1 MEETING 2 BEFORE THE 3 CALIFORNIA AIR RESOURCES BOARD 4 5 6 7 8 9 10 BOARD HEARING ROOM 11 2020 L STREET 12 SACRAMENTO, CALIFORNIA 13 14 15 16 17 18 19 THURSDAY, JUNE 26, 1997 20 9:30 A.M. 21 22 23 24 25 Vicki L. Medeiros, C.S.R. License No. 7871 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii 1 MEMBERS PRESENT 2 John D. Dunlap, III, Chairman 3 Joseph C. Calhoun Dr. Friedman 4 Barbara Patrick M. Patricia Hilligoss 5 Jack C. Parnell Sally Rakow 6 Barbara Riordan James W. Silva 7 Staff: Michael Kenny, Executive Director 8 Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer 9 Kathleen Walsh, General Counsel Jim Schnoning, Ombudsman 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii 1 I N D E X 2 --o0o-- 3 Page 4 Proceedings 1 5 Call to Order 1 6 Pledge of Allegiance 1 7 Roll Call 1 8 Opening remarks by Chairman Dunlap 9 AGENDA ITEMS: 10 97-5-1 Public Meeting to consider approval 11 of the San Joaquin Valley Unified Air Pollution Control District's 1997 PM10 12 Attainment Demonstration Plan as a Revision to the State 13 Implementation Plan 2 14 97-5-2 Public Meeting to consider the 15 Status of Manufacturers' Efforts to Develop Aerosol Antiperspirants 16 and Deodorants to meet the January 1, 1999, Standards in the Antiperspirant 17 and Deodorant Regulation 40 18 97-5-3 Public Meeting to Consider a Status Report on the 19 Perchloroethylene Needs Assessment for Automotive Consumer Products 47 20 97-5-4 Public Meeting to Consider Proposals for 21 the Air Resources Board's Innovative Clean Air Technologies Program 57 22 97-5-5 Public Meeting to Consider Research 23 Proposal 98 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv 1 I N D E X (Continued) 2 Page 3 Open Session to Provide an Opportunity for Members of the Public to Address the Board 100 4 Adjournment 101 5 Certificate of Reporter 102 6 --o0o-- 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN DUNLAP: The June meeting of the 4 California Air Resources Board will now come to order. 5 Mayor Hilligoss will lead in the Pledge of 6 Allegiance. 7 (Thereupon, all present recited the 8 Pledge of Allegiance.) 9 CHAIRMAN DUNLAP: Thank you, Patti. 10 Ms. Hutchens, will you call the roll. 11 MS. HUTCHENS: Calhoun. 12 MR. CALHOUN: Here. 13 MS. HUTCHENS: Edgerton. 14 MS. HUTCHENS: Friedman. 15 DR. FRIEDMAN: Here. 16 MS. HUTCHENS: Hilligoss. 17 MAYOR HILLIGOSS: Here. 18 MS. HUTCHENS: Parnell. 19 MR. PARNELL: Here. 20 MS.HUTCHENS: PATRICK. 21 SUPERVISOR PATRICK: Here. 22 MS. HUTCHENS: Ms. Rakow. 23 MS. RAKOW: Here. 24 MS. HUTCHENS: Riordan. 25 SUPERVISOR RIORDAN: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. HUTCHENS: Roberts. 2 Silva. 3 SUPERVISOR SILVA: Here. 4 MS. HUTCHENS: Chairman Dunlap. 5 CHAIRMAN DUNLAP: Here. 6 I would like to begin by welcoming our new San 7 Joaquin Valley Unified Air Pollution Control District Board 8 Member to our Air Resources Board. 9 Good morning, and welcome. Supervisor Barbara 10 Patrick has joined us, she was appointed by Governor Wilson 11 just yesterday, and I swore her in this morning, about half 12 an hour ago. 13 She is a 28 year resident of the San Joaquin 14 Valley, and the Supervisor brings to the Board the skills and 15 the energy necessary to represent one of the most 16 geographically diverse areas in our state. 17 She was an educator in Bakersfield for some 25 18 years before being elected as a supervisor from the Kern 19 counties third district. 20 She received her education from the University of 21 California Santa Barbara, and has been a long time educator, 22 and received a teaching credential from California Lutheran 23 College in the Thousand Oaks area. 24 As many in the audience know, this appointment 25 comes at an especially opportune time for the San Joaquin PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 Valley area given the fact that the Districts PM10 attainment 2 demonstration plan comes before our Board today. 3 So without further ado, on behalf of the entire 4 Board, I would like to welcome you, and are very pleased that 5 you are able to join us. 6 One final opening remark before getting into the 7 agenda, this morning I would like to acknowledge a young man 8 in attendance at Today's meeting, sitting with our Ombudsman 9 Jim Schoning, Rudy Vidaurri. 10 Rudy is sixteen years old and will be a senior at 11 Rio Americana High School this Fall, and as they say in the 12 mentoring business, is job shadowing Mr. Schoning today. 13 Rudy, I'm told, will be applying for college next 14 year in the public policy political science area, and that 15 his top choices include USC, UC San Diego, and, Barbara, the 16 University of Redlands. 17 SUPERVISOR RIORDAN: Good choice. 18 CHAIRMAN DUNLAP: And so you and I will have to 19 strongarm the young man while he is here, but I know that Jim 20 will do that as well. 21 Then Rudy hopes to do graduate work and 22 environmental law. Rudy, I would like to welcome you, and I 23 am pleased that you were able to join us, and I congratulate 24 Jim Schoning, who has done a fine job of mentoring, not only 25 young people, but everyone that he comes in contact with, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 he has just been a fine example, and he cares a great deal 2 about education, and certainly about giving the young people 3 experience in our business, so thank you. 4 All right. Let's hop into the agenda. 5 I would like to remind those of you in the audience 6 that would like to present testimony to the Board on any of 7 today's item's to please sign up with the clerk of the Board, 8 sitting to our left, if you have a written statement please 9 give 20 copies to the clerk of the Board. 10 The first item on the agenda today is 97-5-1, a 11 public meeting to consider the approval of the San Joaquin 12 Valley Unified Air Pollution Control District's 1997 PM10 13 Attainment Demonstration Plan as a revision to the State 14 Implementation Plan. 15 This plan was prepared in the response to the 16 Federal Clean Air Act Requirements, it was due to U.S. EPA in 17 February of this year, so it is already a bit tardy. 18 I understand that the extra time that the District 19 took to get the plan to us helped ensure that all of the many 20 stakeholders for this plan had an opportunity to participate 21 in the District's public outreach and public comment 22 process. 23 The Federal PM10 planning requirements are largely 24 responsible for a remarkable study that is now under way in 25 the San Joaquin valley. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 The California Regional PM10, PM2.5 Air Quality 2 Study. This is unique in both its scope, and in a wide range 3 of interest groups that are working together to develop a 4 better understanding of particulate matter in the San Joaquin 5 Valley. 6 The plan also indicates that there are still some 7 critical information gaps, and that the Regional Study is 8 intended to close, to fill those gaps. 9 Because of these gaps though, the plan is in some 10 ways not yet complete, however. The District commits to 11 identify additional controls for dust related emissions, and 12 to have them in place before the Clean Air Acts 2006 13 attainment deadline. 14 Unlike the South Coast Plan, that we discussed 15 earlier this year, the San Joaquin Valley Plan deals only 16 with PM10, however as a staff report makes clear, PM10 in 17 the San Joaquin Valley is a very complex pollutant. 18 A significant part of the Valley's PM10 problem 19 consists of secondary particulates. Particulates that are 20 formed in the atmosphere from gaseous pollutants such as NOx 21 and hydrocarbons. 22 As a result, even this PM10 plan relies in part on 23 the work that we have put into developing and maintaining the 24 1994 California Ozone SIP. 25 The Valley PM10 plan also enhances that work, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 the Valley's Ozone SIP by including incentive programs for 2 the early introduction of clean alternatives to existing 3 heavy duty diesel engines, among others, and we have come to 4 expect a lot of our Air Qualities Plans here at this Board, 5 and I don't think this plan will disappoint us, so with that 6 lengthy introduction, Mr. Kenny, I say good morning to you, 7 and ask you to please introduce this item. 8 MR. KENNY: Good morning, Mr. Chair, and Members of 9 the Board. The San Joaquin Valley PM10 Attainment 10 Demonstration Plan, like all District plans, must be built on 11 a strong technical foundation. 12 The staff will discuss in more detail, extensive 13 efforts went into this plan. This plan represents a 14 significant step forward from the District's existing PM10 15 plans. 16 The staff will show that the plan uses the 17 information gathered in an intensive air quality monitoring 18 study conducted in the Valley in 1995 and 1996. 19 The plan incorporates a significantly improved PM10 20 emissions inventory from agricultural sources that was 21 developed with assistance of farmers in the valley. 22 It proposes to provide incentives to accelerate the 23 use of diesel technologies, and builds a framework for 24 working with farmers to reduce the emissions generated by 25 their agricultural operations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 However, as the Chairman noted, not all the data is 2 in yet. The result is that the plan does not identify all 3 the steps that will be needed to bring all parts of the air 4 basin into attainment for the 24 hour PM10 standard. 5 This plan projects that much of the Valley will 6 attain the standard by 2001, and requests an extension to 7 2006, as allowed for in the Federal Clean Air Act. 8 It is very likely that you will see revisions to 9 this plan before then, as the District incorporates new 10 information derived from the research projects that are 11 already under way. 12 I will now ask Ms. Sylvia Oey of the Office of Air 13 Quality and Transportation Planning to begin the 14 presentation. 15 MS. OEY: Thank you Mr. Kenny. Good morning 16 Chairman Dunlap, and Members of the Board. Before I begin my 17 presentation on the San Joaquin Valley's PM10 Plan, I would 18 like to give you a brief introduction to the Valley, unless 19 of course, Supervisor Patrick would prefer to do that. 20 The San Joaquin Valley is the State's largest air 21 basin. The Valley extends from Stockton in the north, to 22 Bakersfield in the south. 23 The Valley is home to three million people driving 24 over two million cars. The Valley is home to 6,000 farms and 25 ranches raising over 250 different crops. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 There are over 6300 permitted facilities in the 2 Valley, including six oil refineries, 70 percent of 3 California's producing oil wells are located in Kern county. 4 The San Joaquin Valley is also one of only six 5 areas in the country currently classified serious PM10 6 non-attainment areas, under the Federal Clean Air Act. 7 My presentation today is on the San Joaquin 8 Valley's serious area PM10 demonstration plan. The plan was 9 prepared by the San Joaquin Valley Unified Air Pollution 10 Control District, working with the local agricultural and 11 industrial communities, transportation planning agencies, the 12 Air Resources Board, and the United States Environmental 13 Protection Agency. 14 The plan was adopted by the Air Pollution Control 15 District's Governing Board on May 15, of this year. 16 The question before you today, is whether this plan 17 should be submitted to the U.S. EPA as a revision of the 18 California State Implementation Plan. 19 First, a brief overview of today's presentation. I 20 will begin with some background information, and a brief 21 review of the Federal PM10 planning requirements. 22 After that, I will present an overview of the San 23 Joaquin Valley's plan, the staff's evaluation, and some 24 issues raised by the plan. 25 Finally, I will present the staff's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 recommendations. So, let's start with some background. 2 PM10 is an air pollutant that is identified by its 3 size, rather than by its chemical composition. PM10 is 4 defined as any airborne particle that is the less than 10 5 microns in aerometric diameter. 6 For today's discussion, it will be useful to 7 subdivide PM10 into two groups. Primary PM10 is made up of 8 particles that are emitted to the atmosphere as particles. 9 Smoke and dust clouds contain some particles in the 10 PM10 size range. Secondary PM10 consists of particles that 11 are formed in the atmosphere as gaseous pollutants, react 12 with each other, or condense on water vapor. 13 In California, nitrogen oxide gases, or NOx, play a 14 major role in the formation of secondary particles. 15 You probably already know that the U.S. EPA 16 announced its intent to adopt a PM10, 2.5 standard 17 yesterday. PM 2.5, which consists of particles less than 2.5 18 microns in diameter, is a subset of PM10. 19 Most PM10 control measures also reduce PM 2.5. In 20 1987, U.S. EPA replaced its ambient air quality standard for 21 total suspended particulates with the current PM10 standard. 22 This standard was established to protect human 23 health. The maximum concentration allowed averaged over a 24 24 hour period, is 150 micrograms of PM10 per cubic meter of 25 air. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 The allowable annual average is 50 micrograms per 2 cubic meter. Congress established the current Federal PM10 3 planning requirements in the 1990 amendments to the Clean Air 4 Act. 5 The Act provides for moderate and serious area 6 classifications. Our PM10 non-attainment areas are initially 7 classified as moderate areas. 8 The Act provides for a tiered implementation of the 9 standard. Those areas that cannot attain the standard within 10 the allowed time frame, are bumped up, or reclassified as 11 serious areas. 12 Serious areas are subject to a more stringent 13 standard of control, and are given more time to attain the 14 standard. 15 The San Joaquin Valley was initially classified as 16 a moderate area and submitted a moderate area plan in 1991. 17 Because the plan indicated that it would not be 18 possible to attain the PM10 standard by 1994, the initial 19 moderate area deadline, the air basin was reclassified as 20 serious. 21 The Clean Air Act requires serious areas to adopt 22 two separate plans within 18 months of reclassification. 23 A serious area must adopt a plan for implementing 24 the best available control measures for all significant 25 sources of PM10. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 This first plan is generally referred to as the 2 BACM SIP. The San Joaquin Valley's BACM SIP was adopted in 3 1994. 4 Within four years after reclassification a serious 5 area must submit a demonstration, using air quality modeling 6 that the plan provides, for attainment of the standard by 7 December 31, 2001. 8 The State may request a single five year extension 9 of the attainment date, but it must demonstrate that the 10 attainment by the 2001 deadline is impracticable, and that 11 they will provide for attainment by the earliest possible 12 alternative date. 13 The plan that you are considering for approval 14 today was prepared to comply with these attainment 15 demonstration requirements. 16 An attainment demonstration is a demonstration that 17 the air quality will meet the standard by given future date. 18 There are several key elements to an attainment 19 demonstration. To model future air quality you need to know 20 the starting concentrations or design value. 21 You also need to know the base and future year 22 emission inventories, and the impact that anticipated 23 controls will have on emissions. 24 Of course, you also need an understanding of how 25 emissions impact ambient concentrations, and the calculation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 procedure, or model, that will allow you to quantify that 2 relationship. 3 I will now summarize the San Joaquin Valley Plan in 4 the context of each of these components. A design value is 5 one indicator of the severity of an areas air pollution 6 problem, and the starting point for developing an attainment 7 demonstration plan. 8 The design values used in the Valley's plan were 9 derived from the 1993 through 1995 air quality monitoring 10 data. 11 The design values for five parts of the Valley 12 meet, or exceed, the annual average standard. As this slide 13 indicates however, the annual average standard which is 50 14 micrograms per cubic meter, is exceeded by only a small 15 margin. 16 The design value for the 24 hour average standard 17 is exceeded in the air basin at six sites in the Valley. 18 As this slide indicates, the design values for 19 Bakersfield, Hanford, and Oildale exceed the standard by 25 20 percent, or more, while the core current design value exceeds 21 the standard by over 85 percent. 22 Because PM10 is made up of different types of 23 particles, it is important that the plan discuss the kinds of 24 particles that contribute to violations of the standard. 25 Monitoring data shows that the proportions of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 primary and secondary particles can vary on high PM10 days in 2 the San Joaquin Valley. 3 PM10 episodes that occur from late Spring through 4 early Fall, outside of the rainy season, tend to be dominated 5 by primary Pm10, secondary PM10 tends to be formed in the 6 Winter, when there is more moisture in the air. 7 Samples collected in Winter type episodes also 8 include some primary particles, such as smoke and fine dust 9 particles. 10 These seasonal variations must be taken into 11 account when designing, or evaluating a control strategy. 12 An attainment demonstration must also have base and 13 future year emission inventories. The Valley attainment 14 demonstration plan includes emission inventories for the 1993 15 base year, and forecast inventories for 2001 and 2006. 16 Inventories are provided for directly emitted PM10, 17 and the following PM10 precursors. Nitrogen oxides, sulfur 18 oxides, reactive organic gases, and carbon monoxide. 19 Gaseous ammonia is also a PM10 precursor. Ammonia 20 can react with NOx to form ammonium nitrate, a secondary 21 particle that is present in parts of the Valley under winter 22 conditions. 23 An ammonia emission inventory is being developed as 24 part of the research work that I will discuss a little later 25 in my presentation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 Because of seasonal variations in PM10, the Valley 2 Plan includes inventories for the first quarter, which 3 corresponds roughly to the Winter season, and fourth quarter 4 inventories, which correspond to the Fall season. 5 This slides shows the seasonal changes in the 1993 6 inventory for directly emitted PM10, with January 7 representing the Winter season, and so forth. 8 You can see that emissions from almost all source 9 categories are lowest in the Winter, suppressed by moisture 10 in the soil and lower activity levels in several sectors. 11 The main exception is the other combustion sources 12 represented by the black bars, both agricultural burning and 13 residential fireplace use increase significantly in the Fall 14 and Winter. 15 The Springtime jump in total emissions reflects 16 both increased activity and higher wind speeds. Many fields 17 are newly planted, but until the crops grow enough to provide 18 some cover from the wind there is an increase in windblown 19 fugitive dust, as shown by the orange bar. 20 In the Fall, which is the last bar, you see a 21 dramatic increase in particulates from farming operations, 22 which is in dark green. 23 This is a time when farmers are no longer 24 irrigating the land extensively, but they are harvesting and 25 preparing their fields for the next crop. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 As an aside, the emissions inventory included in 2 previous plans did not show this level of seasonal 3 variation. 4 Your technical staff has worked very diligently 5 over the past year in corporation with the District and 6 members of the farming community to improve the PM10 7 inventory for agricultural operations. 8 Changes in that portion of the inventory account 9 for much of the variation that you see from season to 10 season. 11 As I noted earlier, secondary particulates are also 12 a factor in ambient PM10 concentrations. This slide shows 13 the relative contribution of directly emitted and secondary 14 particles during a representative Fall episode. 15 The large intact portion of the pie chart shows 16 sources of primary particulates, which in typical Fall 17 situations in the Valley constitute approximately three 18 quarters of the particulates captured on the air quality 19 monitoring filters. 20 During a typical Winter episode however, the 21 pattern is reversed. During this time of the year primary 22 particles constitute about 30 percent of the ambient PM10, 23 while secondary particles account for the remaining 70 24 percent. 25 Notice that the dark blue slice representing PM10 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 precursor emissions from on-road mobile sources is almost 2 three times as large in this chart as it was on the previous 3 chart. 4 The absolute amount of NOx emitted from on-road 5 mobile sources does not change much from Fall to Winter. 6 What does change is that the NOx emitted by all 7 those cars and trucks is more likely to be converted to PM10 8 under Winter weather conditions and that there is less 9 primary particulate in the air. 10 I should caution that these pie charts apply our 11 paper emissions inventory to the proportion of primary and 12 secondary PM10 in the air, and that the inventories are at 13 best a starting point for determining the causes of ambient 14 PM10. 15 We may find for example that some directly emitted 16 particles settle out more quickly than others, and that the 17 ambient contribution from those sources is therefor smaller 18 than the inventory would suggest. 19 The modeling used in the plan is combination of a 20 chemical mass balance analysis and speciated rollback. 21 Chemical mass balance analysis was used to 22 determine the most likely sources of the particle matter that 23 was deposited on filters in the ambient air quality monitors, 24 and to determine their relative contribution to the monitored 25 PM10. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 Rollback analysis assumes that ambient 2 concentration of PM will change in proportions to changes in 3 the projected emissions. 4 Speciated rollback analysis starts with the source 5 break down provided by the chemical mass balance analysis and 6 then utilizes projected inventories to predict future PM 7 concentrations. 8 The District's PM10 control strategy includes 9 commitments to upgrade existing PM10 rules, including the 10 rules controlling fugitive dust from stationary sources, 11 paved, and unpaved roads, and emissions from home 12 fireplaces. 13 The current control for these sources satisfy the 14 moderate area planning requirements. The plan commits to 15 upgrade these rules so that they will require the application 16 of best available control measures, or BACM, which is the 17 level of stringency required in a serious PM10 non-attainment 18 area. 19 The BACM are scheduled to be implemented by 2001. 20 Other near term measures include an agreement that the 21 District is developing with State and Federal Parks, and 22 Forestry Managers, to control emissions from prescribed 23 burns. 24 The plan also includes a number of innovative 25 controls that would apply to nonstationary sources. The PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 District proposes to use a part of its Motor Vehicle 2 Surcharge Funds to encourage the retrofit, or replacement of 3 heavy duty diesel trucks and offroad diesel engines. 4 The plan challenges the Valley's eight 5 transportation planning agencies to support modest decreases 6 in the projected growth in vehicle travel. 7 The plan calls for projected growth in vehicle 8 miles traveled within the Valley between 1993 and 2006 to 9 decrease from 60 percent to 58 percent. 10 This is a two percent total decrease over a 13 year 11 time frame. The plan commits to the investigation and 12 implementation of measures to reduce PM10 emissions from 13 agricultural operations. 14 The plan also draws upon the local, State, and 15 Federal controls in the 1994 ozone SIP to reduce secondary 16 particulates. 17 In an attainment demonstration plan, the critical 18 question is; do the design values, current, and projected 19 inventories, and control strategy, add up to attainment of 20 the standards? 21 The San Joaquin Valley's Attainment Demonstration 22 Plan indicates that identified control strategy will result 23 in attainment of the annual average PM10 standard throughout 24 the Valley by 2001. 25 The plan also projects that the 24 hour average PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 standard will be attained at all but three sites by 2001. 2 The plan commits to the attainment of the 24 hour 3 standard at the remaining sites by 2006 through controls that 4 are not yet fully identified. 5 The plan also discusses the ongoing and planned 6 research that is expected to lead to the development of a 7 workable control strategy. 8 The plan does not demonstrate attainment of the 24 9 hour PM10 standards for three areas, Corcoran, Hanford, and 10 Oildale. 11 The controls that the District has identified to 12 reduce fugitive dust emissions and reentered road dust in 13 concert with the proposed controls for secondary 14 particulates, are not expect to result in attainment at these 15 sites by 2001. 16 Because of this, the District has requested the one 17 time, five year extension of the attainment date provided for 18 in the Clean Air Act. 19 This request is subject to approval by the EPA 20 administrator. With that summary, lets turn to the staff's 21 evaluation of the plan. 22 We will present the evaluation in terms of the 23 plans conformance to Clean Air Act requirements, ways in 24 which the plan improves the SIP, and issues raised by the 25 plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 The Valley plan address some, but not all of the 2 Clean Air Act's Attainment Demonstration Plan requirements. 3 It contains the required emission inventories, and identifies 4 design values, it demonstrates the attainment of the annual 5 average PM10 standards throughout the Valley. 6 However, the plan does not contain all of the 7 controls that are needed to reach attainment in the Valley by 8 2001 or 2006. 9 Some of the controls that are identified have not 10 yet been adopted, and need further definition. For some 11 parts of the Valley, more work is needed to identify the 12 sources that contribute to ambient PM10, before potential 13 controls can be identified. 14 For these areas, the plan relies on further 15 research to identify the controls that will result in 16 attainment. 17 The plan also lacks some of the reasonable further 18 progress milestones required by the Act, a consequence of the 19 control strategies lack of specificity. 20 Although the plan does not strictly conform to the 21 Clean Air Acts requirements for Attainment Demonstration 22 Plans, this locally adopted plan does represent several 23 significant improvements over the existing PM10 strategy for 24 the San Joaquin Valley. 25 First, the plan includes a partial demonstration of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 attainment, as we have mentioned it demonstrates attainment 2 of the annual average standard and of the 24 hour standard in 3 all but three areas. 4 It commits to attain in those remaining three areas 5 by 2006. The Plan improves the Valley's PM10 control 6 strategy, it commits to the adoption of BACM level controls, 7 and adds innovative programs for reducing emissions from 8 diesel engines and other sources. 9 The Plan also includes a schedule for continued 10 research into the causes of PM10 episodes, including research 11 looking specifically at the role of agricultural operations, 12 and research to identify cost effective ways to reduce 13 agricultural emissions. 14 Finally, the Plan incorporates improved technical 15 information that has been developed over the past few years, 16 and more recent air quality data. 17 There are a few remaining issues that are not 18 directly related to approvability of the Plan. These issues 19 are the Plan's reliance on research commitments and the 20 impact of the recently announced revisions to the particulate 21 matter standard. 22 Research commitments are an important element of 23 the District's Attainment Demonstration Plan. The viability 24 of the commitment to attain by 2006 is directly related to 25 the completion and reliability of research, which is not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 fully under the District's control. 2 The question has been raised, how do we know that 3 this research will be completed? Most of the research cited 4 in the plan is being conducted as part of the California 5 Regional PM10, PM 2.5 Air Quality Study. 6 Study management, and most study funding, is 7 provided by a public private partnership. The partnership 8 includes U.S. EPA, ARB, the District, private business 9 partners, agricultural representatives, and numerous other 10 public agencies, and private entities. 11 To put it very simply, this partnership has a good 12 track record as the study is an offshoot of the recently 13 completed San Joaquin Valley Ozone Study. 14 Several important phases of the Particulate Matter 15 Study have already been completed, including six weeks of 16 intensive monitoring that were conducted in late 1995 and 17 early 1996. 18 The study is expected to be completed in 2001. 19 Funding has already been provided for over half of the 20 studies $27 million budget. 21 The Agricultural Operations Research cited in the 22 Plan started in 1994 as part of the regional study. Studies 23 completed as part of this research provided Valley specific 24 emission factors for cotton and fig harvesting operations 25 that have already been incorporated in our emission budgets. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 The Study Plan calls for approximately $4 million 2 of research related to agriculture. The U.S. Department of 3 Agriculture has already provided half of that funding, thanks 4 largely to efforts of Valley agricultural representatives. 5 The much discussed revisions to the National 6 Ambient Air Quality Standards have also raised questions 7 about the need for a PM10 plan. 8 The deadline for the submittal of this plan has 9 already passed, thus the mandate for this plan predates the 10 new standards. 11 In addition, in its initial draft implementation 12 policy, U.S. EPA proposed a no back sliding policy with 13 respect to PM10 plan requirements. 14 From a public health standpoint, a more important 15 consideration is that the measures adopted as a result of the 16 PM10 plan will also reduce the PM 2.5. 17 This plan, like our 1994 Ozone SIP, gives the 18 District a headstart in meeting the PM 2.5 standard. The 19 Valley Plan meets many, but not all, of the Clean Air Act 20 requirements for PM10 attainment demonstration plans. 21 Conceptually, the Act calls for the preparation of 22 an annotated street map to attainment, this plan provides 23 directions that are more comparable to a regional map, 24 showing the major roads and highways. 25 This plan will keep the Valley moving in the right PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 direction while the street map is being prepared. The 2 Valley's PM10 attainment demonstration plan relies heavily on 3 commitments to adopt rules, and on planned research. 4 We concur that the plans limitations are 5 unbalanced, and caused by limitations, and are understanding 6 of the causes of PM10 episodes in the Valley. 7 Nonetheless, as the Board, that is ultimately 8 responsible for the State Implementation Plan, you would be 9 justified in requesting a periodic progress report. 10 Because of this, the staff recommends that you 11 request that the District Board revisit the plan within three 12 years. 13 We recommend that this review include, first, an 14 assessment of overall plan progress, second, a reassessment 15 of the attainment demonstration projections, and finally, the 16 adoption of any plan revisions that may be needed to ensure 17 attainment by 2006. 18 Meanwhile, the Plans technical foundation and 19 commitments will significantly strengthen the existing SIP. 20 Because of this the staff recommends that you 21 approve this plan with its respect for an extension of the 22 attainment date, and direct the Executive Officer to submit 23 it to U.S. EPA as a SIP revision. 24 This concludes our presentation. 25 CHAIRMAN DUNLAP: Thank you. Do any of the Board PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 Members have questions before we get into the witness list? 2 We only have two witnesses. 3 Mr. Parnell. 4 MR. PARNELL: Interesting question, since the plan 5 itself does not meet all of the requirements of the Clean Air 6 Act, what would be the anticipated response from EPA when 7 they review the plan? 8 MS. OEY: What we hope is that EPA will approve 9 those portions of the plan that it finds acceptable, and hold 10 off on taking action on the remainder of the plan. 11 MR. PARNELL: Mr. Chairman, I would like to 12 compliment the staff. We continue to compliment the staff, 13 but in this case any staff that can bring 2500 cotton growers 14 together in support of a plan has to be heroic. 15 So, I compliment you. 16 CHAIRMAN DUNLAP: We know that is close to an 17 impossible task. We will ask Mr. Crow to tell us a bit about 18 that in a minute. 19 Dave, could I get you come forward, you are our 20 first witness. Any other questions or comments as he is 21 coming forward? 22 MR. CALHOUN: Yes, Mr. Chairman, what is the status 23 of the rule making. Maybe that is a question that Mr. Crow 24 would want to answer, I don't know. 25 CHAIRMAN DUNLAP: Well Dave, let me introduce you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 properly, we have Dave Crow who is the Air Pollution Control 2 Officer for the San Joaquin Valley Unified APCD, and our 3 second witness is Steven Arita. 4 I'll ask Steven to come forward and maybe sit in 5 the first row. 6 MR. CROW: Thank you, Mr. Chairman, Members of the 7 Board. It is indeed a pleasure to be here today particularly 8 to see a familiar face, Ms. Patrick congratulations on the 9 appointment. 10 The Valley needs representation and you are going 11 to do an excellent job. 12 CHAIRMAN DUNLAP: What we are afraid of what you 13 might say if she weren't sitting up here Dave, so we moved it 14 along just for you. 15 MR. CROW: I tend to be very circumspect. Again, I 16 commend your staff, I think it was an excellent overview of 17 the Plan, and it is indeed, I think, an intelligent solution 18 to a very complex problem. 19 PM10 is a relatively new phenomenon, we know a good 20 deal about it, but there is a good deal we don't know about 21 it at this juncture. 22 That is what has been the justification for the 23 approach that we have taken. The Plan, as pointed out, 24 relies on existing rules, and Mr. Calhoun's question, we have 25 identified over 45 rules already in the Plan that are on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 books, the control NOx, SOX, ROG and CO. 2 We will continue to move forward with our 3 rulemaking as it particularly affects the secondary sources. 4 We recognize however, that there is a lot that we 5 don't understand, and as a result of that there has been an 6 outstanding partnership that has been built on the Zone 7 Attainment Work and studies that have taken place over the 8 last decade. 9 We in the Valley, as well as throughout the State 10 in California ought to be in a leadership role as it relates 11 to a better scientific and technical understanding of the 12 causes and the cures of fine particles, thus the commitment 13 to the research. 14 $27 and a half million is the targeted figure, and 15 I'll update one figure for you, at our meeting last week the 16 Board adopted the new budget and that added another million 17 dollars in District contribution to the funding for the study 18 and others, many of whom you are very familiar with, and have 19 been instrumental over the years in securing continued 20 funding. 21 What the plan does, I think, is very significant, 22 and we agree with the staff's characterization of it as it 23 compares to the Federal Clean Air Act requirements. 24 We also believe that it is totally compatible with 25 the intent of the Act. I think that U.S. EPA will view it in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 a similar way. 2 We acknowledge our strengths and we recognize that 3 there are some needs for continued investigation and 4 research. 5 We are looking at a time period that we find to be 6 necessary to ask U.S. EPA for an extension to the year 2006. 7 We have a very challenging situation in San Joaquin 8 Valley, much analogous to the ozone problem in the South 9 Coast and that why we have made such a collective and intense 10 investment in understanding these issues and moving forward. 11 One of the things that I would like to spend just a 12 moment on relates to upgrades of our understanding thus far 13 as it relates to the emission inventory. 14 Page eight in your staff report points out that as 15 it relates to agriculture there has been a great deal of 16 effort expended by people in Valley agriculture, District 17 staff, and ARB staff, to go back through what was the 18 conventional wisdom, and what was soon to be emissions 19 inventory, and are those emission factors attributable to 20 different agricultural activities. 21 Our time was very well spent as it turns out. Many 22 of those assumptions turned out to be, desperately needed to 23 be revised. 24 Page eight of your staff report cites a lot of 25 collaborative efforts that improve the cropping calendar and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 the number of passes and tilling of different crops, update 2 of the acreage of crop maps. 3 The Valley is huge, it produces probably 4 approaching 15 to 20 billion of agricultural products each 5 year, and over 200 crops, and over 200 soil types. 6 If we are to be effective and efficient, how we go 7 about addressing this problem, we must understand those 8 thorny little details about which soil types, which cropping 9 pattern, and what practices, and cultural practices are 10 utilized, so page eight is part of the dividend of some of 11 the early research and investigation where we were able to 12 actually improve, thus far our understanding, and that gives 13 us a great deal of improvement in what other future practices 14 are going to be implemented. 15 CHAIRMAN DUNLAP: Dave, if I could ask you to 16 embellish a point, you focus on, Mr. Parnell highlighted it, 17 and I know that Jim Schoning, our Ombudsman, spends a lot of 18 time reaching out to various stakeholders, could you say a 19 word or two about what you have done relative to your 20 Ombudsman work with the agriculture community? 21 I think you have a full-time staff person, don't 22 you Dave, that deals with this. 23 MR. CROW: Part time, he has actually retired once 24 and we brought him back. Yes, good point. 25 Your Ombudsman has been present in the Valley and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 conducted a number of stakeholder workshops that were very 2 helpful in terms of bringing the parties together to 3 appreciate what our roles are, and how to best go about it. 4 A couple years ago, we become very aware that we 5 were fairly knowledgeable about ozone, its sources, its 6 solutions, at the staff, and at the Board level, as we 7 embarked on the addressing PM it became pretty evident that 8 while agricultural is a dominant industry in the Valley, some 9 of us don't know that much about agriculture. 10 With that recognition, I contacted an old friend 11 from years past who, I read of his retirement from the 12 University of California, an extension program where he had 13 headed 12 Valley counties UC, an extension effort, and 14 somehow convinced him to come out of retirement and join our 15 staff on a part time basis as an Agriculture Liaison. 16 He has asked to have big ears for agricultural in 17 terms of what they regard as their needs and interests to be, 18 as well as helping educate our staff and Board as to some of 19 that effort. 20 A large part of it is outreach. A large part of it 21 is, almost 30,000 growers in the Valley, a formidable task, 22 they are not always of like mind, they have different 23 interests, they have different amounts of time they can 24 commit to this kind of effort. 25 One of the things that we asked Mr. Bill Hamilton PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 to do is to work with existing organizations and individuals 2 in agriculture and help us reach out to others in agriculture 3 to seek their input. 4 One of the things that I think that we are going to 5 find is that many of the solutions are going to come from the 6 growers themselves. 7 They are the most knowledgeable, and the most 8 practiced in terms of how do you solve the problem once you 9 have identified it. 10 What we have basically done is given an invitation 11 to all to appreciate the problem, step up, and find the 12 straight forward solutions that will work. 13 One of the things about agriculture, if somebody 14 generally finds a better way, it is not long before others 15 pick up on the idea and are emulating it. 16 So that is an ongoing and challenging effort, but 17 it is on that I think is going to be essential as we move 18 forward and take the product of the scientific research and 19 disseminate it back out. 20 We have a memorandum of understanding to work with 21 soil conservation interests, we work closely with soil 22 conservation districts locally, and a lot of that is ideas 23 in, and then disseminating back out what works through the 24 network. 25 Bill has a newsletter, we are tagging into other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 existing agricultural organizations. I apologize for the 2 lengthy answer, but it is a critical point when you are 3 dealing with 30,000 diverse interests in agriculture 4 communications system, it is going to be very important to 5 all of them. 6 I mentioned earlier in response to the question 7 with regard to what kind of rules do we already have. Our 8 existing NOx rules are being looked at, and when necessary 9 strengthened and revised to address primarily the secondary 10 aspects. 11 The staff report you just heard talked about some 12 of the initiatives in both the heavy duty diesel, and heavy 13 duty fleet operations, as well as light and medium duty. 14 Our Board has committed $4.8 million, reserve 15 money, to work on the heavy duty side of issues, and we are 16 looking at the I Five and 99 quarter from South Coast to 17 Sacramento. 18 We are hoping to partner up with those districts as 19 well as the State of California to bring to the table dollars 20 to serve as an incentive to have various interests, being a 21 municipal or on-road trucking, or offroad, to look at ways 22 where the new technologies can be applied and produce a 23 dividend. 24 We are pretty excited about that, and we think that 25 over the long haul that we can keep our financing packages PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 intact, and can enhance some of those, that will be a good 2 positive step in that direction on-road, and offroad fuel 3 uses. 4 The other thing that I would like to point out is 5 that as we move forward, it has been absolutely vital that we 6 use the existing partnerships that exist. 7 We find new ways to communicate with people and 8 that is not always an easy step, but the challenge is there 9 and stakes are high, the Valley does have a difficult 10 problem. 11 I believe, as your staff pointed out, this 12 decidedly moves us towards solutions, and with the continued 13 support of CARB staff, I think that we are going to be 14 successful in this effort. 15 With the track record in ozone thus far, I think 16 that there are reasons to be optimistic. With that, I would 17 like to thank everybody involved from your staff, I have a 18 list of names of individuals, and the same for our local 19 district staff. 20 People have really shouldered together and worked 21 well with the constituent groups. 22 CHAIRMAN DUNLAP: Thank you, Mr. Crow. 23 Any questions for Dave? 24 Very good. Thank you. 25 Steve Arita. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 MR. CROW: By the way, I urge an adoption of the 2 plan. 3 CHAIRMAN DUNLAP: I think we picked up on that. 4 Mr. Arita, I notice that you indicate that you 5 support the plan. 6 Is there anything that you would like to add to 7 Mr. Crow's eloquent comments there about reasons for 8 adoption? 9 MR. ARITA: Yes, thank you, Mr. Chairman. Again, 10 for the record, my name is Steve Arita, with the Western 11 States Petroleum Association. 12 On behalf of our association, I would like to 13 express our support, and urge the Board to adopt the Valley 14 Air Districts Attainment Demonstration Plan. 15 We worked hard with the District and staff of ARB 16 for developing a plan that we believe for the most part 17 addresses the regulatory requirements of the Federal Clean 18 Air Act. 19 As noted in the staff's recommendation, the plan 20 reflects not only the current limits of understanding the 21 causes of PM10 episodes in some parts of the Valley, but also 22 recognizes the continued need for additional research, such 23 that the right regulatory decisions can be implemented in the 24 future. 25 In that regard, Mr. Chairman, we remain committed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 to continuing our support and involvement for the San Joaquin 2 Valley PM10 Study Agency Effort, which in our opinion is 3 currently conducting probably some of the most advanced 4 scientific PM10 studies in the world. 5 In closing, I would also like to express our thanks 6 to you Mr. Chairman and the ARB staff, and certainly I would 7 be remiss not to also express our thanks and appreciation to 8 Mr. Crow and his staff for their efforts in working together 9 on this important plan, thank you. 10 CHAIRMAN DUNLAP: Thank you, Mr. Arita. 11 Any questions of the witness? 12 Very good. Okay. No one else has signed up to 13 testify. Okay. 14 I guess we will conclude the public testimony on 15 this Board item. 16 DR. FRIEDMAN: I just want to make sure I 17 understand. I am very impressed, that was a great 18 presentation. 19 I have seen the research plan, which is 20 comprehensive, and very ambitious, and very appropriate. 21 The question that I have is this, much of the 22 research plan seeks to gather data about PM10, between now 23 and whenever, and we know that before too long we are going 24 need to talk about PM2.5, not PM10, and we about to spend $28 25 and a half million, and a lot of that research is going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 have be repeated for PM2.5, and I just wonder; why we don't 2 get efficient, and study where we need to go, rather than 3 where we used to need to go? 4 You are right, anything that we do about PM10 will 5 influence PM2.5, but not entirely. We are going to be behind 6 the curve. 7 I do not know if that is an appropriate question or 8 comment, but it seems to me that no matter what we do with 9 this very ambitious research plan, we should now know to 10 ratchet it up to study what really needs to be studied which 11 is PM2.5, even if it takes a while longer before we begin to 12 implement the research plan, otherwise someone is going to 13 waste money. 14 MR. KENNY: Dr. Friedman, we have anticipated that, 15 and although the research plan was originally generated as a 16 PM10 plan, it has been converted to PM2.5 PM10 plan. 17 So what we will be doing is we basically spend this 18 $28 million as we achieve it, what we are looking at is 19 essentially both PM2.5 and PM10, and that is the kind of 20 information, I agree with you, that we think that we need for 21 the future. 22 DR. FRIEDMAN: In some of the data gathering, for 23 example Corcoran, I think it was, we were looking at PM10, 24 not 2.5. There are pieces of the research plan that have not 25 yet been sort of ratcheted up, or converted, to cover both 10 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 and 2.5. 2 I mean, I'm sure that is being reviewed, but I 3 think it needs to be reviewed very comprehensively. 4 CHAIRMAN DUNLAP: Dr. Friedman, I think you are 5 right on point. We are all looking, and I think that Mr. 6 Crow mentioned it as well, we don't have unlimited resources, 7 to do studies, data collection, etcetera, so I think that is 8 a very appropriate suggestion, I would ask, and I have asked 9 Mr. Crow to come forth and take the microphone too, maybe to 10 comment as Mr. Kenny did, but I guess what we would ask the 11 staff to do, both staff's, would be to show us some kind of 12 regular report about how we are transitioning, and how we are 13 broadening some studies, what are we doing to encompass the 14 new fine particle standard. 15 Mr. Crow if could you comment, just for a second, 16 on that microphone. 17 MR. CROW: That is an important point that we have 18 to recognize, what the new standards may bring. The research 19 schedule, as is pointed out, does not overlook that when we 20 do speciation on particles throughout that research effort 21 that we are going to look at the totality of what is in a 22 catch. 23 With new standards presumably that will definitely 24 give us a leg up. For example, we don't even normally have, 25 and I don't think that other Districts have as well, in our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 monitoring networks, 2.5 particles capabilities right now, so 2 that is going to be an important consideration. 3 Where is the money going to come from, for just our 4 ambient air stations to get a 2.5 cup, but in this research 5 we have contemplated the best and wanted it to be absolutely 6 final so we won't go out and do a million dollars worth of 7 studies and only speciate to 10. 8 When we do that the research protocol will address 9 2.5 as well. I think that we are going to be in a great 10 position, and in short order we are going to know a whole lot 11 more about fine particles than probably any place else in the 12 country. 13 CHAIRMAN DUNLAP: Unless I am hearing objection, 14 and I do not think that I am from either two of the Exec 15 Officers, if you would not mind, to get some kind of an 16 update to the Board as an informational piece on how we are 17 broadening our look, and what we are doing to make sure we 18 are not spending money on yesterday's issue. 19 Mr. Crow, I might add that the ARB has been very 20 active in pursuing dollars from the Federal Government to 21 expand the monitoring network here in the State locally, as 22 well as the Airport, and I have sent a few letters and talked 23 to Congressman Lewis and his staff about that and hopefully 24 they will hear us and we will be able to have the resources 25 that you mentioned in your testimony to do a better job. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 MR. CROW: We will add our whiney voice as well. 2 CHAIRMAN DUNLAP: All right. Good. Any other 3 questions at this juncture before we get into having staff 4 summarize the written comments we received. All right. 5 Mr. Kenny, do you want to have your team do that at 6 this juncture? 7 MS. TERRY: Yes, it is very brief, one written 8 comment from the Association of Cottongers and Growers by 9 Roger Eisam. He commented that he supports the plan and also 10 supports further study to refine the control strategies 11 within the plan and that was the only written comment that we 12 received. 13 Mr. Kenny, do you have any further comments? 14 MR. KENNY: My only final comment is that the staff 15 recommends approval of the plan and transmittal to U.S. EPA. 16 CHAIRMAN DUNLAP: Since this is not a regulatory 17 item, it is not necessary to officially close the record, 18 however we do have a resolution before the Board for action. 19 Ms. Hutchens, that has been distributed thus far? 20 MS. HUTCHENS: Yes, in the summary. 21 CHAIRMAN DUNLAP: Very good. I would like the 22 Board to take a moment and look at the resolution if you 23 haven't had a chance to do that. 24 SUPERVISOR PATRICK: Yes, Mr. Chairman, this PM10 25 plan that was approved last month by the Governing Board of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 the San Joaquin Valley Unified Air Pollution Control District 2 as a result of a great deal of hard work, not only by ARB 3 staff, but certainly by District staff, and there was a great 4 deal of consensus building and I think that Mr. Parnell 5 discussed, you know it is difficult to bring all of these 6 folks together, and I think the reason that they have is 7 because this is based on sound science and on cost effective 8 measures and that is very important to everybody in the San 9 Joaquin Valley as well as the State of California. 10 So, at this time, I would like to move adoption of 11 the resolution that is before us. 12 CHAIRMAN DUNLAP: Very good. Thank you. 13 There is a second Mr. Silva. 14 DR. FRIEDMAN: Second. 15 CHAIRMAN DUNLAP: Very good, we have a motion and a 16 second. 17 Is there any further discussion? 18 With that, I think we will have a voice vote. All 19 those in favor of adopting resolution 97-28, say aye. 20 Any opposed? 21 Very good. The motion carries. 22 Thank you to the staff for both of the 23 organizations. We appreciate it. 24 Let's move on to our next item, 97-5-2, a public 25 meeting to consider the status of manufactures efforts to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 develop aerosol, antiperspirants, and deodorants, to meet the 2 January 1, 1999 standards in the Antiperspirant and Deodorant 3 Regulation. 4 This item is an informational item and is a status 5 report on the manufacturers progress towards meeting the 6 volatile organic compound emissions standards effective 7 during that January 1, 1999 period. 8 I understand that staff has been working diligently 9 on this issue, and have prepared to provide the Board with an 10 update on their efforts, and I also might note, I see several 11 industry representatives today, and I am sure we will hear 12 from them, and I want to welcome them to the Board meeting. 13 So with that, Mr. Kenny, would you introduce this 14 item and begin the staff's presentation? 15 MR. KENNY: Thank you Mr. Chairman, and Members of 16 the Board, before the staff begins their presentation, I will 17 provide you with a short background on the Antiperspirant and 18 Deodorant Regulation. 19 The Antiperspirant and Deodorant Regulation was 20 approved by the Board in November 1989, it was the first 21 regulation adopted under the ARB authority to control 22 consumer product emissions. 23 This regulation is part of the State Implementation 24 Plan and we are committed to achieving an overall 80 percent 25 reduction in antiperspirant and deodorant emissions by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 year 2000. 2 When fully implemented this role will reduce VOC 3 emissions by approximately six tons per day. This regulation 4 establishes VOC standards for both aerosol and non-aerosol 5 antiperspirants and deodorants. 6 For aerosol antiperspirants and deodorants placed 7 under a compliance plan the regulation sets a zero limit for 8 high volatility organic compounds. 9 These compounds are the compounds used in aerosol 10 products. These limits were effective on January 1, 1995 for 11 manufactures who did not apply for extension through the 12 compliance plan provisions in the regulation. 13 For those manufactures who submitted a compliance 14 plan showing that additional time was necessary to produce 15 satisfactory zero high volatility organic compound aerosol 16 antiperspirants and deodorants, that is a mouthful, executive 17 orders were issued extending the compliance date to January 18 1, 1999. 19 Nine manufacturers representing the entire market 20 submitted compliance plans and received extensions. Because 21 of the technical challenges involved in meeting the 1999 22 standards, the regulation includes a provision that requires 23 us to return to the Board by July 1, 1997 to review and 24 consider any appropriate modifications to the high volatility 25 organic compound limits for aerosol, antiperspirant, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 deodorant products. 2 Today staff will provide the Board with the current 3 status of our investigation regarding efforts to develop 4 complying products to meet the upcoming standard. 5 With that, I call on Ms. Dodie Weiner of our 6 Stationary Source Division to present to you our current 7 assessment of efforts to meet the January 1, 1999 emission 8 standards in the Antiperspirant and Deodorant Regulation. 9 MS. WEINER: Thank you Mr. Kenny, Chairman Dunlap 10 and Members of the Board. As Mr. Kenny mentioned, today we 11 will discuss the process that we have followed to date to 12 evaluate manufacturers progress in achieving the January 1, 13 1999 Aerosol, Antiperspirant and Deodorant Standards. 14 I will begin our presentation by providing you with 15 a short history and description of the Antiperspirant and 16 Deodorant Regulation. 17 Next, I will discuss the process we have used to 18 work with the antiperspirant and deodorant industry, followed 19 by a discussion of our plans for the future. 20 The Antiperspirant and Deodorant Regulation was the 21 first consumer product regulation adopted by the Board in 22 November of 1989 under the ARB authority to control consumer 23 product emissions. 24 It is an important component of the State 25 Implementation Plan and was approved as a SIP revision by the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 United States Environmental Protection Agency on February 14, 2 1995. 3 To date, we have achieved an emission reduction of 4 about four tons per day from the regulation. The SIP 5 commitment is an overall 80 percent, or approximately six 6 tons per day reduction by the year 2000. 7 The Antiperspirant and Deodorant Regulation 8 establishes volatile organic compound, or VOC, standards for 9 both the aerosol and the non-aerosol product forms. 10 Today we are focusing on the standards for the 11 aerosol products. Aerosol products account for about 30 12 percent of the sales in about 90 percent of the emissions 13 from antiperspirants and deodorants. 14 Since the standards went into effect December 19, 15 1992, the VOC emissions from antiperspirants and deodorants 16 have been reduced by about four tons per day. 17 An additional two tons per day emission reductions 18 will be achieved with the January 1, 1999 standard for 19 aerosol products. 20 When fully implemented, the regulation will reduce 21 VOC emissions by approximately six tons per day. These 22 reductions are necessary to meet our SIP commitment of an 23 overall 80 percent reduction. 24 Over the last two years, we have held a public 25 workshop, and numerous meetings with the affected industry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 and trade associations. 2 We also conducted a survey of the industry to learn 3 more about the VOC emissions from these products. In 4 addition, by reviewing the compliance plans, or the required 5 yearly updates, we have seen the progress and research 6 completed by industry in meeting the requirements of this 7 regulation. 8 In summary, industry is making progress towards 9 meeting the standards and achieving the emission reductions. 10 We recognize that this first consumer products 11 regulation does not contain the same flexibility for meeting 12 the requirements as a subsequent consumer products 13 regulation. 14 We will continue our discussions with the industry, 15 and work together in the upcoming months to evaluate 16 approaches to provide more flexibility, while preserving the 17 emission reductions committed to in the SIP. 18 One area we will be looking at is incorporating a 19 reactivity scheme into the regulation to provide an 20 alternative method of compliance. 21 Finally, we plan to keep the Board informed about 22 our efforts. Should a revision to the regulation be fruitful, 23 we will return to the Board in early 1998. 24 Thank you, this ends my presentation. 25 SUPERVISOR RIORDAN: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 Mr. Kenny, do you have anything that you want to add to this 2 report? 3 MR. KENNY: Nothing further to add. 4 SUPERVISOR RIORDAN: In terms of procedure, Board 5 Members, are there any questions that you might have on the 6 staff's update on progress. 7 I think that we are all very pleased, and some of 8 us are remember some of those former hearings, and it is 9 always nice to see an opportunity, particularly a positive 10 one, working with the industry to provide the flexibility 11 that they need sometimes for their products and their 12 manufacturing. 13 Mr. Chairman, I do not see any questions from this 14 Board, and so, I'm not sure in the process, what is next. 15 CHAIRMAN DUNLAP: Every time I step out for a 16 minute, Mr. Kenny, you guys end up quicker than I had 17 anticipated, but thank you for that report. 18 SUPERVISOR RIORDAN: They are very efficient. 19 CHAIRMAN DUNLAP: I know they are and I caught most 20 of it in the back, and I see that no witnesses have signed 21 up. 22 Did you ask, Supervisor, if there were any letters 23 that we received? 24 SUPERVISOR RIORDAN: No I did not. 25 MR. KENNY: The only pearls of a wisdom here is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 that what you are seeing is essentially a very good working 2 relationship between ourselves and the industry and it is 3 actually going forward quite well. 4 CHAIRMAN DUNLAP: Very good. I recognize 5 Mr. Mattesich, and one or two of his colleagues. 6 We can't entice you to come to the microphone, 7 Jim? 8 CHAIRMAN DUNLAP: Thank you for acknowledging that, 9 I'm grateful. All right with that we will close this item 10 and move to the next. 11 Thank you, and thank you to the staff for 12 monitoring this very important issue, in many respects it is 13 one of the more visible consumer products measures that we 14 have. 15 That brings us to 97-5-3, a public meeting to 16 consider a status report on the Perchloroethylene Needs 17 Assessment for Automotive Consumer Products. 18 This is an item in response to the Board's November 19 21, 1996 direction that Board staff perform an assessment of 20 the need to control Perc in consumer products. 21 At this point, I would like to ask Mr. Kenny to 22 introduce this item. 23 MR. KENNY: Thank you Mr. Chairman, Members of the 24 Board. As you may recall, the Board adopted an amendment to 25 the consumer product regulation that would among other things PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 exempt perchloroethylene from the volatile organic compound 2 definition. 3 This was in response to the United States 4 Environmental Protection Agency decision to exempt certain 5 VOC's from their definition due to low photochemical 6 reactivity considerations. 7 Additionally, the Board and staff believe this 8 exemption was necessary to provide the consumer product 9 manufacturers with flexibility to reformulate their products 10 to comply with the VOC limits of the consumer products 11 regulation. 12 This reduction of VOC emissions from consumer 13 products is an integral element in California State 14 Implementation Plan commitment to attain State and Federal 15 ambient air quality standards for ozone. 16 However, Perc is a toxic air contaminant and the 17 Board expressed concerns about the possible health impacts 18 associated with the potential increase in Perc use. 19 Therefore, the Board directed staff to perform an 20 assessment of the need to control Perc use in consumer 21 products and report back to the Board. 22 As we discussed at the November 21, 1996 hearing, 23 brake cleaning operations account for most of the Perc use in 24 consumer products. 25 Therefore, for this assessment staff concentrated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 on Perc brake cleaning products used in California. With 2 that, I would like to call upon Mr. Mark Williams of our 3 Stationary Source Division to present the status of the Perc 4 needs assessment for automotive consumer products. 5 MR. WILLIAMS: Thank you Mr. Kenny, Chairman 6 Dunlap, and Members of the Board. As Mr. Kenny mentioned, we 7 are here to provide a status report on our assessment of the 8 need to control Perc in consumer products, and specifically 9 brake cleaning products. 10 Before you is an overview of our presentation 11 today, of particular interest will be our findings, our 12 estimates of potential exposure and risk, and our recommended 13 actions. 14 Let me begin by providing with you some background 15 information. November 21, 1996, this Board adopted an 16 amendment exempting Perc from the organic compound definition 17 in the California Consumer Product Regulation. 18 The Board adopted this amendment because of Perc's 19 low photochemical reactivity and ozone depletion potential. 20 This action is consistent with the U.S. EPA action 21 to exempt Perc. During the hearing however, the Board 22 expressed concerns about potential risks associated with Perc 23 use and consumer products. 24 Therefore, the Board directed staff to perform an 25 assessment of the need to control Perc use in consumer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 products and report on the status of the assessment by June 2 1997. 3 Based on a review of the 1990 U.S. EPA Consumer 4 Products Database, and discussion with industry 5 representatives, staff identified brake cleaning products at 6 the November Board hearing as the category most likely to be 7 contained, or be reformulated to contain Perc. 8 We have therefor chosen to concentrate on this 9 product category for today's report. As general background 10 we have listed here the major statutory authorities that 11 allow us to regulate toxic air contaminants, and we have also 12 listed the California Consumer Products Law which gives the 13 ARB the authority to regulate VOC's in consumer products. 14 Under Assembly Bill 1807, the Air Toxics Program, 15 the Board identified Perc as a toxic air contaminant in 16 October of 1991. 17 Subsequent to the identification of Perc, there 18 have been several actions taken reduce to reduce the 19 emissions of Perc from drycleaning and degreasing, which 20 together account for the majority of the Perc used in 21 California. 22 In 1993, the Board adopted an air born toxic 23 control measure for drycleaning. Then, in 1994, the U.S. EPA 24 adopted a control measure to reduce the emissions of 25 halogenated solvents, including Perc, from degreasing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 operations. 2 We have also developed non-regulatory guidelines to 3 assist businesses in reducing Perc use from degreasing 4 operations and prohibited new, or increased usage, of Perc as 5 part of the aerosol coatings regulation. 6 Collectively these efforts are expected 7 substantially reduce Perc emissions in California. Now, 8 let's turn our attention back to this assessment. 9 We have made an extensive effort to keep the 10 industry and other affected parties involved. This is an 11 integral part of our activities. 12 As you can see, we have conducted several meetings, 13 assembled a work group, which was involved in the development 14 of the manufacturer survey, made hundreds of phone calls, and 15 conducted 37 site visits. 16 Additionally, we have involved CAPCOA, OEHHA, the 17 State Board of Equalization, and the Bureau of Automotive 18 Repair. 19 An important part of our outreach effort was the 20 Brake Cleaner Manufacturer Survey that was developed with 21 input from participants of the Perc needs assessment work 22 group. 23 The survey requested formulation data from both 24 Perc and non-Perc brake cleaning products. It also requested 25 information on future reformulation efforts for brake PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 cleaning products and other automotive consumer products 2 likely to contain Perc. 3 The surveys that we received account for an 4 estimated 90 percent of the Perc used in brake cleaning 5 products sold in California. 6 The surveys also indicate that over one-third of 7 the brake cleaning products sold in California contain Perc, 8 and represent an annual Perc usage of almost 3.9 million 9 pounds. 10 Even though we have not seen an increase in Perc 11 usage since the November Board action, this is substantially 12 more than the 1990 U.S. EPA consumer products database had 13 indicated. 14 We believe that this the due to lack of 15 representativeness of the original survey, and the 16 reformulation of 111 trichloroethylene, or TCA, brake 17 cleaners with Perc. 18 TCA is an ozone depleter and is being phased out. 19 Perc usage in brake cleaning products may represent up to 20 20 percent of the total statewide usage. 21 For comparison, the drycleaning industry in 22 California was responsible for about 60 percent of the total 23 statewide Perc consumption at the time that the drycleaning 24 ATCM was developed. 25 Based on information from the Board of Equalization PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 and the Bureau of Automatic Repair we estimated that 2 California has over 20,000 brake service facilities. 3 We conducted site visits to 37 of these facilities 4 to gain an understanding of the processes and types of 5 products used. 6 We also gathered data on product usage, building 7 dimensions, operating schedules, and receptor distances so 8 that we could assess Perc concentrations and potential 9 exposures associated with these operations. 10 To summarize what we observed during our site 11 visits, slightly over 40 percent of the facilities used Perc, 12 the other facilities used non-Perc aerosols for their 13 washers. 14 Selection appeared to be based on personal 15 mechanical preference, environmental concerns, and management 16 buying decisions. 17 Staff observed that Perc usage varies based on Perc 18 content and operator technique. Emissions at the facility 19 were affected both by usage and by the operating schedule. 20 Using the information from the site visits, we then 21 estimated potential exposures and risks at the 16 facilities 22 using Perc containing brake cleaning products. 23 This slide indicates the range of risk at the 24 maximum exposed individual resident. That is, the maximum 25 potential risk to residents relative to other residential PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 locations. 2 As you can see, the potential cancer risk was as 3 high as 30 chances in a million, and four of the 16 4 facilities and exceeded the ten in a million level. 5 Potential cancer, acute, and chronic affects, were 6 all below the level of concern. In summary, over one-third 7 of the brake cleaning products sold in California contain 8 Percs, accounting for 3.9 million pounds, or 20 percent of 9 total statewide Perc usage. 10 Some of the facilities that we visited where Perc 11 products are used may pose a potential risk to the public. 12 Based on our findings we believe that the 13 development of an ATCM seems appropriate, however while our 14 assessments to date establishes a good foundation for an ATCM 15 we must gather additional data on the risk, and the cost, and 16 feasibility of alternatives, before knowing if an ATCM is the 17 most appropriate option, therefor we propose to continue 18 collecting information. 19 First, we will conduct a more comprehensive survey 20 of brake cleaning facilities in California, and as a part of 21 our existing manufactures survey we will assess the potential 22 for increased Perc use due to product reformulation. 23 We will also investigate the cost and feasibility 24 of potential alternatives to Perc containing brake cleaning 25 products as well as the most effective control options to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 address potential risk. 2 We also propose to develop appropriate educational 3 materials for brake service facility operators, and as always 4 we will continue our outreach program to ensure that there is 5 adequate opportunity for public participation in the 6 process. 7 If the Board approves these recommended actions we 8 will complete this assessment by early Spring 1998 and report 9 back to the Board at that time. 10 That concludes my presentation, we would now like 11 to answer any questions that you have. 12 CHAIRMAN DUNLAP: Thank you. Any questions of the 13 staff? 14 MR. CALHOUN: Who are the major manufactures of 15 Perc? 16 MR. WILLIAMS: I can tell you who the major 17 manufactures are that sell the Perc brake cleaning products 18 in California. 19 CHAIRMAN DUNLAP: You need to identify yourself for 20 the court reporter. 21 MR. FLETCHER: I am Bob Fletcher with the 22 Stationary Source Division. 23 CHAIRMAN DUNLAP: Any other questions of staff on 24 this item? All right. 25 We have no witnesses that have signed up. Any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 written comments that have been received? 2 MR. VENTURINI: No. 3 CHAIRMAN DUNLAP: Mr. Kenny. 4 MR. KENNY: I think that based on the information 5 that we presented to you today, what we really need to do is 6 look at the viability of an ATCM, and I think that the 7 general direction that we are going is probably toward that, 8 at the same time we do need more information to reach a 9 conclusion as to whether or not that is the appropriate venue 10 to pursue. 11 CHAIRMAN DUNLAP: All right. Well, just a final 12 word or two, I would like to thank staff for the 13 presentation, and I appreciate the time and effort that went 14 into this. 15 It is apparent to me that industry has worked well 16 with us. That is very important and lately I have been 17 teasing Mr. Venturini that he is getting a reputation for 18 being very soft these days it appears. 19 But I know that the staff is devoting a lot of time 20 and attention to working with the industry and I am grateful 21 for that, because that means that the Board does not have to 22 have a lot of contentious debate and discussion here. 23 The information provided by staff indicates that 24 Perc usage and brake cleaning products may have the potential 25 to adversely impact public health, and that is something that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 we are very concerned about. 2 Also, I know the reputation, whether it is a just 3 reputation or not, about Perc, and I just want to encourage 4 the staff to stay on their toes, and I certainly support the 5 staff recommendation, but need you to track and keep us 6 informed as this issue develops. 7 So, with that we conclude. This is not a 8 regulatory item so it is not necessary to officially close 9 the record, but we will conclude it. 10 I thank the staff, and we will move on to the next 11 item. Thank you. 12 We are moving very swiftly today, I want to point 13 that out to Mr. Parnell. 14 MR. PARNELL: For which we are very grateful. 15 CHAIRMAN DUNLAP: Which he will say one out of ten 16 months I guess, it is a welcome change. If I could get the 17 staff team Dr. Holmes, I believe you are up. 18 The next item on the agenda today is 97-5-4, a 19 public meeting to consider proposals for the Air Resources 20 Board Innovative Clean Air Technologies Program, ICAT. 21 This is the third year for this program, which is 22 intended to support technologies that have high potential for 23 improving air quality in California and offers great promise 24 for stimulating the States economy through commercialization 25 of these products and ideas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 Today we have before us four proposals that are 2 being recommended for the Board's consideration. I have been 3 pleased with the interaction that I have had with Dr. Holmes 4 and his team on this program. 5 I want my Board member colleagues to know that I 6 put Dr. Holmes and Mr. Kenny through their paces on this 7 effort to make sure that we get all that we can. 8 I know that some of the Board Members, particularly 9 Sally Rakow will know a bit about giving grants, and research 10 dollars, and so I encourage her to ask away any questions 11 that you have. 12 I would like to have Mr. Kenny introduce this 13 item. I know after this item, we have a very brief one, one 14 additional research item, which we will try to take up 15 quickly. 16 MR. KENNY: Thank you, Mr. Chair, Members of the 17 Board. As the Chairman has indicated, we will be discussing 18 the Innovative Clean Air Technologies Program. 19 This program provides seed money for projects to 20 move from the research and development phase toward 21 commercialization. 22 Let me point out that in order to be eligible for 23 consideration to the program proponents must commit 24 significant resources of their own, and also show resource 25 commitments from outside resources. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 Because this is the third year of the program, we 2 now have a track record of progress for ongoing projects. 3 This year we have received a number of good 4 proposals we have evaluated. We have evaluated these 5 proposals to determine which ones can best support the 6 Board's rules, clean up our air, while simultaneously helping 7 the State's economy. 8 Last August we received 44 preproposals in response 9 to our request for proposals under the program. After a 10 requested 17 had proposed to submit full proposals, ten 11 proposals were received and evaluated. 12 Of these ten proposals, staff recommends that the 13 Board consider four be approved for funding. My two Deputies 14 and I believe the objectives of these four proposals are 15 consistent with the Board's policy. 16 These proposals meet the technical and business 17 requirements of the program. With that, I would like to turn 18 the presentation over to Manjit Ahuja of the Research 19 Division to go through the proposals. 20 MR. AHUJA: Good morning, Chairman and Members of 21 the Board. This the third year of the Innovative Clean Air 22 Technologies Program, or ICAT. 23 This year, we are recommending funding of four 24 proposals received under this program. The purpose of our 25 presentation is to summarize these recommendations for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 funding of proposals. 2 I will also review the status of ongoing projects 3 that were awarded during the first two years of this 4 program. 5 ICAT projects must increase the efficiency of the 6 existing air pollution prevention and control technologies, 7 increase their cost effectiveness, or develop new cost 8 effective alternatives. 9 All projects must have broad based application, 10 potential for commercialization, and potential for creating 11 jobs in state of the California. 12 All types of air pollution prevention and control 13 technologies are eligible for funding. In the United States, 14 funding for basic research is much more available than for 15 prototype development and application demonstration. 16 Basic research includes development of an idea, and 17 proof of concept, referred to as steps one and two on the 18 slide. 19 Once an application has been demonstrated, venture 20 funds may be available to move the technology into 21 commercialization. 22 However, somewhere around steps three, and four, 23 and five, on the slide, is the Valley of Death. Some 24 projects die for lack of funding, while others are purchased 25 by foreign companies and are eventually commercialized. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 ICAT funds are used to help businesses, bridge this 2 valley of death, so that good ideas can lead to cleaner air 3 and a stronger economy. 4 To implement the ICAT program, we developed an RFP 5 that specifies certain rules, such as matching fund 6 requirements. 7 Some companies have found that various requirements 8 of the ICAT RFP are confusing. Therefore as we have done 9 since 1995, we held a workshop to assist companies submitting 10 the ICAT proposals. 11 At this workshop, we discussed the overall ICAT 12 program objectives, and administrative requirements, such as 13 matching funds, and participation of minority, women, and 14 disabled veteran businesses. 15 Matching funds are required for all projects funded 16 under the ICAT program. The RFP specifies that the applicant 17 must provide at least 20 percent of the project cost. 18 The RFP specifies that an additional 30 percent of 19 the project cost must be provided either by the applicant, or 20 by co-funding partners. 21 This means that ICAT will provide no more that 50 22 percent of the total project cost. This year ARB funding 23 under ICAT was limited to a total of $500,000 per proposal. 24 The ICAT RFP specified that rates for, number one, 25 overhead rates are not to exceed 100 percent. Number two, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 fringe benefits are not to exceed 35 percent, and number 2 three, general and administrative costs, G and A costs, are 3 not to exceed 15 percent of salaries. 4 Also, applicants and partners cannot charge any fee 5 or profit. We have set these stringent requirements because 6 the purpose of the ICAT program is to help the companies move 7 their technologies to commercialization. 8 This will enable the companies to recover their 9 expenses and make a profit after the technologies get 10 commercialized. 11 ICAT proposals were evaluated by ARB staff and by 12 an advisory committee, which consisted of external reviewers 13 from the private sector and the Universities. 14 The ICAT committee consists of two individuals from 15 the private sector. Sheila Washington is with the California 16 Business Incubation Network, and Susan Hackwood is with the 17 California Council on Science and Technology. 18 Two ICAT advisory business reviewers are associated 19 with State's University system these are Professors Jane Hall 20 from California State University at Fullerton, and Cornelia 21 Pechmann from the University of California at Irvine. 22 The ICAT advisory technical reviewers were Robert 23 Sawyer from the University of California at Berkeley, Daniel 24 Chang from the University of California at Davis and Forman 25 Williams from the University of California at San Diego. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 Next, I would like to review the history of the 2 ICAT program. In the two preceding years of this program 3 there have been some significant accomplishments, but we also 4 have had some problems. 5 Eight ICAT projects are currently under way. Four 6 were funded in fiscal year 1994 and 1995, and are moving well 7 along. 8 Four other projects were funded last year, and are 9 in the early stages of development. Finally, we are 10 proposing to fund four more projects for this fiscal year. 11 This slide shows the title of the companies of the 12 first four ICAT projects funded. Let me first briefly 13 describe the status of these projects. 14 We would like to highlight the progress that has 15 been made under two of these projects, which are currently 16 ongoing, and those are BKM and Ultramet. 17 The first project, Clean Air Two-Stroke for Utility 18 Engine Application, is currently under way at BKM in San 19 Diego. 20 The goal is to develop and commercialize an 21 electronically controlled, direct fuel injection system, for 22 a hand-held utility engine. 23 A breadboard version showed compliance with the 24 ARB's Tier ll 1999 emissions standards for hand-held utility 25 engines for hydrocarbons, carbon monoxide, and NOx PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 emissions. 2 Later this year, we plan to ask the Board to 3 consider the need for any revisions to the regulations that 4 led to those standards. 5 At that time, we will present a status report on 6 the development of the technology to meet these standards. 7 BKM's innovative technology promises to deliver emissions 8 reductions that greatly exceed what are required for 9 compliance with our standards, as well as better fuel 10 economy. 11 BKM intends to have a 46 cc Tanaka-based engine 12 with the new technology running later this summer. After we 13 agreed to provide co-funding for this project, the start of 14 work was delayed by one year because prospective co-funders 15 from out of State lost interest. 16 They withdrew from co-funding the projects because 17 US EPA's delays in implementing the nationwide emission 18 standard for utility lawn and gardening equipment. 19 Without sufficient certainty in the regulatory 20 setting, the development of promising pollution technologies 21 are frequently delayed. 22 However, BKM has now built a consortium of 23 manufacturers to further the development of their 24 technology. 25 ICAT funds and the prospective ARB emissions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 standards for hand-held engines were instrumental in the 2 formation of the consortium. 3 The total budget for this project is about 4 $700,000, to which we are contributing about $200,000. 5 The remaining funds are provided by the consortium 6 as shown on the next slide. 7 Five consortium members Honglin, Suzuki, Tokatsu, 8 Tanaka, and Yamaha, are contributing $80,000 each for a total 9 of $400,000 and BKM is providing about $100,000 of in-kind 10 funds. 11 Our involvement with this project through ICAT has 12 led to the participation of several original equipment 13 manufacturers. 14 The BKM project is demonstrating that the ICAT 15 program can advance air pollution control technology and 16 provide economic benefits to the State. 17 The next project, High-Efficiency Catalytic 18 Converter Prototype Demonstration, is under way at Ultramet 19 in Los Angeles County. 20 Their goal is to develop a new catalyst substrate, 21 using a silicon carbide substrate as a catalyst support. 22 The initial application is a"close-coupled" 23 catalytic converter on a light-duty auto. Ultramet believes 24 that their catalyst design will allow the development of 25 lower cost, lower pressure-drop catalytic converters. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 Ultramet has been testing the catalyst substrate in 2 the laboratory and is nearing the demonstration phase. 3 The total project cost is about $487,000, of which 4 we are contributing $242,000. The co-funding is being 5 jointly provided by Ultramet and by NASA, the National 6 Aeronautic and Space Administration. 7 Honda is working with Ultramet to install this 8 technology into their vehicles. Recently, Ultramet received 9 a letter of commitment from Honda stating that they will make 10 a low-emitting vehicle available as a test platform and also 11 provide for substantial emissions testing. 12 Having a state of the art engine platform, and 13 emissions control system, will greatly aid the Ultramet 14 program. 15 Furthermore, Engelhard Corporation, a major 16 catalyst manufacturer, has committed to supply their state of 17 the art catalyst for use with the Ultramet substrates that 18 will be demonstrated in the ICAT program. 19 These commitments, as well as Ultramet's 20 cooperation with other smaller companies, should enable the 21 Ultramet technology to be successfully demonstrated later 22 this year. 23 I will now discuss the two remaining projects that 24 were funded two years ago. For the next project, Acurex 25 Environmental Corporation in the Bay Area, is developing an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 enhanced reburn technology for use in dusty environments of a 2 coal-fired cement kiln. 3 Cement kilns are among the highest NOx emission 4 sources in the State, but have few control options for these 5 emissions. 6 Statewide, cement kilns represent about six percent 7 of NOx emitted from stationary facilities, but are more 8 important in certain parts of the State. 9 For example, cement kilns represent over 30 percent 10 of the NOx emitted in the Southeast Desert Air Basin. Acurex 11 is using gas reburn, a process shown to reduce NOx emissions, 12 in which natural gas is injected downstream of the main heat 13 release zone of the furnace. 14 Pilot-scale testing of this technology was 15 performed at the US EPA's combustion research facilities. 16 This project has overcome one major hurdle and must 17 still overcome another hurdle. Originally, this project was 18 to be co-funded by Acurex and the Gas Research Institute. 19 Early in the project, the Gas Research Institute 20 withdrew their support because they had over committed their 21 funds. 22 The project was put on hold until Acurex was able 23 to secure matching funds. The project is currently being 24 co-sponsored by Acurex and the U.S. EPA. 25 As this slide shows, we are currently funding about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 a substantial portion of this half-million dollar project. 2 The second major hurdle for this project is to 3 secure a host site for field trials and demonstration. 4 Acurex is currently working to secure a suitable 5 host site. The Gas Research Institute may again co-sponsor 6 this project once a site is secured. 7 For the last project in this category, the Coen 8 Company is developing a gas-fired burner with ultra-low 9 emissions of NOx that would address the market sector of 10 industrial air-preheat burners in California. 11 These burners would provide nine parts per million 12 NOx emissions with air pre-heat, as is required by several 13 air district rules for new burners. 14 Although other low NOx burner technologies may 15 achieve this level, they cannot use air pre-heat, which 16 greatly improves overall efficiency. 17 This project includes commercial scale fabrication, 18 and testing of the burner. As we frequently encounter in 19 co-funded projects, there has been a delay of several months 20 in this project due to problems with co-funding commitments. 21 The project is now moving along well. Computer 22 modeling of the burner is complete, and pilot-scale testing 23 has been successfully conducted, at Coen's large test 24 facility in the Bay Area. 25 Coen is currently negotiating with the Department PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 of General Services for use of a nearby State facility to 2 retrofit its burner in Sacramento itself . 3 As this slide shows we are funding close to ten 4 percent of this $2.3 million project. It is being co-funded 5 by Coen Company, the Gas Research Institute and the Southern 6 California Gas Company. 7 In summary, the first four projects funded under 8 the ICAT program have made substantial progress, although 9 significant work must still be performed. 10 Now I will discuss the four ICAT projects that were 11 funded last fiscal year. These projects have not progressed 12 as far as the first four I have just described, so I will 13 describe their status more briefly. 14 For the first project, Air Quality Specialists is 15 combining two innovative technologies, the dynamic 16 recirculation and fluidized bed adsorption. 17 They will test a VOC emissions control system at a 18 Steelcase office furniture manufacturing facility in Orange 19 County. 20 Instead of venting paint solvent vapors directly 21 into the outside air, the ventilation air flow will be 22 dynamically optimized so that a relatively concentrated 23 solvent vapor stream can be passed through a packed adsorbent 24 bed. 25 These higher concentrations make it possible for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 the solvent to be trapped in this bed, leading to solvent 2 reclamation rather than evaporation. 3 This technology will not only reduce emissions, but 4 heating and air conditioning energy savings will result from 5 the lower ventilation rates. 6 The design work for this project has been 7 completed, and the necessary construction should start soon. 8 For the second project, AeroVironment is working 9 with Adhesive Coatings Company to develop a zero-VOC metal 10 coating. 11 Evaporation of solvents from metal coating and 12 related processes represents about three and a half percent 13 of the statewide VOC emissions inventory for stationary 14 facilities. 15 However, if successful, the technology could be 16 applied to other coatings categories, which overall represent 17 about a quarter of the VOC inventory. 18 Using a patented process to produce a zero-VOC 19 resin, they have completed their laboratory optimization and 20 have begun small scale testing in Los Angeles County. 21 Preliminay results show that the properties of 22 painted metal panels are similar to those produced using more 23 conventional metal coatings. 24 For the third project, the CHA company is 25 developing its CHA NOx process. This process has been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 developed for retrofit onto stationary diesel engines. 2 It removes pollutants by passing the exhaust gases 3 through a carbon based adsorption bed. This bed traps NOx, 4 sulfur oxides, soot and most VOC's. 5 The pollutants are then destroyed during carbon 6 regeneration using microwave energy. This technology is 7 currently being tested and perfected in the laboratory using 8 a 58 horsepower diesel engine. 9 Following successful completion of these tests, the 10 device may be tested and demonstrated at McClellan Air Force 11 Base in Sacramento on an aerospace power cart or auxiliary 12 power generator. 13 For the fourth project, Valley Detroit Diesel 14 Allison, located in Los Angeles County, is developing a 15 retrofit system to reduce emissions from heavy duty diesel 16 vehicles. 17 These vehicles are important sources of NOx and 18 particulate emissions. A special high pressure fuel injector 19 directly delivers natural gas, along with a tiny amount of 20 diesel fuel, into the combustion chamber. 21 It provides for up to a 98 percent reduction in 22 diesel fuel burned. The retrofit system has been installed 23 in a diesel bus that will be evaluated based on a long term 24 field demonstration. 25 The project team's goal is partnership with an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 original equipment engine manufacturer. In summary, all four 2 projects funded last fiscal year are moving forward. 3 We will now request Mr. William Johnson to give a 4 brief overview of BKM's project, and then request Mr. Edwin 5 Stankiewicz of Ultramet to give a brief overview about his 6 company's project. 7 Mr. Johnson has been with BKM since 1977, and has 8 served as president since 1990. He has 25 years of 9 experience in the design, development and management of new 10 industrial and commercial mechanical products. 11 He received his engineering degree from California 12 Polytechnic University, and is a member of the Society of 13 Automotive Engineers. Mr. Johnson. 14 MR. JOHNSON: Mr. Chairman and Members of the 15 Board, I appreciate the opportunity to come and explain our 16 participation in this high tech program, as well as a unique 17 opportunity, really on behalf of all of the ICAT contractors, 18 to thank the Board Members for consideration and approval of 19 our proposals. 20 As Manjit has already explained our project 21 objective has been to demonstrate compliance with Tier ll 22 1999 car and utility engine regulations. 23 We intend to do this by developing and 24 demonstrating a unique and innovative low cost fuel injection 25 system which is tailored and optimized for small one cylinder PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 two cycle engines. 2 The commercial applications for this technology 3 range actually from hand held engines, to upper range small 4 hand held engines and smaller motor bikes. 5 We feel this variety of engines for applications is 6 important in order to minimize cost of the common components 7 of the system. 8 Currently our test engine is based upon a 46 cc 9 string trimmer type engine. 10 BKM is a San Diego company founded 22 years ago. 11 We currently have 35 employees, mostly engineering staff. 12 We concentrate on engineering and new product 13 development and work on engine related technology and fuel 14 injector technology and also the electronic engine management 15 is part of the fuel system technology. 16 The programs currently range from diesel engines, 17 to gasoline engines to natural gas engines. We earn our 18 living by doing contract engineering services as well as 19 development or lease of intellectual property. 20 Approximately 80 percent of our work is currently 21 commercial and the remaining 20 percent under Government 22 contracts. 23 Our facilities includes engineering testing machine 24 shop areas and engine test item monitors with quite a wide 25 range of five horsepower to 600 horsepower. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 Programs that relate to what we are doing under the 2 ICAT program, we have developed high pressure diesel fuel 3 injection equipment, electronically controlled, for OEM 4 clients. 5 We have developed natural gas fuel injectors for 6 multipoint injection of natural gas as well as the integrated 7 engine management application of these systems to the large 8 heavy duty engines. 9 We have developed what we call a common rail 10 gasoline fuel injection system for a more sophisticated two 11 cycle engine such as personal water craft engines or marine 12 engines. 13 In fact, we just finalized a license agreement with 14 a world class manufacturer of personal water craft engines 15 and vehicles. 16 This particular program was published by 17 demonstrating the EPA 2006 emission regulations with actually 18 improved credibility of the vehicle. 19 We have developed, on the engine side, small two 20 cycle utility engines for at least two different OEM 21 manufacturers. 22 This is over the course of 30 years, but that is an 23 important asset for our engineering staff to address this 24 regulation for utility engines. 25 It was bit of a natural decision to divide our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 engine capability and our fuel system background to address 2 this challenge of the Tier ll ARB regulation. 3 Our program concept and development of the small 4 utility engine with low emissions has pretty much paralleled 5 the development of the Tier ll regulations. 6 We have spent about seven or eight years now 7 working on the concept. We, as Manjit pointed out, we did 8 receive some funding from the State of New York and private 9 investors during that period when I appeared that the EPA was 10 going to track in a timely fashion the car regulation. 11 We got into a bit of a vacuum there when the EPA 12 delayed and delayed and also appeared to be changing the 13 regulation requirements to be not quite as severe. 14 We had the program on the shelf for awhile, but 15 then we developed this consortium concept that Manjit 16 described, which we brought commercial people in and had an 17 opportunity to submit a proposal on the car ICAT program. 18 There really was not an opportunity to pursue this 19 production until we put the ICAT funding in place. This 20 really served as catalyst to finalize our agreements with the 21 industry partners. 22 This is a little bit redundant and I owe an apology 23 to Manjit there has been one additional player enter our 24 consortium time in just the last few weeks. 25 This particular consortium member has asked to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 remain anonymous, which is a little different from the 2 others, but happens to be one of the top five motor bike 3 builders in the world, located in Taiwan. 4 Essentially the mechanism they have taken, we have 5 finalized the licence option agreements with these people. 6 BKM will enjoy a moderate royalty with these people 7 and they have made a co-fund which will be credited towards 8 future royalties so their entry has minimal impact, 9 especially to take on the technology. 10 In addition to collecting the royalties, BKM 11 intends to manufacture componentry for these engines, just 12 like spark plugs or carburetors, these engine owners 13 recognize the need to buy standard components, especially in 14 the area of electronics. 15 San Diego and the State of California are in a good 16 position to provide the hardware and the other components of 17 the engine. 18 We have had several summit meetings of these 19 consortium members during the course of this project and it 20 has been rather enjoyable because for the most part these are 21 competing companies, but if we get 25 or 30 people in one 22 room with common interests, the friendships and the 23 networking have occurred in some meetings have been kind of a 24 secondary benefit. 25 I am not going to go into a great deal of detail PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 about how this operates, but just for the purpose of 2 illustration, we are looking at the top half here, there is 3 integration of components within the engine which is very 4 definitely important for cost reduction. 5 It is not a bolt on type system. There is a single 6 plunger pump which is essentially is needle bearing, moving 7 up and down by the action of the cam shaft. 8 There is a nozzle out in the cylinder head and 9 there is a small solenoid valve and there is a electronic 10 control unit about the size of a deck of cards, which will 11 ultimately be reduced when the application specific 12 electronics are applied. 13 The cost effectiveness has been borne out, and we 14 are quite proud of the way that this system has gone 15 together. 16 We mentioned some proof of concept work done in 17 conjunction with the EPA about 1993, or 1994 time period. 18 EPA asked if we could supply a breadboard type 19 engine of some kind to get an idea of what the level of 20 engines could be with this technology. 21 This breadboard was a little bit clumsy in that it 22 was all external mounted hardware by a 66 cc chainsaw, a 23 function of the fuel injector was identical to what we 24 currently integrated on the engine. 25 From these test results, we concluded that we had PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 actually beat the Tier ll regulations by about a factor of 2 two across the board. 3 I should mention that EPA was neither interested or 4 set up to test for particulate emissions, so that data 5 happens to be missing from this test, this was an independent 6 test conducted by the EPA. 7 I won't go into detail on our schedules, but just 8 to mention, we have broken our schedule into two components. 9 The first phase is just coming to end, which is the 10 development of components, the detail design of the engines 11 hardware and the release of that hardware from production. 12 We are now entering the phase where we will be 13 testing the engine, actually the first running will occur in 14 the month of July, then we will get into a period of 15 optimalization of the hardware and the software that operates 16 the injector. 17 As far as the importance of the ICAT funding 18 program, I can say at least two major points that this 19 funding did, in fact, trigger the initiation of the project, 20 when we developed the consortium members, we felt a little 21 uncertain that we had enough budget, when the ICAT funding 22 was confirmed, we had a decision point to go ahead with the 23 program, and it has been very successful automotive program. 24 The endorsement of the Air Resources Board has been 25 favorable to present this technology to other potential PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 consortium members and, in fact, we are currently in 2 negotiation with some additional small engine builders to 3 join this program. 4 I believe that will have more activity there when 5 we run engines in the next month. I would like to finish 6 with one last slide to quickly review the challenges to get 7 this technology into the market place. 8 Obviously, funding is difficult to come by for a 9 small company likes ours. We have to the raise the funds to 10 execute the programs that we are conducting, the ICAT funding 11 obviously was an important aspect as the seed money for that 12 program. 13 Another challenge is, of course, complacency. The 14 industry spends a lot of time arguing why things can't be 15 done. 16 We like to argue why things can be done. I do 17 believe when the engine is running that we will see more 18 activity. 19 But it is interesting to note that the US and 20 European companies have sort of taken a side step here and a 21 wait-and-see attitude. 22 The other concern is, of course, levels of 23 emissions and regulations. Companies that we are working 24 with make strategic decisions based on what technologies that 25 they are going to get involved with as long as we have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 achievable regulations that we now think we are able to 2 achieve, we want to be sure those are firm and consistent and 3 don't create waves with the funding partners that we now 4 have. 5 Decisions between four cycle engines and two stroke 6 engines, that sort of thing, these companies make the 7 decisions a year or two in advance, which technologies they 8 are going to pursue. 9 We would like to see the target remain firm. That 10 concludes my presentation, thank you very much. 11 CHAIRMAN DUNLAP: Thank you, Mr. Johnson. Any 12 questions of the witness? All right. 13 Supervisor Roberts is not here, but if he were he 14 probably would ask if you were located in his Supervisorial 15 District in San Diego. 16 Are you in San Diego proper, in the city? All 35 17 employees are there? 18 Thank you for that overview. I appreciate the 19 comment too at the tail end about making sure regulations are 20 consistent and predictable. 21 We have concern about that too, and Mr. Kenny and 22 our staff knows that any deviation from what we have planned, 23 there has to be a very good reason for it. 24 We are not inclined to want to make many changes, 25 if at all. Thank you. Manjit, you are up again. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 MR. AHUJA: As Mr. Johnson referred to the 2 consortium meetings, staff attends those meetings and finds 3 them extremely useful. 4 Next, I would like to introduce Mr. Edwin 5 Stankiewicz. He has been at Ultramet since 1991, and he is a 6 manager of new product development. 7 He has authored papers on catalytic converters, hot 8 gas filtration, an other topics. He received his engineering 9 degree from Drexel University, and his MBA from Pepperdine 10 University. 11 Mr. Stankiewicz. 12 MR. STANKIEWICZ: Thank you, Mr. Chairman and 13 Members of the Board. I would like to echo the sentiments, 14 thank you for the opportunity to present, and tell you what 15 we are doing with the funding. 16 One of the things mentioned at the end of 17 Mr. Johnson's presentation was funding and a moving target. 18 On funding, the ICAT program is like much needed 19 water in the desert, as it were, even if it is LA. This 20 water in the desert is a small part of how we have leveraged 21 the ICAT funding and I will present that further. 22 Agenda for the slides is, I want to tell you about 23 Ultramet and who we are and why we are here. Ultracat is a 24 catalyst substrate that you are funding some research on and 25 the advantages of Ultracat. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 The next one is the ICAT program objectives, 2 leveraging of ICAT funding and benefits of the program. 3 Ultramet is founded in 1970, it is a California 4 company, still closely held. We specialize in advanced 5 material solutions for extreme environments. 6 Every space shuttle engine ever launched runs 7 because of a little valve that we make. That makes a market 8 an inch wide and an inch deep come to us when nothing else 9 works. 10 Why we are here is we developed this forced media 11 that is great for heat shield, it also is a great filter at 12 high temperature and it also is an excellent substrates for 13 catalyst where high temperature gas comes through. I will 14 explain the advantages further later. 15 Again, people come to Ultramet when nothing else 16 works. Cold temperature for us is a thousand degrees 17 centigrade. We work up to around 4000 degrees centigrade. 18 $5.6 million in sales last year, 55 employees, we 19 have grown since last year, and we do all of this in the 20 employment enterprise zone. 21 We anticipate around $7 million in sales this 22 year. I can talk heavily on what we call the Ultracat 23 catalyst substrate. We view it as an enabling technology for 24 ULEV. 25 What it brings to the table is low mass, high heat PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 transfer, high mass transfer. It is a silicon carbide open 2 cell foam. Silicon carbide is a nice refractory material 3 which is stable at high temperatures, and can be used 4 continually for 1400 degrees centigrade. 5 I have some samples that can be passed around, one 6 is a prototype of a catalytic convertor for an automobile, 7 and that is the big heavy one with the steel casing and what 8 else is coming around is a beige piece of honeycomb that is 9 in everyone of your automobiles and it makes Corning very 10 happy to be producers of that world wide. 11 What that is, is an excellent piece of ceramic 12 which is at its limits of application, and that is where 13 Ultramet comes to the table because come to us when nothing 14 else works. 15 What also is coming around is a single piece of our 16 Ultracat silicon carbide foam and that will just give you a 17 touchy-feely of how lightweight the material is and how 18 interconnected the three dimensional porosity is. 19 CHAIRMAN DUNLAP: If I might interrupt, I think 20 that Jack Largarus is here, and Jack, this is one of those 21 times when we need you to come up here and hold these things 22 for us and tell us what we are looking at. 23 For newer Board members, Mr. Largarus to serve on 24 this Board for many, many years. Welcome Jack, and you are 25 missed, Calhoun is not quite cutting it up here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 MR. STANKIEWICZ: The black piece of Ultracat 2 silicon carbide foam that you have in your hand has a macro 3 pore poor structure as shown in the next slide. 4 This is 87 percent air and only 13 percent solid 5 volume. Emissions gas from an automobile has to go through 6 each pore and contact the catalyst intimately and quickly, 7 there is no boundary layer. 8 That is what we mean by low mass transfer. What we 9 mean by high heat transfer is the solid in that substrate 10 will absorb a lot of heat from the engine so electrically 11 heated catalytic convertors will not be needed. 12 What we want to do is react in the first 20 seconds 13 in turning on an engine where 80 percent of the carbon 14 emissions are released. 15 This slide is going to give a comparison of our 16 Ultracat versus the honeycomb. The honeycomb has a square, 17 or a rectangular, or triangular shape conduit as gas flows 18 down that conduit it forms a boundary layer between the 19 catalyst and the solid, and that is what the hubbub is all 20 about, that boundary layer slows down the oxidation of the 21 hydrocarbons and that is what makes things slow in reacting. 22 That boundary layer also slows down the heat 23 transfer. So a typical catalytic converter takes longer to 24 heat up. 25 So, this cell structure combined with the material PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 gives us these advantages, fast light off. We are looking 2 for passive emission control, which is compact, has low back 3 pressure, heats up quickly and has high mass transfer. 4 We get all that having 90 percent frontal open 5 area, and being able to use it at very high temperatures 6 means that we can mount it on the manifold. 7 If you look at any of the lead vehicles that are 8 certified in California, you will notice that they have a 9 catalytic convertor very close to the manifold. 10 We can go in the manifold, on the manifold, we can 11 be inside the piston if required, inside the compression 12 chamber. 13 We also have automatic broadband sound absorber, 14 and that means that it is a muffler and it works very well in 15 the inline sound continuation. 16 We have already measured four decibels of reduced 17 sounds coming from aircraft engines, and we can control the 18 properties depending on what we want to accomplish. 19 What you are seeing now is a typical automobile 20 engine exhaust system. What a catalytic converter is, is a 21 bandaid. An engine makes pollutants, and a catalytic 22 convertor tries to put them into a more benign state. 23 You need a good engine, that is all there is to it, 24 if your engine puts out too much pollution you will not get 25 to where you want to go. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 They are various places where people want to put 2 catalyst, that close coupled location right next to the 3 manifold is what we are going to do. 4 The piece of steel and foam that is in front of 5 you, this is a cross section of it, gas is going to come in 6 the inside of the tube, go through the wall and exit through 7 the conduit. 8 We put the V-shape in there to reduce back 9 pressure. We put a thin wall to reduce back pressure. We 10 can have a thin wall because of our high mass transfer. 11 A typical catalytic convertor is six inches long, 12 and as your exhaust gas blows through the six inches, it 13 creates pressure and it draws the power from the engine. 14 We, inch for inch, will have higher back pressure, 15 but that is why we make ours in a tube and have a very thin 16 cross section, we can do that because of high mass transfer. 17 Technically it does -- enabling advances in 18 technology allow you to make it thinner, operate at higher 19 temperatures so it can be more compact, closer to the engine, 20 and have lower back pressure. 21 Given all of these things that we see in the 22 material, I want to talk about the program objectives. 23 What we fundamentally want to do in this program is 24 show the feasibility of using Ultracat substrates as a 25 commercial tool to meet future emission standards. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 ULEV is the stated goal right now. We have people 2 in formulated natural gas engines who want us to go below 3 ULEV, and take it beyond there, again, manifold mounting 4 catalytic convertors. 5 Part of the program we formulate and develop 6 methods of applying catalysts. This is a very different 7 substrate and the Englehards, Johnson Mathes, the gooses of 8 the world, Allied Signals aren't used to coating, so we have 9 to coat it, and then teach them how to coat. 10 We also put our own catalyst on it to get work 11 started. We design and demonstrate a catalytic convertor, 12 such as you see before you, that one is for automobiles, we 13 are using that on small engines and general aviation aircraft 14 as well. That is thumbnail sketch of the program. 15 Next, I would like to talk about how we are 16 leveraging the funding. Funding is the mother milk of 17 progress, you can do what you can on your own, and on the 18 bottom of this slide, we spent more than any one else, taking 19 it to a point. 20 I heard in the last presentation, complacency of 21 many manufactures, that is one way of looking at it, the 22 other is they have hundreds of millions of capital 23 investments to commit to in an uncertain technology future. 24 Like I said at the beginning, the engine starts 25 everything. This is a bandaid, and the capital equipment to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 put in that engine is phenomenal. 2 America, and the rest of the world's automobile 3 engine manufacturers, internal combustion people, have 4 sponsored something greater than the space program to the 5 Moon under their own dime, to get automobile engines, and 6 small engines, and weed wackers down to lower pollution 7 levels, it costs about two or three billion to go to a new 8 engine. 9 For us, we go out and everyone who can use the 10 advantages that we bring, we try to get funding, SPIR, ICAT, 11 State matching funds, we go to engine manufacturers, 12 automobile people, we go to ourselves and commit our IR and D 13 budget, $350,000 on a $5-million company, that is a 14 substantial chunk of our change. 15 We are committed to this, and we are trying to 16 commercialize the product in many markets, and one of them is 17 catalytic convertors. 18 The lean NOx treatment that everyone has especially 19 with the new engines that are going to have higher oxygen and 20 more NOx. 21 A monolific catalyst bed is their rocket launching, 22 that is our home turf, because we go to rocket companies when 23 nothing else works, and we get them to launch their rockets, 24 and California benefits from that because we learn how to 25 make better catalysts and we apply them as part of this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 program. 2 The top program on here, the hot gas filters, we 3 are making large pieces of catalyst. We change the way we 4 make it slightly, and it becomes a hot gas filter for 5 advanced coal fire plants, and that will help in emissions in 6 a different area, but helps us make these substrates at a 7 lower cost which means they can get it in automobiles, or 8 into a general aviation craft or small engine. 9 So, through all of our endeavors, we have over 10 six-to-one leveraging of ICAT funding. All this is to span 11 the chasm between technology and product, and I will go into 12 that more later. 13 There is a college guy, his name is Hall. I think 14 that he founded Alcoa. 15 He started in 1880. He came up with the process to 16 turn oxide into aluminum. After he went bankrupt, just 17 twice, the real kick in his pants, the World War ll helped 18 him a lot, United States Government came into his plant, took 19 his technology, spread it around the world, and we call it 20 Kaiser and Reynolds, I don't know which other ones came from 21 that. Materials research is a long, slow, arduous process. 22 Unfortunately that is what our company does, and if 23 you are the space shuttle, we are great, if you are an 24 automobile, everybody looks at you, wow, that's fascinating. 25 How much does it cost. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 Part of this program allows us to bridge that chasm 2 to allow technology to commercial product where an engine 3 exhaust product manager comes in and goes, I have a 3.2 liter 4 engine that has this exhaust stream, and I need this size 5 catalytic convertor, I need 300,000 of them by this year, how 6 much will it cost me? 7 You have an answer. How big does it have to be? 8 What catalyst loading does it need? 9 And that is what we are working on here. 10 Part of our program benefits is we have 11 credibility, as Mr. Johnson said, and we can walk in a room 12 and say look we have invented, and someone looked us over and 13 they think we have some credibility. 14 Working relationships with major auto companies. 15 SAE, if you go to SAE international congress, you will see 16 two hundred engineers discussing emissions control. 17 There are about five meetings a year that SAE has 18 on various branches of emissions control, so the world is 19 listening to emission control. 20 We have worked is Hiram Gandi he is Ford's guru of 21 catalytic convertors, and Mike Foster out at GM, and we are 22 talking to Honda R and D. 23 Part of what we are doing is we are trying to get a 24 free car to test our catalytic converter. The engine is an 25 important part, so you need a modern car. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 In fact, you would like a 1998 or 1999 version, so 2 you have to be deep within a company. You can't go to a used 3 car lot and effectively do this program. 4 After a year of effort, Honda R and D has antied up 5 at least a lead car, and we want to take it to the next 6 hurdle. 7 They may give us more advanced, depending on their 8 availability, but Honda has come in, and part of the 9 credibility we had with the ICAT program allowed us to go to 10 Honda. 11 We developed catalysts, but there are people better 12 at it. They spend billions, and we spend hundreds of 13 thousands. 14 Englehard is right now the leading producer of 15 catalysts that can take high temperature, light off quickly, 16 and survive close to the engine. 17 They have committed to coating our substrate so we 18 could use it on the Honda automobile so we can complete the 19 ICAT program. 20 Another benefit of the program is the networking 21 with major companies, and networking with companies inside of 22 California. 23 In California, we are working with Catalyst 24 Solutions, Inc. They are a startup company in Santa Barbara 25 who does nonprecious metal catalysts, and that will bring PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 down the cost of these new catalytic convertors. 2 Borla Performance Industries, they are in Oxnard, 3 they make mostly high end mufflers. They are on the Ranger, 4 the Infinity Q45, some Honda vehicles, some Toyotas. 5 They are working with us. I believe they are a 6 woman-owned business, and they are canning our product. They 7 are right up the road from us, and they work with Honda R and 8 D, so we have a nice network going with these groups of 9 California companies. 10 We also work with Universities CE-CERT, Dr. Tim 11 Truix, and Dr. Norbach down there, and we have hired one of 12 their students to work in with us, and that is how we created 13 two new jobs, we also hired a UCLA post doc to work in our 14 catalyst formulations, so the benefits of this program are 15 tangible, they are local, and they are needed. 16 Other things that we get. The nuts and bolts, we 17 need to do FTP testing, if this thing works, let's see if we 18 can commercialize it. If it doesn't work, let's put it to 19 bed. 20 SAE presentation, we have submitted an abstract, it 21 is going to be based on this work to present the data. SAE 22 last year presented open cell foams for the time as light off 23 catalysts, and we have been working with automobile companies 24 for three years now to use this as light off catalytic 25 convertor. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 J1088 testing, small engine testing, and 2 commercialized dual use technology, we have this DOD 3 technology and aerospace technology, but let's put on it the 4 ground where a lot more people can use it, and bring the cost 5 down, and create more jobs, and build a bigger plant, 6 everyone's dream. 7 We just are trying to make it a reality. Funds for 8 productization, now that is DOD odd word. We have the 9 technology, but it is not a product. 10 The chasm between technology and product is deep 11 and treacherous. This is just one way, we talk to end user 12 and get it at cost and performance that meets their needs. 13 I would like to sum up, there is FTP testing, the 14 SAE presentation, the J1088, the commercialization of dual 15 technology, and productization. 16 The next slide is a summary of where we are at. 17 ICAT, it is high risk money, it is seed money for new 18 technologies. 19 It is not out there in the breeze, it is matched 20 funding and it is often leveraged very heavily. Mr. Johnson 21 before me told you how he leveraged it, I told you how I 22 leveraged it, part of the betting process make you have 23 serious technology, often State funds are leveraged and it is 24 usually in California that the funds are spent. 25 Transition air space technology in the to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 commercial sector, we need more of that, this is one way to 2 do it, it only works, from a small company point of view, it 3 with a larger amount of money. 4 The concluding slide, additional benefits that we 5 got from the program were networking with the local 6 businesses, and we have created some jobs, as we have become 7 successful we have further revenue creation for California, 8 and as the technology becomes commercial, it produces cleaner 9 air for automobiles and stationary sources in California. 10 I also would like to thank Mr. Maldinado and Mr. 11 Ahuja for their careful follow-up in communication in keeping 12 this program going. 13 With that I conclude my remarks. 14 CHAIRMAN DUNLAP: Thank you, any questions of the 15 witness? I appreciate that presentation. 16 I particularly appreciate your candor in how open 17 you were about the process that you go through. That was 18 worthwhile for us to learn that. 19 MR. STANKIEWICZ: Thank you for the opportunity to 20 communicate. 21 CHAIRMAN DUNLAP: Very good. Well, Dr. Holmes, Mr. 22 Kenny, in conclusion, what would you like to say as we take 23 up this item? 24 And as you know Mike, I am a firm believer in not 25 talking past what is a likely yes. So, anything else you PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 want to add? 2 MR. KENNY: We were going to present some 3 information with regard to the specifics of the four 4 proposals, but if the Board does not have any questions with 5 the four proposals, then we would like to simply. 6 CHAIRMAN DUNLAP: What is the Board's pleasure? 7 Are you comfortable with what the staff is 8 recommending? 9 MS. RAKOW: I just have one quick question to the 10 staff as you anticipated I might, then I have some other 11 questions that are more detailed that I might call the staff 12 later on. 13 Some of the projects that were mentioned in the 14 previous years, and this year, I rather recognize that there 15 could be an energy component. Since I, in my former life, 16 headed up the research and development that handed out lots 17 of money, lots of grants, I wondered if there was any 18 coordination between the ARB and the Energy Commission in 19 this grant making, because some of these projects serve two 20 purposes. 21 MR. AHUJA: Absolutely, Ms. Rakow, we work with the 22 Energy Commission staff. We work with the DEDAC group and 23 the EDAC group of bargaining and job assignment. 24 Specifically, they did not review these proposals 25 because of the confidential agreement and we have not brought PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 them into the loop yet. 2 Informally we work very closely with them, and in 3 fact when we set up the program, before setting up the 4 program, there were several meetings between us and them, in 5 fact we attended their public workshops because they were 6 conducting those programs before we set this program up. 7 MS. RAKOW: Is there a possibility that when there 8 is a direct energy component that a grant applicant might 9 receive monies from both? 10 MR. AHUJA: Absolutely, in fact a number of 11 proposals that we get they are co-funded by an Energy 12 Commission and we make note of that. 13 Not only that, when we get some proposals which are 14 not directly related to air pollution control and automotive 15 energy conservation we direct those proponents to go and meet 16 with the folks at the Energy Commission and give them the 17 right direction. 18 MR. PARNELL: Mr. Chairman, in the interest of 19 elongating the meeting beyond twelve o'clock, because of 20 monetary considerations, I offered to buy his lunch if we 21 concluded earlier, but I have to say that the Air Board 22 historically has been a technology forcing Board, and with 23 great sensitivity, and I think that the ICAT program is kind 24 of putting our money where our mouth is, and I really like 25 that component. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 A lot of technologies languish because they are not 2 understanding people with funding sufficient to allow us to 3 cross that valley of death, and it is a very real valley. 4 I appreciate the work that our staff has done and 5 certainly appreciate that there is a program, and I wish it 6 were larger than it is, but nonetheless, this is, I think has 7 demonstrated, yielded great, positive effect, past program, 8 and I would like to recommend that we approve these projects 9 that are presented to you today. 10 SUPERVISOR RIORDAN: I'll second the motion. 11 CHAIRMAN DUNLAP: Okay. Very good. We did not 12 have any written submissions nor witnesses signed up on this 13 item. 14 DR. HOLMES: No, there are no written submissions 15 nor comments. 16 CHAIRMAN DUNLAP: Okay. Very good. We have before 17 us a motion and a second to adopt the four Resolutions 97-29, 18 97-30, 97-31, 97-32, that follows the staff's recommendation 19 that is in our package, and one thing that I should point out 20 to the Board Members, we have asked Mr. Kenny and his team to 21 give us those resolutions in advance because we were getting 22 them pretty close to decision making time and it was causing 23 us some unease, so I want to acknowledge that Mike and his 24 team have done a good job with that. 25 If there is no further discussion, I then will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 proceed with a voice vote on those four combined. Is that 2 legal to do? 3 MS. WALSH: Yes. 4 CHAIRMAN DUNLAP: All those in favor of approving 5 those four Resolutions as I have just outlined please say 6 aye. Any opposed? 7 Very good. Thank you very much. 8 Dr. Holmes fine job to you and your team, thank 9 you. You have one small research item. 10 Is that correct? 11 DR. HOLMES: That is correct, Mr. Chairman, we have 12 one from the Baseline Research Program, Item 97-5-5. 13 This is augmentation to Air Monitoring Program that 14 has been underway in Southern California. 15 We discovered it late in the game that we are going 16 to do some additional air monitoring in support of the 17 Southern California Ozone Study. 18 What this project will do for us is allow 19 monitoring, some more air monitoring along the Mexican 20 border, and some additional monitoring of background levels 21 in the northwest part of Santa Barbara County, near Point 22 Conception, where we get our supply of clean air that flows 23 into Southern California. 24 We recommend approval of this item. It is 25 contracted with Desert Research Institute, to provide these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 additional monitoring setups for us this summer in Southern 2 California. 3 CHAIRMAN DUNLAP: Okay. And the dollar amount is, 4 Dr. Holmes? 5 DR. HOLMES: It is $206,000, Mr. Chairman. 6 CHAIRMAN DUNLAP: Okay. Mr. Kenny and 7 Mr. Scheible, as it relates to augmentation of contracts, I 8 know you have been very careful, the Board sent very clear 9 messages to you about living within budget and developing a 10 work plan that makes sense and that you can live with, and 11 the extenuating circumstances here seem to be that you can 12 for a relatively small amount, though $200,000 is a lot of 13 money, you can get an awful lot of bang for the buck and more 14 bread than more conclusions to help us ultimately as we bring 15 forward control programs as result of this information. 16 Do you think, Mr. Kenny, that this justifies the 17 additional expenditure, and the Board ought to have comfort 18 with that explanation. 19 MR. KENNY: I don't think that I could have said it 20 better than the Chair just said it. 21 CHAIRMAN DUNLAP: Okay, and this will not be a 22 habit forming endeavor; is that correct? 23 MR. KENNY: Correct. 24 CHAIRMAN DUNLAP: All right. Very good. If my 25 Board colleagues are comfortable, I would entertain a motion PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 to move forward. 2 MAYOR HILLIGOSS: So moved. 3 CHAIRMAN DUNLAP: A motion by Mayor Hilligoss and a 4 second by Dr. Friedman. 5 Any discussion on this item? 6 The motion I'm to assume was to approve Resolution 7 97-33, which was to augment the existing work to the amount 8 of $206,000. 9 Any discussion? 10 All right. 11 We will proceed at a voice vote. All those in 12 favor, say aye. 13 Any opposed? 14 All right. Very good. Motion carries. Thank you 15 very much. 16 Thank you, Dr. Holmes. 17 Before we wrap up the meeting, we have an open 18 comment period, which we have intentionally put on the Agenda 19 to allow those in the audience which have things that are 20 burning within their breast that they must share with this 21 Board. 22 Is there anyone that has a breast burning 23 experience or issue that they wish to share with us? 24 All right. Again, just to recognize our colleague 25 Mr. Largarus, Jack, good to see you, I appreciate you being PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 here, and I would assume it is for the item on the San 2 Joaquin Valley work. If not, you were just in the 3 neighborhood and wanted to say hi. 4 We appreciate your work, and I know you devoted a 5 lot of time and attention to San Joaquin Valley, and I am 6 appreciative of that, and I would encourage you to come up 7 and shake our newest Board Members hands. 8 So, if there is nothing else, Mr. Kenny, do you 9 have anything else? Then we will conclude, or adjourn this 10 the June meeting of the California Air Resources Board. 11 (Thereupon the Air Resources Board meeting 12 was adjourned at 11:55 a.m.) 13 --o0o-- 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 4 I, VICKI L. MEDEIROS, a Certified Shorthand 5 Reporter of the State of California, do hereby certify: 6 That I am a disinterested person herein; that the 7 foregoing hearing was reported in shorthand by me, Vicki L. 8 Medeiros, a Certified Shorthand Reporter of the State of 9 California, and thereafter transcribed into typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this sixth day of July, 1997. 15 16 17 18 VICKI L. MEDEIROS 19 Certified Shorthand Reporter 20 License No. 7871 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345