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, SEPTEMBER 28, 2000 20 9:00 A.M. 21 22 23 24 Janet H. Nicol Certified Shorthand Reporter 25 License Number 9764 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii 1 APPEARANCES 2 MEMBERS PRESENT: 3 Alan C. Lloyd, Ph.D., Chairman William Burke 4 Joseph C. Calhoun Dee Dee D'Adamo 5 Mark DeSaulnier C. Hugh Friedman 6 William F. Friedman, MD Matt McKinnon 7 Barbara Patrick Barbara Riordan 8 STAFF: 9 Michael Kenny, Executive Director 10 Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer 11 Lynn Terry, Deputy Executive Officer Kathleen Walsh, General Counsel 12 Kathleen Tschogl, Ombudsman 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii 1 INDEX 2 PAGE Proceedings 1 3 Call to Order 1 4 Pledge of Allegiance 1 5 Roll Call 1 6 Opening Remarks by Chairman Lloyd 2 7 AGENDA ITEMS: 8 0-9-1 Public Meeting to Consider the Adoption of 9 the Proposed Risk Reduction Plan for Diesel-Fueled Engines and Vehicles 10 Introductory Remarks by Chairman Lloyd 2 11 Staff Presentation 12 Mike Kenny 5 Randy Pasek 7 13 Kathleen Tschogl 23 14 Board Discussion 25 15 Public Comments Barbara Lee 56 16 Tim French 58 Cynthia Cory 66 17 Manuel Cunha 68 Jeb Stuart 74 18 Michael Kelly 79 Mitch White 91 19 Philip Vermeulen 95 Michael Lewis 97 20 Stephanie Williams 102 Herbert Hunn 107 21 Elaine Chang 108 Peter Rooney 111 22 Tim Carmichael 115 David Smith 119 23 Janet Hathaway 122 Bonnie Holmes Gen 126 24 Bruce Bertelsen 129 Catherine Nyberg 134 25 (continued) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv 1 INDEX (continued) 2 PAGE Public Comments 3 (continued) Terry Ellis 134 4 Duane Chamberlain 139 Louie Brown 144 5 William Bunn 149 Ted Holcombe 151 6 Sean Edgar 158 Paul Ryan 162 7 Greg Gilbert 164 Joe Kelly 169 8 Christina Morgan 175 9 Questions/Comments 177 10 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v 1 INDEX (continued) 2 PAGE Public Comments 3 Harry Krug 221 Robert Sutton 224 4 Robert Warkentin 228 5 Questions/Comments 238 6 0-9-4 Public Hearing to Consider the Adoption of 7 Amendments to Regulations Regarding the Conflict of Interest Code of the Air 8 Resources Board 9 Introductory Remarks by Chairman Lloyd 240 10 Staff Presentation Mike Kenny 240 11 Ash Lashgari 241 12 Public Comments None 13 Questions/Comments 244 14 Open Session to Provide an Opportunity for Members 249 15 of the Public to Address the Board 16 Adjournment 249 17 Certificate of Reporter 250 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 CHAIRMAN LLOYD: Good morning. The September 3 28th, 2000, public meeting of the Air Resources Board will 4 now come to order. 5 Supervisor Patrick, will you please lead us in the 6 Pledge of Allegiance. 7 BOARD MEMBER PATRICK: Certainly. Please join us. 8 Salute, pledge. 9 (Pledge of Allegiance recited.) 10 CHAIRMAN LLOYD: Thank you very much. 11 Will the clerk of the board please call the roll. 12 MS. KAVAN: Dr. Burke. 13 (No response.) 14 MS. KAVAN: Calhoun. 15 BOARD MEMBER CALHOUN: Here. 16 MS. KAVAN: D'Adamo. 17 (No response.) 18 MS. KAVAN: Supervisor DeSaulnier. 19 BOARD MEMBER DeSAULNIER: Here. 20 MS. KAVAN: Professor Friedman. 21 BOARD MEMBER C.H. FRIEDMAN: Here. 22 MS. KAVAN: Dr. Friedman. 23 BOARD MEMBER FRIEDMAN: Here. 24 MS. KAVAN: McKinnon. 25 BOARD MEMBER McKINNON: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. KAVAN: Supervisor Patrick. 2 BOARD MEMBER PATRICK: Here. 3 MS. KAVAN: Riordan. 4 BOARD MEMBER RIORDAN: Here. 5 MS. KAVAN: Supervisor Roberts. 6 (No response.) 7 MS. KAVAN: Chairman Lloyd. 8 CHAIRMAN LLOYD: Here. 9 I think we'll move straight into the first agenda 10 item. 11 I would like to remind anyone in the audience who 12 wishes to speak on today's agenda items to please sign up 13 with the clerk of the board. Also, if you have a written 14 statement, please give 30 copies of that statement to the 15 board clerk. 16 The first item on the agenda today is 00-9-1, 17 public meeting to consider the proposed risk reduction plan 18 for diesel-fueled engines and vehicles. 19 I think before we start the staff presentation I'd 20 like to say just a few comments here, indicating that we've 21 made significant progress since the board first listed 22 diesel particulate as a toxic air contaminant. That was 23 done in 1998. 24 Today we can clearly see the emergence of diesel 25 after-treatment technology that will cut public risk by 85 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 to 90 percent once it's placed in service on new and 2 existing engines. I'm speaking, of course, about the 3 catalyzed continuously regenerating trap technology, which 4 we have seen come into the marketplace. 5 Also there's a significant quantity of 15 ppm 6 sulfur, low sulfur, in the marketplace and we're preparing 7 for nationwide sulfur, low sulfur, in 2006. 8 This low-sulfur fuel is an essential component of 9 our comprehensive diesel clean-up plan, and I'm very glad to 10 see it in reach and we're hoping, obviously, that EPA will 11 stay the course on that, sticking with low-sulfur diesel. 12 The board has also begun the process of rulemaking 13 to clean up the diesel fleets starting with the transit bus 14 rule adopted earlier this year. 15 Lastly, we've initiated a grant program to clean 16 up older, high-emitting diesel school buses, aided by a 17 $50 million budget appropriation approved by Governor Davis 18 for 2000-2001 fiscal year, and by the South Coast AQMD 19 Adopt-the-School-Bus Program, recently announced by Chairman 20 Burke. 21 The district and ARB staff are also collaborating 22 on a school bus retrofit trap demonstration program with 23 testing underway as I speak. 24 All of these efforts have moved us forward and 25 give me confidence that we can accomplish the ambitious PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 public health goals put forth in the diesel risk management 2 plan that we're here today. 3 Outside the confines of this plan, we also have a 4 continuing promise of clean alternative fuels, compressed 5 natural gas, liquefied natural gas, LPG, hydrogen and 6 electricity, all give us additional options for reducing 7 heavy-duty engine emissions and public health risks. 8 Along those lines, the Air Resources Board is 9 going to be working closely with the California Energy 10 Commission to identify how fuel diversity can help us meet 11 our environmental and energy reliability goals in the 12 transportation sector. 13 The Commission's report, "Energy Outlook 2000," 14 will be published shortly, and we're expecting that report 15 to set the stage for strategic planning and strategic 16 investments in all the transportation fuels for the future. 17 As we move forward on the individual rulemaking 18 called for this in plan, a detailed analysis of emission 19 control options will also be done. 20 For a variety of reasons, I believe we're going to 21 see a mixture of emission control choices in the future. 22 Some fleet operators will pursue pure diesel 23 retrofits, with the added cost of low-sulfur diesel fuel. 24 Others will offer alternative fuels as the preferred 25 compliance method because it meets their needs perfectly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 We can help people make those choices by laying 2 out clearly what's entailed and what are the pros and cons 3 of each option. Of course they're all good air quality, 4 which again gives me great confidence as we move ahead. 5 At this time, I'd like to turn the item over to 6 executive officer, Mr. Kenny, to begin the staff's 7 presentation. 8 MR. KENNY: Thank you, Mr. Chairman, members of 9 the board. 10 The proposed diesel risk reduction plan before you 11 today represents the culmination of more than two years of 12 work with local air districts, affected industry, 13 environmental groups, the public and US EPA. 14 To ensure full opportunity for consultation and 15 input, we created an advisory committee and four separate 16 subcommittees to serve as a forum for identifying and 17 working through the issues associated with various 18 strategies to reduce diesel particulate matter emissions. 19 The help we received from all these stakeholders 20 was invaluable and I'd like to thank them publicly now for 21 their assistance. 22 In developing this plan, the staff has come to the 23 following conclusions. 24 One, diesel-fueled engines are the significant 25 source of air toxics in California. About 70 percent of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 total risk from all identified air toxics in California is 2 from exposure to diesel particulate matter. 3 Two, existing regulations have reduced diesel 4 particulate matter emissions from diesel-fueled engines, but 5 more reductions are feasible and are needed. 6 And, three, we need to examine all the categories 7 and uses of diesel-fueled engines for further control. 8 The diesel risk reduction plan is a road map for 9 how we intend to proceed. The plan recommends several 10 control measures with specific time lines for their adoption 11 and implementation. The plan also provides updated 12 emissions inventories, exposure assessments and risk 13 calculations. 14 As you will see from the staff presentation, the 15 proposed measures are very aggressive. We are essentially 16 proposing to retrofit every diesel engine in the state by 17 2010. If we are successful in doing that, we will achieve a 18 90 percent reduction from new diesel engines and a 75 19 percent reduction from existing diesel engines upon full 20 implementation of this plan. 21 A key element of this plan is our reliance on 22 low-sulfur fuel. Simply put, the after-treatment technology 23 for diesel exhaust depends upon it. 15 parts per million 24 low-sulfur diesel fuel is the essential building block and 25 needs to happen at both the state and the national level. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 If approved by the board, staff will develop the 2 proposed control strategies in this plan into specific air 3 toxic control measures, motor vehicle regulations and fuel 4 standards. 5 During this process the details of each rule will 6 be worked out with full public participation so that in fact 7 we can implement this in a cost-effective fashion. 8 As we have shown by our actions to date, we were 9 committed to work with all interested parties in developing 10 fair and cost-effective approaches. We'll be examining all 11 feasible methods, including opportunities to use alternative 12 fuels. We will also be taking a close look at the retrofit 13 costs and the available financing options. 14 And with that I'd like to now introduce Dr. Randy 15 Pasek, who will make the presentation. 16 Dr. Pasek. 17 DR. PASEK: Thank you, Mr. Kenny. 18 Good morning, Mr. Chairman and members of the 19 board. 20 For the next 30 minutes or so, I want to share 21 with you staff's proposed diesel risk reduction plan. 22 Before I proceed I would like to point out that a 23 number of ARB divisions were involved in the development of 24 the plan, including the Stationary Source, Mobile Source 25 Control, Planning and Technical Support, and Research PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 Divisions. 2 My presentation will begin with some background on 3 the development of the plan. 4 Next I will provide information about the sources 5 and magnitude of diesel PM emissions in California. 6 I will then discuss the potential risk associated 7 with the diesel-fueled engines and vehicles. 8 And follow this by a discussion of available 9 control options. 10 Next, I will provide an overview of staff's 11 proposed measures for control of diesel PM. 12 Then I will discuss the benefits of the plan. 13 This will be followed by an overview of the key 14 issues identified during the development of the plan. 15 And I will conclude today's presentation with a 16 summary of the proposal and staff's recommendation. 17 Before presenting the details of the plan, I'd 18 like to summarize staff's proposal. 19 What we are presenting to you today is a 20 comprehensive plan to significantly reduce diesel 21 particulate matter emissions and the associated potential 22 cancer risks. 23 This plan is a commitment for action over the next 24 five to seven years. All new and existing activities that 25 result in diesel PM emissions, mobile, stationary and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 portable, will be examined for emission reduction 2 opportunities. 3 The plan proposes development of 14 new control 4 measures that will be brought to the board over the next 5 several years. These measures will significantly reduce 6 diesel PM emissions from both new, as well as existing, 7 engines and vehicles. 8 The plan also calls for reformulation of diesel 9 fuel to a very low sulfur content to ensure that the control 10 technologies are the most efficient and that the very 11 low-sulfur fuel is available for all diesel-fueled engines. 12 The benefits of implementation of the plan would 13 be reduction of current diesel PM emissions and their 14 associated potential cancer risk levels by 75 percent in 15 2010 and by 85 percent or more in 2020. 16 As you recall, in August of 1998 the board listed 17 diesel PM as a toxic air contaminant. With the 18 identification of diesel PM, the board directed staff to 19 begin the risk reduction process for controlling diesel PM. 20 This plan is the first formal step of the risk 21 management phase. 22 The board also directed staff to form the Diesel 23 Advisory Committee to assist in the development of the plan. 24 The advisory committee and its four subcommittees met many 25 times to discuss control approaches. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 Representatives on the committee and its 2 subcommittee consisted of staff from the ARB, US EPA, state 3 and local agencies, industry, environmental groups and 4 interested public. 5 In addition to formal committee and subcommittee 6 meetings, ARB staff also met with individual stakeholders. 7 There are many diesel-fueled engines in California 8 and they are used in a variety of applications. Over one 9 and a quarter million engines operate in California, with 10 the majority of engines associated with mobile sources. 11 The number in each category is shown in this 12 slide. The on-road category count includes an estimated 13 39,000 out-of-state heavy-duty vehicles that travel on 14 California's roads every day. 15 Examples of on-road engines include diesel-fueled 16 trucks, buses and cars, and examples of off-road engines 17 include tractors, construction equipment such as bulldozers 18 and scrapers, as well as auxiliary engines associated with 19 portable equipment such as cranes and drilling rigs. 20 The other category of diesel engines includes 21 emergency standby engines and prime stationary engines. 22 Examples of emergency standby engines include diesel-powered 23 emergency generators and emergency water pumps for fire 24 protection. Prime engines are stationary engines that are 25 not emergency standby engines and also include generators PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 and water pumps. 2 In this slide the contribution of diesel PM for 3 the year 2000 by source category is displayed. From the pie 4 chart you can see that the majority of diesel PM is emitted 5 by mobile sources, and most of the mobile source emissions 6 are from off-road mobile source category. 7 As you can see from this slide, diesel PM 8 emissions are significant. Between 1990 and 2000, 9 considerable reductions have occurred mainly due to on-road 10 and off-road new engine standards and CARB diesel. 11 However, emissions are still significant and will 12 stay high into the future if nothing more is done. 13 This pie chart shows the estimated percent 14 contribution to the statewide average ambient potential 15 cancer risk levels for the top nine toxic air contaminants 16 emitted in California. As you can see, diesel PM emissions 17 are estimated to be responsible for 70 percent of the 18 potential cancer risk from toxic air contaminant emissions 19 in California. 20 In this slide we present examples of ranges of 21 risks associated with typical activities where diesel 22 engines are used. 23 The estimated risk ranges are used to provide a 24 qualitative assessment of potential risk levels near sources 25 of diesel PM. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 For example, we would expect the risk associated 2 with diesel PM emissions from prime or non-emergency standby 3 engines would fall between two and seven hundred potential 4 cancers per million. 5 I want to emphasize that the methodology to 6 calculate the risk levels are consistent with the Office of 7 Environmental Health Hazard Assessment's approved risk 8 assessment methodology. 9 The ranges within each activity result from 10 variations in the number and type of engines and how they 11 operate, and different meteorology. 12 It is apparent from this slide that each of the 13 activities investigated can contribute significant potential 14 risks and indicates that almost any engine, depending on how 15 often it operates and its location, could potentially be a 16 significant health risk. 17 We would expect similar results from other 18 diesel-related activities. 19 Given the potential for elevated near-source risk 20 levels, staff believes all categories of diesel-fueled 21 engines should be evaluated for further control 22 requirements. 23 In summary, the staff's analysis of the diesel PM 24 inventory shows that significant gains have been made in 25 reducing diesel PM emissions. However, emissions and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 potential risks remain high. Diesel PM is the most 2 significant contributor to ambient risk levels in 3 California. 4 Further, there is a very high potential for 5 elevated risk levels near most sources where diesel-fueled 6 engines and vehicles are present. 7 Thus, staff believes all uses and categories of 8 diesel-fueled engines need to be examined. 9 Based on the need to further reduce diesel PM 10 emissions and risk, staff has developed a comprehensive 11 control plan that is designed to achieve the goals shown on 12 this slide. 13 In short, the goal is to reduce emissions from new 14 and existing engines to the maximum extent that is 15 technically and economically feasible. 16 To achieve these goals, several control options 17 are identified and discussed in the plan. The most 18 effective control options are listed on this slide. 19 Catalyst-based diesel particulate filters, or 20 traps, offer the most effective control for diesel PM from 21 diesel-fueled engines. I will discuss the traps more 22 completely in the next few slides. 23 The alternative technologies, which include 24 electric motors and fuel cells, and the alternative fuels 25 such as compressed and liquefied natural gas, liquefied PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 petroleum gas, and dual fuels, are viable options in some 2 applications and the plan provides for their consideration. 3 Diesel PM traps offer a very high control 4 efficiency for both PM and hydrocarbons in the exhaust, 5 greater than 90 percent. 6 The traps have enjoyed great success and have been 7 applied successfully on over 40,000 mostly mobile 8 applications over the last 14 years worldwide. Traps are a 9 relatively simple control device that physically captures 10 and holds the diesel PM at high enough temperatures so that 11 it is destroyed at a higher efficiency. The trap is a 12 relatively simple device that is transparent to the 13 operation of the engine. 14 There are a few examples of traps on the tables 15 behind you. 16 In addition, a trap-equipped pickup truck is in 17 our west parking lot for you to view. 18 Diesel PM traps are very versatile and can be used 19 on new or existing engines. This picture shows a trap that 20 has been retrofitted on a refuse hauler and as you can see 21 the trap incorporates well into the existing exhaust system. 22 This is a picture of a trap on a forklift, an 23 off-road mobile engine, and this is a picture of a trap that 24 has been fitted to a school bus, and this slide shows the 25 diesel PM trap that has been installed on a 2200 horsepower PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 emergency standby generator set. 2 Diesel PM traps have two basic requirements, 3 minimum exhaust temperature and a very low-sulfur fuel for 4 best performance. As I mentioned earlier, the trap needs to 5 reach a certain temperature to clean out the collected 6 diesel PM. For most engines and duty cycles, the necessary 7 temperatures should be reached. 8 In addition, very low-sulfur fuel is needed to 9 ensure that the trap operates at peak efficiency, although 10 significant reductions are still realized if a trap-equipped 11 engine is run on CARB diesel. 12 In addition to diesel PM traps, other control 13 options are identified in the plan and may prove useful in 14 certain situations. 15 The appropriateness of each option will be 16 completely evaluated during the regulation development 17 phase. 18 The alternative technologies include use of a 19 electric motor or fuel-celled powered electric motor, 20 instead of a diesel engine, or switching to an engine design 21 to use compressed or liquefied natural gas or liquefied 22 petroleum gas. 23 In addition to other engine technologies and 24 alternative fuels, diesel fuel formulations such as 25 water-diesel mixtures and diesel fuel additives are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 available. 2 And, finally, for existing engines, modifications 3 to the engine are available and will be considered as 4 regulations are developed. 5 Staff proposes an ambitious program where 14 6 measures would be developed over the next two or three years 7 covering mobile, stationary and portable equipment engines, 8 and diesel fuel specifications. 9 In addition, the plan relies on federal action for 10 some categories of engines that are excluded from the 11 state's control. 12 Now I will briefly describe the proposed measures 13 identified in the risk reduction plan. 14 As shown here, there are four measures proposed 15 for on-road mobile sources. The dates in the parentheses 16 are the regulation adoption dates. 17 Staff is proposing lower emission standards for 18 new heavy-duty engines consistent with the rule that has 19 been proposed by the US EPA. 20 We expect to propose a PM standard of .01 grams 21 per brake horsepower hour to be implemented with the 2007 22 model year. 23 While new engine standards provide significant 24 long-term emission benefits, near-term emissions reductions 25 require that we address the existing fleet more quickly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 through retrofits. 2 Staff is also proposing a suite of in-use control 3 strategies and supplemental certification test procedures to 4 ensure that emission benefits gained through new engine 5 standards and retrofits are maintained throughout the life 6 of the engine and vehicle. 7 The goal is to more closely model real-world 8 operations and conditions. 9 These measures will be phased in between 2002 and 10 2008. 11 For the off-road engines, staff is recommending 12 four measures. 13 Staff recommends that the lower new engine 14 standards for off-road engines be based on the use of very 15 low-sulfur fuel and diesel PM trap technology. 16 The retrofit program for off-road, while 17 challenging, is certainly feasible. Staff has looked at a 18 variety of implementation programs and concluded that we 19 could begin as early as 2002 with demonstration programs. 20 Staff also proposes a diesel PM standard for new 21 pleasure craft engines. 22 As with on-road engines, an in-use compliance 23 program is necessary to ensure that control strategies 24 remain effective over the lifetime of the engine or 25 equipment. On-board diagnostics would be implemented, along PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 with new engine standards rule. 2 Staff also anticipates an in-use compliance 3 program of some form of inspection and maintenance for 4 off-road engines. These measures would be phased in between 5 2002 and 2008. 6 Five measures are recommended for stationary and 7 portable equipment engines. The measures will cover both 8 new and existing engines and all categories of uses 9 including emergency standby, prime, agricultural and 10 portable equipment. 11 Adoption of the measures is anticipated in 2002, 12 and implementation of the measures will occur between 2002 13 and 2005. 14 Staff recommends that the existing CARB diesel 15 regulation be amended by 2001 to require very low-sulfur 16 CARB diesel for all on-road, off-road and stationary 17 engines. 18 The plan calls for very low-sulfur fuel to be 19 required statewide not later than 2006. 20 ARB staff will work with refiners to ensure that 21 an adequate supply of very low-sulfur diesel fuel is 22 available for vehicle fleets and stationary engines that are 23 required through state or local rules to install diesel PM 24 traps prior to 2006. 25 ARB staff is also proposing to develop guidance on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 alternative diesel fuels and additives. The guidance will 2 identify available alternative fuels, such as biodiesel, 3 diesel-water mixtures, and diesel fuel additives. 4 It will also outline the potential emission 5 reductions associated with the alternative fuels and 6 additives, as well as the cost associated with their use. 7 A critical element of the plan is federal action 8 to realize a significant portion of the estimated diesel PM 9 reductions. About 30 percent of the total reductions in 10 2010, and 35 percent of the total reductions in 2020 will 11 require federal assistance. 12 The locomotives, staff proposes exploring both a 13 voluntary incentive program for locomotive retrofits and 14 working with US EPA to explore further rulemaking. 15 For commercial marine vessels, staff proposed 16 several strategies. 17 First, a speed reduction measure for ocean-going 18 ships as they travel along our coast. 19 Second, a federal incentive program to encourage 20 re-powering and retrofitting. 21 Finally, a federal regulation that requires 22 adherence to more stringent PM standards when these engines 23 are rebuilt or repowered. 24 California is preempted in the Clean Air Act from 25 applying new engine standards to farm and construction PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 equipment with engines below 175 horsepower. 2 ARB staff will work with US EPA and off-road 3 equipment standards to develop new engine standards for this 4 category. 5 And, finally, staff is encouraging US EPA to adopt 6 its proposed heavy-duty vehicle emission standards and fuel 7 specifications for on-road engines and to extend these to 8 non-road engines as well. 9 Now I would like to describe the significant 10 benefits associated with this plan. 11 The proposed measure will significantly reduce 12 emissions of diesel PM in California and their associated 13 potential risk. 14 Additional benefits from the decrease diesel PM 15 emissions include improved visibility, reduced soiling and 16 reduced incidents of noncancer health effects such as 17 asthma. 18 This slide shows the reductions from year 2000 19 estimated risk and emission levels with implementation of 20 the plan. 21 The first bar is the year 2000 risk in emissions, 22 and is at 100 percent. 23 The second bar shows that without the plan, we 24 will only achieve a 20 percent reduction in diesel PM 25 emissions and risk. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 The third and fourth bar show that with the plan 2 we will realize a 75 percent reduction in 2010, and an 85 3 percent reduction in 2020. 4 This means that the potential cancer risk of 540 5 in a million, due to diesel PM, will drop to 130 in a 6 million in 2010, and 80 in a million in 2020. 7 The purpose of the slide is to emphasize the 8 importance of the retrofit program. By 2010 over 9 four-fifths of the reductions are due to retrofit of 10 existing engines, and by 2020, close to half of the benefits 11 are due to retrofits. 12 The cost of the plan is significant, and 13 preliminary estimates show that it is comparable with other 14 major ARB programs. 15 However, the detailed cost analysis will be 16 determined as the recommended measures are developed. 17 In addition, staff will investigate economic 18 incentives. 19 During the development of the plan, several key 20 issues were identified. 21 For example, the cost of the equipment in terms of 22 effectiveness of control per dollar spent was continually 23 raised and will be further investigated in the measure 24 development stage. 25 Also, some engines, because of their duty cycle, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 may not generate enough heat to clean the diesel PM traps. 2 This and other issues related to the use of diesel PM traps, 3 particularly for retrofitted engines, will be further 4 investigated during the development of the measures. 5 As part of this effort, Chairman Lloyd has 6 established an international team of experts and 7 stakeholders to advise ARB on diesel engine retrofits. 8 And, finally, there were comments that the 9 alternative technologies and fuels were not adequately 10 considered as part of the plan. 11 In response, staff is committed to fully 12 investigate opportunities for alternative technologies and 13 fuels as we indicate in the plan. 14 To summarize, the plan is a commitment for action 15 to control significantly diesel PM emissions in California. 16 The plan identifies the program goals and proposes 17 14 new measures to achieve the goals. 18 If the board approves the plan today, the details 19 of the measures will be addressed during the upcoming 20 regulation development phase. 21 The proposed control measures will address new and 22 existing engines as well as reformulating diesel fuels to 23 very low-sulfur levels. 24 The plan provides for alternatives, and these 25 alternatives will be actively considered in the regulation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 development phase. The overall benefits of the plan will be 2 a 75 percent in diesel PM emissions and risk in 2010, and an 3 85 reduction in 2020. 4 Staff recommends that the board approve the risk 5 reduction plan, and direct staff to implement the elements 6 in the plan as quickly as possible. 7 This concludes my presentation. 8 (Applause.) 9 CHAIRMAN LLOYD: Not very often that happens. I'm 10 not sure whether that was because you were ending or not. 11 (Laughter.) 12 CHAIRMAN LLOYD: But applause is most welcome. 13 Thank you. 14 And any other comments, Mr. Kenny? 15 MR. KENNY: No. 16 BOARD MEMBER BURKE: Mr. Chairman -- 17 CHAIRMAN LLOYD: Dr. Burke, can I just go 18 through -- 19 BOARD MEMBER BURKE: Oh, sure. 20 CHAIRMAN LLOYD: I'm going to go to the ombudsman 21 and then we -- I know this is not a regulatory item, but I 22 would like the ombudsperson to make a few comments on this 23 item and then we'll get the board comments. 24 OMBUDSMAN TSCHOGL: Be glad to. 25 Mr. Chairman and members of the board, ARB staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 has embarked on a thorough and well-coordinated effort of 2 public outreach during the development of this plan. 3 The background work began in the fall of 1998 4 after the board identified diesel particulate matter as a 5 toxic air contaminant. 6 At the request of the board, ARB staff formed an 7 advisory committee consisting of ARB staff, air district 8 staff, other regulatory agencies, industrial 9 representatives, environmental groups and the general 10 public. 11 The committee's purpose was to assist in the 12 development of the diesel risk reduction plan. 13 The advisory committee held its first meeting on 14 October 29th, 1998. During this meeting, ARB staff outlined 15 the strategies, schedule and milestones for developing the 16 plan. 17 In addition, ARB staff formed four subcommittees, 18 the Risk Management Subcommittee, the Stationary Sources 19 Subcommittee, the Fuel Subcommittee, and the Mobile Source 20 Alternative Strategy Subcommittee. 21 Over 500 individuals participated in various 22 meetings and activities of the advisory committee and its 23 four subcommittees. 24 The advisory committee and the four subcommittees 25 met about 30 times with stakeholders and interested parties. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 During these public meetings, ideas were freely 2 exchanged and comments and inputs were solicited for the 3 plan. 4 Staff placed all of the meeting agendas, meeting 5 minutes, summaries, highlights and presentations on the ARB 6 Web site to ensure public access to pertinent information. 7 In addition to these 30 public meetings, ARB staff 8 held more than 30 individual meetings with interested 9 stakeholders. 10 Staff also attended numerous fact-finding field 11 trips, workshops and seminars in order to gain in-depth 12 knowledge about the latest developments in the diesel field. 13 In July 2000 staff released for public comment and 14 review the first draft of the plan. 15 ARB staff received about 30 public comments on the 16 draft from stakeholders and interested parties through 17 letters, faxes and e-mails. 18 Staff has reviewed all of these comments and made 19 appropriate modifications to the plan or responses. 20 As you can see from the outreach effort I just 21 outlined, ARB staff has made a diligent and concerted effort 22 to reach out to all affected stakeholder groups and 23 interested parties. 24 I believe that the proposed diesel risk reduction 25 plan before you today resulted from an inclusive and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 thorough process. 2 CHAIRMAN LLOYD: Thank you very much. 3 Comments from the board? I know Dr. Burke was -- 4 BOARD MEMBER BURKE: Since the ombudsman was just 5 speaking, my first set of questions are directed to her. 6 Of the 30 community meetings that you had, how 7 many of those meetings were in environmentally challenged 8 areas? How many were in areas which, under environmental 9 justice, would come under that classification? 10 We don't have an environmental justice agenda 11 here, is that why we can't evaluate? 12 CHAIRMAN LLOYD: Staff will respond. 13 MR. KENNY: Dr. Burke, the vast majority of the 14 meetings were here in Sacramento. There were some meetings 15 in Los Angeles. 16 BOARD MEMBER BURKE: So, you know, I would start 17 off by commenting that it would seem to me that in a rule 18 this important, this momentous to the state, those people 19 who are affected the most by this rule should be included in 20 the rulemaking process if you're ombudsman. 21 I mean, Sacramento is a great place, but it's only 22 a small portion of the state. 23 CHAIRMAN LLOYD: Dr. Burke, remember, this is the 24 plan. The regulatory hearings will come, rulemaking -- 25 BOARD MEMBER BURKE: Right. You know, if there PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 was no purpose to have the meetings, then we wouldn't have 2 had the meetings. 3 There was a purpose to have the meetings, so we 4 needed to have them where the people are. 5 Number two, in the individual meetings, did we 6 have any meetings with environmentally challenged people, 7 poor people, Hispanic people, black people, do we have any 8 meetings with those people? 9 MR. KENNY: We had -- these were actually public 10 meetings. They were not individual private meetings with 11 the groups that you are identifying. 12 BOARD MEMBER BURKE: But she said there were 13 public meetings, and then there were individual meetings, 14 there were 30 also, and -- or did I misunderstand? 15 OMBUDSMAN TSCHOGL: I will have to step out of 16 here and I'll come back with a list of who met with -- 17 BOARD MEMBER BURKE: Let's go to the first 18 question first. Did you have 60 meetings or 30 meetings? 19 MR. DONOHOUE: This is Dan Donohoue. I can 20 respond to that. 21 The 30 meetings were part of the advisory 22 committee, subcommittee group of meetings. The other 23 meetings were with respect to individual -- any individual 24 stakeholders who came in and requested meetings with us and 25 those have all -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 BOARD MEMBER BURKE: We never asked individuals? 2 We only responded to those who came to us? 3 MR. DONOHOUE: That's correct. 4 BOARD MEMBER BURKE: That's what I understand. 5 MR. KENNY: Dr. Burke, if I could add something, 6 though. We actually have other programs in which we are 7 going out to the communities that you're talking about. And 8 in fact the community health program that we presented to 9 the board last month was specifically designed to 10 essentially do that. 11 We also have specific programs, for example in 12 Barrio Logan in San Diego, in which what we were trying to 13 do is reach out to the types of communities that you're 14 talking about and to address very specific issues with 15 regard to health risk, to those poorer communities. 16 So we are working other programs to do that. 17 This program, however, we actually just simply 18 were going with larger public meetings open to everyone. 19 BOARD MEMBER BURKE: And in Sacramento? 20 MR. KENNY: Correct. 21 BOARD MEMBER BURKE: You see, combine that within 22 the presentation, it would have probably been much better 23 for me to understand the basis of the issue, if in the 24 presentation of the diesel engine numbers that there was 25 also in stationary and mobile numbers that there were -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 should have been from my perspective a breakdown of mobile 2 numbers in a manner in which the board could really evaluate 3 how many of those are really big trucks, how many are 4 pleasure vehicles, because we mentioned that we're going to 5 develop a pleasure craft rule. 6 And I don't know how -- you need to get an impact 7 is all this problem from diesel trucks? 8 We've been going through down in South Coast, and 9 if I was led to believe what I was led to believe down 10 there, the vast majority of it is from big trucks, but I'm 11 not sure that that's really true. I haven't seen any 12 statistical information that would lead to that. 13 And in the stationary source portion, standby 14 generators are a enormous portion of the number. If just 15 you're talking about the overall number of stationary 16 sources, standby generators are a significant portion of 17 that number, yet we know they only run during periods which 18 they either test their capability or have some purpose for 19 coming on. 20 So if you have this large number of stationary 21 standby generators, how does it skew the -- there's probably 22 such an insignificant portion of the overall emissions, 23 should we not consider maybe some kind of weight on this 24 rulemaking to those who pollute the most the fastest? 25 CHAIRMAN LLOYD: Maybe I can comment on that, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 because I would have agreed with you a year ago. Given the 2 shortage of power in the state at the moment, I'm not sure 3 we can be as confident that those engines are going to run 4 for such a limited period of time. I think that's something 5 we're going to have to ask staff to look at. 6 BOARD MEMBER BURKE: That's an extrapolation on 7 facts that we haven't seen yet. That's based on something 8 that may happen in the future or may not happen. If we 9 could get EPA off of slowing down some of these electrical 10 generating plants, maybe we wouldn't have those kind of 11 problems but we're not -- 12 CHAIRMAN LLOYD: I think it's an intelligent 13 extrapolation, Dr. Burke. We have to use that all the time. 14 BOARD MEMBER BURKE: If we can get those numbers, 15 I think that it's useful. 16 MR. DONOHOUE: Dr. Burke, those numbers, a basic 17 summary of those numbers, with the overall breakdown, very 18 grossly is in the body of the report itself on page -- 19 BOARD MEMBER BURKE: I saw that. 20 MR. DONOHOUE: In Appendix 2 and Appendix 3 have a 21 detailed -- 22 BOARD MEMBER BURKE: Doesn't give it to you in a 23 manner in which it's skewed by number versus emissions, and 24 that's what I'm really looking for. 25 MR. VENTURINI: Dr. Burke, I just want to mention PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 in Appendix 3, for example, there are some tables that break 2 out the on-road inventory. Page 3-8 of the Appendix 3 3 includes some -- 4 BOARD MEMBER BURKE: Can you give me a page 5 number? 6 MR. VENTURINI: On page 26, in the report page 26 7 and 27, there's a breakdown. 8 MR. SCHEIBLE: Page 26 of the board book, page 12 9 of the report is the breakdown by emissions and number of 10 engines. 11 BOARD MEMBER BURKE: Yes, I saw this. 12 But what I'm saying is mobile source needs to be 13 broken down. Is it big trucks, you know, tractor trailers, 14 is it school buses? 15 MR. VENTURINI: Dr. Burke, on page 123, I believe, 16 of the board book, it's in Appendix 3, I think there is the 17 breakdown that you're looking for. Table 4 is for 18 on-road -- 19 BOARD MEMBER BURKE: I didn't see this. 20 MR. VENTURINI: And it's statewide and South Coast 21 and Table 5 has off-road, and it's quite a bit of 22 information there. I think that may be the type of 23 information you might be interested in. 24 BOARD MEMBER BURKE: This is exactly what I'm 25 talking about. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 BOARD MEMBER D'ADAMO: Mr. Chairman. 2 CHAIRMAN LLOYD: Ms. D'Adamo. 3 BOARD MEMBER D'ADAMO: Yes. I hadn't planned on 4 getting into this right now, I wanted to wait until we heard 5 from some other witnesses, but since we're on it now, 6 anyway, I'd be particularly interested in a breakdown 7 according to sector, if that's possible, and my question 8 primarily goes to the issue of off-road equipment that is 9 only used seasonably, for example agricultural equipment. I 10 don't know if this analysis breaks that down further. It 11 doesn't appear to. 12 MR. VENTURINI: I don't think we have that 13 breakdown now, but that will be something we would 14 definitely have to do as we look into the control measures 15 in the next step. 16 BOARD MEMBER D'ADAMO: Thank you. 17 MR. VENTURINI: Oh, I'm sorry. There is on Table 18 5 of the appendix, page 125, there is some information on 19 agricultural, but it doesn't separate out the seasonal and 20 so forth, but that is something we are going -- when we get 21 into the control measure development phase, we're going to 22 have to refine all of our emission estimates and our 23 inventory data to sort these out and to guide us into what 24 we do next. 25 CHAIRMAN LLOYD: Mr. McKinnon. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 BOARD MEMBER McKINNON: Yeah. I've been following 2 very carefully Dr. Pasek's work in environmental justice in 3 Barrio Logan and some of the meetings in LA around the 4 airport. 5 And I guess beyond kind of where the meetings 6 were, I'm interested in whether or not to the extent the 7 meetings occurred, wherever they occurred, were 8 environmental justice organizations included, were they 9 present, did they have an opportunity to speak? There are 10 some organized, and I think that's a little different 11 question than Dr. Burke asked -- but were the organized 12 folks that have organized around that issue, were they 13 present and did they have an opportunity to speak? 14 MR. VENTURINI: They were certainly on our list of 15 invitees, and at some of the meetings I do recall the ones I 16 attended there were some representatives of some of the 17 environmental organizations that were at the meetings. We'd 18 have to go back and check all our records to see which 19 specifically, which specific organizations were present at 20 individual meetings, but they were on our lists and received 21 all the notices and so forth. 22 OMBUDSMAN TSCHOGL: I would be happy to provide 23 the sign-in sheets and give you that information. In fact, 24 I can do it by the end of the public testimony today, if 25 you'd like that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 BOARD MEMBER BURKE: To their credit, Matt, I had 2 a very active minority group who attended their first ARB 3 meeting came to South Central, came to the airport area. I 4 think it's organized by Congressman Waters. And they were 5 almost -- it was almost heart wrenching how appreciative 6 they were that ARB came to their -- it was the first time 7 they had ever seen them, and they just, you know, they came 8 to my office and they were just laudatory in their comments 9 about -- but they said they promised they would come back, 10 and I haven't seen them since the first time, so I explained 11 to them that we can't meet every day there, you know, but 12 I've got to give the staff credit, they have been there. 13 CHAIRMAN LLOYD: Yes, Mr. McKinnon. 14 BOARD MEMBER McKINNON: I also want to give the 15 chair and his community health appointee a lot of credit, 16 because I think, you know, there has been a noticeable 17 change in addressing that since we had this chair. 18 So thanks. 19 CHAIRMAN LLOYD: Thank you. 20 I know, Dr. Burke, I participated in two of those 21 meetings down there, actually three meetings down -- it 22 wasn't on this particular of the diesel issue, but we heard 23 a lot about the diesel issue, and I think as a result of 24 some legislation from Assemblyman Firebaugh, in fact the 25 board is going to address some of these issues down in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 community there. So I think that point is well taken there. 2 Mr. Calhoun. 3 BOARD MEMBER CALHOUN: One of the view graphs that 4 you showed is quite revealing. I had reference to the one 5 that shows the pie chart, that shows the distribution of the 6 diesel particulate emissions by mobile sources. And -- 7 CHAIRMAN LLOYD: Which slide is that? 8 BOARD MEMBER CALHOUN: It's the pie chart on, I 9 guess it's slide number 9, it's on page five of the -- and 10 it shows the distribution of the particulate emissions from 11 off-road, on-road, portable and stationary sources. 12 And the interesting thing about it is that about 13 two-thirds of the diesel particulate comes from off-road 14 uses, and I don't know if that's quite obvious to most of 15 the people. You know, they think that most of the 16 particulate emissions come from diesel trucks. 17 And if this pie chart is -- if it's accurate, then 18 that's kind of the -- their assumption that most of them 19 from diesel trucks isn't correct, because two-thirds of them 20 come from off-road sources, and I wonder since we're going 21 to be putting a lot of effort into that, the technology is 22 here, that we can really do a lot about that? 23 MR. CACKETTE: Let me first explain sort of 24 generically why you see that outcome on the pie chart. 25 First of all, we have a lot of economic and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 agricultural activity in California, so there is a large 2 amount of equipment, roughly on the same order as the 3 trucks. 4 Second of all, we have been slower at adopting 5 regulations that affect new engines, new off-road equipment, 6 than we have on trucks. Basically the strategy has been do 7 cars and then we're sort of doing trucks, and then as the 8 technology on diesel trucks proved itself viable, we helped 9 move that on to off-road. 10 As the result, the first time that we had 11 substantial regulations on cars, of course, was in the '60s. 12 The first time we had substantial regulations on trucks was 13 the '70s. The first time we had substantial regulations on 14 off-road diesel equipment was 1996. 15 So the average off-road piece of equipment has a 16 much higher emission rate and is less technologically 17 advanced that's in the fleet today than our trucks, and so 18 we've been slower at getting there. That's the principal 19 reason why you see a bigger chunk of emissions from that 20 category of engine. There are also many of them are used 21 under very high load. 22 As for whether we'll be able to transfer the 23 technology from trucks to off-road, we think we will, but 24 the challenges are more difficult, there is more variety of 25 equipment, the same engines are used in a very diverse PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 applications. One can be used in a construction equipment 2 digging mines, another one can be a row crop, same engine 3 could be a row crop machine of some type. 4 And these traps in particular that we've discussed 5 in the presentation have to be kind of custom tailored to 6 each application, not just the engine. So it's going to a 7 harder task. 8 There are more applications where the population 9 is a few hundred or -- a few hundred types of pieces of 10 equipment, even though they have very high emissions, it's 11 going to have to be -- there's going to be more tailoring of 12 the equipment, so it's going to be a little harder and 13 probably take a little bit longer than the on-road trucks, 14 but we're still hopeful that a large fraction of the 15 off-road diesel equipment can use particulate traps. 16 And, of course, in parallel with that, we're 17 working with EPA to establish very stringent standards on 18 new trucks and then shortly thereafter even more stringent a 19 fourth tier of emission levels for off-road equipment would 20 occur in the late 1990s -- or late 2000, first decade of the 21 2000s. 22 CHAIRMAN LLOYD: Mr. Cackette, wouldn't it be 23 true, for example, this is a little bit misleading since 24 it's statewide, if you're looking at Huntington Park the 25 split would clearly be very different. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 MR. CACKETTE: Oh, yeah. If you look at Los 2 Angeles, for example, the off-road equipment is dominated by 3 construction, and very little agriculture, and you look at 4 the San Joaquin Valley and you see somewhat of the opposite, 5 you see much higher fraction of -- 6 CHAIRMAN LLOYD: And the trucks. 7 MR. CACKETTE: And the trucks are pretty -- I 8 mean, they're pretty distributed across the urban areas. 9 CHAIRMAN LLOYD: Yeah, that's right. 10 MR. CACKETTE: It's the agriculture equipment that 11 really varies radically, it's pretty obvious, between the 12 different parts of the state. 13 MR. CROSS: Tom, also, don't forget that there's a 14 pilot project -- this is Bob Cross from the staff -- there's 15 a pilot project going in Southern California right now to 16 actually retrofit a number of construction machines and try 17 it out, which is a cooperative project between the 18 construction industry and ARB staff, South Coast and 19 manufacturers of retrofit devices. 20 So we will have answers in the near future about 21 how easy or difficult this is to do. 22 CHAIRMAN LLOYD: Dr. Friedman. 23 BOARD MEMBER FRIEDMAN: Alan, you touched on what 24 I was going to comment about, the pie chart is interesting, 25 but it is misleading. The issue, we just spoke about, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 environmental justice and pockets of pollution and so forth, 2 this is not normalized for exposure of the population. And 3 if it was, then this would be very very different configured 4 pie chart. It's really, since we're dealing with toxic air 5 contaminants, it has to do with the number of people 6 exposed, not just the total amount that the state produces 7 in the course of a year, and so, you know, I'm -- that 27 8 percent of on-road may be doing a hell of a lot more damage 9 than all the farm equipment put together in the state, as to 10 an exposure. 11 CHAIRMAN LLOYD: Professor Friedman. 12 BOARD MEMBER C.H. FRIEDMAN: Yeah. I was going to 13 comment on that too. 14 And given that, if I understand correctly, this 15 initial major step in reduction plan is going to be followed 16 and implemented with further development of specific 17 control, proposed control measures, which will be 18 regulatory, by category. 19 And in connection with that, I assume we will look 20 forward to having additional public workshops, input, and I 21 trust the staff will even be more vigorous in going into the 22 communities that are most affected, including the 23 agricultural communities, I take it, because their 24 businesses are going to be potentially affected by what we 25 do and we need to hear from them too. As well as, of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 course, the pockets. We've heard about that when we talked 2 about the fuel formulations and the corridors that are so 3 polluted. 4 So I just wanted to make sure I understood where 5 we're going and what this is a piece of. 6 MR. KENNY: Professor Friedman, you are correct. 7 What we would do essentially is, presuming the board was 8 comfortable with this plan, we would then begin to implement 9 the plan through the adoption, through the proposal of 10 individual regulatory matters. We have basically 14 of them 11 that we're looking at over the next couple of years, and 12 each of those would involve substantial public process and 13 then ultimately a hearing before you as the board, so that 14 in fact we would have the ultimate hearing here. 15 BOARD MEMBER C.H. FRIEDMAN: Thank you. 16 CHAIRMAN LLOYD: Mrs. Riordan. 17 BOARD MEMBER RIORDAN: Yes, Mr. Chairman, I want 18 to go back just a moment to what Mr. Cross was talking 19 about. 20 I think it's going to be very very important to me 21 as a board member, and I assume many of my colleagues, that 22 that information that those studies produce is available to 23 us at the time we make the decision about the rulemaking. 24 And what I guess what I'm saying is I hope, and 25 now I am looking at Mr. Kenny, that we have put adequate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 resources towards these studies, because I think they're 2 very important so that we understand this broad range of 3 engine family and what will work for one and what won't work 4 for another. 5 People have said to me, you know, for instance, 6 the engines that cranes use they may not heat up enough to 7 produce what we want them to produce and we may have to get 8 very creative when we help those. 9 So I'm just hopeful that we have our resources 10 planted in these studies so that the information will be 11 available in a timely manner, and that probably is going to 12 take some budgeting on our part. 13 MR. KENNY: No, you're absolutely correct. For 14 this to work effectively, we need to make sure that in fact 15 the applications are ones that actually give us the kinds of 16 results we want to see, and our plan is and we are doing 17 that already and we will continue to do it is to work very 18 closely on the research, work very closely on the pilot 19 programs we have going and make sure that in fact we're 20 getting the kinds of things we want. 21 We want to do this in a way that essentially gives 22 us the reductions and at the same time make sense. 23 BOARD MEMBER RIORDAN: Right. 24 MR. VENTURINI: Mrs. Riordan, if I can add too, I 25 think there's a very another important element here with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 respect to the staff's ongoing efforts, and that is the 2 creation by our chairman of basically the International 3 Retrofit Committee to help guide us and provide us 4 information on the various issues and technical aspects of 5 retrofits, and that committee has something over 40 6 individuals, both technical experts and various 7 stakeholders, including representatives of the agricultural 8 community and others, and I think we as staff look very 9 forward to the input that we're going to be getting from 10 that committee to help advise us as we proceed down the 11 path. 12 BOARD MEMBER RIORDAN: I think that will be 13 helpful to us, but I just want to be sure that you all have 14 the resources to do the work that you need to do to get us 15 that information that we need. 16 MR. KENNY: Actually, Mrs. Riordan, the one thing 17 I would add is that we've actually already begun to 18 reorganize the ARB in order to address this. We've actually 19 created branches and sections that are going to be dedicated 20 to this so in fact we do have the resources focused on it, 21 because we do realize now significant it is, and how 22 important it is to do it correctly. 23 BOARD MEMBER RIORDAN: Thank you. 24 MS. TERRY: Dr. Lloyd, if I can just comment. 25 In terms of the studies, there's also on a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 parallel track addressing the issue of exposure in 2 communities throughout California, and we think that's an 3 equally important aspect in terms of looking at the benefits 4 of this plan in the long run in very specific communities, 5 and that is our cumulative exposure project that's part of 6 the community health program. 7 CHAIRMAN LLOYD: I know, Ms. Terry, you're leading 8 that excellently and that's a good point to bring up there. 9 Mr. Calhoun, then Dr. Burke. 10 BOARD MEMBER CALHOUN: Yes. One of the slides you 11 showed pertained to the number of diesel engines in 12 California, 1.25. I assume that's a snapshot within, and 13 on-road, of that number 687,000 of those are on-road 14 engines. And what percentage of those are out of state? Do 15 we have a feel for that at all? 16 MR. CROSS: It's about a quarter, quarter of the 17 VMT, if I remember correctly, is approximately a quarter of 18 heavy heavy is -- of the heavy heavy category, approximately 19 a quarter is out of state. 20 BOARD MEMBER CALHOUN: That leads me to my next 21 question. In the staff report on page 34 we list all of the 22 good things that EPA can do to support the recommended 23 measures, and the last one, the US EPA should require the 24 implementation of a retrofit program to reduce diesel 25 particulate matter from locomotives. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 I guess the question that naturally comes to mind 2 is we have trucks coming in here from out of state, why not 3 suggest to EPA that they include retrofit program for those 4 particular engines? 5 MR. KENNY: Actually US EPA does have a voluntary 6 program right now for retrofitting and they have roughly 7 10,000 vehicles that have participated in that program and 8 we are working with us EPA. 9 I think in the end, your suggestion is probably 10 one that we will want to work with US EPA on, because 11 obviously we do get trucks coming in from out of state. 12 BOARD MEMBER CALHOUN: If you're going to have -- 13 BOARD MEMBER BURKE: Trucks or locomotives? 14 BOARD MEMBER CALHOUN: They're recommending that 15 they retrofit the locomotives, but I'm talking about the 16 trucks also, that if one-quarter of the heavy-duty, heavy 17 heavy vehicles coming into the state are federal vehicles, 18 then that puts the people who register the vehicles in the 19 State of California, operating in California, it puts them 20 at a little economic disadvantage, so we can try to equalize 21 that by requiring the other trucks coming into the state to 22 meet the same requirements. 23 MR. KENNY: Mr. Calhoun, we've actually already 24 begun to have some conversations with the California 25 Trucking Association about that very issue. We do recognize PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 that there are economic disadvantages and we're trying to 2 work to not have those occur. 3 MR. CACKETTE: We will follow up on your 4 suggestion and make sure that we encourage EPA to do as much 5 as possible. They're also a member of the advisory board, 6 so they'll be able to see what's happening in California and 7 we'll make that a theme to try to look at the trucks that 8 are interstate commerce. 9 And their program to do 10,000 as a goal is 10 noteworthy, but that's for the whole country, so maybe it 11 needs to be focused some way on the states closer to us or 12 the trucks that are in neighboring state commerce, things 13 like that, and of course it's got to have the low-sulfur 14 diesel fuel, which we remain hopeful they will adopt as a 15 national standard that for 2006. 16 CHAIRMAN LLOYD: Dr. Burke. 17 BOARD MEMBER BURKE: This is like every time I 18 come here it's like deja vu, you know, we go through it with 19 the South Coast and you go through it here, or you go 20 through it here and I go to the South Coast, so it's 21 reverberating in my head, and all these issues kind of come 22 together, but Ms. Riordan made an excellent point, but I'd 23 like to expand on it a little bit. 24 One of the things when we were dealing with 1100 25 series rule in South Coast was that there are a number of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 fuel trap manufacturers, and all of them have the miracle 2 trap, and ARB, we're the standard setter, if you can't pass 3 us, your trap is not really viable. 4 But I have yet to see someone from ARB say to me 5 as an individual board member, this trap out of all the 6 traps that we look at, in our evaluation this trap or these 7 traps have the best potential for solving our problem. 8 You see, you know, I think that probably if I 9 were -- if it were a perfect world what we would do is take 10 a more aggressive role and not only say it's okay, but 11 providing some kind of resources to those who we think have 12 the inside track. 13 And I know I got excited about a couple of these 14 and I call out and right a way the scientists say, no, 15 Billy, better be careful, that one is better marketing than 16 technology, so I go back and I scurry around to find another 17 one. 18 But he's probably just telling me what some of the 19 guys out there have told him, so if our guys are telling him 20 that info, it would seem to me that like on this durability 21 stuff that it seems to be a great threshold barrier for trap 22 manufacturers, if we could figure out some way so that the 23 government's resources could be used for either endurance 24 testing or something, of those only that our people think 25 have great potential, it would seem to me that that might be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 some -- if we have legislation for that or go to the 2 Governor for money, that ought to be something that we ought 3 to consider, because if you wait on private industry, 4 especially in something that's so highly specialized and not 5 always the big manufacturers, the big manufacturers always 6 come in here and you know they're going to slow you down 7 because they know they're going to get it anyway. The guys 8 who are entrepreneurs want to get on the fast track because 9 they're out there with a little lab or a little factory and 10 they're trying to get it together. 11 So that was my suggestion on that one. 12 On what Mr. Calhoun said, the locomotive issue is 13 a particularly tough issue in South Coast because we are a 14 transportation hub for California. We receive great amount 15 of events that are distributed from Southern California to 16 the state. 17 And from, as you may or may not know, we have been 18 going through encouraging industry to develop a clean diesel 19 engine for locomotives. We think that technology has been 20 developed, we think it has been developed with grant money 21 that includes grant money from the South Coast and industry 22 has shown that. 23 And when I met with a company who shelved it, they 24 said, well, you know, there are only two engine 25 manufacturers all over the United States, and some of our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 customers didn't want CNG, so what do you think we're going 2 to do? 3 How do we go about encouraging them to unshelve, 4 you know, we're looking for technology on one side, they got 5 it in the corner in the vault on the other side, how do we 6 go about encouraging people to bring technologies which may 7 be in the vault, other than this locomotive technology, to 8 bear on some of our problems here in California? 9 MR. CACKETTE: Well, if the last comment could be 10 broadened to your first question, which is is there 11 technology looming on the shelves that can't get off the 12 shelf for some reason, we have been in extensive discussions 13 with the major manufacturers of particulate traps, and I can 14 tell you that they are putting in more resources into 15 developing these and assuring that they are commercially 16 viable than they put into catalytic converters. I mean, 17 it's a huge effort because they see a monstrous market here. 18 BOARD MEMBER BURKE: I don't have to tell you that 19 when we started the 1190 series, I mean trap manufacturers 20 were telling us three years from now they'll be ready, three 21 years from now. The further we got down the regulatory 22 process, it became two years from now, one years from now, 23 oh, we can get you some now, oh, we can sell you all you 24 need now. 25 So I would think that for diesel truck, you know, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 if we really put the pedal to the metal here, we might 2 increase -- and you don't want to always depend on the big 3 guys, because the big guys may have an idea but the little 4 guys may have a better idea. 5 MR. CACKETTE: In fact, we have a program that's 6 doing just what you're suggesting, which is helping one of 7 the little guys who happens to be a California manufacturer, 8 get through the durability portion for -- 9 BOARD MEMBER BURKE: That company is going 10 bankrupt waiting to get their check after we approve the 11 grant. I mean, they have been to see me at least a half a 12 dozen times just trying to get their money. I'm sure you're 13 talking about the company that's headed by the lady Ph.D who 14 developed -- 15 MR. CACKETTE: CCRYX. 16 BOARD MEMBER BURKE: CCRYX, they were approved, 17 what kind of grant were they approved? 18 MR. CACKETTE: The Energy Commission has funding 19 for them to help demonstrate durability of their combined 20 particulate NOx program. 21 BOARD MEMBER BURKE: They've been also in a joint 22 program to evaluate it and -- 23 MR. CACKETTE: We've tested it as well. 24 BOARD MEMBER BURKE: They were seven months, and 25 they still hadn't got their check after the grant was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 awarded. 2 MR. CACKETTE: This is underway just now to help 3 them get through the durability part. 4 I think you raised a question about ARB stepping 5 out in front to sort of give the blessing to these 6 technologies. We do have a process in place, and we do have 7 a group of people that will be certifying equipment and 8 equipment that gets grant money like under the bus program 9 and things like that have to be certified. 10 But the issue is a little bit different than the 11 way it was characterized in that we know that these traps 12 work. If we showed there were 40,000 applications of these 13 various traps around the world that have been in operation 14 for fairly long periods of time, they're durable, they've 15 got hundreds of thousands of miles or hours on them, 16 thousands of hours, the issue really, though, is will it 17 work on this piece of equipment. 18 And so it's that extra step of having to make sure 19 we match them as -- 20 BOARD MEMBER BURKE: The CCRYX people say their 21 trap works on all the equipment. So if it was in fact a 22 problem, that's what they -- you know, I'm not promoting 23 their product, I'm just saying what they say, that's a 24 little company in California. So if it works on all the 25 equipment, then we don't have -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 CHAIRMAN LLOYD: I understand -- 2 BOARD MEMBER BURKE: I don't want to belabor. 3 CHAIRMAN LLOYD: On the other hand, I understand 4 what you are saying, Dr. Burke, but we have a 5 responsibility, knowing some of the issues that's come back 6 to haunt us in the past that we want to ultimately make sure 7 that not only are we cleaning up what's there, but we're not 8 creating any other problems. 9 So I understand. 10 But I think we should move ahead. 11 Yes, Mr. McKinnon. 12 BOARD MEMBER McKINNON: I was going suggest moving 13 ahead, but I do kind of want to temper things with this, and 14 that is when the electric vehicle discussion started, there 15 were no hybrids, there is very little talk of fuel cells and 16 that kind of thing. 17 I am less comfortable to favor one technology over 18 another. I think where we're headed today and over the next 19 several years is beginning to set standards and when we set 20 those standards then that that drives people to develop the 21 technology for the specific applications. 22 And certainly moving technology and pushing 23 technology doesn't necessarily always mean being very 24 specific about it. It's saying where we want to go and 25 sticking to where we want to go. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 If we're saying we're taking sulfur out of the 2 fuel, the people who invest in technology to take the sulfur 3 out of the fuel should know that that's where we're going, 4 we're going to stay there, they should invest well, and 5 there's some reliability that that's what we're going to do 6 and then they can move that technology and make those 7 investments. 8 So, you know, kind of as a broad kind of outlook 9 on it, I tend to think where we're heading today setting 10 the -- beginning to set the standards, beginning to set the 11 direction is the way that the technology moves. That's why 12 people will make investments looking down the road. 13 Thanks. 14 CHAIRMAN LLOYD: Thank you very much. 15 Supervisor Patrick. 16 BOARD MEMBER PATRICK: Yes. I just want to make 17 the comment that after we have heard the testimony and so 18 forth, I would really like to revisit the pilot projects and 19 have you explain to us how those are done, because, as I 20 look at the degree to which off-road vehicles contribute to 21 this, to our PM problem, I think that it's important that 22 when you look at the myriad of uses that we're able to 23 demonstrate to people, that we have successfully met the 24 challenge, that we've successfully met the standard in these 25 different areas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 And so at some point in time after this is over, 2 I'd really like to hear more about how you're going to go 3 about doing this, because we're setting something, we're 4 setting the stage for something very important. 5 And I know that there is a lot of concern out 6 there, certainly in the San Joaquin Valley and certainly 7 throughout the state, how is my industry going to be 8 affected. We're unique. I know that every industry thinks 9 that they're unique, but actually there are many many unique 10 uses. 11 So at some point in time perhaps we can revisit 12 that. I know that we're anxious to get folks started on 13 their testimony. 14 CHAIRMAN LLOYD: Thank you. 15 I think -- Professor Friedman. 16 BOARD MEMBER C.H. FRIEDMAN: In view of the time, 17 I just would be very very quick. 18 Two points that have been raised. 19 What about foreign trucks coming across borders, 20 Mexico, Canada, for example? 21 MR. KENNY: They are an issue. They are a 22 problem. 23 BOARD MEMBER C.H. FRIEDMAN: In addition to 24 interstate. So we're going to do what we can on that, but 25 it's basically up to the federal? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 MR. KENNY: One of the things we actually have in 2 place right now is we do have smoke opacity stations that 3 are actually at the border in which we try to catch the 4 trucks that are the worst, but we would also have to work 5 with the Mexican national government as a way of trying to 6 essentially get them to use a trap technology and also lower 7 sulfur fuel. 8 BOARD MEMBER C.H. FRIEDMAN: That part of NAFTA as 9 well? 10 MR. KENNY: It's probably a later portion of this, 11 just because it's a more difficult aspects of trying to do 12 it through international boundaries. 13 BOARD MEMBER C.H. FRIEDMAN: From the sublime to 14 the banal, there's several references in the bullet points 15 here to lower new engine standards. And I think what we're 16 doing is raising the standards. We're lowering emissions. 17 MR. KENNY: That's correct. Right now, for 18 example, the truck standard is roughly a four gram NOx 19 standard, and there really is not sort of an appropriate PM 20 standard associated with that, and what we're talking about 21 is really matching up with what US EPA is proposing, which 22 is .2 gram NOx standard and a .01 PM standard. 23 BOARD MEMBER C.H. FRIEDMAN: When we say lowering 24 standards, we're really raising the bar. 25 MR. KENNY: We're raising the bar. We're making PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 it more difficult. 2 BOARD MEMBER BURKE: Is it legal for us to impose 3 a fine on a truck coming into this state which has higher 4 emission standards than our state, either on an 5 international or national basis? 6 MR. KENNY: No, it's not. But what we can do 7 basically -- 8 BOARD MEMBER BURKE: Would that be a violation of 9 federal or state law? 10 MR. KENNY: What ends up happening it's not so 11 much that, is that we don't have a specific authority to 12 essentially discriminate on the basis of different standards 13 that exist outside the state. 14 What we can do, however, is if we see trucks 15 coming into the state that have higher opacity levels than 16 we allow in the state, then we can fine those trucks and we 17 actually do do that. 18 BOARD MEMBER BURKE: But if the Legislature gave 19 us the authority to do that, is that possible to fine? 20 MR. KENNY: I think we get into interstate 21 commerce issues there. 22 CHAIRMAN LLOYD: Thank you. 23 Any other question come from the board? 24 I think with that, we'll move ahead to the first 25 witness. I'd like to call the first three witnesses who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 have signed up. 2 I would also ask that we limit the testimony to 3 five minutes. We've taken quite a while here and we've got 4 nearly 30 witnesses for the first item. 5 First three people to testify will be Barbara Lee, 6 Tim French and Cynthia Cory. 7 MS. LEE: My name is Barbara Lee and I am the Air 8 Pollution Control Officer from Northern Sonoma County. I'm 9 also the president elect of the California Air Pollution 10 Control Officers' Association. 11 On behalf of CAPCOA, I'm here to give you our 12 strongest support for the Air Resources Board reduction plan 13 for diesel-fueled engines and vehicles. Our association 14 feels that exposure to diesel particulate exhaust is one of 15 the most serious risks to public health from air pollution 16 in California today. 17 More importantly, there is great public concern 18 about diesel exhaust and we believe there is broad support 19 for reducing exposure to it. CAPCOA has worked hard with 20 ARB staff to develop permitting standards for new 21 diesel-fueled stationary engines. 22 We support the guidance document and we will do 23 our part to reduce diesel particulate emissions from these 24 stationary sources. They are a small but important piece of 25 the emission reduction strategy before you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 Understanding, however, that diesel exhaust is 2 almost entirety a mobile source problem, we agree that 3 California needs a comprehensive program to reformulate 4 fuels and improve new engine performance, install control 5 devices and upgrade existing engines throughout the state. 6 We also recognize that such a program will take 7 time to develop and implement, but we urge the staff and the 8 board to move ahead as quickly as possible. 9 In particular, we urge the ARB to address portable 10 equipment at the earliest practicable date. 11 Although this is a diverse group of sources, there 12 are measures that can be implemented now to reduce emissions 13 of diesel particulate exhaust from them. 14 For example, the ARB can require that any engine 15 seeking registration in the state program meet the minimum 16 engine standard you are recommending in the permitting 17 guidance document that is the next item on the agenda. 18 Add-on controls could be required on a 19 case-by-case basis where they are feasible, considering 20 technical issues and cost. 21 We ask the board and the staff to work quickly to 22 implement this standard for newly registered portable 23 engines, which will close a real gap in the overall 24 strategy. 25 The risk reduction plan before you today is an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 ambitious and much needed proposal. CAPCOA applauds the ARB 2 staff for bringing it forward. 3 Thank you for the opportunity to comment on this 4 proposal and for working to address this serious air quality 5 and public health risk. 6 CHAIRMAN LLOYD: Thank you very much. 7 Questions from the board? 8 Thank you very much. 9 Sorry, question. Ms. D'Adamo. 10 BOARD MEMBER D'ADAMO: Just would like the staff 11 to respond to Ms. Lee's suggestion on portable engines. 12 MR. DONOHOUE: With respect to portable engines, 13 as part of the overall stationary source portable element in 14 the plan, we have in the plan proposed to move forward with 15 regulations in the March 2002 time frame, which is 16 approximately 14 to 16 months away from now. There are a 17 number of issues that we are going to need to look at in the 18 portable equipment program, but certainly on the new engines 19 that's something that we will look to see if we can move 20 forward more quickly on. 21 CHAIRMAN LLOYD: Thank you very much. 22 Next Tim French, then Cynthia Cory, then Manuel 23 Cunha. 24 MR. FRENCH: Distinguished board members, good 25 morning. My name is Tim French with the Engine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 Manufacturers' Association. 2 Before addressing EMA's specific comments 3 concerning the guidance documents before us, I want to take 4 a moment and thank and acknowledge the ARB staff, including 5 especially Peter Venturini, Dan Donohoue and his team for 6 their hard work, professionalism and true commitment to a 7 public process in putting the plan, guidance documents 8 together. 9 While we do not agree with several aspects of the 10 report statements pertaining to risks, we cannot argue with 11 staff's willingness and availability to listen to our 12 concerns and meet with us and have an open and fair dialogue 13 about it. We appreciate it very much. 14 Turning to the substance of the draft risk 15 reduction document that's at issue, let me say first and 16 foremost that EMA supports the ARB's efforts to reduce 17 particulate matter emissions. The US EPA and ARB, as 18 opposed to local districts, are the appropriate authorities 19 to set mobile source standards and other requirements. 20 We also fully support a statewide harmonization of 21 stationary requirements. 22 Now, despite our overall support for the ARB's 23 efforts in this regard, EMA does have some specific and 24 significant concerns regarding two areas of the draft risk 25 guidance document before us. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 First, the purported health risks associated with 2 ambient exposures to diesel particulate matter are, in our 3 view, materially overstated. 4 And, second, the assumed feasibility and 5 effectiveness of applying a general control strategy for 6 existing sources is somewhat unrealistic. 7 With respect to the purported risk levels, we need 8 to keep in mind that the draft risk reduction plan and 9 document does not take into account the 90 percent or better 10 reductions in particulate emissions that will result from 11 the 2007 standards that EPA has announced and that ARB will 12 be tracking. 13 This is very significant because the ARB-projected 14 health impacts are based upon applying estimates of ambient 15 diesel particulate levels to the unit risk factor that OEHHA 16 and the SRP adopted in April of 1998. 17 Now, with respect to that URF, the SRP's 3 times 18 10 to the minus 4 number, we are again compelled to note 19 that in our view, and based on the evidence we've looked at, 20 that number is not based upon sound science. 21 Significantly, within just the past two months, US 22 EPA has released its revised draft health assessment 23 document for diesel emissions. In it, EPA specifically 24 concludes as follows, and I'm quoting. 25 Given the equivocal evidence for the presence or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 absence of an exposure response relationship for the studies 2 of railroad workers, and exposure uncertainties for the 3 studies of truck drivers, it is judged that the available 4 data are too uncertain at this time for a confident 5 quantitative dose response analysis and subsequent 6 derivation of cancer unit risk for diesel emissions. 7 The Clean Air Science Advisory Committee, together 8 with the panel of the world's leading experts on diesel 9 health, will be reviewing this draft health assessment 10 document next month, and we encourage ARB staff to follow 11 these developments and revise the documents that we're 12 dealing with today as appropriate. 13 More to the point, however, and especially since 14 the OEHHA SRP unit risk factor number is really not 15 necessary to craft a progressive and effective diesel 16 particulate matter reduction plan, it simply should no 17 longer be used to drive the development of potential control 18 measures. 19 For example, EPA has developed its proposed 20 standards without a URF, without relying on a URF, and we 21 recommend that ARB do so as well as we move forward. 22 Now, compounding the problem with the unit risk 23 factor, the risk scenarios presented in the risk reduction 24 plan that we've heard a little bit about today also 25 materially overstate exposure and we have a simple reason to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 explain why. 2 More specifically, if you think about it, no 3 exposed individual or receptor will ever ever stand in the 4 same exact spot outside day in and day out, without 5 interruption for 70 years in a row, facing a head wind 6 blowing directly at that person from a diesel-fueled engine 7 assumed to be in operation today and assumed to stay in 8 operation again without interruption for 70 years, always in 9 close proximity, the maximum point of impact of that engine. 10 That just doesn't happen, but that is the type of 11 risk scenario that's driving the numbers that we're hearing 12 about. In our view, again, it's resulted in overstated 13 exposures and risks. 14 Accordingly, the risk reduction plan and guidance 15 documents should fairly explain how the reported risks are 16 fundamentally overstated when compared with real-world 17 exposures and the real encounters that actual residents have 18 to diesel-fuel power sources. 19 At the very least, these documents should 20 reference that the risk range could include zero. 21 Turning to our second main concern, the board 22 should note the fact that a single control strategy cannot 23 and will not fit all applications of existing engines, which 24 includes marine applications, emergency standby generators 25 and such a wide variety of off-road machinery and equipment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 After-treatment technologies are simply not 2 available for certain applications in model years. 3 Accordingly, the risk reduction plan will achieve 4 optimal reductions in diesel particulate matter by carefully 5 tailoring programs to these different applications, and we 6 look forward to working with staff to do that. 7 In conclusion, EMA fully supports the goal of 8 cleaner air through further cost-effective means to reduce 9 particulate matter emissions, means which include voluntary 10 and incentivized retrofit programs utilizing verified 11 retrofit systems. We've heard a little bit about that 12 today. That's critically important for ARB to take the lead 13 in the area. 14 The risk reduction plan provides a template to 15 obtain further reductions, and so improved air quality on a 16 statewide basis. 17 Nevertheless, as the process moves ahead, we 18 should refrain from overstatements concerning potential 19 risks. 20 In closing, let me reiterate our sincere 21 appreciation of staff's effort in this important endeavor. 22 We look forward to our continuing dialogue as we begin the 23 difficult task of fashioning potential control measures, and 24 we're confident that mutually acceptable and beneficial 25 solutions can be found. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 Thank you for your time and I'd be happy to answer 2 any questions that you might have. 3 CHAIRMAN LLOYD: Thank you. 4 Dr. Friedman. 5 BOARD MEMBER FRIEDMAN: Well, I find, to be very 6 candid with you, your comments to be very depressing. 7 A dose response curve is sigmoid shaped. I don't 8 really care -- you're concerned about over interpretation of 9 risk, and I'm concerned that you are under interpreting 10 risk. 11 I don't really care if I have enough exact points 12 on a dose response curve to create that whole sigmoid shape, 13 when I know that there are hundreds of thousands of people 14 living next to highways in areas of our state that are 15 exposed well beyond the figures that the EPA considers in 16 the ballpark for creating cancer risk. 17 And I don't think those people care either whether 18 we have the exact points on a sigmoid shaped curve. 19 Now, you know, it took this board about 12 years 20 to finally designate particulates from diesel engines to be 21 toxic, and they are. 22 And we can quibble, and it's always brought up 23 that the science is not perfect. Science is not perfect for 24 many many many things. But common sense relates to the fact 25 that there are toxic air contaminants in diesel that are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 productive of cancer. 2 And no amount of argument from industry can erase 3 it, because you think we're over interpreting a couple of 4 numbers. 5 And, I mean, our mission is to protect health, and 6 we're going to try and do that. 7 You're absolutely right, I mean there's going to 8 be lot of additional data. The data that is thus far it has 9 not been perfect, but it certainly resonates with common 10 sense and reasonability that we have a responsibility to 11 protect big portions of our population. 12 And that's what we're trying to do. 13 And the quibbling over a number here or there is 14 of no concern to me when I'm taking care of a bunch of 15 people whose cancers I think are probably related to 16 overexposure from particulates, and I don't care if they 17 stand in the wind and stand behind a machine and inhale from 18 an exhaust pipe. I mean, that's not my concern. It's not 19 the concern of anybody in the hospital today who is 20 suffering from a potential particulate cancer. 21 CHAIRMAN LLOYD: Thank you. 22 MR. FRENCH: I think our point, sir, was just that 23 we prefer not to quibble over that number either. We've 24 made our point about it, and we think we can move on to the 25 control measure phase and adopt control measures that are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 cost effective, feasible, without portraying these risks in 2 the manner they've been portrayed thus far. That's our only 3 point. 4 CHAIRMAN LLOYD: Any comments from the board? 5 Thank you. 6 MR. FRENCH: Thank you. 7 CHAIRMAN LLOYD: Next is Cynthia Cory, then Manuel 8 Cunha and then Jeb Stuart. 9 MS. CORY: Chairman and board, Cynthia Cory, 10 California Farm Bureau. 11 I'm just going to briefly touch on two points 12 today. They've been, I know the board is aware of them, 13 we've made them aware in our comments, but I'd just like to 14 briefly emphasize them. 15 First off, I'd like to say that I want you to know 16 that the ag industry is very willing to be a cooperative 17 partner in achieving cleaner air, we just want it to happen 18 in a fair and reasonable manner. 19 As President Clinton said when he was running for 20 office, it's the economy, stupid. 21 Cost, cost is our first point. So when growers 22 and ranchers of this state read in the papers that every 23 diesel engine is going to have to be retrofitted, you have 24 to understand that raises a lot of concern for them, because 25 they're looking at their tractors that sit on the field that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 they use a couple months out of the year that are 30 years 2 old and they're saying, hum, $50 per horsepower, that 3 doesn't pencil out. My 30-year-old tractor that I use a 4 couple months out of the year isn't worth that. 5 So I just want -- I know you're aware of that, but 6 I have to emphasize that point. 7 Also on that, I'd like to state that you have to 8 understand that when we do only operate a couple months out 9 of the year that the costs that it will take to -- any 10 increased cost for retrofitting will have to be recovered 11 over a much shorter period of time, because we don't operate 12 on an annual basis, so please take that into account. 13 The second point I just want to briefly mention is 14 against the diesel reformulation. As you know, under the 15 last reformulation some of the older agricultural engines 16 had problems. So we ask you, and I've heard you say that 17 this morning that you're going to be looking at the effect 18 of the new sulfur, lower sulfur diesel in the older engines. 19 We ask that you pay close attention to that. 20 As you know, under the current situation we're in 21 right now, things are tight, supply is tight. We don't want 22 to make the supply any tighter than it currently is, so our 23 people are very concerned about that. 24 We ask that when you look at this new sulfur 25 diesel, that you're looking at it, and I know you are, but PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 on a federal level, and that we're not in the future, as we 2 go through this new plan, let's try not to be a 3 California-state-only fuel, because maybe it will prevent 4 the situation from happening what we have right now, we're 5 paying twice what we paid for diesel last year. 6 It just doesn't work for business. It's very bad. 7 So we ask you keep these points in mind as you go 8 through your regulatory process on each of these measures. 9 We look forward to working with you. 10 I'd like to state that we are going to be working 11 very closely with you to find voluntary risk reduction 12 measures and financial incentives for anything that would 13 require retrofit. 14 Thanks. 15 CHAIRMAN LLOYD: Ask one question. Do you have a 16 member on the retrofit committee? 17 Any questions from the board? 18 Thank you very much. 19 Mr. Manuel Cunha, then Jeb Stuart and then Michael 20 Kelly. 21 MR. CUNHA: Good morning. Thank you very much. 22 Manuel Cunha with the Nisei Farmer's League. 23 Mr. Chairman and board members, the staff, 24 Mr. Kenny, I've given you a two-page, plus several others 25 and I'll just -- not going to read them, you can, but what I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 want to emphasize, number one, is the USDA air quality task 2 force just went to the Federal Register, and you have it 3 before you a voluntary incentive plan for agriculture across 4 the United States, that is out of EPA. 5 And several people at the administrative level 6 believe that this is the direction that agriculture will be 7 going across United States and we will hope that the Air 8 Resources Board would support that and maybe submit some 9 comments by the 19th of November in support of this type of 10 incentive-based plan. 11 The second thing you have before you is a document 12 that came out of the February 1999 statistics about farmland 13 in California, and it shows in there that approximately over 14 73 percent of the total farms are under 50 acres, close to 15 55,000 acres out of the 71,000 approximately are small 16 family farmers, under 50 acres. And you'll see that 17 document. 18 What I'd like to get to real quick, let me put on 19 my glasses, it's been due to a lot of government reading 20 that I've lost my sight, and it's not because of anything 21 that I don't want to hear. Okay. 22 So if you will excuse my -- I will deal with the 23 bullet points first. 24 As a member of the USDA air quality board for 25 USDA, and I would like to at this time thank Chairman Lloyd, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 and the Governor's office from the economic summit of '99, 2 '98, of putting together an air-agriculture advisory 3 committee to help guide the Air Resources Board in dealing 4 with agriculture across California on air issues, so first 5 I'd like to thank you very much, Chairman Lloyd, for that 6 and putting it together. 7 The first thing I think is a very important issue 8 and that's cost effectiveness and the technology. Our 9 agriculture tractors, as Cynthia Cory just stated, are an 10 average of 20 to 30 years old, and farmers cannot go out, 11 and especially in last several years, buy new tractors. 12 So when you start to deal with cost in 13 retrofitting, many of our small tractors and farmers cannot 14 go out there and retrofit that tractor. The cost is not 15 there, nor is the emissions. 16 We do not run 365 days a year. That's what EPA 17 thinks. They think a farmer operates his pump engine 365, 18 and he drives his tractor 365 days a year, and they do not. 19 They may operate an average of two months out of the year 20 total operation time. 21 When you look at that, you're looking at 44,000 22 farmers under 50 acres, that has the bulk of the farm 23 tractors. Okay. 24 So those two items must be heavily considered in 25 the ARB's planning to deal with the retrofit issue or any PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 other cost dealing with changing that farm equipment around. 2 There is an exemption, of course, under the 209 E 3 under the federal Clean Air Act. I don't talk much about 4 that, but I'd just like to mention it once in a while, just 5 to keep in mind that we want to work together and that's our 6 goal and 209 E of the federal Clean Air Act under the 175 7 horsepower I think does allow that. I think it does allow 8 us to look forward in trying to deal with the new equipment 9 that's coming out. Let's try to work with our dealers and 10 put the best engine, the cleanest engine on that vehicle, 11 versus trying to go backwards. 12 The on-road agriculture and off-road issue is a 13 big thing. I don't think we want to confuse IC engines that 14 are used in agriculture with an IC stationary engine that 15 works a generator for other industries that may operate 16 continuously, whereas a farm pump engine may only operate if 17 we have to pump water out of the ground. If we have water 18 in the hills and the canals are available, then we do not 19 use our IC engines. 20 So in that comment I'd like to say that the Moyer 21 funding that the board has allocated through the Governor's 22 office has been the greatest thing, and I'd like to report 23 from San Joaquin Valley and the Sacramento, out of the San 24 Joaquin Valley I think we have the highest air district in 25 the nation that has the most IC engines being replaced with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 new engines by the Carl Moyer funding. I think we have 2 close to 800 engines that have been removed and submitted 3 with the new proposal. That is the highest number that I 4 know of, an air district in a voluntary program with 5 farmers. And that means the regulators don't go out there 6 and check the farmer every day because he can't handle that 7 type of pressure. Okay. But the program is working. 8 CHAIRMAN LLOYD: Who can't stand the pressure? 9 MR. CUNHA: No comment. 10 Again, I think it's important that in your 11 documents we want to work with the staff on this whole 12 process. 13 We know of the International Retrofit Committee. 14 The only thing of it is being on Los Angeles on the 4th of 15 November on a Friday trying to get out of LA at 4:00 16 o'clock, that will be interesting to do. Maybe we can hop a 17 train. 18 But I think retrofitting will be a thing that we 19 need to look at very carefully. 20 I wasn't here for the first part of your board 21 presentation. I apologize. I was at a labor meeting under 22 Bill Lyons. 23 But is that we will support and work with you on 24 our new equipment and those types. When you go back into 25 our '80s and '70s and '60s and our '50s and some of you may PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 have a 9N tractor, you don't go put a huge catalytic 2 convertor that will cost $1500. The tractor is only worth 3 $30 and it's used two weeks out of an entire year to haul 4 gondolas for raisins, and that's it. 5 So we want to work with you. We want to move 6 forward. We believe your plan is a plan. It's a start. 7 There's going to be some ag people talking on some 8 real technical issues today of having the board look at and 9 reevaluate those technical issues. Not saying that you've 10 missed the whole boat. No. Is that we think you have 11 defined it in the wrong place and it needs to be 12 reevaluated. 13 But from that I want to close. I've gone over my 14 time, and I apologize. 15 And again the ag industry and the task force from 16 USDA, we believe what you're doing is giving our industry 17 and others the opportunity to work together as a 18 partnership. 19 We support all of the Carl Moyer. We need to have 20 more there to help incentives for the trucking industry, as 21 well as the agriculture industry. 22 With that closing, I thank you very much. 23 And I want to thank Mike Kenny and Bob Cross. Is 24 he here? I want to thank him also, Chairman, for his hard 25 work on the inventory of getting that accurately put into PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 place now and after so many years, we now have a good, I 2 think, balanced inventory that addresses agriculture in 3 California on its equipment. 4 So thank you very much. 5 CHAIRMAN LLOYD: Thank you very much. 6 Questions or comments from the board? 7 Thank, you Mr. Cunha. 8 Jeb Stuart, Michael Kelly, then Mitch White. 9 MR. STUART: Good morning, Mr. Chairman, members 10 of the Air Resources Board. I am Jeb Stuart, representing 11 the Construction Industry Air Quality Coalition, which is 12 composed of the Building Industry Association, Southern 13 California Contractors Association, Engineering Contractors 14 Association, and the Rock Products Association. 15 We have on the order of 12,000 member companies in 16 CIAQC. They move at least 80 to 50 percent of the dirt in 17 the area. They probably 70 to 80 percent of the home 18 construction is done by our members. 19 Our purpose is to interface with the three 20 regulatory agencies, the federal, state and local level on 21 behalf of our members. 22 First, I'd like to say that there will be four 23 more people coming up from this organization that are 24 following me, Mike Kelly, who is the president of Sukut 25 Equipment Company, then Mitch White of Manson Construction. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 Manson is one of three large waterborne-type companies that 2 do dredging and other things in the harbor. And he will be 3 followed by a Phil Vermeulen, who is with the Engineering 4 Contractors Association. And then Mike Lewis, my associate 5 in CIAQC, will wrap it up with the final say. 6 CIAQC and the construction industry in general 7 fully support the risk reduction plan with certain, we 8 think, minor amendments that can be made to it. 9 It was mentioned earlier that we are conducting a 10 field test, or we have proposed a field test in conjunction 11 with ARB and the district, which will commence in early 12 2001, will involve 14 machines and 20 engines. That's in 13 conjunction again with the LA County Sanitation District. 14 Your board or your staff has agreed to do the 15 testing or at least pay for the testing. The South Coast 16 District has agreed to pick up the tab for most of the rest 17 of the cost. 18 As someone mentioned earlier, I think it's a 19 critical element to determine which engines are susceptible 20 to filters, and I would propose to you that it's a very 21 modest approach that we're taking, and it should be expanded 22 over the year to include crane engines, dredge engines and a 23 lot of portable equipment engines. 24 The cost of running the program is in the 25 neighborhood of half a million dollars, and most of that is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 the cost of emissions testing. 2 I'm not sure we need the emission testing to that 3 extent on the other engine, because we're more interested in 4 will the engine work, will they plug up, will the filter 5 plug up the engines, to what extent is it feasible, 6 technically feasible, to do so. 7 This plan is not an ambitious plan. It's in our 8 opinion the most ambitious plan ever undertaken in terms of 9 retrofitting equipment. 10 The only parallel I can think of was the plan or 11 the program to install de-NOx devices on pre-catalyst cars 12 in the early '70s. And I see Tom Cackette wincing when I 13 said that. That was a disaster, not because it wasn't a 14 good program, because the devices weren't the best that 15 could be done. I think that indicates how important it is 16 to be sure we're doing the right thing as we go through this 17 plan. 18 Could I have my first slide, please. 19 CHAIRMAN LLOYD: You're very close to five 20 minutes, Mr. Stuart. 21 MR. STUART: Being a senior citizen, Mr. Chairman, 22 I thought you could give me more time. 23 CHAIRMAN LLOYD: We're not sure you can last five 24 minutes. I was looking at discounting the other way. 25 MR. STUART: Let me run through them quickly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 I think they're self-explanatory. 2 We think the most important change that needs to 3 be made to that plan is to reschedule portable equipment 4 retrofit from 2003 to 2006, mainly because the fuel will not 5 be readily available for 2006. 6 If you recall, your executive officer opposed a 7 South Coast District amendment to 431.2, which would have 8 required refineries to produce ultra low sulfur fuel, I 9 think in the next year or so. For the very same reason, 10 we're worried that the fuel will be available for the 11 portable equipment items. 12 Next slide, please. 13 Next slide, please. 14 I want to give you some idea what we're talking 15 about in portable equipment. Your staff says there is 16 50,000 items of equipment out there that are powered by a 17 diesel engine, which do not propel a vehicle. 18 We think the number is 100,000 or plus. I don't 19 think anyone knows. You have a registration program, which 20 we were involved in developing, that has registered about 21 10,000 of these engines, and I don't think they have touched 22 the surface on the total number of engines. A lot of these 23 engines are owned by small family companies, some 24 individuals, and most, I'd say 90 percent, of the people 25 that are using those engines have no idea that we're sitting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 here today discussing a potential 8 to 20 thousand dollar 2 retrofit in the next two and a half years, and I think it 3 makes so much more sense to tie it in with a mobile date of 4 2006. 5 And they only represent about 4.6 percent of the 6 total diesel emissions. You're not losing an awful lot by 7 doing that. 8 Next slide, please. 9 The plan that calls for retrofitting the mobile 10 engines, off-road engines, between the years of 2006 and 11 2008, we think it makes more sense, it's more cost effective 12 to do it if 20 percent of the engines retrofitted per year, 13 commencing in 2006. This is something obviously we'll 14 discuss with your staff. It would spread the cost over five 15 years instead of two, which is most important to some of the 16 smaller businesses that have this equipment and allows them 17 to program their replacements rather than retrofit an old 18 engine. They can replace that engine if they have more time 19 to do so. 20 Last, next slide please. 21 CHAIRMAN LLOYD: How many slides you have, 22 Mr. Stuart? 23 MR. STUART: This is the last one. 24 I think I've got the answer to this, you have 25 given your -- the plan is not a state implementation plan, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 it is flexible. Peter Venturini assured me that it can be 2 amended by the staff if they see the reason, and we hope 3 you'll make that clear to your staff. 4 CHAIRMAN LLOYD: Thank you very much. 5 Questions or comments? 6 Thank you, Mr. Stuart. 7 Mr. Michael Kelly, Mitch White, Philip Vermeulen. 8 MR. KELLY: Good morning. My name is Michael 9 Kelly. I'm president of Sukut Equipment. We're a heavy 10 construction firm. We own 170 heavy off-road machines. 11 I'm also a member of CIAQC, and I'm also one of 12 the main participants in the pilot program. We are 13 currently going to supply the engines and the machinery at 14 no charge to the ARB for testing purposes and durability 15 purposes of the PM traps. 16 I've also been very vocal to Caterpillar Tractor 17 Company for the last 30 years on emission controls, hoping 18 to drive that effort, which has gone nowhere basically. 19 I'd like to start basically on the retrofit 20 program of portable equipment. Our job sites are very 21 remote. They run from the Arizona border to the Oregon 22 border. Getting low-sulfur, extreme low-sulfur fuel would 23 be almost impossible until the whole market is covered by 24 it. So I think the staff should really look at the 25 implementation of that program being pushed back to 2006 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 until we can get the fuel to the machines. 2 We have a problem with dual fueling. Most of our 3 sites are regulated to have one tank on site because they're 4 remote. Be impossible for us to carry two types of fuels. 5 On the retrofit of the equipment, the two-year 6 window that you're proposing would cost us over a million 7 and a half dollars for those two years. We like to see it 8 spread out over five years, 20 percent or lower our cost, 9 keep us in business, keep my 300 employees working. 10 I agree with Jeb that the portable equipment 11 registration program should be reopened and I think it 12 should be reopened indefinitely. And let's try to really 13 get a count of what's out there. 14 Thank you. 15 CHAIRMAN LLOYD: Thank you very much. 16 Yes, Mr. Calhoun. 17 BOARD MEMBER CALHOUN: Would you repeat the 18 statement you made about Caterpillar? I didn't get that. 19 MR. KELLY: I've been to Caterpillar a few times 20 and I've always been very vocal in the past about emissions, 21 in trying to convince Caterpillar to step up the emission 22 program many years ago. 23 So I think it's imperative that the emissions of 24 new engines be regulated and I think it's imperative that we 25 get this fuel in place prior to anything happening. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 Everything is based on this extreme low-sulfur 2 diesel fuel, and until we get a level playing field with it, 3 I think these programs are doomed to fail. 4 CHAIRMAN LLOYD: Mrs. Riordan. 5 BOARD MEMBER RIORDAN: Mr. Chairman, to the staff, 6 and you may want to comment a moment, picking up on what 7 Mr. Stuart said and now Mr. Kelly, what about the 8 availability of fuel and how are we going to address that? 9 How do you see that? 10 MR. KENNY: Mrs. Riordan, we have actually had 11 conversations with the different oil companies in the state 12 and there are volumes of low-sulfur fuel available at the 15 13 part per million level. And so we actually have some 14 volumes available, both in Northern and Southern California, 15 and in the Central Valley, and we think those volumes will 16 be sufficient to at least begin the introduction of traps 17 throughout the staff. 18 We also have the announcement by Tosco that they 19 are planning to essentially retrofit or actually do refinery 20 modifications in such a way that all the fuel they'll be 21 selling in 2003 will be 15 ppm sulfur fuel and so that's on 22 top of where we already know some of the refineries are at. 23 BOARD MEMBER RIORDAN: Mr. Kenny, can I just 24 follow up on that? We have Arco producing; correct? 25 MR. KENNY: Arco is producing some of their volume PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 as 15 part per million, that's correct. 2 BOARD MEMBER RIORDAN: And we now have Tosco -- 3 MR. KENNY: Tosco has announced that by 2003 they 4 will have made refinery modifications such that all of their 5 production will be 15 ppm. 6 BOARD MEMBER RIORDAN: Do we have others? 7 MR. KENNY: We have two other refineries, who also 8 have capability of producing substantial volumes at 15 ppm, 9 although they cannot produce entirely at 15 ppm. 10 BOARD MEMBER RIORDAN: And we're pretty confident 11 of that? 12 MR. KENNY: Yes. 13 BOARD MEMBER RIORDAN: Good. Because I think 14 that's been a real issue in the minds of -- I think there 15 are a number of construction people that only know of Arco, 16 and feel that they would be really in trouble if there's 17 only one producer, but if we see that now we have maybe four 18 coming -- 19 MR. KENNY: There are multiple producers who can 20 produce volumes of 15 ppm, and to a great extent, what we're 21 relying upon in the transit bus rule that the board adopted 22 in February is that fuel that can be provided through fleet 23 sales at this point in time. 24 The difficulty is going to be as we move away from 25 fleet sales and more into general retail application, then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 we have distribution and storage issues that we have to 2 address. 3 And so what we're probably going to do as we move 4 through this plan is look more at the fleet applications 5 initially where the fuel is available so that we can then 6 avoid the retail problems which potentially occur. 7 BOARD MEMBER RIORDAN: Thank you. 8 CHAIRMAN LLOYD: Professor Friedman. 9 BOARD MEMBER C.H. FRIEDMAN: Just annotating that, 10 I heard 20 percent quantification of low-sulfur fuel 11 presently. 12 MR. KENNY: Presently? 13 BOARD MEMBER C.H. FRIEDMAN: Yeah. Or soon. 14 MR. KENNY: I would say that is probably a fairly 15 accurate number, it could even be higher than that. 16 BOARD MEMBER C.H. FRIEDMAN: And I heard a 17 statement by the gentleman here that without low-sulfur 18 fuel, retrofits are out of the question. I didn't 19 understand that to be the case, at least based upon what 20 I've heard from the staff. 21 MR. KENNY: It is partly the case, in the sense 22 that what we are relying heavily upon are the particulate 23 traps, and the particulate traps actually are depending upon 24 low-sulfur fuel. 25 BOARD MEMBER C.H. FRIEDMAN: For optimal? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 MR. KENNY: Well, no, actually what will happen is 2 the higher sulfur fuels will prevent their application and 3 there are other types of particulate reduction technologies 4 that do not require low-sulfur fuel, but they also are not 5 nearly as efficient as the traps that we are talking about, 6 so for the traps we actually do need low-sulfur diesel fuel. 7 BOARD MEMBER C.H. FRIEDMAN: So for the traps 8 you're referring to, you have to have those? 9 MR. KENNY: Yes. 10 BOARD MEMBER C.H. FRIEDMAN: You agree with that 11 statement? 12 MR. KENNY: Yes. 13 MR. CROSS: This is Bob Cross again. 14 They have catalyst coatings on them, and the 15 sulfur causes problem with the coatings, and then also as 16 the sulfur in the fuel goes up, you end up with sulfate 17 production by the trap. So you end up getting rid of 18 particulate emissions and emitting sulfate instead. So it's 19 having low-sulfur fuel is critical for the whole strategy to 20 work properly. 21 MR. DONOHOUE: I think I need to clarify something 22 on that. Oftentimes when we start talking about low-sulfur 23 fuel, depending on who you're talking to, that varies. 24 With respect to the national average we're looking 25 at 260 part per million fuel, and so when you come to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 California and see 140, that is considered lower sulfur 2 fuel. 3 Number of the trap manufacturers do feel and have 4 identified, and we do even have in stationary application 5 traps that are working at a fairly high efficiency, not at 6 90 percent, but certainly above 60 percent, on what would be 7 considered nationally low-sulfur fuel but is actually 140 8 ppm. 9 A number of other applications start talking about 10 low-sulfur fuel as being 50 ppm and there are a greater 11 number of traps with efficiencies associated with that. 12 When you get down to looking at the optimum, 90 13 percent plus reduction, you really do need the 15 ppm sulfur 14 fuel. 15 So we always have to be kind of careful when we 16 talk about what's low-sulfur, and what's the efficiency on 17 the traps. 18 BOARD MEMBER C.H. FRIEDMAN: Then I was not being 19 clear. I guess my confusion, you've clarified it, if that 20 is the definitive statement, because I understood that 21 our -- that most of the sulfur fuel available in California 22 is 140 ppm or something half or about half of the national 23 standard. 24 And I understand that we're going to a 15 parts, 25 and there's about 20 percent or so of the fuel now available PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 which is low-low-low-sulfur fuel of 15 ppm. 2 But I understood that with existing low-sulfur 3 fuel supplies in California, meaning the 140 ppm or lower, 4 that particulate traps could be efficient. They are not 5 optimally efficient, that's not maximum bang for the -- you 6 don't get the total combustion, and you do have some 7 potential, with some of them, some potential, other 8 emissions. 9 But so there are -- it's not a perfect. 10 MR. CROSS: I'd like to enter into this again. I 11 think that the trap manufacturers -- Bob Cross, staff -- the 12 trap manufacturers are pushing the possibility that you 13 could run these higher sulfur fuels in the traps, and I 14 think there are areas and places like these stationary 15 engines where they may work, but historically the reason 16 that we don't have -- didn't have traps on vehicles 15 years 17 ago was sulfur. 18 In other words, they were trying to put a catalyst 19 on the trap which would reduce the temperature at which the 20 combustion started and whenever they went to a catalyst that 21 worked at a low enough temperature so the combustion 22 started, the thing became a sulfate factory. 23 That technology has advanced to the point where 24 it's not quite so bad, but it's still an issue, and I think 25 that if you ask any of these trap manufacturers, they will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 tell you they'd much rather have 15 part per million sulfur 2 running through that than even 50. 3 BOARD MEMBER C.H. FRIEDMAN: I think I understood 4 that. 5 But then I guess that gets back to the question, 6 is this a justification or a good reason, a sound reason for 7 postponing from 2006 to 2008? 8 MR. CROSS: No. 9 BOARD MEMBER C.H. FRIEDMAN: For such 10 requirements. 11 MR. KENNY: I think the key thing we're going to 12 have to do, Professor Friedman, is we basically look at the 13 individual rules that we're going to be proposing and then 14 bringing it to you is making sure that in fact the fuel and 15 the traps work as a system. 16 And so that will be part of the task that we have 17 to make sure we undertake. 18 BOARD MEMBER C.H. FRIEDMAN: And my own view is if 19 it's not optimal, but it's still getting reductions, without 20 any untoward side effects, other countervailing detriment, 21 and my own view is the earlier the better. 22 MR. SCHEIBLE: I think the policy the staff is 23 proposing is one of if we are in that dilemma, bring the 24 fuel forward, not delay the traps. 25 So if we get in the situation where we say traps PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 have been designed for all these vehicles in use and they 2 past the cost-effectiveness test, and now we're ready to put 3 them on and we can do that in a short period of time and we 4 are outstripping the fuel supplies, we go back to the 5 refiner and say we need more fuel, we need a better 6 distribution system, work with us to provide it or watch -- 7 or we'll have to come in with proposed regulations that 8 bring it. 9 And the final goal is universally no matter where 10 you buy the fuel, wherever it's supplied in California, it 11 will be 15 ppm or below, but we ramp up to that, on a ramp 12 that goes up quicker than the traps' demand needs it. 13 BOARD MEMBER C.H. FRIEDMAN: And I understood the 14 2006 was almost in tandem with when the federal rules kick 15 in. Am I wrong? 16 MR. SCHEIBLE: That's correct. And that 17 recognizes the fact that to get 100 percent of the diesel 18 fuel that California needs now and will need by then we will 19 have to have imports and therefore we need reliable supplies 20 of that same low-sulfur fuel from refineries outside of 21 California. 22 BOARD MEMBER BURKE: Professor, EPA has not passed 23 that rule for 2003, and has only indicated they're 24 considering it, and there's no guarantee if there is a 25 change -- there's obviously a change in administration in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 Washington, but depending on who the change is, there's not 2 written in cement that will come into effect. 3 BOARD MEMBER C.H. FRIEDMAN: You're not holding 4 your breath? 5 CHAIRMAN LLOYD: Thank you. 6 Supervisor Patrick. 7 BOARD MEMBER PATRICK: Mr. Chairman, the last two 8 speakers have talked about the dual fuel, they foresee a 9 dual fuel requirement at their job sites, and I'm wondering 10 if staff could respond to that. 11 CHAIRMAN LLOYD: I thought staff was saying that 12 may be addressed in the individual rulemaking, to see 13 whether that's going to be necessary. 14 MR. CROSS: I think that the staff, if you look 15 at, for example, our proposed school bus rule and the 16 transit rule, in both cases what we did was once the trap 17 systems became required on that particular vehicle type, the 18 whole fuels pool for the particular sector is changed over 19 to low-sulfur fuel. Otherwise you run into infrastructure 20 problems and the likelihood of misfueling. 21 So the staff bent at this point would be to 22 require the whole, for example, construction job or 23 construction company or farming company or whatever to go to 24 low-sulfur at the outset. 25 BOARD MEMBER PATRICK: The moment that any of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 these engines are brought into compliance, they must use 2 low-sulfur fuel at that facility? Am I understanding you to 3 say that? 4 MR. CROSS: That's what we've done so far with 5 centrally fueled facilities like school districts and 6 transit agencies. Where I think it's going to be tricker is 7 with other groups. 8 BOARD MEMBER PATRICK: Yes, I get it on buses and 9 school buses and urban transit buses and that kind of thing, 10 but I think what the people were talking about was the 11 jobsite that runs many many different kinds of engines, some 12 of which may be in -- be required to do a changeover in 2003 13 and then going up. 14 MR. CROSS: Low-sulfur fuel is good for all 15 engines. That's not the issue. It costs more. 16 BOARD MEMBER PATRICK: I understand that too, but 17 what you're saying then is that if we were to change 18 tomorrow to low-sulfur fuel, there would be no engines that 19 would have a problem with running it? 20 MR. CROSS: That's correct. I'd go with that. 21 BOARD MEMBER PATRICK: Thank you. 22 MR. CACKETTE: One thing, we are sensitive to the 23 availabilities of fuels. Prior to the statewide or 24 nationwide mandate in the school bus or in the transit bus 25 program, for example, where we can require retrofits, we did PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 acknowledge that there might be areas, Ukiah or somewhere 2 far north or far out of the urban areas, where getting the 3 fuel would be cost prohibitive in the short term, it would 4 have to trucked or it would have excessive price. 5 So I think before 2006 we want to consider not 6 just the fuel matching the technology, but also the 7 availability of the fuel and where the technology, where the 8 engines are used. I mean, if these engines do bounce around 9 and they're used half the time in Arizona or 10 Nevada-California border, then that's a question as to how 11 you get low-sulfur fuel out there and they might drop down a 12 notch in terms of their priority for being retrofitted. 13 But once 2006 comes, it should be available 14 statewide on and off-road everywhere and that should solve 15 the problem. 16 BOARD MEMBER PATRICK: Thank you. 17 CHAIRMAN LLOYD: Take one more witness, Mitch 18 White, then I'm going to take a ten-minute break for the 19 court reporter. 20 So Mr. White. 21 MR. WHITE: Thank you and good morning. I'm Mitch 22 White. I'm with Manson Construction. We're a Seattle-based 23 marine contractor. We primarily do dredging, pile driving 24 and sewer outfall placement up and down the West Coast and 25 also in the Gulf. We have two regional offices here in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 California. 2 I just wanted to make a few points of some of our 3 concerns. Manson Construction, and I can also speak for the 4 Marine Contractors of California, I'm chairman of the Marine 5 Contractors Committee for the Association of Contractors of 6 California, we're all committed to improving air quality. I 7 mean that -- we have been working with that for some time. 8 Our efforts to date have been with respect to NOx 9 emissions. Unfortunately, our experience has not been good. 10 Some folks next door to us in Long Beach spent well over a 11 million dollars on one derrick barge to install SCR to 12 comply with some requirements, and it didn't work, and it 13 was eventually removed. 14 We've done the same thing with another one of our 15 crane barges, spent well over a million dollars to reduce 16 NOx emissions that did not work. 17 Today we are investigating the possibilities of 18 installing another SCR on another newer machine of ours. 19 We understand that there may be two people in the 20 United States that can provide that technology, and I know 21 we're not here to talk about NOx, but I just want to talk to 22 you about our concerns about technology. 23 There may be two people in this country that can 24 give us the necessary resources to install that. We don't 25 know if it's going to work. If we do install it, we will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 have a very clean running machine, which right now has five 2 certified Cat engines on it, they're brand new. 3 Our concern is we're going to have some new 4 technology coming down the pike now. Will this -- will our 5 NOx equipment that we install, will that work with the PDFs? 6 I don't know. It may be a simple matter, but it's a concern 7 of ours, because we have found that technology is very new 8 and oftentimes it doesn't work. 9 Another concern of ours is our equipment is 10 typically duty cycle, it runs fast, it runs slow, it doesn't 11 run steady. When it runs fast, when it runs slow, you don't 12 get the stack temperatures necessary to, as I understand, 13 adequately remove particulate matter with these PDFs. 14 So that's a concern of ours. 15 The last concern I think you all hit on it quite 16 well is the low-sulfur fuel. We, as many of the marine 17 contractors, work up and down the West Coast. We may leave 18 California and go to Alaska we've got the particulate, the 19 PDF on, it's operating, we can't get low-sulfur fuel in 20 Alaska, we can't get it in Washington, and we may be able to 21 get it eventually, but at this point in time we can't. 22 That's a concern. Do we disengage that system and then when 23 we come back we reengage that system? It's possible, but 24 it's logistically and economically it's very difficult. 25 Those are just some of our concerns I wanted to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 share with you and I appreciate the time. 2 CHAIRMAN LLOYD: Thank you very much. 3 Yes, Barbara. 4 BOARD MEMBER RIORDAN: Mr. Chairman, question of 5 Mr. Cross. Are we in the study going to look at dredging 6 equipment or is that one of our problems? 7 MR. CROSS: I hadn't thought of it, to be honest, 8 but obviously it's one we'll have to look at. 9 I think in response to his more general question, 10 SCR and particulate traps are compatible. It's a matter of 11 managing your exhaust temperature. 12 And we will be testing traps on a wide variety of 13 engines. I think we would just have to look at your engines 14 and what the trap manufacturers have available and see if 15 there's a match. 16 BOARD MEMBER RIORDAN: Maybe the company could 17 loan us an engine to try. 18 MR. CROSS: It probably be easier in the dredge. 19 MR. WHITE: I just want to add, though, our 20 extreme concern was the duty cycle nature of crawler cranes, 21 which we also operate pile driving machines and clam shell 22 dredges. Those engines are up and down. So to maintain -- 23 MR. CROSS: As long as they're up for long enough, 24 you get the exhaust temperature we're okay, but that's just 25 something you have measure. It's not rocket science. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 MR. WHITE: Our temperatures vary about 300 2 degrees of Fahrenheit. 3 MR. CROSS: That's okay as long you get to the 4 high temperature for long enough. 5 MR. WHITE: Understand we're not there, though. 6 MR. CROSS: You measure it. 7 MR. WHITE: We have measured it and I understand 8 we're not there, so it's just something we'd like 9 flexibility. 10 CHAIRMAN LLOYD: Thank you. 11 MR. CROSS: I guess the other piece of that is 12 that when we were talking about catalysts earlier, you used 13 catalysts to bring the temperature down, and I expect there 14 will be progress in that, but we clearly aren't going to put 15 traps on something where they won't work. 16 CHAIRMAN LLOYD: Thank you. 17 The next speaker will be Philip Vermeulen, after 18 the break, so we're going to take a ten-minute break, so 19 that 20 after by that clock back of the room. 20 (Thereupon a short recess was taken.) 21 CHAIRMAN LLOYD: I'd like to continue with our 22 next speaker, Mr. Philip Vermeulen, then Michael Lewis, then 23 Stephanie Williams. 24 MR. VERMEULEN: Good morning, Mr. Chairman, 25 members, my name is Phil Vermeulen. I represent the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 Engineering Contractors Association of Southern California, 2 but also I also represent the Sacramento Builders Exchange, 3 Marin Builders Exchange, Fence contractors, Flasher 4 Barricade Association, a lot of little mom and pops out 5 there, all told about 15,000 contractors. 6 My message follows up with Mr. Stuart and several 7 of the other spokesmen for the construction industry, and 8 that is we applaud the staff for the recommendations. We 9 think they're sound. 10 Our recommendation, though, is the 2006 makes a 11 lot of sense to us. Simply, we're dealing in construction 12 here, we're dealing in remote sites. If we get into these 13 things where we're spending money on putting on traps and 14 things like that that could possibly be contaminated as a 15 result of fuel that's higher sulfur content, then we've 16 defeated the purpose. 17 Also we want to make sure that these test programs 18 we're talking about in the pilot to see if these different 19 pieces of equipment work with these traps and makes sense. 20 To do something prior to the 2006 we fear will be 21 throwing the baby out with the bathwater. 22 With that, we would urge the 2006 implementation 23 date and we look forward to working with you. 24 Thank you. 25 CHAIRMAN LLOYD: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 Michael Lewis, Stephanie Williams and Elaine 2 Chang. 3 MR. LEWIS: Morning, Mr. Chairman, my name is Mike 4 Lewis. I'm the executive vice president of Construction 5 Industry Air Quality Coalition, and I bring not opposition 6 to your proposal, as your sign-in you have to make a choice 7 on your sign-in cards, but I think constructive 8 recommendations. 9 Our industry, I think, has been very progressive 10 when it comes to dealing with air quality issues. 11 When the first particulate matter became an issue, 12 at least in the South Coast, we stepped up to the plate with 13 the air district and drafted the first, and I think today 14 the state-of-the-art dust control measure for construction 15 sites. I think it's probably still one of the few in the 16 country. 17 We are the ones who conceived and sponsored the 18 legislation to create the portable equipment registration 19 program which your agency now operates. 20 And we are the ones who have been driving the 21 effort for this off-road construction equipment particulate 22 trap test in the South Coast air basin. 23 Our concerns are several. 24 First, I think as has been discussed before is the 25 availability of the fuel. You have chosen in your plan to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 require these 50,000 pieces of portable equipment to be some 2 of the first to install these traps, and our concern is 3 that, and based on the analysis that we have done by Booze 4 Allen in the South Coast basin is who owns this equipment. 5 It's largely owned by small mom and pop operations, they 6 only own a couple of pieces of this equipment, and you're 7 talking about an $8,000 device that may well cost more than 8 they paid for the equipment originally. 9 Secondly, these people are hard to find. As we've 10 discovered with the statewide registration program, there's 11 only 12,000 pieces of equipment registered in that program. 12 Your inventory and ours confirm that there's roughly 50,000 13 pieces of equipment. That program is the cheapest program 14 they could get into, it's one of the simplest to get into, 15 it's one of the most forgiving. And if only 12,000 people 16 signed up for it, you're going to have a very difficult time 17 persuading the rest of them, number one, to get in the 18 program, or number two, that they should -- that you can 19 even find them to require them to put these devices on their 20 equipment. 21 And our concern about that is if a guy, one of 22 these small contractors has a diesel truck and he's got his 23 portable equipment on the back and he's driving it to the 24 jobsite and he has to fuel at a gas station, and he's got a 25 choice between putting cheaper diesel fuel in his truck, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 he's got to put more expensive diesel fuel in -- and we 2 would question the six cent a gallon differential, I think 3 that's probably a cost to manufacture, that's not how it's 4 going to translate at the pump, and I think if you look at 5 the recent American Petroleum Institute study on what they 6 expect to happen to that market it 2006, they're projecting 7 at least temporarily a 35 to 50 cent a gallon price 8 differential for that fuel -- I think it's going to be very 9 difficult for him or not likely that he's going to put the 10 cheap stuff in his truck and the more expensive stuff in his 11 portable equipment, simply because there's a rule that says 12 he has to. 13 Until it's only one fuel available and he only has 14 one choice, I think you're going to have a very difficult 15 time enforcing that particular requirement on that 16 particular segment of this equipment. 17 Secondly is the limited application of the 18 technology. I think the things that the manufacturers of 19 these devices that you're about to mandate tell you, and the 20 things that they tell us when you sit down at the table with 21 the checkbook and say now this will do this, right, as you 22 write the check, there's a little bit different story. 23 When we first proposed this test and we told them 24 you had to be able to reduce by 90 percent particulate, and 25 we said we wanted to test some equipment on the current PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 diesel fuel, not the new low-sulfur fuel, only one 2 manufacturer would even talk to us and the other guy walked 3 away from the table. There are only two manufacturers' 4 equipment who meet that criteria today. 5 The temperature, the duty cycle, and the fuel are 6 critical to making that equipment work right, and as you've 7 heard, a lot of this equipment simply won't reach the 8 temperatures for long enough periods of time to trigger the 9 catalysts to burn off the sulfur. 10 I think our concern about the test is we really 11 want to understand what the long-term reliability of this 12 equipment is. 13 There is going to be a problem with fueling, as 14 long as there's two fuels available and we know that this 15 equipment is going to get misfueled on job sites. You know 16 that those catalysts are going to get plugged. 17 Frankly, there's an operating consideration for 18 heavy equipment operators, they use the plume as a meter, 19 they can tell from the plume how well the equipment is 20 operating and whether or not there's something wrong with 21 it. When you eliminate the plume, we have whole new problem 22 that we have to figure out in how we are going to tell 23 whether we have blown a turbo or other considerations are 24 needed to be taken into account in how well the equipment, 25 or if the equipment is operating properly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 We want to do a thousand- to two-thousand-hour 2 test of this equipment. We think that's important to 3 understand. You have to realize on a construction site this 4 equipment it's not like a school bus that runs on a paved 5 road at moderate speed, this stuff has enormous vibration, 6 enormous jarring, and attaching anything to this equipment 7 is a difficult task and having it stay on during the 8 operation, and we think that may well turn out to be one of 9 the biggest obstacles that has to be overcome in the 10 process. 11 CHAIRMAN LLOYD: Can you summarize, Mr. Lewis. 12 MR. LEWIS: Yes. 13 CHAIRMAN LLOYD: Please. 14 MR. LEWIS: Yes. I do have something I'd like to 15 submit for the record, and that's an analysis that we just 16 had completed recently by Booze Allen and Hamilton on the 17 cost effectiveness of these devices, and our projections are 18 that for looking at graders, dozers, scrapers, the cost of 19 per ton of reduced of particulates is anywhere from $27,000 20 to $57,000, and I want to make sure that you have that as a 21 part of the consideration. 22 And I would ask finally that you join with us 23 aggressively in this test that we're proposing down in South 24 Coast basin, because we think it's critical to have that 25 information before you start to finalize these rules. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 And we think as second phase you need to look 2 closely at the portable equipment so we can determine what 3 equipment this stuff really works on, bearing in mind while 4 it may work on one engine and one application, it may not 5 work on exactly that same engine in another application, and 6 that's the consideration that we have to have on behalf of 7 our industry. 8 So thank you. 9 CHAIRMAN LLOYD: Thank you very much. 10 Questions, comments? 11 Thank you. 12 Stephanie Williams, Elaine Chang, Peter Rooney. 13 MS. WILLIAMS: Good afternoon, Chairman Lloyd and 14 ARB board members. My name is Stephanie Williams, and I'm 15 the director of environmental affairs for the California 16 Trucking Association. 17 And we are not opposed to a statewide retrofit on 18 diesel trucks. 19 With that said, the trucking industry is in really 20 a crisis right now, because of the fuel standards that we 21 have in California, and we've been working with your staff 22 trying to figure out ways to level the playing field. 23 In the last couple of years we moved ahead of our 24 federal sister organization, the American Trucking 25 Association, and came out in support of the national fuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 standard of 15 ppm in 2006. 2 Not only did we move out ahead, but we went to the 3 hearings and we directly testified and lobbied Congress on 4 this issue, and we will continue to do that. 5 There are many who would like to see that rolled 6 back. There are rumors that if a Republican is elected for 7 President that it could be rolled back. And we have made a 8 commitment, our organization, to make this national fuel 9 standard work and 15 parts per million the future of United 10 States and diesel fuel. 11 Now, on the other hand, on the retrofit in 12 California, here's where our problems lie, and we're hoping 13 that the air board can help us help the State of California 14 get clean air, because there's two ways to go about doing 15 this. 16 We charge a $1.25, the going rate for freight is 17 $1.25 a mile, so we keep about two cents on every dollar, 18 the trucking company gets to keep as profit. That's if the 19 oil companies decide not to spike in a certain year. This 20 year they decided to spike, so that profit won't be there. 21 But we have to keep our rates at that level and 22 still be able to retrofit, and we don't have a problem with 23 that, but we'll need your help. 24 The same with ag. Ag has to sell oranges or 25 apples or whatever they're selling against Mexico, who isn't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 going to be doing this, and no one care that our oranges 2 were delivered in 15 ppm diesel sulfur fuel, all they care 3 about is how much oranges cost when they put them in the 4 grocery store. 5 So I think the trucking association wants to do 6 its part. We're tired of getting the bad press of that 7 black belching diesel smoke. We want to do something about 8 it. 9 But we're going to have to do it in a way where we 10 can be the trucking companies that move the freight in 11 California. 12 And we are working feverishly with your staff. 13 We have two proposals that you'll see in the 14 Legislature, and we would hope that those proposals don't go 15 just here. We would like you as board members to go to the 16 Governor and say, hey, the trucking industry needs your 17 help, they want to do their part, they make two cents on a 18 dollar, so we're going to help them out. 19 This is what we need you to do. 20 Our plan is a PM abatement program, and we have 21 passed, after three unsuccessful tries, our board has 22 elected to tax every truck in the State of California $50. 23 That $50 would be given to the Air Resources Board to 24 distribute to air districts weighted by PM nonattainment. 25 For example, Los Angeles, Dr. Burke's area, they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 have a harder time meeting the PM standards, as does San 2 Joaquin, than, you know, Mt. Shasta or an area like that, so 3 the money would be weighted towards nonattainment. 4 It would go in grants to companies, not just big 5 fleets like has been done in the past, towards alternative 6 fuels. This could be used to do alternative fuels in big 7 fleets. You could that take $5,000 truck in the port, which 8 we hope you do, and upgrade that engine to an engine that 9 doesn't smoke, that's more fuel efficient, help the little 10 guys, help the big guys. 11 And really the air districts know where these 12 areas of environmental justice, as you were saying, are. 13 There's two sides to environmental justice. Those are also 14 those members driving those trucks that are worth $5,000. 15 Chairman Burke knows about this. He has 2,000 16 signatures, called some of the people during the rule 431.2. 17 They were impressed by that, by the way. 18 But we can do this, but it can't be finger 19 pointing. You know, you see a big truck and you see the 20 black smoke. You don't understand what goes behind what the 21 person that is in that truck has to do to make his living, 22 what the costs are, and I think if you recognize that, and 23 we can work together, the trucking industry is willing to 24 stand up and be first, and we're looking forward to working 25 with your staff and pushing this forward. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 Our two pieces of legislation will be introduced 2 January 1st. 3 The second beyond the PM abatement program is an 4 excise tax, I'm sorry, sales tax removal. We would like to 5 create something similar to Sweden. Sweden has two diesel 6 fuels. They have 5 ppm and I think it's a 20 ppm diesel 7 fuel. And, no, it's 50. It's 15 and 50. And the 15 ppm 8 diesel fuel has less tax on it, and that creates a demand 9 for people to use that, so when you create the demand the 10 companies can choose to go to Arco or Tosco and have that 11 fuel delivered, and they can use the traps also. 12 So I think the combination of our two pieces of 13 legislation and the support beyond this board upwards 14 towards the Governor's office, I think we can do this 15 together, and we can see great progress, not only in 2006, 16 but in 2010. We'd like to see the public think when they 17 see a diesel truck, not associate it with black smoke. 18 Thank you. 19 CHAIRMAN LLOYD: Thank you very much. 20 By the way, I really appreciate, Stephanie, your 21 personal leadership here in working with us cooperatively, 22 and also Mr. Angus, and I think it's obviously a distinct 23 improvement in what we're doing, and we really very much 24 appreciate that and look forward to continue to respond to 25 your needs, as well as our needs working together there. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 MS. WILLIAMS: Thank you. 2 CHAIRMAN LLOYD: Questions from the board? 3 Thank you very much. 4 I've got a change in order here. Mr. Herbert Hunn 5 has been waiting here all the morning, and I know that he's 6 a farmer who's anxious to get back to his work, so we, if 7 you don't mind, I would like to take him out of order, then 8 after that we'll take Dr. Chang, Peter Rooney, and then Tim 9 Carmichael. 10 MR. HUNN: Thanks for your consideration, sir. I 11 appreciate it very much. 12 My name is Herbert Hunn. I represent the family 13 farming organization called Hunn and Muro in Clarksburg. We 14 farm in the Delta, growing several different types of crops. 15 We are faced with an economic situation here in 16 our agriculture now with crops at the lowest prices we've 17 ever experienced. 18 We are part of the debacle with Tri-Valley Growers 19 that have just gone bankrupt, and so the situation is pretty 20 dire with many of us. 21 Retrofitting used equipment would be very 22 prohibitive. I was talking with one of my sons, 300 23 horsepower tractor, at $50 a horsepower is $15,000. The 24 tractor isn't worth it. At that price it's all it is is a 25 boat anchor. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 So we're saying to you that used equipment 2 retrofitting is just out of the question financially, unless 3 you want to put us out of business. That's what it amounts 4 to. 5 We feel that the amount of time that the equipment 6 is used, we are seasonal in operation, and as a result it 7 isn't like the equipment is running year-round. So we feel 8 that our impact on the environment is minimal in relation to 9 one that is year-round type of equipment. 10 We hope that you take this discussion in your 11 consideration, and I thank you for your kind attention. 12 CHAIRMAN LLOYD: Thank you. Rest assured this 13 board has not any intention of putting you out of business. 14 We'll have to work together. 15 MR. HUNN: Thank you. I appreciate that, sir. 16 CHAIRMAN LLOYD: Next is Dr. Elaine Chang. 17 DR. CHANG: Good morning, Mr. Chairman and members 18 of the board. My name is Elaine Chang, assistant deputy 19 executive officer with the South Coast Air Quality District. 20 I'm here this morning to support your approval of 21 the toxic plan, with a specific request for a particulate 22 matter low-sulfur diesel fuel. 23 I would like to request you direct staff to begin 24 your regulatory process immediately after the plan approval. 25 Why is this measure so important to us? You may PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 already know that our governing board just adopted a 15 ppm 2 sulfur diesel regulation two weeks ago. I would like to 3 share some of the information we gathered during our own 4 rulemaking to highlight the importance of this particular 5 measure to us. 6 I think your staff also pointed out that the 7 low-sulfur fuel is essential building block of this diesel 8 plan, not only we get the toxic reductions, we also get 9 multiple criteria pollutant reductions, PM 10, SOx, which is 10 a precursor to PM 10, and with the application of 11 after-treatment technologies we're also going to obtain the 12 NOx emissions. 13 Next, please. 14 Our local toxic study also shows that 70 percent 15 diesel contribution to our overall toxic risks, but once 16 more is in your draft plan you pointed out to us that South 17 Coast has higher average diesel concentrations than anywhere 18 else in the state. 19 I believe with this information you will 20 understand why we feel the urgency in our area to move ahead 21 with this measure and why we're somewhat impatient on this 22 matter. 23 Next. 24 If you look at the NOx emissions inventory diesel 25 emissions with on-road and off-road source categories PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 combined contribute about 45 percent of total inventory. 2 Low-sulfur diesel with after-treatment again can reduce this 3 emissions significantly. 4 Next. 5 Here again you see diesel fuel is the single 6 largest contributor to our SOx emissions inventory. 7 Our analysis indicates that, next, with this 8 low-sulfur diesel regulation in our South Coast region 9 alone, you can achieve up to 1.1 tons per day in PM 10 10 emission reductions, as compared to approximately 300 pounds 11 per day of statewide PM 10 reductions from your earlier 12 transit bus regulations. This is very significant to us. 13 Next. 14 With the improved PM 10 air quality, the health 15 benefits we can translate into approximately $38 million per 16 year air quality benefit. 17 In addition, there could be up to ten cancer cases 18 avoided each year. The sooner you move ahead, the earlier 19 we can realize all these health benefits. 20 All these health benefits, next, come along with a 21 relatively small price to our refineries. 22 As part of our rulemaking, we have documented that 23 the average cost to our refineries to make the necessary 24 modifications of approximately $23 million each year and 25 their reported 1999 net profit is in the billions, a little PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 bit less than $7 billion. 2 What we will like to request you again in light of 3 the long lead time that refineries need to make the 4 modifications and our 2006 attainment date for the federal 5 PM 10 standards, we urge you to move ahead with the 6 rulemaking for this particular message as soon as you can 7 implement it as early as practical. And we will appreciate 8 your time. 9 Thank you. 10 CHAIRMAN LLOYD: Thank you very much. 11 Questions or comments? 12 Thank you, Dr. Chang. 13 Peter Rooney, and Tim Carmichael, and David Smith. 14 MR. ROONEY: Thank you, Mr. Chairman, members of 15 the board. It's nice to be back in this room. I certainly 16 enjoyed my many days here before. 17 And I do want to commend you before starting on 18 this topic, certainly my pleasure in seeing that the new 19 administration has continued the work and this board has 20 continued the work of trying to clean the air in California 21 and taking a lot of hard stance that undoubtedly brings you 22 great grief sometimes. 23 But nonetheless I appreciate the work you've done 24 here. 25 I'm appearing here today for an organization by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 the name of Pony Pack Incorporated. We did submit some 2 prior information to you. And it's in regard to a portion 3 of the plan which I did not hear discussed this morning by 4 staff and that's the section called non-regulatory 5 strategies, and then subtitled transportation control 6 measures and subtitled to that idling restrictions. 7 My client manufactures the device which is 8 generally known as an auxiliary power unit, and this unit 9 replaces the operation of the main engine when the truck is 10 at idle, and I think it was interesting this morning to note 11 that 25 percent of the vehicle miles traveled by heavy-duty 12 trucks in California are by out-of-state vehicles. 13 If you can imagine the out-of-state vehicle, 14 generally it's going to have a very large crew compartment, 15 if you will, and these modern crew compartments have 16 microwaves, television, certainly air conditioning and 17 heating. 18 And as these drivers come up against their hours 19 of service limit when they have to come from out of state, 20 they have to park the vehicle, and they have to rest, and 21 the practice is to live in that vehicle while they're 22 resting and scheduling the next stop. 23 This device, generally this class of device is 24 called the auxiliary power units, can provide for the 25 environmental conditions, if you will, of this steel box, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 which is their home away from home. 2 So we feel that the staff, and we've talked to the 3 staff and they're very encouraging, that this plan should 4 emphasize not only the study and quantification of how much 5 emissions can be saved by shutting down that big engine, and 6 running a small specially designed hybrid, if you will, to 7 carry this particular load. 8 Our manufacturer suggests that the big engine will 9 require a gallon to a -- a gallon and a half to three 10 gallons per hour just for these purposes, whereas an 11 auxiliary power device uses a pint to a pint and a half per 12 hour for the same purpose. 13 So we really think there's advantages that can be 14 accomplished now. Our manufacturer has already installed 15 2,500 of these units in the nation's truck fleet and we 16 encourage the support that we've gotten from your board and 17 from the state and we look forward to working with you in 18 the future in this particular area. 19 So thank you very much. 20 CHAIRMAN LLOYD: Thank you very much. 21 I think it's an excellent approach to reducing 22 those idling emissions. 23 Is staff addressing that issue? I know there are 24 several technologies to do that. It's an excellent 25 approach. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 MR. CROSS: The answer is yes. We are in the 2 process of including this in the Carl Moyer guidelines as an 3 appropriate strategy for use on trucks, which means that the 4 truckers would be able to receive some subsidies towards the 5 purchase of them. 6 The subsidies aren't as high as some of the items 7 that are on the Moyer list just because this device is so 8 good that it saves the trucker money in the very long run, 9 but they're there. 10 MR. ROONEY: That's correct, and we appreciate 11 that. 12 One area we might look in the future is even 13 emission credits in the sense that these people will be 14 doing things voluntarily ahead of schedule to help. 15 So thank you very much. 16 CHAIRMAN LLOYD: Maybe one of the last meetings in 17 this building, Mr. Rooney, going into your building shortly, 18 the building that you helped design. 19 MR. ROONEY: And I hope you enjoy it and I hope 20 programmatically I'm sure it will work very well for not 21 only the air board but the entire Cal EPA complete range of 22 programs. 23 CHAIRMAN LLOYD: I think we're looking forward to 24 it. Thank you. 25 BOARD MEMBER BURKE: Mr. Chairman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 CHAIRMAN LLOYD: Yes. 2 BOARD MEMBER BURKE: Quick question. 3 Are we also looking into the school bus warm-up 4 period? Because in South Coast, you know we have the 5 largest school district in the state, and they mandated that 6 all their school buses be warmed up for 15 minutes standing 7 still. Isn't that wild? 15 minutes standing still. 8 CHAIRMAN LLOYD: That's a stationary source. 9 BOARD MEMBER BURKE: You know, if I get it 10 classified that, I tell you, we'd make a rule in a 11 heartbeat. 12 It's something that I don't know if other school 13 districts do that but -- 14 MR. CROSS: There's no technical reason for doing 15 that. We'll look into that. 16 CHAIRMAN LLOYD: Yes. Tim Carmichael, David Smith 17 and Janet Hathaway. 18 MR. CARMICHAEL: Good morning, Chairman Lloyd and 19 members of the board, my name is Tim Carmichael. I'm the 20 director of the Coalition for Clean Air. 21 And we are here to support the plan before you, 22 but with some perspective comments, and then some specific 23 comments. 24 On the perspective, I don't think staff spent long 25 enough in their presentation talking about why they're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 presenting this plan to this board and to California as a 2 whole. 3 The reason is diesel exhaust has been identified 4 as the dominant source of toxic emissions in this state, and 5 from our perspective that's a crisis. 6 You know, I feel sometimes our society is on 7 Novocaine and we don't see crises when they're right in 8 front of us. And when 70 percent of the toxic air pollution 9 in our state is coming from one type of fuel or one type of 10 engine, that's something we have to move aggressively to 11 change. 12 And our biggest beef with the proposal before you 13 is not its content, but its timing, and we don't feel that 14 this agency is moving quickly enough to address what we 15 perceive to be a public health crisis. 16 As identified in 1998 as a toxic air contaminant, 17 causes cancer, and we're really taking 10 to 12 years to get 18 a handle on it. 19 And some people think that's too aggressive, some 20 people think that's moving too fast, but when we're talking 21 about the air we breathe, we don't think it's moving quick 22 enough. 23 Couple of things I wanted to point out. 24 It's not a question of technical or technology or 25 feasibility. We've heard plenty of testimony about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 outliers, but the examples that were given about pieces of 2 equipment that don't operate in ag or in construction, I 3 mean the fact is we wouldn't be the number one ag producer 4 in the state if we weren't using some of this equipment a 5 lot. We wouldn't be building the most houses in the country 6 if we weren't using some of the construction equipment a 7 lot. We're shouldn't be focusing on the outliers. 8 We want to, just like the businesses, they want to 9 spend their money where they're going to be the most bang 10 for the buck. The environmental community feels the same 11 way. Why spend billions on outliers when we can focus on 12 segments that are clearly the majority of the problem. 13 And that's where we feel we should be moving 14 aggressively. 15 We heard plenty of the testimony about the fuel 16 issue. In fact, the business interests are arguing that 17 until we have the fuel we shouldn't move ahead with 18 particulates, and that's a reason for delay. 19 We actually would argue the other way, that that's 20 a justification for accelerating the time line to roll out 21 low-sulfur diesel. It is doable. It is a question of cost, 22 and it is not a question of technology or feasibility. It's 23 a question of political will. 24 We should be moving this more quickly, given the 25 crisis that we have with air quality in the state. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 The last point I want to make on the perspective 2 is where we should be going as this -- where this agency 3 should be going, where the state should be going relative to 4 pollution. 5 The future is about pollution prevention. It is 6 not about pollution control. 7 Pollution control makes sense today because we're 8 in a crisis mode. It does not make sense 20 years from now. 9 We should be doing everything we can to make sure that 20 10 years from now all of our sources of transportation or power 11 generation are not generating any pollution that needs to be 12 trapped. 13 Today traps make sense, but we need to be pushing 14 alternative fuels and alternative technologies that are 15 inherently cleaner, so we don't need traps 15 or 20 years 16 from now. 17 Couple of specific points. 18 You received a letter, as the staff did, and my 19 colleagues from NRDC and American Lung will emphasize these, 20 but I'll just mention them, these specific things that we're 21 requesting the board to look at and request the staff to 22 come back with in 90 days is the alternative fuel, zero 23 emissions vehicle component for new vehicles. This plan 24 focuses on retrofits, the fleet that's on the road. We need 25 the piece about the future of the vehicles. That's critical PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 to addressing this problem comprehensively. 2 Accelerate the low-sulfur fuel time line. We do 3 firmly believe that it can be done a couple years before 4 this agency is currently proposing. 5 And then finally, we think it's critical that if 6 we're going to deploy these technologies, let's ensure that 7 they work over time, let's make sure we have an audit 8 provision or an in-use test provision so over time we are 9 making sure that they're not only staying on the equipment 10 once installed, but that they're working, because why 11 require anybody to spend this money if we're not going to be 12 there to make sure that it's working. 13 With that, thank you very much for your time. 14 CHAIRMAN LLOYD: I think that's the nub of the 15 issue there, Tim, your last two points, balancing those two. 16 I think that's what staff is trying to do. It's obviously a 17 very careful one. 18 Questions from the board, comments? 19 Thank you very much. 20 MR. CARMICHAEL: Thank you. 21 CHAIRMAN LLOYD: David Smith is going to tell us 22 why we can or cannot have low-sulfur diesel quickly. 23 MR. SMITH: Mr. Chairman, you can have it today, 24 if -- I'll give you the name and phone number of the Arco 25 employee to call. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 But today I am Dave Smith, and I'm pleased to be 2 here before the board testifying on behalf of the Western 3 States Petroleum Association. 4 We have submitted written comments to you, and 5 I'll just briefly go over the highlights of them. 6 I'm pleased to be here to endorse the overall plan 7 and the very significant reductions in particulate matter 8 that's associated with the plan. 9 We support the establishment of new regulatory 10 standards for new on-road, off-road and stationary engines 11 and the requirement to produce low-sulfur diesel fuel. 12 Specifically, WSPA members have voluntarily, as 13 you've heard, provide low-sulfur diesel fuel early. Based 14 on information that the South Coast provided to us lately, 15 based on their confidential discussions with our individual 16 members, we understand that there's approximately 30,000 17 barrels a day of low-sulfur diesel fuel currently available 18 in the state. 19 My company, BP or Arco, is producing, is willing 20 to commit to make 20,000 barrels per day of that material 21 available today and we've signed contracts with people to 22 provide that fuel already. 23 CHAIRMAN LLOYD: How much of that, compare with, 24 get an idea of the percentage, how much is used in the day 25 per day, how many barrels per day, so we can get a feel for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 that. 2 MR. SMITH: I think the total demand is, what, 3 around 250, 200. 4 MR. SIMEROTH: This is Dean Simeroth, staff. 5 On- and off-road is 200,000 a day on average. The 6 on-road range is about three quarters of that, 7 approximately. 8 MR. SMITH: So around 200,000 barrels a day of 9 diesel. 10 CHAIRMAN LLOYD: This is about 10 to 15 percent 11 available. 12 MR. SMITH: Right. 13 In the South Coast our commitment to make 20,000 14 barrels a day for Arco would cover all of the public fleets 15 that Dr. Burke's fleet rules would have controlled, 16 significantly more than that actually. 17 We have a couple important comments that are not 18 critical to our support of your plan. 19 We are concerned about the conservative exposure 20 assumptions included in the plan. 21 We look forward to working with the staff as they 22 look to various individual rules to try to better 23 characterize the risks, the potential risks, that people are 24 exposed to as you develop those rules. 25 We, although not a real significant use on within PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 our own companies, we are a bit concerned of the focus on 2 the emergency standby engines, a focus on that. These 3 engines are not used a long time, they have a critical 4 service in emergency conditions, there's a wide variety of 5 sizes, and we just encourage the board and the staff to 6 consider moving too quickly on this particular source, and 7 the problems that might result from that. 8 And finally, as the plan looks at alternative fuel 9 engines, we'd encourage and look towards the future rules, 10 to influence a discussion of the potential toxic risk from 11 those engines. 12 The alternative fueled engines do have emissions 13 of listed toxic air contaminants, and it would be 14 appropriate to be included in the assessment as you move 15 forward with whatever control regulations. 16 Thank you. And we're pleased to support this plan 17 and its adoption. 18 CHAIRMAN LLOYD: Thank you very much. 19 Thank you. 20 Janet Hathaway, Bonnie Holmes Gen and Bruce 21 Bertelsen. 22 MS. HATHAWAY: Thank you, Mr. Chairman, members of 23 the board. My name is Janet Hathaway and I'm representing 24 the Natural Resources Defense Council on this matter. 25 I want to first just applaud this important plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 It's so important for public health, as so many speakers 2 have said, but, as you know, because of the high cancer risk 3 from diesel in our air, and because of the extreme long 4 longevity of the engines that are out there, we simply have 5 to move with retrofit technologies in order to reduce that 6 risk. 7 It's extremely impressive that you're taking this 8 step, because it is a can of worms in a lot of the details. 9 The details are difficult and it's going to take a lot of 10 people working together to make this all a success. 11 But when you have the California Trucking 12 Association and WSPA standing up before you and saying that 13 they're going to be a partner in this success, and NRDC can 14 join in with that, it's kind of a wonderful moment and quite 15 unusual. It is a little weird too. Yeah. 16 BOARD MEMBER DeSAULNIER: Sorry. Almost surreal. 17 MS. HATHAWAY: The one area that I think you would 18 expect us to emphasize, and we do have to emphasize, is that 19 we need to consider how much faster we can move than the 20 plan currently suggests. 21 So many people have come before you and said that 22 the low-sulfur fuel is a critical element, and it does 23 appear to us that moving faster than 2006 is possible. The 24 costs do not appear to be prohibitive and especially if we 25 can move into the fleets that are most problematic in terms PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 of the imposing the greatest risk, the health risk to the 2 public, we can make a lot of progress before 2006 time 3 frame. 4 And finally I just want to say that one element 5 that is very important to NRDC and to the environmental 6 community generally is that California have an energy 7 diversity and a fuels plan that is comprehensive, and that's 8 something that we're really missing right now, and I know 9 that ARB staff is equal to the task of looking at how we can 10 protect public health and give ourselves some fuel diversity 11 that is really going to protect us economically, as well as 12 environmentally, and that's something that's going to take 13 some time, but I think that with your leadership the future 14 generations of Californians would really benefit. 15 There's too much of an ad hoc nature to how we're 16 proceeding, and I think that that leaves us very vulnerable 17 to the kinds of price shocks that we're seeing right now, 18 but also to making mistakes about where we can get the 19 greatest public health benefit. 20 So I just urge you to see if that's a possibility 21 in the near term. 22 And thank you very much for this plan. I hope you 23 do endorse it and move forward with it even more quickly 24 than the plan currently suggests. 25 CHAIRMAN LLOYD: Thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 Yes, Dr. Burke. 2 BOARD MEMBER BURKE: I'd like to ask staff since 3 it's about 175,000 barrels a day need in the state, if 4 they've calculated, we just permitted a start-up of an older 5 refinery which does 50,000 barrels a day, and it's my 6 understanding that they will be able to produce low-sulfur 7 fuel also, and if that would enable us to have supply 8 earlier, as many people obviously want to do, I think 9 that -- I don't know if it's already been taken into your 10 calculations or if not, or if it hasn't maybe it should be. 11 MR. VENTURINI: Dr. Burke, we are aware of this 12 refinery that's trying to start up again, and certainly any 13 additional fuel that can come into the system, although it's 14 a small refinery it would be a fairly small increment, but 15 any additional fuel, particularly low-sulfur, is certainly 16 going to be very helpful. 17 I think one of the important things we're going to 18 have to work closely on is to assure that we will continue 19 to be able to obtain fuel from refineries outside of 20 California, because demand has risen so much in the state 21 that we're basically routinely having to import fuel, and I 22 think that's the main thing that we'll be looking at. 23 CHAIRMAN LLOYD: I think again that was one of the 24 thrusts that we heard from Janet here, and some of the 25 others, that because of that we need to look at this energy PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 diversity, fuel diversity issue, and I'll be coming back to 2 that a little bit on that. 3 Thank you. 4 Bonnie Holmes Gen, Bruce Bertelsen, and then 5 Catherine Nyberg. 6 MS. HOLMES GEN: Thank you, Chairman, and members 7 of the board for the opportunity to testify. I'm Bonnie 8 Holmes Gen with the American Lung Association of California. 9 And I'm really pleased to be here today to be part 10 of this important action. After the ten years of study and 11 the two years of workshops and hard work on this, it's 12 really exciting to see the board taking action on diesel as 13 a toxic air contaminant. 14 And so first I want to applaud the action that 15 you're about to take today, and to say that this is a 16 ground-breaking plan and it is essential to improving public 17 health, to reducing cancer risk and reducing asthma attacks 18 in California. 19 And I want to remind you that the breathing public 20 is acutely aware of the health problems posed by diesel 21 exhaust, and the public wants strong action from the state 22 to substantially reduce and eventually eliminate this risk. 23 The breathers are with you in this plan. 24 There was a slide that flashed by really quickly 25 in your staff presentation which showed that diesel accounts PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 for 70 percent of the cancer risk in the state, and that 2 slide went by very quickly, and I know that every time I 3 tell somebody from the public about that figure, they are 4 astounded. This demonstrates the very high priority that we 5 need to place on diesel control measures, both retrofit and 6 replacement. 7 We do agree with the specific comments that have 8 been presented by NRDC and the Coalition for Clean Air. 9 Number one, we want to see aggressive pursuit of 10 retrofit measures. You have a 2002 to 2008 stretch of time 11 in your plan, and we believe that you need to move forward 12 as quickly as possible to deliver health benefits. We hope 13 that the majority of these measures can be adopted to be 14 implemented in the early years, and as part of that we're 15 very concerned about this issue of low-sulfur fuel, and 16 there has been extensive discussion of that. 17 And we would like to see low-sulfur fuel rule 18 moved down to 2004, but at least if your board could at 19 least include the option of early introduction in your plan, 20 you have a 2005 to 6, the plan states 2006, at least if the 21 plan could provide the option of early introduction to 2004, 22 it sounds like there's supplies available, refineries are 23 moving ahead on this, and if your staff could evaluate in 24 the next few months the possibility of moving that deadline 25 up to 2004, I think that would be very beneficial to this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 plan. 2 We strongly support the development of alternative 3 fuels, and we've asked your board to include as part of your 4 resolution a separate direction to staff to come back with 5 an alternative fuels plan to specifically identify measures 6 for promoting, acquisition of alternative fuels and zero 7 emissions technologies and developing the infrastructure to 8 develop those alternative fuels. 9 We do believe it's important to fuel diversity, 10 it's important to emissions benefits, it's important to 11 public health. 12 And finally, we are strongly in support of 13 developing a comprehensive in-use component to do some 14 real-world testing, and I know that you're also very aware 15 of this, to ensure that effectiveness of these retrofit 16 technologies in the real-world driving conditions, on the 17 road as they're in use. 18 Your board has spent ten years doing an exhaustive 19 study of the problem, as I stated up front, another two 20 years carefully studying the control options. At this point 21 it's time to act. The public is tired of choking on diesel 22 soot. Everybody knows how difficult it is to drive behind a 23 diesel truck or bus, to stand on the corner and have a 24 diesel bus drive up and spew out those toxic contaminants 25 into the air that you're breathing. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 The public is calling on you to take action and 2 move quickly to adopt this plan. 3 Unfortunately, you're not really hearing from all 4 the members of the public who feel strongly about this, and 5 be assured that there is strong sentiment in the public that 6 the board should take strong action today and move ahead on 7 this plan. 8 CHAIRMAN LLOYD: Thank you very much. 9 Question. 10 Thank you. 11 Bruce Bertelsen, then Catherine Nyberg, then Terry 12 Ellis. 13 MR. BERTELSEN: Good afternoon, Chairman Lloyd, 14 members of the board. For the record my name is Bruce 15 Bertelsen, and I'm the executive director of the 16 Manufacturers of Emission Controls Association. 17 With me today is John Mooney, president of MECA. 18 We are extremely -- I have some pictures of filter 19 systems and different applications, which we can run 20 through, but I think in the interest of time, I'm going to 21 be fairly brief. 22 We're extremely pleased to be here today, and 23 express our strong support for ARB's initiative. We think 24 the plan establishes the parameters for an effective, 25 comprehensive program that is going to yield extremely PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 important and significant health benefits. 2 We recognize that the action by the board today is 3 only the first step, but it's truly a historic step. 4 We would also like to commend the members of the 5 staff for their thorough analysis of the issues, for their 6 willingness to reach out to all the interested parties and 7 hear different views and opinions. We've appreciated the 8 opportunity of working with staff over the past two years. 9 Just a little bit of background on MECA. We're an 10 association of the world's leading manufacturers of 11 emissions control technology for on-road, off-road and 12 stationary engines, an industry that is made up of both 13 large companies with a lot of experience, small companies, 14 start-up companies, a true mix. 15 But as an industry we have over 30 years of 16 experience and a well-established track record. 17 Increasingly, our members and the number of 18 members are focusing on diesel emissions control as that 19 becomes an important area of attention. 20 But I would be remiss if I didn't mention the fact 21 that our companies are also involved in controlling 22 emissions from gasoline-fueled vehicles, we're active in the 23 alternative fuels area, we have companies that are 24 developing components for advanced technologies such as fuel 25 cells, so we really cover the full range. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 I'd like to focus my comments here today on the 2 issue of controlling emissions from diesel engines. 3 I'd like to make a couple of general comments. 4 We've submitted a written statement and I'm not 5 going to go through that word for word, but I would like to 6 make a couple of general comments, and I think perhaps maybe 7 even more importantly, stand here before you today and 8 pledge our support, our industry support, to work with the 9 board and other interested parties to make this program a 10 truly great success. 11 We recognize as an industry that this is an 12 opportunity for us. It also presents a challenge and it 13 also is a responsibility for us to deliver. 14 And I'm here to tell you today that we stand ready 15 as an industry ready to do that. 16 With regard to controlling emissions from diesel 17 engines, there are technologies that are available today. 18 Diesel particulate filters, and we've heard a lot 19 of discussion about that, that's a demonstrated commercially 20 available technology. 21 As the staff indicated, it's been demonstrated to 22 control 90 percent or more of PM mass emissions using a 23 low-sulfur fuel. Toxic hydrocarbons can be controlled up to 24 90 percent or more. Filters are extremely effective in 25 controlling the ultra fine carbon-based particulates, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 reductions up to 99 plus percent, tremendous emission 2 control. 3 In terms of operation experience, that experience 4 is growing rapidly. I think the staff referenced the fact 5 that there are already 40,000 diesel engines worldwide 6 equipped with filters, and these represent the full range of 7 engine applications. 8 The durability of this technology, particularly 9 where it's used with low-sulfur fuel, has been outstanding. 10 There have been a number of filter systems 11 operating in Scandinavia, primarily in Sweden, where there's 12 very low-sulfur fuel. Some of these engines have 13 accumulated mileages up to 600,000 kilometers, that's about 14 350,000 miles if my math is correct, maintaining very very 15 high emission control. 16 Mechanical integrity, an issue that was raised by 17 one of the previous speakers. Many of the first 18 applications of filter technology were on construction and 19 mining equipment, extraordinarily rigorous operating, and 20 these devices maintained very very good, excellent 21 mechanical integrity. 22 I think the other thing that's important to keep 23 in mind is even though this technology is commercially 24 available today, it continues to evolve. Our companies are 25 spending literally millions of dollars to improve diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 control technologies, and we will continue that effort. 2 Been a lot of discussion today about low-sulfur 3 fuel. We were strongly in support of your efforts to 4 establish a low-sulfur limit of 15 ppm. It's a critical 5 part of the emission control strategy and system. It will 6 allow maximum control efficiencies. It will allow maximum 7 application of the catalyzed filter technologies. And it 8 will help ensure the reliability and durable operation of 9 the systems. 10 BOARD MEMBER C.H. FRIEDMAN: If you could 11 conclude, please. 12 MR. BERTELSEN: Just a quick note on retrofit. 13 When we were looking at retrofitting a large size 14 of engines, it's important to have careful planning and 15 careful implementation. As the staff and others have 16 spoken, there are engineering considerations that must be 17 taken into consideration when we are looking at retrofit, 18 and that's why we think the concept of a advisory committee 19 that has been established by ARB is extremely important, and 20 we strongly believe that working together retrofit will 21 prove to be an extraordinarily effective strategy, and we 22 think the overall program will be a great success. 23 Thank you. 24 BOARD MEMBER C.H. FRIEDMAN: Thank you, 25 Mr. Bertelsen. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 Any questions, comments? 2 MR. BERTELSEN: Thank you. 3 BOARD MEMBER C.H. FRIEDMAN: Thank you. 4 Next speaker I believe is Catherine Nyberg. 5 MS. NYBERG: Good afternoon. My name is Catherine 6 Nyberg and I'm with the Agricultural Council of California, 7 and we represent grower-owned cooperatives throughout 8 California. 9 I'll be brief with my comments today. 10 Our concerns with the diesel risk reduction plan 11 have already been articulated by previous speakers this 12 afternoon, and they include the seasonality issue with our 13 industry, and also the economic viability associated with 14 the high cost of retrofitting. 15 We look forward to working with the board on 16 developing more cost-efficient and incentive-based voluntary 17 measures. 18 Thank you. 19 CHAIRMAN LLOYD: Thank you very much. 20 Our next speaker is Terry Ellis and Duane 21 Chamberlain and Louie Brown. 22 MR. ELLIS: This one work? Good morning, members 23 of the board, Mr. Chairman, staff. 24 I'd be remiss if I didn't start off by saying that 25 diesel issues are my life and have given me eternal job PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 security. 2 CHAIRMAN LLOYD: This isn't Terry Ellis? 3 MR. ELLIS: Yes, it is. 4 CHAIRMAN LLOYD: It is? You speaking on behalf of 5 WSPA? 6 MR. ELLIS: On behalf of COPS, which is a WSPA 7 strategic alliance, and on behalf of Gary Jones Company, 8 which is a portable equipment engine user, and then on 9 behalf of the CCTS, which is a diesel engine technology, the 10 only one pre-certified by this agency to retrofit diesel 11 engines. 12 CHAIRMAN LLOYD: I was -- 13 MR. ELLIS: Do I get 15 minutes because I 14 represent three? 15 CHAIRMAN LLOYD: I was bit confused because WSPA 16 has testified in support, and you are coming under WSPA as 17 opposing, so I wasn't sure. 18 MR. ELLIS: You have two choices out there, and 19 I'm sort of like in agreement with Mike Lewis, you've got 20 oppose and support. I want a bright red one that says 21 positive solutions. 22 So these are critical comments, if you want to 23 call it as such. 24 But to get back to the last eight years, I kind of 25 feel like the fourth floor is my second home. Peter and his PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 staff and under the direction of Mike Kenny and before that 2 Jim Boyd, have put up with me and tolerated me and my voice 3 and opinions on diesel engines for many many years, almost a 4 decade now. 5 But the three hats I'm wearing this morning, first 6 one is COPS, Coalition of Petroleum Services. What we do is 7 we provide portable equipment, diesel engine contracting 8 services to all the major operators and independent 9 operators in the state. We help them find, produce and 10 refine crude oil and natural gas into your homes, your cars. 11 And what we do is we participate throughout. And 12 COPS was formed in the formation of the portable equipment 13 rule, many years ago. So we've been working on cutting edge 14 of diesel issues for a long time. 15 We are in full support of what CIAQC said earlier 16 and would like to participate because we've addressed the 17 issue more than a year and a half ago to be a part of 18 finding sound science and testing on a stationary and 19 portable equipment side before, long before, we revisit the 20 portable equipment rule. 21 Portable equipment rule, as originally wrote, 22 through CAPCOA, by myself, and then furthered by CIAQC, 23 through the Assembly, because of the air districts not 24 adopting as proposed portable equipment, we have come to the 25 conclusion that testing is necessary in order to validate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 the technologies that you're going to add on to existing 2 diesel engines in the portable equipment realm. 3 Sound science has to be part of that before we 4 revisit. Portable equipment took the lead and put in place 5 voluntary controls long before we were required to on diesel 6 IC engines. 7 At Gary Drilling, we have 350 engines. I'm here 8 after the board hearings today to revisit that and re-permit 9 all of my engines. We were the first company to take our 10 engines and we were beginning -- we allowed the students to 11 take our equipment, run through the process, learn how to 12 permit in the portable equipment program, so we've been on 13 the cutting edge there also. 14 But bottom line is our sister company, Clean Can 15 Technologies, has come up with a technology patented many 16 times over in thousands of uses, buses and portable 17 equipment, stationary sources, certified or pre-certified, 18 as Mr. Martin would like to say, before the governing board, 19 by this agency as a retrofit, viable retrofit technology. 20 We would like, not to announce today, but I was 21 hoping Dr. Burke was here, because he said it earlier, it's 22 a family-owned company, we have spent three and a half 23 million dollars on research and development, another $2 24 million retrofitting all the portable equipment at Gary 25 Drilling Company, but more importantly another million PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 dollars on inventory, and I'm pretty much here to announce 2 today that we're broke, and we're going out of business with 3 the only certified technology by this agency, because of the 4 lack of funding. 5 Three years in row we've been turned around ICAT 6 to go into marine sources, locomotive sources, mobile 7 sources. They're out of money. They sold the drilling side 8 of the business in April. They took the remaining 9 inventory, they have tried to make it a go and they made the 10 decision to go out of business. 11 So the only verifiable retrofit technology 12 certified again by this agency probably will no longer exist 13 in the near future. 14 We would like to be a part of the testing that 15 goes on on stationary sources and portable equipment long 16 before we revisit that role, because we were on the cutting 17 edge. We were there long before we were required to be 18 there. 19 So I would hope that you would take those comments 20 into consideration that before you move and attach something 21 to the end of an exhaust stream, and the fuel is a critical 22 component, we all agree on that, and I do support that end 23 of it, but we want to know what that technology will do in 24 our applications, which are cyclic and have not proven 25 themselves in all applications that we're approaching here PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 by these risk management guidelines. 2 So I would ask you to consider long before we 3 revisit, because I never thought I'd agree with the Natural 4 Resources Defense Council and the Coalition for Clean Air, 5 but portable equipment is that little tiny piece of the pie, 6 and they want, CAPCOA wants to move it up ahead of schedule 7 and they want to revisit it, but I don't think I can support 8 that long before we have this science, to say that those 9 devices work in those applications. 10 So I'd ask your support in those issues, please. 11 CHAIRMAN LLOYD: Thank you very much. 12 Questions or comments? 13 Thank you. 14 Duane Chamberlain, Louie Brown, then Dr. Bunn. 15 MR. CHAMBERLAIN: Thank you. I'm Duane 16 Chamberlain, representing Chamberlain Farms, and also 17 president of Yolo County Farm Bureau. 18 First thing I'd like to comment is that at the 19 beginning of this meeting you mentioned that all these open 20 meetings had already been held, 30, I heard the number 30, 21 60 once. I've never heard of any public meetings that I can 22 come to. If this has happened, we have not been notified. 23 I've talked to three or four farmers in the last 24 few days that are very upset at these rules. Two of them 25 have said flat out we're going out of farming if they push PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 this through. That's enough is enough. 2 CHAIRMAN LLOYD: Just a clarification there, sir. 3 Remember, these are not rules today. This is a plan which 4 will be followed up by rules, and there will be 5 opportunities with the rulemaking process and certainly 6 we'll make sure that we have an outreach to the farmers. 7 MR. CHAMBERLAIN: Okay. This is what I was going 8 to suggest next is you're leading up to, you send somebody 9 to my board of directors meeting and talk to the farmers. 10 You go out on the ranches where we're farming and talk to 11 these people. 12 Now, what I'm going to start with is I agree with 13 Pete Hunn that farming is already in a disaster state, and 14 that's not your fault but this can tip -- it's like one of 15 the letters you'll get from one of my constituents, or 16 whatever you call him, it's the last straw. 17 Now, what I would like to bring your attention to 18 is fire hazard as one thing. I bale hay and straw. We just 19 finished 15,000 acres. We didn't start one fire this year. 20 About 20 years ago when we got into catalytic 21 convertor mess, one day I just had enough, we burned up 22 150-acre wheat field and a brand new pickup, took all my 23 vehicles back to the shop, took the catalytic convertors 24 off, I said I don't care what the damn laws are, we're not 25 running with catalytic convertors. They were a stupid PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 design. 2 Now we've gone back some, but every machine that I 3 have in the field is diesel, and I have about eight diesel 4 pickups. I have about five newer gasolines. One seemed to 5 have finally solved the problems. Get these problems solved 6 before you put them out in the field. I don't want to be 7 out there starting fires. 8 Another thing, just think about as you put the 9 farmers out of business, slowly but surely. I farm 5,000 10 acres. I use 50 diesel engines. For every diesel engine, I 11 farm 100 acres. You can put that diesel engine out, but 12 when I sell that 100 acres, you're going to have 500 homes 13 on it. That's a thousand cars sitting there. How can you 14 even consider the air pollution difference? These 15 agriculture engines way out in the rural areas are not your 16 air pollution problem, particulate or whatever. 17 Just as I come across the causeway on a hot 18 sunny -- hot afternoon from Yolo County, there's that big 19 brown cloud over Sacramento. And maybe it's diesel engines, 20 but it's sure is not from my diesel engines out running out 21 in the country. 22 And same thing, I flew into LAX the other day. As 23 we're landing the plane, people around me are commenting, 24 oh, look at that big brown cloud down there. 25 I was born in LA and I don't like the cities like PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 that, but the cities are air pollution, making the air 2 pollution, not us farmers out there. 3 And this is just ridiculous too. To go on a 4 comprehensive deal all-diesel engines, it's already been 5 brought up, I have some diesel engines -- I have a diesel 6 engine sitting in my shop that doesn't even run, but it's 7 there in case we run out of water and it has to be put on a 8 pump. You gonna have them spend money to retrofit that 9 engine? I have other tractors that are old, that only run 10 maybe a ditcher, maybe a hundred hours a year. 11 I have other engines that run a lot. They're new. 12 I spent a lot of money. 13 I've even gone into your retrofit program, which 14 is another thing, that the last two engines that they ran 15 out of money, so they never paid for their share. 16 So what I had to do, my Cummins dealer, do you 17 think he's -- I can go down and say, geez, sorry, the state 18 didn't pay their share, well just forget it. I paid it. So 19 I don't think a lot of your programs are thought through and 20 finished all the way. 21 CHAIRMAN LLOYD: Are you, in that case, you 22 talking about the Moyer program there? 23 MR. CHAMBERLAIN: I think that's what -- I heard 24 that name come up. I don't know the name it was, but I know 25 that the last two engines they ran out of money in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 program for some reason. 2 CHAIRMAN LLOYD: You were promised money and you 3 didn't get it? 4 MR. CHAMBERLAIN: Yes. 5 I've done -- I've retrofitted four-cylinder 6 engines and two six-cylinder, and one of the fours and one 7 of the six, it was some deal where they ran out of money in 8 the program. 9 CHAIRMAN LLOYD: Maybe staff could take a look at 10 that. 11 MR. CHAMBERLAIN: Yeah. This is kind of 12 interesting. 13 Anyhow, another thing, I might go back to is this 14 meeting is at a very bad time for the farmers. We're in the 15 middle of harvest. It be a lot better if you're going to 16 have these meetings if you could have them in like in 17 January or February, because -- and it's very difficult to 18 get farmers to come in to Sacramento anyhow. 19 Get out in the field. I'd like to have one of you 20 people come to my Farm Bureau board of directors meeting, 21 and talk to us, and tell us what's going on, because maybe 22 you'll get some support. You're not going to get any 23 support the way it is now. I've had people call me just 24 really really unhappy. 25 CHAIRMAN LLOYD: I think staff has made a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 commitment to do that. 2 MR. CHAMBERLAIN: Thank you. 3 CHAIRMAN LLOYD: Thank you. Thank you very much. 4 Mr. Lou Brown, Dr. Bunn and Ted Holcombe. 5 MR. BROWN: Good afternoon, Mr. Chairman. Thank 6 you. 7 My name is Louie Brown and I'm here on behalf of 8 the California Cotton Growers and Ginners Associations. We 9 represent over 2200 cotton growers throughout the State of 10 California and over 80 gins, cotton gins in the State of 11 California. 12 And I have to prefer this, I signed the purple 13 card that said opposition, and I'm like some of the others, 14 I wasn't necessarily opposed, I'm not necessarily all in 15 support. I'm right there in the middle. So if we could 16 have had a card that said maybe, I could have signed that. 17 Because the way I'd like to lead this is to talk 18 about a couple of the questions that we specifically have in 19 regard to irrigation pumps and standby pumps that are used 20 in agriculture. 21 For one, we'd like to work with staff to get a 22 clarification on the number we're actually working with. 23 Page seven of the report states that there's 4800 engines in 24 the prime engine classification. On page eight it said that 25 there's somewhere around 5,000 engines. Later in Appendix PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 2, page 41, it says that there's 7,000 irrigation pumps in 2 the State of California of which greater than 90 percent are 3 run off electricity, which would mean, I take to infer 4 there's 700 irrigation pumps running on diesel fuel. 5 It's later said in Appendix 7, page five, that 6 two-thirds of the prime engines are irrigation pumps. 7 I'm not very good in math, but that leads me to a 8 number of somewhere about 1100 prime engines, and so I'm 9 thinking if we can get some type of clarification. 10 And we're more than willing and interested to work 11 with staff to kind of get a handle on what we're actually 12 looking at, because if there's a difference between 7,000 13 irrigation pumps and 700 irrigation pumps, I think that's a 14 big discrepancy that the agricultural industry wants to know 15 more about, so we really have a better feel what the 16 magnitude of the problem is. 17 Secondly, in dealing with the risk scenario as it 18 relates to irrigation pumps, the risk scenario uses urban 19 meteorological models. 20 In the staff report it says that roughly 21 two-thirds or more than two-thirds of the irrigation pumps 22 in the State of California are found within the Sacramento 23 and San Joaquin Valleys. 24 We think there's an inconsistency here. If we're 25 going to look at the risk scenario of an irrigation pump, we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 think it's only logical that you use the metrological data 2 that is consistent with the scenarios where we're going to 3 find a majority of those engines. 4 Along with that, it states that the point of 5 maximum impact for an irrigation pump, and they use the 6 figure 20 meters, in the San Joaquin and Sacramento Valleys, 7 it's going to be a few and far between that you find 8 irrigation pumps within 20 meters of a bus stop, a church, a 9 school or even a residence, so we think that some of these 10 numbers can be worked with in particular to ag irrigation 11 pumps, so that we can get a better feel on the risk 12 scenario. 13 And we've worked with the staff on this and are 14 willing to work with them more to get a better picture on 15 this. 16 My third and final point is basically our support 17 for a continued support for the Carl Moyer program. We 18 realize that additional funding was made available for that 19 program this year. We continue to support that. It is an 20 important program for production agriculture. I'm sure that 21 there are others out there like Mr. Chamberlain that have 22 had some frustration with the program, but all in all it's a 23 program that has shown some good benefits for production 24 agriculture. 25 The reason that this program is so important for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 production agriculture, it's been said once, and I'd like to 2 finish up because I think I might be the last representative 3 from the agriculture this afternoon, is that growers cannot 4 pass on the cost that come with a retrofit or that come with 5 new diesel fuel. It's stated in the report that new fuel 6 may cost as little as five cents a gallon. 7 Well, the one thing we're facing in agriculture 8 this day with the higher cost in diesel fuel is it is the 9 grower that is paying their own diesel fuel bills, but 10 they're also receiving surcharge notices from the people 11 that are supplying them fertilizers, people that are hauling 12 their produce from the farm to processor, saying that we're 13 getting higher diesel fuel bills, we can't cover those, 14 they're not in our budget, so we're passing that on to you. 15 The grower in turn is not going to turn around and 16 send a surcharge notice to the grocery store, to the 17 consumer, to the processor for that matter. 18 So we're looking at agriculture at a severe point 19 in time where they're receiving low cost for their products, 20 higher input costs, not only because of diesel fuel, but for 21 a myriad of reasons. 22 When we look at the economic impact on 23 agriculture, please consider the impact that that has even 24 if it's as minuscule as five cents a gallon. 25 I'm over time. I thank you very much. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 CHAIRMAN LLOYD: Thank you very much. 2 Questions, comments? 3 Yes, Mr. Calhoun. 4 BOARD MEMBER CALHOUN: I thought I heard you say 5 that the growers can't pass off their costs. I guess I 6 don't quite understand that. They're running a business; 7 aren't they? 8 MR. BROWN: They are running a business. The very 9 first day of ag economics 101 when I was at Cal Poly San 10 Luis Obispo they said the first lesson you need to know 11 about ag economics is that production agriculture farmers 12 are price takers, they're not price makers. 13 And so when we are dealing with fewer and fewer 14 buyers in the market, say, processing tomatoes these days 15 and actually just produce in general, when you're looking at 16 11 buyers nationwide that are buying all the produce in this 17 country, I can't afford to go out and tell Raley's, Safeway, 18 or whoever it may be, that this is the price that I'm going 19 to demand for my product. 20 They in turn are telling us the price that they're 21 going to buy our product from. And that goes across the 22 spectrum in agriculture. It's an issue that is very 23 cyclical. And on good years when either supply is low and 24 demand is high or vice versa, we'll see better prices, but 25 when it comes to the actual opportunity of telling a buyer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 what it is that we need for them to pay for our crops, 2 that's not an option. 3 CHAIRMAN LLOYD: Thank you. Thank you very much. 4 Just announcement to my colleagues here, lunch is 5 served at the back, so we're going to work through lunch. 6 And we can hear in the back as well. 7 Dr. Bunn, then Ted Holcombe, then Sean Edgar. 8 DR. BUNN: I am Bill Bunn with International Truck 9 and Engine. 10 I would like to assure the board that 11 International is committed to clean air and diesel 12 technology, and we appreciate the continued recognition of 13 the category of diesel engines, and we will work with ARB to 14 build environmentally sound, fuel-efficient, safe diesel 15 engines. 16 However, International does not support an RRP 17 based on the current California unit risk value. 18 However, this does not mean that we will not 19 reduce particulate matter, we will not reduce NOx and other 20 emissions from our engines. 21 It does mean that any program cannot be based on a 22 single quantitative risk estimate. 23 We would ask the ARB to reject a risk-based 24 mandatory program and address the across-the-board needs for 25 this retrofit, and also look carefully at each category of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 retrofit in terms of technical and economic feasibility. 2 I also request ARB's support and cooperation in 3 two areas where I think increased scientific analysis is 4 needed. 5 First, in the recent South Coast proposal to 6 compare the risk of engine technology, the diesel unit risk 7 factor was used for the diesel particles, and zero risk 8 assumed for the particles of other technologies. 9 To my knowledge, there's no data that shows any 10 potential risk is unique to one type of particle. 11 OEHHA and ARB sent a letter recommending that URF 12 not be utilized to determine potential risk in this 13 situation, rather that exposure be reduced by another method 14 such as reducing the particles of either technology. 15 This approach leads to a practical approach that's 16 based on feasibility. 17 I hope and assume this approach will be utilized 18 by ARB, when these decisions may be faced in the future. 19 Second, potential risk in this particular case is 20 multiplied by unit risk value times a micrograms of diesel 21 particulate matter. But what is diesel particulate matter? 22 In the Garshick study on which the URF is based, a 23 small fraction of the particles breathed by railroad workers 24 in the '50s and '60s were measured as a surrogate for all of 25 the risks. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 In recent calculations in South Coast and also 2 here, all particles or all particles and chemicals in the 3 air were measured. These measurements are somewhat like 4 apples and oranges and I believe it overestimates the risk 5 by two to ten times. 6 I would ask ARB and OEHHA to work with academic 7 and industry scientists to clarify this issue, and ARB to 8 incorporate these results in future regulations. 9 Finally, I would ask for a commitment from ARB to 10 join us to fund research to study the potential health 11 effects, any potential health effects, and guide the 12 development of safe, environmentally sound technology. 13 For example, we could can set aside one or two 14 percent of the cost of the retrofit for research. This 15 would make a major difference in our knowledge, and with the 16 scientific truth we can move beyond making major economic 17 decisions without adequate or accurate scientific studies. 18 Thank you very much, Dr. Bunn. 19 CHAIRMAN LLOYD: Thank you very much. 20 Next, Ted Holcombe, Sean Edgar and Paul Ryan. 21 MR. HOLCOMBE: Chairman Lloyd, board members, 22 staff and attendees, I'm Ted Holcombe, a senior 23 environmental policy engineer with Pacific Gas and Electric 24 Company. 25 Diesel exhaust particulate contributes about 70 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 percent of the cancer risk in California from the inhalation 2 of anthropogenic emissions. We support efforts to control 3 diesel particulate emissions but recommend a more direct 4 focus on actual risk. 5 As you know, there might not be enough electrical 6 energy available in 2001 to meet customer demands. Governor 7 Davis has signed AB 970 enabling the more rapid approval of 8 temporary peak load power plants which do not create any 9 significant adverse effect. 10 But we are concerned that narrowly defining 11 emergency generators and imposing controls based upon engine 12 size, hours of operation and type of use, rather than upon 13 expected emissions, could encourage the use of smaller, 14 dirtier, customer-operated engines that would not be as 15 clean or as effective in meeting statewide power needs. 16 While most existing emergency generators are 17 diesel-fueled, the ARB should require risk assessments from 18 all facilities with actual annual diesel particulate 19 emissions over a specified level. 20 This would encourage the construction of cleaner 21 fueled or controlled generators and preclude the abuse of 22 existing exemptions based on horsepower size or hours of 23 operation. 24 Risk management guidelines could still allow 25 agricultural engines to benefit from their more remote PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 locations or seasonal operations, and emergency generators 2 to benefit from their less frequent years of operations. 3 In other words, I'm suggesting that before you 4 actually impose a control on a source, you first see that 5 they've got annual emissions above a threshold. You decide 6 what that threshold is. 7 And then in the case where the person chooses to 8 do so, they have the option of doing risk assessment to show 9 that their risk and their application, because they've got 10 5,000 acres and they're in the middle, and it's five miles 11 to the fence line or whatever, they don't have that same 12 risk. Maybe they escape the control for that reason. 13 You just build sensibility into the process, and 14 that's what the plans are about and we're talking about 15 plans at this stage. So I say we ought to plan for that 16 sensibility. 17 Compression ignition engines are currently 18 available using mixtures up to 95 percent natural gas, and 19 only five percent diesel. Such engines cannot operate on a 20 hundred percent diesel fuel and hence are more difficult to 21 misfuel. 22 While EPA emission factors suggest that 23 uncontrolled natural gas engines emit 87 percent less 24 particulate than uncontrolled diesel engines, controlled 25 diesel emissions could be reduced to uncontrolled natural PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 gas rates. 2 However, doing so would not change prior year 3 conclusions, and I quote, that based upon existing-in use 4 test data, PM in-use emissions would be 30 to 50 percent 5 lower for natural gas bus engines certified to the proposed 6 0.03 grams per brake horsepower PM standard than for a 7 diesel bus engine certified to the proposed 0.01 grams per 8 brake horsepower PM standards. 9 Thus, not only equal emission rates, actual 10 vehicular diesel emissions could be six to ten times higher. 11 But even the stationary applications where 12 emissions could be more readily equalized, risk would not. 13 Diesel fuel contains far higher levels of heavy metals and 14 more complex organics that are more difficult to completely 15 combust. 16 Also, more of the particulate measures in natural 17 gas combustion exhaust may come from ambient air intake 18 rather than from fuel combustion. 19 When diesel exhaust was identified as a toxic air 20 contaminant, it was based upon epidemiological exposures 21 resulting from the combustion of diesel fuel and compression 22 emission engines, and defined accordingly. 23 That diesel exhaust factor should not be applied 24 to natural gas exhaust particles with different 25 characteristics, such as a lower metal content. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 While the staff's diesel-fueled definition focuses 2 on diesel and jet fuels, there's nothing in the guidance or 3 plan on how fuel mixtures will be treated and because there 4 is a possibility one of the control options is a mixture of 5 natural gas and diesel fuel, that needs to be considered. 6 Until a better approach can be developed, reviewed 7 and approved, we urge the board to encourage the use of 8 cleaner fuel mixes by directing the staff to apply the 9 diesel risk factor to exhaust particulate only in proportion 10 to the percent of diesel or diesel-like fuel in the fuel mix 11 combusted. 12 PG&E has worked with its suppliers to develop a 13 dedicated spark ignition heavy-duty service vehicle. This 14 vehicle uses natural gas not only to move about, but also 15 for its associated generator and compressors. We'll be 16 placing such trucks into our own fleet and we'll encourage 17 others to do likewise. 18 But we operate in both the urban and rural areas 19 and it will take time to build up natural gas refueling 20 infrastructure. 21 The ARB is proposing 14 separate measures. 22 The ARB should encourage cleaner fuels and better 23 controls by allowing banking and trading between control 24 categories, adding flexibility by effectively setting diesel 25 particulate emissions reduction targets for those companies PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 like PG&E with larger engine and vehicle fleets that are 2 affected by multiple source category rules. 3 This could be specified as a compliance 4 alternative. 5 While we understand and support the ARB's desire 6 to implement the best available control, we suggest that 7 emission reduction targets may allow faster and less costly 8 reductions, at least during the early stage of the program. 9 I appreciate your attention and time on this very 10 busy day and am available to answer any questions you have. 11 Thank you. 12 CHAIRMAN LLOYD: Thank you. 13 Any questions? 14 BOARD MEMBER CALHOUN: Have the staff respond. 15 CHAIRMAN LLOYD: Yes. 16 DR. BARHAM: Yes. My name is Bob Barham, with 17 Stationary Source Division. 18 Mr. Holcombe's comments, I think, come down to, 19 well, four basic areas. 20 One has to do with energy supplies, and we have 21 been working extensively with the Independent Source 22 Operators, ISO, the air pollution control districts, CEC, 23 and ARB to try to develop methods and ways of making sure 24 that we get through these energy shortages and we will 25 continue to do that over the next several months. In fact, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 October, November time frame is really when we need to get 2 some basic plans in place, so that work is clearly underway. 3 Mr. Holcombe also suggests a risk-based approach. 4 We believe that a more direct approach is really a 5 technology-based approach, which is what we're proposing 6 here. 7 I think you've heard today that this technology is 8 readily available, it's readily applicable in many 9 situations. There are some fuel availability questions, but 10 we believe those are going to be sorted out in the next few 11 years. 12 So that's something that's really moving ahead, 13 but the bottom line is the technology is there and is 14 effective. 15 How to deal with mixtures in fuels, that is 16 partially CNG or other fuel and diesel, that's something 17 that we're going to have to work on. Perhaps at this point 18 in time there's very little health data available for some 19 of these other fuels, and that's something that will have to 20 be developed. 21 Perhaps the approach that Mr. Holcombe is 22 suggesting is a way to go in the interim, but that's 23 something staff is going to have to look at as part of the 24 process that we're going to be going through after moving 25 forward on the plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 And lastly the making and trading of these 2 emissions, quite frankly I have some problems with that. As 3 I've said before, the technology is there. I guess as staff 4 I would recommend that we would move ahead with the 5 available technologies and reduce the emissions across the 6 board. 7 BOARD MEMBER CALHOUN: Seems to me, Mr. Holcombe, 8 you've got a second chance when they are developing the 9 rule. 10 MR. HOLCOMBE: Yes, sir, that is true and we just 11 thought we would share these thoughts with you at this time. 12 And we wanted to emphasize, too, to save your time 13 we're just making this one set of comments, but they apply 14 both to the plan and the guidance. 15 CHAIRMAN LLOYD: Thank you. So we won't see you 16 again today. 17 MR. HOLCOMBE: No. 18 CHAIRMAN LLOYD: Thank you very much. 19 MR. HOLCOMBE: I'll be in the audience though. 20 CHAIRMAN LLOYD: Thank you. 21 Next is Sean Edgar, and Paul Ryan and then Greg 22 Gilbert. 23 MR. EDGAR: Good afternoon, Chairman Lloyd and 24 board members, Sean Edgar, Edgar and Associates, on behalf 25 of California Refuse Removal Council, Northern District. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 Since 1952, California Refuse Removal Council has 2 provided a trade association setting in which member 3 companies can participate in the process. 4 And we appreciate you hearing our comments this 5 afternoon. 6 The organization is comprised of 150 solid waste 7 hauling and recycling companies throughout the State of 8 California. Operations include 90 material recovery 9 facility and transfer stations, 300 recycling centers, 20 10 green waste composting facilities, utilizing a variety of 11 vehicle types and equipment types and managing the solid 12 waste here in California. 13 As a quick illustration, the 40 million tons of 14 solid waste going into California's landfills, assuming ten 15 tons per truck, which would be a garbage truck or refuse 16 hauler as we have seen on some of the slides, that would 17 equal approximately four million packer truckloads per year 18 going into the landfills. That's exclusive of what is 19 recycled at many of these material recovery and transfer 20 stations. 21 Our quick comments is with regard to the staff 22 recommendation we're fully supportive of efforts to enhance 23 our ability to minimize toxic emissions on California's 24 public. 25 Ours is the business of environmental protection, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 and we are pleased to be able to be engaged in the process, 2 and as it moves forward understanding that in different 3 particular geographic areas and with certain of the 4 districts some of our organizations have already been 5 instrumental in looking at alternative fuels and other fleet 6 conversion type of issues. 7 We'd like to just briefly speak about 8 participation in the rulemaking process. 9 And as part of the overarching mission as 10 expressed by the Governor and also Secretary Hickox relating 11 to cross-media issues, understanding that our organizations 12 provide service to the 400-plus jurisdictions that are 13 responsible for solid waste management and handling here in 14 the State of California, everywhere from Tehama to Tulare to 15 Kern to San Diego. 16 Our organizations are very interested in 17 understanding fully as we go through this process what the 18 cost implications will be and the cost effectiveness of a 19 variety of approaches, understanding that the ultimate cost 20 structure as it comes to the ratepayer, meaning everybody, 21 the homeowner and the business owner that our companies 22 provide service to, we want to be able to fully understand 23 what the costs will be as we go through the process, work 24 through the cost effectiveness, and also understanding our 25 need to be able to provide the most effective solid waste PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 management that we can. 2 My colleague, Paul Ryan, will speak briefly about 3 harmonizing the federal diesel fuel standards into this 4 process and have some brief comments about that. 5 However, we would just like to leave with the 6 thought that the impacts on the cost of recycling and any 7 other businesses, for instance Ms. Williams' comments, our 8 business is primarily one of transportation, and we are 9 interested to understand as all of this material is moving 10 around, all of which is generated by our citizens, we want 11 to make sure that we are able to participate. 12 And we certainly appreciate staff and your 13 opportunity to listen to us today. 14 CHAIRMAN LLOYD: Thank you. 15 Approximately what percentage of your fleet would 16 be natural gas, raw fuels there? 17 MR. EDGAR: The individual companies in particular 18 jurisdictions, for instance one of our member companies, 19 Bertek Industries in the Inland Empire and Southern 20 California marketplace, has worked in a variety of local 21 conversion issues, and a lot of that is under Carl Moyer, 22 and Paul Ryan behind me can speak more intelligently to 23 that. 24 CHAIRMAN LLOYD: Thank you. Thank you. 25 Paul Ryan, then Greg Gilbert, Joe Kelly and then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 Christina Morgan. 2 MR. RYAN: Honorable Chairman and board members, 3 I'm Paul Ryan, director or regulatory affairs for the 4 California Refuse Removal Council, Southern District. 5 The Southern District supports the efforts of the 6 California Air Resources Board in reducing the particulate 7 emissions for heavy-duty on-road vehicle, diesel vehicles. 8 I've been somewhat preempted by my northern 9 counterparts, so I won't belabor anything that's been 10 discussed heretofore. 11 The one thing I would like to do in addition to 12 the fact that I submitted a letter to the board, which I 13 believe you have in your packet, is something that we've 14 been successful in achieving with the South Coast Air 15 Quality Management District, and I'd like to see us proceed 16 with the similar venue here at the state level, and it's the 17 fact that through the help of the district board and the 18 industry, we were able to form a industry working group 19 whereby we can meet with the staff and discuss the issues of 20 implementation of the rulemaking and talk about various 21 technologies, because, as you well recognize, this is a very 22 complex issue. 23 And I represent, as Dr. Burke talked about 24 earlier, I'm the very small people to some of the very large 25 companies, and I deal with folks that are the owner, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 operator, the relief driver and the mechanic and then again 2 some very multi, large multi-national corporations. 3 The one thing that the industry has come to 4 conclude in this whole matter is that, and this is their 5 perception, is that we're on this grand R and D scheme. 6 Because they can't get the answers, they really need to make 7 intelligent decisions on one kind of retrofit program or 8 alternative fuel programs they need to put in place to be 9 successful and survive in this tough economic time. 10 So again my comment is simply this, I would like 11 to see the board establish with the staff a solid waste 12 recycling industry working group to assist CARB in the 13 rulemaking process, and I would hope that you would consider 14 as part of your findings for the approval of the plan today, 15 or when you do adopt the plan, include that working group as 16 one of the conditions of approval. 17 It would be immensely helpful to us to move 18 forward and to tackle the issues of funding and all the 19 other complex issues that we have to address. 20 Thank you. 21 CHAIRMAN LLOYD: Staff want to comment on that? 22 Thank you. 23 MR. KENNY: I think as we go forward, basically 24 looking at the individual rules that we're proposing to the 25 board that that is actually going to be probably almost a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 necessity and so the plan would be that we would be reaching 2 out to all the different constituents essentially on a 3 rule-by-rule basis, and so I think what the witness is 4 requesting is something that almost certainly will happen. 5 CHAIRMAN LLOYD: Thank you. 6 Greg Gilbert and the Joe Kelly and Christina 7 Morgan. 8 MR. GILBERT: Thank you, Chairman and fellow board 9 members. My name is Greg Gilbert. I'm here today on behalf 10 of Goal Line Environmental Technologies. 11 Just by way of parenthetical insertion here, 12 Dr. Lloyd, the farmer from Clarksburg was referring to the 13 Seed program, which was administered by the Sacramento Air 14 District, and that actually preceded Moyer. I worked at the 15 air district at that time. 16 CHAIRMAN LLOYD: It did run out of money? 17 MR. GILBERT: Actually there was various reasons 18 for why that happened, some of them having to do with EPA. 19 Seed was a program which took B-52 credits from Mather Air 20 Force Base and tried to administer them locally in a 21 creative program, but there were lots of ups and downs. 22 That was sort of the first one out of the box, so speak, per 23 Moyer. ARB staff can contact the Sacramento district to get 24 a better read on that, if they need to. 25 I'm here on behalf today of Goal Line PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 Environmental Technologies. GLET has sko NOx technology 2 which is backed layer, best achievable control technology, 3 lowest emission technology for turbines. We're trying to 4 spin that technology down to fit on mobile sources. That's 5 why I was hired out of the Sacramento district some time 6 back and have extensive background at the district on mobile 7 source and diesel issues. 8 I want to let you know that I support the work 9 that staff has done on behalf to Goal Line, and we're 10 encouraging you folks to stay the course. 11 The technology forcing regulation is what it's all 12 about and when you're on the private sector side and you're 13 a smaller company, Dr. Burke referred to earlier to the 14 small guys, or I forget exactly how he put it, we have to 15 work harder to make things work out there, make things 16 happen. It's not an easy task. We got millions into R and 17 D and every time we have a delay out there it makes it that 18 much harder to make payroll. 19 So we're hoping that you stay the course. We 20 believe that technology will solve the problems out there 21 with particulate. 22 Goal Line's technology right now gives somewhere 23 between 40 and 60 percent particulate reduction. We have 24 tremendous control over TACs, and for example in natural 25 gas-fired turbines we're seeing two to three orders of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 magnitude reductions in toxic air contaminants associated 2 with particulate, and so we are developing our technology to 3 go on mobile. We're working with a major OEM to do it. 4 But we have to have the certainty of what's out 5 there in the market in the years to come to be able to 6 justify our investments and to make sure that we're going to 7 make it. 8 Just real quickly, we are also supporting an 9 earlier introduction, if you can do that. 2004 would be 10 wonderful. 11 Back here a page, I would encourage you also to 12 think that technology would support collateral benefits, not 13 just a PM, but when you get a PM, CO and a NOx benefit all 14 in one, that should deserve extra attention than if you just 15 get a PM benefit. 16 And there are those technologies that will hit. 17 sko NOx is one of them. 18 We're seeing tremendous reductions across the 19 board and we're hopeful that staff at ARB will promote 20 proactive and creative programs which recognize that and 21 give us some additional extra benefit when we're out there 22 trying to sell these technologies. 23 And by the way, sko NOx is great stuff, but you 24 have to ask yourself, do we have a lot of sales, do folks 25 like us out there and the answer is no. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 When was the last time you met a utility that 2 wanted to go out and spend double to reduce their emissions 3 on their power plant? 4 Now, if they can get 200 percent or a hundred 5 percent better emissions control with our technology than 6 the competition, but they have to pay twice as much, I can 7 tell you what they're going to do. They're not going to 8 support us and they haven't. And it's a tough sell. 9 And so we're depending on regulatory support and 10 incentive programs, and creative thinking outside the box to 11 help us get out there, make the difference in the air 12 basins. Especially important for places like Sacramento and 13 San Joaquin with serious nonattainment and a 2005 attainment 14 deadline on NOx. 15 If we can promote NOx and particulate reductions, 16 and help those jurisdictions attain their objectives, we all 17 win in the process. 18 Low-sulfur diesel is required for sko NOx. We're 19 working on sulfur-tolerant technologies. There are others 20 out there. 21 You have a truck out here in the parking lot. I 22 heard some discussion earlier about low-sulfur diesels is an 23 absolute requisite. It's not. There are technologies which 24 will reduce both NOx and particulate right now that are 25 available, and I'm not going to stand here and say that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 there isn't good competition out there, there's great 2 competition. 3 In the interest of cleaner air, I hope we can all 4 move forward on that. 5 Aggressive incentives are critical for us, 6 flexible retrofit strategies, for example leasing, DPS. We 7 heard a comment from a gentleman who came down from Seattle, 8 the Sacramento air district, and hopefully will embark on a 9 program to go out and actually lease DPS to put them on 10 their vehicles when they're here in town. 11 Those kind of strategies are creative, outside the 12 box kind of thinking which, frankly, don't fit the construct 13 and the sort of command and control perspective which has, 14 let's face it, typified regulations relative to mobile 15 sources for years and years and years. 16 Those are the kinds of things we need to think 17 about and work on to make these programs work. 18 By the way, we are have gotten ICAT money and from 19 ARB and we were very supportive or appreciative of that fact 20 and are working with your staff to make sure that our 21 technology makes it out there. ICAT is tremendously 22 important to us and can't tell you how much we're looking 23 forward to utilizing those dollars to make the program work, 24 our program work. 25 CHAIRMAN LLOYD: The light is red. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 MR. GILBERT: Pardon? 2 CHAIRMAN LLOYD: The light is red. 3 MR. GILBERT: We're at five minutes? Okay. That 4 went quick. 5 I'll just sum up and say appreciate your help. 6 We're pushing for -- we're hoping that you push for an 7 earlier introduction. We're here to make a presence in 8 California. 9 Very much available for staff to work on creative 10 programs and we will be approaching staff to work with us to 11 really make a difference out there. 12 Thank you very much. 13 CHAIRMAN LLOYD: Thank you very much. 14 Joe Kelly and Christina Morgan. 15 MR. KELLY: Board members, my name is Joe Kelly. 16 I'm from Templeton, San Luis Obispo County. 17 I'm one of those 54,000 farmers of under 40 acres 18 or 50 acres, pardon me. 19 And to answer, I believe it was Mr. Calhoun's 20 question earlier to the gentleman that represented the 21 cotton mills, or cotton gins, whatever it was, is why you 22 cannot pass on a spike hike, because you're generally under 23 contract prior to even growing. That's a primary concern. 24 Agriculture, manufacturers, commerce and 25 navigation, the four pillars of our prosperity, are then PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 most thriving when left most free to individual enterprise. 2 Thomas Jefferson said that. 3 But it doesn't hold true anymore. 4 I realize that the California Air Resources Board 5 mission is to protect, promote, protect public health, 6 welfare and ecological resources, and while recognizing and 7 considering the effects of the economy. 8 This is going to have a very drastic economic 9 effect on the farmers and on the economy. Considering that 10 ten percent of your disposable income is for food, do we 11 want to go with other countries and spend 50 percent or 12 more? 13 Let's look at it very carefully, please. 14 Board members, I request that you consider a 15 minimum of 40 days, 30 days, or better yet 45 days for 16 noticing these types of hearings. I want to agree with the 17 gentleman from Yolo County. This left me six days by the 18 time I received your documentation to read. I put in 12 to 19 15 hours of late night hours on this document, and I didn't 20 get through it, and I didn't get into the secondary document 21 at the stationary engines. I'm very concerned. 22 My reading of this document has left me with a 23 quite a few, quite a few questions and concerns. 24 One of them is have any fuel injection pump 25 manufacturers been involved in this discussion, to include PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 in the 15 ppm and the retrofit? 2 Because as you've seen in the document, Sweden had 3 a concern when their 15 ppm, they put a fuel additive in to 4 take care of the lubrication effect of what sulfur has in 5 the current diesel fuels. 6 I'm concerned about that because I do have an 7 engine that has a diesel pump on it, external, not one of 8 the new ones with the turbo fired and all this type of 9 stuff. It's a different process. 10 So I think we need to look at that. 11 One of the things I do have concern about also is 12 the use of this 15 ppm fuel, the very low-sulfur diesel 13 fuel. Will it have an adverse effect on the performance, 14 acceleration and torque, mileage per gallon, reliability and 15 engine life? 16 That wasn't discussed in any of the books. I 17 haven't heard any of the manufacturing people come up and 18 say anything about that. 19 To include in that concept too is the possible 20 adverse effects in the same range of the particulate 21 filters. Will there be adverse effects? 22 Plus the adverse effect, will it restrict exhaust 23 on the filters of these diesel engines? Heat is a 24 detrimental process to an engine, any engine, but it can be 25 very detrimental to the best engine we have, the most PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 efficient engine, which is the diesel engine. 2 I would also ask has anybody been following the 3 results by California environmental, what is it, California 4 environmental engineering on the PEER fuel, performance 5 enhanced emission reduced. This is the fuel -- now I 6 understand these people are putting out for $1 million 7 investor monies and they couldn't get it yet, but this is 8 supposed -- PEER stands for performance enhanced emissions 9 reduced, and it's supposed to at this time would reduce the 10 airborne diesel exhaust particles, and the use of PEER does 11 not require any engine retrofit and demonstrate no 12 degradation in acceleration or loss of torque. This is 13 important. This is very important. 14 My concern too is looking at natural gas aspect. 15 I'm going to look forward to seeing what PG&E does, because 16 I've talked to some head mechanics of school buses -- 17 schools that are the bus mechanics and they tell me that for 18 schools, and in particular in San Luis Obispo County, and 19 where I'm from, Templeton, he says they won't pull the hill. 20 So I would also like to look at the aspect of 21 electro retrofit of agriculture irrigation pumps. PG&E was 22 here. PG&E is in the document has given that information on 23 retrofit costs that it submitted full panel transformer. I 24 did not see a cost basis differentiation between current 25 cost of electricity, future unregulated cost of electricity PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 and cost of operating a diesel engine. 2 Another factor not discussed in time is time use 3 restrictions of electricity for irrigation purposes. That's 4 important too, to the farmer. 5 From my perspective, let's look at the decline of 6 acres being farmed. That was brought up because of the 7 agriculture census that goes on every five years. 8 But it's the age of the farmer, cost of the 9 equipment, decline in sales, prices, bankruptcy of 10 processors, cost of employees, cost of diesel and 11 electricity, foreign subsidized imports, cost of land, 12 interest rates, rising input cost, high chemicals, high cost 13 of chemicals, that are much less effective than competitors 14 use. Fertilizers and seed. California growers have higher 15 cost than foreign competitors due to labor, chemical and 16 environmental regulations. 17 What incentives are you offering to offset program 18 costs to those affected? 19 I would ask you to take a hard look at the effects 20 of the economy, on the economy, pardon me. 21 Unless it is the purpose of these regulations to 22 kill the diesel engine, stop farming in California and the 23 US and become reliant on and held hostage by Third World 24 countries to provide our food and fiber, while bolstering 25 their economies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 There's more I would like to discuss, but you 2 allot five minutes for presentation. 3 In closing how do I get my name on the contact 4 list for future hearings on this subject? 5 And I would like as an additional emphasis, I 6 would like to see it in all counties, so that people -- and 7 advertised perhaps through the local -- the county ARB's 8 that -- 9 CHAIRMAN LLOYD: Maybe I can suggest that the 10 ombudsperson talk to you afterwards to make sure you get 11 that. 12 MR. KELLY: Thank you very much. 13 CHAIRMAN LLOYD: Thank you. 14 Any questions? 15 BOARD MEMBER RIORDAN: Do we know -- 16 CHAIRMAN LLOYD: Yes, she's got her hand up. 17 Yeah. 18 Thank you very much. 19 BOARD MEMBER RIORDAN: Mr. Chairman, I just add, 20 if Mr. Kelly is listening to me as he walks down the aisle 21 there, one of the reasons we want to do these tests is to 22 answer some of your questions, and I'm sure that when we do 23 get your name, we will put you on that list that allows you 24 then that information, you can study it once those tests are 25 done on the equipment. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 CHAIRMAN LLOYD: Thank you very much. 2 Yes. Last speaker is Christina Morgan. 3 MS. MORGAN: Always last. Always last. Sorry. 4 Good afternoon. My name is Christina Morgan. I'm 5 with CCRYX. We make the quad-cat catalytic convertor. It's 6 a quad-cat because it does NOx particulate matter, 7 hydrocarbon and carbon monoxide. 8 We're here to let you know that we support the 9 low-sulfur fuel, although I do have to say that we're 10 currently running on 160 parts per million both in our 11 testing and on our F-250, which is outside in the parking 12 lot. 13 Also our two Sacramento school buses and our two 14 refuse trucks in Ventura County are running on CARB number 2 15 diesel. 16 We do, however, agree that for durability and 17 particulate matter reduction, low-sulfur fuel is the way to 18 go. 19 We are pleased to announce that we have been 20 accepted into the South Coast school bus program, will be 21 running two two-strokes and a four-stroke, which are, as you 22 know, some of the toughest applications in the diesel world. 23 We are working with ARB. In fact I'm meeting with 24 them in El Monte next week to go over all of our testing 25 that we've done both at Cav Tech in Richmond, an MTA PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 facility. We are establishing a durability protocol so we 2 can become verified as soon as possible and start 3 retrofitting all these diesel engines out there. 4 We do stationary applications and mobile. I know 5 some of the people were worried here that we could do either 6 mobile or stationary. We are a technology that will work on 7 both. 8 CCRYX is also sensitive to the cost. I heard 9 $15,000 thrown around by some of the people here. Our 10 technologies is about 7500 for a mobile application. 11 That's all I'd like to say. 12 Thank you very much for your time. 13 CHAIRMAN LLOYD: Thank you very much. 14 So you have some vehicles out in the parking lot? 15 MS. MORGAN: We have our F-250, yes. 16 BOARD MEMBER BURKE: How long is it going to be 17 before your durability testing is complete? 18 MS. MORGAN: We have to go about, I believe 19 100,000 miles, and what we're trying to do is get a protocol 20 for our gen set of 235 horsepower Cummins, which has been 21 graciously donated by Cummins Cal Pacific, run a 24/7 and 22 with the staff in El Monte we're trying to get it so that we 23 can actually get some transient data as much as you can do, 24 plus our on-road demonstration. 25 So we're hoping three months. That's what we're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 working on. 2 CHAIRMAN LLOYD: Thank you very much. 3 MS. MORGAN: Thank you. 4 CHAIRMAN LLOYD: Mr. Kenny, does the staff have 5 any more comments? 6 MR. KENNY: Nothing further. 7 CHAIRMAN LLOYD: Well, since this is not a 8 regulatory item it's not necessary to officially close the 9 record. However we do have a resolution before the board, 10 so any discussion then before we take a look at the 11 resolution? 12 Yes, Supervisor DeSaulnier. 13 BOARD MEMBER DeSAULNIER: Maybe, first of all, 14 just a comment that I mention a couple of my colleagues in 15 the back that two years ago if somebody had told me that 16 this public hearing would have gone so well, and with all 17 due respect to people who have problems with it, I would 18 have been shocked. Maybe it was a result of Mr. McKinnon's 19 comments when we were in South Coast dealing with the 20 transit bus rules when he warned about what was going to 21 happen. 22 But whatever reason, I think staff has done an 23 excellent job and the hearing has gone very well. 24 I wonder if staff might respond to my concerns I 25 have, and there's been a lot of discussion about moving up PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 or somehow getting incentives to the petroleum industry to 2 move up the availability of low-sulfur, and I am reminded of 3 what we did reformulated 3 and some of us wanted to go a 4 little bit further, faster, but the refining community is 5 saying no, give us the flexibility and we'll get there. 6 And from my colleagues for the five Bay Area 7 refineries and four in Contra Costa County, they have shown 8 me their business plans to try to meet the deadlines for 9 reformulated 3 and it strikes me, and I mention this to 10 Mike, that there might be a business opportunity here to 11 encourage them to, while they're doing that, also put 12 construction bids out to do the necessary capital 13 improvements to get more low-sulfur on faster than 2005. 14 So, Mike, maybe you can respond too that. 15 MR. KENNY: Actually it's a good idea. We haven't 16 actually thought about it ourselves, and we haven't really 17 had the discussions with the industry yet, but it's 18 something that we'll be more than happy to pursue and report 19 to you on. 20 BOARD MEMBER DeSAULNIER: Maybe when we're ready 21 to make the resolution, Mr. Chairman, you could suggest how 22 we do this, whether it's necessary to what Janet and Tim 23 have suggested or whether there's another way to get at that 24 on all three of their issues, but particularly that one. I 25 think if we put some work into that we might find that we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 can get the industry, in particular refiners, to actually be 2 more aggressive as a business investment than actually do 3 the capital improvements sooner rather than later. 4 MR. KENNY: Okay. 5 CHAIRMAN LLOYD: You might want to sort of broaden 6 that there to ask staff to look at all options here and 7 incentives to actually expedite getting fuel into the 8 marketplace. 9 BOARD MEMBER DeSAULNIER: Understanding that the 10 Governor, and we're very sensitive to the cost of the 11 product, but if they're going to have to pay for it, I think 12 some of them having -- I'm supposed to go to a political 13 reception for WSPA after this hearing in Martinez, so if you 14 don't hear from me again, you'll know my idea wasn't 15 received warmly, but if they're going to have to pay for it 16 sooner or later, I think some of them will make a business 17 decision to do it sooner, since they're doing a lot of these 18 capital investments in any case. 19 MR. KENNY: I think the key thing we need to do is 20 look at the different types of incentives that might 21 actually sort of promote their early introduction of the 22 fuel, and again I think one of the things we could do is 23 begin the conversations with them and see what might 24 sufficiently attract them into moving ahead quicker. 25 BOARD MEMBER DeSAULNIER: So rather than just PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 moving the date up, if there's a way to encourage them to 2 actually in effect get the date moved up, I think that's a 3 very doable thing. 4 MR. KENNY: Okay. 5 BOARD MEMBER DeSAULNIER: Thank you, Mr. Chairman. 6 CHAIRMAN LLOYD: Yes, Mrs. Riordan and then 7 Supervisor Patrick. 8 BOARD MEMBER RIORDAN: I just have a question. 9 Are we opening up the portable equipment 10 registration program, and if so how long, because that was 11 an issue that was asked for. 12 MR. KENNY: It is part of this, and what we would 13 be doing is essentially looking at how we can make that 14 program essentially work more effectively and achieve the 15 emission reductions -- 16 BOARD MEMBER RIORDAN: It's in our interest, 17 definitely. 18 MR. KENNY: Right. 19 BOARD MEMBER RIORDAN: I just wanted to be sure 20 that was part of the goal. 21 Thank you. 22 CHAIRMAN LLOYD: Supervisor Patrick. 23 BOARD MEMBER PATRICK: Thank you. 24 I was hoping that someone could address for me 25 very briefly the kinds of testing that are going to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 necessary to cover the breadth of off-road sources to assure 2 folks that are going to have to be making eventually a 3 tremendous -- to be putting tremendous amounts of dollars in 4 this tremendous investment, and so I want to be -- feel very 5 comfortable that you're going to work with folks and that 6 all these different applications that we're talking about 7 are going to be tested before we get to the point where 8 we're adding additional regulation. 9 MR. KENNY: I think Bob Cross is probably a better 10 person to answer that than me, but I would like to maybe 11 make one quick comment, which is that we do realize what 12 we're doing is something that is unique and it is aggressive 13 and we do realize that in fact we have to approach it with 14 certain level of common sense so that in fact we don't get 15 into situations in which failure becomes the outcome. 16 So one of the things we will be looking at are all 17 the types of applications and how to best make those 18 applications work in an reasonable and effective fashion. 19 So with that as kind of the overview from where 20 we're going, and I guess I'll go back to Bob. 21 MR. CROSS: And I guess my first advertisement 22 that I'll add is that Mike Kenny has graciously donated a 23 bunch of staff to us to proceed with this, and we will use 24 them. 25 We have a test facility in Southern California, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 which used to be the MTA facility, which is really a 2 state-of-the-art heavy-duty engine and heavy-duty chassis, 3 i.e., complete vehicle test facility, and we've been 4 operating it for some time now and it's going very well. 5 That was where the CCRYX tests were done, for 6 example. 7 I think that what we know now is kind of what 8 operating conditions these devices tend to like, and which 9 ones tend to be problematic, and so I think what we're 10 really kind of planning on doing is going out and 11 understanding what engines are out in the field, how much 12 they're used, and then what operating -- really what kind of 13 exhaust temperatures exist in the engines, and whether or 14 not those match with the retrofit technology which is 15 available. 16 And we're kind of going to be going in two 17 directions. One will be verifying that the -- that in the 18 ones that ought to be a slam dunk that they really work as 19 well as they should, so we'll be doing work in that area, 20 and then the ones that are really marginal we're going to be 21 running programs as well. 22 That's already occurring with our cooperative 23 program with South Coast on school buses, for example, 24 they've selected some buses that ought to work and then they 25 have selected ones that are marginal and we expect to do the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 same thing in the area of construction, and we'll just keep 2 going with it. 3 But I think I would like to give you our assurance 4 that we don't want failures in the field either. We would 5 much rather have a situation where these devices are 6 deployed in a way where the users are happy and not 7 adversely impacted by them. And so we've got testing 8 planned to do that. 9 BOARD MEMBER PATRICK: Good. If I can just follow 10 up that question, in the report it emphasizes that the 11 technology it has to be technologically feasible and it has 12 to be cost effective, what kind of cost effectiveness 13 standards -- I mean at what threshold are you going to say 14 we're just not going to get enough bang for our buck out of 15 this particular use, so we will not pursue that. 16 MR. CROSS: I think that the way to get the most 17 reduction is to start with the engines that run the most and 18 have the most horsepower. In other words, or run at the 19 highest loading. That means they're processing the most 20 diesel fuel. 21 BOARD MEMBER PATRICK: Sure. 22 MR. CROSS: Then you connect to that what you all 23 discussed earlier today with physical location, how close 24 are they to the folks who are going to breathe the exhaust 25 and then connect back to the technical feasibility. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 So we start at the top of the list, looking both 2 at the most feasible engines, and then the highest use 3 engines, and work down, and I think in some point we're 4 going to hit ones that are at extremely light usages or 5 extremely remote or extremely difficult technically to 6 retrofit or, goodness knows, other things like that which 7 don't make sense. I think that it's too early to tell where 8 that line is, but it's one that we're going to be cognizant 9 of. Again, if it were not really producing benefits, it 10 doesn't make sense. 11 MR. SCHEIBLE: I think that we're going to be 12 breaking some new ground here. We're dealing with something 13 that is a toxic and it's fairly potent in the concentrations 14 that we see in urban areas. 15 It also affects PM directly and has those health 16 effects visibility. So there's a lot of new ground in terms 17 of how much is a pound of reduction of diesel exhaust worth 18 before you say, no, that cost is too much. 19 The other thing I think is even though it's 20 principally a technology approach in the cost of applying 21 the technology, we're going to have to blend some risk 22 estimates in here. A engine that is not used a whole lot 23 but is located very close to a receptor may be a candidate 24 for control even though the cost per pound is fairly high, 25 but the emissions have a direct effect, whereas a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 moderate-use engine that's located in a remote area, may be 2 one that you say let it operate another five or ten years 3 and when the new one finally replaces it we'll get the risk, 4 because there's not a lot of exposure. 5 But we're going to have to, as we learn more about 6 this and get the specifics, come back and make some 7 recommendations to the board for what we think makes sense 8 and then obviously you'll apply your judgment as to where 9 the line should be and how we should do risk and technology 10 kind of comparisons. 11 CHAIRMAN LLOYD: Yes, Ms. D'Adamo. 12 BOARD MEMBER D'ADAMO: I just think it needs to be 13 pointed out that this is the type of discussion that many in 14 the agricultural community need to hear and perhaps in other 15 sectors where usage of certain engines is limited or 16 seasonal, and that, together with one of the paragraphs in 17 the recommendation, I'm going to just read part of it here 18 for those in the audience that may not be aware of it, it is 19 resolved that the executive officer is directed to 20 investigate economic incentives as appropriate to assist in 21 carrying out the proposed risk reduction plan, et cetera. 22 And I think that we all know here at the board 23 that you're going to work -- that staff is going to work 24 very closely with some of the associations involved, I think 25 in particular Cynthia Cory from the Farm Bureau, and Manuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 Cunha on this, but for those in the audience that are 2 concerned about the impact that this could have on them, the 3 discussion that was just engaged in, together with this 4 commitment that staff is going to be directed to look at 5 incentive programs, I think that in the coming months, we're 6 going to see this issue being further refined to the point 7 that many of the issues that were raised today are likely to 8 be resolved. 9 CHAIRMAN LLOYD: Yes, Professor Friedman. 10 BOARD MEMBER C.H. FRIEDMAN: I just wanted to make 11 sure that we're clear that we will be looking for the staff, 12 and they, as usual, are committed to having a very open 13 public process. They will be going out into the outer 14 lands, that is out of South Coast, and other hot spots. 15 BOARD MEMBER BURKE: I take that personally. 16 BOARD MEMBER C.H. FRIEDMAN: And out into the pure 17 clean air in the farmlands of the north. 18 So they will be going out and making reasonable 19 effort to give all those affected and who are potentially 20 subject to the regulations the opportunity to understand 21 what's going on, to understand the extent to which we see or 22 the staff sees that there are activities that are polluting, 23 and give them the full opportunity to participate. 24 I know that was understood, but I want to be sure 25 it's in the record. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 CHAIRMAN LLOYD: I think that's important. 2 I think this is also a reflection to the 3 complexity and the comprehensiveness of this plan, because 4 it's affecting many many activities in the state, so it 5 poses a challenge for all of us, for the staff as well the 6 affected parties here. 7 I would agree very much, Professor Friedman. 8 I'd also like to add a couple of other things 9 there too. 10 And that is I was also concerned as we talked 11 about we need to move ahead, but to make sure that the 12 devices are working, and I guess one of the speakers who 13 made the suggestion, if you like, some sort of quality 14 assurance plan that these things actually do work on the 15 road and that we have a compliance plan, an audit program 16 for these devices, and whether we work with the manufacturer 17 of the emission control equipment or whatever, I think that 18 will be very important to make sure, as we move ahead, that 19 that is investigated, have staff investigate it. 20 The other one, I think as we stated earlier in the 21 month when we looked at the light-duty sector, I think it is 22 important to see that we look at opportunities and options 23 for the use of alternate fuels and technologies to 24 complement the diesel technology. 25 Clearly, this plan is ensured here to keep diesel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 in the marketplace, but we also have to reduce that risk, so 2 we're not subject there, but equally important as we look 3 ahead and the growing need for imports outside that we have 4 to look, I think, for the fuel diversity and the alternative 5 technology to bring into this. 6 So I would like to ask staff maybe in 180 days or 7 so to come back and look at some of those options where 8 these things may be viable in terms of the heavy-duty sector 9 and the off-road. 10 And we've seen some of the technologies with the 11 hybrids, et cetera, in the past, but I think that would be 12 very important as we look ahead for the challenge that we 13 face with continued growth and maybe continued reduction in 14 refining capacity. It's nice to see that we do have some 15 more in the South Coast there, so if you can do that, that 16 will be helpful. 17 Any other questions from the board? 18 Mr. McKinnon. 19 BOARD MEMBER McKINNON: Yeah. I kind of want to 20 ditto some, one of the concerns particularly in the ag, just 21 kind of based on personal experience. 24 years ago working 22 a season for one of Mr. Chamberlain's constituents in Yolo 23 County, and certainly there were times that we used a 24 certain piece of equipment for a matter of a few hours. And 25 there were times that a D6 or a D8 Caterpillar would run 24 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 hours a day for two months with very limited times to stop 2 and making repairs. Just changing operators and refueling. 3 And didn't get shut off to refuel, didn't get shut off to 4 change operators. 5 So there's really a lot of variation. That has to 6 be considered. And some variation that may mean there are 7 whole categories that we let them wear out, as Mr. Scheible 8 said, let them wear out when the new equipment gets 9 replaced. 10 So I share some of the concerns raised in that 11 area. 12 In terms of the discussion about moving up the 13 fuel requirements, while there's some openness to it, I 14 think what's really important for us is to harmonize 15 nationally, and to not give up that opportunity because 16 harmonizing nationally gets us that benefit of not having 17 price spikes that are related to having a separate fuel. 18 So I think that's huge. I think that in terms of 19 our being able to move forward it also shows, I think, a 20 certain level of commitment by this board that when we set 21 out over a long program that we kind of stick to our word. 22 So I tend not to be in a rush. 23 I think what may happen is that truck -- 24 over-the-road truck buyers and equipment buyers are going to 25 make decisions, buy decisions, that are long term. They're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 pieces of equipment that last a long time, and as they make 2 buy decisions between now and 2006, they're going to 3 step-by-step be bringing up the demand towards 2006. 4 So, you know, I don't know if we'd measured what 5 effect that will have, how many tractors get bought every 6 year, how many tractor trailers get bought, but I think that 7 will move demand for the supply that's developing in 8 California. 9 Thanks. 10 CHAIRMAN LLOYD: Thank you. 11 Yes. Dr. Burke. 12 BOARD MEMBER BURKE: I am always concerned, you 13 know, if, you know, the State of California were a nation it 14 would be the seventh largest nation in the world. Los 15 Angeles County -- I'm sorry, fourth largest nation in the 16 world. Los Angeles County were a nation it would be the 17 seventh largest nation in the world. 18 So we here think in terms of the United States, 19 but in the world we carry enormous weight as it relates to 20 what we consume and standards we set and things of that 21 type. 22 I just want to pledge to the staff that the South 23 Coast Air District will continue to cooperate, as we have in 24 the past, and working with this rule, and I know we always 25 don't agree, but doesn't mean that we're not working towards PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 the same goal. 2 And I swear I won't choke you, Mr. Kenny, when you 3 write me another letter and say I can't have my rules 4 anymore. 5 CHAIRMAN LLOYD: I don't think he wrote it to you. 6 BOARD MEMBER BURKE: It was to me, even though my 7 name wasn't on it. 8 I think that this is, you know, last month we had 9 just -- we had a momentous meeting last month, but I think 10 that this is a kickoff. As Mr. McKinnon indicated is 11 another momentous move forward, because this diesel fuel 12 thing is incredible, and for public health we are -- we have 13 the charge and we got to go get them and if it takes some of 14 our money from South Coast, we're willing to spend our 15 money, and if it takes our influence in the Legislature to 16 help ARB, who never needs our help in the Legislature, but 17 if it ever did, to go after more money for ARB to expedite 18 some of these programs that some of the board members have 19 been talking about, we're there and we're a hundred and ten 20 percent behind you on this one. 21 And I just -- the only thing that I have is that 22 time deadline, you know, is a very sensitive thing, and, as 23 you have know, I have bumped my head up against 2006 on more 24 than one occasion and come away with my head smashed in. 25 But I think that Congressman Burton's committee PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 hearings last week when he had Ms. Brownert testify before 2 him, and she said that EPA was doing everything that it 3 could in California to increase refinery capacity in the 4 state beyond its current level, because of the problems that 5 we are having, I think that's important. 6 I wish it was true. In my heart of hearts I 7 question that, but I take her at her word, and I hope it's 8 true. 9 But because we have to work, integrate all these 10 things together to get through all of the things that we're 11 facing here, and I'd like to congratulate the staff on doing 12 a good job on the report. It was a really good job. 13 CHAIRMAN LLOYD: Thank you, Dr. Burke. 14 And as you know, personally, I'm also obviously 15 very committed to working with South Coast. We appreciate 16 your leadership there. 17 I mentioned before you just arrived your 18 leadership on the Adopt-a-School-Bus program was excellent 19 in moving ahead in those areas, so we look forward to 20 continued work and continued testing because both of, 21 obviously, all our agencies and the other groups mentioned 22 here are represented here, agencies, we're all committed to 23 get that clean air, but we've got to make the technology 24 work, so we've got endorsement very much there. 25 Any more discussion? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 If not, do I have a resolution, motion? 2 BOARD MEMBER FRIEDMAN: So moved. 3 BOARD MEMBER McKINNON: Second. 4 CHAIRMAN LLOYD: All in favor say aye. 5 (Ayes.) 6 CHAIRMAN LLOYD: Negative? 7 (No response.) 8 CHAIRMAN LLOYD: Thank you. Unanimous. 9 Despite my comment earlier, I keep forgetting the 10 court reporter needs to eat, and while we make take it in 11 shifts, we only want one court reporter, so we're going to 12 have to take a break. I apologize for that to my fellow 13 board members who have already eaten. So I propose that we 14 take maybe a 20-minute break, come back at ten of 2:00 by 15 the clock. 16 (Thereupon a short recess was taken.) 17 CHAIRMAN LLOYD: The next agenda item today is 18 00-9-2, public meeting to consider proposed risk management 19 guidance for the permitting of new stationary sources. 20 The previous item focused on our comprehensive 21 plan for cleaning up existing diesel engines and the 22 standards that will be set for new diesel vehicles in the 23 future. 24 This item is something different, namely how to 25 address the stationary diesel engines that are permitted by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 local air districts. 2 At this time I'd like to turn this item over to 3 our executive officer, Mr. Kenny, to introduce the item and 4 direct staff to begin the presentation. 5 MR. KENNY: Thank you, Chairman Lloyd and members 6 of the board. 7 This guidance for permitting new stationary 8 diesel-fueled engines is the second part of our initial 9 effort to address diesel PM emissions. 10 The diesel risk reduction plan which you just 11 approved was the first. 12 There are three reasons for developing this 13 guidance document. 14 First, stationary diesel-fueled engines are not 15 subject to current off-road or on-road emission standards. 16 Second, emissions from such engines can represent 17 a significant source of diesel particulate matter. 18 And third, stationary diesel-fueled engines are 19 used throughout the state in a variety of applications, many 20 of which places these engines in close proximity to 21 residences, schools and hospitals. 22 The guidance uses a technology-based approach to 23 establish permit requirements for new stationary 24 diesel-fueled engines. To reduce diesel particulate matter 25 emissions to the greatest extent possible, the guidance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 recommends compliance with either minimum technology 2 requirements or performance standards. 3 The minimum technology requirements consist of 4 meeting a stringent but currently achievable emission level 5 for diesel particulate matter, using CARB diesel fuel with 6 very low-sulfur content and installing a catalyst-based 7 diesel particulate filter. 8 The performance standards are based on the 9 anticipated reductions associated with implementing the 10 minimum technology requirements. 11 The proposed guidance could be applied to most 12 diesel engines. However, we are suggesting that any 13 proposed equipment to install a diesel particulate filter on 14 emergency standby engines not take effect until September 15 2001. 16 This additional time will enable staff to address 17 several questions regarding the performance of particulate 18 engines, particulate filters in standby engines. 19 All in all, we estimate that full implementation 20 of the guidance statewide would significantly reduce diesel 21 PM emissions from new stationary diesel-fueled engines by 80 22 to 90 percent. 23 Before I turn the meeting over to staff, I would 24 like to make it clear that the guidance we are presenting 25 today is non-regulatory. As such, our guidance does not PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 preclude a district from adopting stringent or different 2 requirements, nor does it preclude a district from 3 considering permit specific situations. 4 With that, I'd like to now turn it over to 5 Mr. Alex Santos, who will make the presentation. 6 MR. SANTOS: Thank you, Mr. Kenny. 7 Good afternoon, Chairman Lloyd, and members of the 8 board. 9 In my presentation today I'm going to provide you 10 information on the proposed risk management guidance for the 11 permitting of new stationary diesel-fueled engines. 12 In my presentation, I will discuss the purpose of 13 the guidance and how it was developed. 14 I will then discuss the overall approach to 15 permitting defined by the guidance. 16 Next, I will discuss some of the details regarding 17 the suggested permitting approach, followed by a discussion 18 of issues identified during guidance development. 19 Finally, I will conclude today's presentation with 20 a summary of the proposal and staff's recommendation. 21 The overall purpose of the permitting guidance is 22 to assist local air pollution districts and air quality 23 management districts in making permitting decisions for new 24 stationary diesel-fueled engines. 25 By following the guidance, districts would ensure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 that new stationary diesel-fueled engines would use the best 2 available control technologies and reduce exposure and risk. 3 How did we develop the guidance? 4 The guidance document you see before you today was 5 developed over the last two years. As you heard earlier 6 today during the presentation of diesel risk reduction plan, 7 an advisory committee and four subcommittees were 8 established, one of which is the Risk Management 9 Subcommittee. 10 Staff worked extensively with the Risk Management 11 Subcommittee in developing the guidance, meeting six times 12 over the last two years. 13 The Risk Management Subcommittee served as a 14 sounding board for risk management approaches and included 15 wide representation, as shown on the slide. 16 Staff, working with the Risk Management 17 Subcommittee, developed four draft versions of the guidance 18 prior to the final proposed version you see before you 19 today. 20 What diesel-fueled engines are addressed by the 21 guidance? The guidance addresses new stationary 22 diesel-fueled engines that districts would require a permit 23 to operate. Shown here are examples of engine applications 24 addressed by the guidance. The guidance does not address 25 mobile engines, portable engines, agricultural engines and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 federally exempt engines. 2 What is the overall approach to permitting defined 3 in the guidance? 4 The guidance suggests a permitting approach based 5 on engine application and annual hours of operation. The 6 suggested permitting approach consists of meeting either 7 technology requirements or performance standards. 8 For engines that operate over a set number of 9 hours a year, a health risk assessment would also be 10 required. 11 We have established two categories of new 12 stationary diesel-fueled engines based on their application, 13 emergency standby engines and all other engines. 14 Emergency standby engines are used to provide 15 power when normal power line or natural gas service fails or 16 for the emergency pumping of water for either fire 17 protection or flood relief. 18 Staff estimates that about 100 new engines will be 19 permitted each year. 20 This slide is a picture of a generator set that 21 can be used in emergency standby applications. 22 This slide summarizes the suggested permitting 23 requirements for emergency standby engines. Emergency 24 standby engines would be required to either meet the most 25 stringent diesel particulate matter emission levels and use PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 CARB diesel fuel, or meet the proposed performance standard. 2 At this time, there's no requirement for the use 3 of a diesel particulate trap on emergency standby engines. 4 As we develop the guidance, questions are raised 5 on whether the exhaust from an emergency standby engine 6 would reach the temperature necessary to clean the diesel 7 particulate matter trap. 8 We are currently gathering information to address 9 this issue. As a result, we propose that the guidance defer 10 to no later than March 2002 the requirement install traps on 11 emergency standby engines. 12 At that time, we believe we will have enough 13 information to support the requirement for installing diesel 14 particulate matter traps on emergency standby engines. 15 In addition to the requirements I just described, 16 we are also suggesting that new emergency standby engines be 17 plumbed to allow for the installation of a diesel 18 particulate matter trap at a later date. 19 Now I'm going to discuss how the guidance 20 addresses new stationary engines other than emergency 21 standby engines. 22 Examples of non-emergency standby applications of 23 new stationary diesel-fueled engines includes stationary 24 water pumps, compressors, prime power generators and rock 25 crushers. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 Staff estimates that there are approximately 5,000 2 of these engines in California and there are approximately 3 20 to 30 new engines that are permitted every year. 4 This slide summarizes the suggested permitting 5 requirements for all new non-emergency standby stationary 6 engines operating less than or equal to 400 hours per year. 7 The technology requirements consist of a 8 combination of an advanced technology engine, very 9 low-sulfur fuel and a diesel particulate matter trap. 10 The performance standard option can be met in lieu 11 of meeting the technology requirements and is set at 0.02 12 grams per brake horsepower hour. 13 The photograph on the slide is of diesel 14 particulate matter traps installed on a stationary 15 diesel-fueled engine at a facility in Santa Clara, 16 California. 17 This slide summarizes the suggested permitting 18 requirements for new stationary diesel-fueled engines 19 operating greater than 400 hours per year. 20 The requirements are essentially the same as those 21 for engines operating less than or equal to 400 hours per 22 year, except for the additional requirement of a 23 site-specific health risk assessment. The reason we require 24 a site-specific health risk assessment is because these 25 engines have the potential to pose a significant risk even PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 if well controlled. 2 If the health risk assessment shows a potential 3 risk of greater than ten in a million, we suggest a specific 4 findings report be put together that discusses and 5 summarizes the results of the health risk assessment and 6 summarizes additional source-specific information to be 7 considered before making a permit decision. I'll discuss 8 the specific findings report more in the next slide. 9 This specific findings report is a report that 10 identifies and discusses the site specific information the 11 district will consider when making its final permitting 12 decision. 13 The report is put together by the district with 14 input from the owner-operator that is seeking a permit. 15 Examples of information that may be included in 16 the specific findings report are listed on the slide. 17 For engines requiring a specific findings report, 18 we suggest allowing the public to review and comment on the 19 proposed permitting action. The district would consider 20 these comments when making its permitting decision. 21 Several issues have been raised regarding the 22 suggested approach. 23 Issues raised are similar to those raised 24 regarding the recommended measures of the diesel risk 25 reduction plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 The first issue was addressed earlier in my 2 presentation. We're currently gathering additional 3 information on the use of diesel particulate matter traps on 4 emergency standby engines. 5 The availability of very low-sulfur diesel fuel. 6 We believe there is enough very low-sulfur fuel being 7 produced today to fuel all of the new stationary fuel 8 engines that would be addressed by this guidance. 9 The biggest issue is related to the logistics of 10 transporting low-sulfur diesel fuel to specific locations. 11 Because of this, we have built into the guidance flexibility 12 to allow for districts to decide whether the requirement for 13 very low-sulfur fuel is applicable for specific permitting 14 actions. 15 So in summary, the guidance suggests permit 16 requirements be based on engine application and annual hours 17 of operation. 18 The suggested permit requirements consist of 19 meeting either technology requirements or performance 20 standards, which reflect the state of the art in engines, 21 fuels and add-on controls. 22 For engines that operate over a set number of 23 hours a year, a health risk assessment would also be 24 required. 25 The staff recommends that you approve the proposed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 guidance. 2 That concludes my presentation. 3 Thank you. 4 CHAIRMAN LLOYD: Thank you very much. 5 Madam Ombudsman, do you have any comments on this 6 item? 7 OMBUDSMAN TSCHOGL: In the interest of time, 8 Mr. Chairman and members of the board, because the outreach 9 on this item was very similar and in fact almost identical 10 to the previous item, unless you had some specific 11 questions, I would like to pass on that. 12 CHAIRMAN LLOYD: Thank you. 13 I had one question in terms of this item was 14 worked through, was CAPCOA fully involved with the process? 15 MR. KENNY: Yes. 16 MR. VENTURINI: We worked very closely with 17 CAPCOA. In fact, Barbara Lee could not be here to testify 18 this afternoon, but we do have a letter of support. 19 CHAIRMAN LLOYD: I assumed. I just wanted to get 20 that on the record. Thank you. 21 Board members have any questions? 22 The petition is working. 23 With that, I would like to call the first witness 24 here, Manuel Cunha and Dave Smith, Tim French and Terry 25 Ellis. That's the sum of the people testifying on this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 item. 2 Manuel Cunha, not here? 3 Dave Smith. 4 MR. SMITH: Thank you, Chairman Lloyd, board 5 members. I'm Dave Smith again representing WSPA. I am an 6 employee of BP, sometimes known as Arco. 7 CHAIRMAN LLOYD: I thought it was Beyond 8 Petroleum. 9 MR. SMITH: It is. We're into solar. A lot of 10 other things too. 11 We have submitted written comments to you. 12 We're supportive of these development of 13 guidelines, which was one of the issues that we were 14 concerned about when the diesel particulate was listed as a 15 toxic air contaminant, so we're thankful for that. 16 One of the things that we are encouraging you to 17 do would be to add some language to the guidance documents 18 about how one is to compare the toxic risk from diesel 19 emissions compared to alternatively fueled engines. 20 You've heard some discussion of that earlier on 21 the plan. I think the permitting guidelines suggest that 22 health risk assessment is going to be part of the permitting 23 guidelines. 24 We've certainly entered into a very lively debate 25 in the South Coast about how one is supposed to do that, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 I think it would give the ARB a good opportunity through 2 this permitting guidance document to provide some additional 3 guidance, not only to the South Coast, if they choose to 4 take it, or to all the other districts that are going to be 5 faced with the same issue. 6 So we would encourage you, and we've had 7 discussions with the staff and they've indicated some 8 willingness to consider this, that there would be a 9 discussion in this document about how the districts would do 10 that. 11 And obviously our group, WSPA, has been supporting 12 the comparison of the mass emissions of particulate and 13 non-methane hydrocarbons as one way of comparing the 14 relative risk between diesel exhaust and other alternatively 15 fueled vehicles. It would be fairly straightforward 16 comparison as compared to some of the other approaches that 17 are suggested. 18 I have basically two other comments. 19 One is that the permitting guidance requires that 20 health risk assessments be done for a certain subset of 21 engines. 22 We would like to suggest that the permitting 23 guidelines recognize the ability of operators to choose to 24 go ahead and do a health risk assessment, to try to come up 25 with alternative permit conditions than are otherwise PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 suggested in your guidance documents. 2 I think some of these issues have been brought up 3 especially about the exposure issues. 4 Right now the permit guidelines would suggest that 5 if you had a 51 or whatever size horsepower engine, that it 6 wouldn't make any difference from the guidance perspective 7 whether that engine was located in the middle of the desert 8 or in the middle of Los Angeles or Sacramento, it would -- 9 those engines would have to meet the same emissions or 10 criteria. 11 And I think it would be appropriate to allow the 12 operator the flexibility to submit a health risk assessment 13 to argue that certain types of controls are not needed for 14 certain applications because of exposure differences. 15 Finally, you've heard a lot about the emergency 16 standby engines. The plan that you've just recently adopted 17 calls for an air toxic control measure to be adopted. 18 Here I think, fairly shortly about these engines, 19 I guess again WSPA is, you know, we used emergency standby 20 engines and again we're suggesting that possibly you take 21 the emergency standby engines out of this permitting process 22 and depend on the process where you're going to develop an 23 air toxic control measure as a way to best consider how to 24 control these sources. 25 These sources are used in emergency conditions and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 I think it may be -- you may be moving too fast in including 2 these in these permit guidelines. 3 So that completes my testimony. I'd be glad to 4 answer any questions. 5 CHAIRMAN LLOYD: Thank you. 6 I notice in the specific comments they were 7 suggesting that the air districts actually take into account 8 CO2 emissions. 9 MR. SMITH: Yes. Well, certainly, when you're 10 comparing, if you're talking about comparing emissions or 11 the risk associated risk between different types of control 12 measures, I do think you need to look at more than just PM 13 or NOx from those. You have to look at the other pollutants 14 and other particulates or other toxic materials including 15 CO2. 16 CHAIRMAN LLOYD: So CO2, what's the rationale for 17 adding CO2? 18 MR. SMITH: Well, I mean it's a greenhouse gas. 19 CHAIRMAN LLOYD: Fine. Thank you. 20 MR. SMITH: Sorry. Our principal concern is 21 getting some guidance in here on the comparing the toxicity 22 from the two different types of vehicle engines. 23 CHAIRMAN LLOYD: Thank you very much. 24 Next is Tim French. No? 25 Terry Ellis. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 MR. ELLIS: Good afternoon again. Again I'm not 2 from WSPA, I'm from Coalition of Petroleum Services and 3 CCTS, Clean Can Technology Systems. 4 The purpose of my comments will be brief. 5 Maybe the best place to start is a clarification 6 on, since this is a guidance document for new stationary 7 permitting, I want to make sure that I understand that we're 8 going to address and use this document to handle and only 9 deal with new stationary sources, and it doesn't fall over 10 into or retroactive to the existing, as we know those are 11 two different categories, and the technologies that are 12 applicable to new engines are not always going to be 13 applicable to existing technologies. 14 More importantly, though, as the technologies 15 evolve, we will have the need to assess whether or not they 16 work, and it brings me back to my previous point in previous 17 testimony in this morning's item is when we test and when we 18 certify our technology, we had a target. We had a new 19 engine standard to shoot for. And if we progress, as we're 20 suggesting here, to hang a particulate trap off of a 21 particulate efficiency of 85, 90 percent, where does that 22 get us without the new engine standards? 23 So I would hope that as we follow through on this 24 proposed guideline, that we have emission standards that 25 when we get to the existing engines also that would be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 appliable that we could shoot at that, we could have a 2 target, because if we're going to differentiate, and we 3 must, I want to make sure that what stays here in new 4 stationary and permitting does not fall over into the 5 existing categories. 6 That's my main concern. 7 Outside of that, I'll leave this morning's 8 comments as on that issue, because this is specific to new 9 diesel engines. 10 So thank you for your time. 11 CHAIRMAN LLOYD: Thank you very much. 12 I don't know whether we have Mr. Cunha or Tim 13 French back? 14 I guess, if not, then that's the last of the 15 witnesses. 16 Mr. Kenny, do you have any other comments? 17 MR. KENNY: Nothing further. 18 CHAIRMAN LLOYD: You sure? 19 MR. KENNY: Yes. 20 CHAIRMAN LLOYD: Well, I'm sure you had something 21 more to say, but maybe not. 22 Okay. Since this is not a regulatory item, it's 23 not necessary to officially close the record, however we do 24 have a resolution before the board. 25 Want to take some time to review that, or the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 other thing, if there are other discussion amongst the board 2 members, questions, before we get to that I guess. 3 BOARD MEMBER C.H. FRIEDMAN: Move adoption, if I 4 may. 5 BOARD MEMBER FRIEDMAN: Second. 6 CHAIRMAN LLOYD: All in favor say aye. 7 (Ayes.) 8 CHAIRMAN LLOYD: Thank you. Unanimous. Thank you 9 very much. 10 We'll take a few minutes while we change over. 11 (Pause in proceedings.) 12 CHAIRMAN LLOYD: Next item on the agenda today is 13 00-9-3, a regulation pertaining to the conditional rice 14 straw burning program. This is the final step in the 15 phasedown of rice straw burning in Sacramento Valley. 16 Before I turn this item over to staff, I would 17 like to take a moment to thank the Sacramento Valley rice 18 growers for their contribution to air quality in the region. 19 We recognize the operational changes you've adopted in order 20 to meet the phasedown requirements, and we appreciate that 21 very much. 22 We also appreciate working with some of our staff 23 to help us understand this issue. 24 As a result of your efforts, smoke impacts from 25 rice straw burning have dramatically declined over the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 years. This benefits everyone's health, but it is 2 particularly important for those individuals with 3 respiratory diseases. 4 I also want to thank the Advisory Group Basinwide 5 Control Council and the growers who actively participated in 6 developing this regulation. Your participation was critical 7 to the staff, staff's efforts, to effectively meet 8 objectives of state law. 9 With that, I'd like to turn it over to Mr. Kenny 10 to introduce the item to the board. 11 MR. KENNY: Thank you, Mr. Chairman and members of 12 the board. 13 Today's proposal would provide a regulatory 14 framework for issuing rice straw burn permits for the 15 purposes of disease control. 16 These permits may be granted only for fields with 17 rice disease likely to cause a quantifiable and significant 18 reduction in rice yields. 19 The permits would be issued by air districts in 20 the Sacramento Valley air basin. 21 Staff's goal in developing the proposed regulation 22 was to ensure a sound technical approach for documenting 23 disease, while minimizing program costs. 24 The program will require inspections to confirm 25 the presence and quantity of disease. This information will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 be assessed by the local agricultural commissioners who have 2 responsibility under state law to make a disease 3 significance finding prior to approval of a permit 4 application. 5 Staff accepted the recommendation of the 6 Sacramento Valley Basinwide Air Pollution Control Council 7 that the council develop the details of the burn permit 8 program consistent with these regulations. 9 This provides for flexibility, while ensuring that 10 fundamental elements such as field inspections are included 11 in the program. 12 The proposal would require the council, which 13 consists of all air districts in the region, to submit a 14 final program to ARB for approval. 15 Staff's presentation will describe the required 16 program elements and the rationale for the approach. 17 I'd now like to ask Mr. Paul Buttner to make the 18 presentation. 19 MR. BUTTNER: Thank you, Mike. 20 Good afternoon, Chairman Lloyd and members of the 21 board. 22 It is my pleasure to provide you with a brief 23 presentation on our proposed conditional rice straw burning 24 regulation. 25 I will start off by providing some background on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 the rice straw burning law and then summarize the current 2 proposal for you. 3 CHAIRMAN LLOYD: Excuse me. Does the board have 4 copies of your presentation? 5 MR. BUTTNER: I believe they do. 6 CHAIRMAN LLOYD: I believe they don't. 7 BOARD MEMBER RIORDAN: I don't have one. 8 CHAIRMAN LLOYD: No, I don't have one. 9 Is it coming around. It's coming. 10 Thank you, Paul, continue. 11 MR. BUTTNER: Moving on to the second slide, the 12 phasedown law was implemented in 1992 and has gradually 13 reduced the amount of burning by rice growers in the 14 Sacramento Valley air basin. 15 Beginning in 2001, the law restricts rice burning 16 to the lesser of 25 percent of each individual grower's 17 planted acreage or 125,000 total acres in the Sacramento 18 Valley. 19 The Air Resources Board is required to -- excuse 20 me. Burning will also be restricted for disease control 21 purposes only, which is the main purpose of this regulation. 22 CHAIRMAN LLOYD: What's happened to your volume? 23 MR. BUTTNER: The Air Resources Board is required 24 to adopt a regulation establishing a procedure for 25 identifying and quantifying rice disease. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 The regulation is designed to meet several basic 2 objectives. 3 First, the regulation must establish a process for 4 allowing the burning of diseased rice fields. In doing so, 5 the Air Resources Board must meet several provisions in 6 state law. The law requires that we consider 7 recommendations from the conditional rice straw burning 8 advisory group. 9 This group was created to make recommendations on 10 how certain elements of the program should be designed, 11 mostly how the agricultural commissioner's findings are 12 made. I will address the agricultural commissioner's 13 findings role later in detail. 14 The law also requires a program that quantifies 15 rice disease in the field and makes a determination of 16 significance. 17 Working with the University of California 18 researchers and others, we have developed the proposed 19 procedure to accomplish this. 20 Finally, as a practical matter, staff propose to 21 designate the Sacramento Valley Basinwide Air Pollution 22 Control Council as lead in the final development and 23 adoption of the local program required by the proposed 24 regulation. 25 The proposed regulation establishes a basic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 framework or minimum standards, if you will, that a local 2 adopted program must satisfy. 3 The program must have provisions for field 4 inspections and standardized reports for recording and 5 submitting results. 6 To make sure that field inspections are properly 7 conducted, a program for training inspectors on how to 8 identify the diseases in the field is required. Only those 9 who successfully complete the training may be permitted to 10 officially inspect for disease. 11 Growers who complete the training may self-inspect 12 their own fields. 13 The field inspection reports are then submitted to 14 the county agricultural commissioners for review and 15 approval. 16 Once the agricultural commissioner has approved a 17 conditional burn application, the air pollution control 18 officer can issue a permit to burn. 19 For the purposes of monitoring the program's 20 effectiveness, annual reports will also be required from the 21 Basinwide Council regarding the ongoing implementation of 22 the program. 23 To maintain our oversight responsibility, staff 24 has included provisions to authorize the executive officer 25 to approve or disapprove the Basinwide Council's submittal PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 in accordance with a specified procedure. 2 The Basinwide Council is created by law and is 3 composed of elected officials from the air district boards 4 of the Sacramento Valley air basin. 5 Their primary responsibility is to design program 6 details consistent with the framework of the proposed 7 regulation. 8 In addition, they are also responsible for the 9 implementation of the overall program, as well as other 10 related elements such as training, annual reporting, 11 compliance and coordination with the agricultural 12 commissioners. 13 The Legislature assigned the agricultural 14 commissioners with the most significant role for public 15 agencies in this program. They are required to review and 16 approve or disapprove all inspection reports submitted 17 within the program. 18 Oversight field inspections or spot checks are 19 also a responsibility of the agricultural commissioners. 20 They are accustomed to performing this role and other 21 programs such as the regulation of pesticides. 22 Staff's proposal requires each agricultural 23 commissioner to go into the fields to confirm the results of 24 at least one of every 20 inspection reports they receive. 25 The regulation requires the agricultural PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 commissioners to maintain a public file for inspection 2 reports submitted in accordance with the program. 3 The agricultural commissioners will also have a 4 role in working with the Basinwide Council to make 5 inspection training programs opportunities available to 6 those who need them. 7 There are currently three diseases considered by 8 the program. Examples are shown in this slide. They are 9 stem rot, aggregate sheath spot, and blast. 10 Each of these diseases can affect rice yields as 11 the diseases develop in the fields. Generally speaking, the 12 worse the disease, the greater the potential for yield loss. 13 We use this information to determine levels of 14 disease incidence that can be called significant. Although 15 the program currently considers these three specific 16 diseases, there is a joint process between ARB and the 17 Department of Food and Agriculture for the addition or 18 removal of diseases from this list. 19 Staff's proposal requires field inspections to 20 quantify diseases in the field. The proposed inspections 21 must estimate average disease levels for each field proposed 22 for burning. These levels of disease are then compared with 23 the significance thresholds staff has developed for the 24 diseases. 25 If levels in the field exceed these thresholds, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 the field may be approved for burning. 2 We propose to require quantification against these 3 thresholds for an intensive two-year period and evaluate the 4 need to continue the quantification requirement. 5 Currently, staff believe there is enough disease 6 present in the Sacramento Valley to qualify the maximum 7 acreage allowed for disease control burning. 8 However, if the first two years of data do not 9 support this conclusion, or if disease levels drop in the 10 future, we will revisit the need to reinstate the 11 quantification requirement. 12 We have worked with the advisory group, University 13 of California, growers and others to refine the options for 14 conducting field inspections. 15 There are three available methods that can be used 16 to demonstrate disease in the field. 17 Stem sampling, which we believe will be the most 18 popular, involves going into the field and cutting stems at 19 specified locations. Average levels of disease are then 20 calculated by counting diseased versus healthy stems. This 21 is a relatively quick, straightforward method with reliable 22 results. 23 The second method involves visual inspection of 24 the stems. Small groups of stems are visually inspected to 25 quantify the diseased stems. This method is only slightly PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 more time efficient than stem sampling and often 2 underestimates disease. 3 The final method is soil sampling. This method 4 involves going into a field before planting and collecting 5 soil samples for later lab analysis. Staff expect this 6 method to be the least desirable because of cost 7 considerations. However, we recommend that it remain as an 8 alternative to growers. 9 To ensure that the proposed approaches are 10 reasonable, we have participated in a pilot program to test 11 the methods in the field. Representatives from the 12 University of California have developed a four-hour 13 inspector training program. A pilot of this program was 14 held in August. Many of the agricultural commissioners who 15 took the course in August have already implemented test 16 inspections to determine if the training and field methods 17 are reasonable. 18 Based on the inspection of over 35 fields, staff 19 has concluded that the training and subsequent field 20 inspections are relatively simple, practical and effective 21 for identifying and quantifying rice disease. 22 Before concluding my presentation, I would like to 23 acknowledge the significant contributions made by growers 24 and other representatives of the organizations listed on 25 this slide. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 While I cannot possibly mention everyone who 2 participated, I would like to acknowledge Mr. Steve Shaffer 3 from the Department of Food and Agriculture for his 4 substantial efforts, and much of the proposed regulation 5 could not have been developed without the help and 6 participation of Dr. Robert Webster and Mr. Jack Williams of 7 the University of California who developed the inspector 8 training program and which will be a core element of the 9 proposed regulation. 10 And finally the collective efforts of the 11 conditional rice straw burning advisory group, chaired by 12 Mr. Hairy Krug, put forth a well-organized recommendation 13 that staff has used as a basic foundation for writing the 14 proposed regulation. We appreciate these collective efforts 15 and look forward to continuing our working relationships as 16 we implement the regulation. 17 In conclusion, staff recommends that the board 18 approve the regulation to establish the framework for a 19 local inspection program to be adopted and submitted to the 20 board by the Basinwide Council, and we further recommend the 21 board authorize the executive officer to consider the 22 approval of the Basinwide Council's program. 23 That concludes my formal presentation, and I'd be 24 happy to answer any questions you may have. 25 CHAIRMAN LLOYD: Board members have any questions? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 None. 2 I'd like to call the witnesses who have signed up. 3 Do we have a list of -- these are ones which have got 4 written comments. 5 BOARD MEMBER FRIEDMAN: I'm sorry. 6 CHAIRMAN LLOYD: We now have the list. 7 First is Harry Krug, then Robert Sutton and then 8 Robert Warkentin. And those are the full list of people to 9 testify. 10 MR. KRUG: Good afternoon. 11 CHAIRMAN LLOYD: Good afternoon. 12 MR. KRUG: Chairman, Board members, my name is 13 Harry Krug. I'm the Colusa County air pollution control 14 officer and county agricultural commissioner. So I wear 15 both hats. 16 As you heard, I was chairman of the advisory group 17 that developed the recommendations and findings. I think we 18 first met about three years ago and took a couple-year 19 hiatus when we had the pause in the phasedown and then got 20 back to work. 21 I would like to read a letter from county 22 supervisor William Waite, who is also chairman of the 23 Sacramento Valley Air Basin Control Council, so start with 24 that short letter. 25 It says: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 Dear Mr. Chairman and board members: 2 I'm writing to express my approval of the draft 3 regulations for the conditional rice straw burning program. 4 Unfortunately I'm unable to attend the hearing today because 5 of rice harvest. 6 The staff of the ARB, along with Steve Shaffer of 7 the California Department of Food and Agriculture, and the 8 various members of the advisory group that helped develop 9 the background information and findings did an admirable 10 job. 11 Specific members of the advisory group that should 12 be noted are Jack Williams with the University of California 13 Cooperative Extension, and Dr. Robert Webster of UC Davis, 14 both for their valuable information and knowledge of rice 15 and rice diseases. 16 And special recognition to Susan Engstrom of the 17 Sacramento Metropolitan Air Quality Management District for 18 her diligent performance in developing and preparing the 19 various documents which have become an important part of the 20 program to carry out the new regulation. 21 I must commend the principal author, Paul Buttner, 22 of your staff for his thorough research into the issues 23 while developing the regulations. His willingness to work 24 with all persons who had an interest in the formulation of 25 the regulation package has made it an enforceable and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 workable document to protect the public and the rice 2 industry. 3 I must emphasize that the rice disease problems in 4 the Sacramento Valley may become more frequent and the need 5 to exceed the 25 percent maximum allowable burn may be 6 required. This can still be accomplished with a joint 7 determination of extraordinary circumstances from the ARB 8 and CDFA. 9 I must also stress that the need for alternative 10 uses of rice straw must continue to be pursued along with 11 the development of an economical benefit for growers to 12 dispose of their rice straw. 13 Thank you for the opportunity for the Basin 14 Control Council to participate and become a partner in the 15 process to carry out the conditional rice straw burning 16 program. 17 That was by William Waite. 18 And I would just like to ditto on that. I would 19 like to thank Susan Engstrom, who kept me on track, and the 20 committee, and Jack Williams for all his hard work in doing 21 the research and the training. 22 Thank you. 23 CHAIRMAN LLOYD: Thank you very much. 24 Any questions from the board, comments? 25 Next we have -- sorry, Professor Friedman. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 BOARD MEMBER C.H. FRIEDMAN: While we're getting 2 kudos spread around, I just want to say how much I admire 3 the work Paul did on this and it's in the finest tradition 4 of the staff at the ARB. 5 CHAIRMAN LLOYD: Thank you very much, Professor 6 Friedman. 7 Next we have Robert Sutton. 8 MR. SUTTON: Hello. Thank you for the opportunity 9 to be here today. I'm Robert Sutton, a Colusa county rice 10 farmer. 11 And AB 1378, SB 318, safe harbor. It hasn't been 12 cheap, but here we are. The California Rice Commission was 13 an active participant in this process. 14 I would like to thank Mr. Buttner in particular 15 for his efforts. 16 We support the rules as presented. 17 However, I would like to examine one part of the 18 rules and I have a few points on perspective. 19 Economic significance. The rules used ten percent 20 of net income as a threshold, about one sack per acre. 21 Simple. Doesn't sound like much until you see the total 22 cost to the producer. 23 First, from 1992 until now, you must know that the 24 rice producers have spent over $112 million incorporating 25 rice straw. And that next year during safe harbor the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 annual cost to the producers will be over $28 million. This 2 will go on year after year. 3 Safe harbor is my part of AB 1378, and I have paid 4 dearly to get here. I have spent personally on my farm 5 $195,000 to deal with straw from the year of 1992 to 2000. 6 Next year it will cost me over $61,000 to deal with straw in 7 the name of air quality. In ten years that's $610,000. I 8 hope I survive this cost. 9 Now back to economic significance. A compromise 10 was reached and that was between the players here, was 11 reached and it appears that farmers who can burn under safe 12 harbor qualify economically and with enough disease for two 13 years, only presence of disease will be required after that, 14 if that happens. Okay. 15 But if it doesn't happen, then you will hear from 16 me again. By this I mean we must redefine economic 17 significance. You see, economic significance to me is 18 different than it is to someone else. 19 First of all, the program will cost me about $1200 20 per year, 10 years, that's $12,000. Cost to get to safe 21 harbor again for me was $195,000. The cost annual to me 22 again is $61,000 per year. The presence of disease is more 23 now than it was in 1992, and there's a cost associated with 24 that in yield reductions. 25 If we don't arrive at showing presence of disease PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 only in two years, we should redefine economic significance. 2 In closing, I want everyone to remember safe 3 harbor is my part of AB 1378 and it should be easy and cheap 4 to use. 5 The thought that I want you to remember the most 6 is in the spirit of AB 1378 they promised to give us 7 alternatives, but where are they? 8 Thank you. 9 CHAIRMAN LLOYD: Thank you. 10 Mrs. Riordan. 11 BOARD MEMBER RIORDAN: Just in perspective, while 12 I visited your county and have seen the rice fields, that 13 investment that you've had to make, that's spread over how 14 many acres that you farm? 15 MR. SUTTON: That's 1100 acres of rice. 16 BOARD MEMBER RIORDAN: 1100 acres of rice. Thank 17 you very much. 18 CHAIRMAN LLOYD: Is the acreage used for rice 19 growing, is that increasing or decreasing? You implied in 20 your remarks -- 21 MR. SUTTON: In my particular case when we started 22 out in '92 I was about a thousand acres. I've gone up a 23 hundred, and this year I think I went up 80 more. I'm 24 actually 1170 as this moment. Economics are so poor in 25 other crops that we've grown a little bit more rice on my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 ranch. 2 CHAIRMAN LLOYD: So although it's getting tougher, 3 it's still more attractive? 4 MR. SUTTON: Well, when you think about $4 wheat, 5 if you know the economics of that, and $220 a ton safflower, 6 I grew safflower this year and lost $50 an acre, so you kind 7 of don't plan on doing that again. And I grew a reasonable 8 crop. 9 CHAIRMAN LLOYD: Ms. D'Adamo. 10 BOARD MEMBER D'ADAMO: Yes. You're saying that 11 you don't see the alternatives. I'm a little confused, 12 because this program -- 13 MR. SUTTON: There was a lot of negotiating and 14 politicking that went on in 1992 when they passed this bill 15 and they needed a vote from the San Joaquin Valley, they 16 needed one more vote, so they exempted the rice to the south 17 of Sacramento. So a lot of things happened and everybody 18 kept saying we'll develop alternatives, we'll develop 19 alternatives, you know, economically viable alternatives 20 that don't cost me so darn much money. 21 That's what I'm saying by alternatives. 22 So if you bale and remove and then do something 23 with the straw, they have proven that to almost take care of 24 our disease as good as burning. That's why we burn. I'm 25 assuming people have a background on this, so I use very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 common language. I don't mean to be rude or anything. 2 So the alternatives aren't here, except for straw 3 incorporation, which are so expensive, and they just don't 4 work very good. It takes a lot of energy and effort, diesel 5 fuel that's a little more expensive today than it was last 6 year. 7 BOARD MEMBER D'ADAMO: I understand. I guess I 8 misunderstood. I thought you meant the alternatives in 9 terms of disease control, that there were no alternatives 10 for that. You were talking about alternative -- 11 MR. SUTTON: No, I'm talking about alternatives to 12 straw incorporation that are economically feasible, which 13 would make -- I'd go away if we could -- 14 BOARD MEMBER D'ADAMO: Yes. 15 MR. SUTTON: -- use half our rice straw, you know, 16 just break even would be fine with me. Just get it out of 17 the field, break even on it, but there just aren't -- you 18 know, weren't one or two percent doesn't -- anyway, thank 19 you. 20 CHAIRMAN LLOYD: Yes. Robert Warkentin, last 21 witness. 22 I realize, Madam Ombudsman, I will come back to 23 you. I realized I skipped that. 24 MR. WARKENTIN: I'm Robert Warkentin. I'm not a 25 rice grower, don't live in a rice area. I'm a Visalian. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 Just by way of introduction, I'll read what I 2 wrote to the board. It's boring, just tune out until I get 3 to tell you about the project. 4 I am a native Californian born in Tulare County. 5 I've been involved in agriculture throughout my life, having 6 spent 20 years as a dairyman and cotton grower. 7 In 1965 I began trading agricultural commodities 8 contracting with large growers, feed lots, dairies and 9 exporters. 10 In 1971 I was employed by Wilbur Ellis Company as 11 a commodities trader, acting as a field representative. I 12 held this position until 1991. 13 Along with trading commodities, I also developed 14 new uses for byproducts of agriculture. 15 It became more apparent to me that so-called 16 waste, in quotes, could be utilized for profitable purposes. 17 Thus, I researched the possibility of using worms as the 18 machinery for creating added value to such byproducts. 19 After testing, at this time it was 36, but now it 20 is 44 types of fibrous residues as worm feed, I was 21 encouraged by a patent attorney to apply for a process 22 patent. 23 I applied for that patent in 1995 and was issued 24 the patent in 1998. 25 And last two years I have used this patent at a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 dairy, at a heifer feed lot, at a non-tillage pecan grove, 2 at a winery, which will be beginning this fall has the worms 3 in place. At a non-tillage vineyard, and also in a vineyard 4 where we were recycling the raisin trays which have been 5 burned for the last 60 years. 6 Plans have been drawn now for four more operations 7 in Tulare, Fresno and Kern counties. 8 I've been keeping abreast of the rice straw 9 problem as much as I could and have done continuous R and D 10 with straw since 1992. 11 Problems create opportunities. I look forward to 12 being a part of the solution. 13 The name of my company and my project is the Last 14 Straw. 15 The use of earthworms, eisenia fetida, are their 16 name, is to convert rice straw into value-added products. 17 The process is called vermicomposting. 18 The process is patented and is my sole product. 19 Then I will pose some questions as a form to 20 arrive at some statements I will make following them. 21 What is the -- how is the conversion accomplished? 22 The rice straw in chopped form is placed in a berm 23 about 12 inches high and four to five feet in width. Two 24 movable misters or sprinkler lines for moisture maintenance 25 are placed over the length of the berm. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 After a thorough soaking, worms are added to the 2 top of the berm. The worms immediately work their way into 3 their new feed source. 4 The applied moisture causes the straw to decay. 5 The decayed matter is then ingested by the worms, 6 not chewed. They don't chew anything. 7 For this worm introduction it is recommended to 8 place one pound of worms for each cubic foot of feedstock. 9 It takes approximately 1,000 worms to equal one pound. 10 Additional chopped straw is added as needed on top 11 of the berm for the first 120 days as needed. Thereafter, 12 the feed is added at a slant on one side of the berm. This 13 induces the worms to migrate at each successive -- as each 14 successive feeding takes place. 15 When all of the infants have followed the adults 16 to the benched feed, the earthworm castings, which is worm 17 manure, can be picked up with a skip loader, which I will 18 show in an outline later. 19 CHAIRMAN LLOYD: You've got five minutes. 20 MR. WARKENTIN: I'll get done. 21 A one-acre site reserved for vermicomposting is 22 sufficient for converting up to 2,000 tons per year, using 23 the continuous migration system. 24 What do we know about this worm? This worm is 25 highly reproductive. A herd of worms will double its PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 population every 120 days, with a life span of approximately 2 seven years and remaining reproductive for five of those 3 years. 4 Let us consider the magnitude of their conversion 5 of feedstock to value added products. These worms consume 6 daily an amount that equals 50 to 70 percent of their own 7 body weight. 8 Beginning with 2,000 pounds of worms we can 9 calculate that feeding an operation beginning in January 1 10 of 2001, you would accomplish growing a herd that will total 11 in the year 2008 the last day of December, 16,777,000 plus 12 tons. 13 If you saved all the rice straw, you would still 14 have not enough feed for those worms at that time. 15 CHAIRMAN LLOYD: Thank you. Are you about 16 finished? 17 MR. WARKENTIN: About half. 18 CHAIRMAN LLOYD: Yes. 19 BOARD MEMBER C.H. FRIEDMAN: I have a question. 20 Do earthworms result in any emissions to the air? 21 MR. WARKENTIN: No, they do not. Worms live in 22 the moisture condition in darkness, under the ground or in 23 their feed source. And they do some really miraculous 24 things in helping improve the air in that there's no dust in 25 this operation at all. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 The other thing is that the worms will deodorize 2 every single feedstock that they are given, including onion 3 skins and garlic skins, completely deodorized. 4 BOARD MEMBER BURKE: Professor, this is the same 5 process as currently being used in Australia at the Olympic 6 Games, and they are planning on disposing of 100,000 tons of 7 trash by the use of worms. 8 BOARD MEMBER FRIEDMAN: How do they dispose of the 9 worms? 10 BOARD MEMBER BURKE: You see, in Australia they 11 got more room. They're using it right now. 12 MR. WARKENTIN: Worms are worth, and have not 13 changed average price for the last 10 to 11 years, around 14 $10 a pound for bulk purchases. In small purchases of a 15 pound they're $24 a pound. 16 And the manure or the castings will end up 17 weighing more than the straw you fed them, because you 18 moistened the castings at 40 to 50 percent moisture content. 19 The other half of the income comes from the worms 20 if you wish to sell them. You won't need to. If you just 21 sell the castings, you're home free, plus. 22 CHAIRMAN LLOYD: Yes, Ms. D'Adamo. 23 MR. WARKENTIN: I have a demonstration out here at 24 the table. I don't want to take anyone else's time. 25 BOARD MEMBER D'ADAMO: I just have a question PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 about water, how much water do you use per acre? 2 MR. WARKENTIN: I don't have the measurement of 3 the amount of water, but you only mist the top that has 4 dried out from the previous day's sun or wind, and that 5 usually occurs during the warm spring days into fall. Once 6 you've had a rain or two, the worms maintain all the lower 7 moisture and the fog and the rain maintain most of the top 8 moisture. A light sprinkler on an automatic mister about 15 9 to 20 minutes at sunup or so. 10 BOARD MEMBER BURKE: Maybe we should ask staff to 11 check with the Olympic Committee in Australia. 12 CHAIRMAN LLOYD: You mean not going there? 13 MR. WARKENTIN: Australia leads the world in 14 vermiculture technology. They're leaps and bounds ahead of 15 us. 16 And some of this terminology that I use comes from 17 Australia, for instance, calling worms livestock. 18 BOARD MEMBER C.H. FRIEDMAN: How about a herd? 19 Not a pride, not a gaggle, not a flock. 20 MR. WARKENTIN: I have more copies of this so you 21 don't need to hear me read it. 22 Thank you. 23 BOARD MEMBER BURKE: Mr. Chairman, do we have 24 somebody give the people in Australia a call? 25 CHAIRMAN LLOYD: Oh, yes. I think staff should -- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 that's why I was asking, staff should follow up with the 2 Olympic organizers in Sydney to see how it's working out. 3 BOARD MEMBER PATRICK: Mr. Chairman, if you'd like 4 a live report. 5 CHAIRMAN LLOYD: That I was -- 6 BOARD MEMBER PATRICK: And the state would like to 7 pay, I'll be happy to go to Australia and check it out. 8 BOARD MEMBER BURKE: Just in time for closing 9 ceremony. 10 BOARD MEMBER PATRICK: Absolutely. I'm sure 11 there's a free ticket we can scalp from somewhere. 12 CHAIRMAN LLOYD: Sounds like a pretty efficient 13 process. 14 Yes, Ms. D'Adamo. 15 BOARD MEMBER D'ADAMO: I probably should have 16 asked this while you were up here, but did you apply for a 17 grant, are you familiar with the grant process? 18 MR. WARKENTIN: I am, but it's really not 19 practical, because every farmer who grows rice can do this 20 on-site at his own place. Nobody needs a grant. I can 21 start the worms the next week, he's in business. 22 BOARD MEMBER FRIEDMAN: I don't mean to differ 23 with your view, but a demonstration project, which is 24 fundable, might sell the idea so that it would indeed then 25 become a widespread practice. That is the purpose of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 grant process, that the board is involved in in an intrinsic 2 way. 3 CHAIRMAN LLOYD: What is the initial reaction of 4 some of the people who are involved and got the rice straw, 5 is there any interest in this sort of thing? 6 Bob, I see you sitting back there. You have any 7 feeling? Before we get too carried away, do you see any 8 potential this could help you out? 9 MR. SUTTON: I think the process would probably 10 work, the digestion part, but we have to first chop all this 11 straw, remove it from the field, you're now handling a loose 12 product instead of a baled compacted product. Baling is $40 13 a ton. 14 How much an acre, Jack, real quick? 15 That's a baled product to remove it, so if we bale 16 it and remove it, that would be the easiest way, then unbale 17 it and get it loose for the worms and then the water, and 18 where you going to put it. And a thousand acres would fit 19 on, what, a hundred acres, ten percent of my land is gone. 20 I rent my land. It's not my land. 21 MR. WARKENTIN: One acre. 22 MR. SUTTON: The straw won't fit on an acre, 23 believe me. Where you put it? And then you -- all the 24 material handling would be more expensive than the expenses 25 that I just discussed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 So although the process, I'm sure, has a lot of 2 viability, the cost of material handling is where I see the 3 problem with this gentleman's suggestion. 4 CHAIRMAN LLOYD: Thank you very much. 5 I think it's still be good for staff to take a 6 look at it. Might have other applications. 7 BOARD MEMBER BURKE: If you could centralize -- I 8 understand the handling and the cost and the chopping, but 9 if you had a centralized facility which, you know, could be 10 operated by a cooperative or something, maybe there's some 11 potential there. 12 CHAIRMAN LLOYD: Yes. Madam Ombudsman, sorry for 13 skipping you earlier. 14 OMBUDSMAN TSCHOGL: That's okay. 15 Mr. Chairman and members of the board, staff began 16 this outreach effort in the early part of this year by 17 holding individual and group meetings with stakeholders to 18 outline the plan and schedule for preparing this regulation. 19 Since April, staff has maintained regular contact 20 with all stakeholders and interested parties. 21 In addition to workshops and individual meetings, 22 staff has provided presentations to the Sacramento Valley 23 Basinwide Air Pollution Control Council and its technical 24 advisory committee, to the conditional rice straw burning 25 advisory group, and to the agricultural commissioner. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 Staff has also met several times with UC Davis 2 experts. 3 In May 2000, staff released a draft report, a 4 draft staff proposal for public review and comment. Staff 5 then held two public workshops, one in Sacramento and one in 6 Colusa. 7 Based on the input received, staff modified the 8 proposal, released a revised draft in mid July, and a third 9 workshop was held to discuss the revisions. 10 Staff further revised the regulations and released 11 the final draft in August of 2000. 12 Attendance at each workshop ranged from about 35 13 to 55 participants, including growers, agricultural 14 commissioners, environmentalists, air pollution control 15 officers, rice straw users, and other members of the public. 16 In addition to the formal workshops, staff has had 17 more than 25 individual meetings and telephone conferences 18 with the stakeholders I just mentioned. 19 ARB staff has made a diligent and concerted effort 20 to reach out to all affected stakeholder groups and 21 interested parties. 22 Thank you. 23 CHAIRMAN LLOYD: Thank you very much. 24 Yes, Dr. Friedman. 25 BOARD MEMBER FRIEDMAN: I just want to add my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 compliments to the compliments that Hugh Friedman just paid 2 a short time ago to Paul and staff, because this is a 3 thoughtful, logical program approach. Every effort really 4 was made to listen carefully to stakeholders. And it really 5 makes me proud to be a member of this board to see a product 6 like this. And I appreciate it. Thank you. 7 BOARD MEMBER C.H. FRIEDMAN: Move approval. 8 CHAIRMAN LLOYD: Not quite. 9 BOARD MEMBER C.H. FRIEDMAN: You need to make your 10 statement? 11 CHAIRMAN LLOYD: Yes. No, no. 12 BOARD MEMBER C.H. FRIEDMAN: Withdraw the motion. 13 CHAIRMAN LLOYD: Mr. Kenny, does the staff have 14 Any further comments? 15 Since all the testimony and written submission and 16 staff comments for this item have been entered into the 17 record, and the board has not granted an extension of the 18 comment period, I'm officially closing the record on this 19 agenda item No. 00-9-3. 20 Written or oral comments received after the 21 comment period has been closed will not be accepted as part 22 of the official record on this agenda item. 23 Just a reminder to the board members, any ex parte 24 revelations on this item? 25 No. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 So I guess now we will take a moment to review the 2 resolution, 00-32, which contains a staff recommendations. 3 Do I have a motion and a second? 4 BOARD MEMBER C.H. FRIEDMAN: So moved. 5 BOARD MEMBER McKINNON: Second. 6 CHAIRMAN LLOYD: All in favor say aye. 7 (Ayes.) 8 CHAIRMAN LLOYD: The second was Mr. McKinnon. 9 It's unanimous. Thank you very much. 10 Thank you, staff. 11 So now we go on to take a moment and then go on to 12 the final agenda item today, which is 00-9-4, amendments to 13 the conflict of interest code of the Air Resources Board. 14 (Pause in proceedings.) 15 CHAIRMAN LLOYD: As I indicated, the final item on 16 today's agenda is 00-9-4, amendments to the conflict of 17 interest code of the Air Resources Board. 18 Mr. Kenny, will you please begin the staff 19 presentation. 20 MR. KENNY: Yes. Thank you, Mr. Chairman and 21 members of the board. 22 The Political Reform Act requires a biennial 23 review of each state agency's conflict of interest code. 24 The Air Resources Board's code was last amended with 25 non-substantive changes and approved by FPPC in 1997. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 241 1 Today's amendments simplify and expand the board's 2 conflict of interest code, essentially making more 3 individuals subject to reporting requirements and bringing 4 it into line with the current organizational structure. 5 Staff presentation will be made by Ash Lashgari, 6 an air pollution specialist with the Resource Division, who 7 is also currently attending law school. 8 CHAIRMAN LLOYD: I am looking at Diane there, and 9 you say simplify and expand. I'm not sure I believe that 10 when I see it. 11 BOARD MEMBER RIORDAN: We believe the expansion, 12 it's the simplification that troubles us. 13 MR. KENNY: Actually is there some inconsistency 14 between lawyers and simplification? 15 DR. LASHGARI: Thank you, Mr. Kenny. 16 Mr. Chairman, members of the board, the law 17 requires that everyone who works for a state agency and also 18 makes or participates in making a decision which may 19 foreseeably affect financial interest, meets certain 20 disclosure requirements. 21 ARB has followed the requirements of the Political 22 Reform Act and has incorporated the standards set by the 23 Fair Political Practices Commission and the ARB's conflict 24 of interest code. 25 ARB's code designates the members, employees and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 242 1 consultants who must disclose their financial interests and 2 financial disclosure statements. 3 The designated officials and employees filed 4 disclosure statements upon assuming office, annually and 5 upon leaving office. 6 The code also places the designated officials and 7 employees in categories that establish the types of 8 financial interest that must be disclosed. 9 The employees in categories that establish the 10 types of financial interest that must be disclosed, the 11 designations are found in sections 95001, which names the 12 professional employees of the ARB who make or participate in 13 making decisions, and sections 95002, which designates 14 officials and employees and executive and chair's office, 15 among others. 16 Section 95002 through 95007 provide for categories 17 of disclosure that relate to the types of financial interest 18 that may cause conflict of interests for officials and 19 employees in the various offices and divisions of the board. 20 The ARB's code has been updated periodically and 21 was last updated in 1997. Since then the ARB has added to 22 and changed organization of the board, has added, deleted 23 and reclassified staff positions, and has reorganized the 24 Planning and Technical Support Division. 25 Next slide, please. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 243 1 Changes within the designations of category 1 of 2 relevance to the board reflect the new offices of Community 3 Health and the new office of Science and Advanced Technology 4 in the chair's office and title changes in the chair's and 5 executive offices. 6 The proposed amendments to category 1 would 7 require additional employees in the Administrative Services 8 Division to report. 9 The proposed newly designated employees are 10 contract analysts, business services officer, supervisors 11 and business management analysts. 12 These classifications will be joint branch chiefs, 13 the training section manager, the contracts manager and 14 procurement officers who already are designated for the 15 Administrative Services Division. 16 To help simplify the ARB's code and to reflect 17 additions and deletions in professional staff positions -- 18 next slide, please -- proposed amendments designate broad 19 new professional categories that should remain robust 20 through further organizational changes. 21 The approach proposed is to broadly designate 22 professional categories, rather specify each classification. 23 Under the proposed approach, any employee with a 24 specified profession as part of the employee's 25 classification title would be a designated employee who PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 244 1 would report financial interests as specified in the 2 category for the employee's office or division. 3 Finally, these amendments reflect a reorganization 4 of the Planning and Technical Support Division -- next 5 slide, please -- with new PTSD branches marked in gold and 6 old branches which are no longer in service marked in red. 7 This concludes the staff presentation. 8 BOARD MEMBER BURKE: Mr. Chair. 9 CHAIRMAN LLOYD: Yes. 10 BOARD MEMBER BURKE: Are these changes mandated by 11 the Legislature or this our own desire to simplify our 12 procedures? 13 MS. JOHNSTON: My name is Diane Johnston, and I'm 14 staff counsel. 15 And the FPPC requires that we biennially update 16 our code, and so this is one of the biennial updating 17 process. 18 BOARD MEMBER BURKE: They don't specify what you 19 put in it, they just say biennially you have to do it? 20 MS. JOHNSTON: That's correct. 21 BOARD MEMBER BURKE: My question follows a comment 22 made by Mrs. Riordan, and it deals with the advisory 23 committees. Are the advisory committees usually volunteers? 24 MS. JOHNSTON: Yes, they are. 25 BOARD MEMBER BURKE: How do they come under the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 245 1 heading of staff? 2 MS. JOHNSTON: The FPPC regulations require that 3 advisory committees may have reporting responsibilities and 4 so under our code -- 5 BOARD MEMBER BURKE: Two different words, require 6 or may. They require or they may require? 7 MS. JOHNSTON: They require that when they meet 8 certain conditions that are specified in the FPPC's 9 regulations that they have to report, and so our provisions 10 reflect those same requirements. 11 It wouldn't be every advisory committee member 12 that has to report. 13 BOARD MEMBER RIORDAN: Are they more or less 14 standing committees? For instance, we just went through 15 some advisory committees today, which I would hope didn't 16 have to fill out forms, because they're lending their time 17 and expertise, but we have some very clear standing 18 committees who do make some recommendations to us that are 19 somewhat substantial. 20 MS. JOHNSTON: Right. For example the Research 21 Screening Committee -- 22 BOARD MEMBER RIORDAN: Exactly. 23 MS. JOHNSTON: They do report. 24 But not all advisory committee report. It depends 25 on whether they're in the position of recommending positions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 246 1 to the board which the board usually takes their advice on, 2 and the Research Screening Committee is that kind of 3 committee and therefore they have reporting 4 responsibilities. 5 Committees that act in an advisory capacity where 6 they're not acting in an ongoing capacity are not required 7 to report. 8 CHAIRMAN LLOYD: Yes. Professor Friedman. 9 BOARD MEMBER C.H. FRIEDMAN: Do I understand 10 correctly that our rules currently designate only three 11 committees whose members are subject to these reporting 12 requirements? Members of the Scientific Review Panel on 13 Toxic Air Contaminants, members of the Scientific Advisory 14 Committee on Acid Deposition -- I think that must mean 15 disposition? Deposition? 16 MS. JOHNSTON: Deposition. 17 BOARD MEMBER C.H. FRIEDMAN: As in being deposed? 18 MS. JOHNSTON: Right. 19 MR. SCHEIBLE: Fall out of the air. 20 BOARD MEMBER C.H. FRIEDMAN: Oh, okay. That's a 21 legal term, deposition. 22 And members of the Research Screening Committee. 23 And those are the three? 24 MS. JOHNSTON: That's correct. 25 BOARD MEMBER C.H. FRIEDMAN: Those you're PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 247 1 indicating follow because they are standing committees and 2 they have some discretion to recommend? 3 MS. JOHNSTON: Right. And the board has generally 4 followed their recommendations. 5 BOARD MEMBER C.H. FRIEDMAN: But the Carl Moyer 6 grant committee -- 7 MS. JOHNSTON: No, they have not fallen into that. 8 BOARD MEMBER C.H. FRIEDMAN: Other committees are 9 not? 10 MS. JOHNSTON: Right. 11 BOARD MEMBER C.H. FRIEDMAN: And the rice growers 12 committees. 13 Thank you. 14 MS. JOHNSTON: We've sought advise from the FPPC 15 on some of these other committees and have been advised that 16 until they're in a position where they're meeting regularly 17 and the board is generally following their advice, that they 18 do not have to report. 19 CHAIRMAN LLOYD: Is the deposition committee still 20 in existence? 21 MS. JOHNSTON: Yes, it is. 22 CHAIRMAN LLOYD: Come to think of it, I think 23 we're hearing the close-out in Santa Barbara; is that right? 24 MR. SCHEIBLE: We will probably have a final 25 meeting fairly shortly. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 248 1 CHAIRMAN LLOYD: Okay. Any other comments or 2 questions from the board? 3 Yes, we have no one to speak on this item. 4 Any other comments, Mr. Kenny? 5 MR. KENNY: No. 6 CHAIRMAN LLOYD: I guess since all written 7 testimony, all testimony, written submissions and staff 8 comments for this item have been entered into the record and 9 the board is not granting an extension of the comment 10 period, I'm officially closing the record on this agenda 11 item 00-9-4. 12 Written or oral comments received after the 13 comment period has been closed will not be accepted as part 14 of the official record on this agenda item. 15 Any ex parte communications on this? 16 Seeing none, the board has a resolution before it. 17 Do I have a motion? 18 BOARD MEMBER D'ADAMO: So moved. 19 BOARD MEMBER McKINNON: Second. 20 CHAIRMAN LLOYD: Second. Okay. So moved. 21 All in favor say aye. 22 (Ayes.) 23 CHAIRMAN LLOYD: Thank you. 24 We have no one signed up for the open comment 25 period, so with that, I'll officially -- oh, sorry. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 249 1 Mr. Kenny. 2 MR. KENNY: Actually if I could just say one thing 3 before the board adjourns, which is that I did want to sort 4 of I guess kind of correct something that I was remiss in 5 previously, which is that we do have a new clerk of the 6 board, and that is Marie Kavan. 7 And we are doing our usual, which is that we are 8 throwing her into the fire. I mean she really just started 9 with the board meeting this month on ZEVs and so she's 10 essentially been here for ZEVs and for the diesel reduction 11 plan. 12 And so without a whole lot of training, but giving 13 her two very controversial items, I did want to at least 14 inform the board that we do have a new clerk and she's been 15 with the Air Resources Board for about eight years, but now 16 she's in a new role. 17 Welcome, Marie. 18 CHAIRMAN LLOYD: Welcome. 19 And as Mr. Kenny said, two challenging board 20 meetings to start off, so we are delighted to have you. 21 So with that, I guess I will officially close the 22 September 28th, 2000, board meeting. Thank you. 23 Next month it's in Santa Barbara. 24 (Thereupon the meeting was adjourned 25 at 3:30 p.m.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 250 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, JANET H. NICOL, a Certified Shorthand Reporter 4 of the State of California, do hereby certify that I am a 5 disinterested person herein; that I reported the foregoing 6 meeting in shorthand writing; that I thereafter caused my 7 shorthand writing to be transcribed into typewriting. 8 I further certify that I am not of counsel or 9 attorney for any of the parties to said meeting, or in any 10 way interested in the outcome of said meeting. 11 IN WITNESS WHEREOF, I have hereunto set my hand 12 this 5th day of October 2000. 13 14 15 16 Janet H. Nicol 17 Certified Shorthand Reporter License Number 9764 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345