MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM CALIFORNIA AIR RESOURCES BOARD 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, SEPTEMBER 28, 1995 9:30 A.M. Nadine J. Parks Shorthand Reporter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Eugene A.Boston, M.D. Joseph C. Calhoun Lynne T. Edgerton M. Patricia Hilligoss John S. Lagarias Jack C. Parnell Barbara Riordan Ron Roberts Jim Silva Doug Vagim Staff: Jim Boyd, Executive Officer Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Michael Kenny, Esq., Chief Counsel Annette Guerrero, Staff, Mobile Source Division Bob Cross, Assistant Division Chief, MSD Steve Albu, Chief, Engineering Studies Branch, MSD Peter Venturini, Chief, Stationary Source Division Dean Simeroth, Chief, Criteria Pollutants Branch, SSD Joan Denton, Ph.D., Manager, Substance Evaluation Section, SSD Susan Johnson, Applied Management Planning Group Bart Croes, Research Division Tom Jennings, Esq., Staff Counsel Don Ames, Assistant Chief, Stationary Source Division Genevieve Shiroma, Chief, Air Quality Measures Branch, SSD Peggy Taricco, Manager, Technical Evaluation Section, SSD Julie Billington, Staff, Stationary Source Division Bob Jenne, Esq., Staff Counsel Patricia Hutchens, Board Secretary Wendy Grandchamp, Secretary Bill Valdez, Administrative Services Section PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X PAGE Proceedings 1 Call to Order 1 Pledge of Allegiance 1 Roll Call 1, 2 Remarks by Supervisor Riordan re Chairman's Confirmation by Senate 2 Remarks by Chairman Dunlap re San Diego Report 3 Remarks by Supervisor Roberts re San Diego Report 4 Statement by Jim Schoning, ARB Ombudsman 5 Opening Statement by Chairman Dunlap 11 AGENDA ITEMS: 95-9-1 Public Hearing to Consider Amendments to Certification Requirements and Procedures for Low-Emission Passenger Cars, Light-Duty Trucks, and Medium- Duty Vehicles Introductory Remarks by Chairman Dunlap 11 Staff Presentation: Jim Boyd Executive Officer Annette Guerrero Mobile Source Division 17 Questions/Comments 36 PUBLIC COMMENTS: Richard L. Klimisch, Ph.D. American Automobile Manufacturers Assn. 50 Questions/Comments 55 INDEX, continued. . . PAGE AGENDA ITEMS: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv 95-9-1 Michael Berube Chrysler Corporation 58 Questions/Comments 63 Al Weverstad GM 64 Questions/Comments 67 Michael Schwarz Ford 68 Tim Carmichael Coalition for Clean Air 70 Questions/Comments 75 Bill Van Amburg CALSTART 78 Paul Wuebben SCAQMD 84 Questions/Comments 88 Kent Hoekman Chevron Appearing for WSPA 92 Questions/Comments 96 Continued Presentation by Mr. Hoekman 101 Questions/Comments 104 Melissa Sherlock Unocal 109 Glenn Keller Engine Manufacturers Assn. 112 Questions/Comments 115 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v INDEX, continued. . . PAGE AGENDA ITEMS: 95-9-1 Dale McKinnon MECA 115 Greg Vlasek Natural Gas Vehicle Coalition 118 Questions/Comments 121 Written Comments Entered Into Record by Steve Albu 126 Record Officially Closed to Await Notice of 15-day Comment Period 127 Motion by Lagarias to Approve Resolution 95-40/with direction to staff 128, 129 Discussion 129 Roll Call Vote 132, 133 Luncheon Recess 133 Afternoon Session 134 95-5-2 Public Meeting to Consider Update on Implementation of California Reformulated Gasoline Introductory Remarks by Chairman Dunlap 134 Comments by Jack Lagarias 135 Comments by Joe Calhoun 137 Comments by Doug Vagim 142 Questions/Comments 146 Staff Presentation: Jim Boyd Executive Officer 147 INDEX, continued. . . PAGE AGENDA ITEMS: PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi 95-9-2 Dean Simeroth Chief, Criteria Pollutants Branch Stationary Source Division 148 Peter Venturini Chief Stationary Source Division 164 Susan Johnson Applied Management and Planning Group 167 Questions/Comments 174 David Novak Novak Communications Consultant to Board 183 Questions/Comments 184 Continuation of Presentation by Peter Venturini 187 Joan Denton, Ph.D. Manager, Substance Evaluation Section Stationary Source Division 191 Summary by Jim Boyd 197 PUBLIC COMMENTS: Dr. Gerald Barnes General Motors 201 Questions/Comments 207 95-9-3 Public Hearing to Consider Adoption of Amendments to California Regulations for Reducing VOC Emissions from Antiperspirants and Deodorants, Consumer Products, and Aerosol Coating Products Introductory Remarks by Chair Dunlap 210 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vii INDEX, continued. . . PAGE AGENDA ITEMS: 95-9-3 Staff Presentation: Jim Boyd Executive Officer 212 Julie Billington Stationary Source Division 216 PUBLIC COMMENTS: Jim Mattesich, Esq. Livingston & Mattesich for CTFA 226 Theodore Wernick The Gillette Company 230 Bruce Varner Helene Curtis 233 Closing Comments by Chairman Dunlap 233 Entry of Written Comments Submitted Before Closure of Record 234 Record Officially Closed to Await Notice of 15-day comment period 237 Motion to Approve Resolution 95-41 by Parnell 238 Roll Call Vote 238, 239 Adjournment 239 Certificate of Reporter 240 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN DUNLAP: We'll call this, the September 4 meeting of the California Air Resources Board to order. And 5 I'd like to ask Mayor Hilligoss to lead us in the Pledge of 6 Allegiance, please. 7 (Thereupon, Mayor Hilligoss led the Board 8 Members, Staff, and Audience in the Pledge 9 of Allegiance.) 10 CHAIRMAN DUNLAP: Thank you. I'd like the Board 11 Secretary to please call the roll. 12 MS. HUTCHENS: Boston? 13 DR. BOSTON: Here. 14 MS. HUTCHENS: Calhoun? 15 MR. CALHOUN: Here. 16 MS. HUTCHENS: Edgerton? 17 MS. EDGERTON: Here. 18 MS. HUTCHENS: Hilligoss? 19 MAYOR HILLIGOSS: Here. 20 MS. HUTCHENS: Lagarias? 21 MR. LAGARIAS: Here. 22 MS. HUTCHENS: Parnell? 23 MR. PARNELL: Here. 24 MS. HUTCHENS: Riordan? 25 SUPERVISOR RIORDAN: Here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 MS. HUTCHENS: Roberts? 2 SUPERVISOR ROBERTS: Here. 3 MS. HUTCHENS: Silva? 4 SUPERVISOR SILVA: Here. 5 MS. HUTCHENS: Vagim? 6 SUPERVISOR VAGIM: Here. 7 MS. HUTCHENS: Chairman Dunlap. 8 CHAIRMAN DUNLAP: Here. Thank you. 9 Before we begin the meeting, I'd like to turn the 10 mike over to Supervisor Riordan for a brief comment. 11 SUPERVISOR RIORDAN: Mr. Chairman, I think on 12 behalf of all the Board that we'd like to congratulate you 13 on your confirmation. 14 CHAIRMAN DUNLAP: Thank you. 15 SUPERVISOR RIORDAN: And to let the audience know, 16 some of whom I think are from out of State, that the process 17 of confirmation for any one of us, but particularly the 18 Board Chair, is sometimes challenging. And our Chairman was 19 confirmed at about 3:20 on the last day of the session in 20 the Senate. And had the confirmation not occurred sometime 21 that day, unfortunately, we would not have had a Chairman 22 today. 23 So, we are very grateful for that. But I thought 24 I'd like to share with all of you one of the editorials that 25 appeared in Southern California. This is the Riverside PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 Press Enterprise. It's the paper that covers part of the 2 Inland Empire. And I thought the last sentences were best. 3 "The Governor made a good nomination. 4 The Democrats are not likely to get anyone 5 better. Both sides should be happy to be 6 winners and confirm John Dunlap." 7 And that's what I wanted to share with everybody. I thought 8 that was an excellent one. And I think we should give you a 9 hand. 10 (Applause.) 11 CHAIRMAN DUNLAP: Very kind of you. Appreciate 12 it. I feel a lot better this month than I did at the last 13 meeting, by the way. 14 Well, before we begin today, I would like to call 15 your attention to the newly published Air Quality in San 16 Diego County - 1994 Annual Report, which each of you have in 17 front of you, my colleagues on the Board. 18 This comprehensive publication is particularly 19 noteworthy in its effort to inform the public about the 20 causes and health effects of air pollution as well as local 21 strategies to improve air quality. 22 And I've asked Supervisor Roberts to take a moment 23 or two and provide some comments on this report. 24 But when I received it in the mail, it caught my 25 eye, and I thought it was very well done. Ron? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 SUPERVISOR ROBERTS: Mr. Chairman, I didn't 2 realize you had asked me to do that. This is my first look 3 at the report, so I'm going to be very brief. 4 I think we're fairly proud of the things that 5 we're doing. There's a number of different efforts underway 6 in San Diego. We still have a lot of work to do. I would 7 just encourage you to read the report. I'm going to read 8 it. 9 And we have recently just approved a major 10 purchase of CNG buses for the local transportation agency, 11 and a very aggressive of crunching older cars, and are 12 working very closely with the industrial companies and the 13 power companies to see that we can make the improvements 14 that are needed with respect to the fixed sources of 15 pollution, also. 16 But I'm anxious to see what good things maybe that 17 are in this report that I haven't seen. We're definitely 18 making some improvements. San Diego is directly affected in 19 a major way by whatever happens in the Los Angeles area. 20 So, it's not completely under our control, and we wish our 21 neighbors to the north good luck, also. 22 CHAIRMAN DUNLAP: Great. Thank you, Supervisor. 23 I didn't mean to throw you a curve, but I try to make some 24 time to review some of these documents, and it was very well 25 done. I see a number of these. It wasn't a lengthy report; PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 it was very concise and very well done. And I appreciate 2 it. 3 Please pass on my thanks to your colleagues on the 4 board and to your air pollution control officer for a fine 5 job. 6 At this time, I'd like to ask Jim Schoning -- 7 actually, I'd like to introduce Jim Schoning, who is the Air 8 Resources Board's Ombudsman. Jim was appointed in March, 9 and has quickly proven to be an integral part of the Wilson 10 team and the Air Resources Board team, and I wanted to 11 welcome you. 12 This is the first time you've had a chance to say 13 anything, Jim, before the Board. So, welcome. 14 MR. SCHONING: Thank you, Mr. Chairman. 15 As a close member of the Chairman's staff, I am 16 one of those who's especially grateful for the wisdom of the 17 State Senate. And it's a privilege to be here with each of 18 you, and to have the chance to work with an outstanding 19 organization, staff and Board members, here at the ARB. 20 What I wanted to do was comment briefly on the 21 origin and the concept of the Ombudsman, provide a little 22 bit of my own background and activities here, and then get 23 out of the way, because you have a full room and a full 24 agenda before you today. 25 As I'm sure all of you know, the notion of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 Ombudsman is a Scandinavian concept in origin, and it's 2 generally defined these days as an individual who works 3 inside a large organization to help citizens and customers 4 resolve their complaints. 5 Mike Scheible said to me shortly after I arrived, 6 "You're the 'Complaint Department.'" 7 The 1990 amendments to the Clean Air Act 8 considerably extended the regulatory reach of government, 9 and we hope its grasp as well. But taking into account the 10 extension of that reach, Title 5 required that the position 11 of Ombudsman be created and filled in organizations such as 12 the Air Resources Board. 13 The Wilson Administration determined that this 14 position should be at the level of the gubernatorial 15 appointee. Personally, I began my career in public service 16 with the California Legislature. I served as Chief 17 Administrative Officer long, long ago, but not very far away 18 in the California State Assembly. 19 Since then, the bulk of my career has been on the 20 staff of the Coro Foundation in both Los Angeles and New 21 York City. And in 1991, Governor Wilson appointed me to be 22 Chief of the Bureau of Automotive Repair of the State's 23 Department of Consumer Affairs. As many of you know, BAR 24 regulates some 40,000 small and not-so-small enterprises and 25 retailers throughout the State of California and provides PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 consumer protection in the field of automotive repair. 2 Not many people realize it, but some 450,000 3 Californians earn a living either repairing cars or selling 4 parts to those who do. So, it's a not insignificant part of 5 California's workforce and one that faces many of the same 6 challenges as far as adjusting to the rapidly growing 7 technology that the balance of our workforce does. 8 The Bureau of Automotive Repair also manages the 9 State's Inspection & Maintenance program. And so, my tenure 10 there gave me a good orientation to State and Federal 11 approaches to air quality. 12 When I came to work, Chairman Dunlap outlined for 13 me three of his top priorities. First was to help simplify 14 and demystify the regulatory process; second was to help 15 encourage fuller and earlier involvement, particularly by 16 the small business community, in the regulatory process 17 itself, so they have the best possible chance of getting it 18 right the first time. 19 Finally, the traditional and more conventional 20 role of the Ombudsman -- to advocate on behalf of 21 individuals ensnared in the bureaucracy, and who bring any 22 sort of a complaint of the regulatory process, either at the 23 district or the State level. 24 It didn't take me long to discover that ARB has 25 quite a number of splendid and unbroken ombudsmanlike PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 programs and activities that need little or no fixing -- 2 from our compliance assistance programs, our business 3 assistance activities, an 800 toll free number, a new and 4 very promising still-to-be-developed electronic bulletin 5 board, the Arbus system; and a well-defined and much 6 recognized public workshop and hearing process. 7 With regard to the traditional complaint 8 department function, I spend a lot of time helping 9 individuals move their piece of paper from the bottom of a 10 stack to the top of the stack, sometimes in our own 11 organization but, as often as not, in a sister State agency 12 or local air district. 13 We've assisted in getting better scheduling time 14 at ARB hearings for parties on both sides of some 15 significant issues that are before the Board. And we've 16 counseled local air districts on strategies for 17 implementing, or amending, or changing current State- 18 mandated programs. 19 We've gotten a number of straight answers for 20 out-of-state businessmen wondering how to do business here 21 in California who have new products to sell. 22 And we spend a great deal of time simply 23 connecting someone with a question to one of the many 24 splendid experts here at Air Resources Board. 25 While California, between the Air Board and our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 districts, has what seems to me and most others a world 2 class system, the best in the world, the experience of 3 organizations from IBM, and AT&T, and many others in the 4 public sector tell us that today's world class organization 5 can become tomorrow's dinosaur if we don't look regularly to 6 stay in close touch with our customers and the changing 7 environments in which we do business. 8 In that sense, we're working on two initiatives 9 with our partners at the air district level and CAPCOA. 10 First, we have formed a small business assistance working 11 group in response to interest from a number of air districts 12 over how they can offer more effective and useful small 13 business assistance programs in their districts. 14 The first thing we thought we ought to do, because 15 there are many excellent initiatives again at the district 16 level, just as we found here at ARB, is take inventory and 17 catalog those activities that are going on now before we 18 spend a lot of effort and needless energy reinventing wheels 19 that are working just fine. We'll see what that catalog and 20 an inventory effort yields before we make any further 21 recommendations. 22 The second initiative with CAPCOA is to conduct a 23 series of stakeholder forums around the State with the 24 stakeholders in California air quality system. Those would 25 be the environmental community and the regulated community PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 principally, although I think perhaps we might find a few 2 seats for the research and development community as well, 3 because they're terribly important to us. 4 Essentially, we'll be asking three questions at 5 these forums: How are we doing? We expect we can predict 6 most of the feedback, but you never know for sure and you 7 don't want to take it for granted. 8 Second, what are the forces and factors from 9 international competition, to changing demographics, to 10 pressures on public budgets that we're going to have to 11 contend with in California over the next 15 years as we move 12 towards attainment of Federal and State standards? 13 And, third, what does our system need to look like 14 in five or six years from now in order to effectively adjust 15 to those pressures and changes that are headed towards us 16 and enable us to continue to be successful in our mission? 17 So, those are some of the initiatives we have 18 going. I could conclude by saying, I'm especially grateful 19 to be here. I've spent my entire life either in public 20 service or preparing others for it, and I would add I never 21 had the chance to work with a finer public servant than our 22 Chairman. 23 CHAIRMAN DUNLAP: Thank you very much. I 24 appreciate your coming here this morning and giving a brief 25 overview. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 Any questions of Jim? Okay. Very good. Thank 2 you. 3 I would like to remind those in the audience who 4 would like to present testimony to the Board on any of 5 today's agenda items to please sign up with the Board 6 Secretary here to my left. 7 If you have any written statements or written 8 materials, please provide 20 copies to her. 9 The first item on the agenda today is 95-9-1, 10 public hearing to consider amendments to the certification 11 requirements and procedures for low-emission passenger cars, 12 light-duty trucks, and medium-duty vehicles. 13 This item is a regulatory review of California's 14 low-emission vehicle program. The LEV program is a primary 15 element of California's long-term plan for reducing air 16 pollution from light- and medium-duty vehicles. 17 The program is significant because it requires the 18 implementation of advanced mobile source control strategies 19 which will result in cars with 75 percent fewer hydrocarbons 20 and 50 percent fewer oxides of nitrogen compared to cars 21 sold in other States. 22 When the Board approved the LEV regs in 1990, they 23 recognized the significant challenge that the new 24 requirements would pose to the automotive industry. 25 Accordingly, staff was directed to periodically PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 report back to the Board on the status of the implementation 2 of the regulations and to propose any appropriate regulatory 3 modifications. 4 In May of last year, staff presented a progress 5 report on the technological feasibility of low-emission and 6 zero-emission vehicles. Today, staff will be presenting 7 amendments concerning the adoption of reactivity adjustment 8 factors and other changes that would further improve 9 implementation of the Board's regulations. 10 Staff will also be presenting the first regulatory 11 action relating to the mobile source element of the State 12 Implementation Plan. Those amendments pertain to 13 accelerated introduction of medium-duty ultra-low emission 14 vehicles. 15 Before I ask Mr. Boyd to introduce the staff's 16 presentation, I would like to affirm to the audience that 17 today's hearing is a regulatory review of the low-emission 18 vehicle program, and is therefore not the appropriate forum 19 to discuss the status or implementation of zero-emission 20 vehicles. 21 The staff will be addressing amendments to that 22 portion of the low-emission vehicle regulations in 1996. I 23 would like to request, therefore, that the audience refrain 24 from commenting on the zero-emission vehicle program at this 25 time. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 At this point, I'd like to ask Mr. Boyd to 2 introduce the item and begin the staff's presentation. 3 Good morning, Mr. Boyd. 4 MR. BOYD: Good morning, Mr. Chairman. Let me add 5 the staff's congratulations. 6 CHAIRMAN DUNLAP: Thank you. 7 MR. BOYD: It is indeed a relief to all of us to 8 have you with us permanently and to have that chapter in 9 history behind us, I hope. So, we look forward to the 10 future. 11 As the Chairman indicated in his opening remarks, 12 we're dealing with what is a fairly significant program of 13 the Air Resources Board. I want to spend just a moment to 14 go back in history a little bit to discuss the passage of 15 the low-emission vehicle/clean fuels program, which was 16 really a package, a synergistic package, that the Board 17 dealt with back in the nineties. 18 Of course, those historic times were preceded by 19 several years of work. This was a significant, complex, and 20 not easy task. It was predicated on the fact that, when in 21 1987, the staff at the Air Resources Board took measure of 22 the California air quality situation -- and you know 1987 23 was the year that the Federal law said that we would have 24 clean air in the nation, California included -- California 25 had already indicated to the Federal Government that we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 would do more than anyone in the world had done ever to 2 clean up air. 3 But we could not forecast that we would meet the 4 national objective of 1987, and slowly but surely other 5 people -- other States found themselves in the same 6 predicament. 7 We began actually in 1986, looking at what will we 8 do next, and I remember discussions with Mr. Calhoun in 9 those days about how could we squeeze anything more out of 10 the automobile? It's down to zero practically in any event. 11 But nonetheless, we went to work over a couple of 12 years, both with the Legislature and the affected 13 communities of California on the creation and passage of the 14 California Clean Air Act, and on a program within the Air 15 Resources Board to address what had been identified as still 16 the major emission source -- mobile sources. And that 17 brought forward to you the low-emission vehicle and clean 18 fuels program. 19 And I guess the rest is history. The passage of 20 the low-emission vehicle component of that package was 21 indeed a significant event, and I think that's been shown 22 repeatedly in the history of perhaps not only California's 23 motor vehicle emission regulations, but maybe those types of 24 regulations in general. 25 Since the inception of the program, there's been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 very rapid progress made and continues to be made in the 2 development of emission control technology. 3 I would add that there is certain more to the 4 low-emission vehicle program than that which you seem to 5 read about most in the press, the ZEV component or the 6 electric vehicle component. As you will recall, it was a 7 large program involving a period of years and in a 8 stair-step program affecting various classes of vehicles and 9 increasing clean air requirements and emission stringency. 10 So, we have the infamous "LEV Brothers" program, 11 the TLEVs, the LEVs, the ULEVs, and, finally, the ZEV. 12 Well, today, we want to deal with the nonelectric vehicle 13 component of that program, because this is an area in which 14 so much technology has been developed, for which we are 15 eternally grateful, to help us reach the goals that we need 16 to reach here in California. 17 And once again, our faith in the auto industry has 18 been repaid time and time again as they develop the 19 technologies that not only are meeting, but often exceeding 20 and in advance of deadlines, the goals that we have 21 established. 22 But I'm laying the groundwork for the fact that 23 this is a very dynamic situation, and due to the dynamic 24 nature that this technology development has brought forth, 25 your staff does indeed recognize and has recognized the need PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 to adjust regulatory requirements to keep pace with the 2 progress that's being made here. 3 And, as the Chairman mentioned today, we are 4 proposing new reactivity adjustment factors for natural gas, 5 for liquified petroleum gas, for Phase 2 reformulated 6 gasoline, and for so-called M85. 7 We are also proposing modifications to the medium- 8 duty vehicle requirements pursuant to the State 9 Implementation Plan approved by your Board just last 10 November. 11 Finally, we'll briefly summarize the numerous 12 amendments that are being proposed to either clarify or 13 simplify the existing provisions, and further facilitate 14 implementation of the program that we've laid out for you 15 before. 16 Before turning it over to the staff, I'd like to 17 point that the proposal being presented to you here today is 18 the result of, once again, extensive discussions with 19 members of both the automotive and oil industries and other 20 affected public. Staff has expended, as always, a 21 considerable amount of energy and time in efforts to achieve 22 consensus with industry and with other affected parties. 23 And, as I hope you'll see, their efforts have 24 produced a very high level of accord. 25 With that, I'd like to introduce Annette Guerrero PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 of our Mobile Source Division, who will give you the staff 2 presentation. Ms. Guerrero, if you would. 3 MS. GUERRERO: Thank you, Mr. Boyd. 4 Good morning, Chairman Dunlap and members of the 5 Board. 6 The purpose of today's hearing is threefold: 7 first, to conduct a third regulatory review of the low- 8 emission vehicle regulations; second, to present the first 9 mobile source element of the SIP; and, finally, to propose 10 new reactivity adjustment factors. 11 As Mr. Boyd mentioned, the Board instructed staff 12 to conduct periodic review of the regulations in order to 13 keep pace with the rapid progress of technology development. 14 Staff has conducted four reviews of the regulations thus 15 far. 16 In June, 1992, and again in May, 1994, staff 17 reviewed the progress of low-emission vehicle technology 18 development. In both instances, the Board found that the 19 program continues to be technologically feasible within the 20 time frames specified in the regulations. 21 Staff has also conducted two regulatory reviews, 22 the first in November, 1991, to propose the first reactivity 23 adjustment factors, and the second in January, 1993, to 24 propose regulatory amendments. The purpose of today's 25 hearing is to present the third regulatory review. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 Today, I will be dividing the discussion into 2 three parts. First, I will briefly discuss the proposed 3 technical amendments to the regulations, then the medium- 4 duty SIP proposal; and, finally, the proposal for new 5 reactivity adjustment factors. 6 Before I begin staff's presentation, however, I 7 would like to briefly summarize some of the key aspects of 8 the low-emission vehicle program. 9 The LEV program is the primary element of 10 California's long-term plan for reducing air pollution from 11 light- and medium-duty mobile sources, and is expected to 12 significantly reduce emissions of criteria pollutants. 13 The program introduced four new categories of 14 emission standards for passenger cars, light-duty trucks, 15 and medium-duty vehicles. The standards are progressively 16 more stringent, beginning with transitional low-emission 17 vehicle, or TLEVs;, followed by low-emission vehicles, or 18 LEVs; ultra-low emission vehicles, or ULEVs; and, finally, 19 zero-emission, or ZEVs. 20 This chart shows the percent reduction of the 21 low-emission standards compared to the current Tier 1 22 standard. 23 In order to provide manufacturers with flexibility 24 in complying with the emission standards, the low-emission 25 vehicle program incorporates a market-based approach to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 implementation through the use of a fleet-average 2 requirement coupled with a credit-trading system. 3 Manufacturers of passenger cars and light-duty 4 trucks are not required to certify specific percentages of 5 vehicles to an emission category; rather, they can certify 6 to any combination of low-emission vehicle categories as 7 long as the overall fleet-average requirement is met. 8 Additional flexibility is provided through the use 9 of a credit-trading system, whereby a manufacturer that 10 produces more low-emission vehicles than needed to meet the 11 fleet average can generate credits which can be banked, 12 traded, or sold to other manufacturers. 13 The requirements for medium-duty vehicles are 14 somewhat different because lower production volumes and a 15 multitude of vehicle classes make a fleet-average 16 requirement impractical. 17 Manufacturers of medium-duty vehicles are required 18 to meet certain percentage phase-in requirements; however, 19 they can accumulate marketable emission credits by exceeding 20 the required percentages. This credit system also affords 21 manufacturers considerable compliance flexibility. 22 The only instance where certification of light- 23 duty vehicles to a specific category is required is the 24 mandate for zero-emission vehicles. Beginning in 1998, all 25 large volume manufacturers are required to produce and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 deliver for sale 2 percent of their California light-duty 2 fleet as ZEVs. This percentage increases to 5 percent in 3 2001 and to 10 percent in 2003. 4 Another unique element of the LEV program is 5 accounting for the reactivity of vehicle exhaust. The most 6 important objective of California's mobile source pollution 7 control program is to reduce ozone in the lower atmosphere, 8 where it is a primary ingredient of urban smog. 9 As you know, ozone is formed as a result of 10 complex photochemical reactions of hydrocarbons with oxides 11 of nitrogen, or NOx, in the atmosphere. The reactivity of 12 each of the hydrocarbons emitted from mobile sources can 13 vary considerably in contributing to the amount of ozone 14 that is created. 15 In order to account for the varying reactivity of 16 the hydrocarbons in vehicle exhaust, whether it be from 17 reformulated gasoline or other clean alternative fuels, the 18 low-emission vehicle program expands the measurement of 19 exhaust mass emissions and includes a new reactivity 20 component to properly credit fuels and technologies which 21 contribute to lower ozone. 22 The program establishes a nonmethane organic gas, 23 or NMOG, STANDARD, which, for the first time, counts the 24 full mass of not only nonmethane hydrocarbons, but all 25 oxygenated hydrocarbons, such as formaldehyde or methanol, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 contained in vehicle exhaust. 2 Also included is a mechanism by which the full 3 mass of NMOG emissions are adjusted according to their 4 potential to form ozone in the atmosphere using a reactivity 5 adjustment factor, or RAF. 6 For example, consider these two vehicles, each of 7 which emits the same mass of exhaust. In this example, 8 however, the red vehicle produces a more reactive exhaust 9 than the green one. Thus, even though each vehicle produces 10 the same mass of NMOG, more ozone is created by the red 11 vehicle than from the green one. 12 The source of the increased reactivity of the red 13 vehicle could be from the fuel or it could be from the 14 choice of emission control hardware used by the vehicle, 15 because both the type of fuel and type of emissions controls 16 can affect reactivity of the exhaust. 17 In order to account for the varying reactivities 18 of these vehicle technology and fuel combinations, the 19 concept of reactivity adjustment was developed. That is, in 20 order to limit the amount of ozone created in the 21 atmosphere, a vehicle must minimize both reactivity and mass 22 of the exhaust. I will discuss the RAF concept in more 23 detail later in the presentation. 24 Today, the LEV program is well underway. For the 25 1996 model year, all large volume manufacturers have PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 certified at least one engine family as a gasoline-powered 2 TLEV. This slide shows the models produced by the seven 3 large-volume manufacturers for the 1996 model year. 4 Staff is also pleased to note that Honda is 5 certifying the first gasoline-powered LEV in 1996, and will 6 also be producing a gasoline-powered ULEV in 1998. 7 In addition, our preliminary estimates indicate 8 that the costs ascribed to the low-emission vehicles are 9 well within the original estimates. Staff is encouraged by 10 the progress made to date. 11 Now, I will turn to the regulatory modifications 12 being proposed in today's hearing. 13 There are many technical modifications being 14 proposed in this rulemaking which pertain to the nuts and 15 bolts of the regulations, which cover a broad range of 16 topics. 17 Some of the more substantive changes include the 18 removal of the M100 luminosity requirement, which would 19 allow the fuel to be dispensed without a luminosity 20 enhancing additive, revision of the laboratory NMOG emission 21 measurement methods to account for improved measurement 22 techniques, updates to the assembly line and new vehicle 23 test procedures to utilize new on-board diagnostic systems, 24 and the addition of a smog index window label which 25 identifies the relative pollution of a vehicle. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 The remainder of the proposed amendments serve to 2 clarify and facilitate implementation of the regulation. A 3 complete list of the proposed technical amendments can be 4 found in Appendix A of the staff report. 5 As Mr. Boyd mentioned, staff has had extensive 6 interactions with the automobile manufacturers in order to 7 achieve consensus on the proposed modifications. For this 8 reason, staff does not expect extensive comments on them in 9 today's hearing and, therefore, these amendments will not be 10 described further in this presentation. However, staff can 11 address specific issues which may arise during the course of 12 the hearing. 13 The next portion of the presentation concerns the 14 medium-duty vehicle SIP proposal. In November, 1994, the 15 Board approved its State Implementation Plan, or SIP, to 16 meet the Federal air quality standards by 2010. 17 The mobile source element of the SIP, which 18 includes the control of light- and medium-duty vehicles, is 19 an integral part of the SIP strategy. 20 Today, staff will be proposing the first 21 regulatory action relating to the mobile source element of 22 the SIP -- Measure M3, the accelerated introduction of ULEV 23 standards for medium-duty vehicles. 24 In today's presentation, I will first describe the 25 technological feasibility of staff's proposal, followed by a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 discussion of a proposed phase-in requirements and their 2 effect on the SIP. And, finally, I will conclude with a 3 summary of staff's cost analysis. 4 By way of background, however, I would first like 5 to describe the medium-duty vehicle category. 6 Medium-duty vehicles are a diverse category of 7 vehicles, ranging from sport utility vehicles, utility vans, 8 small school buses to large motor homes. This category 9 accounts for an appreciable share of the emission inventory, 10 particularly for NOx, even though it comprises less than 6 11 percent of the total vehicle population. 12 There are two classes of medium-duty vehicles -- 13 complete vehicles and incomplete vehicles. Chassis 14 certified or complete vehicles are sold fully assembled. 15 This class is divided into five weight categories, ranging 16 from 0 to 14,000 pounds, and comprise approximately 70 17 percent of the medium-duty population. 18 An incomplete medium-duty vehicle usually consists 19 of a chassis and/or a cab minus the cargo container. This 20 allows manufacturers to build a variety of vehicle types 21 using only one engine configuration. 22 Manufacturers usually certify incomplete vehicles 23 using the engine dynamometer test procedure. It is 24 important to note the distinction between complete and 25 incomplete vehicles, because staff's proposal includes the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 introduction of separate phase-in requirements for these two 2 classes. 3 Previously, the phase-in requirements applied to 4 the entire medium-duty vehicle category and did not 5 distinguish between these two classes. 6 The following is a list of some of the emission 7 control strategies for gasoline vehicles that are expected 8 to be utilized by manufacturers to meet the low-emission 9 standards. Staff expects manufacturers will develop some 10 alternative fuel vehicles; however, since they are generally 11 easier to certify to the low-emission standards than their 12 gasoline counterparts, they will not be discussed at this 13 time. 14 In order for gasoline-powered medium-duty vehicles 15 to meet the low-emission standards, staff expects that 16 manufacturers will utilize similar engine and emission 17 control systems to those used in passenger car applications 18 with some modifications to account for the increased weight 19 and load capacity of these vehicles. 20 Some of the strategies that staff expects 21 manufacturers to employ include internal engine 22 improvements, improved fuel control, and the use of more 23 efficient and durable catalyst systems. 24 Recent developments in palladium-only and trimetal 25 catalysts have improved both the efficiency and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 high-temperature durability of catalysts. This is 2 significant because thermal degradation of the catalyst is a 3 major concern for medium-duty vehicles, which can experience 4 high exhaust temperatures under some operating conditions. 5 There are several other technologies that 6 manufacturers are currently investigating, which could also 7 provide viable alternatives to current emission control 8 strategies. 9 Unlike the light-duty category, the medium-duty 10 vehicle category also includes a significant number of 11 diesel engines. The greatest challenge for diesels is the 12 simultaneous control of NOx and particulate matter 13 emissions. This is because some of the more effective 14 control strategies for reducing NOx emissions tend to 15 increase PM emissions and vice versa. 16 Although many emission control strategies are 17 still in the developmental stages, staff has identified some 18 key elements of NOx and PM control. These includes fuel 19 injection and combustion chamber improvements, the use of 20 turbochargers to increase combustion efficiency, retarding 21 ignition timing, fuel injection rate shaping, and exhaust 22 gas recirculation. 23 It is staff's expectation that manufacturers will 24 be capable of achieving LEV and ULEV emission levels with 25 the above-mentioned gasoline and diesel technologies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 With that background, I would now like to present 2 staff's proposal. Under the SIP approved by the Board in 3 1994, staff proposed an accelerated phase-in of ULEVs. Due 4 to significant manufacturing alterations that would have 5 been required under the original SIP proposal, however, 6 manufacturers asked staff to consider an alternative 7 proposal designed to achieve essentially the same emission 8 reductions estimated in the original proposal. 9 This table shows staff's alternative proposal. 10 Essentially, staff is proposing that the phase-in 11 requirements for complete vehicles remain unchanged through 12 the 2000 model year and ramp up to the introduction of 40 13 percent ULEVs by the 2003 model year. 14 Staff has also created separate phase-in 15 requirements for incomplete or engine-certified vehicles in 16 order to align with the anticipated Federal heavy-duty low 17 NOx requirements beginning in 2004. 18 In addition to the amended phase-in requirements, 19 staff is also proposing a number of modifications to the 20 emission standards. The most significant modification is 21 the reduction of LEV NOx levels to ULEV levels beginning in 22 1998 for complete vehicles. 23 This reduction helps to achieve the same NOx 24 emission reductions targeted in the original SIP proposal 25 without requiring 100 percent ULEVs in 2002. Other changes PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 include an extension of the intermediate in-use compliance 2 standards, slightly increasing the CO standards, and the 3 introduction of a new emission category -- "Super Low 4 Emission Vehicle," or "SLEV," which is 50 percent below the 5 ULEV standard. 6 This new category is not required, but can be used 7 by manufacturers to offset deficits, because it receives 8 extra NMOG credits. It is anticipated that primarily 9 alternative fuel vehicles will utilize this option. 10 The most significant amendment to the standards 11 for engine dynamometer certified vehicles concerns the 12 proposal by the U.S. EPA. In July, 1995, the U.S. EPA, 13 along with engine manufacturers and the ARB, issued a 14 statement of principles outlining a proposal for a Federal 15 heavy-duty low NOx standard. 16 Even though the final Federal rule has not been 17 issued, staff is proposing that the Board adopt the two 18 standards set forth in the statement of principles -- one, 19 a 2.4 grams per brake horsepower hour NMHC plus NOx 20 standard; or, two, a 2.5 grams per brake horsepower hour 21 NMHC plus NOx standard with a .5 gram cap on NMHC. 22 Staff has added language in the regulation that 23 the ARB will consider adoption of the Federal standard 24 within one year after the adoption by the U.S. EPA. 25 Staff has also made adjustments to the engine PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 phase-in requirements and the CO and PM standards to provide 2 manufacturers with more compliance flexibility. 3 As I mentioned earlier, staff was asked by the 4 automobile manufacturers to consider an alternative SIP 5 proposal because of the possible adverse effect of the 6 original proposal on their production plans. 7 Since our goal was to achieve the emission 8 reductions estimated in the original SIP proposal -- 4 tons 9 per day reactive organic gases and 32 tons per day NOx -- it 10 was necessary to analyze the effect of any alternative 11 proposal on the expected emission reductions. 12 To do this, staff prepared an inventory model 13 which reflects the unique contribution of medium-duty 14 vehicles to the emission inventory. 15 However, in the process of preparing the model, 16 staff discovered that several adjustments to the inventory 17 were necessary to accurately characterize the medium-duty 18 fleet. We discovered that the original SIP proposal 19 overestimated the NOx emission reductions that could be 20 achieved from 100 percent ULEVs. 21 Based on staff's analysis, the actual NOx emission 22 reductions that should have been attributed to the SIP 23 proposal are 23.5 tons per day, while the expected reactive 24 organic gas, or ROG, emission reductions did not change 25 appreciably from the 4 tons per day. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 Staff's revised SIP proposal meets the revised NOx 2 emission reductions calculated from the SIP because of the 3 accelerated introduction of ULEV NOx standards in 1998; 4 however, it does fall short of the original 32 tons per day 5 reduction goal. In addition, the revised staff proposal 6 falls slightly short of the original goal for ROG. 7 However, technological uncertainty precluded staff 8 from proposing a more aggressive phase-in of advanced ROG 9 specific technology at this time. 10 Staff plans to revisit this proposal in 1998, when 11 additional development and evaluation of new control 12 technologies will be available, and will propose any 13 appropriate revisions at that time. 14 Staff also prepared a comprehensive cost analysis 15 of the LEV and ULEV requirements of the medium-duty vehicle 16 proposal. Information for this analysis was compiled 17 utilizing industry technical papers, evaluating the status 18 of technology development, and consulting with 19 manufacturers. 20 A complete description of the cost methodology is 21 contained Appendix F of the staff report. From the 22 analysis, staff estimates that compared to a Tier 1 vehicle, 23 the incremental costs of gasoline LEVs and ULEVs are $169 24 and $260, respectively. 25 The incremental cost of diesel LEVs and ULEVs PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 compared to Tier 1 vehicles is estimated at $348 and $428, 2 respectively. 3 The cost-effectiveness of gasoline vehicles 4 relative to Tier 1 vehicles is estimated to be less than 50 5 cents per pound of pollutants reduced. 6 For diesel vehicles, the cost-effectiveness 7 relative to Tier 1 vehicles is estimated to be less than 8 $1.50 per pound. 9 Both of these values compare favorably to other 10 motor vehicle control measures. 11 I would like to conclude this presentation with 12 the staff proposal for new reactivity adjustment factors. 13 As I mentioned earlier, the low-emission vehicle program 14 established a procedure which takes into account the 15 relative reactivity of the exhaust emissions using a 16 reactivity adjustment factor, or RAF. 17 To calculate the generic reactivity adjustment 18 factor for low-emission vehicles operating on a clean fuel, 19 such as reformulated gasoline or natural gas, the ARB 20 measures the reactivity of the exhaust of low-emission 21 vehicles operating on that clean fuel and divides that value 22 by the reactivity of the exhaust of a comparable 23 low-emission vehicle operating on conventional gasoline. 24 For example, the generic RAF for LEVs operating on 25 Phone 2 reformulated gasoline is 0.94. This value is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 calculated by dividing the specific reactivity of LEVs 2 operating on Phase 2 gasoline, which is 2.94, by 3.13, which 3 is the baseline specific reactivity of LEVs operating on 4 conventional gasoline. Both of these values are determined 5 by the ARB. 6 As an alternative, manufacturers may develop their 7 own RAFs applicable to a specific engine family if they are 8 able to achieve lower exhaust reactivity than the technology 9 present in the vehicles used by the ARB. 10 In this example, the engine family specific RAF 11 was 0.88. In order to calculate the engine family specific 12 RAF, one would divide the specific reactivity of that 13 vehicle, 2.75, by the baseline reactivity of 3.13 for a RAF 14 of 0.88. 15 You can that the denominator of 3.13 is the same 16 value that is used to establish the generic RAF, and will 17 remain unchanged over time. 18 Compliance with the emission standard is then 19 determined by multiplying the NMOG mass emissions of a 20 vehicle and fuel system by the applicable reactivity 21 adjustment factor. The result must be less than or equal to 22 the applicable NMOG emission standard. 23 In this example, the NMOG mass of a vehicle 24 operating on LPG is 0.1 grams per mile. Using the proposed 25 LPG RAF of 0.5, the emissions of this vehicle would be 0.05 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 grams per mile. This result is less than the LEV emission 2 standard, so this vehicle could be certified as an LEV. 3 Since 1990, the ARB has been testing various 4 vehicle and fuel combinations to establish generic 5 reactivity adjustment factors. To date, the Board has 6 approved baseline specific reactivities -- the denominator 7 of the RAF equation -- of 3.42 for TLEVs and 3.13 for LEVs 8 and ULEVs. 9 The Board has also approved a RAF of 0.41 for 10 TLEVs operating on M85, a RAF of 0.98 for TLEVs, and .94 for 11 LEVs operating on Phase 2 gasoline. 12 Today, staff will be proposing a baseline specific 13 reactivity for medium-duty LEVs and ULEVs and the remaining 14 RAFs for Phase 2 gasoline, M85, natural gas, and LPG. 15 Since 1993, staff has conducted additional testing 16 to establish RAFs for light-duty vehicles operating on CNG 17 and LPG, and to establish baseline specific reactivity for 18 medium-duty vehicles. 19 Based on the results of our testing, staff is 20 proposing a RAF of .43 for light-duty LEVs and ULEVs 21 operating on CNG, a RAF of .5 for light-duty LEVs and ULEVs 22 operating on LPG, and a baseline specific reactivity of 3.13 23 for medium-duty vehicles operating on conventional gasoline. 24 Even though staff has been continuously testing a 25 wide variety of vehicles since 1990 in order to establish PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 generic RAFs, to date, only a portion of the RAFs have been 2 established. 3 This is because staff has had difficulty in 4 procuring vehicles equipped with advanced emission control 5 technologies representative of future production low- 6 emission vehicles. 7 Since the absence of generic RAFs could hinder 8 development of some low-emission vehicles because 9 manufacturers may not be able to identify the emission 10 category to which a vehicle could be certified, 11 manufacturers have requested that interim values be 12 established for the remaining RAF categories. 13 Adopting interim values would provide 14 manufacturers with sufficient leadtime to incorporate 15 specific low reactivity strategies into their future 16 production vehicles. 17 Therefore, staff is proposing interim RAFs for the 18 remaining categories shown in blue in the table. These 19 interim values are based on data generated from limited 20 vehicle testing conducted by the ARB, and would be effective 21 through the 2000 model year. 22 As production low-emission vehicles become 23 available, ARB staff will evaluate whether adjustments to 24 these generic RAFs will be necessary. It is important to 25 note that should the specific reactivities of future PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 production vehicles exceed the baseline established by the 2 ARB, future RAFs could be adjusted appropriately. This 3 would ensure manufacturers produce vehicles that are low in 4 both exhaust mass and/or reactivity. Vehicles that exhibit 5 high specific reactivities would have to lower their mass 6 emissions accordingly in order to meet the low-emission 7 standards. 8 That completes the major part of the presentation. 9 I'd now like to talk a little bit the 15-day changes the 10 staff is proposing. 11 As a result of requests from automobile 12 manufacturers, staff is proposing additional minor 13 modifications to the originally noticed regulatory text. 14 These changes include adding an intermediate in-use standard 15 for SLEVs and incomplete medium-duty vehicles, increasing 16 the 50 degree emission multiplier for LEVs and ULEVs to 2, 17 and modifications to the smog index window label, which I 18 would like to comment on briefly. 19 Senate Bill 2050 is intended to base vehicle 20 registration fees on the pollution level of a vehicle and 21 its annual miles traveled. The bill directs the ARB to 22 develop a smog index label to identify the pollution level 23 of each new and used vehicle. 24 Although implementation of the smog index depends 25 on contingencies contained in the bill, the ARB staff PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 concluded that implementation of the smog index label is 2 good idea regardless of the ultimate fate of SB 2050, since 3 the label would provide consumers with a means of 4 identifying and purchasing the cleanest vehicles. 5 Accordingly, staff is proposing that the Board 6 adopt a smog index labeling requirement for new vehicles at 7 this time, and has petitioned the Federal Trade Commission 8 to approve a similar labeling program for used vehicles. 9 A copy of the proposed modifications is available 10 for the public at the table located outside the hearing 11 room. 12 In conclusion, staff would like to recommend that 13 the Board adopt the proposed regulatory amendments, the 14 medium-duty SIP proposal, the proposed interim reactivity 15 adjustment factors, and the 15-day changes. 16 This concludes the staff presentation. The staff 17 would be happy to answer any questions the Board might have 18 at this time. 19 CHAIRMAN DUNLAP: Thank you, Ms. Guerrero, for a 20 fine presentation. Any of my colleagues have any questions 21 of staff? 22 Mr. Lagarias. 23 MR. LAGARIAS: Thank you, Ms. Guerrero. I'd like 24 to just ask a few questions about the RAFs. Since the LEVs 25 and the ULEVs are requiring substantially less mass PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 emissions than our present cars, doesn't the significance of 2 RAFs become much, much less important? 3 MR. ALBU: I don't think so. What we're looking 4 at is really the ozone per mile that we need to achieve for 5 improved air quality. And that's the product of the mass 6 and the reactivity. 7 If you lower the mass, for example, oftentimes 8 reactivity will go up if you choose the wrong technology 9 and, therefore, you get no real -- not as much of a gain as 10 you expect. 11 So, what we're doing is we're simply saying in our 12 programs, as we have in the past, that we're trying to 13 control ozone per mile and that we're trying to maintain the 14 capability that was demonstrated back in 1990 as being 15 feasible. 16 So, that's the basis for controlling both. 17 MR. LAGARIAS: Well, you essentially have done 18 nothing about the RAFs; you've just suggested that the 19 numbers we've heard for the TLEVs be continued into the 20 ULEVs and the medium-duty vehicles. 21 MR. ALBU: Well, the TLEV number is slightly 22 higher than the LEV and ULEV number, the reformulated 23 gasoline, at least. 24 MR. LAGARIAS: Well, the CNG and LPG essentially 25 would be allowed to have roughly a little more twice the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 mass emissions of Phase 2 gasoline? 2 MR. ALBU: Yes. 3 MR. LAGARIAS: All right. Does this take into 4 account evaporative losses or other losses other than 5 tailpipe losses? 6 MR. ALBU: Not at this time. We have not had the 7 capability to measure the evaporative reactivities until 8 just recently. And we can look into this in the future, but 9 at the present time, we didn't have enough information to 10 suggest RAFs for evaporative emissions. 11 MR. LAGARIAS: If you haven't, I would think that 12 would be one of the earliest and the easiest RAF numbers to 13 obtain. 14 MR. ALBU: Well, it requires a special test 15 facility. And until just recently, we haven't had that 16 capability to measure emissions on the high temperature 17 evaporative test. 18 MR. LAGARIAS: Steve, can you give me any idea of 19 the significance of the ozone forming potential of 20 evaporative losses, vis-a-vis the losses from the tailpipe? 21 MR. ALBU: I'm not sure I can at this time, Mr. 22 Lagarias. 23 MR. LAGARIAS: Maybe you can't give me a number, 24 but can you give me a feel for it? Is it highly 25 significant, an order of magnitude greater perhaps, or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 nothing at all? 2 Well, it seems to me, what I'm concerned about is 3 we're ratcheting down more and more on the tailpipe 4 emissions and maybe the evaporative emissions and the 5 running losses are much, much higher and we're really trying 6 to get more and more out of one of the small leak areas. 7 MR. CACKETTE: Mr. Lagarias, I think, in general, 8 the evaporative emissions are less reactive than the exhaust 9 emissions. 10 And, of course, if you look at this table which 11 lists alternative fuels, there are no evaporative emissions 12 from the two categories, which is CNG and LPG. 13 MR. LAGARIAS: That's what I've seen. All right. 14 Thank you. 15 CHAIRMAN DUNLAP: Mr. Calhoun. 16 MR. CALHOUN: The reactivity adjustment factors 17 were controversial when they were first adopted. They will 18 probably always be controversial. I don't know that. 19 But I guess my question concerns the reactivity 20 adjustment factors as it pertains to the database on which 21 the interim factors were determined. Is it my understanding 22 that all of the interim factors are based on testing that we 23 did? Did you get any data from industry at all? 24 MR. ALBU: We did get some data for some limited 25 cases. But, by and large, it was mostly staff generated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 data. Industry's somewhat reluctant to provide low-emission 2 vehicles early on for the staff to test, especially 3 gasoline. 4 In the case of natural gas and LPG, we also had 5 very few vehicles from the auto manufacturers, but we did 6 have vehicles from conversion manufacturers to test. 7 MR. CALHOUN: Okay. Thank you. 8 CHAIRMAN DUNLAP: Any other questions of staff? 9 Supervisor Vagim. 10 SUPERVISOR VAGIM: Thank you, Mr. Chairman. 11 Just two quick questions on a semantical issue. 12 The SLEV is lower than the ULEV. Isn't ultra kind of the 13 lowest? Shouldn't we have an SU category versus an S 14 category? I mean, like gigantic is bigger than great? 15 Just as a suggestion, Mr. Chairman, maybe we ought 16 to call this an SU to keep the public's simplicity versus 17 this -- because you could have confusion with it. 18 The other issue is the window index, smog index. 19 What is that going to look like and what does it mean to the 20 public when they see it? And is it going to be something 21 simple that everyone understands? 22 MS. GUERRERO: If you'll look on your 15-day 23 packet, if you look at the very last page, or the second to 24 the last page, at the bottom. 25 SUPERVISOR VAGIM: Is that page 6? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 MS. GUERRERO: Page 6. 2 SUPERVISOR VAGIM: I have that, the chart on the 3 bottom of the label? 4 MS. GUERRERO: That's it, yes. 5 SUPERVISOR VAGIM: Okay. The higher the darker 6 color of the bar, the higher the index, the higher the 7 probability of the -- 8 MS. GUERRERO: The more it pollutes. 9 SUPERVISOR VAGIM: The more it pollutes. So, is 10 that going to be a super or an ultra? 11 MS. GUERRERO: It will be able to take care of all 12 of them. 13 MR. CACKETTE: That's one way of getting around 14 the alphabet soup. 15 MR. CALHOUN: Is this something required by the 16 Legislature, or is this something we're doing? 17 MR. CACKETTE: Okay. There was a bill that 18 required us to develop the index and put it on vehicles. 19 That bill, however, had another objective, which was to run 20 this pilot program in San Diego and Ventura, in which 21 people's cars would have this index multiplied by their 22 mileage, and they would ranked. 23 And those who were in the highest polluting 24 category either drove a whole bunch or they drove a car that 25 was really dirty would be penalized in some way. And they'd PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 have to get an annual smog check instead of a biennial smog 2 check. 3 The way the bill was set up is it said, go do this 4 index, but it made that contingent upon these two areas 5 running this pilot program. And the pilot program was at 6 the discretion of the county government. 7 And one of the counties decided not to go ahead 8 with that pilot program. As a result, the bill that 9 authorized the specific label is -- I guess you'd say it's 10 inactive now. It's no longer operative. 11 In developing the index, however, and 12 participating in getting ready for this pilot program that 13 now looks like it may not happen, staff became sensitized to 14 the need to and the benefits of letting people know having 15 an informed choice when they buy a new car as to whether 16 it's a clean or less clean category. 17 We have these categories from conventional all the 18 way down through the LEV Brothers' numbers. And to try to 19 translate that into something that people could quickly look 20 at the label and say this car's got half the pollution of 21 this other new car, that maybe they would make an informed 22 choice that would be good for air quality. 23 So, we became believers that the label would be a 24 good way of explaining the pollution potential of the car 25 and think that we should have it anyway, notwithstanding the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 problems of this piece of legislation. 2 And our legal counsel advises us that we have the 3 legal authority to require labeling of new cars anyway. So, 4 the purpose of the changes today was to let you know and let 5 the audience know that we wanted to go ahead with this label 6 to try to provide information to new car buyers about the 7 pollution potential of a car, and do it notwithstanding this 8 pilot program that has, as of yet, to gone forward. 9 MR. CALHOUN: So, this means, then, that every 10 engine family would have a label that shows the specific 11 emission factor. 12 MR. CACKETTE: Right. It would have this bar on 13 it. And all of the bars -- it would have two features. The 14 reason for putting the 0 to 10 is to let people know that 15 new cars are clean; they're not dirty, like a 1986 car, 16 which of course -- like a '66 car would be a 10 on this 17 scale. 18 And then, second of all, within the choices you 19 have, cars can range from essentially zero index to 1. And 20 it gives them the ability to see that one car is cleaner 21 than the other. So, they might go in and have two models 22 which have two different engine families in them; one's a 23 hundred horsepower and one's 120 horsepower. Some people 24 will buy the horsepower, some people will buy the MPG, the 25 mileage that's on the label now. And some people, we think, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 will choose the car with the lowest smog index, which they 2 don't have that information available to them in an 3 understandable way right now. 4 But we also want to try to advertise the lower 5 cars, you know, now that LEVs and TLEVs are coming into the 6 fleet, we want to try to put that information out to the 7 public. And this is the way of turning the alphabet soup, 8 as I said that we've got with all these LEV names, into 9 something that people can understand. 10 MR. CALHOUN: What kind of reaction are you 11 getting from the auto manufacturers regarding this program? 12 MR. CACKETTE: You'll hear that in a little while. 13 (Laughter.) 14 MR. CACKETTE: If you want me to summarize what 15 know, I'll be glad to. I don't mean to be flip, but. . . 16 CHAIRMAN DUNLAP: Tom, why don't we wait on that 17 till we hear. We have ample representation from industry. 18 Don't bait the staff, Mr. Calhoun. 19 (Laughter.) 20 MR. CALHOUN: I won't anticipate what the 21 testimony is. 22 CHAIRMAN DUNLAP: Supervisor Vagim, you had 23 another question? 24 MR. JENNINGS: One point to add on that, 25 particularly in light of Mr. Lagarias' comments, is that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 smog index takes into account both exhaust and evaporative 2 emissions, so it gives the whole picture. 3 MR. LAGARIAS: But I just heard they don't have a 4 reactivity figure for the evaporative emissions. 5 MR. CACKETTE: Well, this index is simplified to 6 come off the emission standard that you certify to. So, the 7 reactivity is taken into account in determining which 8 category you're in -- LEV, TLEV, or ULEV, for example. And 9 then, once you've certified to that standard, this index 10 triggers off that standard. 11 So, every ULEV would be the same -- have the same 12 index if it meets the new evap standards. 13 MR. LAGARIAS: But my question was, how 14 significant are the emissions based on reactivity of the 15 tailpipe compared to the evaporative emissions? 16 MR. CACKETTE: Right now, that would not be 17 included. It would go off the mass of the mass standard, 18 which is reactivity adjusted for evaporative emissions; and 19 the tailpipe standard, which is reactivity adjusted. 20 But the consumer's not going to see that. They're 21 just going to see one number that represents the evap and 22 exhaust. 23 CHAIRMAN DUNLAP: Since we have the new capacity, 24 as you mentioned, Mr. Albu, you know, to be able to acquire 25 this number, what's the time frame when you'll be able to do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 this analysis, where we'll have a more complete picture? 2 MR. LAGARIAS: That's the reactivity of the 3 evaporative emissions? 4 CHAIRMAN DUNLAP: Right, the evap. 5 MR. ALBU: I would think within a couple years, we 6 would have -- 7 CHAIRMAN DUNLAP: Okay. 8 MR. ALBU: -- a pretty good idea of what the 9 various fuels' characteristics would be like in terms of 10 reactivity. 11 CHAIRMAN DUNLAP: And this could be factored into 12 the labeling -- 13 MR. ALBU: Sure. 14 CHAIRMAN DUNLAP: -- at that time? 15 MR. ALBU: Sure. 16 CHAIRMAN DUNLAP: All right. 17 Supervisor Vagim. 18 SUPERVISOR VAGIM: Thank you. One question. Is 19 this going to be relative to the fuel that they use? If 20 they go fuel up in Reno, will the fuel have a higher index 21 than if they fuel in California? 22 At no time was RFG involved in this? 23 MR. CACKETTE: Well, it's based on the fuel that 24 the vehicle will certify to. So, in this case -- 25 SUPERVISOR VAGIM: Anticipating it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 MR. CACKETTE: Right. So, it's a California RFG, 2 which would lead you to meet a LEV standard, and then your 3 index is that number. 4 SUPERVISOR VAGIM: So, it won't be confusing, 5 then, if someone takes that car out of State and moves out 6 of State that the -- 7 MR. CACKETTE: Well, the purpose of the index is 8 simply a buying guide for new car buyers. We believe it 9 will influence their choice towards cleaner cars when they 10 buy them. Once that's done with, I don't think they'll be-- 11 SUPERVISOR VAGIM: And there hasn't been any 12 Federal -- Federal discussion or standardization, so there 13 is some common denominator if they move out of the State, 14 that the car sold in that State, using another -- or even 15 with California equipment -- using another fuel may have 16 another smog index? 17 MR. CACKETTE: Well, the value of 1 is -- Tier 1, 18 which is the national standard, there would be technically a 19 difference, because we have cleaner gasoline than those 20 other places. But I think EPA would do it the same way. If 21 they trigger off the standard to what it's certified, that 22 says that car's not supposed to emit more than X-grams per 23 mile, and that has an index of .8. And so, they would be 24 consistent at the point where we have some cars that are 25 like Federal cars. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 SUPERVISOR VAGIM: If they use -- 2 MR. CACKETTE: It would not be something that 3 would be an apple and an orange index for cars that are sold 4 in Nevada versus here, for example. 5 SUPERVISOR VAGIM: But it is fuel dependent in a 6 sense, because you're anticipating RFG to make this window 7 sticker say what it says. 8 MR. CACKETTE: Yes. 9 SUPERVISOR VAGIM: Is that correct? 10 MR. CACKETTE: But the fuel dependency really is 11 just in what standard you meet. And then once you meet that 12 standard, that determines the index. So, to some extent, 13 the index is -- that's taken care of ahead of time. The 14 index just reflects the end result. 15 SUPERVISOR VAGIM: Its potential to pollute or -- 16 MR. CACKETTE: Right. 17 SUPERVISOR VAGIM: -- not pollute is really -- 18 MR. CACKETTE: Is a reactivity adjusted number. 19 SUPERVISOR VAGIM: Right. The other issue is, 20 since we would begin and let the genie out of the bottle on 21 this one, how about the used-car market during biennial 22 inspections? Would there be a factorial that you could hand 23 the consumer and say this is your smog index, or, as it gets 24 higher and higher, it goes up the ladder, and at the end it 25 says "Crush," or something like that? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 (Laughter.) 2 SUPERVISOR VAGIM: But we are beginning a public 3 awareness of a new index for this. Would it be wise, then, 4 to maybe at least offer to the used-car market something -- 5 at least at the point of sale when you're doing smog checks? 6 MR. CACKETTE: Yes. We've already petitioned the 7 Federal Trade Commission that deals with the buyer's guide 8 for used cars, and we're working to try to get the label put 9 on the used car label, which we don't have the direct 10 regulatory authority. 11 But we have a parallel effort, because we think -- 12 that's why we put on this one. We showed the whole range of 13 0 to 10, where new cars are all going to be 1 or less, 14 because we want people to understand that used cars will be 15 higher and make them think about this label when they go to 16 buy a used one. 17 SUPERVISOR VAGIM: Yeah, and -- 18 MR. CACKETTE: And we'll get that on the car. 19 SUPERVISOR VAGIM: -- there will be people looking 20 for that. 21 MR. CACKETTE: Because there, the cars might be 22 labeled 3, 6, 8, for example, depending on their emission 23 standards. 24 SUPERVISOR VAGIM: Thank you. 25 CHAIRMAN DUNLAP: Very good. Any other questions PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 of staff? Okay. 2 We'll move on to the -- sure, Ms. Edgerton. 3 MS. EDGERTON: I'd just like to comment that I 4 appreciate this proposal very much, because it's always good 5 when we can do things to encourage people to voluntarily 6 make choices that reduce emissions rather than tell them 7 that they have to do things by regulation. 8 So, it's quite consistent with our effort to 9 harness people's desires to do the right thing anyway, to 10 have this index. 11 So, thank you. 12 CHAIRMAN DUNLAP: Very well. Why don't we move 13 into the witness list. I'll try to call you three at a 14 time. We have the benefit -- and I thank those witness for 15 providing us with written comments. We've had a chance to 16 peruse that. Try not to cover word for word your written 17 comments, please. 18 Dr. Klimisch, AAMA, followed by Michael Berube 19 from Chrysler, and Al Weverstad from G. 20 Good morning, Dick. 21 DR. KLIMISCH: Good morning, Mr. Chairman. 22 Congratulations. Good morning, Board members. 23 I'm Dick Klimisch from the American Automobile 24 Manufacturers, whose members are Chrysler, Ford, and General 25 Motors. We appreciate the opportunity to testify today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 The first paragraph talks about the incredible 2 improvements that we've already had in air quality and 3 vehicle emissions reductions. We're very proud of that. 4 And you can read that. 5 These gains have not come without a price. The 6 automobile industry has spent billions of dollars developing 7 clean air solutions, and California is also spending 8 hundreds of millions of dollars every year on clean air 9 projects. 10 And the source of all this funding, obviously, are 11 the citizens and our customers. CARB and the auto industry 12 share the common responsibility of providing the cleanest 13 air at the lowest prices. Basically, we must exercise 14 fiscal responsibility. And we all, I think, know that none 15 of this is going to work if the consumer doesn't buy in. 16 That's crucial to us, but we believe it's crucial to you and 17 for air quality in California. 18 It's this fiscal responsibility that brings us 19 here today. We, like you, are genuinely concerned with 20 providing a quality product at a reasonable price and 21 safeguarding the air we breathe. 22 In the past, we've used these hearings to voice 23 our concern and sometimes our opposition to proposed 24 changes. Today, however, we are pleased to inform you that, 25 through the cooperative effort between the CARB staff and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 our industry, America's automobile manufacturers support the 2 majority of the changes proposed. 3 We believe these changes will help in the 4 implementation of the LEV program, leading to further 5 improvements in California's air quality, while balancing 6 cost. And we are even more pleased by the process that was 7 involved here. 8 Last year, CARB staff proposed changes to the SIP 9 which, in our opinion, phased in modifications to the MDV 10 standards in a manner that presented some cost and 11 feasibility issues. We testified to this effect, and we 12 agreed that more could be done then to improve medium-duty 13 vehicle emissions relative to current levels, and we 14 committed to work with CARB staff to develop a better 15 alternative. 16 The road to today's hearing wasn't paved with 17 complete and immediate agreement. It was, however, paved 18 with determination and excellent dialogue between the 19 industry and the staff. Throughout the process, CARB staff 20 and the industry worked closely to find solutions to a very 21 complex problem, which balance feasibility and cost. 22 As a result, far in advance of today's hearing, 23 consensus between the industry and CARB was reached on most 24 issues -- we're very pleased about that -- including the 25 California assembly line and new vehicle compliance test PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 procedures. 2 Just for the record, we would like to note a few 3 remaining issues that we have concern. 4 Regarding the reactivity adjustment factor, AAMA 5 is concerned about the staff report's inference that it may 6 be appropriate in the future to increase RAFs if the actual 7 emission control systems do not reduce reactivity to the 8 extent forecast by the staff. 9 Such a change would improperly increase the 10 stringency of the standards, potentially requiring unique 11 vehicle hardware and careful reevaluation of leadtime, 12 feasibility, and cost-effectiveness. 13 We would also point out that one fuel which may be 14 employed in the near future in California, E85 -- 85 percent 15 ethanol -- is missing from the RAF table because the staff 16 lacked sufficient data. AAMA has now provided the staff 17 with data to fill this void from the auto/oil program, and 18 it suggests an E85 RAF of .69. We ask the Board to add this 19 fuel to the RAF table. 20 I'm sure you're not surprised -- we still don't 21 endorse the cost estimates that the staff is doing. We 22 believe they're too optimistic. 23 In stark contrast to the systematic and 24 cooperative dialogue which led to a reasonable resolution of 25 most of the issues included in today's rulemaking, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 staff, in proposing the smog index rule, did so without 2 workshops and without adequate discussion. 3 AAMA still objects to implementing a smog index 4 label that applies to new vehicles only, rather than to all 5 vehicles as was intended by Senate Bill 2050. 6 Further, we strongly object to the late change 7 proposed by the staff today, which would remove the 8 statutory triggers, particularly the one requiring two 9 districts to allocate funds to conduct pilot programs 10 utilizing the smog indices and the market-based incentive 11 program. 12 The labeling program alone for only the newest and 13 cleanest vehicles, without any assurance that it will lead 14 to the piloting of tangible market-based programs, is vastly 15 different and less beneficial than the program outlined in 16 the Senate bill. 17 And we disagree with the assertion that the Board 18 can rely on general authority in this area, when Senate Bill 19 2050 specifically conditions that authority. 20 We have discussed these issues with the staff and 21 believe the staff understands our position. Staff and AAMA 22 have agreed to continue dialogue on these issues. Although 23 we're not able to resolve everything to the satisfaction of 24 all of us, we believe the systematic and cooperative process 25 used for most of today's issues best serves the citizens of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 California, your constituents and our customers, and we are 2 pleased to have been part of it. 3 We hope that this rulemaking process serves as a 4 model for the future. 5 CHAIRMAN DUNLAP: Thank you. Any questions by the 6 Board? 7 Yes, Supervisor Silva. 8 SUPERVISOR SILVA: Yes. Dr. Klimisch, I have a 9 concern. It's along the fiscal responsibility that you 10 mentioned in our letter and your report. I'm concerned with 11 the impact to the consumer. And I know that in California, 12 it seems like we pay more taxes and more fees than other 13 parts of the country for the use of an automobile. 14 What impact do you see, the most costly scenario 15 of the road that we're headed down? 16 DR. KLIMISCH: Yeah. I guess I don't have an 17 exact -- exact figures for that. We're certain that the 18 elasticity is going to be about one. But I don't know what 19 the percentage change is going to be in the cost here. 20 I'd defer to my members companies, or we'll have 21 to get back to you on that. But I don't know what that 22 number is at this point. 23 SUPERVISOR SILVA: Okay. Thank you. 24 DR. KLIMISCH: I'm not allowed to talk about it. 25 We haven't reached agreement. Sorry about that. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 DR. KLIMISCH: Thank you. 2 MR. LAGARIAS: Mr. Chairman? 3 CHAIRMAN DUNLAP: Yes, Mr. Lagarias. 4 MR. LAGARIAS: You've suggested for E85 a RAF of 5 .69 be considered due to the auto/oil studies. In the 6 auto/oil studies, have the confirmed or challenged the RAF 7 numbers that we have for Phase 2 gasoline and for the other 8 fuels? 9 DR. KLIMISCH: I don't think so. I think they're 10 fairly consistent. 11 MR. LAGARIAS: Because that would make the E85 12 number more attractive. 13 DR. KLIMISCH: I don't believe so. And if I'm 14 wrong, I'm sure one of my colleagues will tell you that. 15 MR. LAGARIAS: Thank you. 16 CHAIRMAN DUNLAP: Ms. Edgerton. Thank you for 17 coming. 18 It's my understanding that the Senate Bill was not 19 passed on the smog index. 20 DR. KLIMISCH: Well, I thought 2050 passed. 21 There's another bill that's trying to adjust this -- 22 920-something. It's trying to get some other counties, as I 23 understand. I thought 2050 was passed. 24 MS. EDGERTON: Well, let me just check. What's 25 been actually signed into law? Maybe you could clarify PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 that. 2 MR. KENNY: SB 2050 was actually signed into law. 3 MS. EDGERTON: Okay. 4 MR. KENNY: And SB 2050 did provide for conditions 5 for the specific smog index requirements in that bill to go 6 into effect. We are aware of the fact that those particular 7 conditions have not been satisfied. 8 So, we would basically propose the smog index 9 could be implemented through the general authority that 10 exists in the Health & Safety Code under 43200. That 11 particular provision provides that there are labeling 12 authorities provided to the Board. And those labeling 13 authorities are specifically directed for consumer 14 information. 15 So, to that extent, we believe that particular 16 section is applicable and can be relied upon. 17 MS. EDGERTON: Thank you. 18 DR. KLIMISCH: There is another bill that hasn't 19 been passed yet. 20 CHAIRMAN DUNLAP: Okay. Very good. Thank you. 21 MR. CALHOUN: Mr. Chairman? 22 CHAIRMAN DUNLAP: Yes, Mr. Calhoun. 23 MR. CALHOUN: One comment in this regard. The 24 idea of labeling a particular vehicle in order to show its 25 emission level is nothing new. It's been bounced around and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 kicked around for a long time. It's certainly has been 2 discussed in the Legislature for at least ten years. And 3 so, I guess they've made some progress in terms of trying to 4 get a bill out. 2050 has, in fact, passed. 5 But I've always, in the past, the comments I've 6 heard say nothing more than -- there's no value added to it. 7 That's one of the reasons why it was not, I believe, 8 successful in getting through the Legislature. 9 But maybe Ms. Edgerton's correct. Maybe some 10 people will buy a car based on emission levels. I don't 11 know that. 12 DR. KLIMISCH: We're not against this consumer 13 information. I guess our real concern is that some of the 14 differences between used cars and new cars, the consumer's 15 really not getting the full story here. 16 CHAIRMAN DUNLAP: Okay. I appreciate it, Dr. 17 Klimisch, thank you. 18 Michael Berube, Chrysler; Al Weverstad, GM; 19 followed by Michael Schwarz from Ford. 20 Good morning. 21 MR. BERUBE: Good morning. Michael Berube from 22 Chrysler Corporation. Chrysler is a member of the American 23 Automobile Manufacturers Association, and fully supports 24 their comments just presented by Dr. Klimisch. 25 I'd like to begin my comments by emphasizing that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 Chrysler has been before this Board and at workshops a 2 number of times since 1990, talking about the LEV program. 3 We've said in the past that we view the LEV program's as a 4 major technological challenge of controlling emissions, 5 while also maintaining acceptable vehicle performance and 6 cost. 7 I'd like to tell you today that that position 8 hasn't changed. We view that we really still are at the 9 infancy of implementing the LEV program. And Chrysler still 10 views that program as a significant technological challenge 11 and cost challenge. Our engineers, who I talk with 12 regularly, are pushing the frontier on new technologies, on 13 new vehicle calibrations. These are technologies we simply 14 don't have experience with yet in use out in the field. 15 Having said all of this, Chrysler does recognize 16 the unique air quality situation here in California. We are 17 working hard and committed in trying to achieve the goals of 18 that LEV program. 19 We are encouraged with our progress to date, 20 although I should note that we have not certified an LEV 21 gasoline package yet, and ULEVs certainly pose even greater 22 cost challenges and technical challenges. 23 Ultimately, when we look at what the success will 24 be, I think what we have to look at is what will happen when 25 we have vehicles with 50 and 100,000 miles out on the road, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 and have we proved out their in-use emissions, their OBD 2 systems, their enhanced evaporative systems, their cold CO, 3 their 50 degree LEV requirements, and we could go on with 4 the other emission requirements. 5 I mention all of this, not because I'm coming here 6 today to object to the changes that have been proposed to 7 the Board on the LEV program, but because I want to support 8 the process that was used today and used over the past 9 months to arrive at today. 10 Chrysler talks a lot about process and focuses on 11 process. I'd like to comment that we support the 12 cooperative process that has led to today's hearing. 13 Through the dialogue that we have had with staff, we 14 certainly have not agreed on all issues, but we've been 15 encouraged by the attempt to achieve emissions control at a 16 minimum cost and customer impact. 17 And because the LEV program is pushing us to the 18 technological limit and pushing our engineering resources, 19 this cooperative process is absolutely imperative for 20 success. It will be many years now before we know whether 21 we have success, and we must continue this type of process. 22 We look forward to ongoing dialogue with the Board 23 and with the staff. 24 I would like to point out one issue in particular 25 where I hope we do have a significant amount of ongoing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 dialogue, and that is the issue of RAFs. We've had some 2 discussion about that already today. 3 Chrysler does not support the staff's report's 4 statement that future RAFs should be increased to a value 5 greater than 1.0 if early LEVs cannot achieve the staff's 6 projection of best case specific reactivity. Such a change 7 would be equivalent to increasing the stringency of all LEV 8 standards and would likely require new vehicle hardware. 9 To be clear, Chrysler supports the intent of RAF 10 to link vehicle fuel to emission standards -- we support 11 that -- such as what is being with the new CNG and LPG RAfs 12 that are being proposed today. 13 What we are objecting to is expanding the use of 14 RAFs to push new vehicle hardware. Pushing the frontier -- 15 as I said, we are trying to do at Chrysler -- means trying 16 new approaches and accepting new risks, we are doing that. 17 But piling on more risk by changing RAFs at this time may 18 have the effect of stalling new technology, since there is a 19 limit to the risk that can be taken by any manufacturer. 20 It's our position that any increase in the 21 stringency of the LEV program and the standards requires 22 significant study of the leadtime, the cost, and the 23 technological feasibility. 24 We feel that any such increase in stringency would 25 be premature until experience is gained in the field in-use. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 I guess I'd also like to make a brief comment on 2 the smog label issue. I spoke earlier about process. I 3 guess it concerns me a little bit about the process of the 4 last minute change on the smog label. This is something 5 that wasn't initially brought up at workshops. 6 It was something in the initial staff report, 7 although what is proposed today and what was handed in the 8 15-day notice is different even from discussions we had with 9 staff as of last Friday. We'll certainly go back and take a 10 look at what's being proposed. Although, I guess, the last 11 minute change does concern me, and it's quite in contrast to 12 the other process we've had. 13 A few, maybe off-the-cuff comments are looking at 14 the label format, some concern over whether that double bar 15 will be confusing to consumers, and whether the wording goes 16 along with it. 17 It's also worth pointing out that regulations 18 today already require that a vehicle be labeled if it is a 19 low-emission vehicle as defined by the statutes. It has to 20 say, this is a certified to low-emission vehicle. 21 In addition, the vehicle emission control label 22 required in all cars goes further and say this is a 23 transitional low-emission vehicle. This is a LEV. This is 24 a ULEV. 25 There are actually a number of different places on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 the vehicle that you can find all that information today. 2 Those are only on new vehicles. So, I think we do need to 3 take a look at the intent. 4 Clearly what's being proposed today is now 5 something different than what was in SB 2050 and needs to be 6 reviewed in an independent light. 7 CHAIRMAN DUNLAP: Thank you. Ms. Edgerton. 8 MS. EDGERTON: I wanted to follow up, Mr. Berube, 9 on that certification label. 10 It's my understanding, though, that's just when 11 people go in to purchase a car. That doesn't stay on there 12 in that window where it says it's a TLEV, does it? 13 MR. BERUBE: The vehicle emission control 14 information label is permanent on the car. 15 MS. EDGERTON: Where is that? 16 MR. BERUBE: But that's under the hood. The 17 other label would be -- the other low-emission vehicle label 18 is the same type of requirement as being proposed for this 19 new smog index label. It would not necessarily be a 20 permanent label on the vehicle. 21 MS. EDGERTON: The ones that I see when I go to 22 car -- I'm just trying to understand what we're talking 23 about. The ones that I see are, when you go to buy your new 24 car, on the sticker, on the window. 25 MR. BERUBE: Typically, yeah. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 MS. EDGERTON: And then, it's taken off after you 2 buy it so you can look through the window. 3 MR. BERUBE: Correct. That's the same authority 4 and same statutory section as what's being proposed today by 5 the staff, I believe, under the smog index label. 6 MS. EDGERTON: But you don't end up with a car 7 that's driving around where anybody -- any family can go to 8 a grocery store and they can see that their next door 9 neighbor has a car that pollutes more than theirs? 10 MR. BERUBE: Not unless they put the hood and look 11 at it. 12 MS. EDGERTON: Yeah, right. Thank you. 13 CHAIRMAN DUNLAP: Okay. Very good. Thank you. 14 Mr. Weverstad, GM; Michael Schwarz, Ford; and then 15 Tim Carmichael, Coalition for Clean Air. 16 Sir, did I butcher your name? 17 MR. WEVERSTAD: No, you did an excellent job. 18 CHAIRMAN DUNLAP: Thank you. I've been worried. 19 MR. WEVERSTAD: You did as good a job as my mother 20 would. 21 CHAIRMAN DUNLAP: Okay. 22 (Laughter.) 23 MR. WEVERSTAD: Good morning. My name is Al 24 Weverstad, and I am manager of the vehicle emission 25 activities at General Motors, environment and energy staff. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 General Motors has the following comments on the 2 package of regulatory changes to the LEV program being 3 considered by the Board today. 4 At the outset, we support the comments of the 5 American Automobile Manufacturers Association and the Engine 6 Manufacturers Association, and incorporate them by 7 reference. 8 The regulatory changes being considered today 9 cover a broad range of areas, as evidenced by the 10 presentation of your staff. Yet, my comments will be brief. 11 This is because GM, through its trade 12 associations, has worked together with the staff throughout 13 this rulemaking process. This work actually began after the 14 SIP hearing last November when we started developing an 15 alternative to the SIP's medium-duty truck measure. This 16 alternative, which is being proposed by your staff today, 17 will provide equivalent emission benefits to the November 18 SIP, but at much lower cost. 19 Thus, we urge the Board to adopt the staff 20 proposal in lieu of the November SIP measure. 21 The brevity of my comments do not reflect on the 22 importance of the regulations being considered here today. 23 These regulations, which affect the nonmandate portions of 24 the LEV program, will cover most of our future production, 25 and will provide the overwhelming portion of the emission PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 reductions projected in the SIP. 2 Clearly, a smooth implementation of this portion 3 of the LEV program is critical. That is why a regulatory 4 structure that facilitates a smooth implementation, such as 5 interim in-use standards, is so important. And we support 6 the improvements to the interim in-use standards being 7 proposed by the staff. 8 Another area that is very important to the LEV 9 program is the reactivity adjustment factors, or RAFs. 10 Because emissions are determined by multiplying the NMOG 11 mass by the RAF, the RAF, thus, is part of the standard. 12 GM commends the staff for proposing the RAFs for 13 almost all of the different fuel and vehicle categories 14 through the 2000 model year. And we support AAMA's proposed 15 ethanol RAF of .69. This will provide us with the certainty 16 we need in developing systems to meet the future LEV program 17 standards during this timeframe. 18 However, GM is troubled with several statements in 19 the staff report that infer that the RAFs may be used in the 20 future to increase the stringency of the LEV program. This 21 undermines the certainty manufacturers need. 22 Moreover, any changes that impact the stringency 23 of the LEV program must go through a full rulemaking process 24 to provide the proper consideration of the feasibility, 25 cost, and benefits of such changes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 Thus, GM recommends that the RAFs proposed by the 2 staff through the 2000 model year be extended through the 3 2003 model year, and that any changes to RAFs be considered 4 as part of the post-2003 LEV program rulemaking. 5 In closing, I would like to emphasize again that 6 GM is very encouraged by the process leading up to this 7 hearing. The open dialogue between industry and staff 8 resulted in the vast majority of issues being resolved. 9 I would now be happy to answer any questions. And 10 I do have a written copy of the comments I've given, and 11 I'll provide to whoever would like it. 12 CHAIRMAN DUNLAP: The Board Secretary would be 13 fine. Any questions from my colleagues on the Board? 14 Lynne, Ms. Edgerton? 15 MR. LAGARIAS: Mr. Weverstad, is your program with 16 the Geo Prizms -- I think it is -- where you plant a tree 17 for everyone that buys them still ongoing? 18 MR. WEVERSTAD: I believe so. That is through our 19 marketing arm. But, yes, I think that's still on. 20 MS. EDGERTON: And if I understand that correctly, 21 I mean that's an effort to point out to people that these 22 cars are cleaner, and that GM is doing its best to help 23 clean up the environment? 24 MR. WEVERSTAD: Yes, it is. It's an effort to 25 show that we're part of the environment, and trying to do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 our share. 2 MS. EDGERTON: And it's involved in -- I've been 3 very impressed with it. It's all involved in environmental 4 education, and the kids go out there and help learn that you 5 all are planting the trees. And they understand the 6 relationship of the trees to the whole atmosphere. 7 I just want to compliment you on that program. I 8 think providing that kind of connection, information, and 9 incentive is very good. 10 Thank you. 11 MR. WEVERSTAD: Thank you. 12 CHAIRMAN DUNLAP: Any other questions? Very good. 13 Thank you. 14 Mr. Schwarz from Ford; Tim Carmichael, Coalition 15 for Clean Air; and bill Van Amburg from CALSTART. 16 MR. SCHWARZ: Good morning. 17 Congratulations to the Chairman. 18 CHAIRMAN DUNLAP: Thank you. 19 MR. SCHWARZ: I'm Mike Schwarz, Executive Engineer 20 with the Ford Motor Company for Vehicle, Environmental, and 21 Energy Planning. 22 I also chair the industry group at AAMA, the 23 California Liaison Panel. 24 Ford is a member of AAMA and the Engine 25 Manufacturers Association, and we support the statements PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 made by those associations. 2 The AAMA statement that you heard identified 3 several open issues which we believe deserve the Board's 4 careful attention. But I don't want you to lose sight of 5 the major achievement of the staff in ironing out numerous 6 once contentious issues through a thorough technically based 7 process over the last 10 months or so. 8 This process is a class example of how progressive 9 management, be it government or industry, needs to operate 10 in order to get the optimum out of its human resources. A 11 progressive manager knows that he needs to surround himself 12 or herself with good people, competent, creative problem 13 solvers, and then give these people latitude -- or that 14 nineties' word, "empower" them -- to work with affected 15 parties to derive the optimum solution. 16 In this case, this classic model was followed by 17 both government and industry. And, as a result, technically 18 justified solutions were determined which achieve emission 19 reductions equivalent to those of the placeholder measures 20 that were placed in the SIP. 21 I'd like to commend the staff, specifically it's 22 key members -- Annette Guerrero, Steve Albu, Bob Cross -- 23 for their openmindedness and determination. And I really 24 have to single it out. I can't say enough about the 25 leadership role played by Bob Cross. I know you have him on PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 the hot seat on the EV issue chairing all these forums. 2 But there are numerous times where he two groups were 3 essentially at loggerheads. There just wasn't a way to 4 agree, and things were breaking down. 5 And he was able to refocus things on the overall 6 objectives and get us back on track. So, my compliments to 7 the staff, and I think it should be a prototype for the 8 future on how we derive regulations. 9 And I'll be glad to answer questions. 10 CHAIRMAN DUNLAP: Thank you for your kind words. 11 I think their performance evaluations should be due later 12 today, don't you think? 13 (Laughter.) 14 CHAIRMAN DUNLAP: Well said. We appreciate you 15 standing up for the staff. 16 SUPERVISOR RIORDAN: It's nice to hear that. 17 CHAIRMAN DUNLAP: No questions. Thank you. 18 Mr. Carmichael, Mr. Van Amburg, and then Paul 19 Wuebben from the South Coast Air District. 20 Good morning. 21 MR. CARMICHAEL: Good morning. Let me begin by 22 saying that the Coalition for Clean Air's pleased to be 23 addressing the Air Resources, and especially the recently 24 confirmed Chairman. As many of you know, we testified in 25 support of Mr. Dunlap's nomination, and we'd like to extend PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 our congratulations. 2 Members of the Air Resources Board, the Coalition 3 for Clean Air appreciates the opportunity to be here. Our 4 comments today relate specifically to the medium-duty 5 vehicle revised SIP proposal. The Coalition for Clean Air 6 does not support the proposed changes to the medium-duty 7 vehicle regulations. 8 The California Air Resources Board is 9 internationally regarded as the preeminent leader in 10 developing and implementing the kind of technology-forcing 11 programs essential to cleaning California's air and critical 12 to meeting the Federal health-based air quality standards. 13 The proposed changes before you today are not in 14 keeping with CARB's record of implementing technology 15 forcing programs necessary to clean California's air. The 16 Coalition for Clean Air believes that the proposed changes 17 are as bad for California's economy as they are for our 18 environment and, in fact, would take California in the wrong 19 direction. 20 If California really wants to be the home of new 21 industries, advanced technology, and long-term job 22 opportunities, these proposed changes should be rejected. 23 There are three major problems with the proposed 24 changes: First, CARB staff identifies a shortfall in NOx 25 emission reductions in excess of 8 tons per day relative to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 the reductions included in the State Implementation Plan. 2 While a shortfall has been identified, the 3 proposed changes before you contain no indication of how 4 California will recoup this loss of emissions reductions. 5 Unfortunately, the infamous "black box" is growing just when 6 it should be shrinking. 7 Our second, and perhaps greater concern, relates 8 to the proposed relaxation of the particulate matter 9 standard for medium-duty engines. This change would double 10 the particulate matter standard. In light of several recent 11 health studies that show particulate matter to be deadly, 12 the Coalition for Clean Air finds it unconscionable that 13 california would even consider relaxing the particulate 14 standard in any air quality regulation. 15 While I'm sure that you're aware of these health 16 studies, I would like to mention just a few: 17 Loma Linda University conducted a 10-year study, 18 which found that women living in areas of high total 19 suspended particulates experienced a 37 percent increased 20 risk of cancer. 21 In March of this year, Harvard School of Public 22 Health, the American Cancer Society, Harvard Medical School, 23 and Brigham Young University released the results of the 24 largest study ever conducted on the health effects of 25 particulate matter. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 The study found that people living in the nation's 2 most polluted cities are up to 17 percent more likely to die 3 prematurely than those living in our cleanest cities. 4 Earlier this year, California's EPA, Cal-EPA, 5 released the results of its own study, which looked the 6 effects of particulate matter in Riverside and San 7 Bernardino Counties. This study found that microscopic 8 particles of air pollution cause an estimated 275 premature 9 deaths each year. 10 The growing number of health studies which condemn 11 particulate air pollution make it clear that if the Air 12 Resources Board is to make any change to the particulate 13 emission standard, that change should be to strengthen it, 14 not weaken it. 15 Our third major concern relates to what appears to 16 be a change in the philosophy behind California's air 17 quality regulations. The Coalition believes that the Air 18 Resources Board must maintain its reputation and continue to 19 implement the kind of technology-forcing regulations 20 necessary to restore clean air to California. 21 The Coalition supports incentives for industry to 22 use cleaner alternative fuels, as called for in California's 23 SIP proposal, which was submitted to the U.S. EPA last 24 November. Unfortunately, the delays incorporated in the 25 proposed changes before you today, coupled with the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 relaxation of the standards for carbon monoxide and 2 particulate matter, are designed to accommodate the 3 prolonged use of gasoline and diesel. 4 While we are aware that the proposed changes 5 suggest adding a super low emission, SLEV, category, for 6 medium-duty vehicles, it is unlikely that the auto and 7 engine manufacturers will pursue this level if a weakened 8 regulation allows them to achieve medium-duty ultra low 9 emission levels with gasoline or diesel. 10 The proposed changes are effectively taking away 11 the carrot which has driven technology advancement for the 12 first half of this decade. 13 In closing, the Coalition for Clean Air strongly 14 urges that you reject the proposed changes for the 15 medium-duty vehicle SIP proposal. At a minimum, the Air 16 Resources Board should delay action on this item until staff 17 has identified specific replacement measures to address the 18 shortfall in NOx emissions reductions. 19 Because mobile sources now account for a majority 20 of California's air pollution emissions, it is essential 21 that these replacement measures be applied to mobile rather 22 than stationary sources. 23 Given the serious health implications of 24 California's air quality problems, California cannot afford 25 to delay or relax our air quality regulations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 Thank you very much. 2 CHAIRMAN DUNLAP: Thank you. Any questions of Mr. 3 Carmichael? Ms. Edgerton. 4 MS. EDGERTON: Thank you. I want to thank you for 5 coming. 6 If course, I agree that -- and I'm sure everyone 7 on this Board agrees that -- or at least I would assume that 8 everyone does -- that we do not want the black box to be 9 increasing. Obviously, we're trying to shrink the black 10 box. 11 My difficulty, Mr. Carmichael, is that the 12 principles of chemistry don't appear to be under this 13 Board's control. And from what I -- I'm not a scientist, 14 but from what I understand of the principles of chemistry 15 with respect to some of these emissions reductions, result 16 in getting some increases -- small increases in particulate 17 matter at the same time that you get enormous decreases in 18 NOx. 19 My understanding from talking with the staff it 20 that the ratio of NOx reductions to PM10 increases a hundred 21 to one, and that's my understanding. 22 Given that that's the case, what should the Board 23 do? Should we do nothing and not reduce the NOx, because it 24 might increase a little bit of the PM? Or should we go 25 ahead with the technology we have and reduce the NOx PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 significantly, and keep working on the smaller PM10? 2 It's the principles of chemistry that seem to be 3 boxing us in here a little bit, at least that's my 4 understanding. 5 MR. CARMICHAEL: Okay. I think there's two 6 important points. The first one is related to what 7 technology do we have? Here we are in the middle of 1995, 8 and there is already one -- and we believe several in 9 research and development -- vehicle in the medium-duty that 10 will match the proposal that you submitted last November to 11 the U.S. EPA. They will match the emissions reduction 12 levels, the existing program. 13 The second point is that the fuel -- the problem 14 fuel in mobile sources is diesel fuel. That is where the 15 majority, if not all, mobile source particulate pollution is 16 coming from. 17 So, to change a regulation to accommodate the 18 dirtiest fuel that we use in mobile sources makes no sense 19 to us. I mean, if the goal is to truly clean California's 20 air, then we should be moving to stop using that fuel rather 21 than prolonging the use of that fuel. 22 CHAIRMAN DUNLAP: Mr. Cackette, could I ask you to 23 comment on that characterization? 24 MR. CACKETTE: Well, first, I'd like to confirm 25 what Ms. Edgerton said. In all of these kind of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 technological forcing areas, you have to make some choices. 2 And in looking at this regulation and the technology 3 available, we saw the opportunity for very large reductions 4 in NOx emissions. And those NOx emissions help with ozone 5 in the summertime, but they also reduce ambient particulate, 6 the same ambient pollutant that a testifier commented on 7 have these adverse health effects. And so, this regulation 8 will reduce ambient particulate. 9 Unfortunately, diesel engines have a tradeoff. 10 When you control NOx, you increase particulate, and the 11 vehicle manufacturers, in controlling NOx, will also have to 12 deal with the fact that the particulate matter's going to go 13 back up, and it's going to have to be brought back down to 14 the existing .1 standard. 15 In this situation, we just belief that in order to 16 realize the NOx reductions, and the benefit of ozone and 17 particulate of those NOx reductions, that we had to relax 18 this one standard just in this one category of medium-duty 19 trucks back up to where all the other diesels are, which is 20 a .1 standard. And I point out that .1 standard is roughly 21 a 90 percent in particulate matter from uncontrolled engines 22 and engines that meet, vehicles that meet that standard are 23 essentially smoke free. 24 So, it's not like we're letting this vehicle go 25 back to some, you know, smoke-belching mode of operation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 like it may have had in the past. 2 But it was a trade. We had to make that. We 3 tried to make the one that we thought was best for air 4 quality. 5 CHAIRMAN DUNLAP: Okay. Thank you. Appreciate 6 your time. 7 We'll take a moment for our court reporter. I'd 8 ask at this juncture, though, that Mr. Van Amburg come 9 forward. Mr. Wuebben, wait in the wings. And Mr. Hoekman 10 from Chevron, Kent Hoekman from Chevron would be after Mr. 11 Wuebben. 12 (Thereupon, there was a brief pause in the 13 proceedings to allow the reporter to replenish 14 her paper.) 15 CHAIRMAN DUNLAP: Good to see you, Bill. 16 MR. VAN AMBURG: Good to see you, Mr. Chairman. 17 Congratulations. You've heard that enough today. 18 I'll try and keep this session shorter than your 19 confirmation. 20 CHAIRMAN DUNLAP: Okay. 21 MR. VAN AMBURG: I want to first of all just 22 congratulate staff. These are tough choices that have to be 23 made. There are a lot of balancing acts that have to be 24 made. 25 I actually think the smog index for the windows of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 vehicles is an excellent idea. We certainly salute CARB and 2 staff for that idea, and I think it should move forward. 3 Maybe something that would make it easier for consumers is 4 to put something on it where you can compare older vehicles 5 or different classes of vehicles to vehicles you're going to 6 be buying as opposed to just seeing the number there kind of 7 in a vacuum. 8 So, if that's an adjustment, I would recommend it 9 might be that. It's a great idea. 10 One thing we just wanted to point out here today, 11 if I can go to the next slide, there are tough choices to be 12 made. CARB staff is doing the best job that it can to try 13 and do that. 14 But if there are some concerns that we would like 15 to point out, it's that we have a tremendous air pollution 16 problem in this State. We're only dealing right now with 17 half of it what we've identified with pollution control 18 measures. And that includes the entire LEV program, that 19 aggressive program, the 10 percent ZEVs that you have put 20 forward; all of that still only deals with half the 21 pollution we know that's out there. 22 If we can go to the next slide. 23 The other half, obviously, everybody talks about 24 this black box. And it's not to make fun of it, but 25 essentially, today we have added another 10 tons per day to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 the black box. And the question is, where does that come 2 from down the road? Who will it be applied to? And we 3 would like to suggest and encourage that maybe it does 4 continue to apply to this class of vehicle as new 5 technologies do come along, and as the staff and the CARB 6 Board reassess this over the next couple years. 7 If I can go to the next slide. 8 Just another way of visualizing this is the 9 tremendous problem certainly in the South Coast, our primary 10 problem. The first column is where we were in 1990. The 11 second column, almost as high, is where we'll be in 2010 12 with all of the programs we've enacted. 13 The third column is where we need too be to meet 14 the health-based air standards. We've got a long ways to 15 go. Ten tons a day may not seem like a lot, but we've 16 continued to add to what we're not solving at this moment. 17 I just want to go through a couple very quickly 18 things that you have done with technology forcing and these 19 tough, aggressive standards. You have mangled my slide, 20 first of all. 21 (Laughter.) 22 MR. VAN AMBURG: What I wanted to point out was a 23 new industry that seems to be slightly skewed there. 24 CHAIRMAN DUNLAP: This was the key slide. 25 MR. VAN AMBURG: This was the key slide. We can't PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 go on. 2 And industry that has frankly grown tremendously, 3 spurred in great part by the tough, aggressive standards 4 that have been set by CARB, an industry that's more than 5 tripled in size in the last three years. 6 And if I can show the next slide, an industry that 7 is dealing with a number of different areas across the board 8 of where the emissions control from the mobile sector will 9 come from -- not just from electrics, not just from natural 10 gas, a technology that's really coming into the fore right 11 now, but also hybrid electrics, which I don't think anybody 12 on the CARB staff thought would move as far along as it has. 13 And it has been driven again by your technology forcing. 14 Next slide, please. 15 Heavy-duty NGVs and also medium-duty NGVs are 16 proving out to be very clean. It also happens to be a very 17 economic niche, and it's a niche that's also being forced by 18 energy policy act requirements in some way for fleet 19 operators. That's something that should be considered, 20 because the technology in this area is substantially 21 improving and moving along. 22 If I can have the next slide. 23 Also, some of the concerns about natural gas 24 vehicles for many people is in infrastructure. But those 25 are being answered as well. We're working on a number of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 technology projects to lower the cost of compressed natural 2 gas refueling. And there are a number of innovative 3 approaches, such as mobile tank trailers that can be taken 4 out, precompressed gas to lower the cost and get multiple 5 sites out more quickly. 6 There are also an awful lot of heavy and medium- 7 duty electric and hybrid electric vehicles. This bus just 8 rolled out. It's going to be operating in Santa Barbara. 9 We rolled it out two weeks ago. And at the end of last 10 week, the same bus, number two in the series, rolled out at 11 Yosemite National Park, where they now have a 35-foot all- 12 electric bus, two of them operating. 13 In compressed natural gas and electric hybrids, 14 now, these are vehicles -- the one on the left is operating 15 now. There's three of them. It meets a one-gram per brake 16 horsepower hour standard right now for its NOx emissions. 17 And that is not as clean as we expect them to go very 18 quickly, because we'll be putting turbo alternators aboard 19 that bus. It should be substantially below that. 20 These technologies are not pie in the sky; they're 21 coming along. Now, this may be pie in the sky -- as a 22 commuter in L.A., I actually would like one of these. 23 (Laughter at picture of tank.) 24 But one of the reasons that we're seeing so much 25 development in hybrids is because the military is so PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 interested. They're pushing obviously heavier duty than 2 probably we need for commute cars, but the same technology 3 base is helping rapidly improve hybrids that we're going to 4 be seeing in heavy-duty and medium-duty areas, especially in 5 the on-board systems providing power. 6 And there are also medium-duty vehicles like this 7 step van. There are several companies building these -- 8 what I call Fed Ex size delivery vans -- that are pure 9 electric and can be hybrid electric, very clean vehicles 10 that can be used in the medium-duty segment and lower the 11 overall fleet average. 12 So, I just wanted to leave you with the thought 13 that, while you're dealing with some very tough things that 14 you have to weigh and fully understandable, don't forget 15 that you have seen a lot of things happen that maybe you 16 didn't think would be happening. 17 This is just a very short list of what has 18 happened because of the LEV program over the past five 19 years. I think we probably can do better, and I would 20 encourage you to find a way to take that 10 tons and still 21 keep it within the medium-duty vehicle area, and simply try 22 and find a way to encourage other cleaner fuels within that 23 arena to make up the difference. 24 Thank you. 25 CHAIRMAN DUNLAP: Any questions of Mr. Van Amburg? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 Very well. Thank you for a fine presentation. 2 Mr. Wuebben, Mr. Hoekman, and Melissa Sherlock 3 from Unocal. Good morning. 4 MR. WUEBBEN: Good morning, Mr. Wuebben. And I'm 5 very happy to join that chorus of congratulation, being the 6 first one I think to hire you into the field of air 7 pollution about 10 or 12 years ago. 8 But, congratulations; great achievement. 9 I'm here this morning, of course, representing the 10 South Coast Air Quality Management District. And we'd like 11 to refer to basically three issues in today's rulemaking -- 12 the reactivity adjustment factors, the medium-duty 13 standards, and the methanol luminosity. 14 In general, we're very impressed with the degree 15 of technical proficiency that your staff has applied to a 16 wide range of complex issues. I really want to genuinely 17 compliment them in that effort. 18 We're also, as I mentioned in my written comments, 19 very supportive of the reasonable and appropriate amendments 20 to the reactivity adjustment factors. We're also in support 21 of the proposal by the American Automobile Manufacturers 22 Association to extend to the year 2003 the application of 23 those reactivity adjustment factors. I think that that 24 provides both regulatory flexibility and fuel flexibility in 25 the case of providing alternative fuel diversity. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 Another important area that I think has been very 2 useful for your staff to identify has been the possibility 3 that these baseline reactivity factors that are used to 4 specify, of course, the ozone per mile of your baseline 5 Phase 2 gasoline, that those may in fact end up in use being 6 higher than what was originally anticipated, and that we 7 think that it is wise, as suggested by the staff, to 8 continue to obtain more in-use data on that issue. 9 And we think that that's obviously going to be 10 important as we move forward in these higher technology 11 vehicles. 12 We also think that it might be relevant to 13 consider, in terms of flexibility, to provide auto 14 manufacturers some limited flexibility to actually 15 substitute their own baseline reactivity factors if they do 16 a very high degree of rigorous testing of individual engine 17 families. And we think that that concept might have some 18 relevance to provide yet even more flexibility for 19 introduction of some of these lower emitting alternative 20 fuels. 21 Another point just to reference that, you might 22 note that in the data in the staff report, I think six of 23 the eight light-duty vehicles were actually above the 3.13 24 baseline RAF once they were measured in use. So, there does 25 seem to be some preliminary data that suggests that some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 adjustment might be appropriate. And we would suggest that 2 kind of flexibility if you want to consider that. 3 Another area, of course, has to do with the 4 medium-duty vehicles. And, as you well know, the light-duty 5 Chrysler ULEV was the first ULEV -- in fact, I believe still 6 today the only ultra low emission vehicle as a natural gas 7 vehicle. 8 We're concerned that you not go beyond the 9 leniency that you're proposing for in-use NOx standards and 10 limit that to no more than say the three years that are 11 reflected in the staff report. 12 Probably the most important area in the medium- 13 duty is the particulate issue. And I think to address Ms. 14 Edgerton's point, that when she notes that there is 15 principles of chemistry involved, I think what's important, 16 Lynne, there is that these are principles of diesel 17 chemistry that are involved. 18 If you talk about principles of alternative fuels 19 chemistry, there's no question that if you look at the 20 natural gas certification results, goodness, those are well 21 below 2 grams, 1.4, 1.5 grams referencing even 1 gram NOx 22 levels and, at the same time, levels of particulate that are 23 .02, far below -- 80 percent lower than this tenth of a gram 24 level. 25 And why is that significant? Your own Cal-EPA, as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 you know, has issued a report that has what I believe is the 2 single-most profound data point in air pollution that has 3 been found this decade; namely, that in San Bernardino and 4 Riverside Counties -- just in those two counties in Southern 5 California -- 275 people can be attributed to having died 6 because of their exposure to particulate. 7 The equivalent of an Oklahoma City bombing each 8 year should not be a satisfactory status quo, and that's why 9 we would suggest that that proposal to maintain a tenth of a 10 gram forever be seriously reevaluated. And that's why we 11 would suggest that perhaps in another year, 12 months, you 12 request the staff to bring back some additional options for 13 lowering that standard. 14 Because we're convinced that the growth of 15 technology, particularly in alternative fuels, they're 16 certifying engines faster than the manufacturers ever 17 imagined. 18 Hercules, Caterpillar, Cummins, Detroit Diesel, 19 they've even given us, as a district, emission reduction 20 credit authority based on certifying to these lower 21 standards. 22 So, proposing -- I think it's just really 23 important in this instance to have this revisited within a 24 fairly short period, because your actions can and are 25 effectuating real alternative fuel engine development. And PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 to keep that momentum forward, I think a reassessment would 2 be appropriate. 3 One last point. Perhaps it might be a misnomer to 4 call a tenth of a gram diesel truck an ultra low emission 5 vehicle. So, I just caution that, when we start using these 6 phrases, let's not forget, you know, what the entire picture 7 is. 8 Lastly, just real quickly, you might remember 9 about a year ago, I stood before you and urged some 10 additional flexibility for luminosity requirements, because 11 of concerns about operation of M100 buses and even fuel 12 cells, and we're trying to permit some fuel cell related 13 M100s. We have a fuel cell bus, for example, that would 14 fall subject to that rule. 15 And so, we're are very much supportive of the 16 prudent recommendation to eliminate that luminosity 17 requirement. 18 So, with that, I appreciate this opportunity and, 19 obviously, I'm happy to answer any questions. 20 CHAIRMAN DUNLAP: Mr. Lagarias. 21 MR. LAGARIAS: Mr. Wuebben, a little concerned 22 about your analysis of the health effects and comparing them 23 to the Oklahoma bombing. I don't think we talk about 24 particulates knocking 275 people off the streets. We're 25 really talking about maybe shortening the lives of some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 people rather than -- and not give the impression that 2 they're just absolutely killed by these things. 3 MR. WUEBBEN: Well, I didn't mean to overstate the 4 comparison, Mr. Lagarias. And I certainly didn't mean any 5 disrespect. All I was pointing out is that it's a very 6 large number, and I don't believe that in mortality 7 statistics we've ever seen anywhere near that level of 8 mortality impact associated with air pollution. 9 And at least from the experts I've talked to, that 10 number was quite a surprise, given the magnitude, you know, 11 of the population size. 12 MR. LAGARIAS: Well, don't forget this mortality 13 is not a documented figure, but an estimated projection 14 based on population and other figures. 15 We're concerned. We're aware there are health 16 effects, but how they're presented is also of concern to us 17 as well. 18 MR. WUEBBEN: Sure. 19 MR. LAGARIAS: Thank you. 20 CHAIRMAN DUNLAP: Good point. Any other 21 questions? Yes, Mr. Calhoun. 22 MR. CALHOUN: Mr. Wuebben, you mentioned something 23 to the effect that manufacturers should be allowed to 24 determine their own RAFs or something of that nature? 25 MR. WUEBBEN: Well, I know at least from some of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 the written correspondence of the auto manufacturers, that 2 there was some recommendation at least that be considered; 3 that if there was a very rigorous amount of testing, and you 4 had a very solid base for an individual engine family, that 5 there be some flexibility to develop their own baseline 6 reactivity. 7 MR. CALHOUN: I think that's already allowed in 8 the regulation. 9 MR. WUEBBEN: Not the baseline. I think that the 10 3.13 is a fixed value, and that's basically -- 11 MR. CALHOUN: That's what the baseline -- 12 MR. WUEBBEN: -- generic. To my knowledge -- I 13 think the staff could correct me, but my understanding is 14 that right now they don't have that flexibility. 15 MR. ALBU: I think there may be some confusion on 16 the part of Mr. Wuebben. We used the baseline specific 17 reactivity as a fixed value for time. And vehicle 18 manufacturers can indeed demonstrate with their line of 19 vehicles that, if they do have lower specific reactivity 20 than our baseline, they could get credit for that on an 21 individual family basis. 22 So, yes, they have that capability already. 23 MR. WUEBBEN: so, the 3.13 can be adjusted; is 24 that what you're saying? 25 MR. ALBU: There's no reason to adjust it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 MR. WUEBBEN: Oh. 2 MR. ALBU: It's a fixed guide, and that's the 3 baseline by which you determine the value. You have to have 4 that present to make the individual engine family specific 5 value in the first place; otherwise, you couldn't do it. 6 MR. WUEBBEN: Well, I guess what I was 7 understanding was that there's baseline gasoline RAF 8 specific reactivity, and then there's also reactivity 9 adjustment factors, which were applied to the alternative 10 fuels. 11 MR. ALBU: I don't think you're understanding is 12 quite correct. We can discuss it later. 13 MR. WUEBBEN: Well, I thought I had read that 14 recommendation. But I'll accept that. 15 MR. CALHOUN: That's fine. 16 CHAIRMAN DUNLAP: Very good. Thank you. 17 MR. WUEBBEN: Thank you. 18 CHAIRMAN DUNLAP: Ken Hoekman, Chevron; Melissa 19 Sherlock, Unocal; Glenn Keller, Engine Manufacturers 20 Association. 21 If I May, sir, and for those that follow you, in 22 the interest of time, so that we're redundant, if there's 23 any new perspectives you could share, I'd appreciate it if 24 you'd focus in that area. 25 Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 MR. HOEKMAN: Good morning, Mr. Chairman and other 2 Board members. My name is Ken Hoekman. I work for Chevron 3 Research and Technology Company, and I'm here today 4 representing WSPA. 5 WSPA appreciates the opportunity to comment on 6 CARB's proposed amendments to low-emission vehicle 7 regulations dated August 11, 1995, and on the supporting air 8 modeling report dated June 22, 1995. 9 WSPA has long maintained that CARB's approach for 10 calculating and applying reactivity adjustment factors is 11 flawed, and could have a detrimental effect on air quality. 12 The principal flaw is in the notion that any single 13 reactivity scale can be applied uniformly under all urban 14 atmospheric conditions. 15 It is true that different NMOG species contribute 16 to urban ozone formation to different extents. In this 17 sense, it can be said that NMOG species differ in their 18 reactivities. 19 However, applying a single fixed reactivity scale, 20 such as the MIR scale, neglects important influences of 21 atmospheric conditions in determining the actual reactivity 22 of a particular species in a real urban situation. 23 Stated simply, the reactivity of any NMOG species 24 is not a constant, but is a complex variable which depends 25 upon many other factors. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 The use of a single reactivity scale can produce 2 RAFs which exacerbate urban ozone under certain atmospheric 3 conditions. This possibility was demonstrated by CARB's own 4 air modeling work conducting in support of the proposed RAFs 5 for CNG and LPG fueled LEVs. 6 In this work, exhaust emissions from the 7 alternative fuel vehicles were adjusted upward in accordance 8 with the proposed RAFs, and the resulting ozone impacts were 9 assessed. If these RAFs were correct, the increased 10 emissions from the alternative fuel vehicles should lead to 11 the same ozone impacts as lower emissions from conventional 12 fuel vehicles. 13 An expression used to compare these ozone impacts 14 is the so-called "null test result," which is shown in 15 Figure 1. 16 And I'd like to explain what this Figure 1 17 illustrates. The mathematical formula which you see there 18 expressing the null test result has a number of terms all 19 called ozone "sub" something. Those ozone values are all 20 model predicted ozone levels. 21 The ozone/afv refers to the ozone that is 22 predicted by modeling when all vehicles are assumed to be 23 using an alternative fuel vehicle. 24 The ozone/rfa is the ozone predicted in the same 25 modeling episode when all off the vehicles are assumed to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 using baseline gasoline, which is called RFA gasoline. 2 And the ozone/null represents the ozone which 3 would be predicted in the same modeling scenario, where all 4 of the emissions from light-duty vehicles are set to zero. 5 So, in other words, the numerator in that 6 expression represents ozone contributed by vehicles 7 operating on a particular alternative fuel vehicle. 8 The denominator represents ozone contributed by 9 vehicles operating on baseline gasoline. 10 As can be seen from this expression, if the RAF 11 adjusted alternative fuel case and the conventional gasoline 12 case produced equivalent ozone impacts, the null test result 13 would be 1. You would have the same value in the numerator 14 and denominator. 15 Null tests results greater than 1 indicate that 16 alternative fuel vehicles lead to more ozone than the 17 conventional vehicle case, while results less than 1 18 indicate less ozone from the alternative fuel vehicles. 19 Various ozone metrics can be used when computing 20 null test results. Since both Federal and California ozone 21 standards are based on peak ozone, WSPA maintains that the 22 most appropriate metric is basinwide peak ozone. 23 The CARB technical support document for reactivity 24 regulations dated September 27, 1991, also states that a 25 peak ozone metric must be considered when assessing air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 modeling results. 2 Figure 2 depicts the peak ozone null test results 3 from modeling of CNG, LPG, and RFG vehicle cases. These 4 results are taken directly from the CARB air modeling report 5 of June 22, 1995. 6 In this figure, you see that each fuel has three 7 separate modeling scenarios which were used. Scenarios 1 8 and 2 are both episodes from the 1987 from the 1987 SCAQS 9 program, the Southern California Air Quality Study. 10 Scenario 3 is an older episode from 1982. Also, 11 with each episode, you'll notice there were two different 12 emission inventories applied. So, this provides six points 13 of comparison for each fuel, comparing that fuel with 14 baseline gasoline. 15 This figure clearly illustrates that application 16 of the proposed RAFs for both CNG and LPG fueled LEVs would 17 be expected to increase peak ozone in the South Coast Air 18 Basin when compared with either RFG or conventional gasoline 19 LEVs. 20 You can see that, because the null test results re 21 substantially higher than one in those cases. 22 To achieve equivalent ozone impacts, these 23 modeling results indicate that both CNG and LPG RAFs need to 24 be adjusted upward. 25 In summary, WSPA believes that CARB's applicatifon PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 of reactivity concepts is flawed and can lead to worsening 2 of air quality in some cases. The modeling work in support 3 of the LEV RAFs strongly suggests that peak ozone will 4 increase if the proposed RAFs for CNG and LPG fueled LEVs 5 are implemented, thereby making attainment of the Federal 6 and State ozone standards more difficult. 7 To avoid this problem, WSPA urges CARB to increase 8 the proposed RAFs for these alternative fuel vehicles, and 9 then repeat the air modeling work to determine if further 10 adjustments are necessary. 11 That concludes my prepared comments. With the 12 Chair's permission, I would like to elaborate on two other 13 points to address the expected response from CARB staff. 14 MR. LAGARIAS: Dr. Hoekman, before you do that -- 15 and I would want to hear from the staff -- would you explain 16 to me again what you man by the ozone null level? 17 MR. HOEKMAN: Yes. Perhaps we should put that 18 Figure 1 back up. 19 MR. LAGARIAS: Just explain the zero emission 20 vehicle case. 21 MR. HOEKMAN: The null case refers to a modeling 22 situation in which emissions from all light-duty vehicles 23 are set to be zero. In other words, it represents the ozone 24 that would be produced in the absence of light-duty 25 vehicles. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 MR. LAGARIAS: It's a background level; is that 2 what you're talking about? Background ozone level? 3 MR. HOEKMAN: Yes, I think you could call it 4 background, meaning it's ozone produced from all other 5 sources than light-duty vehicles. 6 MR. LAGARIAS: That's a fascinating concept, and 7 I'd like to think about it. 8 But I hope the staff has had a chance to mull it 9 over and can respond to this approach. 10 MR. HOEKMAN: Mr. Lagarias, this approach of the 11 null test is something that has been used in the past. We 12 are not objecting to that approach. 13 MR. LAGARIAS: Well, I know that. I'm just -- I'd 14 like the staff to react to your proposal. Because, as I 15 understand it, you're suggesting that the CNG and the 16 natural gas have its reactivity numbers raised because of 17 the presence of the null, the background level? 18 MR. HOEKMAN: That's exactly right. 19 MR. LAGARIAS: And that applies equally to 20 reformulated gasoline? 21 MR. HOEKMAN: Well, you'll notice that the null 22 test results for the reformulated gasoline were very close 23 to 1 for peak ozone, So, we are suggesting that no 24 adjustment is necessary for the reformulated gasoline. 25 MR. LAGARIAS: Tom? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 MR. CACKETTE: Bart Croes will respond to that. 2 MR. CROES: Mr. Lagarias, I'm Mark Croes of the 3 Board's Research Division, and I've been responsible for 4 guiding the development of the RAF approach for the last 5 five years. It's a complex subject, so I have three 6 overheads I'd like to show you. 7 First, we think that the RAFs have a sound 8 scientific basis. The RAFs are not designed to be 9 applicable to all atmospheric conditions, but rather to 10 those where hydrocarbon control is important. 11 The null test is a check of this concept. The 12 Advisory Board for Air Quality and Fuels established by 13 Assembly Bill 234 recommended that all fuels be treated on a 14 level playing field through the use of air quality based 15 performance standards. In November, '91, the Board 16 implemented these recommendations with the adoption of RAFs 17 to account for differences in ozone formation potential 18 among fuels and vehicle technologies. 19 The National Academy of Sciences in their report, 20 "Rethinking the Ozone Problem - Urban and Regional Air 21 Pollution," has endorsed the Board's RAF approach as a valid 22 way to treat fuels equally. 23 Research on RAFs sponsored by the Board, the 24 Auto/Oil Air Quality Improvement Program, and the Department 25 of Energy, has passed several tests of scientific peer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 review. Seven articles favoring ARB's approach on the 2 development, application, evaluation, and certainty analysis 3 of the RAF concept have been published to date. 4 Next slide, please. 5 The null test is a check of the level playing 6 field among different fuels over a wide range of atmospheric 7 emissions. 8 The RAF test in question by WSPA follows a 9 protocol first suggested by the Reactivity Advisory Panel in 10 1991. This was an ad hoc group of the public, auto 11 manufacturers, and fuel suppliers, including WSPA members. 12 The protocol was established at the November, '91 13 Board hearing and employed again at the January, '93 Board 14 hearing. 15 The protocol requires us to examine results from 16 peak ozone as well as a measure that takes into account all 17 hours that people are exposed to ozone levels above the 18 State standard. 19 Our documents, including the one quoted in WSPA's 20 recent letter to the Board, are quite clear on this point. 21 Both of these measures of ozone are important. An air 22 basin's attainment status is based on peak ozone levels. 23 The low-emission vehicle regulations area designed to reduce 24 exposure to unhealthy levels of ozone everywhere. 25 However,just as in every other ozone control PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 program we have, ozone will go down in some areas more than 2 others. This depends on where the emission reductions occur 3 and which way the wind is blowing on a particular day. 4 Because of this fact, we use a measure that takes 5 into account all instances of ozone levels above the 6 standard that impact where people live. 7 Can I have the next slide, please? 8 This table fills in the measure of ozone exposure 9 ignored by WSPA in their recent letter. A null test result 10 of 1.00 implies a level playing field. A value of 1.10 11 means that the RAF for a particular fuel should be adjusted 12 upwards by 10 percent to ensure a level playing field. 13 The average results for the two measures of ozone 14 shown on the second line from the bottom are quite different 15 for CNG and LPG fueled vehicles. This is due to the peak 16 ozone results shown in shading. These ozone peaks located 17 over Mt. Baldy in the modeling domain are less sensitive to 18 hydrocarbon emissions than much of the urban area. So, the 19 null test results are the ratios of two small numbers 20 resulting in a statistical noise. 21 The peak ozone results for the September, 1982 22 episodes are more statistically robust, because of the 23 higher response to hydrocarbon emissions from LEV vehicles. 24 These results fall more in line with the exposure results. 25 By placing less weight on the peak ozone for the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 two episodes with greater statistical noise, we have 2 recommended no increase in the RAF for CNG rather than the 2 3 percent shown in bold on the bottom line of the table. 4 Using the same logic, we recommended a 10 percent 5 increase in the RAF for LPG. These interpretations of the 6 null test results are consistent with those employed at the 7 1991-1993 Board hearings for RFG and M85, and are protective 8 of air quality over the entire basin. 9 In summation, we feel the RAFs have a firm 10 scientific basis, are derived using the same protocol 11 adopted in two earlier regulatory hearings, place less 12 weight on statistically weak data, and are protective of the 13 entire population exposed to unhealthy levels of ozone. 14 Thank you. 15 MR. LAGARIAS: Dr. Hoekman, continue, please. 16 MR. HOEKMAN: Thank you. 17 I would like to respond to two particular points. 18 The first one has to do with deciding what is the relevant 19 metric for deciding when the null test result is valid. As 20 Mr. Croes has stated -- and I will read the wording exactly 21 from the CARB document -- he has stated that both peak 22 levels and ozone exposure need to be considered. And that 23 is true. 24 As it's stated in the CARB technical support 25 document of September 27, 1991, the airshed model PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 evaluations will demonstrate a successful reactivity scale 2 if two fuel vehicle combinations result in equal one-hour 3 basin peak concentrations and equal ozone exposure. Both of 4 those measures are mentioned. 5 On the preceding page is stated another truth that 6 a RAF determined so that two vehicles have equal impact on 7 peak ozone, in general, will be different from a RAF derived 8 so that the vehicles have equal impacts on integrated ozone. 9 What that is saying is we have two standards, two 10 metrics to be considering. Those two metrics will be 11 different, depending upon atmospheric conditions and many 12 other things. 13 It is the contention of WSPA that the most 14 relevant metric is peak ozone, since that it what the 15 national ambient air quality standards and the California 16 air quality standards are based upon. 17 Our position would be that we should consider 18 integrated ozone or exposure levels; that's important, also. 19 But we need to give at least equal weighting, if not more, 20 to speak levels, since that is what the standard is based 21 upon. 22 The second point I'd like to respond to is the 23 idea that the peak levels should not be given the adequate 24 weighting, because we're comparing two small numbers. I 25 would like to show Figure 1 again, please. Refer to Figure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 1. 2 The small numbers that we are talking about or the 3 deltas, the small deltas -- the small deltas to which we're 4 referring are the numerator and denominator in the null test 5 result. What we're saying is that the difference in ozone 6 on a peak basis, the difference in ozone is quite small 7 whether or not vehicles are included. That is true. It may 8 be surprising, but that is true. 9 Support for that is also provided in modeling 10 results from the Auto/Oil Air Quality Improvement Research 11 Program, which conducted simulations for Los Angeles 12 situations in the year 2010. 13 The conclusion from those modeling results 14 indicated that the contribution of light-duty vehicle 15 emissions to peak ozone is less than 10 percent. So, we are 16 talking here about small numbers, because that's the 17 reality. We cannot simply throw them out and say they're 18 not important. They're small because they're small. That 19 does not invalidate them. 20 To add further perspective to that, you might say, 21 if we're only talking about a 10 percent in peak ozone, 22 whether or not there are vehicles, then you would certainly 23 expect even a smaller change in comparing one fuel to 24 another fuel. And that is true, too. 25 So, what would be the harm, you might say, in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 allowing a RAF, which is slightly incorrect, allowing a 2 slight increase in peak ozone? It will only be 1 or 2 3 percent increase in peak ozone. 4 Well, again, let me refer you to the auto/oil 5 program, in which a number of reformulated gasolines were 6 compared and ozone modeling was conducting to assess the 7 impacts from changing from one fuel to another. 8 The two fuels of greatest interest would be 9 comparing fuel RFA with a severely reformulated gasoline, 10 Fuel C in the auto/oil nomenclature. 11 Fuel C comes pretty close to Phase 2 gasoline. 12 The difference in peak ozone that was concluded from the 13 modeling between all vehicles using RFA, baseline gasoline, 14 and all vehicles using Fuel C was less than 3 percent. 15 My point is that small numbers are important 16 numbers, important enough to force introduction of Phase 2 17 gasoline. And we ought not to neglect them because they're 18 small. 19 MR. LAGARIAS: Thank you. 20 CHAIRMAN DUNLAP: Thank you. Mr. Lagarias? 21 MR. LAGARIAS: Well, I have to admit it's an 22 interesting new concept to me, and I think peak conditions 23 are more significant because of the regulatory requirements. 24 But I wonder about -- since I'm not well versed with this, 25 the ozone null level is a background level, won't some of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 that be a contribution of automotive emissions the day 2 before, or two days previously, or some accumulation in the 3 null value? 4 MR. HOEKMAN: In these modeling episodes, the 5 light-duty automobiles are removed entirely from the 6 modeling scenario over the multiple days in which it is run. 7 So, we truly are looking at a case with no 8 vehicles compared to a case with vehicles. 9 MR. LAGARIAS: Well, I guess this isn't smoke and 10 mirrors, but it is a little dim at the present time. Thank 11 you. 12 MR. CALHOUN: It seems to me that the key issue 13 here is which is the most appropriate way of determining the 14 null test, whether it ought to be based on the peak ozone or 15 the population-weighted base. 16 And that's kind of controversial. I'm not sure 17 we're going to adopt that today and what Jack was zeroing in 18 on. 19 CHAIRMAN DUNLAP: Ms. Edgerton. 20 MS. EDGERTON: Is your peak the 24 hour or the 21 eight hour? 22 MR. HOEKMAN: It's a one-hour maximum. 23 MS. EDGERTON: One-hour maximum. Where did you 24 say your data comes from about the 10 percent contribution 25 of LEVs to peak ozone? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 MR. HOEKMAN: I can cite two things: one in this 2 very set of information from ARB, looking at what the peak 3 ozone is with or without the motor vehicles included, the 4 difference is approximately 10 percent in the 1987 5 inventory. Notice there were two emission inventories. It 6 is larger. It is 20, maybe 25 percent in 2010 inventory. 7 The other source is from the auto/oil program. 8 MS. EDGERTON: Thank you. Which inventory do you 9 think is more appropriate, or do you think 2010 is more 10 appropriate to use? 11 MR. CROES: We like to look at both inventories 12 just because it gives a range of conditions. 13 I'd like to clarify this 10 percent impact. It's 14 the impact of the hydrocarbons only on ozone peak. It 15 doesn't include the impact for the CO and NOx, which also 16 affect ozone. 17 Plus, it's just the impact of the exhaust, not the 18 impact of the evaporative emissions from the vehicle or the 19 running losses. 20 And for the 2010 case, it's well into the future 21 when the car emissions are at very, very low levels. So, 22 it's the impact of a small part of the emissions from those 23 vehicles on ozone, and there are different hypothetical 24 situations. 25 For one of the episodes, the '82, the ozone PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 impacts are much higher. 2 MS. EDGERTON: Thank you. Would you like to make 3 a response to the argument that the reliance on the peak 4 ozone standard versus -- I mean emissions versus the overall 5 ozone concentrations and its apparent inconsistency? 6 MR. CROES: Well, we feel -- and this is supported 7 by the reactivity advisory group and health effects expert, 8 and she's looked at several measures of ozone because of the 9 impact of the regulation affects the entire basin and 10 affects entire populations. 11 We didn't feel that we should look only at one 12 hour over Mt. Baldy; that you should look at all hours over 13 the entire basin. And we place less weight on the peak 14 ozone results because we feel, because we're dividing a 15 small number by another small number, that you have a lot of 16 statistical noise. And so, it's not that we feel peak ozone 17 is not important; we just feel that the number is not 18 necessarily statistically valid. 19 CHAIRMAN DUNLAP: Anything else? 20 MS. EDGERTON: I just want to see if I understand 21 it. So, you think that the peak ozone, the one-hour ozone 22 concentration is less valid statistically than the other -- 23 than the ozone concentration, general concentration? 24 MR. CROES: Well, what happens in some of the 25 modeling cases is that the peak ozone isn't very responsive PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 to the hydrocarbon emissions, and only looking at the effect 2 of hydrocarbon emissions and not NOx and CO. So, because of 3 that small impact, the numbers become less reliable. 4 Hydrocarbon control from the LEV program has its 5 greatest benefit in the basin in the areas where people 6 live. We feel it's important to look at that aspect of the 7 problem. 8 MS. EDGERTON: So, if I understand you, the 9 reactivity factor, a RAF, that did not take into account the 10 overall ozone concentration would not be a reasonable one, 11 because it would not reflect the ozone producing properties 12 of that fuel. 13 MR. CROES: Yeah. It looks at the overall effect 14 of the fuel -- of one fuel versus the overall effect of 15 another fuel. 16 MS. EDGERTON: So, you think it would be 17 irrational to have something that excluded all except -- 18 MR. CROES: Yes, that was the advice involved in 19 this entire -- 20 MS. EDGERTON: So, all the experts, all that 21 advisory board. I just wanted to understand that. Thank 22 you very much. 23 CHAIRMAN DUNLAP: Okay. Very good. Thank you for 24 your time. We appreciate it. 25 Melissa Sherlock, Glenn Keller, Dale McKinnon, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 our concluding Greg Vlasek. 2 Good afternoon. 3 MS. SHERLOCK: Good afternoon. 4 Good afternoon, Chairman Dunlap and Board members. 5 My name is Melissa Sherlock, and I'm a fuels 6 planning engineer for 76 Products Company, which is an 7 operating group of Unocal, which you're probably more 8 familiar with. 9 And I'm here today to comment just briefly on the 10 proposed amendments to the low-emission vehicle regulation. 11 Specifically, my comments will address reactivity adjustment 12 factors, the revised SIP proposal for medium-duty vehicles, 13 and the proposed amendment to the specification for M100 14 methanol. 15 First, on the reactivity factors, I just want to 16 say that Unocal is a member of the Western States Petroleum 17 Association, or WSPA, and we adamantly support all the 18 comments that were made earlier by Kent Hoekman, or just 19 previous to me. I have some more information there, but 20 it's just duplicating what Kent already discussion, and so 21 I'll just pass it by, and just let you know that we 22 adamantly support everything he said. 23 With regard to the revised SIP proposal for 24 medium-duty vehicles, we support the proposed changes to the 25 mobile source control measures for medium-duty vehicles and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 the related regulatory to the low-emission vehicle 2 regulation. 3 We think these changes will provide vehicle 4 manufacturers with greater flexibility in complying with the 5 regulatory requirements, and we think that this flexibility 6 will allow them to look at a number of different vehicle 7 technologies to meet the emission standards rather than to 8 restrict them to just a few technologies that are likely 9 still in the prototype stages of development. 10 In addition, we think that the concepts that are 11 illustrated in this proposal can be applied to the light- 12 duty side of the regulation and add flexibility in achieving 13 the emission reductions attributable to the zero-emission 14 vehicle program. 15 We think similar revisions to the light-duty 16 vehicle category can result in a cost-effective and 17 practicable market and performance based system rather than 18 the current mandate based system. 19 And we urge CARB to look at these concepts and try 20 to apply them to light-duty category and explore the 21 potential for emission reductions that are there. 22 And, finally, with respect to the M100 fuel 23 methanol specification, we do not support the proposal to 24 remove the requirement for a luminosity additive in the 25 specification for M100 fuel methanol. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 Although we do agree with the staff's technical 2 assessment that the risk of an M100 fire is low, the 3 technical information does not dismiss the fact that M100 4 fuel can ignite and catch fire. And the fact still remains 5 that if an M100 fuel does catch fire perhaps as a result of 6 a vehicle collision on a public highway, the flame will be 7 virtually invisible and it can lead to some serious injuries 8 to unsuspecting accident victims and fire and rescue 9 respondents. 10 In addition, we think that, as the popularity and 11 performance of M100 vehicles continues to evolve and the 12 fuel becomes more available, we think it's likely that their 13 use will expand beyond fleet applications and just further 14 increase potential exposure to M100 fires by untrained and 15 unsuspecting public members. 16 We don't agree that the reduced risk of M100 fires 17 should be used as a basis to remove the luminosity 18 requirement, and we think that requirement should remain 19 intact and that the requirement for fire suppression systems 20 be used as a substitute until a suitable luminosity additive 21 can be identified. 22 That's all I have. 23 CHAIRMAN DUNLAP: Very good. Thank you. Any 24 questions? 25 Okay. Glenn Keller, Engine Manufacturers PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 Association. Mr. Keller, we have a copy of your 2 presentation. Anything you'd like to add? 3 MR. KELLER: I will be very brief. 4 EMA wants to express its congratulations to you on 5 your confirmation. Again, I'll introduce myself. I'm Glenn 6 Keller, Executive Director of the Engine Manufacturers 7 Association. 8 EMA is the national association representing 9 worldwide manufacturers of engines for all applications 10 other than passenger cars and aircraft. 11 EMA's members produce, among other things, the 12 engines that are used in medium-duty vehicles, both 13 compression ignition and spark-ignited, which under CARB's 14 regulations, include those vehicles having a gross vehicle 15 weight rating greater than 6,000 pounds. 16 In that regard, our remarks will be primarily 17 directed towards those aspects of the rule pertaining to the 18 engines which are engine dynamometer certified, and used in 19 the vehicle applications greater than 8500 pounds and 20 incomplete vehicles. 21 I'll summarize our comments into three points. 22 Number one, we want to let it be known to the Air Resources 23 Board that EMA is very appreciative of the several 24 opportunities that CARB staff provided EMA to comment on 25 the development of the pending amendments to both the MDV PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 and the heavy-duty rules. 2 This cooperative type of give-and-take process 3 among regulators and the affected industry has resulted in 4 stringent, yet generally workable, requirements in 5 California. 6 This approach to developing new regulations in 7 turn will yield significant initial air quality 8 improvements, while at the same time, preserving a full 9 array of cost-efficient and durable mid-range power sources 10 in California. 11 I think there should be also a lot more credit 12 given to the wonderful program, "The Statement of 13 Principles" that was recently entered into among U.S. EPA, 14 CARB, and the engine manufacturing industry regarding future 15 emission regulations for heavy duty on-highway vehicles. 16 This was referenced Ms. Guerrero's summary, and the emission 17 requirements that are being targeted for the year 2004 18 represent dramatic NOx reductions of over one-half the 19 current levels that we're producing today. 20 This SOP constitutes a true milestone in 21 attainment of cleaner air through reasoned regulatory 22 efforts. It will increase the certainty and stability for 23 the heavy-duty industry, which is vital for manufacturers' 24 strategic business planning. And it will also ensure 25 cleaner air in a manner which is both realistic for industry PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 and very responsive to the genuine environmental concerns of 2 California. 3 We want to point out that the amendments that we 4 are looking at here today also account for and try to align 5 with those of the Federal program beginning in the 2004 6 model year. 7 And we're very supportive of that concept. 8 And finally, in closing, I want to bring up the 9 point that EMA greatly appreciates and fully supports the 10 specific amendments MDV rule that provide for a stair-step 11 100 percent phase-in program for the engine dyno certified 12 MDVs, and that retain a 100 percent Tier 1 requirement for 13 engine dyno certified MDVs through the 2001 model year. 14 EMA also appreciates this recent staff amendment 15 brought up today that specifically includes the permitting 16 of intermediate in-use standards for engine dyno certified 17 MDVs and in-use -- and those are the LEV standard for 2002 18 and 2003 model years of 3.2 grams per brake horsepower hour, 19 and the ULEV standard intermediate in-use factors of 2.7 20 applying to 1992 to 2003. 21 All of these help in the manufacturers' ability to 22 meet the standards, giving them the necessary stability in 23 the meantime to meet the increasingly stringent standards. 24 And more importantly, these amendments serve to 25 avoid the prospect of certifying engines to standards PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 applicable for one year. 2 In conclusion, EMA appreciates this opportunity to 3 work with CARB staff. EMA looks forward to similar 4 cooperative efforts in implementing the SOP and in achieving 5 full harmonization of the CARB and EPA regulatory programs, 6 and not just the resulting emission standard levels. 7 Thank you, and I'll be happy to answer if there's 8 any questions. 9 CHAIRMAN DUNLAP: Very good. Thank you. Any 10 questions? Appreciate your comments about working closely 11 with us and U.S. EPA on that heavy-duty engine program. 12 It's very important. Thank you. 13 MR. KELLER: It's our pleasure. 14 CHAIRMAN DUNLAP: Okay. Dale McKinnon, and then 15 Greg Vlasek. 16 MR. Mc KINNON: I'd also like to extend my 17 congratulations, Chairman Dunlap. 18 CHAIRMAN DUNLAP: Thank you. 19 MR. Mc KINNON: Good afternoon, my name is Dale 20 McKinnon, and I'm the technical director of the 21 Manufacturers of Emission Controls Association, MECA for 22 short. 23 MECA's pleased to provide these comments in 24 support of the Air Resources Board's proposal to amend the 25 certification requirements and procedures for low-emission PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 passenger cars, light-duty trucks, and medium-duty vehicles. 2 MECA commends the Board for its continuing efforts 3 to implement a motor vehicle emission control program that 4 will address California's serious air quality problem. 5 MECA's a nonprofit association of manufacturers of 6 emission controls for motor vehicles. Our companies are 7 developing and producing control equipment that can help 8 reduce NOx, hydrocarbons, CO, and particulate emissions from 9 diesel engines; but not only diesel engines, gasoline 10 powered engines, and alternative fueled motor vehicles. 11 Because we have had on numerous occasions the 12 opportunity to talk to staff and the Board on different 13 technologies, we'll keep our comments brief. 14 For the past two decades, California has provided 15 critical leadership in the development of its mobile source 16 emission control program. Standards adopted by the Air 17 Resources Board over the years has stimulated enormous 18 technical development efforts that have resulted in 19 important advances in engine design and control technology, 20 which are providing significant reductions in motor vehicle 21 pollution. 22 We believe that the proposed program will further 23 stimulate development, both by engine manufacturers and 24 those development control technologies. 25 A few words about gasoline powered medium-duty PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 vehicles. We concur with the staff that significant 2 advances have been made in catalyst technology, in 3 particular, with improved light-off characteristics, 4 increased durability and high temperature resistance. We 5 believe that these aid the manufacturers to meet the new 6 proposals. 7 We also concur with the staff's assessment that, 8 if needed, electrically heated catalysts could be optimized 9 for medium-duty applications. This technology has evolved 10 dramatically over the past five years, and its effectiveness 11 and durability is being established for possible light-duty 12 vehicle application to meet the ULEV standards. the larger 13 It's not hard to imagine it being further optimized 14 for medium-duty vehicles. 15 Hydrocarbon traps have reached a stage of 16 development to be considered a viable candidate. As far as 17 diesel powered medium-duty vehicles to meet the proposed 18 emissions standards MECA members have developed and are now 19 manufacturing control technologies that could be used to 20 help diesel powered vehicles -- diesel powered medium-duty 21 vehicles meet the proposed standards. For example, our 22 members have been and continue to work on lean NOx catalyst 23 technology. It shows considerable promise for providing 24 significant NOx reduction from diesel engines. 25 Also, oxidation catalysts and trap oxidizer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 technology can be used to control particulate emissions on 2 these vehicles. 3 Oxidation catalyst technology has been proven 4 effective in reducing engine-out particulate by up to 30 5 percent, hydrocarbon by 30 percent, and carbon monoxide by 6 30 percent. Trap oxidizer technology can reduce particulate 7 emissions by over 90 percent. 8 We concur with the fact that these technologies 9 will be among the technology choices available to 10 manufacturers to meet the proposed medium-duty standards. 11 Although the technologies discussed above can be 12 used in conjunction with the diesel fuel currently available 13 in California, even further reductions in fuel sulfur would 14 enhance their performance. 15 In closing, we wish to reiterate our support for 16 the proposed revisions of the low-emission vehicle program, 17 and to reiterate that our industry stands ready to do its 18 part to help ensure that the objectives of the regulatory 19 changes are achieved. 20 Thank you. 21 CHAIRMAN DUNLAP: Thank you very much. Any 22 questions of Mr. McKinnon? 23 Very well. Appreciate it. 24 MR. Mc KINNON: Thank you. 25 And our final witness, Mr. Vlasek. Good PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 afternoon, Greg. 2 MR. VLASEK: Good afternoon, confirmed Chairman 3 Dunlap and members of the Board, Greg Vlasek, representing 4 the natural gas vehicle industry today. Most of my remarks 5 have been amply address by Messrs. Van Amburg, Mr. 6 Carmichael, and Mr. Wuebben. You have my written comments 7 before you. So, I will be brief. 8 I have one point, one observation, and one 9 question of clarification for the assembly today. 10 First, on the point of the NOx reductions in the 11 medium-duty proposed changes, we are, as you are, concerned 12 about additions to the black box. In my comments, we have 13 made the suggestion that the ARB consider adoption of the 14 SLEV standard as a tailpipe standard rather than an optional 15 standard, and to take that into consideration in the next 16 set of deliberations in changes to the standard. 17 As staff pointed out, there's regrettably a dearth 18 of emissions data for natural gas vehicles in the medium- 19 duty category. And there are certainly some issues and 20 characteristics of the medium-duty market that may be quite 21 different from the light-duty and heavy-duty markets. 22 The phase on the emission standard that is coming 23 in for light-duty NGVs and for heavy-duty NGVs, we believe 24 that an option of a -- or a phase-in of an SLEV tailpipe 25 standard beginning around 2002 is not an unachievable PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 opportunity to get additional NOx reductions. 2 So, we'd ask that you would look into that between 3 now and the 1998 review of these standards. 4 The observation I wanted to make is related to 5 that, and actually occurred to me during the staff's 6 presentation this morning. 7 It's on the approach that is engendered in this 8 particular rulemaking, and the exchange of NOx reductions or 9 acceleration of the NOx standards in exchange for CO and 10 particulate, relaxation of those standards. 11 It appears, if I'm reading the situation here 12 correctly that the market-based approach that Ms. Guerrero 13 mentioned as providing flexibility to the industry is 14 failing. It's not working. The decision to trade off CO 15 and PM reductions in the medium-duty class for accelerated 16 NOx reductions suggests to me that none of the manufacturers 17 in the industry are capable of achieving those NOx 18 reductions without having more relaxed CO and PM standards. 19 And I don't know that that's the case. 20 Maybe the staff can comment on that. But it would 21 seem to me if the ARB and the industry is serious about 22 utilizing market-based incentives as an approach, that we 23 ought to not adjust the LEV, ULEV, and SLEV standards as we 24 go along to accommodate the lowest common denominator -- 25 technological denominator as offered by the OEMs. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 But, in fact, we should encourage trading between 2 the manufacturers and not penalize those manufacturers who 3 could meet the accelerated NOx schedule, and not require 4 relaxation of the other standards, but in fact could meet 5 all the ULEV standards without any relaxation at all. 6 So, I'd ask you to consider that as you look at 7 the way the proposed changes are presented here to you and 8 the way the industry offers solutions to our emissions 9 problems in the future. 10 The final item is a clarification related to the 11 SLEV standards. There was not a lot of detail given on the 12 late changes in the SLEV, and I wanted to find out if, for 13 incomplete medium-duty vehicles, the SLEV standard would be 14 too grams or would it be a 2.4 combined standard? 15 The reason I'm asking this question is because 16 we're working with the Legislature and the California 17 Trucking Association to develop some market-based incentives 18 that would be somewhat dependent upon this determination. 19 So, with that, I'll turn it over to the staff. 20 Thank you for your attention. 21 CHAIRMAN DUNLAP: Do you have a response to Mr. 22 Vlasek's question? 23 MR. VLASEK: I don't know if my question's clear. 24 CHAIRMAN DUNLAP: Why don't you restate it, Greg. 25 MR. VLASEK: I believe that the mailout indicates PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 that the SLEV NOx standard, 2 gram per brake horsepower hour 2 for incomplete SLEVs -- my question is: Is that still the 3 case or is the SLEV optional standard also being proposed to 4 be modified to the compliance standard? That would be 2.4, 5 2.5. 6 (Thereupon, Ms. Guerrero's answer was not 7 heard by the reporter because her microphone 8 was not activated.) 9 MR. CROSS: The answer is she didn't propose any 10 15-day change for the incompletes. So, it's not changed. 11 MR. VLASEK: Fine. Thank you. 12 CHAIRMAN DUNLAP: All right. Mr. Calhoun. 13 MR. CALHOUN: Yes. I think, Mr. Vlasek, the last 14 time you appeared before the Board, you were asking for 15 change to the regulations so as to permit -- make it a 16 little easier for the natural gas engine to certify. And 17 today, you seem to be objecting to also a suggestion that 18 some of the staff recommendations, in particular regarding 19 the concession being granted the industry. Would the 20 natural gas industry be receptive to going back and doing 21 the same kind of certification that the OEMs have to go 22 through in order to certify these vehicles? 23 MR. VLASEK: I believe that's what we were asking 24 for a retrofit item back in July. We were asking for 25 treatment similar to what the OEMs have. I'm not quite sure PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 I see the relationship. 2 MR. CALHOUN: The OEMs have to undergo a very 3 rigorous certification. And I think -- what you were asking 4 for is something to make it a little more easy for the 5 natural gas industry to certify as I recall. 6 MR. VLASEK: I guess the distinction being that 7 that pertained specifically to retrofit systems or 8 aftermarket systems that do not benefit from the OEM 9 engineering, the calibration, and so on. It's not given to 10 them in advance -- it's not afforded to them in advance. 11 So, what we were asking for there is greater use 12 of assigned deterioration factors and a greater length of 13 time to establish durability. 14 I'm not quite certain I see how that relates to 15 what we're talking about here, which is OEM certification. 16 MR. CALHOUN: Well, I guess the only point I was 17 raising, though, it seems as though you are opposing what 18 thae staff is recommending, in terms of changes regarding 19 the NOx and particulate standard. And yet, in the past, 20 you've asked the Board make it more convenient -- maybe 21 that's the wrong way to phrase it but -- for the natural gas 22 industry to certify its vehicles. And you can go buy a 23 vehicle from the OEM that is equipped with natural gas 24 certification. But yet the OEMs have to go through a 25 rigorous certification process initially. And it seems to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 me as though you're asking for -- you did ask for 2 concessions. But yet today, when the staff is proposing 3 something that makes it a little more convenient for some of 4 the other -- some of the other OEMs, that you're opposing 5 that. 6 MR. VLASEK: I guess the difference is -- what I'm 7 asking the staff and the Board to reflect on today is the 8 change in the actual standards; how do you prove whether or 9 not you're meeting those standards over 50,000 miles or 10 100,000 miles, or 120, or 180,000 miles? I see that as a 11 different matter, frankly. 12 But what you're doing today has implications for 13 attainment of NOx certainly. Doesn't get us as far as the 14 medium-duty category as we would all like to see. And I 15 think there are legitimate reasons for that that the staff 16 has certainly considered. 17 I guess I'm asking you to reflect on some of the 18 approaches that you have offered in the past -- market 19 incentives being one -- whether or not there's a strong 20 commitment to that as an approach, and whether the changes 21 proposed today are really fully warranted or if there are 22 other options that should be looked at the next around or in 23 the future, rather than a relaxation of a specific tailpipe 24 standard, if there might not be another way to do it that 25 preserves -- that achieves what you want to do with NOx and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 not at the expense of particulate matter, which I think we 2 all recognize is an important and serious pollutant that 3 needs to be controlled -- and CO for that matter. 4 I don't see how you certify or how you prove it 5 over the long run as being the same issue. 6 MR. CALHOUN: Thank you. 7 CHAIRMAN DUNLAP: Thank you, Greg, I appreciate 8 your time. 9 Ms. Edgerton? We've lost our witness. 10 MS. EDGERTON: That's all right. I just wanted to 11 make a comment. 12 I thought that Supervisor Vagim had a good point 13 about possible confusion between ULEV and super ULEV -- 14 super LEV and ULEV. It made sense to me. super LEV -- 15 SULEV. Are you concerned about that at all? 16 MR. VLASEK: No. 17 MS. EDGERTON: No. 18 (Laughter.) 19 MS. EDGERTON: I guess you guys get it. But I 20 find it confusing. 21 And I'd just like to comment that I think that 22 your presentation of an opportunity to possibly phase in a 23 super ULEV standard, additional super ULEV standard is 24 welcome, and we take a look at it. 25 CHAIRMAN DUNLAP: Very well. Thank you. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 Well, that concludes the public testimony on this 2 item. For the record, I'd like the staff to briefly, very 3 briefly, to summarize those written comments the Board has 4 received on this item, or from individuals who were unable 5 to join us today. Nissan had a letter, correct? 6 MR. ALBU: Nissan had some comments regarding the 7 light-duty vehicle class. We provided some interim in-use 8 phase-in for that class, and they had some very detailed 9 comments about the numbers that we actually achieved in that 10 phase-in process. 11 We did that with AAMA in detail, and Nissan feels 12 that there's some discontinuity from '98 to '99, and they 13 would also like to see the in-use compliance extended 14 another three years. 15 We feel that the agreement we have with AAMA 16 reflects a compromise already, and there's good balance 17 between in-use compliance and meeting the standard in a 18 timely manner. 19 CHAIRMAN DUNLAP: We also had one I believe from 20 the SOCAL Gas Company. I see my friend Lauren Dunlap is 21 here. Do you wish to say anything? We have the written 22 comments. Do you want to summarize those? 23 MR. ALBU: It looks like the gas company's 24 comments reflect those of the last witness. I don't see 25 anything in particular that's different. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 CHAIRMAN DUNLAP: Similar to Mr. Vlasek's 2 comments? 3 MR. ALBU: Yes. 4 CHAIRMAN DUNLAP: Okay. Very good. Anything 5 else? 6 I think that's it. All right. Does the staff 7 have any further comments, Mr. Boyd? 8 MR. BOYD: I believe staff has no further 9 comments, Mr. Chairman. 10 CHAIRMAN DUNLAP: All right. Thank you. I will 11 now officially close the record on this agenda item. 12 However, the record will be reopened when the 15-day notice 13 of public availability is issued. 14 Written or oral comments received after the this 15 hearing date but before the 15-day notice is issued will not 16 be accepted as part of the official record on this agenda 17 item. 18 When the record is reopened for a 15-day comment 19 period, the public may submit written comments on the 20 proposed changes which will be considered and responded to 21 in the final statement of reasons for the regulatory action. 22 Just a reminder to my colleagues on the Board of 23 our policy concerning ex parte communications. Again, while 24 we may communicate off the record without outside persons 25 regarding Board rulemaking, we must disclose the names of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 our contacts and the nature of the contents on the record. 2 And this requirement, of course, applies 3 specifically to communications which take place after notice 4 of the Board hearing has been published. 5 Are there any communications on this item which 6 need to be disclosed? 7 Ms. Edgerton. 8 MS. EDGERTON: Yes, I spoke with Andy Hirsch of 9 the Gas Company, and he essentially made the points that 10 Greg made here today. 11 CHAIRMAN DUNLAP: Very good. Anything else? All 12 right. We have before us a Board resolution. Why don't we 13 take a few moments to review it. 14 While we're reviewing that, I'd like to say a word 15 to those that came today and that testified. I appreciate 16 your time, and effort, and energy you put into responding to 17 this issue. I know it's a complex issue at several levels 18 to deal with. And it was difficult, I know, to kind of 19 track and sift through. There were several items tossed 20 into this. But I appreciate it. Again, I want to recognize 21 those who commented. 22 The Board has before it Resolution No. 95-40, 23 which contains the staff recommendations. Do I have a 24 motion and a second to adopt or to modify the proposal? 25 Mr. Lagarias. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 MR. LAGARIAS: Mr. Chairman, I move adoption of 2 Resolution 95-40, but I'd like to add this point. I think 3 that the issue of reactivity adjustment factors, as we have 4 in this proposal and this time period, should stay just the 5 way it is. 6 But I would like the staff to continue to explore 7 the manner in which reactivity adjustment factors are used 8 for subsequent years. And I would hope you could fill me in 9 on this issue that came in today. 10 SUPERVISOR RIORDAN: I'll that motion, Mr. Chair. 11 CHAIRMAN DUNLAP: Okay. Any other discussion? 12 Actually, I have a point. I would like to see a time line 13 of when -- particularly with this new capacity that you 14 have, when you're going to be able to deal with those other 15 emission sources, the evap, I guess, characterization? 16 You mentioned a time frame, Mr. Albu, earlier. If 17 you could just give us some communication back on that, I'd 18 appreciate it. 19 MR. CALHOUN: Yes. I guess I'd like you to 20 elaborate a little bit more about -- we have a little bit of 21 difference here between the staff and WSPA on the 22 appropriateness of using the peak reading as opposed to 23 using your weighting. And that hasn't been resolved,I don't 24 think. I guess I'd like to have some indication that the 25 staff will get together with the WSPA representative to see PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 if you can resolve this, and bring it back to the Board 2 sometime. 3 CHAIRMAN DUNLAP: Okay. 4 MR. CALHOUN: If it's appropriate. 5 MR. LAGARIAS: I agree with that, but I think the 6 point I wanted to make is I wanted to make sure that we have 7 numbers that the automobile manufacturers and suppliers can 8 work with in this time period. That's why I didn't want to 9 indicate that this thing is in Limbo. 10 CHAIRMAN DUNLAP: Well, on that point, what I 11 guess -- Mr. Kenny, I'm going to need some counsel from you 12 about how to have a meaningful discussion in lieu of the 13 action before us. Could you offer any suggestions? 14 MR. KENNY: I'm not sure I quite follow the 15 question. You're asking me, can the Board entertain some 16 discussion with regard to a direction toward the staff on 17 the issue of the disagreement between WSPA and the staff. 18 CHAIRMAN DUNLAP: Yes, having some meeting to try 19 to strive for resolution without impacting the regulatory 20 action today. 21 MR. KENNY: It would not impact the regulatory 22 action. Essentially, it's our understanding from the 23 comments of Mr. Lagarias and Mr. Calhoun that you would like 24 further investigation into the issue. 25 CHAIRMAN DUNLAP: Okay. Joe, does that work for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 you? Direct the staff to sit down and meet with the 2 parties? Okay. 3 MS. EDGERTON: Mr. Kenny, it's my understanding 4 that in passing this resolution for purposes of today, we 5 are accepting as reasonable and rational the approach of the 6 staff, and we've considered all the approaches, and we are 7 accepting this for purposes of today as an appropriate basis 8 for determining RAFs. 9 MR. KENNY: Ms. Edgerton, that's correct. If, in 10 fact, there was some modification or some change that was 11 going to be arrived at as a result of discussion, it would 12 have to be brought back to you as a regulatory modification. 13 MR. CALHOUN: It could not be included as part of 14 the 15-day notice? 15 MR. KENNY: The difficulty with that at this point 16 is that we don't have sufficient resolution to be able to 17 put that into the 15-day notice at this point in time. 18 The other difficulty is that some of the 19 disagreements between ourselves and WSPA on this issue have 20 been very longstanding and, in fact, have resulted in court 21 actions. We've gone as far as the California Supreme Court. 22 I don't see a resolution happening within the time 23 frame that you're referring to. I think in terms of 24 continued discussions on this matter, that can occur. But I 25 don't really see how we can resolve this in a very short PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 time frame. 2 MR. BOYD: Mr. Chairman, in keeping with what both 3 Mr. Lagarias and Mr. Calhoun said, this is an evolving 4 science, and we're the locus of the activity. And I think 5 some very good points were brought up. And if it's the 6 sentiment of the Board that we pursue that, we certainly 7 will. And with regard to Mr. Calhoun's concerns, I think 8 it's all been said, but I want to recap that we -- when the 9 Board gives us a request, we fulfill that request. We'll 10 continue to discuss with WSPA their concerns about 11 reactivity adjustment factors. 12 And, as stated before, there's five years of 13 history here, and quite a bit of disagreement. We always 14 strive to resolve that, and we'll continue our dialogue as 15 expressed today. 16 CHAIRMAN DUNLAP: Okay. Does that satisfy you, 17 Mr. Calhoun? 18 MR. CALHOUN: Fine. 19 CHAIRMAN DUNLAP: Mr. Lagarias? 20 Very well. Any other discussion? We have a 21 motion and a second. If there isn't any, I'll ask the Board 22 Secretary, I'll ask the Board Secretary to call the roll. 23 MS. HUTCHENS: Boston? 24 DR. BOSTON: Yes. 25 MS. HUTCHENS: Calhoun? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 MR. CALHOUN: Aye. 2 MS. HUTCHENS: Edgerton? 3 MS. EDGERTON: Aye. 4 MS. HUTCHENS: Hilligoss? 5 MAYOR HILLIGOSS: Aye. 6 MS. HUTCHENS: Lagarias? 7 MR. LAGARIAS: Aye. 8 MS. HUTCHENS: Parnell? 9 MR. PARNELL: Aye. 10 MS. HUTCHENS: Riordan? 11 SUPERVISOR RIORDAN: Aye. 12 MS. HUTCHENS: Roberts? 13 SUPERVISOR ROBERTS: Aye. 14 MS. HUTCHENS: Silva? 15 SUPERVISOR SILVA: Aye. 16 MS. HUTCHENS: Vagim? 17 SUPERVISOR VAGIM: Aye. 18 MS. HUTCHENS: Chairman Dunlap? 19 CHAIRMAN DUNLAP: Aye. 20 MS. HUTCHENS: Passes 11-0. 21 CHAIRMAN DUNLAP: Very well. Thank you. At this 22 juncture, I would like to propose -- not propose -- I will 23 direct that we take an hour off for lunch. We'll reconvene 24 about 20 till 2:00. 25 (Thereupon, the luncheon recess was taken.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 AFTERNOON SESSION 2 --o0o-- 3 CHAIRMAN DUNLAP: If everyone will take their 4 seats, we'll reconvene. The second item on the agenda today 5 is a public meeting to consider an update on implementation 6 of California reformulated gasoline. This item is an 7 informational report. 8 Staff will provide an update on the implementation 9 of the California RFG program, which now refer to as just 10 that, California RFG. 11 This is the third status report the Board has 12 received on this subject in the past year. The report will 13 include a brief background on why we adopted the regulation, 14 highlight the features off the program, then staff will 15 discuss the implementation efforts to date, such as the 16 performance testing programs, the transition work on supply 17 and demand forecasting, and the public outreach efforts. 18 We will have a short video on performance, which 19 will provide the Board with a visual overview of the 20 performance test fleets. 21 The public outreach segment will include a 22 presentation by Susan Johnson, who conducted the public 23 opinion research work, in which 1100 individuals were 24 surveyed statewide on the new fuel. 25 I understand we also will see excerpts from some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 off the focus group meetings that were conducted by Ms. 2 Johnson. 3 Before I turn the presentation over to Mr. Boyd 4 and staff, I would like to continue my precedent from the 5 February meeting, and ask Jack Lagarias as well as Joe 6 Calhoun, who serve as Chair and Vice Chair of the Advisory 7 Committee, to offer any thoughts or comments that they may 8 have on progress of these advisory committee and its 9 subcommittees. Jack? 10 MR. LAGARIAS: Thank you, Mr. Chairman. I was a 11 member of the Board in '91 when the regulation was approved. 12 And at that time, many organizations expressed concern that 13 the regulation could be implemented by 1996, because there 14 were so many difficulties associated with it. 15 Since then, many of the organizations and the ARB 16 staff have been working together to address these issues. 17 This public/private partnership is essential to achieve a 18 smooth transition on the use of a newer, cleaner fuel. 19 We were particularly concerned because of the 20 difficulties we had experienced in the introduction of 21 diesel fuel in October of '93. At that time, we were 22 confronted with issues involving performance, availability, 23 and cost. 24 We've since resolved those difficulties and we 25 learned valuable lessons. And one of them we resolved that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 would not occur again. Through the leadership of the then 2 ARB Chair, Jacqueline Schafer, the Advisory Committee and 3 its subcommittees was established in June of last year. The 4 Advisory Committee's purpose was to ensure that the issues 5 related to performance, supply, and public education would 6 be addressed. 7 The mission of the Advisory Committee was to 8 identify potential problems and solutions associated with 9 the implementation of California RFG. 10 Invitations were extended to over 80 11 organizations, including automobile manufacturers, oil 12 companies, gasoline distributors, business and environmental 13 organizations, and Federal, State, and local governments. 14 More than 70 organizations accepted our invitation to 15 participate on the Advisory Committee. 16 Many of these same organization agreed to 17 participate on the subcommittees to address the technical 18 issues. And these subcommittees were organized to evaluate 19 performance and compatibility, supply and demand, and public 20 information. 21 Now, the Advisory Committee held its first meeting 22 in July of last year, and it's been meeting almost quarterly 23 since then. The subcommittees have been meeting more 24 frequently, every six to eight weeks. 25 The performance and compatibility subcommittee has PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 done an outstanding job in a very limited time period 2 organizing a test fleet of over 1200 vehicles and an off- 3 road program that involves lawn and garden equipment, 4 snowmobiles, and watercraft, as well as individual company 5 tests. 6 The transition subcommittee, made up of 7 representatives of the ARB staff, the California Energy 8 Commission staff, and the gasoline suppliers, have been 9 examining the supply and demand problem, and forecasting 10 what may happen as well as monitoring Federal RFG programs. 11 Finally, the public education subcommittee has 12 been working to advise us on how to get the message to the 13 public the value of RFG, and has developed a public outreach 14 program, which we'll hear about shortly. 15 It has also been a resource in developing our face 16 sheet and newsletter. Overall, all of these activities have 17 been outstanding, and they've played a critical role in the 18 process we have made to date. 19 I'd now like to ask Joe Calhoun to fill in on more 20 of the details in his comments regarding the performance 21 subcommittee. Joe? 22 MR. CALHOUN: Thank you, Jack. I was asked last 23 February by our Board Chairman and Jack to serve as Vice 24 Chairman of the Advisory Committee. I attended my first 25 Advisory Committee meeting in February, although had been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 following the work of the Advisory Committee and 2 subcommittees since they began their work in July of 1994. 3 I believe the response from the participants and 4 all of the implementation effort has been commendable. 5 However, this afternoon, I'd like to focus my comments on 6 those activities related to the RFG performance and 7 compatibility test program. 8 For any program to be a success, it must be 9 acceptable to the public and it must undergo public 10 scrutiny. I'm going to repeat that. I think it bears 11 repeating. 12 For any program to be a success, it must be 13 acceptable to the public and undergo public scrutiny. And I 14 can't think of any other program or other product that's 15 more important than the program that we are working on here. 16 It has been impressive to see such a diverse group 17 of oil companies, auto manufacturers, and other 18 organizations cooperate and contribute to this program. I'm 19 not surprised at the work done by the oil companies and the 20 auto industry. They've worked together before, and I've 21 been involved in some of their projects in the past. 22 The performance subcommittee began its work last 23 year by identifying the need for an on-road and off-road 24 test program protocol to ensure that the test programs were 25 designed and implemented based on widely agreed upon PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 procedures. Practically every engine that uses gasoline is 2 involved in this particular test program. 3 In addition, the performance subcommittee worked 4 together to approve test fuel specifications that would be 5 most effective for the overall test program. The 6 subcommittee approved both the protocols and fuel 7 specifications within the first month of beginning its work. 8 The subcommittee members continued their 9 cooperation by advising the ARB staff on the contract 10 criteria for an independent contractor to produce the 11 California RFG test fuel. Some companies did other things. 12 For example, Texaco and Shell, beyond advising, they also 13 paid for some of the test fuel. 14 Some of the test fleets that Texaco arranged for, 15 paying for the transportation of the test fuel to the test 16 fleet. 17 As for the test fleets, the subcommittee members 18 assisted ARB staff in developing criteria to select an 19 evaluate potential test fleets. All of the work I've just 20 mentioned was completed in time for the on-road test program 21 to abe initiated by the end of last February. And I know 22 all of you are anxious to find out about some of the test 23 results. And later on, you will; but a more in-depth report 24 will be presented sometime later on when the test results 25 have been completely analyzed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 Subcommittee members also worked with their own 2 organizations to develop test programs that would complement 3 or fill any gaps in the ARB test program. 4 General Motors and Ford stepped in to provide 5 bench or laboratory testing of elastomer's compatibility and 6 lubricity properties of the fuel. 7 In addition, Chevron and Texaco initiated a fleet 8 program that used their own test fuel. The Department of 9 Energy also helped by initiating a high mileage accumulation 10 test program of California RFG. And you can see there are 11 many, many people involved in this program, and they're 12 involved because they're stakeholders. We all have an 13 interest here. 14 The ARB is a stakeholder. 15 Finally, after the test programs were implemented, 16 it was necessary to analyze vehicle engine and equipment 17 incidents associated with testing control fuels. 18 Performance subcommittee member formed a subgroup of auto 19 and oil company representatives to serve as the technical 20 review panel for the test program. 21 In many instances, the technical review panel 22 brought in their own technical experts from their companies 23 to evaluate these particular incidents. A lot of these 24 people I have known for many, many years, and I feel very 25 grateful to have them. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 The technical review panel is an ongoing body that 2 continues to work with the ARB staff to complete the 3 analysis of the test program data and to resolve the 4 remaining incidents. 5 Most of the on-road test program was completed 6 August 31st, and many of the off-road and individual company 7 test programs have been completed. ARB staff and the 8 technical review panel have already begun to analyze the on- 9 road test program data. And they will provide preliminary 10 analyses soon. 11 Plans are to have the performance subcommittee 12 draft findings by mid-October, a complete draft report of 13 all performance test programs by November, and present a 14 proposed report to the full advisory committee by the end of 15 the year. 16 Based on the preliminary assessments I have seen 17 and conversations I have had with some of the principal 18 parties involved in this program, I believe that, overall, 19 we're finding that the California RFG performs quite well. 20 And I doubt seriously if the customers whose vehicles will 21 be operated on this gasoline will be able to discern the 22 difference. 23 I know the subcommittee and ARB staff are in the 24 process of completing their evaluation of all of the data 25 collected from the test program. Based on what I've seen to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 date, I do not think the subcommittee will find any failures 2 directly linked to the use of CaRFG. I also know the 3 subcommittee and the ARB staff are working hard on the fuel 4 economy evaluation. 5 I'm looking forward to the technical review panel 6 and performance subcommittee preliminary findings, which are 7 to be presented to Advisory Committee at our October the 8 12th meeting. 9 In my view, the test program demonstrates the best 10 elements of teamwork between government and the private 11 sector. The cooperation, communication, and contributions 12 made by such different organizations is very encouraging. 13 I would like to express my appreciation to all of 14 the organizations and individuals who have participated in 15 this remarkable effort. 16 I guess I would like to end my comments by saying, 17 thus far, we have not seen any show stopper. 18 Thank you, Mr. Chairman. 19 CHAIRMAN DUNLAP: Very good. Thank you, Jack and 20 Joe, I appreciate it. 21 Supervisor Vagim, you've been using the California 22 RFG fuel in your personal or county vehicle for a few 23 months. Can you say anything about it? Would you? 24 SUPERVISOR VAGIM: Thank you, Mr. Chairman. I had 25 an opportunity to, since Fresno State was one of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 facilities that took the fuel and it was in very close 2 proximity to where I go to and from -- it wasn't that far 3 out of the way for me to go fuel there. And, of course, 4 coming back up here to the meetings and taking advantage of 5 the GT facility up here, I was able to have a significant 6 amount of fuel, RFG, go through my car. 7 It happened to be the mix from time to time when I 8 couldn't get to an RFG facility, and in between places, so I 9 had also the mixture issue, which I understand staff was 10 concerned about, because they wanted to have a mixture. 11 There's going to be a mixture in the system as we interface 12 the fuel in. 13 And if you go to Nevada, or Oregon, or parts 14 outside of California, you will get the conventional 15 gasoline in the main and have to mix -- come back to 16 California and mix RFG. So, that was an empirical thing 17 that they wanted to see. 18 So, I had an opportunity to kind of replicate a 19 little bit of that. And everytime staff has asked to check 20 my car out and officially sign me up in the program, they 21 keep coming and taking my keys away and sticking their heads 22 under my hood. And I haven't heard any puddles dropping or 23 any engine parts falling off, nor have I felt any. 24 And so, the first thing I did notice, though, is 25 that the test fuel was a hotter fuel than I normally would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 get. It was 89 octane, not 87. And I felt that right away. 2 It wasn't something that I woke up one morning and felt that 3 it was magic. It was indeed 89. So, I haven't had RFG 87, 4 nor has anyone RFG 87. So, that will be a case in point. 5 The issue for me was not the performance. I 6 thought it was grand. I thought the fact -- and I presume 7 the folks are going to check all the hoses and everything, 8 and are going to say everything was okay there. So, all the 9 parts held together. 10 I think the issue for me and I think the issue for 11 all of us needs to be -- is the public, you know, being told 12 upfront over the loss of miles per gallon? I think that's 13 an issue that needs to be at least publicly acknowledged. 14 And I have not seen that discussion in Fact Sheet 1, 2, or 15 3. Somewhere that has to be discussed with the public. 16 And I remember not too long ago, coming out of 17 college, and they started coming out with all this liter 18 system from ounces, and the distillers of spirits decided to 19 get on the bandwagon. They were coming out with 20 milliliters; and at the same time, people in this country 21 decided that alcohol was too hot, and so they had to defang 22 it a little bit. So, you ended up getting milliliters. 23 When you computed it, it was than what you bought before. 24 When you added the octane or the alcohol content, you were 25 getting less before, but yet you were paying more. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 So, I hope the public accepts -- seemed to accept 2 that, because you could still get drunk, I guess, if you 3 drank enough of it. 4 But I think, Mr. Chairman -- and Mr. Lagarias has 5 made a point of this and has told me that, because of some 6 of the discussions I've had with him and Joe Calhoun on the 7 issue of fuel economy, that they are deliberately going to 8 put some of this to some real deliberate tests. 9 In talking to Peter and Dean, I think we're 10 talking about some dynamometer tests under real life 11 conditions. And I have laid this sheet out and gave it to 12 the staff -- pretty much all the fueling times that I have 13 fueled and what miles per gallon I've gotten. And I've 14 compared from what I had gotten before low to high. And 15 I've taken the worst case scenario and compared it to the 16 actual scenario on RFG, and I've laid out the percentages. 17 And some of these percentages, to be honest with 18 you, Mr. Chairman, are higher than what is being advertised. 19 And I think that's something that we need to be upfront with 20 the public. Because I don't want to see the consumers of 21 this State, who all of a sudden are fueling up and getting 22 greater than he 3 to 5 percent loss. In some cases, I was 23 getting on average of 13 percent, 12 percent in some cases. 24 I think we ought to be a little bit concerned about that and 25 take a long look at that. And it could be anything from a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 mixture of very hot days in the Valley, where you're not 2 going to have replicated on the coast. 3 And I think we need to consider that. And it 4 seems to me, when we had real hot days in the Valley and I 5 had the fuel in the tank a long period of time, or even 6 coming from Fresno to Sacramento and Sacramento back to 7 Fresno on a very hot day, the fuel economy was less in that 8 environ than it was if it was a normal cooler day. 9 So, you won't have those replicated on the coast 10 as much as you will the Valley. So, you might have some 11 regional issues on this fuel, too, that we must recognize. 12 So, from that, that is basically the report I can 13 give you. 14 Other than that, the car's still together, right, 15 guys? You just looked at it. It's good fuel from all due 16 respects, and if it gives us 15 to 17 percent reduction, 17 it's well worth the effort. 18 The question is just, what is that economy going 19 to be, and the oxygenate in the summer, and is that an issue 20 that's going to continue? 21 CHAIRMAN DUNLAP: Thank you for the report. I 22 appreciate your participation, and also, Joe and Jack, I 23 know it takes a lot of time, and we're appreciative of the 24 time you spend on this very important issue for the Board. 25 The only comment I'd make -- obviously, we should PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 be concerned and certainly interested in any negative impact 2 on fuel economy. So, I know staff's watching that very 3 closely. Hopefully, that can be explained and we won't have 4 that happen in a widespread way as the fuel's introduced. 5 With that, I'd like to ask Mr. Boyd to introduce 6 the item, and we'll get into the staff report. 7 MR. BOYD: Thank you, Mr. Chairman. 8 As you mentioned in your introduction, we indeed 9 will be presenting the third series, continuing series. of 10 reports to the Board on California reformulated gasoline, or 11 RFG, and the implementation efforts relative to its 12 introduction. 13 We have a four-part presentation for you this 14 afternoon. Dean Simeroth, who you know well as Chief of the 15 Criteria Pollutants Branch in the Stationary Source 16 Division, will begin a presentation by providing a brief 17 background on California RFG. He will also discuss the 18 current status of performance testing programs for motor 19 vehicles, for engines, and various kinds of equipment. 20 Dean will discuss the current forecast for supply 21 of and demand for RFG, and the efforts that underway to work 22 on regional distribution issues. 23 Finally, Dean will provide you with a status 24 report on the refiners' progress in complying with the March 25 1st, 1996, compliance date to have the fuel in the system. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 He'll followed by Peter Venturini, who you know as 2 the Chief of the Stationary Source Division. He'll update 3 all of us on the public outreach efforts. 4 And after his presentation, Ms. Susan Johnson, 5 with Applied Management Planning Group, or AMPG, will make a 6 brief presentation, as you indicated, on the public opinion 7 research that the firm did on California RFG, and will 8 indeed present a short video containing excerpts from the 9 focus group meetings that we have held around the State. 10 Following that, Dr. Joan Denton, who's Manager of 11 our Substance Evaluation Section in the Stationary Source 12 Division, will provide a brief update on the health effects 13 or alleged health effects of RFG with an emphasis on the 14 concern about the effects of MTBE. 15 And, as you will recall, in February, you 16 specifically requested that information from us. 17 And then, in conclusion, I'll have a few remarks 18 to wrap up our presentation. So, with that, I'd like to 19 call first upon Dean Simeroth to begin the presentation. 20 Dean? 21 MR. SIMEROTH: Thank you, Mr. Boyd. Good 22 afternoon, Mr. Chairman, members of the Board. 23 As you've heard, I'm Dean Simeroth, the Chief of 24 the Criteria Pollutants Branch of the Stationary Source 25 Division. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 Today, we will provide you with an update on the 2 efforts to implement the California reformulated gasoline 3 regulation. Today is an important juncture for this 4 program, as the next five months' work will be critical in 5 ensuring the smooth transition to California reformulated 6 gasoline. 7 To provide updates on the California RFG 8 implementation efforts, staff reported to the Board in June 9 of 1994 and last February. The report we'll present today 10 will focus on the following: our background, what it is, 11 its importance; what is being done to ensure a smooth 12 transition; provide an update on, as you've heard, on 13 performance and compatibility test programs, an update on 14 our supply and demand forecast; status of refiners to comply 15 with the regulation. 16 And Mr. Peter Venturini, the Division Chief, will 17 provide an update on the public outreach efforts. 18 Dr. Joan Denton will present an update on health 19 benefits; and finally, a summary by Mr. Boyd. 20 The overall presentation should take approximately 21 one hour, and will include the formal staff presentations, 22 along with a video on the performance test program, and then 23 another video related to public outreach. 24 I will begin the presentation by providing a brief 25 background on the California RFG regulation, its benefits, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 and costs. 2 As you're well aware, the State Implementation 3 Plan is dependent on the California reformulated gasoline. 4 Approximately one-quarter, or 25 percent, of the needed SIP 5 reductions will come from California reformulated gasoline. 6 To develop vehicle fuel specifications, staff 7 views the vehicle and the fuel as a system. This 8 combination of cleaner burning fuels and motor vehicle 9 controls provides maximum emission reductions at the lowest 10 cost. 11 California RFG also plays a vital role in 12 providing the fuel that new vehicles need to meet more 13 stringent Air Resources Board motor vehicle standards in the 14 future. 15 In summary, this program provides significant 16 emission reductions. California RFG will reduce on-road 17 mobile source ozone precursor emissions by approximately 15 18 percent and potential cancer risk from motor vehicles by 30 19 to 40 percent -- gasoline motor vehicles. 20 Staff originally estimated the capital costs for 21 refiners to be approximately $3 to $6 billion to comply. 22 However, based on refiners' revised costs, staff now 23 estimates that California refiner investments will be 24 approximately $4 billion, slightly in excess of 4 billion. 25 Also, this investment should result in California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 having more efficient and modern refineries in the future. 2 Staff recently revised the annualized cost 3 estimates based upon this updated capital investment 4 estimate. At this point, we estimate the annualized cost, 5 which includes capital, operation, and maintenance, to be 6 approximately 1.5 billion compared to our original estimate 7 of $2 billion per year. 8 We hope that the annualized costs will decrease 9 further as refiners learn how to take advantage of the 10 reformulated gasoline predictive model and learn how to 11 minimize operation costs. 12 Also, based on the latest refiners' cost 13 estimates, we've revised our original production costs from 14 the original 12 to 17 cents per gallon range to the present 15 5 to 15 cents per gallon range, with an average expected at 16 10 cents per gallon for all California refiners. This is a 17 production cost. 18 I'll turn now to the background on what the Board 19 and others are doing to ensure a smooth transition to 20 reformulated gasoline next spring. 21 To begin, I will briefly cover the Advisory 22 Committee and the subcommittees. As you heard, the ARB 23 formed an Advisory Committee with approximately 70 24 organizations. These organizations represent members of the 25 oil industry, automobile manufacturers, business, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 environmental groups, Federal, State, and local governments. 2 The Advisory Committee held its initial meeting 3 last July, 1994, and three subsequent meetings. The next 4 meeting is scheduled for October 12th here in Sacramento 5 Three subcommittees were formed -- the performance 6 subcommittee to advise and assist the Board in the design 7 and implementation of the on-road, off-road, and laboratory 8 performance and compatibility testing programs. 9 In addition, members of this committee have been 10 instrumental in coordinating and contributing resources to 11 implement all the test programs. 12 The transition subcommittee was formed to work 13 closely with the California Energy Commission and Air 14 Resources Board staff on transition issues, such as supply 15 and demand forecasting. 16 In addition, this group has helped monitor the 17 implementation of the Federal RFG program in Southern 18 California, which began last January. 19 The public education subcommittee was formed to 20 advise the board on the development and implementation of 21 the public outreach program. This group has assisted in the 22 development of the public outreach plan and implementation 23 of many of the activities identified in the plan. 24 At this time, I'd like to provide with the status 25 report on the performance and compatibility test programs PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 being conducted not only in California, but also around the 2 country and the rest of the world. 3 A number of performance and compatibility programs 4 were implemented. The Air Resources Board initiated a 5 statewide on-road motor vehicle program, test programs also 6 for off-road vehicles, engines, nonvehicle engines, and 7 equipment. 8 Individual companies have initiated a number of 9 on-road, off-road laboratory testing and equipment testing 10 programs to supplement our efforts. 11 The on-road test program began in late February 12 and ended in late August, the last day of August as a matter 13 of fact. 14 As of this date, we have data for 770 tests and 15 584 control vehicles in our database. Staff is currently 16 analyzing data from all the test programs with the 17 assistance of the technical review panel and the performance 18 subcommittee members. 19 The technical review panel was established by the 20 performance subcommittee. 21 In addition, as mentioned, we will include a fuel 22 economy evaluation as part of our analysis. At this time, 23 our analysis indicates an approximate 3 percent fuel 24 penalty. This is based on the City of Sacramento Police 25 fleet. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 It's in our test program, and we're in the process 2 of reviewing the data from the other fleets. As Mr. Vagim 3 mentioned, we are seeing day-to-day or fueling-to-fueling 4 variations, and we're trying to make sense out of that 5 information. 6 I'd like to indicate that the 770 plus test 7 vehicles have used over 500,000 gallons of test fuel. Shown 8 here are the fleets that participated. The participation 9 was voluntary. We did provide the fuel, the test fuel, but 10 we did not provide the control fuel. I'd also like to point 11 out that the California State University at Fresno, 12 Caltrans, and the City of Commerce Division Yard not only 13 had on-road vehicles, but they also had off-road vehicles, 14 utility lawn and garden, and construction equipment. 15 In terms of the off-road test program, we looked 16 at four categories -- utility, lawn and garden, 17 agricultural, industry and construction; finally, personal 18 watercraft and snowmobiles. 19 We've had a number of test programs on this, as 20 mentioned -- California State University, Fresno; Caltrans. 21 Lake Tahoe, there's a fleet of marine vessels at Lake Tahoe. 22 There's also a fleet of snowmobiles at Lake Tahoe. 23 At Lake Cachuma, there is another fleet of marine 24 vehicles, pleasure craft, if you would. The Portable Power 25 Equipment Manufacturers Association participated in our PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 testing -- seven companies worldwide, evaluated their 2 company headquarters using gasoline we provided in their 3 equipment. 4 These companies also provided equipment to 5 California State University, Fresno, to use in their 6 program. This equipment has been returned to the individual 7 companies for a complete teardown and evaluation. 8 I should say, to date, Tecumseh, Briggs and 9 Stratton, Ekco, and Skil have completed their evaluations 10 and provided us reports. They found no fuel-related 11 incidents to date; no performance or durability problems 12 have been identified. Same thing holds for the marine 13 vessels and the snowmobiles, and the industrial and 14 construction equipment previously mentioned. 15 A number of individual companies have done their 16 own programs. General Motors has done a laboratory program 17 on material compatibility. Ford has done a laboratory 18 program on lubricity issues. Nissan recently has done a 19 road and laboratory evaluation of compatibility and deposit 20 formation in the fuel system and combustion chambers. 21 Chevron initiated a program with an employee fleet 22 of 200 vehicles using their own fuel. 23 Texaco has done both an employee fleet and a 24 company fleet, and also been looking at dispensing equipment 25 using a low aromatic fuel. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 The Department of Energy has funded a test program 2 where VDM in Oklahoma has procured five vehicles, California 3 vehicles actually, somewhere between 5,000 and 20,000 miles 4 on the vehicles. They're now accumulating another 30,000 5 miles on the vehicles with their testing. 6 Finally, Harley Davidson, not shown here, but 7 certainly not forgotten, has tested eight motorcycles at 8 their Alabama track, taking some of the engines to engine 9 failure. They have identified no fuel-related problems. 10 All this data will be part of our evaluation of 11 the fuel. It's being integrated into our report that's 12 being prepared through the subcommittee evaluation. 13 At this time, I'd like to show a video. The video 14 was prepared for the ARB on-road and off-road test programs. 15 I hope the Board will understand that this video is in draft 16 form that will be polished before we use it as an 17 educational tool for key audiences through our public 18 outreach program. 19 I hope to have this accomplished and ready for 20 distribution by next month. 21 The video has two major components. The first 22 part is looking at the test fleets and the work that was 23 conducted in inspecting and evaluating individual vehicles 24 and equipment. The second part has a number of statements 25 regarding the test fuel by the fleet managers, supervisors, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 and mechanics who participated in our test program. 2 We'll start with the City Sacramento Police fleet. 3 We had 1991 through 1994 full-size Ford and Chevrolet sedans 4 represented in this fleet. Shown here is -- also, there's 5 107 police vehicles in the fleet. There's inspectors 6 looking for problems in the vehicles. These are inspectors 7 on loan from our heavy-duty vehicle inspection program. 8 Next is Cachuma Boat Rentals in Solvang, had over 9 90 boats, and 5, 6.5, 9, and 25 horsepower outboard engine 10 sizes. 11 Again, our inspectors, they didn't put their 12 fishing boats away. You can see the inspection is quite 13 thorough. Also, I'd note we always had the inspectors from 14 the heavy-duty and also an engineer from either from the 15 stationary source division or the mobile source division 16 would accompany the inspectors. 17 Bank of America in downtown Los Angeles, late 18 model light-duty vans, compact/midsize, these were courier 19 duty, relatively small fleet. There were 20 vehicles in the 20 test, and they had a control of 10. 21 Again, as you can Again, as you can see, the 22 inspections were quite thorough and detailed looking for 23 fuel leaks or any other problems that could be easily 24 identified visually; in some cases, not so easily. 25 Caltrans equipment yard, 48-inch lot sweeper, plus PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 medium heavy-duty vehicles, 25. This is the lot sweeper. 2 concrete mixer, 4 cubic foot concrete mixer. A sign for use 3 along the side of the highways for pass with sequential 4 arrow marker. 5 The County of Sacramento. This was out of the 6 main garage downtown Sacramento. It's an underground garage 7 with maintenance and fuel dispensing done underground. It 8 consisted primarily of light-duty vehicles. Serves as a 9 rental for various county agencies. Had 176 vehicles. 10 GTE, Camarillo, their test fleet. Medium-duty 11 vans, equipment installs. A lot of the vans had on-board 12 generators which also used the fuel out of the vehicle fuel 13 tanks. Also some heavy-duty maintenance trucks. 14 I'd like to mention that Chevron, Division of 15 Measurement Standards, and others helped in some of these 16 inspections as well, particularly with the GTE fleet. 17 The GTE fleet had the highest number of incidents 18 on their vehicles of any of the fleets for some reason. 19 We're still evaluating that. 20 Again, as you can see, the inspections were very 21 thorough. 22 Pacific Bell in Costa Mesa, medium heavy-duty 23 vans, heavy-duty trucks. Again, they also had on-board Onan 24 generators being fueled off the vehicle tanks. So, they 25 were also fuel testing. One of the generators that's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 installed. 2 California State University at Fresno, had a lot 3 of different equipment in the fleet. They had 112 on-road 4 vehicles, plus tractors, leaf blowers, chainsaws, and other 5 lawn and garden, industrial, construction equipment. 6 That was the tractor I drove when I was growing 7 up. You know it was old. There was concern about older 8 vehicles in the fleet. If you notice the black and yellow 9 license plates. Cal State University of Fresno at the 10 oldest vehicles in our test fleet. 11 Paradise Watercraft Boat Rentals, South Shore 12 Parasailing. You can't say we don't get into our work. 13 (Laughter.) 14 This is one where we never had any problem getting 15 volunteers to go on inspections. I couldn't figure out why. 16 You can see they had jet skis, heavy-duty outboard motors, 17 and also large -- I should say in-board motors and also 18 large outboard motors. 19 The engine didn't fail. We stopped it to do the 20 inspection. This is the boat used for the parasail. This 21 is a fairly heavy-duty, large in-board engine. 22 At this point, we go over to observations made by 23 the fleet managers, supervisors, and mechanics. 24 (Thereupon the videotaped statements by 25 fleet managers, et al. were played.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 MR. SIMEROTH: The last statement is particularly 2 significant. The GTE fleet had the highest number of 3 incidents of any of the fleets in the program in terms of 4 things being repaired on the vehicles during the tests. So, 5 his statement there, I feel, is very meaningful. 6 Also, we've had similar statements from mechanics 7 who worked for the gentleman. So, it was up and down the 8 line within the GTE personnel. And we didn't ask him to say 9 anything nice about us either. 10 Turning to the summary of the performance test 11 programs, to date -- I'd like to emphasize "to date" -- no 12 failure's been directly linked to the use of the California 13 reformulated gasoline. 14 However, we're working closely with the technical 15 review panel and its parent, the performance subcommittee, 16 to analyze the data from the test programs and, in 17 particularly, the incidents that occurred at the GTE fleets. 18 We will also further refine our data and analyses 19 to provide a more precise estimate of fuel penalty losses. 20 Preliminary performance test program results 21 should be available by mid-October. The staff plans to 22 present a final report on the performance test program to 23 you at the December meeting. 24 Now, I'd like to provide you with an update on the 25 California RFG transition efforts. The transition PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 subcommittee is focused on evaluating the California RFG 2 supply and demand situation and monitoring implementation of 3 the Federal RFG program in Southern California. 4 Susan Brown of the California Energy Commission is 5 the transition subcommittee discussion leader. The Energy 6 Commission staff has worked closely with the ARB staff to do 7 the necessary data collection and analysis work for the 8 supply and demand forecast. 9 This information is then summarized and provided 10 to the transition subcommittee for review and comment. I 11 want to thank Susan and her staff for the commitment they've 12 made to this effort. 13 This slide illustrates the information compiled by 14 the Energy Commission and Air Resources Board on the supply 15 and demand of California RFG using a high-demand forecast 16 scenario. 17 High demand on the right, red line, represents a 18 two percent annual growth rate with a one-time two percent 19 increase for the expected RFG fuel penalty. This represents 20 a maximum demand situation that is not expected to occur in 21 reality. 22 The maximum capacity estimate is based on a joint 23 ARB/Energy Commission RFG survey, compliance plan updates, 24 and personal communications with petroleum industry 25 representatives. Although high-demand forecasts projects a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 shortfall by 1999, it is expected that if this does occur, 2 California refiners will import finished RFT, important 3 additional blendstocks, or make the necessary refinery 4 modifications to increase production to meet demand. 5 This slide illustrates the Energy Commission 6 forecast for the most likely demand for California gasoline 7 through 1996. This is the one we think is more reasonable 8 to actually expect. The most likely demand forecast is 9 based on the California Energy Commission transportation 10 fuel demand analysis, also sales data through June of 1995 11 has appeared to confirm the forecast. 12 We also have the Energy Commission staff if there 13 are questions on this. 14 The best estimate of 1996 production -- that is, 15 the volume that refiners expect to produce -- is based on a 16 joint survey by the Energy Commission, ARB staff, compliance 17 plan updates, and communications with the petroleum 18 industry. 19 The Energy Commission and the ARB staff are 20 continually reviewing and updating these forecasts. As you 21 can see, even if demand does increase significantly than 22 what is forecast, we're expected to have production capacity 23 to meet that demand. 24 I'd like to shift briefly to another California 25 RFG implementation issue. As you're aware, the fuel PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 regulations allow for variances under certain circumstances. 2 The Air Resources Board staff has prepared draft guidelines 3 for processing of any variance applications. This has been 4 done in response to requests from the affected industry. 5 The guidelines are designed so refiners are 6 encouraged to seek all possible solutions through the 7 marketplace before applying for a variance. 8 It is our intent to discourage the use of a 9 variance unless there has been an extraordinary hardship or 10 just no other alternative. 11 Staff has a draft proposal that the mitigation fee 12 be set at 15 cents per gallon if any variance is necessary. 13 We held one workshop with the members of the oil 14 industry last August on this. We got a favorable response 15 for our proposal. I'd also like to note that Senate Bill 16 709 is expected to be enacted. It's passed out of the 17 Legislature waiting for the Governor's signature. This 18 bill, if signed, will require the Board to adopt the 19 variance guidelines into a regulation. 20 If AB 709 is enacted, we will return to the Board 21 in the next few months to ask for approval of a California 22 RFG variance guideline regulation. 23 Transition summary: It appears that refiners are 24 on schedule to comply with the March 1st compliance date. 25 Compliance plans indicate no one is not going to be ready. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 Supply is forecasted to meet demand; however, 2 we'll continue to monitor this situation. We'll continue to 3 work on the variance provisions for your consideration in 4 the near future. 5 And, at this point, I'd like to turn the 6 presentation over to Mr. Peter Venturini, Chief of the 7 Stationary Source Division, who is also the discussion 8 leader for the public education subcommittee. 9 MR. VENTURINI: Thank you very much, Dean. Good 10 afternoon. 11 The next few minutes, I would like to update you 12 on our public education outreach efforts. We've been 13 extremely active in this area since we last briefed you in 14 February. Let me just start out by saying that public 15 outreach, we believe, is a major and a critical component of 16 our overall effort toward a smooth-as-possible transition to 17 this cleaner burning gasoline next year. 18 What I'd like to do in the presentation today from 19 the next slide, I'd like to highlight our overall outreach 20 strategy. I would like to share with you the results of the 21 public opinion research that has been conducted. And, as 22 you heard, Ms. Susan Johnson of Applied Management Planning 23 Group will provide the summary for you, and will also share 24 with you some excerpts from the focus groups that were held 25 in conjunction with this research. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 Then, after her presentation, I would like to give 2 you an overview of the outreach plan that's been prepared, 3 and the steps we're taking to carry out that plan. 4 On the next slide, I show you the overall strategy 5 for public outreach. In essence, we want to emphasize the 6 positive aspects of this cleaner burning gasoline. For one 7 thing, it's not a new gasoline. It's still gasoline. We 8 changed the formulation. It's evolutionary rather than 9 revolutionary. 10 We want to communicate the value of this, like the 11 value of any product, its air quality benefits, its health 12 benefits. And I think very importantly, we want to honestly 13 address concerns that people may have, concerns related to 14 performance, concerns related to supply, concerns related to 15 fuel economy, concerns related to cost. We want to 16 communicate facts through this program. 17 Another important underpinning, I feel it's very 18 important to cooperate with others; through this effort, the 19 public education subcommittee has been an invaluable asset 20 in this regard. To date, we have met 8 times. The last 21 meeting was last week, and we will be meeting again on 22 October the 12th. 23 And finally, and probably most importantly, we 24 need to be prepared. And we've been working hard, not only 25 ourselves, but members of the subcommittee to prepare for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 the introduction of this cleaner burning gasoline. 2 Early on this program, we in the subcommittee 3 recognized that we probably needed some professional 4 assistance to advise us in this effort. As a result, we, 5 with assistance from the subcommittee, hired Mr. David Novak 6 of Novak Communications to work with us and the subcommittee 7 to advise us on this program, and to develop an outreach 8 plan that would guide our efforts. 9 This plan is our basic road map for our overall 10 outreach effort. Mr. Novak has been working with us and the 11 subcommittee since last March. His expertise and advice 12 have been extremely helpful and valuable. 13 One of the early recommendations and recognitions 14 was that we needed to conduct some credible public opinion 15 research to provide for us the basis for the outreach plan 16 and to help us in the development of key messages; that is, 17 key facts and information that we need to communicate to the 18 public and others. 19 This public opinion research consisted of five 20 focus groups and a telephone survey of 1100 persons 21 statewide. 22 We have asked Ms. Susan Johnson of Applied 23 Management and Planning Group, whose firm conducted this 24 research, to give you a brief presentation on the key 25 findings and results, and to also show you the video of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 focus groups. 2 Ms. Johnson? 3 MS. JOHNSON: Is there a way we can bring up the 4 lights for just a second? 5 And can you all hear me? Good afternoon. I am 6 Susan Johnson with the Applied Management and Planning 7 Group. And we are a firm based in Los Angeles that 8 specializes in conducting public opinion research and market 9 research for public agencies. 10 Our approach in conducting the research for 11 California RFG was somewhat different, inasmuch as we 12 conducted our research in coordination with the development 13 of the public education campaign. 14 The key objectives of that campaign are, number 15 one, to introduce California RFG or cleaner burning gasoline 16 as a product; number two, to identify the values that the 17 public ascribes to California RFG that are the most 18 important and then, in turn, develop messages around 19 conveying that added value; number three, to identify the 20 areas of concern that should be proactively addressed, 21 specifically regarding performance, cost issues, health 22 issues, and fuel availability. 23 Our objective was to conduct quantitative research 24 and qualitative research, integrating our findings, so that 25 we could provide information that would help to support and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 refine the development of the public education campaigns. 2 So, that was really our objective. 3 And that's somewhat different than other market 4 research, which is conducted for our political campaigns and 5 other areas, which is a slightly different approach. 6 For my presentation today, we have completed a 7 full report. I don't know if all of you have seen this yet, 8 but I wanted to highlight for some of the key findings of 9 our survey, and then I'll show you about a ten-minute video 10 that integrates findings from all five of our focus groups. 11 And I'll come back after the video and follow up with a 12 couple other major findings. 13 So, this is a very short presentation for about 14 three months of work. 15 CHAIRMAN DUNLAP: Peter, do we have the document 16 she held up? 17 MR. VENTURINI: We have the document, and we 18 certainly will be glad to provide it to any Board members 19 that would like it. 20 CHAIRMAN DUNLAP: Okay. Because you know it 21 drives us crazy when people hold up documents we don't have 22 up here. 23 If you have one, you can circulate it, just so we 24 can look at it during the presentation. 25 MR. VENTURINI: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 CHAIRMAN DUNLAP: If you have one, Peter. 2 MR. VENTURINI: We'll get one. 3 CHAIRMAN DUNLAP: Okay. Thank you. Go ahead, 4 please. 5 MS. JOHNSON: Okay. As Peter had mentioned, we 6 conducted five focus groups. We also did a telephone survey 7 with 1100 randomly selected licensed California drivers. 8 In conducting our research, one of the methods 9 used for the development of the public education campaign 10 was to divide the State into five geographic regions -- the 11 northern mountain border region, Southern California Metro 12 region, Central Valley, coastline, and the Bay Area. 13 So, in addition to analyzing the data according to 14 various demographics, including income, and education, and 15 gender, we were also looking to find out if there were some 16 geographic differences that would necessitate developing 17 very different types of campaigns, or would necessitate 18 having varying different messages for the different parts of 19 our State. 20 I'll get into some of the major findings from the 21 survey research. The single-most important finding is that 22 overall, in California, 80 percent of our surveyed 23 respondents support or strongly support the use of 24 reformulated gasoline to improve California's air. 25 This is very encouraging and is a very strong PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 majority. More importantly, this support is very high 2 across all of our geographic markets. The support is 3 bolstered by the fact that more than 80 percent agreed or 4 strongly agreed that although they know that driving 5 pollutes the air, they need to continue to drive to maintain 6 their current life style. Therefore, they see a 7 reformulated gasoline as a solution to a problem. 8 In addition, more than three-quarters believe that 9 they are partly responsible for the State's air quality 10 problems, because they are driving. And they do again want 11 to be part of the solution. 12 Statewide, there is low awareness of reformulated 13 gasoline. Less than a third have heard anything about it, 14 and most of these have not heard anything substantive about 15 the fuel other than it is designed to improve air quality. 16 Even in the Southern California metropolitan markets, less 17 than 20 percent were aware that since January 1st, they had 18 been using a Federal reformulation of gasoline. 19 This basically sets up the need for a very strong 20 public education campaign. The support is encouraging, but 21 it must be protected. And in order to protect that, we need 22 to identify the concerns, and then again address them as 23 candidly as possible. 24 Getting to the second part of the campaign, which 25 is marketing what Californians value, number one, they value PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 clean air. This is a commodity that is inherently valuable 2 and it's something everybody wants. And that should be one 3 of the primary selling points in introducing this fuel to 4 the public. 5 Next, Californians are very resistant to change. 6 They want to be assured that California RFG will be 7 available; that it's going to be available in the three 8 different grades that are currently on the market -- 87, 89, 9 and 92 -- and that it will require little, if any, change on 10 their part. 11 Again, as Peter had mentioned, it's important that 12 we emphasize that this is not a new product, but that it is 13 a reformulation, and that it's benefits be broadcast. 14 It was encouraging to hear some of the testimony 15 of those who had actually tested it on their vehicles and 16 their fleets. That answers a lot of the questions that the 17 public has. 18 What I'd like to do now, before I continue 19 further, is to show you our video, and you can hear for 20 yourselves the questions and the concerns that the public 21 have. Again, we did five focus groups. All of the members 22 were recruited at random from the population and the 23 communities that immediately surrounded our areas. 24 So, if we can pull down the lights, let's watch 25 the video and I'll come back and talk to you a little bit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 more. 2 (Thereupon, the video was played.) 3 MS. JOHNSON: I hope that gives you a flavor for 4 some of the focus groups. It's always very helpful to hear 5 candidly from our public the level of concern that they 6 have, some points of confusion. They've heard a little bit 7 about a lot of different issues, but they may not have the 8 full picture. 9 And this is a great opportunity for the Air 10 Resources Board to answer those questions and make sure that 11 we do have an informed public, because that will make them 12 more receptive to the product. 13 We identified skeptics' concerns regarding cleaner 14 burning gasoline. Will it work in my car? Will it really 15 clean the air? Will it affect my health? How much will it 16 cost? And I'm pleased to report to the Board that the 17 California Air Resources Board is perceived by the public to 18 be a very credible source of information about reformulated 19 gasoline. 20 Medical associations, such as the American Lung 21 Association, automobile associations and clubs, and the Air 22 Resources Board are all perceived as credible sources for 23 information. And that's good to know. And that's something 24 that we definitely needed to identify prior to the delivery 25 of the public education campaign. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 With regards to price. Messages have been 2 developed for the public education program that explain that 3 the price of reformulated cannot be known, but that it will 4 be controlled by market forces of supply and demand. 5 The survey research indicates that 56 percent 6 agreed or strongly agreed that an increase in price would be 7 controlled by market forces. Moreover -- or actually 76 8 percent agreed with that. 56 percent agreed or strongly 9 agreed in price would be worth it if the air actually were 10 cleaner. 11 71 percent believe that a slight increase in price 12 would be worth maintaining their right to drive whenever and 13 wherever they want. Again, we've got a driving society, and 14 they see a reformulated fuel as a way to maintain that 15 right. 16 To conclude on the issue of price, the two themes 17 that will be promoted is reformulated gasoline, whether it's 18 California RFG, or cleaning burning fuel, whatever the name 19 is going to be, the number one value is that it is going to 20 help clean the air. People are willing to pay slightly more 21 for that. 22 And, secondly, the price will be controlled by 23 market forces, supply and demand. And the public, according 24 to our research, is willing to accept that. 25 So, again, I hope that this gives you an overview PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 of some of the key findings of our research. And that's it. 2 Questions? I will be happy to answer them. 3 CHAIRMAN DUNLAP: Supervisor Vagim. 4 SUPERVISOR VAGIM: Thank you, Mr. Chair. Well, 5 first of all, the surveys show we have our work cut out for 6 us in Fresno. 7 (Laughter.) 8 SUPERVISOR VAGIM: But I did notice by its 9 absence, and I just wondered if it was just not covered, did 10 you cover the loss of miles per gallon in any of the survey 11 discussions? 12 MS. JOHNSON: Yes, we did. In fact, I had noted 13 that when you had brought it up earlier. In our survey, we 14 had given the respondents the following script. We had said 15 that reformulated gasoline may result in a two to four 16 percent reduction in fuel efficiency. And then we explained 17 this means that if you get 15 miles to the gallon, you would 18 get slightly more than 14.5 miles per gallon, and you would 19 need to fill your tank a little sooner. 20 55 percent of the Californians polled said that 21 they would be somewhat unconcerned or not concerned at all 22 with that level of decline in fuel economy. Of the 44 23 percent who said that they would be concerned, only 17 24 percent, less than one in five, said that they would be very 25 concerned. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 So, there is a small segment of the population 2 that a two to four percent reduction in fuel economy would 3 be concerned. 4 SUPERVISOR VAGIM: Thank you. 5 MR. CALHOUN: Did you go beyond the 2 to 4 6 percent? 7 MS. JOHNSON: That was the information that we had 8 at that point, which was included in the survey instrument. 9 We didn't go into various levels for the fuel efficiency. 10 SUPERVISOR VAGIM: She hadn't talked to me yet. 11 (Laughter.) 12 CHAIRMAN DUNLAP: Supervisor Roberts. 13 SUPERVISOR ROBERTS: When you quoted support of 80 14 percent, what was the question that you were asking? 15 MS. JOHNSON: The question was -- I will read it 16 to you: "Based on the information I have given you in this 17 survey. . ." -- because I have to back out. In the survey, 18 we explained that it was expected to accomplish a 14 percent 19 reduction in vehicle pollutants, and also we talked about a 20 40 percent reduction in cancer risk. 21 So, "Based on the information I have given you in 22 this survey, do you strongly support, support, oppose, or 23 strongly oppose the use of reformulated gasoline as a means 24 of meeting State and Federal air quality laws?" 25 SUPERVISOR ROBERTS: So, you told them it was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 going to be beneficial to health, but you didn't tell them 2 it was going to cost more money at -- 3 MS. JOHNSON: And we also did say that the price 4 is likely to increase; although, at this point, we do not 5 know exactly how much. We also measured price sensitivities 6 to four different levels. 7 SUPERVISOR ROBERTS: And I saw the levels in 8 there. I didn't see the answers and how those dropped off 9 yet. You went up to about 20 cents a gallon or something 10 like that? 11 MS. JOHNSON: Yeah. The four different price 12 levels were 8 cents, 11 cents, 14 cents, and 17 cents a 13 gallon more than price increases (sic). And overall, even 14 at 17 cents a gallon, the great -- more than two-thirds of 15 the Californians surveyed will continue to drive at their 16 current level. 17 So, we did -- in the survey, there was a 18 discussion of both the positives and the drawbacks. And we 19 will achieved an 80 percent response rate. 20 And I think that the most important issue for the 21 Air Resources Board in terms of the public education is to 22 protect that level of support. And the way you can protect 23 that is to proactively identify what issues could erode the 24 support. And I think our research has identified those, and 25 I think some of the other research efforts that have been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 happening with regards to introducing reformulated gasoline, 2 has also given some really good guidance in terms of how to 3 develop the education campaign. 4 CHAIRMAN DUNLAP: I have a question for you. From 5 the focus groups and the survey work that you've done, do 6 you see any blind spots for us? Is there anything that you 7 wish would have been asked or done that you weren't able to 8 that would have helped or would have answered more 9 completely some of the key issues to your satisfaction? 10 Is there anything you're uneasy about? Are there 11 any holes that you would point out for us? 12 MS. JOHNSON: At this point, I would say no. I 13 think that the research is fairly conclusive. I think 14 actually my recommendation would be to replicate, perhaps on 15 a smaller scale, additional market research. 16 Because, as information starts to roll out in the 17 beginning of 1996, public opinion may change. You can see 18 from the responses in the focus groups a little information 19 can be misconstrued and confused very easily. 20 I think the solar panels was a good example of 21 that. I think it would be very important and very prudent 22 for the ARB to replicate the survey at some point to make 23 sure that you're still on track, to make sure that you 24 haven't lost your position. 25 CHAIRMAN DUNLAP: Okay. Good. Any other PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 178 1 questions? 2 SUPERVISOR VAGIM: Mr. Chairman, an observation, 3 and I guess it's a question, too, from a public relations 4 standpoint. 5 There was testimony or at least observations from 6 some of the folks you talked to that they weren't as 7 concerned about the particular component of cleaning up the 8 air. They just wanted to make sure the air was cleaner in 9 the bigger picture. In other words, they could see the 10 mountains again, and the haze was out of the air. Is there 11 so much of a need to have so much of an explicit discussion 12 on what this product is? 13 As you say, some people in Southern California 14 don't even know they're on Federal reform fuel. It doesn't 15 matter to them. They're still going to get their fuel and 16 drive down the road. 17 The issue is, how much are we really cleaning up 18 the air in warnings and meeting the ambient air quality 19 standards that we're all after? I mean, maybe we just ought 20 not say much at all and just do it. 21 And, as the air cleans up, people will start 22 wondering -- maybe not explicitly why -- but the fact of it 23 is, these are components that we're trying to achieve to get 24 to that goal. That's one way of looking at it. 25 The other way is tell them so much; they may get PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 179 1 so excited they might even drive more. 2 (Laughter.) 3 MS. JOHNSON: My response to that -- I think that 4 you're absolutely -- you're correct in surmising that the 5 bottom line issue is: Will this clean the air? That's more 6 important than a lengthy discussion on some of the details. 7 Most consumers don't understand and don't necessarily need 8 to know, nor do they really want to know. Those are 9 secondary issues. 10 The bottom line is, will it clean the air? And 11 cleaning the air, both in terms of visibility and in terms 12 of improved breathability -- do I feel better? I strongly 13 advocate that a public education be conducted. We've all 14 seen examples where there's a front runner in a political 15 race -- for example, everyone knows them; everyone is 16 perceived to support that candidate. 17 And there are a lot of other issues that, by the 18 time people come to the polls, it's neck and neck, and it's 19 no longer a clear case. 20 SUPERVISOR VAGIM: That could be a bad example 21 actually. 22 (Laughter.) 23 CHAIRMAN DUNLAP: You're hitting too close to home 24 for some of my colleagues. 25 (Laughter.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 180 1 SUPERVISOR ROBERTS: Let's think of something 2 else. 3 CHAIRMAN DUNLAP: I think Doug's up in a couple 4 months. 5 To follow up, so you recommend another survey, and 6 certainly to stay the course on the campaign. 7 MS. JOHNSON: Yes. 8 CHAIRMAN DUNLAP: If I could, and I have put in 9 some measure of time, but certainly not as much as Joe and 10 Jack has, on tracking the development of this program, but 11 it's very important for us to be aggressive in defending not 12 only the expense that the oil companies have put forth to 13 comply and be able to make this fuel, but also to protect 14 our investment in the State Implementation Plan. If things 15 were to run counter perhaps to where we would like them to 16 be, and we have a problem with public opinion, we need to be 17 very aggressive. 18 And that credibility point that you made earlier 19 is very important. And we are considered -- we may not be 20 at the top of the list, but we are certainly in the top tier 21 as far as being able to communicate a credible message. 22 So, I think good points. 23 Jack, and then Dr. Boston. 24 MR. LAGARIAS: I'm a little concerned about this 25 emphasis on clean air. The air is clean to begin with. We PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 181 1 get a fresh start almost every day. And this is like a 2 situation where we have a clean body of water and there's a 3 discharge into it. We're talking about less of a discharge 4 into a clean body. We're not talking about cleaning the 5 air. We're talking about not putting as much pollution in 6 the air. 7 And somehow, while the whole objective is to 8 maintain a quality of air, we are not cleaning the air. We 9 are reducing the discharge into the air. And I think that 10 message ought to be put out in some form. 11 MS. JOHNSON: May I respond briefly to that? 12 CHAIRMAN DUNLAP: Sure. 13 MS. JOHNSON: I think that scientifically, you may 14 be absolutely correct. In the public's perception, people 15 believe that smog is a problem and air pollution is a 16 problem, particularly in the metropolitan areas in Southern 17 California and around the San Francisco Bay Area. 18 We asked people a question, the extent to which 19 they agreed to disagreed with the following statement: "Air 20 pollution or smog is one of the top five problems facing 21 California." 22 74 percent agreed. You may be accurate in your 23 scientific assessment of what's happening in terms off 24 particulate matter, et cetera, but the public sees this as a 25 problem, and they see it as a problem that needs to be PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 182 1 addressed. 2 MR. LAGARIAS: I'm not quarreling with it not 3 being recognized that it's a problem. I'm quarreling with 4 how we're addressing the issue. 5 MS. JOHNSON: In terms of how we are -- the 6 semantics are used to describe the issue? 7 MR. LAGARIAS: Yes. 8 CHAIRMAN DUNLAP: Dr. Boston and then Supervisor 9 Vagim. 10 DR. BOSTON: I was really pleased to hear you say 11 that the public has such a high opinion of the medical 12 profession. 13 (Laughter.) 14 MR. LAGARIAS: They didn't poll the Board. 15 DR. BOSTON: I was wondering if you had any plans 16 or any thoughts on how the medical profession might, and 17 organized medicine, be involved in furthering the message to 18 the public and becoming involved in public education on this 19 on this matter? Have you thought about that? 20 MS. JOHNSON: In my opinion, I think it's a matter 21 of having some support for promoting the message. And I 22 know that in the public education campaign, that the 23 experts, David Novak, they've identified ways that they can 24 bring the medical community into the team, if you will, to 25 promote the positive effects and the benefits of RFG. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 183 1 In terms of any of the messages, any of the 2 communication media that you have available to you that go 3 out to the public to include this as a beneficial issue as 4 opposed to something to be afraid of. 5 And I know that David Novak has some other 6 specific strategies that he has in mind. 7 MR. NOVAK: I'm David Novak. Without question, 8 the credibility of the medical profession is right up there, 9 and it's going to be important. And the clean air benefits 10 in terms of health, improved health, putting less pollution 11 in the air is something that needs to be conveyed to people 12 by people they trust, and they trust their doctor. 13 So, the California Medical Association is a 14 complement to the American Lung Association, Heart 15 Association, American Cancer Society. I know that Peter 16 Venturini has placed a high priority in terms of how quickly 17 we get to those organizations and individuals from them, and 18 address them, both individually, meet with them, pull them 19 into our campaign, perhaps even do some direct mail to help 20 professionals. 21 Our outreach to newsletters encompasses hopefully 22 working with HMOs to put information into their newsletters, 23 like Kaiser can reach many, many people. And without 24 question, I mean, the medical community can play a very 25 important and profound role in helping with the education of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 184 1 Californians about the benefits of cleaner burning gasoline. 2 DR. BOSTON: Good. Thanks very much. And I did 3 have a talk with Peter Venturini a couple days ago. And I 4 think we're going to be talking more about how I can be 5 involved in helping in that manner. 6 CHAIRMAN DUNLAP: That's true. That's a good 7 idea. I would recommend you work with the staff, Gene, like 8 you're starting to do, and give some recommendations on how 9 we can strengthen our relationship as a Board with the 10 medical community. 11 SUPERVISOR VAGIM: One question. 12 CHAIRMAN DUNLAP: Supervisor Vagim. 13 SUPERVISOR VAGIM: First of all, Dr. Boston, fill 14 up your Viper with RFG, and that'll set an example. 15 (Laughter.) 16 SUPERVISOR VAGIM: I want to go back to -- first 17 of all, I want to make sure I have a clarification on -- I 18 heard you say performance or miles per gallon, there was a 19 54 percent acceptance. And the other half was not. Then 20 you have 17 percent of that. Those who are not are 21 extremely against something that is the lack of miles per 22 gallon. 23 Can you compare that to the same question that was 24 to price per gallon? Was there the same kind of 25 corresponding number? Higher price, negative attitudes? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 185 1 MS. JOHNSON: In terms of is there correlation 2 between sensitivity to reduced fuel efficiency and 3 sensitivity to increased price? 4 SUPERVISOR VAGIM: Yeah. And where do they stand 5 when you line them up side by side? 6 MS. JOHNSON: That's not included in this report, 7 but we can do that for you. 8 SUPERVISOR VAGIM: Well -- 9 MS. JOHNSON: To answer your question. 10 SUPERVISOR VAGIM: That's a purse string issue. 11 But the point is -- I heard a pretty large number there, 12 which is like Joe was just saying, if it's higher than 13 that, does that 54 percent drop below 50 percent acceptance? 14 I mean, if it's less miles per gallon, a greater 15 miles per gallon lost, does that 54 percent get steeper? 16 Does it go down to only 25 percent accept that, only 10 17 percent accept the loss of miles per gallon? That kind of 18 issue. 19 Or if the question is reversed: If the price goes 20 up 10 cents, 15, cents, or 25 cents, you had that strata 21 there. 22 MS. JOHNSON: I did. 23 SUPERVISOR VAGIM: But you didn't have that other 24 strata in reverse on miles per gallon. 25 MS. JOHNSON: You're right. We did not. We did PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 186 1 do the strata for the price. We did not do varying levels 2 for fuel reduction efficiencies lost. And I think that it's 3 a very valid question. 4 David's telling me, and he's accurate, we did not 5 have more numbers at the time we were drafting and fielding 6 this survey to be testing those. At that point, the best 7 that was available was a two to four percent reduction. 8 Should the ARB again go out back to the field and 9 replicate a survey on this level or a smaller level, that 10 would be an issue that would be worth including. 11 SUPERVISOR VAGIM: Okay. Thank you. 12 CHAIRMAN DUNLAP: Any other questions? Thank you 13 for a fine presentation. 14 MS. JOHNSON: Thank you. We got the report, by 15 the way, that you held up. 16 SUPERVISOR VAGIM: We've only got part of them. 17 They need to copy some more. Not everyone has got them. 18 CHAIRMAN DUNLAP: We'll do that. 19 Okay. Any other questions for staff? Or, Peter, 20 do you have another component staff? 21 MR. VENTURINI: I was going to, and if you'd like, 22 I can go through it quickly. I was going to give you 23 basically a brief update on the plan, the basic elements of 24 the plan, and where we are in the plan. 25 CHAIRMAN DUNLAP: Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 187 1 MR. VENTURINI: And if you'd like, in the interest 2 of time, I can try to speed that up. 3 CHAIRMAN DUNLAP: Sure. Why don't we try to 4 terminate this by 4:00, Peter, can you work with that? 5 MR. VENTURINI: Sure. 6 CHAIRMAN DUNLAP: Okay. 7 MR. VENTURINI: Let me just say from Ms. Johnson's 8 presentation, I think we can see how important that work 9 that was done is to guide us in our plan. 10 Basically, the objective of this plan is to 11 educate on the benefits and importance of this cleaner 12 burning gasoline, to establish ourselves and others as 13 credible sources of information on this program, and to 14 address issues and to communicate facts. 15 The plan is laid out in basically four phases as 16 I've shown on the next slide. They're basically four 17 separate phases. It's very simple. Initially, we've been 18 basically gearing up, laying the foundation, preparing 19 documents, and so forth. We're in the process now of 20 transitioning over a phase that will start reaching out, 21 communicating to the organizations, groups, people that we 22 need to. 23 The third phase, which will begin roughly after 24 the first of the year, will be more of this outreach, but we 25 intend to be much more aggressive, because we're getting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 188 1 closer to the introduction of this cleaner burning gasoline. 2 And then the fourth phase is a postimplementation 3 phase, where we will continue the outreach, but we'll also 4 have another component as part of our outreach, which we'll 5 be responding, and being ready to respond to any concerns, 6 questions that come up as people get experience in using 7 this fuel. 8 In terms of the highlights, I think a lot of this 9 has been covered. The two things I'd like to mention are 10 that we have initiated the preparation of a response plan. 11 Our consultant is in the process of developing this. This 12 is basically a guidance, a road map for us. Hopefully, 13 we'll never have to use it. But if we need to use this 14 plan, we'll be prepared and ready to deal with what may 15 occur after the fuel is introduced. 16 And one of the things that we're heavily involved 17 in right now is what is called message development. What 18 are the key messages that we think everybody needs to know? 19 What are the facts? We want to have consistent facts. 20 We're drafting up those messages. We plan to share those 21 with the public education subcommittee, hope to have those 22 finalized at their next meeting on the 12th, and then those 23 will be converted into fact sheets. 24 They'll be available for use in documents and so 25 forth, so, we can present the basic information that the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 189 1 public needs and provide consistent facts to the public. 2 I was going to go through very quickly some of the 3 highlights of the Phase 1 effort. You can see these on the 4 overhead. It's basically getting geared up, preparing a 5 calendar, speakers -- who are the people we can rely on 6 when we need to match an event with an individual. We're 7 preparing those now. 8 We're preparing a technical resource binder, which 9 will be a tool for us and others that will have a compendium 10 of the basic facts and information we will all need to get 11 the message out. 12 In terms of Phase 2, which we're transitioning 13 into, one of the important things we're doing is 14 coordinating with others that are doing outreach efforts or 15 planning outreach efforts, media outreach. Mr. Novak is 16 preparing a media plan. And that's reaching out to the 17 editorial press, other media, and so forth. 18 Obviously, we're preparing brochures. You saw the 19 video. One of the first targets for the video that you saw 20 in a polished form will be mechanics. We will have an 800 21 information number that will be manned by an individual. 22 And, of course, Phase 2 is the beginning of our 23 outreach. 24 The next slide shows Phase 3 highlights. Really, 25 that's more of Phase 2, more intense, more aggressive, ore PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 190 1 focused. 2 And then, of course, Phase 4, that's after the 3 introduction of this cleaner burning gasoline. One of the 4 things we intend to do is monitor the media. We want to be 5 in a position where something occurs, we can get the 6 information quickly, whether it be newspaper article, 7 whether it be someone mentioning something on a radio 8 broadcast, so we can have that information and we can 9 respond back as quickly as possible with the facts and 10 information. 11 I mentioned the rapid response team will be ready 12 to be deployed as necessary. 13 In summary, then, I'd just like to say that we've 14 established the foundation for our outreach effort. We have 15 a plan, and we're implementing the plan. And one I didn't 16 mention, I guess I should say that plan was approved by the 17 public education subcommittee at its meeting in July. 18 We now are in the process of getting ready for 19 formal outreach and actually getting out to those that we 20 need to communicate with. We intend to very proactive and 21 positive. 22 We intend to continue to work closely with the 23 subcommittee and others in this effort. And I think, 24 importantly, we need to address and intend to address 25 people's concerns upfront and honestly, and once again, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 191 1 communicate facts. 2 I'd just like to close my presentation, as 3 discussion leader of the public education subcommittee, to 4 express my appreciation for their efforts. They've been 5 invaluable in supporting and guiding this effort overall. 6 I'd like to now take this opportunity to turn the 7 presentation over to Dr. Joan Denton, Manager -- one of the 8 section managers in my division. Joan will give you an 9 update on the health benefits associated with this cleaner 10 burning gasoline. 11 Thank you. 12 DR. DENTON: Good afternoon, members of the Board. 13 I am Joan Denton, and I work for Peter in the Stationary 14 Source Division as a Manager of the Substance Evaluation 15 Section. 16 My brief presentation this afternoon will follow 17 the following topics: I'll show you a slide, a general 18 slide, on the California RFG health benefits, discuss a 19 little bit about the RFG oxygenate requirement, give you 20 some background information on methyl tertiary butyl ether, 21 or MTBE. 22 I have a couple of slides to update you on health 23 issues and groundwater issues of MTBE, and then I'll have a 24 short summary. 25 California RFG reduces emissions of hydrocarbons, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 192 1 oxides of nitrogen, carbon monoxide, and sulfur dioxide. 2 These reductions translate into a reduction of health 3 effects associated with these criteria pollutants, such as 4 sore throats, coughing, lung irritation, and lung diseases. 5 California RFG also reduces potential cancer risk 6 by 30 to 40 percent. And this is due mainly through 7 reductions in benzene and 1,3-butadiene emissions. 8 The Federal Clean Air Act amendments of 1990 9 mandated the use of oxygenates in gasoline to reduce carbon 10 monoxide emissions in the winter. 11 California implemented its wintertime oxygenate 12 program in 1992. 13 The Federal RFG program became effective last 14 January, and it requires an average minimum oxygen content 15 of 2.0 weight percent in gasoline in Southern California 16 year round. California RFG will also require a 2.0 weight 17 percent content of oxygen year-round throughout California. 18 However, this will be able to be adjusted by use of the 19 predictive model. 20 ARB's fuel requirements are oxygenate neutral. 21 That is, we do not require the use of a specific oxygenate; 22 for example, MTBE, or ethyl tertiary butyl ether, or 23 ethanol, or any of the other oxygenates. However, MTBE is 24 the primary oxygenate used in California to meet both the 25 Federal and State oxygenate requirements. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 193 1 MTBE background: The use of MTBE is not new. It 2 has been used since the mid-seventies as an octane enhancer. 3 MTBE has been used in California as an oxygenate since 1992, 4 to comply with the Federal requirements for the wintertime 5 oxygenate program that I mentioned in my previous slide. 6 MTBE is the oxygenate of choice and it's used in 7 approximately 90 percent of the wintertime gasoline in 8 California. Also, as I mentioned in the previous slide, in 9 1995, the Federal RFG program required the use of oxygenates 10 year-round in Southern California. 11 And, again, MTBE primarily has been used to comply 12 with that oxygenate requirement. MTBE is expected to be the 13 primary oxygenate used in California RFG at a rate of 11 14 percent volume to meet the average 2.0 weight percent oxygen 15 content. 16 As requested by you, the Board, we have been 17 closely following MTBE health issues and now I want to give 18 you an quick update on the activities that have occurred 19 since last February. 20 The Wisconsin experience: MTBE was introduced 21 into Wisconsin as part of the Federal RFG wintertime 22 oxygenate requirement in December of last year. The 23 citizens of Wisconsin complained of headaches, dizziness, 24 and nausea after the Federal program was implemented. 25 After receiving these complaints, the State of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 194 1 Wisconsin and the U.S. EPA immediately conducted a study 2 from December, 1994 through March of 1995, to evaluate these 3 complaints and the possible relationship to MTBE exposure. 4 A report was released in May, and no association 5 could be found between the complaints and MTBE exposure. 6 A follow-up report was released this month which 7 confirmed the conclusion of the earlier report. 8 And I want to mention here that this study 9 confirms all of the other studies conducted to date on MTBE 10 and short-term exposures. But I also want to tell the Board 11 that these reports did not eliminate the possibility that 12 individuals with preexisting medical conditions may be 13 sensitive to MTBE. 14 I would next like to update the Board on the 15 Maltoni study. This was a study, the results of which were 16 eagerly anticipated in February of this year. It was an 17 ingestion study of MTBE exposure in rats, in which some 18 liver, kidney, and testicular tumors were observed. 19 Important questions have been raised about this study and 20 further research is needed to interpret the results. 21 Two important health assessments, sort of paper 22 studies, are currently underway. The White House Office of 23 Science and Technology Policy is expected to release in late 24 October of this year a short-term assessment in which they 25 are evaluating recent health effect studies. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 195 1 In addition to this evaluation, there will be a 2 recommendation whether or not to continue the Federal 3 wintertime oxygenate program. 4 The Health Effects Institute is spearheading a 5 major assessment of health effect studies done on all of the 6 oxygenates, including MTBE. This effort, this report will 7 be reviewed by the National Academy of Sciences, and its 8 release is expected in the spring of next year. 9 Regarding future research, that is going to be a 10 commuter study, which will be funded by ARCO and the State 11 of New Jersey, this winter. And individual's exposures to 12 MTBE along with a health survey will be evaluated to assess 13 potential effects of MTBE. 14 The U.S. EPA is conducting a chamber study, which 15 is expected to occur this fall, but the results will not be 16 available for a year. And this chamber study is going to be 17 on individuals who have complained of MTBE effects. 18 The Chemical Industry Institute of Toxicology is 19 conducting some major animal studies to address some of the 20 questions which were raised by the Maltoni study. It is 21 also going to be evaluating some pharmacokinetic information 22 for potential use in assessing human exposures. And those 23 results are expected in 1998. 24 And then, finally, the last point, the U.S. EPA 25 has just released a report, a draft report, in which they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 196 1 outline research needs on all of the oxygenates, including 2 MTBE. That report is expected to be final by the end of the 3 year, and research and preliminary conclusions available by 4 1998. 5 I would now like to brief the Board on a 6 relatively new issue that has developed, and that is the 7 detection of MTBE in groundwater. 8 The National Water Quality Assessment Program 9 measured 60 VOCs in shallow groundwater wells during 1993 10 through 1994 in eight urban areas. And I want to emphasize 11 here that the shallow groundwater wells are not the source 12 of drinking water. 13 MTBE was the second most frequently observed VOC 14 behind chloroform. Two possible sources of MTBE in these 15 shallow groundwater wells -- the air contribution is thought 16 to be minimal. The likely sources are gasoline spills or 17 leaking underground storage tanks. 18 Regarding current activities in California, in 19 1994, SB 1764 provided an advisory committee to the State 20 Water Control Board, and that committee is evaluating 21 underground storage tanks and remediation efforts. It is 22 also initiating getting information on MTBE from monitoring 23 wells around underground storage tanks. 24 And then, finally, the San Francisco Bay Area 25 Regional Water Quality Control Board has now required PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 197 1 monitoring of MTBE at wells located close to underground 2 storage tanks. But information is not available yet. 3 In summary, California RFG provides significant 4 health benefits. Federal law has been requiring the use of 5 oxygenates to reduce emissions since 1992, and MTBE is not 6 new, but has been used as an octane enhancer since the mid- 7 seventies nationwide, and has been used to comply with the 8 Federal wintertime oxygenate requirements in California 9 since 1992. 10 No evidence has been developed to date that 11 demonstrates an association between MTBE and health effects. 12 However, there are a large number of studies, either health 13 assessments or research, which will look at MTBE for both 14 cancer and noncancer potential health effects. 15 We here at the Board are committed to continue to 16 monitor these activities and issues, and plan to update the 17 Board on a periodic basis. 18 So now, I would like to turn the presentation over 19 to Mr. Boyd, who will summarize the entire presentation. 20 MR. BOYD: Thank you, Joan. I'll try to be very 21 brief. You've heard a lot of the highlights. First, I want 22 to tell you when we'll be back to you to discuss more about 23 RFG. 24 First, this December, we expect to bring to you 25 some clean-up amendments to the California reformulated PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 198 1 gasoline regulations. And, at that time, we'll give you a 2 brief update again on where we stand. 3 Our final update will be at next February's Board 4 meeting, which is the month prior to the implementation of 5 the program, and we'll give you another, like today, fairly 6 in-depth presentation of the program. 7 A few more comments on the program, and I don't 8 want to be too redundant, but you've seen and you've heard 9 already today how important RFG --or perhaps from this point 10 forward, I'll start calling it clean air gasoline -- is as a 11 component of the SIP. Quite frankly, the SIP that's so 12 important to us doesn't work without, of course, this major 13 program. 14 California clean air gasoline is a critical 15 element that you heard earlier today of the combination 16 program, the low-emission vehicle/clean fuels program. And 17 that, in and of itself, is an even greater piece of the 18 program that we have in this State to strive towards 19 cleaning up the air and protecting the public health of 20 California citizens. And this is in spite of the incredible 21 growth that still continues, a growth in population of this 22 State. 23 You've heard about the performance compatibility 24 test programs. You've seen some of the preliminary results. 25 And analysis will be finishing up in mid-October. The final PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 199 1 results from those programs -- we're working closely with 2 the subcommittees of the Advisory Committee on this subject. 3 But, again, you can kind of hear at this time, 4 it's kind of safe to say so far that clean air gasoline is 5 performing quite well in the real world. And we'll have to 6 work with Supervisor Vagim on why his fuel economy is so out 7 of line. 8 But we'll have to check into that. 9 As we near the March 1st compliance date, it 10 appears that the refiners are on schedule, and I could say 11 that Dr. Boston and I audited a refinery last week in 12 Southern California, ARCO, as a matter of fact. And if I 13 can speak for the two of us, we were quite impressed with 14 the efforts that are being made there. And the changes and 15 expenditures that are being made are very visible and very 16 provable perhaps to the public if they need to see that 17 monies were spent. It's fairly graphic and would be easily 18 photographed, and might be important to show to prove that, 19 you know, monies are being spent to meet our requirements. 20 We've made the preparations for the outreach 21 program, and we're open to any inputs and suggestions that 22 any and all might want to make. 23 I'm pleased to hear that anything Dr. Boston, or 24 I, or any of you say might be well accepted by the public. 25 So, maybe we've got a chance of convincing the public of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 200 1 value of this program. 2 I do want to underscore what Jack Lagarias said 3 earlier about the Advisory Committee and its subcommittees. 4 They're doing a tremendous job. It's been invaluable to us. 5 It's been a valuable lesson to us. And I'm sure it's the 6 wave of the future. 7 We've been engaged in public/private partnerships 8 for quite a number of years at the ARB, perhaps before the 9 term became fashionable. But this partnership between the 10 auto and engine manufacturers and the oil companies -- that 11 is, the refiners, the marketers, and distributors, business 12 and environmental organizations, all levels of government, 13 Federal, State, and local, and representatives of the 14 consumers has proven to be very, very important to 15 understanding what it takes to launch a program of this 16 magnitude. 17 And their continuing efforts are going to be 18 invaluable. So, I too, will add my thanks to the Advisory 19 Committee and to the subcommittee. 20 Frankly, my experience in air quality, which is 21 getting to be kind of long, this effort here demonstrates a 22 very unusual alliance and a very high level of cooperation 23 between all the affected parties, and I think shows the way 24 to the future for us in implementing a lot of the programs 25 that we have yet to implement in this most difficult SIP. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 201 1 So, I look to the future and I look to our 2 involvement with the stakeholders in the future in our other 3 programs. And I look for so far optimistically towards the 4 future launch of clean air gasoline in California. 5 That concludes the staff's presentation, Mr. 6 Chairman. 7 CHAIRMAN DUNLAP: Thank you, Mr. Boyd. Thank you, 8 staff, for pushing it a little bit. I appreciate it. We 9 have lost a couple of our members, but we still hold our 10 quorum. 11 What I would like to do at this juncture is hold 12 the Board's questions of the staff till we hear from our 13 sole witness. Dr. Gerald Barnes with General Motors. 14 DR. BARNES: Thank you, Mr. Chairman and members 15 of the Board. My name is Gerry Barnes. I'm manager of the 16 Clean Fuels Activities for General Motors Environmental and 17 Energy staff. 18 In addition to representing General Motors, I'm 19 also here today as a member of the Phase 2 reformulated 20 gasoline performance subcommittee. 21 As Mr. Lagarias and Mr. Calhoun noted in their 22 opening remarks, there are many vehicle and engine 23 manufacturers represented on the various subcommittees. If 24 you'd back up to that original slide, please. 25 We worked with the staff initially in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 202 1 development of the of the vehicle test program. We designed 2 the program, and the ongoing analyses of the results from 3 that vehicle test program. 4 In addition, individual manufacturers, both engine 5 and vehicle, have been conducting supporting test programs 6 to give us greater incite on some specific concerns and to 7 provide some additional information under more controlled 8 conditions that are possible in the vehicle test program. 9 I'm going to review briefly for you the results 10 from two of those test programs today, and both of them are 11 laboratory bench test programs, one conducted by General 12 Motors and one by Fort Motor Company. 13 Next slide, please. 14 The GM test program essentially is to evaluate the 15 impacts of Phase 2 fuels on the elastomeric and plastic 16 materials that are present in today's fuel systems and in 17 some of the older systems as well. 18 Essentially, we test these materials by immersing 19 them in a fuel sample at high temperature and pressure for 20 times up to a thousand hours. This is a rather severe 21 operating environment, far more severe than we find in a 22 vehicle, but it's done to accelerate the test to represent 23 the full useful life of the vehicle. 24 There are five test fuels. The first one, an all 25 hydrocarbon and nonoxygenated fuel, the auto/oil research PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 203 1 fuel A, which represents the industry average fuel in the 2 1980-1990 time frame; then the Phase 2 vehicle test fuel 3 that's being used, or was used in the programs just ending; 4 and ethanol blend Phase 2 fuel, a low aromatic blend; and 5 for reference purposes, an ASTM reference fuel C, which is 6 kind of a baseline fuel. 7 In addition, some other combinations are produced 8 by switching between these fuels so that it will simulate 9 the exposure to a variety of fuels and the mixture of 10 conventional and Phase 2 fuels that was earlier mentioned. 11 We're looking at five elastomers and five plastic 12 materials. These were selected after some discussion with 13 the performance subcommittee and input from other vehicle 14 manufacturers as well. They're kind of representative of 15 the higher volume use materials and the materials that are 16 used in critical areas, like seals, where leaks would be of 17 importance. 18 They kind of were biased toward and older vehicle 19 designs, because we were more concerned about some of those 20 materials than those from newer vehicles. 21 Following the immersions of the testing samples, 22 we pulled samples at various times and a variety of physical 23 properties are evaluated. 24 In the next slide, you'll see the results of for 25 the material, Viton A is used in seals. It's sort of an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 204 1 intermediate level in terms of history of materials. I'm 2 showing you the results in three fuels -- the vehicle test 3 fuel labeled PH2T, the ethanol blend and the low aromatic 4 blend. There are essentially no significant differences 5 between these three fuels. 6 These are the results at a thousand hours. And at 7 the 500 hour point, the exposure was switched from the test 8 fuel of choice to the low aromatic fuel. In general, we 9 would expect the property changes -- I'm showing them as a 10 percent change here -- to be larger at a thousand hours than 11 at 500 hours. And so, the darker part of the bar would be 12 closer to the zero line. And that's generally true. 13 But, in some cases, there are some reversals, and 14 I think this simply indicates that not much happens beyond 15 500 hours. 16 I would point out two of them of interest, 17 however, if you look in the fourth group of bars to the 18 left, the volume change. You will note that the 500 hour 19 results show a slightly larger volume change in the thousand 20 hour results. This does indicate that when we switch to the 21 low aromatic fuel, we saw some shrinkage, which was one of 22 the concerns. But the amount of shrinkage that's been 23 observed is very small and not enough to cause us any 24 problem. So, we don't believe that that concern is one of 25 issue. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 205 1 In the next slide, this shows one of the more 2 recent materials, a glass-filled polyphenyl sulfide. Now, 3 I'm showing four fuels, the three phase test fuels that I 4 indicated, plus the industry average fuel. And again, with 5 a couple of exceptions, there are no major differences among 6 the fuels. 7 We believe that these differences are not 8 significant. 9 The test status, as of a couple of weeks ago, on 10 the next slide -- we've actually made a little more 11 progress. We're not about 50 percent through the elastomer 12 testing and have nearly completed the plastics testing. 13 We're anticipating that we will complete this in mid- to 14 late October, with data analysis, and the final report 15 sometime around the end of November. 16 So far, we've seen no unanticipated property 17 changes, and we've seen no result that would indicate 18 there's a potential problem in-use in the field. 19 The fourth program involved a program in which 20 they looked at the lubricity effects in a metal-on-metal 21 wear test apparatus. The results are plotted for a variety 22 of fuels shown versus a lubricity index. The higher the 23 value indicates higher wear could be anticipated, the lower 24 value indicating that lower wear could be anticipated. 25 Four of the fuels that were involved in this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 206 1 program, the RFA, or auto/oil A, is the green bar to the 2 left. Then the Phase 2 ethanol blend, the Phase 2 aromatic 3 blend, and the test fuel shown as the other three green bars 4 slightly to the right of center. 5 Those are plotted with the previous studies that 6 were done with the auto/oil fuels. And I think the point of 7 this is that they behave about as we would have predicted on 8 the basis of the aromatic, sulfur, and oxygen concentrations 9 in these fuels. They fall somewhat in the middle of the 10 range of anticipated wear. 11 The RFA repeat matches quite well the earlier run, 12 but the orange part shown -- the second one from the left, 13 indicating the repeatability of the process. 14 In the next slide, the status of these -- test 15 program is that the fuel testing has been completed, 16 analysis underway, the validation of data and the final 17 report again is expected sometime about the middle of 18 November. 19 The lubricity characteristics are not unusual, 20 kind of what we would have expected. And the results are 21 consistent with other tests that Ford and General Motors has 22 done with fuel system components in other bench tests. 23 If I could have the lights now. I think that 24 these results in general indicate that one of the advantages 25 we anticipated for Phase 2 gasoline, the ability to obtain PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 207 1 these benefits in all vehicles that are currently in use on 2 the road is possible. We're not seeing any effects that 3 would indicate that older vehicles will experience problems. 4 We think these data, along with the other results 5 of the vehicle test programs and the other test programs 6 that people have run can be part of the large body of 7 evidence that we can provide to the citizens of California 8 to indicate to them that we can obtain these emission 9 benefits without effects on their vehicle durability or 10 performance. 11 I'd be pleased to answer any questions you might 12 have. 13 MR. CALHOUN: Dr. Barnes, one of the things that 14 comes to mind from one of those slides says something to the 15 effect that there was no unanticipated results. What did 16 you anticipate? 17 DR. BARNES: What we meant by that? Well, what we 18 meant I think, basically, Mr. Calhoun, was that we obviously 19 have a lot of experience with these bench fuel test 20 programs. We know from previous experience what some of the 21 prior changes -- the change in the aromatic content, the 22 addition of various options, and so forth -- will have on 23 certain materials. And, in general, what we're observing 24 with the blend, the package if you will, that's represented 25 by Phase 2 fuels, is not inconsistent with what we would PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 208 1 have expected from those previous tests -- a variety of 2 changes, the changes in tensile strength, the changes in 3 material hardness were pretty much in line with what we've 4 observed in previous tests. 5 MR. CALHOUN: I think I'll ask a very simple 6 question. Did you anticipate any difficulty or problems 7 would arise as a result of the fuel? 8 DR. BARNES: I think we have said since the 9 beginning of the program that we don't anticipate problems 10 in the field with older vehicles or current vehicle designs. 11 But recognizing that we have not had until recently Phase 2 12 fuels defined and samples of that fuel that represent 13 possible commercial fuels to run these tests. So, while we 14 didn't anticipate problems, what we did was actually run the 15 fuels that kind of represent what we think we'll find in 16 the field and see that, indeed, we're not seeing any 17 problems 18 MR. CALHOUN: Thank you. 19 CHAIRMAN DUNLAP: Very good. Thank you. Well, 20 are there any questions of staff from my colleagues on the 21 Board? 22 All right. Dr. Boston. 23 DR. BOSTON: It's not a question, Mr. Chairman. I 24 just wanted to publicly comment Mr. Venturini and 25 particularly Dr. Denton for their tremendous research job PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 209 1 they did on the health effects of this new formula, and 2 particularly about MTBE. I had a meeting with them down in 3 El Monte about a month ago, and I was very impressed with 4 the detail that they put into this research on this 5 countrywide, worldwide as a matter of fact. I want to thank 6 you both personally. 7 CHAIRMAN DUNLAP: Ditto from me as well. I have 8 been receiving regular briefings almost weekly from the 9 staff on this program. And they're committed. They're 10 working well with industry and with the environmental 11 groups, with the technical people. And I appreciate it. 12 I might also give some recognition to David Novak 13 for his work as a key member of the CARB RFG team as a 14 consultant. And I appreciated his efforts. 15 Just a final thought I would give. This program 16 is so important, so central to our SIP that we have to do it 17 right. I think these periodic reports that we're getting 18 back -- I think, Mr. Boyd, you said February you'll be 19 coming back and talking to the Board to kick off the 20 program? 21 MR. BOYD: We have a lesser, minor report in 22 December, but a major report in February. 23 CHAIRMAN DUNLAP: Okay. I will ensure, and I know 24 Mr. Boyd certainly will support this, any briefings you feel 25 you need, my colleagues on the Board, in the interim, we'll PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 210 1 make sure you get that so that you can speak to this issue. 2 I think, Dr. Boston, you're involvement with the 3 medical community and helping us find a way to communicate 4 with a consistent message and come on board, would certainly 5 be helpful. 6 So, thank you very much. We'll move to the next 7 item, then. 8 Why don't we pause for a moment. Madam Court 9 Reporter, how are your fingers? 10 (Thereupon, a brief recess was taken.) 11 CHAIRMAN DUNLAP: If you'll take your seats, we'll 12 get started on our last item for the day. 13 I would like to remind those of you in the 14 audience who would like to present testimony to the Board on 15 any of today's agenda items to please sign up with the Board 16 Secretary to my left. If you have written comments, please 17 provide 20 copies to her. 18 The third item on the agenda today is 95-9-3, 19 public hearing to consider adoption of amendments to the 20 California regulations for reducing volatile organic 21 compound emissions from antiperspirants and deodorants, 22 consumer products, and aerosol coating products. 23 This item for our consideration is proposed 24 amendments to the regulation for reducing VOCs. In today's 25 hearing, we will also be considering amendments to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 211 1 volatile organic compound definition in the antiperspirant 2 and deodorant reg, consumer products reg, and the aerosol 3 coatings regulation. 4 A little less than a year ago, the Board approved 5 the State Implementation Plan, or SIP, for ozone. The 6 reduction of VOC emissions from consumer products is a 7 central element in California's commitment to attain both 8 the State and Federal ambient air quality standards. To 9 date, the Board has taken action to reduce VOC emissions 10 from 27 categories of consumer products, including 11 antiperspirants and deodorants, and 35 categories of aerosol 12 coatings. 13 In fact, the antiperspirant and deodorant 14 regulation was the first consumer product regulation adopted 15 by the Board back in 1989. 16 At that time, as with all subsequent consumer 17 products regulations, we committed to working closely with 18 industry during implementation of the regulatory program. 19 When our efforts to work with the affected 20 industry during the implementation phase revealed issues of 21 concern, the staff pledged to return to the Board with any 22 necessary modifications. 23 In fact, the antiperspirant and deodorant 24 regulation has been amended twice since its adoption in 1990 25 and 1992. We believe these amendments improved the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 212 1 regulation. In the years since the regulation was adopted, 2 it has resulted in significant emissions decreases. 3 However, since last amending the reg in 1992, 4 issues have come to our attention which we believe merit 5 careful consideration. 6 For this reason, staff has worked closely with 7 industry representatives and trade organizations to draft 8 amendments for the Board's consideration which address these 9 concerns, yet preserve the necessary emission reductions. 10 Along with the proposed amendment to the 11 antiperspirant and deodorant regulation, we'll also consider 12 amendments to the VOC definition in all of the consumer 13 product regulations. We're considering this change to 14 reflect the U.S. EPA's decision to exempt certain volatile 15 organic compounds from their VOC definition due to their low 16 reactivity. 17 At this point, I would like to ask Mr. Boyd to 18 introduce the item and begin the staff's presentation. Jim? 19 MR. BOYD: Thank you, Mr. Chairman. I believe, as 20 you all know, the antiperspirant and deodorant regulation 21 was the first consumer product regulation adopted by the 22 Board, and has been in existence for about six years now. 23 As we said repeatedly today about various 24 elements, this, too, is an important component of our 25 strategy to reduce volatile organic compounds, or VOCs, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 213 1 emissions from consumer products. It has been approved by 2 the U.S. EPA as a component of our near-term ozone SIP 3 measures. So, it, like so many other things we talked about 4 today is important to us. 5 At the time the Board adopts a regulation, your 6 staff always commits to you to closely monitor the 7 implementation of the measure in particular and, on 8 occasion, issues not identified by any of the participants 9 during the rulemaking process will come to our attention 10 during regulatory implementation. 11 If we identify issues that we can constructively 12 resolve through an amendment to a regulation, while 13 preserving the necessary emission reductions, I think 14 history shows our willingness to do so. 15 We feel this process has worked well and continues 16 to work well. Since last amending this particular 17 regulation, antiperspirant and deodorant, an issue has come 18 to our attention in the regulation known, as the Chairman 19 indicated, the ethanol exemption. Simply put, the exemption 20 allows products that contained ethanol prior to January of 21 1990, to continue to contain that level of ethanol, even if 22 the standard is exceeded. 23 Products developed after that date were limited to 24 the level allowed in the table of standards. When the 25 regulation was originally adopted, this provision was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 214 1 intended to result in a gradual decrease in ethanol 2 emissions as products containing ethanol are slowly phased 3 out. 4 However, we have determined that there may be an 5 unintended effect of limiting the market in these types of 6 products to just those manufacturers who had ethanol 7 containing products that were marketed at the time of the 8 regulation. 9 This results potentially in locking out those 10 manufacturers who had not previously participated in this 11 product market. We're therefore proposing to extend this 12 ethanol exemption to all antiperspirant and deodorant 13 products to address these competitiveness concerns of the 14 industry. 15 This amendment will provide the same formulation 16 flexibility to all manufacturers and will level the playing 17 field while minimizing any adverse emissions consequences. 18 Additionally, in recognition of the fact that 19 manufacturers may find the third or the last tier of our 20 standards for aerosol products, especially challenging -- 21 and I think we've heard repeatedly that they do -- we've 22 included in the table of standards a commitment that the 23 Board review and consider appropriate amendments to these 24 standards by July of 1997. 25 The standards allow no high volatility organic PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 215 1 compounds, namely the hydrocarbon propellants, in aerosol 2 products after January 1, 1999. By making a determination 3 in 1997 of the final level for antiperspirants and 4 deodorants, manufactures will be given certainty as to the 5 final standard they must meet for their products. 6 Finally, we're proposing to amend the VOC 7 definition in all consumer product regulations to add four 8 new compounds to the list of exempt VOCs. As indicated, 9 this amendment will make California's VOC definition largely 10 consistent with the U.S. EPA's VOC definition and will 11 provide manufacturers with additional formulating 12 flexibility. 13 In summarizing my introduction, I'd just like to 14 emphasize that its paramount that we maintain the emission 15 reductions projected in the original rulemaking and thus 16 included in our ozone SIP. 17 The amendments proposed above are designed to be 18 responsive to industry concerns, but preserve the needed 19 emissions reductions. 20 We understand that industry representatives are 21 concerned that they may not be able to achieve the third- 22 tier standard for aerosol antiperspirants and deodorants by 23 January 1, '99. But, as ever, we are encouraged by the 24 progress manufacturers have made to date. We'd like to 25 leave the door open for further innovation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 216 1 To aid manufacturers in the planning process, we 2 have proposed, as I said, that the Board consider any 3 appropriate amendments by July, 1997. 4 If, after a thorough technical analysis, we 5 determine that the third tier standards are not achievable, 6 we will propose changes and identify alternative sources for 7 the necessary emission reductions at that time, a process 8 that is coincident with the process we follow in most of the 9 standards we approach. And there's precedent for both the 10 process -- and, as I said, history shows in the past that we 11 have made changes. 12 With that introduction, I'll call upon Ms. Julie 13 Billington of the Stationary Source Division to present to 14 you the proposed amendments to our consumer product 15 regulations. Ms. Billington. 16 MS. BILLINGTON: Thank you, Mr. Boyd. 17 Chairman Dunlap and members of the Board, in the 18 interest of time, we have shortened today's presentation. 19 As always, at the end of my presentation, we'll be happy to 20 answer any questions you may have. 21 As Mr. Boyd mentioned, today we are proposing for 22 your consideration amendments to the antiperspirant and 23 deodorant regulation. Additionally, we are taking this 24 opportunity to also propose an amendment to the VOC 25 definition in all of California's consumer products PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 217 1 regulations. 2 I'll begin our presentation by providing you a 3 brief background and then I'll discuss the regulatory 4 proposals before you today. 5 Consumer products that are used in and around our 6 homes and businesses are a large source of volatile organic 7 compounds, or VOCs. Even though the VOC emissions from an 8 individual can of deodorant or aerosol paint may seem small, 9 the combined use of consumer products by 30 million people 10 in California results in approximately 260 tons per day of 11 VOC emissions, or about 13 percent of all stationary source 12 emissions. 13 These VOCs from consumer products and other 14 sources then react with oxides of nitrogen in the presence 15 of sunlight to form two of California's most pervasive 16 pollutants -- ground level ozone and PM10. 17 The ARB has had the authority to regulate consumer 18 products since 1988 when the Legislature passed the 19 California Clean Air Act. 20 As detailed in this slide, the specific 21 requirements were identified that must be met when adopting 22 consumer products regulations. 23 As you can see from this slide, the ARB has taken 24 many steps to comply with this mandate from the California 25 Legislature beginning in 1989. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 218 1 Today, we will propose amendments to the 2 antiperspirant and deodorant regulation. As a short 3 refresher, the consumer products component of the State 4 Implementation Plan, or SIP element, is a multifaceted 5 program comprised of near-term, midterm, and long-term 6 measures, which will be implemented over the next 15 years. 7 The regulations you see listed on this slide are 8 components of the SIP near-term measures. The 9 antiperspirant and deodorant regulation, along with both 10 phases of the consumer products regulation, has already been 11 approved by the U.S. EPA as a component of our near-term SIP 12 commitments. We will also propose amendments to the VOC 13 definition in all the consumer products regulations, 14 including the antiperspirant and deodorant regulation, the 15 consumer products regulation, and the aerosol coatings 16 regulation. 17 The first amendments I will discuss are to the 18 antiperspirant and deodorant regulation. These amendments 19 are designed to provide additional flexibility to 20 manufacturers without compromising the emission benefits. 21 First, however, it may be helpful to provide you with a 22 short history and description of the antiperspirant and 23 deodorant regulation before I discuss the actual amendments 24 to the language. 25 The antiperspirant and deodorant regulation was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 219 1 the first consumer product regulation adopted by the ARB. 2 The regulation was originally adopted in 1989, and has been 3 amended twice since then. It was approved as a component of 4 the SIP for ozone for U.S. EPA on February 14th, 1995. The 5 SIP is reliant upon achieving the 80 percent reductions 6 projected for the antiperspirant and deodorant regulation. 7 Since this component of the SIP has been approved 8 by the U.S. EPA, these emissions reductions have been 9 incorporated into the reference emissions budget 10 Before discussing the proposed amendments in 11 detail, I'd like to highlight some of the more significant 12 components of the antiperspirant and deodorant regulation. 13 These include separate standards for aerosols and 14 nonaerosols, which are effective in three phases. 15 This regulation is somewhat different than the 16 other regulations, in that it regulates VOCs differently, 17 depending upon their vapor pressure. There are, therefore, 18 separate VOC standards for MVOCs, or medium volatility 19 organic compounds, and HVOCs, or high volatility organic 20 compounds. 21 Compounds identified as low volatility organic 22 compounds, or LVOCs, are not subject this regulation. The 23 emission standards allow the use of HVOCs in aerosol 24 antiperspirants and deodorants, but the final January 1, 25 1995 VOC limits set the HVOC standard at zero for all PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 220 1 antiperspirants and deodorants. 2 This requires manufacturers to use non-VOC 3 propellants, such as HLC152A, or compressed gas, for their 4 aerosol products rather than the more traditional 5 hydrocarbon propellants. 6 After complete implementation of the regulation, 7 an overall 80 percent reduction in VOC emissions is 8 projected. 9 There's also an exemption for ethanol, an MVOC, 10 contained in existing products, which are defined as 11 products that were sold in California prior to January 1, 12 1990. Also included is a special provision for aerosol 13 manufacturers. If they submitted a compliance plan by 14 January 1, 1994, documenting that they were doing all they 15 could; that they need more time to comply with the 1995 16 limits, their 1995 compliance date could be extended to 17 January 1, 1999. 18 Currently, there are nine manufacturers that have 19 approved extensions. These nine manufacturers are 20 responsible for over 90 percent of all aerosol sales in 21 California. 22 The antiperspirant and deodorant regulation has 23 achieved emissions reductions to date. According to our 24 most recent survey, we have achieved about a 40 percent 25 reduction in emissions, largely due to the December, 1992 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 221 1 VOC standards. 2 While aerosols account for less than one-third of 3 the market sales by weight, they contribute a 4 disproportionate share of the regulated emissions, 5 comprising almost 90 percent of the total HVOC and MVOC 6 emissions, or 3.6 tons per day in 1993. 7 As noted previously, we project an overall 80 8 percent reduction in VOC emissions from implementation of 9 all three tiers of the regulation, with the majority of 10 emissions reductions coming from the HVOCs or propellants in 11 the aerosol form. 12 We would like to reiterate that while 4 tons per 13 day may not seem like much, this is actually a large 14 category in the consumer products universe, which is 15 comprised off many comparatively small components. 16 I'll now present the proposed amendments to the 17 regulation. When crafting these amendments, we had several 18 goals. Our primary goal was to address fairness concerns 19 raised by industry. However, it is also extremely important 20 that we preserve the emissions reductions claimed for the 21 SIP, and therefore continue to encourage manufacturers in 22 their progress towards producing zero HVOC aerosol products. 23 Finally, our goal is to improve consistency in the 24 antiperspirant and deodorant regulation with the other 25 consumer products regulation. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 222 1 The proposed amendments to the antiperspirant and 2 deodorant regulation before you today were developed with 3 public participation and are the product of constructive 4 discussions with the regulated community. 5 This slide outlines the proposed amendments to the 6 antiperspirant and deodorant regulation. We are proposing 7 to extend the ethanol exemption to all products to address 8 fairness issues, modify the compliance plan requirements to 9 allow new entrants and assist manufacturers in developing 10 acceptable compliance plans, amend components of the 11 definitions, administrative requirements, and test methods 12 to improve consistency with consumer products regulation and 13 aid our Compliance Division in obtaining the information 14 needed to determine compliance; remove the provision 15 limiting the variance period for one year, again to improve 16 consistency with the consumer products regulation; and, 17 finally, permits the Board to hold a hearing to review and 18 consider any necessary amendments to the zero HVOC standards 19 to provide manufacturers with more certainty during their 20 reformulation efforts. 21 The primary environmental impact of the 22 antiperspirant and deodorant regulation is the reduction of 23 VOC emissions from consumer products. This was discussed in 24 more detail during the original rulemaking process. We have 25 determined that there will be no negative environmental PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 223 1 impacts as a result of these amendments. And we have 2 determined that the projected emissions reductions will be 3 achieved. This is because our analysis has shown that, even 4 though more manufacturers will have access to the ethanol 5 exemption and the compliance plan, the effect will be to 6 increase competition in this fixed market rather than to 7 cause the market to expand. 8 Therefore, emissions benefits will be preserved 9 and a SIP shortfall will be avoided, while leveling the 10 playing field for the antiperspirant and deodorant 11 manufacturers. 12 The proposed amendments to the special 13 requirements for aerosol manufacturers and the ethanol 14 exemption are intended to rectify an unintended effect of 15 the regulation, that of restricting competition from new 16 entrants into the market. These modifications will provide 17 greater flexibility to manufacturers, which will ultimately 18 result in an overall cost savings to industry and a greater 19 variety of products. 20 I'll now discuss the VOC definition amendments to 21 all of the consumer products regulations. 22 We are proposing exempt parachlorobenzotrifluoride 23 and the volatile methyl siloxanes from the VOC definitions. 24 We are proposing these exemptions for two main reasons. 25 First, the U.S. EPA has already exempted these compounds PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 224 1 from their VOC definition. 2 Second, we have determined that exemption of these 3 compounds will not result in an adverse environmental impact 4 in California. These proposed amendments, like those 5 mentioned earlier, are expected to provide manufacturers 6 with greater formulating flexibility, which will ultimately 7 result in an overall cost savings to industry and a greater 8 variety of products. 9 We have one additional that we are proposing that 10 was not proposed during the 45-day public comment period. 11 We are proposing to exempt acetone and ethane from 12 our VOC definition for consumer products. These compounds 13 have been recently exempted by the U.S. EPA. The ARB staff, 14 in coordination with the local districts, has performed an 15 analysis of potential environmental impacts to California 16 should these compounds be exempted. 17 Based on this analysis we are pleased to report 18 that there are no negative environmental impacts associated 19 with this change. Both ethane and acetone have very low 20 photochemical reactivity and contribute minimally to ozone 21 formation. 22 Additionally, staff projects cost savings to 23 industry, along with a greater variety of products. 24 We are therefore proposing that these compounds 25 also be exempted from the VOC definition in the consumer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 225 1 products regulation. 2 If approved by the Board, we will submit these 3 changes to a 15-day notice period for public review and 4 comment. 5 In summary, we recommend that the Board adopt 6 these proposed amendments for several reasons. We believe 7 that these amendments will provide additional flexibility to 8 manufacturers without losing the environmental benefits of 9 the regulation. These amendments will provide consistency, 10 clarify some provisions, maintain our SIP commitment, and 11 help to provide more certainty for antiperspirant and 12 deodorant manufacturers by requiring the Board to review the 13 standards in 1997. 14 That concludes my presentation. I thank you for 15 your attention. 16 SUPERVISOR RIORDAN: Thank you. Are there any 17 questions for the staff on behalf of the Board? Oh, Mr. 18 Chairman, you're back. They really hurried. 19 CHAIRMAN DUNLAP: I heard them. Thank you. Any 20 questions? 21 All right. Very good. 22 It seems we have three witnesses, and we'll call 23 them. Jim Mattesich from CTFA, Mr. Wernick from the 24 Gillette Company, and Mr. Varner from Helene Curtis. Good 25 afternoon. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 226 1 MR. MATTESICH: Good afternoon, Mr. Chairman, 2 members. My name is Jim Mattesich. I'm with the law firm 3 of Livingston and Mattesich, and represent the Cosmetics, 4 Toiletries, and Fragrance Association. 5 I've appeared in front of some of you on previous 6 occasions. Staff hurried their presentation, given the 7 lateness of the hour, and I'm committed to do the same, even 8 though we get paid by the word. 9 (Laughter.) 10 MR. MATTESICH: CTFA is a national trade 11 association celebrating its 102nd year this year, and 12 represents approximately 550 companies associated with 13 manufacturing and distributing cosmetics, toiletries, and 14 fragrances across the United States. 15 I'm pleased to be able to be here today, unlike on 16 some prior occasions when I've had a difference of opinion 17 about proposals, to be able to say that CTFA supports the 18 proposed amendments to the Board's antiperspirant and 19 deodorant regulation and supports the Board's actions to 20 declare acetone an exempt VOC. 21 The action that's proposed here today takes 22 several important steps, in our view, towards making 23 compliance with the antiperspirant and deodorant regulation 24 feasible for all manufacturers. 25 We very much appreciate the open and cooperative PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 227 1 manner in which your staff has worked with CTFA and its 2 member companies during the time that we've been addressing 3 these issues. 4 We strongly support the staff's recommendation to 5 extend the ethanol extension to all antiperspirant and 6 deodorant manufacturers, not just those who marketed 7 products in California prior to January 1, 1990. 8 The existing regulation essentially froze the 9 market and precluded new entrants, new companies to come 10 into the market, and limited the flexibility of those who 11 were already in the market. 12 This had the effect of favoring those who were 13 selling their products prior to 1990, and penalizing those 14 who were not. The antiperspirant market and the deodorant 15 is one of the most highly saturated consumer product markets 16 in the country. Virtually everyone is going to use an 17 antiperspirant or deodorant already does so. So, allowing 18 new entrants into the marketplace doesn't end up selling 19 more product, but simply divides sort of a finite pie into 20 different segments as consumers move from one particular 21 product to another, but we don't end up with more product 22 being sold, because we have basically a 99 percent saturated 23 marketplace already. 24 The bottom line is that the staff's proposal will 25 just simply allow more vigorous competition from CTFA's PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 228 1 member companies in this particular market, and we support 2 that. 3 Second, we support the proposal to set the limits 4 that are being proposed here to 40 percent HVOC for aerosol 5 antiperspirants and 14 percent HVOC for aerosol deodorants. 6 These limits represent the maximum reductions in 7 HVOC emissions that are technologically and commercially 8 feasible. They are also consistent with the limits that 9 have been established for the companies that are 10 participating in the aerosol manufacturers compliance plan, 11 which staff mentioned before. 12 Thirdly, we support the staff's proposal to move 13 the future zero HVOC limits, with basically no HVOC at all 14 products, from the current regulation date of January 1, 15 1995, to January 1, 1999, and to allow all manufacturers to 16 participate in the aerosol manufacturers compliance plan 17 process, and thereby attain relief from the zero HVOC 18 limits. 19 We also support the proposal that the Board hold a 20 public hearing before those 1999 dates kick in. We propose 21 it to be July 1, 1997, and that's appropriate in our view. 22 This will allow you to conduct what we think will be a very 23 essential review of the limit zero, which we do not believe 24 is technologically or commercially feasible. But this 25 proposal will allow you to revisit that issue after your PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 229 1 staff has had an opportunity to gather more information from 2 the industry, which are committed to produce and submit to 3 you by these rules. 4 Lastly, if you choose to approve the proposal of 5 your staff, we would respectively request, even though they 6 have lots of stuff to do -- and we know they're extremely 7 busy -- but we would ask that you instruct them to expedite 8 the process of simply moving the paper work along, should 9 you approve this package, to the Office of Administrative 10 Law and ultimately to the Secretary of State's Office, so it 11 becomes legally effective. 12 That sometimes is an onerous task and time- 13 consuming task, and we would ask you to do what you can to 14 shorten that process, because you will then allow 15 manufacturers who've been waiting some time to get into the 16 marketplace to do so at the earliest possible date. 17 I will conclude on that, because one of the tasks 18 your lawyers have is to respond to each of the comments, and 19 that's part of the burden. 20 So, if I shut up, then they have less of a burden. 21 But, again, we thank you for the opportunity today, and 22 would appreciate your aye vote on this proposal. 23 Thank you. 24 CHAIRMAN DUNLAP: Thank you, Mr. Mattesich. 25 Appreciate it. Any questions of him? He's leaving. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 230 1 (Laughter.) 2 No, that's fine. Mr. Wernick from the Gillette 3 Company, followed by Mr. Varner from Helene Curtis. When I 4 call your name, you can queue up there in those seats. Good 5 afternoon. 6 MR. WERNICK: Good afternoon. Mr. Chairman, 7 members of the Board. My name is Ted Wernick. I'm the 8 Director of Scientific Regulatory Affairs for the Gillette 9 Company. 10 The Gillette Company, as you know, manufactures a 11 wide variety of consumer products, including antiperspirants 12 and deodorants. We greatly appreciate this opportunity to 13 voice our support for the proposed changes to the 14 antiperspirant and deodorant regulation offered by the 15 staff. 16 The Gillette Company, since 1988, along with our 17 trade associations, CTFA and CSMA, have been working along 18 with the staff, your staff, to assure that the VOC 19 regulations meet the goals of the State of California and to 20 be fair and equitable both to the State and to industry. 21 At this point, I really would like to emphasize 22 that the relationship we've had with the staff has really 23 been cooperative, and we appreciate that. 24 In light of the technical difficulties we are 25 experiencing trying to reach the zero HVOC limits for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 231 1 antiperspirant and deodorant products, we are particularly 2 grateful and support the staff's proposed modification to 3 the standards section, which commits you, the Board, to a 4 public hearing by July 1, 1997, to review and consider any 5 appropriate changes to the January 1, 1999 zero HVOC limits. 6 We also wanted to make special note of the staff's 7 recommendation to modify the VOC definition in these 8 regulations to make the Air Resources Board VOC definition 9 more consistent with the U.S. EPA definition by exempting 10 acetone and volatile methyl siloxanes. 11 In summary, the Gillette agrees with and supports 12 the staff's recommendation that the Board approve the 13 proposed amendments to the antiperspirant and deodorant 14 regulation and to the VOC definition in all consumer 15 products. 16 Thank you. Are there any questions? 17 CHAIRMAN DUNLAP: Thank you. Any questions of our 18 witness? 19 Very good. 20 Bruce Varner, Helene Curtis. Good afternoon. 21 MR. VARNER: Good afternoon, Mr. Chairman, members 22 of the Board. 23 CHAIRMAN DUNLAP: Is B. J. Kerwin with you by 24 chance today? No? 25 MR. VARNER: Not today. No need for her today. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 232 1 (Laughter.) 2 MR. VARNER: Good afternoon. My name is Bruce 3 Varner, and I am here on behalf of Helene Curtis, 4 Incorporated. 5 Helene Curtis manufactures a wide range of 6 personal care products, including antiperspirants and 7 deodorants, and we are therefore affected by the proposed 8 modifications to the antiperspirant and deodorant 9 regulation, and we appreciate the opportunity to testify 10 today. 11 On January 27th, 1995, Helene Curtis filed a 12 petition with the California Air Resources Board. In this 13 petition, Helene Curtis asked the Board to repeal the 14 ethanol exemption in 17, CCR 94503(d) or make the exemption 15 available to all manufacturers. 16 Helene Curtis asked this action because the 17 ethanol exemption found in the existing antiperspirant 18 deodorant regulation favors certain manufacturers over 19 others. This petition was the culmination of over two years 20 of negotiations with the staff. 21 We are gratified to the action taken on our 22 petition. We believe proposed amendments to the ethanol 23 exemption language will allow manufacturers to compete on an 24 even playing field. Furthermore, we believe that the 25 Board's overall reduction goals will not be compromised by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 233 1 this action. 2 The staff has written an excellent rationale for 3 this action in their initial statement of reasons. I would 4 like to thank the Board and the staff for rectifying the 5 competitive inequity inherent in the ethanol exemption. 6 While we still have certain long-term concerns 7 with the antiperspirant and deodorant regulation, we fully 8 support the modifications proposed today. 9 That concludes my statement, and I'll be happy to 10 answer any questions you might have. 11 CHAIRMAN DUNLAP: Any questions for our last 12 witness? Very good. Thank you. 13 MR. VARNER: Thank you, John. 14 CHAIRMAN DUNLAP: What I'd like to do is just make 15 a couple of closing comments. 16 First of all, I'd like to commend staff for 17 working so well with industry and correcting what many 18 people saw as an inequity in the regulation. It was very 19 important. I appreciate the responsiveness that you've 20 shown here. 21 I think it represents a reasonable approach to the 22 regulation of consumer products. Even more importantly, 23 it's going to accomplish -- I think the proposal's 24 accomplished, brought together without compromising the 25 public health considerations, which is a difficult trick. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 234 1 And I want to laud you for that. 2 I'd also like to remind all of us that the 3 emission reductions to be gained from the antiperspirant and 4 deodorant regulation are an important and necessary 5 component of our State Implementation Plan, and the 6 amendments proposed today will not compromise our emissions 7 reduction plans as part of that SIP. 8 I believe that the staff's proposed amendments 9 fulfill these requirements and represent a reasonable 10 proposal considering the variety of interests involved. 11 So, with that, I'd like my colleagues on the Board 12 if they have any questions, and would ask for the resolution 13 to come forward, please. 14 Before I do that, are there any comments that we 15 need to summarize for the record? 16 MS. BILLINGTON: Yes. We have received four 17 comment letters. The first is from Mr. Lloyd Haanstra of 18 Deft, Incorporated. He comments that Deft supports the 19 decision to exempt acetone from the VOC definition. This 20 exemption will aid in their ability to reformulate aerosol 21 coatings to the 1996 VOC limits. 22 They note that the 1999 future effective standards 23 remain unrealistic. 24 We respond that we are encouraged to know that 25 this exemption will help Deft, Incorporated to meet the 1996 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 235 1 VOC standards for aerosol standards. 2 In regard to the 1999 VOC standards, these are 3 required by law and are subject to review by the Board on or 4 before December 31, 1998. If the standards are found to not 5 be technically and commercially feasible, they may be 6 extended for a period of not more than five years. 7 We also received a comment from Dr. Katy Wolf of 8 the Institute for Research and Technical Assistance. 9 Dr. Wolf expresses her concerns about the 10 potential toxicity of the volatile methyl siloxanes and 11 parachlorobenzotrifluorides. 12 She believes that exempting these substances from 13 the VOC definition will inevitably cause increased usage 14 with severe consequences without proper controls. Dr. Wolf 15 would like the ARB to delay the exemption of these materials 16 until they can go through our AB 1807 process when more 17 information on the toxicity and potential for exposure is 18 available. 19 We respond that our findings on these compounds 20 are consistent with those of U.S. EPA. We do not believe 21 there is a sufficient amount of data available to warrant 22 excluding these chemicals from the list of exempt VOCs. 23 However, we acknowledge that it may be prudent to 24 monitor usage of PCBTFs and the VMSs and consult with the 25 Office of Health Hazard Assessment on the need to further PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 236 1 evaluate potential adverse health effects from exposure to 2 these compounds. 3 If additional information becomes available and it 4 is warranted, we will review them through our AB 1807 and AB 5 2588 program. 6 We also received a comment from Mr. George Brown 7 from the National Aerosol Association. He comments the 8 National Aerosol Association supports the proposed acetone 9 exemption and the extension of the ethanol exemption to all 10 antiperspirants and deodorants. 11 We respond that we are encouraged to know that the 12 National Aerosol Association supports the proposed 13 amendments. 14 We also received a letter from Mr. Ralph Hinkle of 15 the Chemical Specialties Manufacturers Association. He 16 notes the Chemical Specialties Manufacturers Association 17 supports the proposed amendments to the antiperspirant and 18 deodorant regulation as well as the proposed amendments to 19 the volatile organic compound definition in all the consumer 20 products regulations. 21 CSMA also appreciates the improved consistency 22 that will result from these amendments. 23 We respond that we are encouraged to know that the 24 National Aerosol Association (sic) supports the proposed 25 amendments. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 237 1 CHAIRMAN DUNLAP: Mr. Boyd, do you have anything 2 else too add? 3 MR. BOYD: No, Mr. Chairman. That concludes the 4 staff presentation and our remarks. 5 CHAIRMAN DUNLAP: Okay. Thank you. 6 I will now close the record on this agenda item. 7 The record will be reopened when the 15-day notice of public 8 availability is issued. Written or oral comments received 9 after this hearing but before the 15-day notice is issued 10 will not be accepted as part of the official record on this 11 agenda item. 12 When the record is reopened for a 15-day comment 13 period, the public may submit written comments on the 14 proposed changes, which will be considered and responded to 15 in the final statement of reasons for the regulation. 16 Again, a reminder on ex parte communications? Is 17 there anything you have to report? 18 Okay. Very good. We will now take just a moment. 19 We have the resolution before us. Some of you have had a 20 chance to look at it. 21 Do we have a motion? 22 MR. KENNY: If I can interrupt for one moment, Mr. 23 Chair? 24 CHAIRMAN DUNLAP: Sure. 25 MR. KENNY: We had just received a letter from Dow PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 238 1 Corning after you had closed the record, so it is a late 2 comment. But we will look at it, and we will suggest to Dow 3 Corning that they resubmit it during the 15-day comment 4 period. 5 CHAIRMAN DUNLAP: Okay. Very good. Thank you. 6 Do we have a motion? 7 MR. PARNELL: Mr. Chairman, I move Resolution 95- 8 41. 9 CHAIRMAN DUNLAP: Okay. Is there a second? 10 MAYOR HILLIGOSS: I'll second that. 11 CHAIRMAN DUNLAP: Okay. There's a motion and a 12 second. Is there any further discussion needed on this 13 item? 14 All right. I'll ask the Board Secretary to please 15 call the roll for a vote on Resolution 95-41. 16 MS. HUTCHENS: Boston? 17 DR. BOSTON: Yes. 18 MS. HUTCHENS: Calhoun? 19 MR. CALHOUN: Aye. 20 MS. HUTCHENS: Edgerton? 21 MS. EDGERTON: Yes. 22 MS. HUTCHENS: Hilligoss? 23 MAYOR HILLIGOSS: Aye. 24 MS. HUTCHENS: Parnell? 25 MR. PARNELL: Aye. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 239 1 MS. HUTCHENS: Riordan? 2 SUPERVISOR RIORDAN: Aye. 3 MS. HUTCHENS: Vagim? 4 SUPERVISOR VAGIM: Aye. 5 MS. HUTCHENS: Chairman Dunlap. 6 CHAIRMAN DUNLAP: Aye. 7 MS. HUTCHENS: Passes 8-0. 8 CHAIRMAN DUNLAP: Very well. Thank you. Mr. 9 Boyd, is there any further business for the Board today? 10 MR. BOYD: No further business for today's Board 11 meeting, Mr. Chairman. 12 CHAIRMAN DUNLAP: Okay. We start tomorrow, for 13 those in the audience that are covering the meeting 14 tomorrow, it starts at 8:30 a.m., here. And I remind my 15 Board members it's a little bit earlier than normal. 16 So, I guess I will adjourn the meeting until 17 tomorrow at 8:30 a.m. 18 Thank you. 19 (Thereupon the meeting was adjourned 20 at 5:15 p.m.) 21 --o0o-- 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 240 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 4 I, Nadine J. Parks, a shorthand reporter of the 5 State of California, do hereby certify that I am a 6 disinterested person herein; that the foregoing meeting was 7 reported by me in shorthand writing, and thereafter 8 transcribed into typewriting. 9 I further certify that I am not of counsel or 10 attorney for any of the parties to said meeting, nor am I 11 interested in the outcome of said meeting. 12 In witness whereof, I have hereunto set my hand 13 this day of , 1995. 14 15 16 Nadine J. Parks 17 Shorthand Reporter 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345