EXECUTIVE OFFICER'S HEARING STATE OF CALIFORNIA AIR RESOURCES BOARD JOE SERNA, JR. BUILDING CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY COASTAL HEARING ROOM, SECOND FLOOR 1001 I STREET SACRAMENTO, CALIFORNIA TUESDAY, AUGUST 24, 2004 10:30 A.M. TIFFANY C. KRAFT, CSR, RPR CERTIFIED SHORTHAND REPORTER LICENSE NUMBER 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii APPEARANCES STAFF Mr. Manjit Ahuja, Manager, Stationary Source Testing Branch, MLD Ms. Lori Andreoni, Board Secretary Mr. Ranjit Bhuller, Manager, Vapor Recoverty In-Use Program Section, MLD Ms. Diane Johnston, General Counsel Ms. Leslie Krinsk, Senior Staff Counsel Mr. Bill Loscutoff, Chief, Monitoring and Laboratory Division Mr. Niel Nipper, Stationary Source Testing Branch, MLD PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii INDEX PAGE Opening Remarks 1 Item EO-04-1-1 2 Closing Remarks 10 Adjournment 11 Reporter's Certificate 12 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 PROCEEDINGS 2 MONITORING AND LABORATORY DIVISION CHIEF 3 LOSCUTOFF: Good morning. The August 24th, 2004, public 4 hearing of the Air Resources Board Executive Officer will 5 come to order. 6 My name is Bill Loscutoff, and I am Chief of the 7 Monitoring and Laboratory Division. ARB's Executive 8 Officer, Ms. Catherine Witherspoon, has delegated to me 9 the authority to conduct this public hearing to consider 10 proposed amendments to the vapor recovery equipment 11 defects list, also known as VRED list, or I will call it 12 the VRED list. After today's hearing, I will make a final 13 decision on the staff proposal based upon testimony and 14 other material in the record. 15 As some of you may know, in November 2001, the 16 Board approved amendments to Section 94006 of Title 17 of 17 the California Code of Regulations. In that rulemaking, 18 the Board developed criteria to determine whether a defect 19 gasoline vapor control equipment used in motor vehicle 20 refueling operations substantially impaired the 21 effectiveness of the system in reducing air contaminants. 22 The Board also consolidated all of the 23 substantial defects into a single list and incorporated 24 the so-called vapor recovery equipment defects list by 25 reference into Section 94006(b). PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 Section 41960.2(C)(2) of the Health and Safety 2 Code requires the ARB to review the VRED list at least 3 every three years, beginning with January 1, 2001, to 4 determine if it needs to be updated to reflect changes in 5 equipment technology and performance. The changes to the 6 VRED list proposed today are technical in nature and 7 intended to clarify various aspects of the defects already 8 identified in order to enhance compliance and enforcement. 9 In Resolution 01-52, the Board directed the 10 Executive Officer to adopt amendments to the VRED list as 11 appropriate in accordance with the authority set forth in 12 Health and Safety Code Sections 39515 and 39516. 13 With that, I'd like to turn the microphone over 14 to Mr. Neil Nipper to introduce the item. 15 Neil, will you please introduce this item. 16 MR. NIPPER: Thank you, Mr. Loscutoff. 17 Good morning to all the stakeholders in 18 attendance or watching on the web. For the next 15 19 minutes or so, I want to share with you staff's proposed 20 vapor recovery equipment defects, or VRED, list update. 21 In the next two slides, I have listed the topics -- 22 --o0o-- 23 MR. NIPPER: -- I will cover in this 24 presentation. 25 I will begin with the ARB's responsibility with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 respect to vapor recovery equipment defects, specifically 2 where that responsibility comes from. 3 I'll give a brief history of ARB's roll in 4 identifying and listing these defects. 5 I'll describe the criteria that is applied for a 6 defect to be listed. 7 Then I will describe what the ARB does to 8 maintain the VRED list and the determinations which 9 indicates any update. 10 --o0o-- 11 MR. NIPPER: After describing what we do, I will 12 go through where the changes to the list come from. The 13 proposed changes can be categorized into three basic 14 types. I will speak about these categories. 15 We will propose changes to the VRED list which 16 were brought to our attention shortly before the hearing 17 or which will occur soon after this hearing. These 18 changes are not in the staff report and will be made 19 available for public comment for a 15-day period. 20 I will conclude the presentation by describing 21 the future actions stakeholders may expect. 22 --o0o-- 23 MR. NIPPER: As you can see here, the California 24 Health and Safety Code requires the ARB to identify 25 defects which substantially impair vapor recovery systems' PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 ability to reduce emissions. We also are required by law 2 to list those defects. 3 Substantial defects differ from other defects in 4 that they are required to be removed from service or any 5 affected equipment is required to be removed from service. 6 Next I will give a brief description of the 7 equipment defects history. 8 --o0o-- 9 MR. NIPPER: The first list of substantially 10 impairing defects was promulgated into Title 17 in 1982. 11 Vapor recovery was in its infancy, and this list contained 12 12 general vapor recovery defects. When I say general, I 13 mean that all defects apply to all systems. No defect was 14 identified as system specific. 15 As vapor recovery became more sophisticated and 16 systems evolved over the years, defects became more 17 specific to the systems they are associated with. 18 Subsequent defects were identified in the Executive Order 19 certifying the system. 20 With the adoption of the vapor recovery equipment 21 defects list on September 23rd, 2002, the defects from the 22 original Title 17 list and those in the Executive Orders 23 were consolidated into a single list. At the same time, 24 criteria were adopted to clearly define when a defect 25 qualifies as substantial. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 --o0o-- 2 MR. NIPPER: I will now discuss the three 3 criteria which any defect must have to be deemed 4 substantial and thereby included in the VRED list. These 5 criteria are: 6 The defect was not part of the component when was 7 certified as part of the system in question. 8 The defect was not part of the system's design 9 when certified. 10 The degree to which the system collects gasoline 11 vapors is measured as an efficiency expressed as a 12 percentage of the whole. 13 Any defect must reduce the system efficiency by 14 an additional 5 percent to be considered substantial. 15 There must be at least one verification procedure 16 for each listed defect, which can be used as a means of 17 identifying the defect. This procedure may be as simple 18 as direct observation, where that works, or it may require 19 an established test. 20 Given this defect criteria -- 21 --o0o-- 22 MR. NIPPER: -- and our responsibility to 23 identify and list defects, what does the ARB do to 24 maintain the VRED list and when is an update determined? 25 As new systems are certified, part of the certification PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 process is to identify any substantial defect and write a 2 description of the defect in the Executive Order 3 certifying the system. 4 Prior to the adoption of the VRED list, the ARB 5 was required to hold a public workshop to review the Title 6 17 list and the existing Executive Orders before 7 January 1st, 2001. This review was determined if an 8 update was necessary. 9 The review also started a minimum once every 3 10 year review requirement. The review that began this 11 update we are carrying out today was conducted at a 12 workshop on November 5th, 2003. Reviews to determine 13 update necessity should be scheduled prior to the first 14 day of 2007, 2010, 2013 and so on. 15 The Executive Officer may initiate a public 16 review of the list upon written request. The request must 17 demonstrate to the Executive Officer's satisfaction that 18 such a review is needed. 19 --o0o-- 20 MR. NIPPER: The proposed VRED changes offered 21 here today come from a variety of sources, which I will 22 now discuss. 23 These sources are: 24 Any substantial defect listed in an Executive 25 Order signed since the last update of the VRED list will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 be added to the list. 2 As systems are decertified or certifications 3 expire, defects may also be removed from the VRED list. 4 Changes to the VRED list may be the addition or 5 removal of a defect or verification procedure. 6 Any defect meeting the criteria of substantial 7 discovered through field work as a part of inspections or 8 during testing will be considered for addition to the list 9 at the next update. 10 Also, evidence showing that a defect can no 11 longer meet the criteria to be considered substantial will 12 be evaluated, and if found sound, the defect in question 13 will be removed from the VRED list. Vapor recovery 14 stakeholders may also present evidence to ARB staff 15 supporting changes to the VRED list. 16 I will now speak about the types of proposed 17 changes. 18 --o0o-- 19 MR. NIPPER: -- to update the VRED list. 20 The changes we are considering today can be 21 placed in three categories: 22 Specific changes to individual defects listed in 23 a single VRED list table. 24 Modifications which effect a defect listed 25 several times in multiple tables and changes to all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 defects listed. 2 Specific proposed changes are available for 3 review and underlined for additions and strike through for 4 deletions as Appendix 2 of the staff report. 5 --o0o-- 6 MR. NIPPER: It was recently brought to ARB 7 staff's attention that additional defects in about six 8 above-ground storage tank, also known as AST, Executive 9 Orders should be in the VRED list. These AST defects were 10 not included in the staff report, so ARB is proposing that 11 they be part of a 15-day package. 12 Staff is also proposing that other defects 13 identified subsequent to today be part of the 15-day 14 package. Staff expects two Executive Orders, the OPW 15 Vapor Saver G-70-204, and one for the Healy EVR Phase 2 16 system, to be signed shortly after this hearing. Both of 17 these Executive Orders will have substantial defects which 18 should be on the VRED list. 19 --o0o-- 20 MR. NIPPER: The defects from the newly-signed 21 Executive Orders and the defects from the above-ground 22 tank Executive Orders will go out together as a 15-day 23 package. Defects will be described and shown how they 24 will be incorporated into the VRED list. 25 Stakeholders will have 15 days to review and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 comment on these additional changes. After the public 2 comment period is closed, with respect to the 15-day 3 package, all changes will be given to Bill Loscuttoff for 4 review and final approval. 5 A Final Statement of Reasons, also called the 6 FSOR, will be published with all approved changes to the 7 VRED list and any responses to any questions or objections 8 expressed at this hearing or during the public comment 9 period. 10 Upon completion and ARB approval, the FSOR 11 package will be sent to the Office of Administrative Law, 12 referred to as OAL. OAL has 30 days to approve or 13 disapprove of the amended VRED list. Upon OAL approval, 14 the amended list will be sent to the Secretary of State to 15 be filed and will be become effective 30 days after 16 filing. 17 If you have any additional questions or points to 18 discuss with staff -- 19 --o0o-- 20 MR. NIPPER: -- here is my telephone number and 21 e-mail, as well as the telephone number and e-mail of 22 Ranjit Bhuller, the Manager of the section responsible for 23 completing this update. This information is also in the 24 handout of the presentation. 25 That concludes my presentation. I'll be happy to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 answer any questions that you have for me. Thank you. 2 MONITORING AND LABORATORY DIVISION CHIEF 3 LOSCUTOFF: Thank you, Neil. 4 There doesn't appear to be any public testimony. 5 Therefore, we will go beyond that. 6 Mr. Ahuja, are there any further comments? 7 STATIONARY SOURCE TESTING BRANCH MANAGER AHUJA: 8 No further comments at this point. 9 MONITORING AND LABORATORY DIVISION CHIEF 10 LOSCUTOFF: Before adjourning this hearing, I would like 11 to state there have been no ex parte communications. That 12 is, no off the record communications from outside persons 13 after the hearing notice for this item was published. 14 Counsel, if there are no other housekeeping 15 matters, I will now close the record on this agenda item. 16 However, the record will be reopened when the 15-day 17 notice of public availability is issued. 18 Written or oral comments received after this 19 hearing date but before the 15-day notice is issued will 20 not be accepted as part of the official record. When the 21 record is reopened for the 15-day comment period, the 22 public may submit written comments on the proposed changes 23 which will be considered and responded to in a final 24 statement of reasons for this regulation. 25 As previously mentioned, I will consider the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 entire record of the proceeding and shall file a decision 2 on the regulations as delegated to me by the Executive 3 Officer by an Executive Order. That's it. We'll adjourn. 4 The August 24th, 2004, public hearing is now adjourned. 5 (The California Air Resources Board Executive 6 Officer's Hearing adjourned at 10:51 a.m.) 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 12 1 CERTIFICATE OF REPORTER 2 I, TIFFANY C. KRAFT, a Certified Shorthand 3 Reporter of the State of California, and Registered 4 Professional Reporter, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, 7 Tiffany C. Kraft, a Certified Shorthand Reporter of the 8 State of California, and thereafter transcribed into 9 typewriting. 10 I further certify that I am not of counsel or 11 attorney for any of the parties to said hearing nor in any 12 way interested in the outcome of said hearing. 13 IN WITNESS WHEREOF, I have hereunto set my hand 14 this 1st day of September, 2004. 15 16 17 18 19 20 21 22 23 TIFFANY C. KRAFT, CSR, RPR 24 Certified Shorthand Reporter 25 License No. 12277 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345