-FREE FUELS, THE SALE OF MTBE-FREE FUELS WOULD BE SUBJECT 9 TO MANY REGULATIONS, INCLUDING TRUTH IN ADVERTISING 10 REQUIREMENTS, WEIGHTS AND MEASURES, FUEL AND CONTENT 11 REQUIREMENTS AND ARB FUEL SPECIFICATIONS. 12 IN TODAY'S COMPLEX FUEL DISTRIBUTION AND MARKETING 13 SYSTEM, WE BELIEVE IT IS THE ONLY WAY TO PROVIDE INFORMED 14 CHOICE AND A LEVEL PLAYING FIELD FOR PETROLEUM MARKETERS. 15 WE ASK THE REGULATIONS BE WITHDRAWN AND REDRAFTED 16 TO ACCOMPLISH THEIR INTENDED GOAL. 17 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 18 ANY QUESTIONS FROM THE BOARD MEMBERS? 19 YES, MR. CALHOUN. 20 BOARD MEMBER CALHOUN: I GUESS I WOULD LIKE TO GO 21 BACK TO THE STATEMENT THAT YOU MADE ABOUT THE INABILITY OF 22 GETTING A GASOLINE WITH A SPECIFIC LABEL SIX-TENTHS TO 23 WHATEVER THE APPROPRIATE NUMBER IS. 24 IT IS MY -- I GATHER FROM WHAT YOU SAID THAT THERE 25 WOULD BE NO LABELING REQUIREMENT THAT WOULD BE CONSISTENT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 WITH THIS REGULATION, BUT LET ME JUST GIVE YOU OXYGENATE 2 INSTEAD OF MTBE. 3 MR. MCKEEMAN: THAT IS WHAT KINDER-MORGAN HAS 4 INDICATED TO US. 5 BOARD MEMBER CALHOUN: LET ME JUST GET STAFF'S 6 COMMENTS ON THAT. 7 MR. SIMEROTH: MR. CALHOUN, WE HAVE A LETTER THAT 8 WE WILL INTRODUCE FROM KINDER-MORGAN. 9 RIGHT NOW THE ONLY OXYGENATE THAT IS BEING USED IN 10 MTBE AREAS AND BASICALLY IN CALIFORNIA IS GOING THROUGH THE 11 KINDER-MORGAN SYSTEM, IS MTBE. THERE ARE SOME TRACE AMOUNTS 12 OF MTBE AND OTHER, BUT THERE, EXCEPT IN ONE INSTANCE, FOR ONE 13 COMPANY, NOT DELIBERATELY ADDED OR CONTAMINATES IN THE 14 PRODUCTION OF THE MTBE, SO KINDER-MORGAN IS SAYING CONTAINS 15 OXYGENATE, THAT MEETS OUR REQUIREMENT FOR CONTAINING 16 OXYGENATE, THAT OXYGENATE WOULD BE MTBE. 17 MR. MCKEENAN: THAT IS CONTRADICTORY TO WHAT 18 KINDER-MORGAN HAS INDICATED TO US. 19 THEY SAID THAT BATCHES CAN CONTAIN MANY DIFFERENT 20 TYPES OF OXYGENATES. 21 MR. SIMEROTH: THAT IS TRUE, BUT THE PRIMARY 22 OXYGENATE IS MTBE. 23 THE OTHERS IN THERE ARE TRACE AMOUNTS. THEY ARE 24 NOT BEING USED TO SUPPLY THE BASIC OXYGENATE REQUIREMENT. 25 MR. JENNINGS: AND ONE OF THE REASONS FOR THIS IS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 THAT ETHANOL IS NOT PUT IN GASOLINE WHEN THE GASOLINE GOES 2 THROUGH THE PIPELINE. IT IS ONLY PUT IN AT THE TERMINAL 3 AFTER IT HAS GONE THROUGH THE PIPELINE BECAUSE OF PROBLEMS 4 WITH WATER CONTAMINATION. 5 MR. MCKEEMAN: THE FACT IS WHAT KINDER-MORGAN IS 6 GOING TO GIVE US IS A BILL OF LADING THAT SAYS PLUS OR MINUS 7 OXYGENATES, NOT MTBE. 8 WE HAVE NO ACTUAL KNOWLEDGE OF WHAT IS IN ANY 9 PARTICULAR LOAD OF GASOLINE, AND YET WE ARE BEING REQUIRED TO 10 LABEL SOMETHING AS IF WE HAD ACTUAL KNOWLEDGE OF THAT. 11 IT IS NOT CORRECT. 12 CHAIRMAN LLOYD: AS WE MOVE AHEAD, I THINK WHAT 13 STAFF IS SAYING, ONLY MTBE, IS THERE ANY WAY IN WHICH AS WE 14 MOVE FURTHER AHEAD, AND THERE WILL BE DIFFERENT OXYGENATES 15 THAT WE COULD REVISIT THIS ISSUE, OR IS THERE ANY SO THAT WE 16 CAN PROVIDE SOME REASSURANCE TO THE ASSOCIATION? 17 MR. KENNY: THE QUESTION I WAS ASKING STAFF REAL 18 QUICKLY WAS ESSENTIALLY WHAT WAS THE LIKELIHOOD OF MTBE AND 19 TAINTED USAGE IN THE FUTURE, AND THE RESPONSE I GOT WAS, 20 ESSENTIALLY THAT THE LIKELIHOOD IS VERY LITTLE, IF 21 NON-EXISTENT, TO THE EXTENT THAT THE BOARD WOULD LIKE US TO 22 CONTINUE TO MONITOR THAT AND DETERMINE WHETHER OR NOT THERE 23 IS MTBE OR TAINT USAGE IN THE FUTURE, WE CAN DO SO, AND IN 24 FACT, WE SEE THOSE TYPES OF COMPOUNDS GOING UP IN USAGE, THEN 25 WE CAN REPORT BACK TO THE BOARD, BECAUSE IT WOULD BE AN ISSUE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 THAT WE WOULD NEED TO ADDRESS. 2 MR. MCKEEMAN: LET ME ADD ONE OTHER CONFOUNDING 3 FACTOR IN THIS. 4 ARB HAS GONE TO SOME WORK IN TERMS OF PROVIDING 5 TABLES AND SOFTWARE TO HELP YOU FIGURE OUT YOU KNOW FROM 6 BATCH TO BATCH OR AS BATCH CYCLES THROUGH YOUR TANKS WHAT IS 7 GOING ON. 8 THE FUNDAMENTAL PROBLEM WITH THAT IS THAT IT 9 ASSUMES THAT YOU KNOW WHAT THAT INITIAL BATCH WHAT THE 10 OXYGENATE CONTENT IN THAT INITIAL BATCH IS AND NOBODY KNOWS. 11 I MEAN, SO THE SOFTWARE THAT THEY PROVIDE DOES NOT 12 PROVIDE YOU ANY ABILITY TO REALLY CYCLE THROUGH, BECAUSE YOU 13 HAVE TO START FROM SOME PLACE. 14 SO, I GUESS YOU MAKE AN ASSUMPTION, AND THEN YOU 15 CYCLE THROUGH, AND YOU ARE MAKING FURTHER ASSUMPTIONS ABOUT 16 WHAT IS IN THE FUEL, PLUS OR MINUS, BUT YOU DO NOT ACTUALLY 17 KNOW. 18 SO, I MEAN ALL THAT WORK IS NICE. IT DOES NOT 19 PROVIDE ANYBODY WITH THE ABILITY TO ACTUALLY KNOW WHAT IS IN 20 THE TANK. IT IS PLUS OR MINUS. 21 CHAIRMAN LLOYD: ANY RESPONSE? 22 MR. SIMEROTH: THE REGULATION IS SET UP SO THAT IF 23 YOU DO NOT KNOW THE EXACT CONCENTRATION, YOU ENTER IN THE 24 DEFAULT VALUE. 25 AS LONG AS YOU ARE GETTING MTBE-FREE GASOLINE, YOU PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 ALSO GET A DEFAULT VALUE THAT WOULD ALLOW YOU TO KNOW WHEN 2 YOU CAN TAKE THE LABEL OFF OR CONVERSELY HAVE TO PUT A LABEL 3 ON. 4 I WOULD ALSO LIKE TO CORRECT MY EARLIER STATEMENT 5 OF THE LETTER FROM KINDER-MORGAN THAT WE HAVE RECEIVED, YOU 6 HAVE IN YOUR PACKETS, AT THE END OF THE LETTER, THEY SAY THEY 7 ARE GOING TO MODIFY THEIR LABEL TO CLEARLY SAY CONTAINS LESS 8 THAN .6 VOLUME PERCENT MTBE OR MORE THAN .6 VOLUME PERCENT 9 MTBE. 10 MR. MCKEEMAN: THEY INDICATED MTBE IN THEIR LETTER? 11 MR. SIMEROTH: IN THEIR LETTER. 12 MR. MCKEEMAN: WHAT IS THE DATE OF THE LETTER? 13 CHAIRMAN LLOYD: WE UNDERSTAND, AND I THINK QUITE 14 CLEARLY YOU RAISED A VALID POINT. 15 SO, THEY WOULD COME BACK AND CLARIFY THAT. 16 ANY MORE QUESTIONS? 17 ONE OF THE THINGS I MIGHT SUGGEST THAT CLEARLY I 18 THINK STAFF HAS DONE AN EXCELLENT JOB HERE, BUT ON THE 19 SIGNIFICANT TIME CONSTRAINTS, AND THAT MAYBE THEY WILL 20 CONTINUE TO WORK WITH YOU AND MONITORING, LIKE MR. KENNY 21 SAID, THE ISSUES, AND THAT THERE IS CLEARLY, IF ANY ISSUES 22 THAT COME UP, REPORT BACK TO THE BOARD. 23 MR. MCKEEMAN: WE WILL NOT GO AWAY, HOPEFULLY. 24 CHAIRMAN LLOYD: WE DO NOT WANT YOU TO GO AWAY. 25 MR. MCKEEMAN: WELL, I KEEP, AFTER REGULATIONS LIKE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 THIS, IT'S IMPORTANT FOR, I THINK, PEOPLE TO STAND BACK AND 2 LOOK AT THE CUMULATIVE EFFECT OF REGULATIONS IN THE STATE. 3 IT IS NOT JUST ARB REGULATIONS. IT IS WATER BOARD 4 REGULATIONS. IT IS LABOR REQUIREMENTS. IT IS INSURANCE 5 REQUIREMENTS, AND THERE ARE A NUMBER OF THINGS THAT ARE GOING 6 ON CONTINUALLY IN THE STATE THAT MAKE IT INCREASINGLY 7 DIFFICULT FOR SMALL INDEPENDENT BUSINESS PEOPLE TO STAY 8 COMPETITIVE. 9 I WOULD JUST ASK YOU AND THE GOVERNOR'S OFFICE AND 10 CAL EPA AND THE OTHER AGENCIES TO, WHEN YOU TAKE A LOOK AT 11 THESE REGULATIONS, IT IS VERY EASY TO GET MYOPIC ABOUT A 12 PARTICULAR ISSUE, BUT THERE ARE CUMULATIVE EFFECTS THAT MAKE 13 IT DIFFICULT FOR US TO STAY COMPETITIVE, ESPECIALLY IN A VERY 14 DYNAMIC AND COMPRESSING MARKETPLACE. 15 THANK YOU. 16 CHAIRMAN LLOYD: I WOULD SAY THAT THIS, AS I SAID 17 BEFORE, THE MTBE ISSUE HAS BEEN A VERY TOUGH ONE, AND WE ARE 18 WORKING THROUGH THAT. 19 ON THE BROADER SENSE, YOU WILL NOTICE THAT THE 20 GOVERNOR HAS MADE A POINT WHEN, I THINK MATTHEW TODAY AND 21 PROFESSOR FRIEDMAN, WHO IS NOT HERE, LOOKING AFTER SMALL 22 BUSINESS, I THINK HE IS VERY CONSCIOUS, AND I KNOW SECRETARY 23 HICKOX AS WELL, SO I SAY WE REALLY DO NOT WANT YOU TO GO 24 AWAY, WE WANT TO KEEP SMALL BUSINESS AND ASSOCIATIONS VERY 25 ACTIVE, AND WE WOULD LIKE TO WORK ON THIS, AND THIS HAPPENS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 TO BE A VERY TOUGH ISSUE. 2 THANK YOU. 3 ANY OTHER PUBLIC TESTIMONY? 4 ANY DISCUSSION FROM THE BOARD OR ANY FURTHER 5 COMMENTS FROM STAFF? 6 BOARD MEMBER PATRICK: MR. CHAIRMAN, I WOULD JUST 7 LIKE TO MAKE A BRIEF REMARK, AND THAT IS, I AM REALLY FULLY 8 SUPPORTIVE OF WHAT WE ARE DOING HERE, BUT YET SOME OF THE 9 CONCERNS THAT HAVE BEEN BROUGHT UP TODAY CERTAINLY RESONATE 10 WITH ME, RESONATE WITH THE OTHER BOARD MEMBERS. 11 SO, I AM WONDERING IF THERE IS SOMEWAY THAT WE CAN 12 MEMORIALIZE THE STAFF COMING BACK TO US OR SOMETHING LIKE 13 THAT, SO THAT WE CAN TRY TO KEEP A HANDLE, IF YOU WILL, OF 14 WHAT IS GOING ON IN THE MARKETPLACE AND SO FORTH, SO THAT 15 WE -- I KNOW STAFF WILL CONTINUE WORKING WITH PEOPLE, BUT 16 WOULD IT BE APPROPRIATE TO COME BACK WITH A REGULAR REPORT, 17 CERTAINLY NOT ON A MONTHLY BASIS, BUT I MEAN EVERY SIX MONTHS 18 OR EVERY NINE MONTHS, SOMETHING LIKE THAT, SO THAT WE GET AN 19 IDEA OF WHAT IS HAPPENING IN THE MARKETPLACE? 20 MR. KENNY: I THINK WE ARE ACTUALLY SET UP VERY 21 WELL TO DO THAT, BECAUSE WE WILL BE BACK TO YOU IN DECEMBER, 22 WHICH IS IN REGARDS TO PHASE 3 GASOLINE AND A PERFECT 23 OPPORTUNITY. 24 BOARD MEMBER PATRICK: OKAY. KNOWING THAT, I THINK 25 IT IS IMPORTANT THAT WE MOVE FORWARD WITH THIS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 I THINK THIS IS THE DIRECTION THAT WE NEED TO GO 2 IN, BUT YET WE ARE ALL VERY CONCERNED THAT WE ARE CONSCIOUS 3 TO WHAT IS HAPPENING IN THE MARKETPLACE, ESPECIALLY TO THE 4 SMALL BUSINESSES, BECAUSE THEY ARE THE ONE'S THAT ARE GOING 5 TO BE THE LAST ONE'S TO BE ABLE TO REMOVE THIS LABEL. 6 WITH THAT, I WOULD MOVE ON THE RECOMMENDATION. 7 BOARD MEMBER RIORDAN: I WOULD LIKE TO SECOND THAT, 8 MR. CHAIRMAN, AND AGAIN, UNDERSCORE THE NEED FOR THE REPORT 9 BACK IN DECEMBER. 10 CHAIRMAN LLOYD: OKAY. I THINK THAT IS IMPORTANT, 11 BECAUSE WE ALSO HEARD THE ISSUE AGAIN BROUGHT UP BY THE 12 OXYGENATED FUEL ASSOCIATION ABOUT AGAIN PULLING THE PRICE 13 ISSUE, AND THE PRICE SPIKES WITH GASOLINE TIED DIRECTLY HERE, 14 SO IT IS A VERY COMPLICATED ISSUE ON THAT. 15 I GUESS I SHOULD HAVE CLOSED THE RECORD ON THIS 16 AGENDA ITEM. 17 MR. KENNY: ACTUALLY, MR. CHAIRMAN, BEFORE YOU 18 CLOSE THE RECORD, THERE IS AT LEAST LETTERS THAT HAVE NOT 19 BEEN INTRODUCED INTO THE RECORD. 20 SO, IF I COULD ASK THE STAFF TO INTRODUCE THOSE 21 LETTERS INTO THE RECORD. 22 MR. SIMEROTH: THANK YOU, MR. KENNY. 23 CHAIRMAN LLOYD, THERE IS A LETTER FROM 24 KINDER-MORGAN, DATED JUNE 17, 1999, REITERATING THAT IT DOES 25 NOT SPECIFY THE EXACT OXYGENATE CONCENTRATION, AND THEN ALSO PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 ATTACHED IS A MAY 6 LETTER TO THE JUNE 17 LETTER, WHERE THE 2 MAY 6 LETTER IS INDICATING THAT THEY WILL ADD TO THEIR BILLS 3 OF LADING THAT WILL CONTAIN LESS THAN OR MORE THAN MTBE AND 4 THE PERCENTAGES OR THE .6 AND ONE VOLUME PERCENT, SO THAT YOU 5 KNOW, DOES IT CONTAIN MTBE DELIBERATELY, OR DOES NOT CONTAIN 6 MTBE. 7 SO, WE HAVE ONE LETTER FROM KINDER-MORGAN, DATED 8 JUNE 17, AND THE SECOND DATED MAY 6. 9 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 10 I GUESS NOW I WILL CLOSE THE RECORD ON THIS AGENDA 11 ITEM. 12 HOWEVER, THE RECORD WILL BE REOPENED WHEN THE 13 15-DAY NOTICE OF PUBLIC AVAILABILITY IS ISSUED. 14 WRITTEN OR ORAL COMMENTS RECEIVED AFTER THIS 15 HEARING DATE, BEFORE THE 15-DAY NOTICE IS ISSUED, WILL NOT BE 16 ACCEPTED AS PART OF THE OFFICIAL RECORD ON THIS AGENDA ITEM. 17 WHEN THE RECORD IS REOPENED FOR A 15-DAY COMMENT 18 PERIOD, THE PUBLIC MAY SUBMIT WRITTEN COMMENTS ON THE 19 PROPOSED CHANGES, WHICH WILL BE CONSIDERED RESPONDED TO A 20 FINAL STATEMENT OF REASONS FOR THE REGULATION. 21 ALSO, AS A REMINDER TO BOARD MEMBERS, FOR OUR 22 POLICY CONCERNING EX PARTE COMMUNICATIONS, WHILE WE MAY 23 COMMUNICATE OFF THE RECORD WITH OUTSIDE PERSONS REGARDING 24 BOARD RULEMAKING, WE MUST DISCLOSE THE NAMES AND CONTENTS AND 25 THE NATURE OF THE CONTENTS ON THE RECORD. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 THIS REQUIREMENT APPLIES SPECIFICALLY TO 2 COMMUNICATION WHICH WILL TAKE PLACE AFTER THE NOTICE OF THE 3 BOARD HEARING WAS PUBLISHED. 4 ARE THERE ANY COMMUNICATIONS WHICH MEMBERS NEED TO 5 DISCLOSE AT THIS TIME? 6 SEEING NONE. NOW, IF WE COULD TAKE A MOMENT TO 7 REVIEW THE RESOLUTION, THIS IS RESOLUTION NUMBER 92-22. 8 MR. SCHEIBLE: CHAIRMAN LLOYD, MEMBERS, WE HAVE A 9 PROPOSED CLARIFICATION ON THE RESOLUTION, PAGE 6, TALKING 10 ABOUT THE EFFECTIVE DATE. 11 IN THE THIRD LINE OF THE SECOND PARAGRAPH THERE, WE 12 WANT TO ADD, WITH AN EFFECTIVE DATE FOR LABELING REQUIREMENTS 13 OF 30 DAYS AFTER FILING WITH THE SECRETARY OF STATE, OR 14 SEPTEMBER 1, 1999, WHICHEVER OCCURS LATER, AND THEN AFTER 15 THAT, ADD AN IMMEDIATE EFFECTIVE DATE FOR THE REVISION OF THE 16 MINIMUM OXYGEN REQUIREMENT FOR THE LAKE TAHOE REGION. 17 WE WANT TO MAKE SURE THAT THERE ARE AT LEAST 30 18 DAYS FROM THE DECISION WHERE OAL APPROVES THE LABELING 19 REQUIREMENT TO WHEN IT GOES INTO EFFECT, SO THAT THE EFFECTED 20 PARTIES HAVE TIME TO GET THE LABELS ON THE PUMP, BUT FOR LAKE 21 TAHOE, WE WANT THE REGULATION TO TAKE EFFECT IMMEDIATELY SO 22 THAT THE FUEL SUPPLIERS KNOW THEY CAN TAKE ADVANTAGE OF THE 23 REGULATION FOR UPCOMING CO SEASON. 24 MR. JENNINGS: MR. CHAIRMAN, I WOULD LIKE TO 25 SUGGEST AN ADDITIONAL MODIFICATION, AND THAT IS AT THE END OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 PAGE 5, IN THE FIRST, NOW, THEREFORE, BE IT RESOLVED, TALKS 2 ABOUT APPROVING THE AMENDMENTS AND SENDING THEM OUT FOR 15 3 DAY COMMENT, I RECOMMEND THAT IT PROVIDE THAT YOU ARE 4 ACTUALLY ADOPTING THE AMENDMENT TO 2262.5 A, THAT IS THE 5 TAHOE AMENDMENT, AND THEN JUST DIRECTING THAT WE GO AHEAD 6 WITH THE 15-DAY CHANGES ON THE LABELING REQUIREMENT, THAT 7 WOULD ENABLE US TO SUBMIT THE TAHOE MATERIAL IMMEDIATELY TO 8 OAL, WHILE WE ARE COMPLETING THE LABELING PROCESS. 9 CHAIRMAN LLOYD: THAT SEEMS REASONABLE, YES. 10 MR. SCHEIBLE: DID YOU WANT ME IT REPEAT THE 11 SUGGESTED CHANGES? 12 OKAY. IN THE, BE IT RESOLVED, PAGE 6, FIRST FULL 13 BE IT RESOLVED, IN THE THIRD LINE, AFTER THE PHRASE, WITH 14 EFFECTIVE DATE, ADD THE WORDS FOR LABELING REQUIREMENTS, SO 15 IT READS, WITH AN EFFECTIVE DATE FOR LABELING REQUIREMENTS OF 16 30 DAYS AFTER FILING WITH THE SECRETARY OF STATE. 17 THEN JUST BEFORE THE PERIOD, AT THE END OF THAT 18 FULL BE IT FURTHER RESOLVED, ADD AN IMMEDIATE EFFECTIVE DATE 19 FOR REVISION FOR THE MINIMUM OXYGENATE REQUIREMENTS FOR LAKE 20 TAHOE REGION. 21 I THINK IT IS CONSISTENT WHEN WE IMPOSE AN 22 OBLIGATION ON THE INDUSTRY, AND THE TIME WE RELIEVE THEM OF 23 THE REQUIREMENT, WE SHOULD DO IT AS QUICKLY AS POSSIBLE. 24 ONE MORE ITEM, AS WE BROUGHT THIS ITEM FORTH VERY 25 QUICKLY, AND SO AS A RESULT, ESPECIALLY FOR OUR NEW BOARD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 MEMBER, WE PRIDE OURSELVES ON DOING A WORKSHOP PROCESS WHERE 2 WE WORK OUT MANY, MANY OF THE DETAILS ON REGULATORY PROPOSALS 3 BEFORE THEY EVER GET TO THE PROPOSAL STAGE. 4 SO, WITH THIS ITEM, WHAT YOU ARE SEEING IS THE 5 RESULT OF AN ACCELERATED PROCESS TO IMPLEMENT DIRECTION FOR 6 MTBE AS QUICKLY AS POSSIBLE. WE TRY NOT TO DO THIS, BUT IN 7 THIS CASE, I THINK IT WAS NECESSARY TO DO IT IN A TIMELY 8 FASHION. 9 CHAIRMAN LLOYD: I THINK WE UNDERSTAND THAT VERY 10 MUCH, MR. SCHIEBLE, AND I THINK AS INDICATED EARLIER, GIVEN 11 THE TIME CONSTRAINTS, I THINK STAFF DID AN OUTSTANDING JOB. 12 THERE ARE A FEW LOOSE ENDS WHICH WE SAY WHAT WE 13 FEEL THAT WE SHOULD CONTINUE TO WORK ON. 14 MR. SCHEIBLE: WE MIGHT POSSIBLY IMPOSE ON THE 15 BOARD ONCE MORE IN DECEMBER WITH THE PHASE 3 RFG BILL. 16 CHAIRMAN LLOYD: QUESTIONS? 17 SUPERVISOR ROBERTS. 18 BOARD MEMBER ROBERTS: MR. CHAIRMAN, THANK YOU. 19 I AGREE THAT THE STAFF HAS DONE A GOOD JOB IN SHORT 20 ORDER, AND I AM GOING TO SUPPORT THE MOTION, BUT I WANT TO 21 RAISE TWO CONCERNS, AND PERHAPS WHEN STAFF COMES BACK TO US 22 THERE MAY BE SOMETHING THAT THEY CAN TELL THAT WILL PUT ME 23 MORE AT EASE THAN RIGHT NOW. 24 NUMBER ONE, I AM CONCERNED THAT WE ARE GOING TO PUT 25 A LABEL ON PUMPS THROUGHOUT THIS STATE, AND ABOUT 70 PERCENT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 OF THE STATE IS NOT GOING TO HAVE ANY CHOICE OR BE ABLE TO DO 2 ANYTHING OTHER THAN CONTINUE TO PUMP GAS THAT WE ARE PUTTING 3 A WARNING ON THAT SAYS THAT IT IS BASICALLY HARMFUL TO THE 4 ENVIRONMENT, THAT CONCERNS ME, BECAUSE WE PUT A LOT OF GREAT 5 DEAL OF EFFORT RECENTLY. 6 TWO YEARS AGO WE INTRODUCED CARB 2 TO TRY AND SHOW 7 PEOPLE HOW, AND IN FACT, THAT WE WERE IMPROVING THE 8 ENVIRONMENT, ABOUT A 16 PERCENT DECREASE IN AIR POLLUTION 9 STATEWIDE, AND NOW WE ARE TAKING THAT SAME GAS, AND WE ARE 10 GOING TO STICK A LABEL ON IT AND TELL THEM THAT THERE IS 11 SOMETHING THAT YOU ARE DOING NOW THAT IS BAD FOR THE 12 ENVIRONMENT, AND THEY ARE NOT GOING TO LOOK AT IT AS SOME 13 MAGIC INGREDIENT. 14 THEY ARE GOING TO LOOK AT THE FACT THAT THERE IS 15 SOMETHING WRONG WITH THIS GASOLINE THAT THEY WERE SOLD NOT 16 TOO LONG AGO AS BEING THE SAVE ALL AND BE ALL. 17 FIRST OF ALL, AND AS NEAR AS I CAN TELL, 70 PERCENT 18 OF THE STATE THERE IS ABSOLUTELY NOTHING THAT THE CONSUMERS 19 ARE GOING TO BE ABLE TO DO OTHER THAN USE THAT GAS. 20 THAT CONCERNS ME. IN OTHER WORDS, THE LABEL IS ALL 21 IT DOES IS GIVE YOU A LEVEL OF FRUSTRATION, BECAUSE YOU 22 CANNOT GO TO BRAND X DOWN THE STREET. YOU CANNOT GO ANY 23 WHERE ELSE. 24 YOU ARE GOING TO HAVE TO USE THIS UNTIL WE SEE A 25 VERY SOPHISTICATED DELIVERY SYSTEM THAT IS GOING TO BE ABLE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 TO FLUSH THIS OUT AND BRING US AN OPTION WHICH WE ARE HEARING 2 IS GOING TO BE SOME GREAT DEAL OF TIME IN THOSE AREAS OF THE 3 STATE THAT ARE MANDATED TO USE AN OXYGENATE, SO WE ARE 4 TELLING THE CONSUMER, YOU ARE POLLUTING, YOU ARE USING THIS, 5 BUT YOU DO NOT HAVE ANY CHOICE. 6 THERE IS SOME FRUSTRATION IN ME AFTER WE HAVE TOLD 7 THEM THEY HAVE DONE SOMETHING REALLY GOOD HERE IN CALIFORNIA 8 TWO YEARS AGO. WE BETTER INTRODUCE THIS GREAT GASOLINE. 9 SECONDLY, I AM VERY CONCERNED, AND I WAS CONCERNED 10 BEFORE I WALKED IN, AND I AM MORE CONCERNED AFTER I HEAR THE 11 STATEMENTS IN INTRODUCING CARB 2, WE INTRODUCE SOME 12 RESTRICTIONS IN THE MARKETPLACE THAT I THINK HAVE CONTRIBUTED 13 SIGNIFICANTLY TO THE COST OF GASOLINE IN CALIFORNIA. 14 I GUESS MY UNSCIENTIFIC TRIP THAT I HAD JUST TAKEN 15 FROM BOSTON TO SAN DIEGO, WHERE WE PASSED NEARLY THOUSANDS OF 16 GAS STATIONS, AND I CAN GIVE YOU THE PRICES IN ALMOST EVERY 17 AREA, ONLY TO ARRIVE HOME AND FIND OUT THAT THE STATION 18 CLOSET TO MY HOUSE, THE CHEVRON STATION ON INDIA STREET, IN 19 SAN DIEGO, HAD THE HIGHEST PRICE OF ANYTHING I SAW IN THE 20 WHOLE NATION BY FAR, 70 CENTS A GALLON OVER THE LOWEST PRICE 21 THAT I SAW, AND IT SUGGESTS TO ME THAT SOMETHING, AND I SAW 22 THOSE PRICES AS SOON AS WE GOT TO THE CALIFORNIA BORDER, AND 23 IT RAISED SOME QUESTIONS IN MY MIND AS TO WHY, WHICH I HAVE 24 HAD FOR SOME TIME ANYWAY, BUT NOW WE ARE TAKING SOME STEPS 25 THAT COULD FURTHER EXACERBATE THAT, DEPENDING ON THE WAY THIS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 NEW PRODUCT IS ROLLED OUT. 2 IF WE COME BACK HERE IN DECEMBER AND WE SEE THIS 3 HAS CREATED ANOTHER OPPORTUNITY TO INCREASE GAS PRICES IN 4 CALIFORNIA, THAT THERE IS NO SIGNIFICANT, THERE IS NO 5 OPPORTUNITY FOR THE CONSUMERS IN THESE AREAS TO HAVE ANY 6 CHOICE OTHER THAN TO CONTINUE TO USE THAT, AND WE ARE PUTTING 7 A LABEL ON THIS PRODUCT, THE WAY THAT WE ARE, I WOULD FEEL 8 VERY, VERY FRUSTRATED, AND I THINK THAT CONSUMERS IN SOUTHERN 9 CALIFORNIA AND PERHAPS IN SACRAMENTO AND OTHER AREAS ARE 10 GOING TO FEEL THAT SAME SENSE OF FRUSTRATION. 11 I UNDERSTAND WHERE THE STAFF IS GOING, AND THEY ARE 12 GETTING A LOT OF DIRECTION FROM ELSEWHERE, BUT THIS DOES NOT 13 SEEM TO HAVE THE SAME SORT OF CAREFUL THOUGHT THAT I HAVE 14 SEEN WITH PREVIOUS PROGRAMS THAT HAVE BEEN BEFORE US. 15 CHAIRMAN LLOYD: THANK YOU, SUPERVISOR. 16 AGAIN, I THINK UNTIL WE UNDERSTOOD SOME OF THE 17 ISSUES HERE, WE WERE OBVIOUSLY VERY PLEASED WITH WHAT WAS 18 HAPPENING IN THE AIR, AND THESE OTHER ISSUES CAME UP. 19 GOOD THING I GUESS THAT WE IN THE OXYGEN SIDE, 20 THERE IS OBVIOUSLY SOME FLEXIBILITY IN TERMS OF ETHANOL 21 THERE, AND WE WOULD EXPECT TO SEE THAT, RECOGNIZING, HOWEVER, 22 THAT WHAT WE HAVE AT THE MOMENT IS MTBE. 23 BOARD MEMBER RIORDAN: MR. CHAIRMAN, IF I MIGHT 24 COMMENT, SUPERVISOR ROBERTS, HOPEFULLY, AND I SENSE FROM THIS 25 BOARD A REAL INTEREST IN TRYING TO HELP THE INDEPENDENT, AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 THAT CLEARLY IS ONE OF MY REASONS, IS TO PROVIDE THAT 2 COMPETITION, WHICH IS SO VERY NECESSARY TO THIS WHOLE 3 ECONOMIC PICTURE, I MEAN, YES, WE HAVE THE ENVIRONMENTAL 4 PICTURE, BUT WE HAVE THE ECONOMIC PICTURE, WHICH, AS I RECALL 5 BACK AT THE TIME WHEN WE INTRODUCED THE NEW GASOLINE, THAT IT 6 WAS THE INDEPENDENTS AND A FEW OF THE MAJORS SIGNIFICANTLY 7 THAT MADE A DIFFERENCE THAT DROVE THE PRICES DOWN, AND THAT 8 IS CLEARLY WHY I WANT TO PROTECT THE INDEPENDENTS TODAY, 9 HOPING TO SOLVE SOME OF THAT WHICH YOU RAISE AS AN ISSUE. 10 CHAIRMAN LLOYD: ANY OTHER COMMENTS? 11 BOARD MEMBER CALHOUN: MR. CHAIRMAN, I THINK WE 12 HAVE ASKED THE STAFF TO FOLLOW THIS PROGRAM FOR THE NEXT SIX 13 MONTHS AND COME BACK TO THE BOARD, AND SO, I FEEL COMFORTABLE 14 IN MOVING AHEAD WITH THE DEBATE WITH THE PROVISO OF THAT 15 STAFF DOES MONITOR THE PROGRESS OF THE PROGRAM, AND IF THERE 16 ARE PROBLEMS THAT DEVELOP, THEN YOU CAN COME BACK TO THE 17 BOARD. 18 CHAIRMAN LLOYD: I WOULD ECHO THAT. 19 I WOULD SAY THAT IF THERE ARE PROBLEMS, WE DO NOT 20 NEED TO WAIT SIX MONTHS. IT COULD BE BROUGHT BACK AS SOON AS 21 SOMETHING SURFACES. 22 BOARD MEMBER DESAULNIER: MR. CHAIRMAN, JUST 23 REFLECTING ON WHAT RON SAID, I WILL NOT GO THROUGH MY TRIP TO 24 THE NORTHEAST AND MY EXPERIENCE OF GAS PUMP SITES -- WE WERE 25 NOT TOGETHER, BUT IT SEEMS TO ME THAT THIS IS AN IMPORTANT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 FIRST STEP, AND I THINK PART OF THE FRUSTRATION THAT OUR 2 CONSTITUENTS AND THE CITIZENS ARE GOING TO READ WHEN THEY 3 READ THIS LABEL, WHAT WE NEED TO EDUCATE THEM TO IS THAT THIS 4 IS A FIRST STEP, AND WE ARE ACTUALLY DOING SOMETHING ABOUT 5 REMOVING THIS MAJOR RISK. 6 SO, I AGREE WITH YOU, RON, THAT PEOPLE READ IT AND 7 GO, WELL, UNLIKE SMOKING, WE DO NOT HAVE THE OPTION OF 8 STOPPING, WE HAVE TO FILL, SO WE HAVE TO GO A LITTLE BIT 9 FURTHER AND EXPLAIN THROUGH THE PROCESS THAT IT IS A POSITIVE 10 BY LABELING THIS THAT WE ARE GOING TO REMOVE THIS RISK OVER 11 THE COURSE OF THE PERIOD THAT THE GOVERNOR HAS DEFINED FOR 12 US. 13 CHAIRMAN LLOYD: I GUESS I WOULD NOT PASS UP THE 14 OPPORTUNITY TO SAY, AS WE LOOK AT THE GAS PRICE ISSUE, THIS 15 ALSO SAID THAT WE SHOULD LOOK AT FUEL FLEXIBILITY. 16 WE SHOULD BE ENCOURAGING OTHER FORMS AS WE ARE IN 17 SOME OF OUR REGULATIONS ON THE ELECTRIC VEHICLE SIDE AND THE 18 FUEL CELL SIDE. 19 ON THE FUEL CELL SIDE, ALL OF THOSE WILL HAVE TO 20 BALANCE OUT SOME OF THESE THINGS WHEN WE HAVE SOME 21 COMPETITION. SO, AGAIN, I AM DELIGHTED THAT WE WILL BE 22 LOOKING TO THAT. 23 I THINK I HAD A MOTION EARLIER BY SUPERVISOR 24 PATRICK AND SECONDED BY MRS. RIORDAN. 25 MS. WALSH: CHAIRMAN LLOYD, BEFORE YOU MOVE AHEAD, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 YOU MIGHT WANT TO, WITH THE CHANGES THAT WERE PROPOSED BY THE 2 STAFF HERE, BY MR. SCHEIBLE AND MR. JENNINGS, ASK WHETHER 3 SUPERVISOR PATRICK, WHO MOVED THE MOTION IN, AND MRS. 4 RIORDAN, WHO SECONDED IT, IF THEY ACCEPT THOSE CHANGES. 5 BOARD MEMBER PATRICK: YES. 6 BOARD MEMBER RIORDAN: YES. 7 CHAIRMAN LLOYD: I GUESS THE MOTION WILL INCLUDE 8 THE STAFF COMING BACK TO US NO LATER THAN DECEMBER, CORRECT? 9 WITH THAT, ALL IN FAVOR, SAY AYE. 10 AGAINST? 11 THANK YOU VERY MUCH. 12 SECRETARY HICKOX, WOULD NOW LIKE TO SAY A FEW 13 WORDS. 14 MR. HICKOX: I WAS GLAD I HAD AN OPPORTUNITY TO 15 SPEND AN HOUR AND A HALF AND WATCH THIS DELIBERATIVE PROCESS. 16 I AM REMINDED THAT SEEMINGLY THE MOST SIMPLE THINGS 17 ARE NOT WHAT THEY SEEM. 18 AND FOR ALL OF THE PEOPLE THAT WERE HERE TODAY TO 19 OFFER TESTIMONY, BOTH IN SUPPORT OF THE PROPOSAL AND WITH 20 PLEAS FOR CHANGE, I WOULD LIKE FOR THEM TO KNOW THAT I 21 APPRECIATED THE OPPORTUNITY TO HEAR THEM, AND I AM PLEASED 22 THAT YOU ALL LISTENED AND MADE SOME EFFORT TO ACCOMMODATE 23 THEM. 24 IT IS PART OF WHAT I VIEW THE INCREDIBLY DIFFICULT 25 TASK THAT YOU HAVE, WHICH IS BALANCING DIFFERENT VIEWS AND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 COMING TO SOME KIND OF CONSENSUS AGREEMENT. I DO APPRECIATE 2 THAT THIS WAS PUT UPON YOU, AS STAFF, WITH THE TIME FRAME 3 THAT IS DIFFERENT THAN YOU WOULD HAVE PREFERRED, BUT AS BEEN 4 SAID IN THE REMARKS, WE FELT THE NEED TO ACT, GIVEN WHAT WE 5 FOUND WHEN WE TOOK OFFICE EARLY, THE LEGISLATION THAT WAS 6 WELL UNDER WAY THAT BEGAN TWO YEARS AGO WITH PRIOR 7 ADMINISTRATION, AND A SIMPLE THANK YOU IS REALLY NOT ENOUGH. 8 I HAVE NOT HAD A CHANCE TO MEET WITH EACH AND EVERY 9 ONE OF YOU. MOST OF YOU, I HAVE. 10 JOE, WE HAVE NOT HAD A CHANCE TO MEET THIS TIME 11 AROUND, BUT I HOPE WE WILL HAVE A CHANCE TO DO IT SOON, AND 12 SUPERVISOR PATRICK, THE SAME. 13 BUT I WANT TO TAKE THIS OPPORTUNITY TO THANK YOU 14 ALL FOR A JOB WELL DONE, FOR YEARS PAST WITH REGARD TO THIS 15 ITEM, AS WELL AND FOR HOWEVER LONG THINGS STAY AS THEY ARE. 16 AS I SAID EARLIER, I AM REMINDED OF HOW DIFFICULT 17 IT IS AND HOW IMPORTANT THAT THESE DECISIONS BE MADE IN AN 18 OPEN FORUM, AND SOME OF YOU HAVE PROBABLY HAD A CHANCE TO SEE 19 SOME OF MY REMARKS THAT HAVE APPEARED IN NEWS LETTERS, 20 ETCETERA, AND THERE ARE MORE COMING, AND WE ARE THINKING OUR 21 WAY THROUGH THIS CAL EPA ORGANIZATION STRUCTURE AND HOW IT 22 WORKS, AND YOU WORK AWFULLY WELL. 23 THE PEOPLE OF THIS STATE ARE EXTREMELY WELL SERVED 24 BY YOU, AND SO THAT IS A LONGER THANK YOU. 25 HAVE A GOOD DAY. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 CHAIRMAN LLOYD: THANK YOU VERY MUCH, MR. 2 SECRETARY. 3 JUST TO REMIND THE PEOPLE IN THE AUDIENCE, WE ARE 4 NOT GOING TO BE BREAKING FOR LUNCH. WE ARE GOING TO BE 5 WORKING THROUGH. 6 WE HAVE SANDWICHES AT THE REAR FOR OURSELVES HERE, 7 SO WE WILL TRY TO CONTINUE TO WORK. 8 WELL, MAYBE WE WILL TAKE A FIVE-MINUTE BREAK. 9 (THEREUPON A BRIEF RECESS WAS TAKEN.) 10 CHAIRMAN LLOYD: THANK YOU. 11 I WOULD LIKE TO CONTINUE WITH THE NEXT ITEM ON 12 TODAY'S AGENDA, 99-5-2, REGARDING CERTIFICATION AND TEST 13 PROCEDURES FOR GASOLINE VAPOR RECOVERY SYSTEMS. 14 FOR THE BENEFIT OF OUR NEWEST MEMBERS, WE JUST 15 POINT OUT THAT CALIFORNIA HAS REQUIRED VAPOR RECOVERY AT 16 SERVICE STATIONS SINCE 1970'S, AND THAT WAS A GOOD IDEA THEN 17 AND IS CERTAINLY A GOOD IDEA STILL. 18 THE SIMPLE CONCEPT IS TO CAPTURE GASOLINE VAPORS 19 BEFORE THEY GET IN THE ATMOSPHERE SO THAT PEOPLE DO NOT HAVE 20 TO BREATHE THOSE FUMES, AND WE CAN KEEP GASOLINE IN OUR TANKS 21 AND USE AS A FUEL AND NOT SPILL. 22 OVER THE YEARS WE HAVE GOTTEN MORE SOPHISTICATED. 23 NOW WE HAVE CERTIFICATION PROCEDURES FOR ALL TYPES OF VAPOR 24 RECOVERY SYSTEMS, INCLUDING RETAIL STATIONS, BULK PLANTS, 25 TERMINALS AND CARGO TANKS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 WE ARE REGULARLY UPDATING THOSE RULES AS THE 2 CIRCUMSTANCES CHANGE. THE STAFF PROPOSAL MODIFIES PROCEDURES 3 THAT WERE LAST UPDATED IN 1996. 4 MR. KENNY, IS STAFF READY TO GO? 5 MR. KENNY: YES. 6 MS. CASTRONOVO: GOOD MORNING, CHAIRMAN LLOYD AND 7 MEMBERS OF THE BOARD. 8 TODAY I WILL PRESENT PROPOSED REVISIONS TO THE ARB 9 VAPOR RECOVERY CERTIFICATIONS AND TEST PROCEDURES. THIS 10 PROPOSAL REPRESENTS A JOINT EFFORT OF STAFF FROM THE 11 COMPLIANCE DIVISION, THE MONITORING AND LABORATORY DIVISION 12 AND THE OFFICE OF LEGAL AFFAIRS. 13 MY PRESENTATION WILL BEGIN WITH AN OVERVIEW OF ARB 14 VAPOR RECOVERY PROGRAM THAT WILL DISCUSS THE PROPOSED CHANGES 15 TO FOUR CERTIFICATION AND TEST PROCEDURES. 16 I WILL ALSO SUMMARIZE THE PROCESS IN SOLICITING 17 INPUT FROM AFFECTED PARTIES FOR THESE REVISIONS. WE WILL 18 DISCUSS ADDITIONAL PROPOSED CHANGES BASED ON COMMENTS 19 RECEIVED SINCE THE STAFF'S PROPOSALS WHICH WAS ISSUED ON MAY 20 7. 21 FINALLY, I WILL PROVIDE A SNEAK PEEK OF THE 22 ENHANCED VAPOR RECOVERY PROGRAM WHICH WE WILL BE BRINGING 23 BEFORE YOU FOR CONSIDERATION IN DECEMBER. 24 WE WILL START WITH SOME BACKGROUND ON THE VAPOR 25 RECOVERY PROGRAM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 VAPOR RECOVERY REDUCES THE EMISSIONS OF DISPLACED 2 VAPORS AT EACH TRANSFER POINT IN THE GASOLINE DISTRIBUTION 3 SYSTEM. VAPOR RECOVERY OPERATIONS ARE CHARACTERIZED AS PHASE 4 1 AND PHASE 2. 5 PHASE 1 VAPOR RECOVERY IS THE PROCESS THAT RETURNS 6 VAPORS FROM THE SERVICE STATION UNDERGROUND STORAGE TANKS TO 7 THE CARGO TANK TRUCK AND EVENTUALLY TO THE TERMINAL LOADING 8 RACK. 9 PHASE 2 VAPOR RECOVERY COVERS THE OPERATION THAT 10 ROUTES THE VAPORS DISPLACED FROM FUELING VEHICLES BACK INTO 11 THE UNDERGROUND STORAGE TANK. 12 PHASE 1 AND PHASE 2 EQUIPMENT HAVE SEPARATE 13 CERTIFICATION PROCEDURES AND MUST MEET SPECIFIED VAPOR 14 EFFICIENCIES. 15 THE VAPOR RECOVERY PROGRAM IS ONE OF THE MAJOR 16 PROGRAMS FOR CONTROL OF REACTIVE ORGANIC GASES OR ROG 17 EMISSIONS. 18 THIS CHART COMPARES THE ROG EMISSION REDUCTION AND 19 TONS PER DAY FOR THE SOUTH COAST AIR QUALITY MANAGEMENT 20 DISTRICT FOR THREE MAJOR EMISSION CONTROL STRATEGIES. 21 AS SHOWN HERE, THE EMISSIONS REDUCTION IS 22 ATTRIBUTABLE TO VAPOR RECOVERY SHOWN AS VR CONTROLS, ARE 23 ESTIMATED AT 108 TONS PER DAY MORE THAN THE REDUCTIONS FOR 24 LOW EMISSION VEHICLES AND CLEANER BURNING GASOLINE. 25 EVEN WITH VAPOR RECOVERY CONTROLS THE PETROLEUM PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 PRODUCT TRANSFERS STILL RESULT IN SIGNIFICANT EMISSIONS. 2 ACCORDING TO THE 1995 INVENTORY RATE, PETROLEUM 3 MARKETING OPERATIONS EMIT 77 TONS PER DAY OF REACTIVE ORGANIC 4 GAS EMISSIONS STATEWIDE WITH THE EXISTING VAPOR RECOVERY 5 CONTROL. THIS IS 10 PERCENT OF THE TOTAL ROG EMISSIONS 6 CONTRIBUTED TO STATIONARY SOURCES, ABOUT HALF OF THE 77 TONS 7 ARE EMITTED IN SOUTH COAST AIR BASIN. 8 WE BELIEVE THAT EVEN MORE VAPOR RECOVERY EMISSIONS 9 REDUCTIONS ARE ACHIEVABLE. 10 ARB STAFF HAS RECENTLY COMPLETED A FUEL 11 INVESTIGATION WITH SEVERAL DISTRICTS TO EVALUATE PERFORMANCE 12 OF IN USE SYSTEMS. THIS STUDY REVEALED PROBLEMS WITH 13 EXISTING CERTIFIED EQUIPMENT. 14 CORRECTIVE ACTIONS HAVE BEEN TAKEN. FOR EXAMPLE, 15 IN REPLACING ALUMINUM SPATS WITH MORE DURABLE STAINLESS STEEL 16 SPATS FOR SOME NOZZLES, IT IS APPARENT FROM THE STUDY AND 17 OTHER DATA COLLECTED BY THE DISTRICT THAT A COMPREHENSIVE 18 OVERHAUL OF THE VAPOR RECOVERY PROGRAM IS NEEDED. 19 A FIRST STEP IS THE REVISION OF PROCEDURES YOU WILL 20 HEAR TODAY. 21 THEN WE WILL FOLLOW-UP WITH THE ENHANCED VAPOR 22 RECOVERY PROPOSAL FOR MAJOR PROGRAM IMPROVEMENTS WHICH WILL 23 BE CONSIDERED IN DECEMBER, WHICH I WILL BRIEFLY DISCUSS AT 24 THE END OF THIS PRESENTATION. 25 ARB AND AIR POLLUTION CONTROL DISTRICT SHARE THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 RESPONSIBILITIES FOR THE VAPOR RECOVERY PROGRAM. ARB STAFF 2 CERTIFIED PHASE 1 AND PHASE 2 VAPOR RECOVERY EQUIPMENT. 3 STAFF CONDUCTED OR OBSERVED TESTS TO CONFIRM THAT 4 PERFORMANCE STANDARDS ARE ACHIEVED. THE ARB CERTIFICATE IS 5 REFERENCED BY U.S. EPA AND USED BY MANY OTHER STATES AND SOME 6 COUNTRIES. 7 AIR POLLUTION CONTROL DISTRICT STAFF ARE 8 RESPONSIBLE FOR INSURING THAT GASOLINE DISPENSING FACILITIES 9 INSTALL ONLY CERTIFIED EQUIPMENT. DISTRICT STAFF CONDUCT OR 10 REQUIRE COMPLIANCE TEST TO ASSURE THE SYSTEMS INSTALLED ARE 11 OPERATING CORRECTLY. 12 THE CHANGES THAT WE ARE PROPOSING TODAY RELATE TO 13 PHASE 2 CERTIFICATION TO TEST PROCEDURES. THERE ARE TWO 14 MAJOR TYPES OF PHASE 2 SYSTEMS, WHICH YOU CAN OFTEN RECOGNIZE 15 BY THE TYPE OF NOZZLE USED. 16 THE BALANCED SYSTEMS HAVE AN ACCORDION TYPE BOOT, 17 WHICH MUST MAKE A GOOD SEAL WITH THE VEHICLE FILL PIPE TO 18 ENSURE VAPORS ARE RECOVERED. 19 AFTER THIS SEAL IS MADE, THE VAPORS ARE PUSHED BACK 20 TO THE UNDERGROUND STORAGE TANK AS THE LIQUID GASOLINE 21 DISPLACES THE VAPORS. 22 ASSIST SYSTEM NOZZLES AND CONTRASTS ARE OFTEN 23 BOOTLESS. THE VAPORS ARE COLLECTED THROUGH A SERIES OF HOLES 24 ON THE SPOUT, WHICH VACUUM UP THE VAPORS DURING REFUELING. 25 EXAMPLES OF BALANCE AND BOOTLESS NOZZLES ARE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 DISPLAYED ON THE TABLES BEHIND YOU, TOGETHER WITH SOME OF THE 2 TEST EQUIPMENT USED FOR VAPOR RECOVERY. 3 WE ARE PROPOSING AMENDMENTS TO THREE PHASE 2 TEST 4 PROCEDURES TODAY. ONE IS USED FOR ASSIST SYSTEMS, AND THE 5 REMAINING TWO FOR BALANCE SYSTEMS. 6 WE ARE ALSO PROPOSING CHANGES TO THE CERTIFICATION 7 PROCEDURE FOR PHASE 2 SYSTEMS. THESE PROPOSED CHANGES WOULD 8 RESULT IN ENFORCEMENT ISSUES IDENTIFIED BY DISTRICTS AND ARB 9 STAFF AS WELL AS MAKING THE TEST MORE EFFICIENT AND SAFER FOR 10 THE TESTER. 11 CHANGES TO ACHIEVE ADDITIONAL EMISSION REDUCTIONS 12 ARE PART OF THE UPCOMING PROGRAM ENHANCE VAPOR RECOVERY 13 PROGRAM WHICH WE WILL PRESENT TO YOU IN DECEMBER. 14 I WILL SPEND A FEW MINUTES DISCUSSING EACH TEST 15 PROCEDURE PROPOSED FOR AMENDMENT. 16 THE FIRST IS THE AIR TO LIQUID RATION OR A OVER L 17 TEST THAT IS USED FOR CHECKING PERFORMANCE OF THE VAPOR 18 RECOVERY SYSTEM. 19 REMEMBER THAT EACH ASSIST SYSTEM RELIES ON THE 20 VACUUM AT THE NOZZLE TO RECOVER THE VAPORS. IN THIS TEST THE 21 VACUUM HOLE IS ISOLATED SO THAT THE FLOW BACK TO THE 22 UNDERGROUND STORAGE TANK CAN BE MEASURED WHILE FUEL IS 23 DISPENSED. 24 FOR EXAMPLE, IF 9 GALLONS OF AIR ARE RETURNED FOR 25 10 GALLONS DISPENSED, THEN THE A OVER L RATIO IS 0.9. WHEN A PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 SYSTEM DEMONSTRATES THE REQUIRED EFFICIENCY, THE A OVER L 2 RATIO IS MEASURED AND AN A OVER L RANGE IS SPECIFIED IN THE 3 CERTIFICATION EXECUTIVE ORDER. A OVER L TEST IS USED 4 PRACTICALLY TO ENSURE EACH DISPENSE IS WORKING PROPERLY. 5 THE PRIMARY CHANGE TO THE TEST MODIFIES THE TEST 6 EQUIPMENT TO ALLOW GASOLINE VAPOR RATHER THAN AIR TO BE 7 RETURNED BACK TO THE UNDERGROUND STORAGE TANK DURING THE 8 TEST. 9 THIS HAS THREE BENEFITS. FIRST, VAPOR DISPLACED 10 FROM THE TEST TANK GOES BACK TO THE UNDERGROUND STORAGE TANK 11 RATHER THEN EXPOSING THE TEST OR TO GASOLINE VAPOR. 12 SECOND RETURNING VAPOR RATHER THEN AIR PREVENTS 13 VAPOR GROWTH FROM OCCURRING IN THE UNDERGROUND STORAGE TANK 14 WHICH COULD LEAD TO EXCESS EMISSIONS. 15 THIRD, RETURN OF VAPOR MORE CLOSELY SIMULATES AN 16 ACTUAL VEHICLE FUELING. ANOTHER CHANGE REDUCES THE TIME AND 17 COST THAT THE A OVER L TEST BY REDUCING THE NUMBER OF TEST 18 RUNS FROM 3 TO 1 IF THE FIRST TEST SHOWS THE DEFINITE PASS OR 19 FAIL. 20 HOWEVER, IF THE FIRST RUN IS WITHIN 10 PERCENT OF 21 THE ALLOWABLE RANGE, AN AVERAGE OF THREE RUNS IS PERMITTED. 22 THIS SLIDE ILLUSTRATES THE CHANGE IN HOSE 23 CONFIGURATION FOR THE A OVER L TEST. NOTE THE YELLOW 24 STRIPPED HOSE HAS BEEN ADDED TO ROUTE THE DISPLACE VAPORS 25 BACK THROUGHOUT THE VOLUME METER AND THEN THROUGH THE NOZZLE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 BACK TO THE UNDERGROUND STORAGE TANK. 2 THESE REVISIONS TO THE A OVER L TEST WERE 3 ORIGINALLY PART OF THE 1988 VAPOR RECOVERY BOARD ITEM. THE 4 TESTS METHOD WAS WITHDRAWN TO INVESTIGATE CONCERNS THAT THE 5 REVISED PROCEDURE WOULD GIVE DIFFERENT RESULTS FOR CERTAIN 6 PHASE 2 SYSTEMS. 7 SINCE THAT TIME WE HAVE CONDUCTED TEST FOR SEVEN 8 ASSIST SYSTEMS. FIVE SYSTEMS DO NOT SHOW ANY DIFFERENCE 9 BETWEEN THE CURRENT AND THE PROPOSED METHOD. TWO SYSTEMS DO 10 HAVE DIFFERENCES, AND IF THE PROPOSED CHANGES ARE ADOPTED, WE 11 WILL BE MODIFYING THE A OVER L RANGE IN THE EXECUTIVE ORDER 12 TO REFLECT THE VALUES FOUND IN THE NEW METHOD. 13 THE DYNAMIC BACK PRESSURE TEST IS USED TO CHECK THE 14 PERFORMANCE OF BALANCE SYSTEMS. REMEMBER THAT THE BALANCE 15 SYSTEMS DO NOT HAVE A PUMP TO COLLECT DISPLACED VAPORS. 16 INSTEAD VAPORS ARE PUSHED BACK THROUGH THE NOZZLE 17 BY THE FILLING OF THE VEHICLE TANK. THUS IT IS CRITICAL THAT 18 THE VAPOR PATH HAVE LOW RESISTANCE TO THE VAPOR FLOW OR LOW 19 BACK PRESSURE. 20 IN THIS TEST, WE INTRODUCED NITROGEN AT THREE 21 DIFFERENT SLOW SETTINGS, AND MEASURED THE PRESSURE AT EACH 22 SETTING. THE SYSTEM MEASURE MUST NOT EXCEED THE MAXIMUM 23 VALUE ALLOWED AT EACH FLOW RATE. 24 IN 1996, THE PRESSURE DROP CRITERIA WERE MODIFIED 25 TO REFLECT CHANGES AND EQUIPMENT, MAINLY THE REPLACEMENT OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 DUAL HOSES WITH COAXIAL HOSES. 2 RECENT TESTS BY DISTRICTS INDICATE THAT THE 1996 3 CRITERIA IS MORE STRINGENT FOR SYSTEMS CERTIFIED BEFORE THE 4 1996 AMENDMENT. WE DO NOT INTEND TO INCREASE THE STRINGENCY 5 OF THE PRESSURE DROP REQUIREMENTS. 6 TO RESOLVE THE SITUATION, WE PROPOSE TO REMOVE THE 7 PRESSURE DROP CRITERIA FROM THE TEST PROCEDURE AND INSTEAD 8 REFER THE TESTER TO THE CRITERIA SPECIFIED IN THE APPLICABLE 9 EXECUTIVE ORDER. THIS WILL ASSURE THAT THE SYSTEM IS TESTED 10 TO THE SAME CRITERIA TO WHICH IT WAS CERTIFIED. 11 THE THIRD TEST PROCEDURE IS ALSO USED TO CHECK 12 PERFORMANCE OF BALANCE SYSTEMS. AS MENTIONED ALREADY, IT IS 13 IMPORTANT FOR THE VAPOR PATH TO REMAIN FREE OF OBSTRUCTION SO 14 THAT THE VAPORS CAN BE PUSHED BACK TO THE UNDERGROUND STORAGE 15 TANK. 16 ONE WAY THAT THE VAPOR CAN BE BLOCKED IS BY LIQUID 17 GASOLINE IN THE VAPOR LINE. THIS CAN OCCUR EITHER 18 CONDENSATION OF THE VAPORS OR BY CUSTOMER TOPPING OFF. 19 MANY BALANCE SYSTEMS HAVE LIQUID REMOVABLE DEVICES 20 IN THE HOSES, LIKE THE ONE SHOWN HERE, TO ASSURE THAT THE 21 VAPOR PATH IS KEPT CLEAR. 22 IN THIS TEST, 150 MILLILITERS OF GASOLINE ARE 23 POURED INTO THE HOSE AT THE NOZZLE. THE TESTER DISPENSES 10 24 GALLONS INTO A TEST TANK, AND THEN THE HOSE IS DRAINED TO 25 MEASURE THE GASOLINE REMAINING. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 THE LIQUID REMOVAL TEST WAS ADOPTED IN 1996 WITH 2 THE REMOVAL CRITERIA OF 10 MILLILITERS PER GALLON. AGAIN 3 RECENT DISTRICT COMPLIANCE TESTS HAVE SHOWN THIS CRITERIA WAS 4 NOT BEING MET BY MOST BALANCE SYSTEMS. 5 WE HAVE DETERMINED THAT THE CORRECT VALUE SHOULD BE 6 5 MILLILITERS PER GALLON AND THAT THE 10 MILLILITERS PER 7 GALLON IS AN ERROR. THE 5 MILLILITER PER GALLON IS 8 CONSISTENT WITH OTHER VAPOR RECOVERY RULES PROMULGATED ABOUT 9 THE SAME TIME THAT WE WERE PREPARING THE 1996 REVISION. 10 THIS CONCLUDES THE DISCUSSION OF THE THREE TEST 11 PROCEDURES. 12 NOW, I WILL REVIEW THE CHANGES PROPOSED TO THE 13 CERTIFICATION PROCEDURE FOR PHASE 2 SYSTEMS. THE SYSTEM 14 CERTIFIED BY ARB STAFF FOR PHASE 2 VAPOR RECOVERY NORMALLY 15 CONSIST OF COMPONENTS FROM SEVERAL MANUFACTURERS. 16 FOR EXAMPLE, A DISPENSER MANUFACTURER MAY APPLY FOR 17 CERTIFICATION AND OUTFIT A TEST STATION WITH THE NEW 18 DISPENSER ALONG WITH HOSES AND NOZZLES FROM THE OTHER 19 MANUFACTURERS. 20 CURRENTLY THERE IS NO PROVISION THAT THE OTHER 21 COMPONENT MANUFACTURERS BE ALERTED THAT THEIR COMPONENT IS 22 BEING CONSIDERED A PART OF A NEW SYSTEM. 23 RECENTLY SOME MANUFACTURERS HAVE RAISED CONCERNS 24 ABOUT THE COMPATIBILITY OF THEIR COMPONENTS WITH OTHER SYSTEM 25 EQUIPMENT DURING THE CERTIFICATION PROCESS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 ARB STAFF WOULD LIKE THE OPPORTUNITY TO EVALUATE 2 ANY CONCERNS ABOUT A GIVEN COMBINATION OF COMPONENTS BEFORE 3 BEGINNING EXPENSIVE CERTIFICATION TESTS. 4 TO ENCOURAGE EARLY IDENTIFICATION OF COMPONENT 5 COMPATIBILITY CONCERNS, WE PROPOSED THAT THE CERTIFICATION 6 APPLICANT NOTIFY OTHER MANUFACTURERS OF THE COMPONENTS USED 7 IN THE SYSTEM SEEKING CERTIFICATION. 8 WE ARE ALSO REQUESTING THE APPLICANT TO INCLUDE 9 PERTINENT SYSTEM PARAMETERS IN THE APPLICATION THAT MUST BE 10 MET FOR ASSOCIATED COMPONENTS. 11 FOR EXAMPLE, IF A NOZZLE MUST NOT EXCEED A CERTAIN 12 PRESSURE DROP FOR THE DISPENSER TO OPERATE AS DESIGNED, THIS 13 SHOULD BE INCLUDED IN THE APPLICATION. 14 THE SECOND CHANGE INVOLVES CHANGES TO THE WARRANTY 15 PROVISIONS. THE DISTRICT HAD ASKED ARB STAFF TO REEVALUATE 16 THE WARRANTY PROVISIONS AS PART OF AN OVERHAUL PROGRAM TO 17 IMPROVE THE IN-USE OPERATION OF VAPOR RECOVERY SYSTEM. 18 THE STAFF REPORT PROPOSED TO INCREASE THE WARRANTY 19 PERIOD TO THREE YEARS. 20 FEEDBACK RECEIVED DURING THE 45-DAY COMMENT PERIOD 21 INDICATED THAT THERE MAY BE A BETTER WAY TO MEET WARRANTY 22 OBJECTIVES. 23 A ONE-YEAR WARRANTY COULD BE APPROPRIATE IF 24 COMMUNICATION IS APPROVED BETWEEN THE EQUIPMENT MANUFACTURER 25 AND THE END USER. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 ACCORDING TO SOME EQUIPMENT MANUFACTURERS, RETURN 2 RATES ON WARRANTY CARDS ARE VERY LOW, EVEN WHEN THE CUSTOMERS 3 ARE OFFERED A CASH INCENTIVE. 4 STAFF BELIEVES THIS MAY BE PARTIALLY DUE TO THE 5 FACT THAT WARRANTY INFORMATION DOES NOT MAKE IT TO THE 6 STATION OPERATORS AS THE CONTRACTORS INSTALLING THE EQUIPMENT 7 DO NOT PASS ALONG THE PAPERWORK. 8 SINCE OUR GOAL IS TO IMPROVE IN USE OPERATION OF 9 EQUIPMENT, STAFF HAS PUT FORTH AN ALTERNATIVE PROPOSAL THAT 10 WOULD LEAVE THE WARRANTY AT ONE YEAR BUT WOULD REQUIRE A 11 WARRANTY TAG THAT WOULD BE AFFIXED DIRECTLY TO THE CERTIFIED 12 EQUIPMENT THAT COULD ONLY REMOVED BY THE END USER. 13 THE TAG WOULD INDICATE THE TERM OF THE WARRANTY, 14 THE DATE OF MANUFACTURE OR WHERE IT COULD BE FOUND ON THE 15 EQUIPMENT AND THE SHELF LIFE OF THE EQUIPMENT IF THE 16 EQUIPMENT MANUFACTURER DETERMINED THE SHELF LIFE APPLICABLE 17 TO THAT COMPONENT. BASED ON INFORMAL DISCUSSIONS WITH STAKE 18 HOLDERS THERE APPEARS TO BE WIDE SPREAD SUPPORT FOR THIS 19 ALTERNATIVE. THE STAFF RECOMMENDS THAT THE WARRANTY TAG 20 ALTERNATIVE AS A 15 DAY CHANGE. 21 WE EXPECT MINIMAL ECONOMIC IMPACTS FROM ADOPTION OF 22 THIS PROPOSAL. SOME MINOR COSTS WILL BE INCURRED TO UP GRADE 23 THE TEST EQUIPMENT. WE EXPECT NO ADVERSE ENVIRONMENTAL 24 IMPACT FROM THE PROPOSAL. THE USE OF THE IMPROVED TEST 25 PROCEDURES SHOULD LEAD TO INCREASED COMPLIANCE WITH THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 EMISSIONS. 2 FOUR WORKSHOPS WERE HELD TO SOLICIT INPUT FROM 3 AFFECTED PARTIES. THE STAFF WOULD LIKE TO ACKNOWLEDGE THE 4 ASSISTANCE PROVIDED BY THE CAPACOLA VAPOR RECOVERY TECHNICAL 5 COMMITTEE, PARTICULARLY THE BAY AREA AIR QUALITY MANAGEMENT 6 DISTRICT WHO PROVIDED THE ORIGINAL DRAFTS OF SOME OF THE 7 PROPOSED PROCEDURES. 8 WE ALSO APPRECIATE THE COMMENTS AND SUGGESTIONS 9 FROM THE EQUIPMENT MANUFACTURERS, INDEPENDENT TESTERS, AND 10 INDUSTRY ASSOCIATIONS. WE HAVE REGULARLY POSTED INFORMATION 11 RELATED TO THESE REVISIONS ON THE VAPOR RECOVERY WEB PAGES 12 INCLUDING THE 15 DAY CHANGES WHICH WE WILL DISCUSS NEXT. 13 STAFF PROPOSES ADDITIONAL CHANGES TO THE VERSION OF 14 THE TEST PROCEDURES PUBLISHED WITH THE MAY 7 STAFF REPORT. 15 MANY OF THESE CHANGES WERE PRESENTED AT THE MAY 6 WORKSHOP. 16 THE SUGGESTED ADDITIONAL CHANGES FOR TP 21.5 OR THE 17 A OVER L TEST ARE SHOWN HERE. WE ARE CHANGING THE PROCEDURE 18 TO PROHIBIT HOSE DRAINING BEFORE THE TEST IN ORDER TO CHECK 19 THE SYSTEM AS FOUND IN CONFIGURATION. 20 AS REQUESTED BY THE SAN DIEGO AIR POLLUTION CONTROL 21 DISTRICT, WE WILL ALLOW THE USE OF THE WEIGHTS AND MEASURES 22 CALIBRATION PROCEDURE FOR THE VOLUME METER. ALSO WE HAVE 23 REVISED THE LEAK CHECK PROCEDURE TO HANDLE VARIOUS TYPES OF A 24 OVER L ADAPTERS. 25 THE CHANGES TO THE DYNAMIC BACK PRESSURE TEST PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 CLARIFIES THAT THE TEST IS APPLICABLE TO BALANCE SYSTEMS. WE 2 ALSO HAVE MADE SOME IMPROVEMENTS TO THE EQUIPMENT 3 SPECIFICATION AND ADDED IN EQUIPMENT PERFORMANCE CHECK. 4 WE HAVE EXPANDED THE VOLUME RANGE FOR THE AMOUNT OF 5 GASOLINE USED TO CHECK PIPING AT A NEW INSTALLATION AND TO 6 CLARIFY THAT ALL OF THE VAPOR POPPETS SHOULD BE KEPT OPEN 7 DURING THE TEST. 8 ONE ADDITIONAL CHANGE IS PROPOSED TO THE LIQUID 9 REMOVAL TEST, WHICH WOULD CLARIFY THAT THE TEST IS TO BE 10 APPLIED TO CLARIFY FOR BALANCE SYSTEMS ONLY. 11 AS ALREADY DISCUSSED, STAFF RECOMMENDS A 15-DAY 12 CHANGE TO KEEP THE WARRANTY AT ONE YEAR WITH THE ADDITION OF 13 A WARRANTY TAG. 14 WE HAVE MODIFIED THE APPLICATION NOTIFICATION 15 REQUIREMENT TO ADDRESS EQUIPMENT MANUFACTURER CONCERNS THAT 16 THE NOTIFICATION OF THEIR COMPETITORS WOULD PROVIDE AN UNFAIR 17 PREVIEW OF THEIR NEW EQUIPMENT. OUR CHANGES WOULD REQUIRE 18 NOTIFYING ONLY THE HOLDER OF THE CERTIFICATION ORDER. 19 HOWEVER, ALL COMPONENTS MANUFACTURERS WOULD NEED TO 20 BE NOTIFIED FOR NEW SYSTEM CERTIFICATION. 21 THIS CONCLUDES OUR DISCUSSION OF THE PROPOSED 22 REGULATORY CHANGES. 23 NOW, I WOULD LIKE TO LOOK TO THE FUTURE AND BRIEFLY 24 DESCRIBE OUR WORK ON THE ENHANCED VAPOR RECOVERY PROGRAM 25 WHICH IS SCHEDULED FOR THE DECEMBER MEETING. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 AS STATED IN THE BEGINNING OF MY TALK, WE BELIEVE 2 THAT THE VAPOR RECOVERY PROGRAM WHICH BEGAN IN THE EARLY 3 1970'S COULD BE SIGNIFICANTLY IMPROVED. OUR FIRST GOAL IS TO 4 REALIZE ADDITIONAL EMISSION REDUCTION BY SETTING STANDARDS 5 THAT ARE ACHIEVABLE WITH NEW TECHNOLOGY. 6 ANOTHER GOAL IS TO IMPROVE RELIABILITY OF EQUIPMENT 7 BY ADDING DIAGNOSTIC INSTRUMENTATION AND DEVELOPING BETTER 8 COMPLIANCE TOOLS. FINALLY, WE NEED TO ENSURE VAPOR RECOVERY 9 SYSTEMS CAN OPERATE CONCURRENTLY WITH OTHER CLEAN AIR 10 PROGRAMS, SUCH AS ON BOARD REFUELING VAPOR RECOVERY, OR ORVR 11 VEHICLES. 12 STAFF IS WORKING TOWARD THESE GOALS THROUGH THE 13 DEVELOPMENT OF THE ENHANCED VAPOR RECOVERY PROGRAM, OR EVR. 14 EVR IS MADE UP OF THREE MAIN ELEMENTS, ORVR COMPATIBILITY, 15 PROGRAM IMPROVEMENTS, AND IN-STATION DIAGNOSTICS. 16 THE NEXT FEW SLIDES WILL INDICATE OUR OBJECTIVES IN 17 THESE AREAS. THE FIRST ELEMENT OF ENHANCED VAPOR RECOVERY IS 18 ORVR COMPATIBILITY. 19 WE ARE CONCERNED ABOUT POSSIBLE INCREASES IN 20 OVERALL EMISSIONS AS WE HAVE TWO DEVISES SEEKING TO CONTROL 21 THE SAME DISPLACED VAPOR DURING REFILLING. THE VAPORS GO TO 22 A CARBON CANISTER ON THE VEHICLE INSTEAD OF RETURNING TO THE 23 UNDERGROUND TANK. 24 AS THE VAPORS ARE NO LONGER AVAILABLE AT THE 25 NOZZLE, THE ASSIST SYSTEM WILL DRAW AIR INTO THE UNDERGROUND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 TANK, LEADING TO VAPOR GROWTH. THIS RESULT IN FUTURE 2 EMISSION FOR SOME PHASE 2 ASSIST SYSTEMS. 3 IN DECEMBER, WE WILL PROPOSE A NEW TEST PROCEDURE 4 THAT WOULD BE USED DURING CERTIFICATION OF PHASE 2 SYSTEMS TO 5 ENSURE THAT THERE ARE NO ADDITIONAL EMISSIONS DUE TO FUELING 6 OF ORVR VEHICLES. 7 THE SECOND ELEMENT OF THE DECEMBER EVR PROPOSAL IS 8 PROGRAM IMPROVEMENT. WE WILL BE PROPOSING CHANGES TO ACHIEVE 9 ADDITIONAL VAPOR RECOVERY EMISSION REDUCTION BY FOR EXAMPLE 10 INCREASING THE EFFICIENCY OF THE EXISTING EQUIPMENT. 11 THIS WILL ALSO INCLUDE CONTROLLING ADDITIONAL 12 EMISSION POINTS, SUCH AS IDLE NOZZLE EMISSIONS. WE WILL 13 DEVELOP BETTER COMPLIANCE TOOLS INCLUDING SIMPLER TEST 14 PROCEDURES THAT CAN BE USED BY BOTH STATION OPERATORS AND 15 DISTRICT INSPECTORS. 16 THE DISTRICT HAVE IDENTIFIED OTHERS AREAS IN THE 17 PROGRAM THAT CAN BE IMPROVED, AND WE WILL WORK HAND IN HAND 18 WITH THE DISTRICTS IN THIS EFFORT. 19 THE THIRD ELEMENT OF EVR IS IN-STATION DIAGNOSTICS. 20 THE OBJECTIVES OF ISD IS TO ADDRESS THE ISSUE OF 21 SYSTEM RELIABILITY, WHICH I MENTIONED IN THE BEGINNING OF 22 THIS PRESENTATION. WE ARE INVESTIGATING HOW NEW TECHNOLOGIES 23 CAN BE USED TO ENSURE THAT IN USE SYSTEMS ARE OPERATING AS 24 THEY WERE CERTIFIED. 25 THE IN-STATION DIAGNOSTICS WOULD CONTINUOUSLY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 MEASURE, MONITOR AND RECORD THE PERFORMANCE OF VAPOR RECOVERY 2 EQUIPMENT. ISD WOULD ALERT GASOLINE STATION OPERATORS WHEN 3 EQUIPMENT DEGRADATION OR MALFUNCTION OCCUR PREVENTING EXCESS 4 EMISSION AND INSURING LONG TERM COMPLIANCE. 5 ISD WOULD REDUCE RELIANCE ON PERIODIC TESTS THAT IS 6 REDUCING THE TEST BURDEN FOR DISTRICT COMPLIANCE STAFF. WE 7 ARE WORKING WITH TECHNOLOGY VENDORS TO DETERMINE FEASIBILITY 8 ELECTRONICALLY MONITORING THE SYSTEM PRESSURE, FUGITIVE 9 EMISSIONS, AIR TO LIQUID RATIO AMBIENT EMISSIONS. 10 THE EVR PROPOSAL WOULD BE IMPLEMENTED THROUGH 11 ADOPTION OF ADDITIONAL PERFORMANCE. WE WILL DEVELOP NEW AND 12 IMPROVED CERTIFICATION IN TEST PROCEDURES FOR CERTIFICATION 13 AND COMPLIANCE TESTING. TO ENSURE AUTOMATIC MONITORING OF 14 STATION PERIMETERS RELATING TO EMISSIONS WE WOULD REQUIRE 15 APPLICATION OF IN STATION DIAGNOSTIC. 16 THIS CONCLUDES OUR OVERVIEW OF THE ENHANCED VAPOR 17 RECOVERY PROGRAM WHICH WE WILL BE PRESENTING IN DECEMBER. 18 WE HAVE TWO MORE EVR WORKSHOPS PLANNED FOR THIS 19 SUMMER TO DEVELOP OUR PROPOSAL. WE ARE EXCITED ABOUT WORKING 20 WITH THE DISTRICT AND EQUIPMENT MANUFACTURERS, THE PETROLEUM 21 MARKETERS AND ALL OTHER INTERESTED PARTIES IN BRINGING VAPOR 22 RECOVERY TECHNOLOGY INTO THE TWENTY-FIRST CENTURY. 23 TODAY WE ARE TAKING A FIRST STEP TO REALIZE THESE 24 PROGRAM IMPROVEMENTS. IN CONCLUSION, WE ASK THAT YOU APPROVE 25 THE PROPOSED CHANGES AND CERTIFICATION AND TEST PROCEDURES. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 2 MS. MEADE: MY NAME IS KATHLEEN MEADE, FOR THE 3 RECORD. 4 PORTIONS OF THIS ITEM BEFORE YOU WAS LAST HEARD BY 5 THE BOARD MAY OF 1998. GROUPS AFFECTED BY THIS PROPOSAL 6 INCLUDE VAPOR RECOVERY EQUIPMENT MANUFACTURERS, TESTING AND 7 RESEARCH COMPANIES, GASOLINE MARKETING COMPANIES, OIL 8 COMPANIES, GASOLINE DISPENSING FACILITIES AND AIR POLLUTION 9 CONTROL DISTRICTS. 10 SINCE MAY, TO ENSURE GOOD COMMUNICATION WITH THESE 11 STAKEHOLDERS, STAFF ESTABLISHED A VAPOR RECOVERY E-MAIL LIST, 12 CONDUCTED FOUR WORKSHOPS, CONVENED A VAPOR RECOVERY EXECUTIVE 13 COMMITTEE COMPRISED OF INDUSTRY AND DISTRICTS AND CONTINUED 14 TO WORK WITH THE CAPCOA VAPOR RECOVERY TECHNICAL COMMITTEE. 15 THE LISTS CURRENTLY NOTIFIES OVER 80 INDIVIDUALS OF 16 NEW ISSUES AND INFORMATION ON VAPOR RECOVERY, SUCH AS THE 17 15-DAY CHANGES THAT STAFF MENTIONED. 18 SINCE JUNE OF LAST YEAR, THE VAPOR RECOVERY HOME 19 PAGE ON ARB WEBSITE RECEIVED 6487 HITS, AVERAGING ABOUT 541 20 PER MONTH. 21 TO DEVELOP THIS PROPOSAL, STAFF CONDUCTED FOUR 22 WORKSHOPS, ON AUGUST 11 AND NOVEMBER 10, 1998, MARCH 4, AND 23 MAY 6 OF THIS YEAR. 24 STAFF POSTED THE WORKSHOP NOTICES ON ARB WEBSITE 25 AND MAILED IT TO OVER 430 INDIVIDUALS REPRESENTING THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 AFFECTED GROUPS, 20 TO 60 INTERESTED STAKEHOLDERS 2 REPRESENTING THE EQUIPMENT MANUFACTURERS, TESTING COMPANIES 3 AND AIR POLLUTION CONTROL DISTRICTS PARTICIPATED IN THE 4 WORKSHOPS, AND STAFF REPORTS AND WORKSHOP MATERIALS WERE MADE 5 AVAILABLE ON THE WEBSITE. 6 ON MAY 6 OF THIS YEAR, THE HEARING NOTICE AND STAFF 7 REPORT WAS POSTED ON ARB'S WEBSITE AND MAILED TO THE 430 8 STAKEHOLDERS PREVIOUSLY MENTIONED, AND ON JUNE 18, STAFF 9 NOTIFIED THE INDIVIDUALS ON THE LIST SERVED AND POSTED ON THE 10 WEBSITE THE PROPOSED 15-DAY CHANGES CURRENTLY RECOMMENDED BY 11 STAFF. 12 IN CONCLUSION, WE BELIEVE STAFF PROVIDED A 13 PROACTIVE AND INCLUSIVE APPROACH WITH STAKEHOLDERS FOR THE 14 DEVELOPMENT OF THE ITEM BEFORE YOU NOW. 15 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 16 ANY QUESTIONS FROM BOARD MEMBERS? 17 COMMENTS? 18 MR. CALHOUN. 19 BOARD MEMBER CALHOUN: I BELIEVE THE PURPOSE, 20 CORRECTION, IT IS MY UNDERSTANDING THAT THE REGULATIONS ARE 21 ADOPTED BY THE AIR RESOURCES BOARD, BUT THE LOCAL DISTRICTS; 22 IS THAT CORRECT? 23 MS. WALSH: YES. 24 BOARD MEMBER CALHOUN: IT IS ALSO MY UNDERSTANDING 25 FROM READING YOUR STAFF REPORT THAT APPARENTLY THE DISTRICTS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 HAVE BEEN FAILING SOME SYSTEM THAT MEET THE ARB CERTIFICATION 2 REQUIREMENT, AND WHAT IS THE RATIONALE FOR THAT? 3 MR. KENNY: WHAT WE HAVE BEEN TRYING TO DO IS WORK 4 WITH THE DISTRICT WITH REGARD TO A NUMBER OF SYSTEM FAILURES 5 THAT WE HAVE BEEN SEEING, AND THE PURPOSE THERE WAS TO TRY TO 6 DEVELOP A WORKING RELATIONSHIP WITH THE DISTRICTS IN WHICH WE 7 WERE WORKING TOGETHER ON THIS ISSUE. 8 THE PROBLEMS THAT WE HAVE BEEN SEEING, FOR EXAMPLE, 9 WE HAVE SYSTEMS THAT WE HAVE CERTIFIED, AND THEY ARE NOT 10 WORKING AS WELL IN THE FIELD AS WE ANTICIPATED THEY WOULD 11 WORK AS A RESULT OF THE CERTIFICATION. 12 WE ARE DECERTIFYING SOME OF THE SYSTEMS, WHICH IS 13 WHAT THE DISTRICTS ARE LOOKING FOR US DO, AND THEN AT THE 14 SAME TIME WE ARE LOOKING TOWARD THE DISTRICT TO ALSO INCREASE 15 SOME OF THEIR LEVELS OF ENFORCEMENT TO ENSURE THAT THE FACT 16 THAT THE SYSTEMS CAN WORK EFFECTIVELY ARE IN PRACTICE 17 CONTINUING TO WORK EFFECTIVELY. 18 BOARD MEMBER CALHOUN: THE OTHER QUESTION THAT I 19 HAVE PERTAINS TO THE VOLUME OF FUEL COLLECTED. 20 I THINK YOU TOOK THE ORIGINAL PLAN, WHICH WAS FOR 21 IT TO BE 5 MILLILITERS, BUT SOMEHOW 10 CREPT INTO THE 22 REGULATION, AND YOU ALSO SAID IT WAS A TYPO. 23 IT SEEMS TO BE A FAIRLY LARGE TYPO. 24 MS. CASTRONOVO: YES. WE DID NOT CATCH IT AT THE 25 TIME WE WERE DOING THE 1996 REVISIONS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 WE HAD ABOUT 18 TEST METHODS THAT WERE PART OF THAT 2 PACKAGE, AND NO ONE ELSE CAUGHT IT EITHER. WE DID NOT 3 RECEIVE ANY COMMENTS. 4 I WENT BACK AND CHECKED, AND WENT BACK THROUGH AND 5 NO ONE CAUGHT IT. 6 BOARD MEMBER CALHOUN: DO YOU HAVE ANY ADDITIONAL 7 COMMENTS? 8 MR. CACKETTE: AS THE CHART SAID, IT WAS AN ERROR. 9 NOT NECESSARILY A TYPO, BUT THE MISTAKE WAS MADE 10 SOMEWHERE, AND WE ARE NOW CORRECTING IT. IT IS HARD TO 11 FIGURE OUT HOW YOU CAN TYPE 10 WHEN IT WAS SUPPOSED TO BE 5. 12 CHAIRMAN LLOYD: THE QUESTION AS WE LOOK AHEAD TO 13 PHASE 3 GASOLINE, WHAT ASSURANCES DO WE HAVE THAT THE 14 MATERIAL COMPATIBILITY WILL BE THERE DEPENDING ON THE 15 REFORMULATION? 16 IS THAT PART OF THE TEST? 17 I DID NOT SEE THAT ADDRESSED THERE. 18 MR. CACKETTE: LIKE WE DID ON RFG 2, I AM PRESUMING 19 IF THERE IS SUBSTANTIAL CHANGES IN THE RFG 3, THAT THERE WILL 20 BE SOME SORT OF A PROGRAM TO ASSURE THAT THERE ARE NOT 21 MATERIALS COMPATIBILITY PROBLEMS WITH GASOLINE. 22 CHAIRMAN LLOYD: AHEAD OF TIME. 23 MR. CACKETTE: YES, AND WE HAD A VERY EXTENSIVE ONE 24 ON RFG 2, AS YOU KNOW, SO IT OBVIOUSLY DEPENDS ON WHAT THE 25 CHANGES ARE, AND IF THEY ARE VERY MINOR, THEY ARE LESS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 CONCERN THAN IF THEY ARE MAJOR. 2 CHAIRMAN LLOYD: THAT WAS AN ISSUE WHERE SOME OF 3 THEM THERE ARE RESPONSIBLE, FOR EXAMPLE, FOR SOME VAPOR 4 RECOVERY, AND IF WE CHANGE INGREDIENTS AND THERE HAPPENS TO 5 BE SOMETHING THAT COMES UP, THEY SHOULD NOT BE HELD 6 RESPONSIBLE. 7 SO, WE WILL DO THAT. 8 MR. CACKETTE: RIGHT, AND THAT PARTICULAR ISSUE 9 CAME UP, IT WOULD BE GASOLINE CARGO TANKS AS TO WHETHER THEY 10 SHOULD BE CHECKED. 11 I DO NOT THINK WE DID INCLUDE THEM LAST TIME, AND 12 THIS TIME IF WE HAVE AN IN-USE VERIFICATION PROGRAM, WE WILL 13 INCLUDE GASOLINE CARGO TANKS. 14 CHAIRMAN LLOYD: THAT WAS THE CONTEXT THAT CAME UP, 15 TOO. 16 BOARD MEMBER CALHOUN: I JUST HAVE ONE MORE 17 QUESTION. 18 PERTAINING TO THE WARRANTY, AND I HAVE ALREADY 19 ASKED THE STAFF ABOUT THIS, IS IT NECESSARY THAT THE WARRANTY 20 BE EFFECTIVE IF IT IS GOING TO ACCOMPLISH THE OBJECTIVES 21 INTENDED, AND I GUESS I AM SOMEWHAT BOTHERED BY HAVING ALL OF 22 THE VARIOUS COMPONENT MANUFACTURERS COMPRISE A SYSTEM, HAVE 23 SOME RESPONSIBILITY FOR, NOT THE RESPONSIBILITY, BUT FOR THE 24 SYSTEM, GOING AFTER THEM, SO TO SPEAK, IT SEEMS TO ME THAT 25 THE IDEAL THING WOULD BE TO GO AFTER THE MANUFACTURER OF THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 PRODUCT. 2 I HAVE DISCUSSED THIS WITH STAFF, I GUESS THE 3 QUESTION THAT I WOULD HAVE IS WHAT CAN WE DO TO HELP OUT THE 4 COMPONENT MANUFACTURER SINCE HE IS NOW GOING TO BE LOOKED AT 5 AS OPPOSED TO THE MANUFACTURER? 6 MS. CASTRONOVO: I THINK THAT THE EXISTING 7 SITUATION IS THAT THE COMPONENT MANUFACTURERS DO ISSUE THEIR 8 OWN WARRANTY WITH THEIR COMPONENTS, AND WE ARE JUST 9 RECOGNIZING THAT THIS IS THE EXISTING SITUATION, AND THEY 10 WOULD PREFER TO BE IN CONTROL OF THEIR WARRANTY FOR THEIR 11 COMPONENTS. 12 BOARD MEMBER CALHOUN: DOES THE USER, THE END USER 13 KNOW THIS? 14 MAYBE THE SYSTEM THAT YOU PROPOSED PUTTING THESE 15 LABELS ON EACH COMPONENT MIGHT SOLVE THE PROBLEM. 16 MS. CASTRONOVO: EXACTLY. 17 THAT IS THE INTENT OF THE PROPOSAL. 18 BOARD MEMBER CALHOUN: ALL RIGHT. THANK YOU. 19 CHAIRMAN LLOYD: ANY OTHER QUESTIONS? 20 BOARD MEMBER MCKINNON: YES, I PUSHED THE RIGHT 21 BUTTON NOT THE LIGHT. 22 I AM INTERESTED IN THE WARRANTY ISSUE, TOO. IT 23 SEEMS TO BE LIKE A LOT OF OTHER SYSTEMS, AIRPLANES AND 24 DIFFERENT SYSTEMS THAT PEOPLE SELL, THEY WARRANTY WHOLE 25 SYSTEM, AND THE WAY THAT THEY DO THAT IS THAT THEY CERTIFY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 THE VENDORS ALONG THE WAY TO PUT TOGETHER THE SYSTEM, HAS ANY 2 THOUGHT BEEN GIVEN TO THAT APPROACH? 3 IT MAY BE THE SYSTEM MANUFACTURER THINKS ABOUT 4 THINGS THAT WAY. 5 MS. MCKINNEY: MY NAME IS LAURA MCKINNEY, AND I AM 6 THE MANAGER OF CERTIFICATION, IN THE INVESTIGATION SECTION. 7 IN RESPONSE TO YOUR QUESTION, YES, A GREAT DEAL OF 8 THOUGHT HAS BEEN GIVEN TO THAT, AND AT EACH OF THE WORKSHOPS, 9 THERE HAS BEEN CONSIDERABLE DISCUSSION OF THE WARRANTY ISSUES 10 AND CONSIDERABLE INPUT FROM THE MANUFACTURERS. 11 THERE IS CERTAIN RELUCTANCE OF MANUFACTURERS TO BE 12 RESPONSIBLE FOR COMPONENTS OVER WHICH THEY HAVE NO CONTROL. 13 BUT THE ISSUE OF A SYSTEM WARRANTY HAS COME UP AND HAS BEEN 14 EXTENSIVELY DISCUSSED AT THOSE WORKSHOPS. 15 MR. KENNY: BUT IF I MAY ADD TO THAT ALSO, ONE OF 16 THE THINGS THAT WE ARE SEEING WITH THE EXISTING SYSTEMS OUT 17 THERE IS THEY ARE MORE COMPONENTS ORIENTED. 18 SO, IT OBVIOUSLY MAKES IT A LITTLE BIT MORE 19 DIFFICULT. ONE OF THE THINGS THAT WE ARE LOOKING AT WITH 20 REGARDS TO THE ENHANCED VAPOR RECOVERY THAT WE PLAN TO BRING 21 TO YOU IN DECEMBER IS MORE OF A SYSTEMS APPROACH, AND SO IT 22 MIGHT ACTUALLY MAKE IT A LITTLE BIT EASIER. 23 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 24 APPARENTLY, WE DO NOT HAVE ANY PUBLIC TESTIMONY ON 25 THIS, SO I WILL CONCLUDE THAT PERIOD. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 DO WE HAVE ANY WRITTEN SUBMISSIONS TO BE ENTERED? 2 MS. CASTRONOVO: YES, WE DO. 3 WE RECEIVED A TOTAL OF SIX LETTERS, IN THE 45-DAY 4 COMMENT PERIOD, FIVE FROM VAPOR EQUIPMENT MANUFACTURERS, AND 5 ONE FROM THE SAN DIEGO COUNTY AIR POLLUTION CONTROL DISTRICT. 6 THE FIVE EQUIPMENT MANUFACTURERS WERE HURT 7 COMBUSTION ENGINEERING, WAYNE DRESSER, GILBARCO, OPW AND 8 HUSKY, AND I WOULD LIKE TO BRIEFLY SUMMARIZE THE COMMENTS 9 CONTAINED IN THOSE LETTERS AND OUR ACTIONS TAKEN IN RESPONSE 10 TO THOSE COMMENTS. 11 WAYNE, GILBARCO AND OPW WERE UNHAPPY WITH THE 12 ORIGINAL STAFF PROPOSAL TO INCREASE THE WARRANTY TO THREE 13 YEARS. HOWEVER, OUR SUGGESTED 15-DAY CHANGE TO A ONE-YEAR 14 WARRANTY, WITH THE WARRANTY TAG, ADDRESSES THOSE CONCERNS. 15 WE WILL MODIFY THE WARRANTY TAG LANGUAGE AS 16 SUGGESTED BY HUSKY TO ALLOW THE OPTION OF HAVING THE DATA 17 MANUFACTURER STAKED ON THE EQUIPMENT ITSELF RATHER THAN ON 18 THE TAG. 19 OPW HAS SOME DOUBTS ABOUT WHETHER THE TAG WOULD 20 ACHIEVE OUR OBJECTIVE, BUT WE THINK IT IS WORTH A TRY, AND WE 21 WILL INVESTIGATE OTHER OPTIONS IF NECESSARY IN FUTURE 22 RULEMAKING, AND OF COURSE, COMMENTS WILL BE ACCEPTED DURING 23 THE 15-DAY NOTICE PERIOD. 24 OPW AND HUSKY WERE CONCERNED THAT THE NOTIFICATION 25 PROVISION PROPOSED FOR CP 201 WOULD ALERT THEIR COMPETITORS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 OF THEIR NEW PRODUCTS BEFORE THEY WERE CERTIFIED. 2 STAFF'S PROPOSED 15-DAY CHANGES TO LIMIT THE NUMBER 3 OF PARTIES REQUIRED TO BE NOTIFIED SHOULD SATISFY THEIR 4 CONCERNS AND STILL FULFILL THE INTENT OF THE PROPOSAL. 5 GILBARCO HAD REQUESTED ADDITIONAL REQUIREMENTS FOR 6 COMPONENT MANUFACTURERS. HOWEVER, WE FEEL OUR APPLICATION 7 REVISIONS ARE SUFFICIENT TO ADDRESS THIS ISSUE. 8 WAYNE BELIEVES CLARIFICATION IS NEEDED IF WE MAKE 9 THE PROPOSED CHANGE TO REFERENCE BACK PRESSURE CRITERIA TO 10 THE CERTIFICATION EXECUTIVE ORDER. 11 WAYNE ALSO FEELS THE EXISTING CRITERIA SHOULD BE 12 RE-EVALUATED. WE PLAN TO SEND A LETTER TO ALL DISTRICTS 13 CLARIFYING THE BACK PRESSURE REQUIREMENTS, AND WE AGREE WITH 14 WAYNE, THAT THE EXISTING CRITERIA MAY BE DIFFICULT TO MEET 15 FOR SOME ACCEPTABLE COMBINATIONS OF BALANCE SYSTEM 16 COMPONENTS. 17 WE ARE COMMITTED TO DEVELOPING A PRESSURE DROP 18 BUDGET TO ADDRESS THIS ISSUE. 19 HURT IS CONCERNED THAT THE PROPOSAL A OVER L TEST 20 WILL LED TO INCREASE VIOLATIONS FOR THE SYSTEM. WE BELIEVE 21 THAT THE TEST REQUIREMENTS ARE FAIR BASED ON FIELD TESTS THAT 22 WE HAVE CONDUCTED THAT INDICATE THAT HURT CAN MEET A OVER L 23 REQUIREMENTS WITH THE NEW PROCEDURE. 24 HURT HAD ALSO REQUESTED REVISIONS TO THE LIQUID 25 REMOVAL CRITERIA FOR THEIR SYSTEM. THESE CRITERIA ARE NOT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 NEEDED AS A 15-DAY CHANGE CLARIFIES THAT THE LIQUID REMOVAL 2 TEST IS APPLICABLE ONLY FOR THE BALANCE SYSTEMS. 3 WE WILL BE DEVELOPING A TEST PROCEDURE EVALUATING 4 LIQUID REMOVAL SYSTEMS FOR ASSIST SYSTEMS IN THE FUTURE. 5 WE APPRECIATE THE COMMENTS FROM GILBARCO ON 6 ENHANCED VAPOR RECOVERY, AND WE WILL CONSIDER THEM IN 7 DEVELOPING OUR DECEMBER PROPOSAL. WE ALSO APPRECIATE THE 8 COMMENTS FROM SAN DIEGO AIR POLLUTION CONTROL DISTRICT ON THE 9 TWO TEST PROCEDURES. 10 OUR 15-DAY CHANGES INCLUDE ALL OF SAN DIEGO 11 SUGGESTIONS, WITH TWO EXCEPTIONS. 12 SAN DIEGO HAD SUGGESTED THAT THE A OVER L TEST BE 13 RENAMED THE AV OVER L TEST. ALTHOUGH WE AGREE IT IS MORE 14 TECHNICALLY ACCURATE, WE WILL STAY WITH THE A OVER L NAME TO 15 MAINTAIN CONSISTENCY WITH RULES AND EXECUTIVE ORDERS AND 16 OTHER DOCUMENTS THAT REFER TO THE A OVER L TEST. 17 SAN DIEGO HAD ALSO SUGGESTED THAT THE TEST INCLUDE 18 A MAXIMUM FILL HEIGHT, AND WE WILL CONSIDER THIS MODIFICATION 19 AFTER THE DATA IS COLLECTED, WHICH INDICATES THE CHANGE IS 20 NEEDED. 21 THIS CONCLUDES OUR SUMMARY OF THE LETTERS. 22 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 23 DOES STAFF HAVE ANY OTHER COMMENTS? 24 MR. KENNY: NO, WE DO NOT. 25 CHAIRMAN LLOYD: OKAY. I WILL NOW CLOSE THE RECORD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 ON THIS AGENDA ITEM. 2 HOWEVER, THE RECORD WILL BE REOPENED, WHEN THE 3 15-DAY NOTICE OF PUBLIC AVAILABILITY IS ISSUED. WRITTEN OR 4 ORAL COMMENTS RECEIVED AFTER THIS HEARING DATE BUT BEFORE THE 5 15-DAY NOTICE IS ISSUED WILL NOT BE ACCEPTED AS PART OF THE 6 OFFICIAL RECORD ON THIS AGENDA ITEM. 7 WHEN THE RECORD IS REOPENED FOR A 15-DAY COMMENT 8 PERIOD, THE PUBLIC MAY SUBMIT WRITTEN COMMENTS ON THE 9 PROPOSED CHANGES WHICH WILL BE CONSIDERED RESPONDED TO IN THE 10 FINAL STATEMENT OF REASONS FOR THE REGULATION. 11 AGAIN, JUST A REMINDER TO BOARD MEMBERS OF OUR 12 POLICY REGARDING EX PARTE, WHILE WE MAY COMMUNICATE OFF THE 13 RECORD WITH OUTSIDE PERSONS REGARDING THE BOARD RULEMAKING, 14 WE MUST DISCLOSE THE NAMES OF OUR CONTACTS AND THE NATURE OF 15 THE CONTENTS ON THE RECORD. 16 THIS REQUIREMENT APPLIES SPECIFICALLY TO THE 17 COMMUNICATION THAT TAKES PLACE AFTER NOTICE OF THE BOARD 18 HEARING WAS PUBLISHED. 19 ARE THERE ANY COMMUNICATIONS THAT MEMBERS NEED TO 20 DISCLOSE AT THIS TIME? 21 IN SEEING NONE, WE WILL TAKE A LOOK AT THE 22 RESOLUTION BEFORE US. 23 MS. JOHNSTON: DR. LLOYD, MY NAME IS DIANE 24 JOHNSTON. I AM WITH THE OFFICE OF LEGAL AFFAIRS. 25 I WOULD JUST LIKE TO POINT OUT THAT IN THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 ATTACHMENT TO THE RESOLUTION, THAT ONE OF THE 15-DAY 2 MODIFICATIONS THAT STAFF HAS SUGGESTED THAT RELATES TO THE 3 WARRANTY TAG DOES NOT INCLUDE A PORTION OF THE MODIFICATION, 4 AND THAT RELATES TO THE DATE OF MANUFACTURE BEING ALLOWED TO 5 BE ON THE COMPONENTS RATHER THAN ON THE TAG. 6 SO WE ARE, I WOULD LIKE TO SUGGEST TO THE BOARD 7 THAT ADDITIONAL MODIFICATION BE INCLUDED IN THE ATTACHMENT 2 8 LANGUAGE FOR THE RESOLUTION. 9 CHAIRMAN LLOYD: SO BE IT. 10 OKAY, WITH THAT CHANGE, THEN DO WE HAVE A MOTION ON 11 RESOLUTION 1999-23? 12 BOARD MEMBER MCKINNON: MR. CHAIRMAN, I MOVE THE 13 RESOLUTION. 14 BOARD MEMBER ROBERTS: SECOND. 15 CHAIRMAN LLOYD: ALL IN FAVOR, SAY AYE. 16 THANK YOU VERY MUCH. THANK YOU, STAFF. 17 I THINK AT THIS TIME BE AWARE THAT SOME OF THE 18 BOARD MEMBERS WILL PROBABLY BE DISAPPEARING BEHIND THE SCENES 19 HERE TO ENJOY SOME LUNCH, BUT THEY WILL BE MONITORING THE 20 PROCEEDINGS, SO THAT WILL CONTINUE. 21 I WOULD ALSO LIKE TO SAY BEFORE WE MOVE INTO THE 22 NEXT AGENDA ITEM, WHICH IS THE UPDATE ON THE AIR TOXICS 23 PROGRAM AND COMMUNITY HEALTH, I WAS REMISS EARLIER IN NOT 24 THANKING MRS. SALLY RAKOW FOR HER EXCELLENT SERVICE WITH THE 25 BOARD, AND SO I WOULD LIKE TO, ON BEHALF OF THE BOARD, FOR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 THE STAFF TO DRAW UP AN APPROPRIATE DOCUMENT ACKNOWLEDGING 2 THAT SERVICE. 3 WE APPRECIATE IT. 4 BOARD MEMBER MCKINNON: ACTUALLY, I MIGHT ADD TO 5 THAT OUR HOPE IS THAT WE CAN GIVE IT TO HER AT THE BOARD 6 MEETING NEXT MONTH IN SAN FRANCISCO, SINCE IT IS CONVENIENT 7 FOR HER BECAUSE SHE LIVES CLOSE BY. 8 CHAIRMAN LLOYD: EXCELLENT, AND WITH THAT THOUGHT 9 IN MIND, MR. KENNY, WERE YOU ABLE TO DELIVER THE DOCUMENT TO 10 SUPERVISOR SILVA? 11 MR. KENNY: YES, I DID ACTUALLY GO TO THE ORANGE 12 COUNTY SUPERVISORS MEETING ABOUT 10 DAYS AGO AND PROVIDED 13 SUPERVISOR SILVA WITH BOTH A RESOLUTION OF APPRECIATION AND 14 WITH A PLAQUE WHICH COMMEMORATED THE TONNAGE REDUCTIONS THAT 15 WERE ACHIEVED DURING HIS 10 YEARS ON THE BOARD. 16 CHAIRMAN LLOYD: HOW WAS THAT RECEIVED BY HIS 17 FELLOW BOARD MEMBERS? 18 MR. KENNY: I THINK THEY WERE ACTUALLY SOMEWHAT 19 IMPRESSED BY IT, AND I THINK HE WAS IMPRESSED, SOMEWHAT, AND 20 I THINK I WILL LEAVE THAT UNDEFINED. 21 BUT HIS TONNAGE NUMBER WAS 110,000 TONS PER YEAR, 22 SO IT WAS A VERY SUBSTANTIAL NUMBER. 23 CHAIRMAN LLOYD: THANK YOU VERY MUCH. 24 IT WAS A NICE GESTURE. 25 THE NEXT ITEM ON THE AGENDA TODAY IS 99-5-3, THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 UPDATE OF CALIFORNIA'S AIR TOXICS PROGRAM AND RELATED 2 COMMUNITY HEALTH ISSUES. 3 DEALING EFFECTIVELY WITH TOXIC AIR POLLUTANTS IS 4 ONE OF MY HIGHEST PRIORITIES TO DO IN THE NEXT FOUR YEARS. 5 WE NEED TO UNDERSTAND THEM BETTER AND SEE HOW THEY 6 INTERRELATE WITH REGULAR POLLUTANTS AND CHOSE THE BEST IN 7 OVERALL PUBLIC HEALTH RISKS. 8 STAFF IS WORKING ON THE QUESTIONS. AS MANY OF YOU 9 KNOW, I HAVE ALSO HIRED A COMMUNITY HEALTH ADVISOR WITHIN THE 10 CHAIRMAN'S OFFICE TO GIVE ME ADDITIONAL GUIDANCE IN THIS 11 AREA. 12 MR. KENNY, WOULD YOU PLEASE INTRODUCE THE ITEM AND 13 INTRODUCE YOUR TEAM. 14 MR. KENNY: THANK YOU, MR. CHAIRMAN AND MEMBERS OF 15 THE BOARD. 16 TO COMPLIMENT AND ENHANCE OUR EFFORTS TO FULFILL 17 OUR MISSION TO PROTECT PUBLIC HEALTH, TWO MAJOR STATE LAWS 18 WERE ENACTED IN 1980 WHICH FOCUSED OUR ATTENTION ON AIR 19 TOXICS. 20 THESE LAWS, THE AIR TOXIC AIR CONTAMINANT 21 IDENTIFICATION AND CONTROL PROGRAM AND THE HOT SPOTS PROGRAM, 22 COMBINED WITH OUR EXISTING PROGRAM TO REDUCE THE CRITERIA 23 POLLUTANTS. 24 THEY HAVE ACHIEVED MANY ACCOMPLISHMENTS AND REDUCED 25 THE PUBLIC'S HEALTH RISK FROM AIR TOXICS. THE STAFF WILL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 PRESENT AN OVERVIEW OF THE PROGRAM FRAME WORK, HIGHLIGHT THE 2 ACCOMPLISHMENTS AND THEN DISCUSS HOW THIS RELATES TO 3 COMMUNITY HEALTH ISSUES. 4 IN TERMS OF COMMUNITY HEALTH, ADDRESSING 5 PARTICULATE MATTER FROM DIESEL FUEL ENGINES IS A HIGH 6 PRIORITY OF THE AIR RESOURCES BOARD. NOW, THIS IS BASED ON 7 THE EXPOSURE AND THE POTENCY OF TOXIC AIR CONTAMINANTS. 8 THIS COMPLEX MIXTURE MAY BE ONE OF THE MOST 9 IMPORTANT IN TERMS OF POTENTIAL HEALTH RISKS. AS SUCH, THE 10 STAFF WILL ALSO UPDATE YOU ON THE RISK MANAGEMENT ACTIVITIES 11 RELATED TO DIESEL PARTICULATE MATTER. 12 FINALLY, THERE ARE INITIATIVES WHICH ARE 13 INFLUENCING THE FUTURE DIRECTIONS OF THE PROGRAM INCLUDING 14 THE FEDERAL AIR TOXIC PROGRAM AND ENVIRONMENTAL JUSTICE 15 ISSUES. 16 THE STAFF WILL BRIEFLY DISCUSS A FEW OF THESE 17 EMERGING INITIATIVES AND HOW THEY MAY IMPACT CALIFORNIA'S AIR 18 TOXIC PROGRAM. 19 MR. BOB FLETCHER WILL MAKE THE STAFF'S 20 PRESENTATION. 21 BOB. 22 MR. FLETCHER: THANK YOU, MR. KENNY. GOOD 23 AFTERNOON, CHAIRMAN LLOYD AND MEMBERS OF THE BOARD. 24 OUR PRESENTATION TODAY WILL BE AN UPDATE TO THE AIR 25 TOXICS PROGRAM AND WITH THAT UPDATE SOME RECENT EXAMPLES OF PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 HOW THE PROGRAM RELATES TO COMMUNITY HEALTH. 2 TODAY WE WILL PROVIDE YOU WITH INFORMATION ON THE 3 BASIC FRAME WORK OF THE PROGRAM, A FEW OF OUR MAJOR 4 ACCOMPLISHMENTS AND CURRENT STATUS OF ACTIVITIES RELATED TO 5 SIGNIFICANT COMMUNITY HEALTH ISSUES AND A BRIEF INTRODUCTION 6 INTO OUR ACTIONS TO REDUCE THE RISK FROM DIESEL PARTICULATE 7 MATTER. 8 I WOULD LIKE TO BEGIN BY PRESENTING THE PROGRAMS 9 OVERALL FRAME WORK. 10 OUR AIR TOXIC PROGRAM TRACES ITS BEGINNING OF THE 11 CRITERIA POLLUTANTS PROGRAM IN THE 1960'S. AS MANY CRITERIA 12 POLLUTANT CONTROL MEASURES HAVE ALSO REDUCED AIR TOXICS, IN 13 THE 1980'S, TWO NEW LAWS PASSED BY THE CALIFORNIA LEGISLATURE 14 SPECIFICALLY TARGETED AIR TOXICS. 15 THESE NEW LAWS ESTABLISHED THE TOXICS CONTAMINANT 16 IDENTIFICATION AND CONTROL PROGRAM AND THE AIR TOXICS HOT 17 SPOTS PROGRAM. IN 1990, THE FEDERAL CLEAN AIR ACT AMENDMENTS 18 ADDED SIGNIFICANT NEW AIR TOXICS REQUIREMENTS ON A NATIONAL 19 LEVEL, WHICH MUST NOW BE CONSIDERED IN THE IMPLEMENTATION OF 20 OUR OWN PROGRAM. 21 FOR MANY YEARS, OUR CRITERIA POLLUTANT CONTROL 22 PROGRAM HAS BEEN AFFECTED AT REDUCING TOXICS, AS MANY 23 VOLATILE ORGANIC COMPOUNDS AND PARTICULATE MATTER 24 CONSTITUENTS ARE ALSO AIR TOXICS. 25 THEREFORE, IT IS IMPORTANT TO CONSIDER THE CRITERIA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 POLLUTANT PROGRAM AS AN INTEGRAL AND EFFECTIVE COMPONENT OF 2 OUR OVERALL AIR TOXICS PROGRAM. 3 THE AB 1807 IDENTIFICATION AND CONTROL PROGRAM 4 ESTABLISHED A TWO PHASE PROCESS OF RISK ASSESSMENT FOLLOWED 5 BY RISK MANAGEMENT. 6 THE FIRST PHASE RELATES TO THE FORMAL 7 IDENTIFICATION OF A TOXIC AIR CONTAMINANT BASED ON A 8 ASSESSMENT OF THE HEALTH EFFECT AND PUBLIC EXPOSURE. 9 IN THIS PHASE WE WORK CLOSELY WITH THE OFFICE OF 10 ENVIRONMENTAL HEALTH HAZARD ASSESSMENT AND THE INDEPENDENT 11 SCIENTIFIC REVIEW PANEL TO DEVELOP RECOMMENDATIONS FOR THE 12 BOARD WHETHER A SUBSTANCE SHOULD BE LISTED AS A TOXIC AIR 13 CONTAMINANT. 14 AS PART OF THIS PHASE, WE PROVIDE THE OPPORTUNITIES 15 FOR AND CONSIDER PUBLIC COMMENTS. 16 UPON THE FORMAL IDENTIFICATION OF A TOXIC AIR 17 CONTAMINANT, THE SECOND PHASE BEGINS, THIS IS THE RISK 18 MANAGEMENT PHASE. WE EVALUATE THE NEED AND POTENTIAL FOR 19 REDUCING THE RISK. IF APPROPRIATE, WE DEVELOP A CONTROL 20 MEASURE. 21 THE CONTROL MEASURES ARE DESIGNED TO ACHIEVE THE 22 LOWEST LEVEL ACHIEVABLE THROUGH THE APPLICATION AT THE BEST 23 AVAILABLE CONTROL TECHNOLOGY IN CONSIDERATION OF THE COST OF 24 CONTROL AND THE RISK. THE HOT SPOTS PROGRAM WAS DESIGNED TO 25 MAKE PUBLIC AWARE OF INDIVIDUAL FACILITIES THAT MAY POSE A PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 SIGNIFICANT RISK IN WHICH HAS BEEN A STRONG INCENTIVE FOR 2 SOURCES TO REDUCE THEIR RISK. 3 THE MAJOR ELEMENTS TO THE PROGRAM INCLUDE 4 DEVELOPING EMISSIONS INVENTORY FOR SOURCES AND PRIORITIZING 5 POTENTIAL RISK FROM THESE SOURCES, ASSESSING THE RISK FROM 6 IDENTIFIED HIGH PRIORITY SOURCES, NOTIFYING THE PUBLIC IF THE 7 RISK IS SIGNIFICANT AND FOR SOME SOURCES PREPARING AND 8 IMPLEMENTING A PLAN TO REDUCE THAT RISK. 9 THROUGH THIS PROGRAM CALIFORNIA HAS ESTABLISHED AND 10 MAINTAINED A COMPREHENSIVE AIR TOXICS EMISSIONS INVENTORY. 11 UNDER THE NEW FEDERAL AIR TOXIC PROGRAM, THE U.S. EPA MUST 12 DEVELOP TECHNOLOGY-BASED EMISSION STANDARDS IN IDENTIFIED 13 STATIONARY SOURCE CATEGORIES. 14 THESE EMISSION STANDARDS ARE OFTEN REFERRED TO 15 MAXIMUM ACHIEVABLE CONTROL TECHNOLOGY STANDARDS OR MAXIMUM 16 STANDARDS. TO DATE THE U.S. EPA HAS ISSUED ABOUT 35 17 STANDARDS WITH ABOUT 75 MORE EXPECTED TO COMPLETE THIS PART 18 OF THE PROGRAM. 19 CALIFORNIA ALREADY HAS EMISSION STANDARDS FOR THESE 20 CATEGORIES THAT THE U.S. EPA HAS PROMULGATED TO DATE. 21 THESE MAXIMUM STANDARDS MUST BE REVIEWED WITHIN 22 EIGHT YEARS OF PROMULGATION TO ASSURE THAT THE RISK FROM THE 23 SOURCE CATEGORY DOES NOT REMAIN TOO HIGH. THEREFORE, WE 24 EXPECT THE U.S. EPA TO BEGIN EVALUATING AND POTENTIALLY 25 REVISING STANDARDS WITHIN THE NEXT SEVERAL YEARS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 THE U.S. EPA IS ALSO REQUIRED TO ESTABLISH A RISK 2 BASED PROGRAM TO REDUCE EMISSIONS AND RISKS WITHIN URBAN 3 AREAS. 4 THIS PROGRAM REFERRED TO AS THE INTEGRATED URBAN 5 AIR TOXIC STRATEGY MAY SIGNIFICANTLY EFFECT CALIFORNIA'S 6 PROGRAM, DEPENDING ON THE FLEXIBILITY GRANTED TO CALIFORNIA 7 TO IMPLEMENT THE PROGRAM REQUIREMENTS. 8 AS THE FEDERAL PROGRAM SIGNIFICANTLY IMPACTS 9 CALIFORNIA, WE ARE CONTINUING TO WORK WITH THE U.S. EPA TO 10 ADDRESS IMPLEMENTATION ISSUES WITH THIS PROGRAM. 11 WHILE THESE LEGISLATIVE PROGRAMS BEGAN AS SEPARATE 12 ENTITIES, THEY NOW INVOLVED INTO A FULLY INTEGRATED AIR TOXIC 13 PROGRAM, THE KEY ELEMENT OF THIS PROGRAM ARE SHOWN ON THIS 14 SLIDE, AND INVOLVE EVERY DIVISION WITHIN THE AIR RESOURCES 15 BOARD. 16 I WOULD NOW LIKE TO PRESENT AN OVERVIEW OF THE 17 MAJOR ACCOMPLISHMENTS OF OUR PROGRAM AND DISCUSS A FEW OF THE 18 PRIORITY INITIATIVES THAT ARE UNDER WAY. 19 WE HAVE SUBSTANTIALLY INCREASED OUR KNOWLEDGE ABOUT 20 AIR TOXICS IN THE LAST 15 YEARS. WE KNOW MORE ABOUT THE 21 HEALTH EFFECTS OF AIR TOXICS HAVING EVALUATED AND FORMALLY 22 LISTED ALMOST 200 SUBSTANCES AS TOXIC AIR CONTAMINANTS. 23 WE KNOW MORE ABOUT THE SOURCES OF THESE AIR TOXICS 24 AND THEIR EMISSIONS. THE AIR TOXICS EMISSIONS INVENTORY 25 CONTAINS DATA FROM OVER 8,000 FACILITIES IN CALIFORNIA. THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 INVENTORY PROVIDES ESSENTIAL DATA FOR CONDUCTING EXPOSURE AND 2 RISK ASSESSMENTS, PRIORITIZING SUBSTANCES FOR IDENTIFICATION 3 AND FACILITIES FOR CONTROL STRATEGIES AND IDENTIFYING 4 FACILITIES WITH HIGH RISK. 5 WHILE THE EMISSIONS INVENTORY ALLOWED FOR MODELING 6 TO DETERMINE EXPOSURE FOR RISK, WE HAVE ALSO DEVELOPED 7 EXTENSIVE AMBIENT AND INDOOR PROGRAMS THAT SUPPORT OUR 8 EXPOSURE AND RISK ASSESSMENT EFFORTS THROUGH THE DEVELOPMENT 9 AND USE OF THE INFORMATION. 10 WE HAVE AGAIN ESTABLISHED OURSELVES AS A LEADER IN 11 IMPLEMENTING ADVANCED AIR QUALITY STRATEGIES. 12 FOR EXAMPLE, OUR TOXICS AIR MONITORING NETWORK IS 13 THE WORLD'S MOST EXTENSIVE AIR MONITORING NETWORK WITH 29 14 SITES SHOWN HERE AS STARS ON THE MAP. THIS NETWORK HAS BEEN 15 GENERATING DATA FOR ALMOST 10 YEARS AND CURRENTLY COLLECTS 16 THE INFORMATION ON APPROXIMATELY 65 TOXIC AIR CONTAMINANTS. 17 THESE DATA ARE USED TO IDENTIFY SUBSTANCES TO 18 ESTABLISH BACKGROUND CONCENTRATIONS AND CONDUCT RISK 19 EVALUATIONS. 20 OUR DATA ARE MADE AVAILABLE TO THE PUBLIC IN A CD 21 ROM FORMAT AND THROUGH THE ARB WEBSITE. 22 THE INDOOR AIR QUALITY AND PERSONAL EXPOSURE 23 ASSESSMENT PROGRAM IS ALSO RECOGNIZED AS A LEADER IN 24 SPONSORING THE CUTTING EDGE RESEARCH ON ALL ASPECTS OF INDOOR 25 AIR QUALITY AND EXPOSURE AND ASSESSMENTS, INCLUDING THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 CHARACTERIZATION OF EMISSIONS FROM INDOOR SOURCES OF AIR 2 TOXICS, SUCH AS CARPET, PAINT AND WOOD PRODUCTS AND THE 3 DEVELOPMENT OF INDOOR EXPOSURE ASSESSMENT MODELS. 4 OUR RISKS REDUCTION PROGRAM HAS HISTORICALLY 5 FOCUSED ON THOSE TOXIC AIR CONTAMINANTS WE KNOW TO POSE THE 6 GREATEST POTENTIAL HEALTH RISKS. 7 THESE COMPOUNDS INCLUDE BENZENE, CHROMIUM AND 8 PERCOETHYLENE. THE AIR BORNE TOXIC CONTROL MEASURES 9 DEVELOPED BY THE STATIONARY SOURCE DIVISION EFFECT OVER 7,000 10 SOURCES STATEWIDE AND TYPICALLY REDUCE EMISSIONS 95 PERCENT 11 TO 99.9 PERCENT. 12 MANY OF THESE CONTROL MEASURES EFFECT SOURCES SUCH 13 AS GAS STATIONS AND DRY CLEANERS THAT ARE LOCATED VERY CLOSE 14 TO WHERE PEOPLE LIVE. 15 IN 1996, CLEANER BURNING GASOLINE WAS INTRODUCED. 16 NOT ONLY DID IT REDUCE THE SMOG FORMING EMISSIONS 17 BY 15 PERCENT, BUT IT ALSO CUT BENZENE EMISSIONS IN HALF AND 18 REDUCED THE POTENTIAL CANCER RISK FROM VEHICLES USING 19 CONVENTIONAL GASOLINE BY 30 TO 40 PERCENT. 20 FINALLY, ONE OF THE MOST NOTABLE ACHIEVEMENTS OF 21 THIS PROGRAM, HOWEVER, MUST BE CREDITED BACK TO THE INDUSTRY 22 ITSELF. 23 SIGNIFICANT VOLUNTARY EMISSION REDUCTIONS BY 24 SOURCES EFFECTED BY THE AIR TOXICS PROGRAM ARE RESPONSIBLE 25 FOR MILLIONS OF POUNDS OF TOXIC REDUCTIONS. AS I MENTIONED PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 EARLIER, OUR CRITERIA POLLUTANTS PROGRAM HAS GIVEN US 2 REDUCTIONS IN AIR TOXICS. 3 BETWEEN 1980 AND 1997, THE MAXIMUM PEAK ONE-HOUR 4 INDICATOR FOR OZONE DECLINED ABOUT 50 PERCENT, DESPITE A 5 POPULATION GROWTH OF ABOUT 40 PERCENT, AND AN INCREASE IN 6 VEHICLE MILES TRAVELED BY ABOUT 80 PERCENT. 7 WE KNOW THIS ALSO REPRESENTS REDUCTION IN TOXIC 8 EMISSIONS, AS MANY VOC, OZONE PRECURSORS ARE ALSO AIR TOXICS. 9 I NOW WOULD LIKE TO DISCUSS A FEW OF OUR MAJOR 10 INITIATIVES THAT ARE BEGINNING WITH OUR EFFORTS TO BETTER 11 CHARACTERIZE THE IMPACT OF AIR TOXICS. WE PLAN TO CONTINUE 12 OUR MONITORING PROGRAM AND AS NEEDED WILL CONDUCT MONITORING 13 TO ADDRESS COMMUNITY HEALTH CONCERNS. 14 WE OFTEN MUST DEVELOP NEW METHODS FOR MEASURING 15 TOXIC CONTAMINANTS, FOR EXAMPLE, TO ASSIST US IN ASSESSING 16 THE RISKS FROM PARTICULATE MATTER FROM DIESEL ENGINES, WE 17 MUST DEVELOP NEW ANALYTICAL METHODS TO BETTER CHARACTERIZE 18 PUBLIC EXPOSURES AND WE ALSO NEED TO IMPROVE OUR TOOLS AND 19 METHODOLOGIES AND COLLECT ADDITIONAL DATA TO ASSESS RISKS 20 FROM INDOOR EXPOSURES TO TOXIC AIR CONTAMINANTS. 21 PAST ARB STUDIES HAVE REPEATEDLY SHOWN THAT 22 PERSONAL EXPOSURE MAY BE SIGNIFICANT. THEREFORE, WE WILL 23 CONTINUE TO SUPPORT STUDIES THROUGH OUR RESEARCH DIVISION ON 24 PERSONAL INDOOR MONITORING TO BETTER CHARACTERIZE THE TRUE 25 RISK FROM AIR TOXICS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 AS WE MOVE INTO THE FUTURE, WE ALSO WILL BE 2 EVALUATING MODELS TO ALLOW US TO LOOK AT CUMULATIVE EXPOSURE 3 FROM MULTIPLE AIR TOXICS. WE BELIEVE THIS TYPE OF ASSESSMENT 4 WOULD GIVE A MORE REALISTIC PICTURE OF WHAT AN INDIVIDUAL MAY 5 BE EXPOSED TO IN THEIR DAILY ACTIVITIES. 6 THE STAFF OF OUR PLANNING AND TECHNICAL SUPPORT 7 DIVISION AND RESEARCH DIVISION WILL BE EVALUATING AND 8 RECOMMENDING APPROPRIATE MODELS TO ESTIMATE CUMULATIVE AIR 9 EXPOSURES. 10 FROM BETTER CHARACTERIZATION OF EXPOSURES, WE CAN 11 DETERMINE WHAT REDUCTIONS ARE NEEDED TO PROTECT PUBLIC 12 HEALTH. WE HAVE SEVERAL RISK MANAGEMENT INITIATIVES UNDER 13 WAY, SOME OF WHICH YOU WILL BE SEEING OVER THE NEXT YEAR. 14 AS MR. KENNY MENTIONED, ONE OF OUR HIGHEST PRIORITY 15 EFFORTS IS FOCUS ON THE RISK MANAGEMENT OF PARTICULATE MATTER 16 FROM DIESEL FUEL ENGINES. IN A FEW MINUTES, I WILL PROVIDE 17 SOME ADDITIONAL INFORMATION ON THIS EFFORT. 18 WE ARE CONTINUALLY EVALUATING SOURCE CATEGORIES FOR 19 POSSIBLE CONTROL MEASUREMENT DEVELOPMENT AND ADDITIONAL 20 SOURCE SPECIFIC RISK REDUCTION GUIDELINES. 21 FOR EXAMPLE, WE ARE NOW DEVELOPING A CONTROL 22 MEASURE TO LIMIT EMISSIONS FROM THE USE OF AUTOMOTIVE 23 CONSUMER PRODUCTS WHICH WE EXPECT TO PRESENT TO THE BOARD 24 EARLY NEXT YEAR. 25 WE ARE ALSO DEVELOPING A GUIDANCE DOCUMENT FOR THE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 DISTRICTS ON HOW TO REDUCE ASBESTOS EMISSIONS FROM 2 CONSTRUCTION SITES, QUARRIES AND ROADS PAVED WITH SERPENTINE 3 ROCK, AND THE MOBILE SOURCE CONTROL DIVISION ASKED US TO 4 REDUCE EMISSIONS OF VOC AND PARTICULATE MATTER EMISSIONS FROM 5 MOBILE SOURCES WILL CONTINUE TO PLAY A KEY ROLE IN THE AIR 6 TOXICS PROGRAM. 7 IN ADDITION, WE EXPECT TO DERIVE SIGNIFICANT 8 BENEFITS FROM MEASURES WHICH HAVE BEEN RECENTLY ADOPTED BUT 9 HAVE NOT YET BEEN FULLY IMPLEMENTED, AND ATTENTION TO FUEL 10 QUALITY WILL CONTINUE TO BE IMPORTANT AS WELL. 11 AS MENTIONED EARLIER, THE FEDERAL AIR TOXICS 12 PROGRAM PROVIDES NEW CHALLENGES IN CALIFORNIA. WE HAVE 13 PLAYED A KEY ROLE IN NATIONAL EFFORTS TO ADDRESS 14 IMPLEMENTATION ISSUES ASSOCIATED WITH THE FEDERAL PROGRAM. 15 OUR OBJECTIVES HAVE BEEN TO ELIMINATE DUPLICATE 16 REGULATORY REQUIREMENTS, PROVIDE FOR THE EFFICIENT AND 17 EFFECTIVE USE OF ALL OF OUR LIMITED RESOURCES, RETAIN THE 18 ENVIRONMENTAL BENEFITS OF BOTH THE FEDERAL AND CALIFORNIA 19 PROGRAMS AND PROVIDE CALIFORNIA THE ABILITY TO MAINTAIN A 20 MORE COMPREHENSIVE STRINGENT CRITERIA AND TOXIC AIR POLLUTANT 21 CONTROL PROGRAM. 22 PROGRESS HAS BEEN SLOW IN FINDING ACCEPTABLE 23 SOLUTIONS. HOWEVER, THERE ARE A NUMBER OF INITIATIVES THAT 24 ARE UNDERWAY TO TRY TO ADDRESS THESE ISSUES. 25 WE HAVE MADE THIS EFFORT A HIGH PRIORITY AND ARE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 OPTIMISTIC THAT WE WILL FIND PRACTICAL SOLUTIONS IN THE NEAR 2 FUTURE THAT WILL RESULT IN MEETING OUR OBJECTIVES AND 3 IMPLEMENTING THE FEDERAL PROGRAM. 4 A PROGRAM OBVIOUSLY IS ONLY AS GOOD AS IT IS 5 IMPLEMENTED AND ENFORCED, AND INSPECTIONS ARE A KEY ELEMENT 6 OF OUR ENFORCEMENT PROGRAM. 7 SPECIFIC TO THE TOXICS PROGRAM, ARB IS RESPONSIBLE 8 FOR INSPECTING DEMOLITION AND RENOVATION SITES FOR COMPLIANCE 9 WITH FEDERAL ASBESTOS REQUIREMENTS FOR THOSE DISTRICTS THAT 10 ARE NOT ALREADY FUNDED BY THE U.S. EPA. 11 TYPICALLY WE HAVE OVER 300 NOTIFICATIONS OF THESE 12 PROJECTS A YEAR, AND WE WILL EXPECT ABOUT 10 PERCENT. WE 13 ALSO INSPECT THE FACILITIES WHICH SELL SERPENTINE ROCK FOR 14 THE COMPLIANCE WITH THE ASBESTOS AIR BORNE TOXIC CONTROL 15 MEASURE. 16 THE ARB IS ALSO ASSISTED IN THE INDUSTRY AND THE 17 DISTRICTS BY PUBLISHING COMPLIANCE ASSISTANCE AND TRAINING 18 MANUALS. 19 THE LAST FISCAL YEAR WE PUBLISHED AND DISTRIBUTED 20 OVER 3,000 MANUALS AND ALMOST 50,000 HANDBOOKS ON VARIOUS 21 SUBJECTS FOR BOTH THE CRITERIA AND TOXICS PROGRAM. OTHER 22 ACTIONS INCLUDE RULE EFFECTIVENESS STUDIES AND AUDITS OF HOW 23 LOCAL DISTRICTS ARE IMPLEMENTING THE HOT SPOTS PROGRAM. 24 FINALLY, NO PROGRAM WILL BE EFFECTIVE UNLESS THE 25 PUBLIC IS ENGAGED. SHOWN HERE ARE A FEW OF THE PUBLIC PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 OUTREACH TOOLS WE HAVE USED AND ARE FURTHER DEVELOPING. WE 2 ARE PROUD OF OUR WEBSITE, AND IT OFFERS A WIDE RANGE OF 3 INFORMATION ON OUR AIR TOXICS PROGRAM, INCLUDING ALL OF THE 4 RESEARCH NOTES ON AIR TOXICS THAT THE BOARD SPONSORS. 5 IN ADDITION, IT IS CONTINUALLY BEING EXPANDED AND 6 IMPROVED. IN THE NEXT YEAR WE HOPE TO DEVELOP GIS 7 CAPABILITIES, PLOTTING EMISSIONS FROM STATIONARY AND MOBILE 8 AND AIR RESOURCES OF TOXIC EMISSIONS ON AN INTERNET MAP. 9 WE ARE ALSO UPDATING THE CALIFORNIA ALMANAC OF 10 EMISSIONS AND AIR QUALITY TO INCLUDE AMBIENT AIR MONITORING 11 DATA AND EMISSIONS INVENTORY DATA AND RISK INFORMATION FOR 12 AIR TOXICS FOR THE PERIOD 1990 THROUGH 1998. 13 WE PLAN TO HAVE THIS EXPANDED VERSION AVAILABLE BY 14 THE END OF THE YEAR. COMMUNITY HEALTH IS EMERGING AS A 15 SIGNIFICANT PUBLIC POLICY ISSUE THAT WARRANTS OUR ATTENTION. 16 TO HELP US FOCUS OUR ATTENTION ON COMMUNITY HEALTH 17 ISSUES, AND AS CHAIRMAN LLOYD HAD MENTIONED, WE HAVE RECENTLY 18 APPOINTED A COMMUNITY HEALTH ADVISOR. 19 THE FOLLOWING DISCUSSION IS INTENDED TO PROVIDE YOU 20 WITH SOME PERSPECTIVES ON A FEW COMMUNITY HEALTH ISSUES. 21 I WILL START OFF WITH THE BIG COMMUNITY, THE ENTIRE 22 STATE, SHOWN HERE AS SOME OF THE STATEWIDE RISK FROM AIR 23 TOXICS THAT WE CURRENTLY MONITOR PLUS THE ESTIMATED RISK FROM 24 PARTICULATE MATTER FROM DIESEL FUEL ENGINES FOR THE TIME 25 PERIODS FROM 1992 TO 1997. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 WE HAVE USED A THREE-YEAR AVERAGE TO EVEN OUT THE 2 EFFECT OF SUCH FACTORS AS METROLOGICAL IMPACTS. THE DATA 3 SHOWS THAT THE ESTIMATED RISKS DECLINED ABOUT 30 PERCENT FROM 4 ABOUT A THOUSAND POTENTIAL CANCER CASES PER MILLION TO A 5 LITTLE OVER 700 PER MILLION. 6 THIS SLIDE SHOWS THE RELATIVE CONTRIBUTION OF 7 SPECIFIC AIR TOXICS TO THE OVERALL RISK. AS YOU CAN SEE, THE 8 MAJORITY OF THE ESTIMATED RISK IS DUE TO A RELATIVELY FEW AIR 9 TOXICS. 10 THE MOST IMPORTANT BEING PARTICULATE MATTER FROM 11 DIESEL FUEL ENGINES WITH BENZENE, AND 1.3 BUTADIENES ALSO 12 SIGNIFICANT RELATIVE CONTRIBUTORS, NOTE HOWEVER, THAT THESE 13 DATA REPRESENTS GENERAL POPULATION EXPOSURES AND MAY NOT 14 REPRESENT THE RISK NEAR SOURCES. 15 FOR NEAR SOURCE EXPOSURE, OTHER TOXICS MAY DRIVE 16 THE RISK, AS SHOWN IN THIS SLIDE. WE ARE SEEING SOME 17 REDUCTIONS IN AMBIENT CONCENTRATIONS OF THE AIR TOXICS WHICH 18 ARE MAJOR CONTRIBUTORS TO THE OVERALL RISKS. 19 PARTICULATE MATTER FROM DIESEL FUEL ENGINES AT 1.3 20 BUTADIENE HAVE DROPPED ABOUT 30 PERCENT, WHILE BENZENE 21 CONCENTRATIONS ARE DOWN BY OVER 50 PERCENT. 22 HEXACHROMIC HAVE BOTH ALSO SHARPLY DECLINED. 23 THESE REDUCTIONS DUE IN LARGE PART TO THE CONTROL 24 ACTIONS TAKEN BY THE BOARD TO REGULATE CLEANER FUELS AND 25 VEHICLES ALONG WITH SOURCE SPECIFIC AIR BORNE TOXIC CONTROL PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 MEASURES. 2 WHILE WE HAVE SEEN THE AVERAGE STATEWIDE RISK, WE 3 ALSO KNOW THAT SOME COMMUNITIES IN THIS STATE EXPERIENCE 4 HIGHER AND LOWER RISK. SHOWN HERE IS JUST AN EXAMPLE OF 5 RELATIVE RISK TO THE 1995 TO 1997 PERIOD FOR A FEW SELECTED 6 COMMUNITIES. 7 AS YOU CAN SEE, THE LOS ANGELES AREA ARE THE MOST 8 POPULATED AREA IN THE STATE WITH THE MOST MOTOR VEHICLES AND 9 HAS THE HIGHEST ESTIMATED RISK. 10 THERE ARE, HOWEVER, AREAS WHERE EMISSIONS OF 11 SPECIFIC AIR TOXICS MAY PRESENT HIGHER RISK, AND WE NEED TO 12 KEEP FOCUSED ON REDUCING NEAR SOURCE EXPOSURES AS WELL. 13 SOME EXAMPLES ARE CHROME PLATING FACILITIES, DRY 14 CLEANERS, FURNITURE STRIPPERS, OR AREA NEAR HIGH TRAFFIC. 15 I WOULD NOW LIKE TO SHARE A FEW EXAMPLES OF 16 COMMUNITY HEALTH ISSUES THAT HAVE RECENTLY OCCURRED AND HOW 17 WE HAVE RESPONDED TO THOSE ISSUES. 18 IN THE COMMUNITY OF BELL GARDEN, AN ELEMENTARY 19 SCHOOL WAS SITED NEXT TO A CHROME PLATING FACILITY. IN 20 SUPPORT OF A DEPARTMENT OF TOXIC SUBSTANCES CONTROL 21 INVESTIGATION, OUR MONITORING AND LABORATORY DIVISION 22 CONDUCTED AMBIENT MONITORING NEAR THE SCHOOL AND FOUND 23 HEXAVALENT CHROMIUMS WHICH RESULTED IN AN ESTIMATED CANCER 24 RISK OF OVER 100 IN A MILLION. 25 TO AVOID POTENTIAL LIABILITY ISSUES, THE FACILITY PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 DISCONTINUED OPERATIONS, AND THE AIR CONCENTRATION OF 2 HEXAVALENT CHROMIUM ARE NOW BACK AT BACKGROUND LEVELS. 3 NOTE THAT DTSC IS CONTINUING ITS INVESTIGATION INTO 4 EQUIPMENT AND SOIL CONTAMINATION NEAR THIS FACILITY. 5 ANOTHER RECENT EXAMPLE IS IN SAN DIEGO, IN THE 6 BARRIO LOGAN, AND THIS COMMUNITY IS CONCERNED ABOUT EXPOSURES 7 FROM LEVELS OF AIR TOXICS DUE TO NEIGHBORHOOD SOURCES 8 INCLUDING A SHIP REPAIR FACILITY. 9 IN RESPONSE TO A PUBLIC REQUEST, THE ARB MET WITH 10 CONCERNED CITIZENS AND THE DISTRICT, AND SUBSEQUENTLY FORMED 11 A STAKEHOLDER WORKING GROUP TO DISCUSS THE ISSUES RELATED TO 12 AIR TOXIC EXPOSURES IN THIS COMMUNITY. 13 THE ARB HAS AGREED TO PROVIDE MONITORING THIS FALL 14 THROUGH THE WINTER TO IDENTIFY IF THERE ARE ANY ELEVATED AIR 15 TOXIC LEVELS. IF A SIGNIFICANT PROBLEM IS IDENTIFIED IN 16 BARRIO LOGAN, WE ARE COMMITTED TO CONTINUE MONITORING IN THIS 17 AREA. 18 WE HAVE ALSO COMMITTED SUBSTANTIAL RESOURCES TO 19 EVALUATE ASBESTOS EXPOSURE IN EL DORADO, WHICH IS LOCATED IN 20 THE SIERRA FOOTHILLS JUST EAST OF SACRAMENTO. ASBESTOS IS 21 FOUND IN THE SIERRA FOOTHILLS AND OTHER MOUNTAINOUS AREAS IN 22 CALIFORNIA. 23 THE ASBESTOS CAN BECOME AIR BORNE UNDER CERTAIN 24 CONDITIONS. FOR EXAMPLE, DRIVING ON ROADS THAT HAVE BEEN 25 PAVED WITH SERPENTINE ROCK OR CONSTRUCTION OPERATIONS THAT PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 DISTURB THE NATURALLY OCCURRING ASBESTOS. 2 IN RESPONSE TO PUBLIC CONCERNS, WE INITIATED AN 3 EXTENSIVE MONITORING PROGRAM IN EL DORADO COUNTY. OVER THE 4 LAST YEAR, WE HAVE COLLECTED OVER 400 SAMPLES THROUGHOUT THE 5 COUNTY, AND IN GENERAL, THE AMBIENT CONCENTRATIONS WERE LOW, 6 HOWEVER, NEAR CERTAIN SOURCES, ELEVATED LEVELS WERE FOUND. 7 AS A RESULT, THE ARB IN COOPERATION WITH 8 REPRESENTATIVES AT THE CALIFORNIA AIR POLLUTION CONTROL 9 OFFICERS ASSOCIATION IS IN THE PROCESS OF DEVELOPING RISK 10 REDUCTION GUIDELINES, WHICH I MENTIONED EARLIER AS ONE OF OUR 11 CURRENT RISK MANAGEMENT INITIATIVES, THE GUIDANCE DOCUMENT 12 WILL ADDRESS CONTROL OPTIONS AND ISSUES RELATED TO UNPAVED 13 ROADS AND QUARRIES, AND CONSTRUCTION ACTIVITIES IN SERPENTINE 14 ROCK AREAS. 15 IN OCTOBER OF 1997, THE SOUTH COAST AND ARB 16 UNDERTOOK A MAJOR AIR MONITORING PROGRAM IN SUPPORT OF THE 17 MULTIPLE AIR TOXIC EXPOSURE STUDY OR THE MATES 2 STUDY. 18 THIS MONITORING PROGRAM CONSISTED OF 10 FIXED 19 MONITORING SITES CHARACTERIZING REGIONAL CONDITIONS OVER A 20 ONE-YEAR, AND 14 ADDITIONAL SHORT TERM MONITORING SITES 21 CHARACTERIZING LOCAL CONDITIONS. THE MATE 2 STUDY ALSO 22 INCLUDES A TOXIC EMISSION INVENTORY UPDATE. 23 TOGETHER WITH THE MONITORING DATA, THE SOUTH COAST 24 WILL MODEL AND ASSESS AIR TOXIC RISK PATTERNS ACROSS THE 25 SOUTH COAST AIR BASIN, THE PRELIMINARY ANALYSIS OF THE DATA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 COLLECTED AND ANALYZED, IN CORRELATION WITH ARB HISTORICAL 2 AMBIENT MONITORING DATA. 3 HOWEVER, WE ARE VERY INTERESTED IN THE COMPLETION 4 OF THIS STUDY AND WILL BE WORKING CLOSELY WITH THE SOUTH 5 COAST. 6 THE TYPES OF STUDIES THAT I MENTIONED HERE ARE 7 LIKELY TO BECOME MORE PREVALENT IN THE NEXT FEW YEARS AS WE 8 SEEK TO BETTER UNDERSTAND THE CUMULATIVE EXPOSURE AND 9 COMMUNITY HEALTH ISSUES. 10 I WOULD NOW LIKE TO SPEND A FEW MOMENTS TALKING 11 ABOUT OUR HIGH PRIORITY EFFORTS TO ADDRESS PARTICULATE MATTER 12 FROM DIESEL FUELED ENGINES. 13 BASED ON EMISSIONS AND POTENCY, THIS AIR TOXIC MAY 14 BE ONE OF THE MOST IMPORTANT IN TERMS OF POTENTIAL COMMUNITY 15 PUBLIC HEALTH RISK. 16 AFTER NINE YEARS OF EXTENSIVE SCIENTIFIC REVIEW AND 17 PUBLIC INVOLVEMENT, THE BOARD IDENTIFIED PARTICULATE MATTER 18 FROM DIESEL FUELED ENGINES. SHOWN HERE IN YELLOW, ARE THE 19 ESTIMATED RISKS POSED BY PARTICULATE MATTER FROM DIESEL 20 FUELED ENGINES. 21 THE NUMBERS IN RED REPRESENT THE STATEWIDE RISK 22 FROM ALL OTHER AIR TOXICS THAT ARE MONITORED IN OUR AMBIENT 23 TOXIC NETWORK. AS YOU CAN SEE THE ESTIMATED POTENTIAL RISK 24 FROM TOXICS AND DIESEL FUEL ENGINES ARE SUBSTANTIAL. 25 WE ARE NOW IN THE RISK MANAGEMENT PHASE AND MUST PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 LOOK AT THE NEED TO REDUCE EMISSIONS. OUR OBJECTIVE IS TO 2 DETERMINE THE EFFECTIVENESS OF PROGRAMS IN PLACE TO REDUCE 3 THE EMISSIONS AND DETERMINE WHAT TECHNICALLY AND ECONOMICALLY 4 FEASIBLE STRATEGIES COULD BE PURSUED TO FURTHER REDUCE 5 EMISSIONS. 6 THIS INFORMATION WILL THEN BE PRESENTED IN NEED OF 7 ASSESSMENTS REPORT WHICH WE PLAN TO PRESENT TO THE BOARD NEXT 8 SPRING. IN ADDITION, WE ARE PREPARING RISK MANAGEMENT 9 GUIDANCE TO ASSIST RISK MANAGERS IN EVALUATING SPECIFIC 10 PROJECTS. 11 RECOGNIZING THE SIGNIFICANT POTENTIAL IMPACTS, THE 12 BOARD DIRECTED US TO FORM A RISK MANAGEMENT ADVISORY 13 COMMITTEE TO ASSIST US IN DEVELOPING THE NEEDS ASSESSMENT. 14 THE ADVISORY COMMITTEE WAS ESTABLISHED AND NOW CONSISTS IF 15 OVER 300 MEMBERS MADE UP OF REPRESENTATIVES FROM INDUSTRY, 16 ENVIRONMENTAL GROUPS, U.S. EPA, LOCAL AIR DISTRICTS, AND THEN 17 THE PUBLIC. 18 IN ADDITION, WE HAVE ESTABLISHED FIVE SUBCOMMITTEES 19 THAT ARE ADDRESSING THE VARIOUS ISSUES ASSOCIATED WITH THE 20 NEEDS ASSESSMENT. SOME OF THE POSSIBLE RISK REDUCTION 21 STRATEGIES THAT THE SUBCOMMITTEE EVALUATE ARE LISTED ON THIS 22 SLIDE, WILL NOT EXPLICITLY STATE STRATEGY, WE ARE ENCOURAGING 23 THE U.S. EPA TO REQUIRE LOWER SULFUR DIESEL FUEL ON A 24 NATIONWIDE BASIS. 25 PLEASE NOTE THE, WILL NOT DO, AT THE BOTTOM OF THIS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 SLIDE. I WANT TO REEMPHASIZE THAT WE ARE NOT CONSIDERING A 2 BAN ON THE USE OF DIESEL FUEL OR DIESEL FUELED ENGINES. 3 THIS BRINGS ME TO THE CONCLUSION OF MY 4 PRESENTATION. 5 OUR AIR TOXIC PROGRAM HAS BEEN EFFECTIVE IN 6 REDUCING PUBLIC EXPOSURES TO AIR TOXICS. WE HAVE SEEN 7 REDUCTIONS IN AMBIENT LEVELS OF SOME OF OUR MOST SIGNIFICANT 8 CONTRIBUTORS, RESULTING IN REDUCED PUBLIC HEALTH RISK. 9 HOWEVER, OUR JOB IS FAR FROM OVER. WE NEED TO 10 LEARN HOW TO BETTER CHARACTERIZE THE PUBLIC'S TOTAL EXPOSURE 11 CONSIDERING BOTH INDOOR AND OUTDOOR EXPOSURES, AND WE WILL 12 CONTINUE TO PURSUE MEASURES TO REDUCE THE RISK. 13 IN THE FUTURE, OUR FOCUS WILL BE TO LOOK AT 14 COMMUNITY HEALTH ISSUES AND CUMULATIVE EXPOSURES TO LEARN 15 WHAT COMMUNITIES ARE THE MOST IMPACTED AND WHO IN THOSE 16 COMMUNITIES ARE THE MOST VULNERABLE. 17 WE HAVE COME ALONG WAY IN THE PAST 15 YEARS, BUT 18 THERE ARE YEARS OF RESEARCH STUDY AHEAD OF US. 19 TOGETHER WITH THE PUBLIC, WE WILL CONTINUE TO MOVE 20 THIS PROGRAM TOWARDS ITS GOAL OF PROVIDING PUBLIC HEALTH 21 PROTECTION FOR ALL OF CALIFORNIA WHILE INSURING EQUAL 22 PROTECTION IN ALL COMMUNITIES IN CONSIDERATION OF OUR MOST 23 SENSITIVE POPULATIONS. 24 BEFORE I CONCLUDE, I WOULD LIKE TO ACKNOWLEDGE AND 25 THANK THE MANY STAFF FROM THE DIFFERENT DIVISIONS THAT HAVE PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 CONTRIBUTED TO THIS PRESENTATION, AND IN PARTICULAR I WOULD 2 LIKE TO ACKNOWLEDGE AND THANK MS. CAROLINE SEWER, TO MY 3 RIGHT, AND MR. VICTOR DOUGLAS, OVER ON THE COMPUTER THERE, OF 4 THE STATIONARY SOURCE DIVISION, WHO WERE RESPONSIBLE FOR 5 PULLING ALL OF THE PIECES TOGETHER IN A FAIRLY QUICK TIME 6 FRAME. 7 THIS CONCLUDES MY PRESENTATION, AND THANK YOU FOR 8 YOUR ATTENTION. 9 CHAIRMAN LLOYD: THANK YOU VERY MUCH, STEVE. THAT 10 WAS AN EXCELLENT PRESENTATION, AN EXCELLENT OVERVIEW, AND IT 11 IS COMPLIMENTARY, VERY MUCH. 12 ANY COMMENTS OR QUESTIONS FROM THE STAFF? 13 TALK ABOUT THE INDOOR AIR QUALITY THAT KEEPS COMING 14 UP. CAN YOU COMMENT ANYMORE ABOUT THAT? 15 I GUESS WE HAVE NO ABILITY TO ADDRESS THAT ISSUE IN 16 OUR REGULATORY SENSE? 17 MR. SCHEIBLE: RIGHT. 18 NOW WE CONSIDER IT PART OF THE TOXIC AIR 19 CONTAMINANT IDENTIFICATION PROCESS, WITH WHAT THE EXPOSURES 20 ARE, AND IF WE DO MEASURES THAT IMPROVE INDOOR QUALITY AS 21 PART OF OUR TOXIC CONTROL MEASURES, WE LOOK AT THAT, BUT WE 22 DO NOT HAVE ANY DIRECT REGULATORY AUTHORITY TO LOOK DIRECTLY 23 AT INDOOR SOURCES. 24 WE SHARE THE RESPONSIBILITY WITH THE STATE 25 DEPARTMENT OF HEALTH TO ADVISE THE PUBLIC AND RECOMMEND PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 VOLUNTARY ACTIONS. 2 CHAIRMAN LLOYD: CAN IT BE SHOWN IN THE VEHICLE 3 STUDY WHICH GOT A LOT OF PUBLICITY LAST MONTH, WHICH AGAIN 4 THAT IS A CRITICAL ISSUE AS WELL. 5 I GUESS WE DO NOT HAVE ANY WRITTEN COMMENTS OR ORAL 6 TESTIMONY ON THIS ISSUE. 7 SO, I GUESS, WITH THAT, THANK STAFF VERY MUCH. 8 AGAIN, I GUESS WITHOUT ANY COMMENTS FROM YOU, MIKE, WE WILL 9 CLOSE THE RECORD, SINCE IT IS NOT A REGULATORY ITEM. 10 THANK YOU VERY MUCH, INDEED. 11 JUST BEFORE THE STARTING OFFICIALLY, BEFORE THIS 12 NEXT ITEM, I WOULD LIKE TO ANNOUNCE THAT DR. JOHN HOLMES HAS 13 KINDLY AGREED TO JOIN THE CHAIRMAN'S OFFICE AS SCIENCE 14 ADVISOR, STARTING JULY 1, 1999. 15 I GUESS THIS WILL BE JOHN HOLMES' LAST OFFICIAL 16 THING FROM THE RESEARCH THING, AND WE DO PLAN BY THE WAY TO 17 HAVE A MAJOR ACKNOWLEDGMENT OF JOHN'S CONTRIBUTION AHEAD OF 18 THE CONFERENCE OR WORKSHOP THAT WE ARE PLANNING IN THE END OF 19 JULY, AND YOU WILL GET NOTIFICATION OF THAT, BUT I DID NOT 20 WANT TO LET THIS OCCASION PASS WITHOUT SAYING JUST A FEW 21 WORDS FOR JOHN, AND HE WILL HEAR MANY MORE IN THE NEXT MONTH. 22 JOHN, YOU WILL HAVE TO GET USED TO ALL THE 23 COMPLIMENTS THAT YOU ARE GOING TO GET. 24 AS YOU KNOW, IT IS ALSO IRONIC THAT JOHN IS JOINING 25 ME AS SCIENCE ADVISOR, BECAUSE HE ALSO FORMED THAT ROLE, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 ALTHOUGH IT WAS SOMEWHAT MORE INFORMAL AT THAT TIME, THE 2 FIRST CHAIRMAN OF THE CALIFORNIA AIR RESOURCES BOARD, 3 PROFESSOR HARRY HOGENSMITH, AND JOHN, WHEN WE FIRST CAME TO 4 ARB IN 1969, HAVING SERVED TIME IN THE ARMY AND AT UCLA AND 5 HE BEGAN HIS CAREER AS A STAFF SCIENTIST AND WORKED IN A WIDE 6 VARIETY OF AIR POLLUTION PROBLEMS AND AIR POLLUTION RESEARCH 7 AT EL MONTE AND PLAYED A SUBSTANTIAL ROLE IN UNDERSTANDING 8 THE CHEMISTRY OF SMOG FORMATION. 9 I REMEMBER JOHN WHEN I WAS AT THE SOUTH STATE 10 RESEARCH CENTER, BUT MOST SIGNIFICANTLY FOR HIS TECHNICAL 11 LEADERSHIP AT ARB DURING THE NOX RETROFIT DEBATES OR WARS, 12 WHATEVER THAT WOULD BE. 13 I REMEMBER GOING TO SOME OF THOSE MEETINGS. I KNOW 14 THAT JOHN WORKED LONG AND HARD WITH HIS STAFF. HE WAS A 15 VIGOROUS PURSUER OF THE SCIENCE AND A VIGOROUS DEFENDER FOR 16 THE GOVERNOR AT THAT TIME. 17 AGAIN, HIS STRONG AND STEADFAST TECHNICAL 18 LEADERSHIP ALREADY MADE A MAJOR IMPACT ON THE GOVERNOR AND AS 19 I SAW IT HE WAS THEN SUBSEQUENTLY ELEVATED TO BECOME A 20 RESEARCH CHIEF AT THE AIR RESOURCES BOARD. A VERY FITTING 21 TRIBUTE, I THINK. 22 JUST BRIEFLY, DURING HIS 10 YEAR RESEARCH DIRECTOR 23 HERE, HE HAS BEEN RESPONSIBLE FOR MANAGING OVER $140 MILLION 24 IN CUTTING EDGE POLLUTION RESEARCH. THAT IS A TREMENDOUS 25 ACHIEVEMENT. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 SOME OF THOSE THAT WE HAVE IN SOUTHERN CALIFORNIA 2 AIR QUALITY STUDY, IN THE 1997 SOUTHERN CALIFORNIA OZONE 3 STUDY, THE CHILDREN'S HEALTH STUDIES AND THE INNOVATIVE CLEAN 4 AIR TECHNOLOGY PROGRAM ARE JUST SOME OF THE EXAMPLES THAT 5 STARTED UNDER JOHN'S TERM HERE. 6 I THINK MUCH OF WHAT WE HAVE SEEN AND KNOW ABOUT 7 AIR QUALITY IN CALIFORNIA IS A DIRECT TRIBUTE TO JOHN. BUT 8 HE IS NOT ONLY A NATIONAL LEADER HE IS AN INTERNATIONAL 9 LEADER. 10 I HAVE KNOWN AND WORKED WITH HIM FOR MANY YEARS AND 11 I REALIZE HE HAS BEEN A KEY MEMBER OF THE ARB TEAM AND I HAVE 12 GREAT RESPECT OF HIS WORK HERE AND AM LOOKING FORWARD TO HIS 13 ADVICE AND COUNSEL AND CONTINUED CONTRIBUTION THAT HE WILL 14 MAKE. 15 CALIFORNIA IS INDEED LUCKY TO HAVE SOMEONE WITH 16 TECHNICAL AND SCIENTIFIC EXPERTISE OF JOHN'S INTEGRITY AND 17 LOYALTY. I KNOW THAT HE CONTINUES TO EXHIBIT THOSE, AND IT 18 IS CLEARLY FAR TO EARLY FOR US TO LOSE THOSE CAPABILITIES, SO 19 I WAS DELIGHTED WHEN HE ACCEPTED MY OFFER TO JOIN ME, AS I 20 SAY. 21 I AM LOOKING AT SOME OF THE ISSUES THAT WE ARE 22 GOING TO ADDRESS IN THE FIVE YEARS OR SO OR MAYBE LONGER. 23 SO, I AM TREMENDOUSLY EXCITED. I THINK, AS I SAID 24 BEFORE, JOHN IS A PILLAR OF WISDOM, INTEGRITY AND LEADERSHIP 25 THAT HE HAS PROVIDED HERE ON THE RESEARCH SIDE. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 SO, I WILL SAY NO MORE AT THIS TIME THAN TO SAY, 2 THANK YOU, JOHN, FOR ACCEPTING MY OFFER. WE INTEND TO GIVE 3 YOU MUCH MORE PUBLIC RECOGNITION FOR YOUR OUTSTANDING 4 EFFORTS. 5 DR. HOLMES: MR. CHAIRMAN AND MEMBERS OF THE BOARD, 6 I THANK MR. CHAIRMAN FOR HIS KIND WORDS. 7 I DO NOT KNOW WHERE YOU GOT ALL THAT HISTORICAL 8 INFORMATION, BUT IT IS PARTIALLY ACCURATE EXCEPT FOR ONE 9 POINT, AND THAT IS VERY EARLY THE NOX RETROFIT DEVICE, THE 10 CONTROVERSY OVER THOSE BELLS AND WHISTLES THAT WE USED TO 11 HANG ON CARS TO REDUCE THE NOX, AND I DID PARTICIPATE IN THE 12 GOVERNOR'S TOWN MEETING DOWN IN THE STATE BUILDING IN LOS 13 ANGELES, BUT AS IT TURNED OUT, I WAS NOT REALLY SUPPORTING 14 THE GOVERNOR. 15 I WAS THE LONE VOICE SAYING THAT CONTROLLING NOX 16 WOULD BE BENEFICIAL TO AIR QUALITY, BOTH OZONE AND 17 PARTICULATE MATTER. 18 BUT AS THE THING EVOLVED, I REALIZED I WAS LEFT 19 HANGING OUT THERE, SWINGING AND TURNING IN THE WIND, BUT TOM 20 BOIENT, WHO WAS THE CHAIRMAN AT THAT TIME, CAME TO ME LATER 21 AND SAID, THE GOVERNOR TOLD HIM THAT HE NEEDED PEOPLE THAT 22 WERE GOING TO GIVE HIM THE RIGHT SCIENTIFIC ADVICE 23 IRRESPECTIVE OF WHAT THE POLITICS OF THIS SITUATION WERE. 24 SO, THAT IS A LESSON I LEARNED VERY EARLY, AND I 25 TRIED TO BENEFIT FROM THAT LESSON OVER THE YEARS. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 BUT I DO APPRECIATE THE KIND WORDS OF THE CHAIRMAN, 2 AND I KNOW IT HAS BEEN A REAL PLEASURE TO SERVE THIS BOARD 3 AND THE BOARDS THAT HAVE PRECEDED YOU. THOSE BOARDS HAVE 4 ALMOST WITHOUT FAIL GIVEN A STRONG SUPPORT TO THE RESEARCH 5 PROGRAM. 6 THERE IS ONE EXCEPTION THAT I CAN THINK OF, BUT -- 7 BOARD MEMBER RIORDAN: GUESS WHAT, I REMEMBER THAT. 8 CHAIRMAN LLOYD: BUT DR. HOLMES, YOU ARE HERE AND 9 HE IS NOT. 10 DR. HOLMES: WELL, THAT IS TRUE. 11 BOARD MEMBER RIORDAN: MR. CHAIRMAN, IF I MIGHT, I 12 WOULD LIKE TO THANK DR. HOLMES ALSO AS THE MORE SENIOR 13 MEMBER, HE HAS DONE SO MUCH, AND I PARTICULARLY WANT TO THANK 14 YOU ON BEHALF OF THOSE OF US WHO ARE LIVING IN SOUTHERN 15 CALIFORNIA, BECAUSE SOME OF THE WORK THAT YOU HAVE DONE THERE 16 IS SO IMPORTANT FOR US TO UNDERSTAND WHAT IS HAPPENING AND 17 WHAT WE CAN DO TO HELP CLEANUP THE AIR IN PERHAPS ONE OF THE 18 DIRTIEST AREAS OF OUR COUNTRY AND OUR STATE. 19 SO, WE THANK YOU FOR WHAT YOU HAVE DONE FOR US. 20 DR. HOLMES: I THINK IT IS VERY SATISFYING TO VISIT 21 SAN BERNARDINO AND RIVERSIDE COUNTIES FROM TIME TO TIME AND 22 TO SEE HOW MUCH IT HAS IMPROVED, AND YET ON THE OTHER HAND, 23 ALSO TO SEE HOW MUCH MORE THERE IS TO DO. 24 THAT IS SATISFYING THOUGH. 25 CHAIRMAN LLOYD: WELL, THANK YOU, DR. HOLMES, FOR PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 THE CLARIFICATION. 2 I THINK I WAS AWARE OF SOME OF THAT, BUT CLEARLY I 3 DID NOT WANT TO GIVE ANY IMPRESSION THAT YOU WERE NOT 4 SUPPORTIVE OF THE GOVERNOR. 5 DR. HOLMES: I DID VOTE FOR HIM. 6 CHAIRMAN LLOYD: BUT AGAIN I THINK IT IS VERY 7 IMPORTANT, THAT IS EXACTLY THE CHARACTERISTIC THAT I AM ALSO 8 LOOKING FOR IN MY OFFICE, WE NEED PEOPLE TO TELL US WHAT WE 9 NEED TO KNOW, NOT NECESSARILY WHAT WE WANT TO KNOW. 10 BUT THEN AFTER THAT WE CANNOT MAKE POLICY BASED ON 11 BAD SCIENCE, AND THE FUN THING ABOUT SCIENCE IT HAS A HABIT 12 OF COMING UP AND GIVING YOU THE UNEXPECTED, SO, AGAIN WE LOOK 13 FORWARD TO WORKING VERY CLOSELY WITH YOU. 14 SO WITH THAT, I THINK WE WILL GO ON TO THE NEXT 15 ITEM OF BUSINESS BEFORE THE BOARD. 16 WE HAVE SIX RESEARCH PROPOSALS. 17 DOES DR. HOLMES'S STAFF HAVE ANYTHING YOU WISH TO 18 SAY ABOUT THE PROPOSALS? 19 DR. HOLMES: NO. I THINK WE HAVE BRIEFED SEVERAL 20 MEMBERS OF THE BOARD, AND THERE HAVE NOT BEEN ANY QUESTIONS, 21 AS FAR AS I RECALL. 22 THERE WAS ONE MISSTATEMENT ON MY PART THAT RELATES 23 TO ITEM NUMBER 6, ON THE RESEARCH AGENDA FOR THIS AFTERNOON, 24 CONTRACT WITH UC IRVINE, TO CARRY OUT A HEALTH IMPACT STUDY 25 ON TOXICS, AND ONE OF THE HEAVILY IMPACTED AREAS IN LOS PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 ANGELES, NAMELY HUNTINGTON PARK, I WAS TOLD AND SAID THAT 2 THERE WAS A HUNDRED SUBJECTS IN THE STUDY, AND I WAS 3 MISTAKEN. 4 THAT NUMBER WAS CHANGED FROM 100 TO 50. IN 5 EXCHANGE FOR THAT, WE GOT EXTENDED TIME FOR STUDY FOR THE 6 SMALLER NUMBER OF THAT SUBJECT, AND SO IT IS 50 SUBJECTS FOR 7 8 WEEKS, 9 WEEKS, I THINK, BUT WITH THAT CORRECTION, I WOULD 8 SAY THAT THE BOARD HAS NOT HAD ANY ADDITIONAL QUESTIONS ABOUT 9 THE PROPOSALS. 10 CHAIRMAN LLOYD: OKAY. QUESTIONS FROM THE BOARD 11 MEMBERS? 12 BOARD MEMBER CALHOUN: I HAVE HAD EXTENSIVE 13 DISCUSSION WITH STAFF, AND I AM SATISFIED. 14 CHAIRMAN LLOYD: OKAY. I DO NOT THINK THAT WE HAVE 15 ANY PUBLIC MEMBERS TO TESTIFY ON THIS. 16 ANY OTHER MEMBERS, ANY QUESTIONS OR COMMENTS FROM 17 STAFF? 18 NO. OKAY. 19 SO, I GUESS IF EVERYONE HAS HAD A CHANCE TO READ 20 THAT AND ALL MIGHT BE IN FAVOR OF ADOPTING THE RESEARCH 21 PROPOSALS, SAY AYE. 22 NEGATIVE, NO. 23 PASSED UNANIMOUSLY. 24 THEN, THAT IS ALL OF THE PROPOSALS. AGAIN, THANK 25 YOU VERY MUCH. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 DR. HOLMES: I, LIKE THE CHAIRMAN, THANK YOU. 2 YOU DID NOT PUT ME THROUGH A GRILLING ON THE LAST 3 APPEARANCE BEFORE THE BOARD. 4 BOARD MEMBER RIORDAN: BUT WAIT UNTIL YOU BECOME 5 HIS ADVISOR, THEN YOU ARE IN TROUBLE. 6 CHAIRMAN LLOYD: I LEARNED ENOUGH, DR. HOLMES, WHEN 7 I WAS ON THE RESEARCH SCREENING COMMITTEE, AND THAT IS NOT 8 THE TIME TO DO THOSE THINGS IN PUBLIC DEBATE. 9 I GUESS WE WILL OPEN FOR PUBLIC COMMENT PERIOD. 10 ANYBODY? 11 I GUESS IF THAT IS THE CASE, THAT COMPLETES THE 12 AGENDA FOR TODAY. 13 I WILL ENTERTAIN A MOTION TO ADJOURN. 14 ALL IN FAVOR, SAY AYE. 15 THANK YOU VERY MUCH. 16 SO, I GUESS IT IS NEXT MONTH IN SAN FRANCISCO. 17 (THEREUPON THE AIR RESOURCES BOARD MEETING WAS 18 ADJOURNED AT 1:32 P.M.) 19 --O0O-- 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 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 THE 6 FOREGOING HEARING WAS REPORTED IN SHORTHAND BY ME, VICKI L. 7 OGELVIE, A CERTIFIED SHORTHAND REPORTER OF THE STATE OF 8 CALIFORNIA, AND THEREAFTER TRANSCRIBED INTO TYPEWRITING. 9 I FURTHER CERTIFY THAT I AM NOT OF COUNSEL OR 10 ATTORNEY FOR ANY OF THE PARTIES TO SAID HEARING NOR IN ANY 11 WAY INTERESTED IN THE OUTCOME OF SAID HEARING. 12 IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND 13 THIS SIXTH DAY OF JULY, 1999. 14 15 16 VICKI L. OGELVIE 17 CERTIFIED SHORTHAND REPORTER LICENSE NO. 7871 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345