MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA FRIDAY, APRIL 26, 1996 8:40 A.M. Nadine J. Parks Shorthand Reporter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Lynne Edgerton M. Patricia Hilligoss John S. Lagarias Barbara Riordan Ron Roberts Doug Vagim Staff: Jim Boyd, Executive Officer Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Mike Kenny, Esq., Chief Counsel Wayne Rodgers, Chief, Administrative Services Division Terry McGuire, Chief, Technical Support Division Sale Shimp, Manager, Emission Inventory Analysis Section, TSD Cheryl Taylor, Staff, Technical Support Division Vicky Davis, Esq., Staff Counsel Lynn Terry, Assistant Executive Officer Gary Honcoop, Manager, Strategic Analysis and Liaison Section, OAQTP Monica Crumley, Staff, Office of Air Quality and Transportation Planning Bob Cross, Assistant Chief, Mobile Source Division Mike Carter, Chief, Off-Road Control Registration Branch, MSD Jackie Lourenco, Manager, Off-Road Controls Section, MSD Michael Terris, Esq., Staff Counsel Dean Saito, Manager, Liaison Section, OAQTP Cynthia Marvin, Staff Federal Liaison, OAQTP Bob Jenne, Esq., Staff Counsel Patricia Hutchens, Board Secretary Wendy Grandchamp, Secretary Bill Valdez, Administrative Services Division PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X PAGE Proceedings 1 Call to Order 1 Presentation of Resolution to Wayne Rodgers, Chief, Administrative Services Division Upon his Retirement 1 Comments by Mr. Rodgers 5 Certificate Presented to Mr. Lagarias in appreciation for ten years of service 6 Comments by Mr. Lagarias 9 AGENDA ITEMS: 96-3-2 Public Hearing to Consider the Adoption of Permit Fee Regulations for Nonvehicular Sources Pursuant to California Clean Air Act Introductory Remarks by Chairman Dunlap 9 Staff Presentation: Jim Boyd Executive Officer 11 Cheryl Taylor Staff Technical Support Division 13 Entry of Written Comments into Record 19 Closing Comments by Mr. Boyd 19 Questions/Comments 20 (Direction to Staff) 26 Record Closed to Await 15-day Notice 27 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv INDEX, continued. . . PAGE AGENDA ITEMS: 96-3-2 Ex Parte Communications Disclosure 27 Motion by Lagarias to Approve Resolution 96-14 28 Board Action 28 96-3-3 Public Meeting to Consider Approval of Revision to California SIP for Carbon Monoxide Introductory Remarks by Chairman Dunlap 28 Staff Presentation: Jim Boyd Executive Officer 30 Monica Crumley Staff OAQTP 31 Written Comments Entered Into Record 38 PUBLIC COMMENTS: Mike Kulakowski WSPA 40 Questions/Comments 43 (Direction to Staff) 46 Jerry Horn Chevron 49 Motion by Roberts to Approve Resolution 96-13 51 Board Action 51 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v INDEX, continued. . . PAGE AGENDA ITEMS: 96-3-4 Public Meeting to Consider Guidelines for Generation of Mobile Source Emission Reduction Credits Through Conversion of Off-Road Diesel Cycle Engines at or above 50 Horsepower to low-emission Configurations Introductory Remarks by Chairman Dunlap 51 Staff Presentation: Jim Boyd Executive Officer 52 Raida Abachi Staff Off-Road Controls Section, MSD 54 Written Comments Entered Into Record 58 Motion by Edgerton to Approve Guidelines 60 Board Action 61 96-3-6 Research Proposals Introductory Remarks Chairman Dunlap 61 Motion by Riordan to Approve Resolutions 96-15, 16, and 17 62 Discussion 62 Board Action 63 Further Discussion and Direction to Staff 63 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 vi INDEX, continued. . . PAGE AGENDA ITEMS: 96-3-5 Public Meeting to Consider Status Report on State Implementation Plan Introductory Remarks by Chairman Dunlap 64 Staff Presentation: Jim Boyd Executive Officer 66 Lynn Terry Assistant Executive Officer 69 Questions/Comments 79 Adjournment 92 Certificate of Reporter 93 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: Good morning. Welcome to Day 4 Two of the April Board meeting of the California Air 5 Resources Board. 6 Mr. Boyd, could I ask you to join Wayne Rodgers at 7 the podium over here, please. 8 Wayne, come on up. 9 I'd like to digress from our agenda just for a 10 moment. For the second time in as many months I have the 11 dubious pleasure of saying goodbye to another long-time ARB 12 cornerstone, Wayne Rodgers. 13 Last month, we said goodbye to Don Drachand, who 14 was the long-time Chief of the Mobile Source Division. And 15 today, we want to bid farewell to another member of Jim 16 Boyd's excellent team: 17 Wayne Rodgers, who is Chief of our Administrative 18 Services Division. Wayne is retiring after some 33 years of 19 service to the State, 21 years of service to the Air 20 Resources Board. 21 Needless to say, Wayne, we're going to miss you. 22 Wayne has been a leading budget strategist for the Board 23 through its separation from the Water Resources Control 24 Board and the Waste Management Board in 1977, through the 25 development and growth of Cal-EPA, the growth period during PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 the past five years. 2 And it's with a great deal of pleasure and a touch 3 of sadness that I offer you a token of our appreciation, and 4 I'm going to walk down and hand it to you, Jim. And, if you 5 wouldn't mind reading it to Wayne, and I'll let you do the 6 presentation. 7 While Jim's readying himself to do that, just to 8 give the audience a sense of just how valuable Wayne is to 9 this organization, I've had the opportunity prior to being 10 appointed to this post, serving in another Cal-EPA 11 department. And we had tremendous difficulties in dealing 12 with the Legislature on our budget, and making sure that we 13 were able to secure the resources year to year that we 14 needed to perform our mission. 15 And Wayne has taken that, a wild card, that factor 16 out of the equation here, and has just, with his expertise, 17 has made it much, much easier for us to take care of 18 business and get the trains to run on time. 19 Mr. Boyd, will you share with us the resolution? 20 MR. BOYD: I'd be glad to. And just a word or so. 21 I don't want to take away from my speech for tonight's 22 retirement party, but I just want to amplify what Chairman 23 Dunlap has said about Wayne. And point out that that not 24 only is Wayne probably the best Administrative Division 25 Chief that I've ever met -- and I've been around even longer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 than he has; why is he retiring? 2 (Laughter.) 3 MR. BOYD: -- in a multitude of departments. 4 But, secondly, Wayne has proven over the years to 5 be a real utility outfielder for us, so to speak, because we 6 have given Wayne dual responsibilities on occasion. We made 7 him run an engineering division for a long period of time, 8 in addition to running the Administrative Division, many 9 years ago, when we had a vacancy and nobody available at the 10 time, and he proved himself a very able and versatile 11 manager. 12 And I'm just suddenly remembering some of Wayne's 13 history here. He has been an invaluable asset to the Air 14 Resources Board. 15 Wayne, step up here in the limelight a little bit 16 more, and let me read this: 17 WHEREAS, Wayne E. Rodgers has provided 18 exemplary service as Chief of the Administrative 19 Services Division of the Air Resources Board for 20 20 years, enabling the rest of us to work towards 21 clean air in comfort and security; 22 WHEREAS, Wayne combined his business and 23 financial acumen, his Army service, and his 24 experience with other agencies to develop the 25 most efficient ambient services organization under PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 the stratosphere; 2 WHEREAS, Wayne is a wizard with finances, 3 magically producing and stretching dollars for the 4 ARB, totaling over a billion dollars in 21 ARB 5 budgets; 6 WHEREAS, Wayne's a genius at accomplishing any 7 administrative tasks to perfection in record time, 8 gaining him collectively the respect and 9 admiration of his staff, his agency, his four 10 branch chiefs who have dedicated almost three 11 quarters of a century in his service; 12 WHEREAS, due to Wayne's tireless efforts, the 13 ARB successfully and almost painlessly moved to 14 a state-of-the-art office building in a prime 15 location; 16 WHEREAS, Wayne developed and implemented the 17 ARB's Administrative Services Letter -- ASL, as we 18 call it -- to provide managers and staff with 19 current information for all administrative areas, 20 a model for agencies statewide; 21 WHEREAS, Wayne's talent for budgetary acumen, 22 or alchemy -- "alchemy" is a better word, also 23 works on cars, enabling him to transfer gross 24 emitters into lovingly restored Ford beauties; 25 I've seen Wayne's Model T and a few others. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 WHEREAS, Wayne not only talks the talk but 2 also walks the walk, logging over 30,000 miles 3 during his 20 years of daily runs at the ARB; 4 WHEREAS, Wayne is retiring from the ARB to 5 dedicate more time to his family, outdoor 6 activities, and traveling -- now that he has 7 spoiled all of us at ARB with his outstanding 8 service: 9 NOW, THEREFORE, BE IT RESOLVED, that the 10 Board will sorely miss Wayne Rodgers and wishes 11 him a long, joyful, and productive retirement; 12 BE IT FURTHER RESOLVED, that the Board exhorts 13 Wayne, if he really must leave ARB, to apply for 14 a job running the U.S. Postal Service or Amtrak." 15 (Laughter.) 16 MR. BOYD: Wayne (handing framed and signed 17 resolution to Mr. Rodgers.) 18 (Applause.) 19 MR. RODGERS: Thank you, Jim. Mr. Chairman, 20 members of the Board. This is -- I don't know if this is me 21 or not. It sounds sort of like me, but it's overwhelming. 22 I appreciate it. 23 I guess for an ARB employee, receiving one of 24 these resolutions is like a soldier receiving a Medal of 25 Honor. Of course, the way things have gone this week, I'm PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 just happy that it's not a Purple Heart instead. 2 (Laughter.) 3 MR. RODGERS: Let me just say that, as a native 4 Californian and the great, great grandson of pioneers that 5 settled this Valley when the air was clean and the water was 6 pure, I want to express my appreciation to each of you and 7 your predecessors for the efforts you're making to restore 8 and protect our State's air quality. 9 It's been fulfilling to me to work for an 10 organization that is recognized as a world leader in air 11 pollution emissions control, and to work with individuals 12 who are among the best and the brightest professionals in 13 their field. 14 I'm proud to have been a member of the ARB 15 management team for 21 of 33 years in State service, and to 16 have played a role in helping the Board achieve its clean 17 air goals. 18 I want to thank you Jim Boyd, Mike Scheible, and 19 Tom Cackette for your strong leadership and their 20 recognition of the importance of their administrative 21 support staff. 22 And I want to say how great the 85 members of the 23 ASD staff are. Some of them are here today. These are not 24 protesters, I don't believe. 25 (Laughter.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 MR. RODGERS: They all look very familiar to me. 2 However, they did bring empty gas cans just in case we had a 3 surprise for them. 4 But these are the people, as you all know -- 5 you're all managers -- you know you don't do these things by 6 yourself. And all these nice things that were said about me 7 here would not have been possible without the support of 8 these wonderful people. 9 So, that's all I have to say today. Like Jim, I'm 10 going to save a few words for tonight. 11 Thank you very much, and I wish you all success in 12 your continuing fight for clean air. 13 CHAIRMAN DUNLAP: Thank you, Wayne, very much. 14 (Applause.) 15 CHAIRMAN DUNLAP: A final comment -- a final 16 comment on Wayne is one of the great services he's rendered 17 the Board is training a successor. And Jim Boyd was able to 18 fill his post from within the ranks. We have a very fine 19 person to step in that's learned some things from Wayne. 20 And we think we're going to be able to continue that 21 tradition of having an outstanding Administrative Services 22 program. 23 So, good luck to you, Wayne. 24 Mayor Hilligoss, can I get you to grab Mr. 25 Lagarias and take him down front? Probably reluctant to do PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 this. 2 It is with a great deal of pleasure that I get to 3 make this next announcement. Two of our distinguished 4 colleagues, members of this Board, have marked a decade of 5 service on our Board -- Jack Lagarias, as of January 31, 6 1996, and Gene Boston, who isn't with us today, will mark -- 7 actually marked ten years two days ago, on the 24th of 8 April. 9 Both of these Board members have participated in 10 many milestones over the last decade in an effort to bring 11 cleaner air to California. In lieu of a ten-year pin, the 12 Air Resources Board would like to acknowledge, Jack, your 13 distinguished service on the Board and to the citizens of 14 California by presenting you both with a certificate for 15 outstanding public service for a period of ten years. 16 And I've asked Mayor Hilligoss to just take a 17 moment and read this humble token of our appreciation, Mr. 18 Lagarias. 19 MAYOR HILLIGOSS: It's not as fancy as the one 20 before. 21 CHAIRMAN DUNLAP: It isn't? 22 MAYOR HILLIGOSS: No. 23 CHAIRMAN DUNLAP: Well, they have to put in 24 another ten to get the really big one, right? 25 MAYOR HILLIGOSS: Right. (Reading) This PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 certificate is presented to John S. Lagarias for outstanding 2 service as a member of the State of California Air Resources 3 Board for a period of ten years, completed January 31st, 4 1996. And it's signed by John D. Dunlap, III, Chairman, and 5 James D. Boyd, Executive Officer. 6 MR. LAGARIAS: Thank you. 7 (Applause.) 8 MR. LAGARIAS: I have to say I've enjoyed it, but 9 it's been ten years and, after last night, going on thirty. 10 (Laughter.) 11 CHAIRMAN DUNLAP: Well, said. 12 (Laughter and Applause.) 13 CHAIRMAN DUNLAP: Congratulations, Jack. 14 All right. Let's get into our agenda. I'd like 15 to remind those of you in the audience who would like to 16 present testimony to the Board, please sign up with the 17 Board Secretary to my left. And if you have written 18 comments, please provide her with 20 copies so that the 19 entire Board may have your written statement. 20 The second item on the agenda today is 96-3-2, 21 public hearing to consider the adoptio of permit fee 22 regulations for nonvehicular sources pursuant to the 23 California Clean Air Act. 24 This item is a proposal to authorize continuation 25 of the California Clean Air Act fee regulation for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 nonvehicular sources for the next fiscal year. 2 This fee program requires the State's largest 3 stationary sources to share the cost of implementing this 4 nonvehicular source related provision of the California 5 Clean Air Act. 6 The program authorizes this Board to collect up to 7 $3 million per year in fees. Staff is proposing that these 8 fees be renewed for the 96-97 fiscal year in that amount in 9 order for the control program to be maintained at the 10 present level. 11 Fees were first collected under this program in 12 1989, which -- under the California Clean Air Act, which 13 authorizes these fees, and contains a sunset provision which 14 will end the collection of these fees after the 96-97 fiscal 15 year. 16 Therefore, the fees proposed today will be the 17 last to be collected under this program. The funds from 18 these fees have been used during the last seven years to 19 support a variety of important ARB activities, such as ozone 20 transport studies, the development of air quality 21 indicators, the development of air quality models, expanded 22 air quality monitoring, improved emissions inventories, and 23 technical assistance to districts for developing air quality 24 plans. 25 The fruits of this work have played an important PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 role in the development of the 1994 ozone attainment plan. 2 And I believe these fees have been put to good use. And at 3 this point, I'd like to ask Mr. Boyd to give a brief run- 4 through of what's proposed today. 5 Mr. Boyd. 6 MR. BOYD: Thank you, Mr. Chairman. Good morning, 7 Board members. The funds that are derived by these fees 8 have, over time, been used to fund projects that have 9 greatly improved our understanding -- "our" being the State 10 and local agencies throughout California. They've improved 11 our understanding of California's air pollution control 12 problems. And, as indicated, we're aware of numerous 13 instances where work funded by these fees have resulted in 14 the development of more cost-effective attainment strategies 15 which, in turn, have reduced the cost of emission controls 16 to California industry. 17 And I believe these cost reductions have far 18 outweighed the costs of the fees that were collected during 19 the life of the program. 20 In addition, this fee regulation has provided an 21 incentive for business itself to reduce its emissions. Over 22 the life of the program, the emissions subject to this fee 23 have dropped by about 60,000 tons per year of oxides of 24 nitrogen, or NOx, and 14,000 tons per year of reactive 25 organic gas. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 Because of these emissions reductions, the numbers 2 of large facilities subject to the fee regulation had 3 dropped from 116 in the inception to just 69 in the year 4 1996. 5 Although the Clean Air Act fees are not solely 6 responsible for these emissions reductions, it was one of a 7 number of factors that did contribute to substantial 8 reductions emissions from stationary sources during the 9 1990s. 10 As the Chairman has indicated, the fees may not 11 exceed $3 million a year. And, frankly, it remained at this 12 level for many, many years. 13 By law, operation of the law, the fees are 14 collected from large sources located in places where the 15 State ambient air quality standards are violated and which 16 admit at least 500 tons per year of specified pollutants. 17 The 69 sources impacted by the fee proposal you 18 will consider today emit about 150,000 tons of pollutants 19 per year at present. 20 Although these fees subsidize the effort, let me 21 tell you, these funds do not even begin to come close to the 22 support and to support the Board's activities to carry out 23 the requirements of the California Clean Air Act. They were 24 but a small, but very significant, contribution. 25 When the authorization of this fee program expires PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 at the end of the next fiscal year, many activities in 2 support of the California Clean Air Act will be 3 significantly reduced or, frankly, eliminated. 4 The proposed fees for this final year of the 5 program are for badly needed research and methods developed 6 to improve our understanding and to continue to improve our 7 understanding of the air pollution problems in this State. 8 The staff presentation will discuss the details of 9 the proposed fee regulation, which I think you've heard 10 before in prior years, including the emission inventories 11 that are used to calculate the fees each year. 12 The staff will discuss the methods used to compute 13 the fees for this, the last year. 14 And with that, I'd like to call upon Cheryl 15 Taylor of the Technical Support Division to provide the 16 staff presentation. 17 Ms. Taylor? 18 MS. TAYLOR: Good morning, Chairman Dunlap, 19 members of the Board. 20 My name is Cheryl Taylor. The proposed regulation 21 amendments that I'll describe today are to secure the 22 funding needed to implement the provisions of the California 23 Clean Air Act relating to nonvehicular sources for the 24 1996-97 fiscal year. 25 This proposal is based on regulations adopted by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 the Board for this program for the last seven years. As 2 Chairman Dunlap mentioned, the California Clean Air Act 3 contains a sunset provision after the 1996-97 fiscal year. 4 So, this will be the eighth and final year of the program. 5 I will now outline my presentation for you. 6 First, I'll provide an overview of the proposal. Next, I'll 7 explain the process we used in developing the regulations 8 and calculating the fee rate. 9 I'll finish up by discussing the fiscal impacts on 10 business. 11 In the California Clean Act, the Legislature 12 imposed a number of requirements on the Board and the 13 districts. The Act also provides a mechanism to help defray 14 the State costs of implementing the nonvehicular source 15 requirements in the form of fees on permitted stationary 16 sources which emit 500 tons or more per year of any 17 nonattainment pollutant or its precursors. 18 Please note that these fees only apply to the 19 largest facilities, those emitting the greatest amount of 20 emissions. 21 We're proposing today that the Board collect 22 sufficient fees to provide $3 million to support the Board's 23 work to carry out the mandate of the California Clean Air 24 Act in fiscal year 1996-97. 25 This year's proposed fee rate is $18.78 per ton of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 nonattainment pollutant. This is a different rate than what 2 was published in the notice and the staff report. I will 3 explain the reasons for these differences later in the 4 presentation. 5 An updated package containing changes of the 6 emissions and the fee rate is available to the public on the 7 table outside the back of the room. 8 Requirements of the Act supported by this program 9 include consumer products regulations, emission inventory, 10 air quality progress indicators, air quality analysis and 11 models, transport studies, planning guidelines, and new 12 planning requirements. 13 The results from this programs proved to be a good 14 investment, because they played an important role in the 15 development of the 1994 ozone nonattainment plans. These 16 studies provided information which improved our 17 understanding of the factors that influence the formation 18 and transport of ozone in California. 19 This improved science allowed the development of 20 more cost-effective emission control plans. 21 Now, I'll discuss the process we used in 22 developing the proposed regulation. We first identified 23 those facilities in the State that might be subject to the 24 fees. This included all facilities for which we have 25 preliminary 1994 emission data, which represents the most PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 recent statewide emissions data available. 2 We included facilities that emitted 500 or more 3 tons of any nonattainment pollutant or its precursors that 4 are located in districts designated as nonattainment for 5 that pollutant. 6 On December 28th, 1995, we provided the affected 7 districts with a list of these facilities and their 8 emissions. Districts were asked to review and verify the 9 emission figures to be used in the fee calculations. 10 In February, we invited the staffs of the affected 11 districts and representatives of affected facilities to a 12 consultation meeting to provide them with an opportunity to 13 comment on the proposed fee regulation. 14 As part of the public review process, the staff 15 report and proposed regulation were sent on March 8th to all 16 districts and affected facilities. 17 I'll now discuss how the fee rate for the proposed 18 regulation was calculated. 19 First, we determined that the Board would need to 20 collect the full $3 million to continue the tasks specified 21 by the California Clean Air Act. Second, the regulations 22 require that any excess revenues from previous years be 23 carried over. 24 This carryover amount will be subtracted from the 25 $3 million. To get the fee rate in dollars per ton, the $3 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 million, less the carryover amount, is divided by the total 2 applicable emissions. The proposed fee rate for the 1996-97 3 fiscal year is $18.78 per ton. 4 As I mentioned earlier, this rate has decreased by 5 14 cents from the rate that was published in the March 8th 6 staff report. Since the time of publication, we have 7 received revised emission estimates from some districts up 8 to today. Also, the amount of excess revenues carried over 9 from previous years has changed. 10 The cost of the proposed fees to affected 11 businesses vary, depending on how much they emit. The fee 12 for an individual company emitting close to the 500 ton per 13 year threshold is about $10,000. The fee for one very large 14 corporation operating at nine locations around the State 15 would be about $550,000. 16 The Administrative Procedures Act requires that 17 agencies determine the impact of regulations on businesses. 18 Based on the staff's methodology for evaluating fiscal 19 impacts, we believe adoption of these regulations will not 20 have a significant fiscal impact on companies subject to the 21 fees. This is because the affected companies are among the 22 largest in the State both in size and financial strength. 23 Also, we believe that adoption of the regulations 24 will not significantly affect the ability of California 25 businesses to compete with businesses in other States, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 will not affect the creation or elimination of jobs within 2 California, and will not impose a noticeable impact on the 3 profitability of California businesses. 4 This slide compares the proposed fee program to 5 the previous year's regulations. For fiscal year, 1996-97, 6 12 facilities have dropped out of the program due to 7 emission reductions and five have come into the program. 8 This is a net reduction of seven facilities. 9 In conclusion, the major change being proposed in 10 the California Clean Air Act nonvehicular source fee 11 regulation for fiscal year 1996-97 is revised fee rates. 12 The fee amount has been recalculated for the new fiscal year 13 based on 1994 emissions. 14 The fees that will be collected for the ARB, if 15 the proposed regulations are adopted, would be used to 16 defray implementation of the California Clean Air Act. 17 The fees which we are proposing will result in the 18 collection of approximately $2,800,000. The resulting fee 19 would be assessed at $18.78 per ton. 20 Because the changes that have occurred since the 21 publication of the staff report have not undergone public 22 review, these changes will be subject to a 15-day comment 23 period following the hearing. 24 We have received one comment on this item from the 25 Society of Plastics Industry. They are a Washington, D.C. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 based lobbying group representing all segments of the 2 plastics industry. 3 While the Society does not have any members that 4 are affected by the proposal presently before the Board, the 5 Society submitted a letter expressing its general opposition 6 to fees assessed upon businesses. The letter notes that 7 many facilities pay permit fees and local district fees in 8 addition to the California Clean Air Act fees. 9 I'll be glad to answer any questions you may have. 10 CHAIRMAN DUNLAP: Thank you. Mr. Boyd, do you 11 have anything to add? 12 MR. BOYD: Oh, maybe a couple of comments. I'd 13 like to note that the biggest payors of these fees were here 14 yesterday in the room. And, unfortunately, they're not here 15 today to hear this item. But, nonetheless, none of them 16 were the plastics industry I might note. 17 And then a serious note. I want to point out to 18 you that we're not here today asking you to help us continue 19 these fees. The law sunsets. It was the intend, when it 20 was passed, that adequate resources be provided to do the 21 job. And since we were part of the preparation of the law, 22 we concurred with that. 23 I just have to say it's a shame that the job, 24 frankly, isn't done. It's not done for a variety of reasons 25 that you're all too familiar with -- the complexity of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 job, the incredible emphasis on the SIP, and the total time 2 wasted fooling around with the FIP, and the general slowdown 3 of the California economy. And thus, the deference we gave 4 to that situation has left us, while still trying to get the 5 SIP implemented, you know, turning back to fulfilling a 6 requirement for the California Clean Air Act. And we will 7 continue to do that into the future as best we can. 8 Again, it's unfortunate the job's not done, but 9 we're kind of used to these situations and having to just 10 tough it out and carry on the task. 11 With that, I'll close my comments and thank you. 12 CHAIRMAN DUNLAP: Okay. Any Board member 13 questions for staff? 14 Supervisor Vagim. 15 SUPERVISOR VAGIM: Mr. Chairman, thank you. 16 How much per ton this year compared to last year? 17 MS. TAYLOR: Last year, it was $17.75, and this 18 year it's 18.78. 19 SUPERVISOR VAGIM: Mr. Boyd, you did touch on it, 20 but I think we need to dwell on it a little longer. You're 21 losing 3 million bucks. 22 MR. BOYD: Yes, sir. 23 SUPERVISOR VAGIM: And the Legislature obviously 24 thought that this would do the job, and it didn't do the 25 job. And you just touched on the fact of why -- so many PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 other things. Will there be a move at all by anybody here 2 or in the Legislature to reexamine that? That's a 3 significant loss of money. 4 MR. BOYD: It is. And at present, I've not seen 5 any efforts on the part of the Legislature to address this, 6 although I think it's part of the climate and part of the 7 times. 8 CHAIRMAN DUNLAP: I can say there have been 9 discussions within the administration about options. It 10 appears that, given the climate that we have in Sacramento, 11 it's unlikely that there'd be a lot of interest to move a 12 vehicle this year. 13 However, Mr. Boyd and I have been in a few 14 meetings where people have expressed, from industry, a 15 willingness to consider an extension, putting forward some 16 support for an extension, provided there was a willingness 17 on the Board's part to agree to a workplan that's specific. 18 And I think it's been some weeks since we had 19 these discussions. But that will probably, in my view, 20 would probably be the mechanism by which this could get an 21 extension this year. 22 Mr. Boyd, would you concur with that assessment? 23 MR. BOYD: Yes, and I'm sure yesterday's long day 24 may have some impact on this whole situation, because a lot 25 of the people and the industry in question are, of course, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 subject to these fees and were major players in the original 2 debate on passing the so-called California Clean Air Act 3 that Assemblyman Sher authored. 4 But that law, as you've heard before, was a real 5 milestone in the State. It's a tribute to the business, 6 environmental, and regulatory people of the State, because 7 it was a two-year long mutually -- mutually developed 8 proposal that recognized to be needed for a couple of 9 reasons. Number one, the Federal Clean Air Act was 10 expiring, and there seemed to be no inclination on the part 11 of Congress to deal with the problem on a timely basis. 12 And California had, even before the magic 1987 13 year, realized, you know, it couldn't meet the Federal 14 standards; but, when that occurred some day, still had its 15 own standards which did then--and I still believe today-- 16 were protective of the citizens of this State and were part 17 of what made California the great State that it was -- the 18 quality of life, et cetera, et cetera. 19 So, that was a real milestone piece of 20 legislation. And I don't think people are going to let it 21 just slip away. But it's going to take some time to get 22 some focus on it because of the concerns for the economy. 23 And we all know the peace dividend didn't visit California, 24 and it's been a long, hard struggle. 25 So, many people are beginning to start thinking PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 about this again. 2 SUPERVISOR VAGIM: This is for the next fiscal 3 year we're working on right now. 4 MR. BOYD: Yes, this covers us through next fiscal 5 year. And had it been a perfect world, we'd be prepared to 6 deal with it right now. But we'll have to deal with it in 7 the time remaining. 8 SUPERVISOR VAGIM: Thank you, Mr. Chairman. 9 CHAIRMAN DUNLAP: Supervisor Roberts. 10 SUPERVISOR ROBERTS: Well, I would encourage the 11 Chair and Mr. Boyd to pursue some version, some acceptable 12 version of this. 13 I was curious, Mr. Boyd, if this could account for 14 20 cents a gallon that were missing? 15 (Laughter.) 16 MR. BOYD: Couldn't even come close. 17 MR. SCHEIBLE: For an hour perhaps. 18 (Laughter.) 19 SUPERVISOR ROBERTS: I'm still looking. 20 SUPERVISOR RIORDAN: You're still working on it. 21 MR. BOYD: I think it kept me up all night, and I 22 was looking, too. 23 SUPERVISOR RIORDAN: Have you seen this morning's 24 Bee? 25 SUPERVISOR ROBERTS: I noted it, and I don't want PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 to say anything while Supervisor Silva is in transit here, 2 but I did notice they had me listed as an Orange County 3 Supervisor, and I may not survive that. 4 (Laughter.) 5 SUPERVISOR RIORDAN: That's because you were 6 looking for 20 cents. 7 CHAIRMAN DUNLAP: Yes. Mayor Hilligoss. 8 MAYOR HILLIGOSS: Every year, I do the same thing, 9 because the Bay Area seems to give most of the money. And 10 we evaluate the emissions of the facilities. I believe in 11 the other areas, they do not. And there's only San Joaquin 12 Unified, there are 15; South Coast at 14; and we have 16. 13 And we do pay the most amount. 14 And I was going to say, I'm not going to fight it 15 this year, because they haven't fought it. 16 But, however, if we do have this again, I think 17 everybody should not allow the self-evaluation of emissions. 18 They should go out and do them like we do them. That would 19 be fairer. 20 CHAIRMAN DUNLAP: Okay. You didn't bring it up, 21 but I'll ask Jim. I think I know the answer. The reason 22 the Bay Area has the largest number by one or two, is simply 23 because they have sources that emit over the threshold 24 amount; is that correct? 25 MR. BOYD: They're blessed with clean air, but PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 they do have big emitters -- 2 CHAIRMAN DUNLAP: Right. 3 MR. BOYD: -- remaining there. 4 MR. SCHEIBLE: And in the case of the South Coast, 5 some of their sources -- for example, both districts have 6 power plant rules that end up at about the same place. The 7 South Coast started implementing theirs a little bit 8 earlier. So, there are some areas where the same activity 9 in the Bay Area -- the controls are going on a little bit 10 later. 11 CHAIRMAN DUNLAP: Right. Okay. 12 MR. BOYD: We had a big party to celebrate the 13 clean air area last year, then Mother Nature allegedly 14 messed it up for them. 15 CHAIRMAN DUNLAP: Mr. Lagarias. 16 MR. LAGARIAS: I looked into the reason for the 17 high cost of the Bay Area District vis-a-vis other 18 districts, and I was satisfied that this was because of 19 different types of operations that exist in the Bay Area, 20 the number of them, and the fact that more stringent 21 controls are in comparable plants in the South Coast. So, 22 that was not a problem. 23 I would like to say, I'm glad to see something 24 finally sunsetting. I think we put -- have way too many 25 laws. The fact that the Federal Clean Air Act came after PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 the California Clean Air Act usurps many of the needs that-- 2 or duplicates many of the requirements we have to go 3 through, especially through Title 5. 4 So, if this is going to be reexamined, I think it 5 has to be done in the light of the Federal as well as the 6 California law. 7 CHAIRMAN DUNLAP: That's wise counsel. I guess, 8 gauging the sense of the Board, Jim, you're being encouraged 9 to dialogue, as they say, with the industry representatives 10 to see what type of scope of work might work for us. Again, 11 encourage you to exercise caution, as you discuss with them, 12 because we don't want them to force some scope of work on us 13 for some product, Supervisor Vagim, that might not be in our 14 interest. 15 SUPERVISOR VAGIM: Don't forget the Title 5 Task 16 Force and the work that they're doing. 17 MR. BOYD: I could never forget the Title 5 Task 18 Force. It just goes on in perpetuity. 19 CHAIRMAN DUNLAP: Okay. Any other comments or 20 questions of staff? 21 All right, then. You're already mentioned the one 22 letter. Staff, are there any others that you need to 23 summarize? 24 MS. TAYLOR: No. That was the only comment we 25 received. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 CHAIRMAN DUNLAP: Okay. I'll now close the record 2 on this agenda item; however, the record will be reopened 3 when the 15-day notice of public availability is issued. 4 Written or oral comments received after this hearing date 5 but before the 15-day notice is issued will not be accepted 6 as part of the official record on this agenda item. 7 When the record is reopened for a 15-day comment 8 period, the public may submit written comments on the 9 proposed changes, which will be considered and responded in 10 the final statement of reasons for the regulation. 11 Just a reminder to the Board about the ex parte 12 communication disclosure. Do we have any communications on 13 this item you need to disclose? 14 I believe I do. I had part of a grander meeting 15 with CCEEB, and I think it came up during the notice period 16 in early April when K.C. Bishop, who is part of that group, 17 brought it up. Jim, you may have been with me in that 18 meeting. I don't recall. 19 But I'll get you the exact date of when that 20 occurred or ask Ms. Shelby to look it up and get into the 21 record. 22 All right. We have a resolution before us. We've 23 had it for a few moments. Why don't we pause for a minute 24 and review it. 25 And then, after you've had a chance, I will, of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 course, entertain a motion to approve the Resolution 96-14. 2 MR. LAGARIAS: Mr. Chairman? 3 CHAIRMAN DUNLAP: Mr. Lagarias. 4 MR. LAGARIAS: I move approval of Resolution 96- 5 14. 6 CHAIRMAN DUNLAP: All right. 7 SUPERVISOR VAGIM: Second. 8 CHAIRMAN DUNLAP: Any discussion that needs to 9 occur? 10 All right. Will the Board Secretary call the 11 roll? I guess we could do this by voice vote, couldn't we? 12 All those in favor, please say aye? 13 (Ayes.) 14 CHAIRMAN DUNLAP: Any opposed? Motion carries, 15 seems unanimously. 16 Let's move to the next item, 96-3-3, public 17 meeting to consider approval of a revision to the California 18 State Implementation Plan for carbon monoxide. 19 This proposed revisions consists of a request to 20 the U.S. EPA to redesignate 10 areas in California to 21 attainment to the national carbon monoxide standard. Also 22 included is a maintenance plan that demonstrates continuing 23 attainment of the standard in future years. 24 It's a pleasure to be able to consider items that 25 reflect successes in the effort to clean California's air. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 The ARB's carbon monoxide control program is a notable 2 success. We've seen CO concentrations drop substantially 3 throughout California since about 1990. That's good news. 4 It's especially gratifying because we can point to 5 the ARB's motor vehicle and clean fuels program as the 6 primary reason for achieving this goal. In fact, air 7 quality monitoring data show quite clearly and dramatically 8 when our requirement for wintertime oxygenated fuel took 9 effect. We're able to see the direct result. 10 Now, I want to take a moment to say a few words 11 about this achievement. The ARB's been working hard for 12 years to reduce motor vehicle emissions. From the early 13 crankcase controls in the 1960s, to catalytic converters in 14 the seventies, to our LEV/ZEV program during this decade, 15 for the nineties, this Board has had the foresight to push 16 the envelope of technology in order to attain clean air. 17 Today, we acknowledge the success of these 18 efforts. We've been able to cut the statewide CO pollution 19 enough to meet national standards in all areas, except for 20 small portions of the South Coast Air Basin. 21 As we consider this item, I would like to pay 22 tribute to the work of those previous Boards who made the 23 decisions that enable us to be here today. Without them, we 24 certainly wouldn't be in this position. 25 At this point, I'd like to ask Mr. Boyd to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 introduce this item and begin his staff's brief 2 presentation. 3 MR. BOYD: Thank you, Mr. Chairman, and thank you 4 for your introductory remarks. I just observe how 5 unfortunate it is today that you can't find a camera for 6 blocks when we have a good news story like this that is, as 7 you indicated, the proof and the culmination of years and 8 years of effort and activity. And some of the people who 9 were in the room yesterday would have enjoyed and even 10 played a part in this. 11 I would just invoke the memory of Don Drachand, 12 who we mentioned earlier, Chief of our Mobile Source 13 Division for so many years. I'm just sorry we didn't have 14 this item on the day he retired so we could get a little 15 closer connection to what the motor vehicle program has done 16 over the years. 17 So, it's indeed a pleasure to deal with this good 18 news story. It is a major victory. And the fact that so 19 many major urban areas no longer violate the standard is 20 testimony to the effort. And when you think about how many 21 citizens live in these major urban areas in this State, this 22 is a lot of people having their public health protected by 23 reaching the goals that define protection. 24 The areas being considered for redesignation to 25 attainment today include the San Francisco Bay Area, San PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 Diego, urban areas in the San Joaquin and Sacramento 2 Valleys, and finally, Lake Tahoe, an area I know we've been 3 struggling with for all the years I've been here. 4 If the Board decides to approve the item, we will 5 then forward the request for redesignation and all the 6 appropriate related materials to the U.S. EPA for its 7 consideration, and I'm sure approval. 8 With that, I'll ask Ms. Monica Crumley of our 9 Office of Air Quality Planning to begin the presentation. 10 Ms. Crumley? 11 MS. CRUMLEY: Thank you, Mr. Boyd. 12 Good morning, Chairman Dunlap and members of the 13 Board. My name is Monica Crumley. I will begin with an 14 outline of my presentation. 15 I will cover three general topics -- a summary of 16 the proposed redesignation request, a description of the 17 Federal requirements related to redesignation, and a look at 18 future air quality trends. 19 I will conclude my reviewing public comments and 20 then offer the staff's recommendation. 21 First, I will describe the proposed redesignation 22 request. Today, you are considering approval of a request 23 for attainment designations by U.S. EPA for ten areas 24 classified as nonattainment for the Federal carbon monoxide 25 standard. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 As required by the Federal Clean Air Act, we also 2 propose to submit a maintenance plan that will ensure that 3 the ten areas continue to meet the Federal standard in the 4 future. 5 The maintenance plan relies on the motor vehicle 6 emission reductions to offset future growth. Emissions 7 forecasts show ARB program will continue to achieve 8 substantial carbon monoxide emission reductions in future 9 years. 10 As I indicated, this redesignation request 11 pertains to the Federal standard. As background, I should 12 point out that there are both State and Federal standards 13 based on eight-hour averages. 14 The Federal standard is set at nine parts per 15 million. The State CO standard is 9.0 parts per million. 16 Because of rounding conventions, that means that the State 17 standard is slightly more stringent. 18 There's also a separate standard -- State standard 19 for the Lake Tahoe Air Basin, which takes into account the 20 effects of exposure at high altitudes. 21 The health benefits of meeting the CO standard are 22 clear. The standard provides protection from acute adverse 23 health effects that occur at ambient exposures above the 24 standard. 25 Moderate exposures affect the respiratory and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 central nervous systems. A specific example is an increase 2 in the symptoms of heart disease. 3 There are ten areas that are eligible for 4 redesignation -- Bakersfield, Chico, Fresno, Lake Tahoe -- 5 North and South Shores -- Modesto, Sacramento, San Diego, 6 the San Francisco Bay Area, and Stockton. 7 Once U.S. EPA approves this redesignation request, 8 all of California, with the exception of the South Coast 9 Basin, will be designated as attainment for the Federal CO 10 standard. 11 Next, I will describe the Federal requirements 12 that must be met before U.S. EPA can redesignate an area to 13 attainment. 14 The legal requirements for redesignation are laid 15 out in the Federal Clean Air Act. First, air quality 16 monitoring data for each area must show attainment. 17 Second, each area must have an approved State 18 Implementation Plan, or SIP. 19 Third, air quality improvements must have been the 20 result of permanent and enforceable measures. 21 And, fourth, an area must have a maintenance plan. 22 Let me begin with the air quality monitoring data 23 to show -- that show attainment. The Federal test of 24 whether an area is attainment for carbon monoxide is two 25 consecutive years of monitoring data with no violations. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 The dotted line on this graph represents the 2 Federal standard. As this slide indicates, all ten areas 3 are below the Federal standard for this two-year period, 4 some by a large margin. The value used to make this 5 determination is called the design value. 6 Although it isn't required for the attainment 7 designation, we also looked at the air quality monitoring 8 data for an additional two years, the 1994 through '95 9 period. This data, shown as green bars, are either the same 10 as the bars for 1993 through '94, or lower for some areas 11 like Sacramento and Fresno, some by a considerable margin. 12 We also looked at the historical trends for three 13 areas with high concentrations. With this graph, it's easy 14 to see where we were ten years ago compared to where we are 15 today. 16 As a point of interest, I call your attention to 17 the design values for 1992 and '93. As you can see, that 18 period had one of the largest decreases of any two-year 19 period. That drop coincides with the implementation of 20 ARB's wintertime oxygenated gasoline program. 21 The redesignation requirement that I will discuss 22 is that areas have an approved SIP. This slide lists the 23 items that comprise an approved SIP for this purpose. All 24 have been submitted previously to U.S. EPA and are awaiting 25 approval. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 The first item is an emission inventory. A 1990 2 emission inventory was submitted to U.S. EPA as a SIP 3 revision on November 13th, 1992. As required, an update was 4 submitted in September, 1995. 5 The public hearings on these emission inventories 6 were deferred until now. Therefore, we are now asking the 7 Board to approve these inventories as part of the 8 redesignation request. 9 Other items include an oxygenated gasoline 10 regulation, an inspection and maintenance program, and new 11 source review rules. 12 There are several additional requirements for the 13 Fresno area due to its previously higher CO levels and 14 corresponding Federal classification. 15 The additional requirements are updates to the 16 attainment demonstration, VMT forecasts, and contingency 17 measures that were originally submitted in 1992. With the 18 submittal of this request to you U.S. EPA, we will ask for 19 their approval as SIP revisions. 20 Another Federal requirement for redesignation is 21 to demonstrate that the improvement in air quality is due to 22 permanent and enforceable emission reductions. The air 23 quality improvements must not have occurred as a direct 24 result of an economic downturn or favorable meteorology. 25 This slide shows some off the measures used to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 make this demonstration. These include Phase 1 reformulated 2 gasoline and wintertime oxygenated gasoline. One of the 3 largest single decreases in CO emissions came from the 4 wintertime oxygenated fuel program first implemented in the 5 winter of 1992-93. We attribute about a ten percent 6 reduction in CO levels in the 1992-93 winter season to this 7 measure. 8 Other measures providing permanent emission 9 reductions are the full complement of ARB's motor vehicle 10 emission standards, clean diesel fuel, and the Board's 11 aggressive low-emission vehicle and clean fuels program. 12 The final Federal requirement for redesignation is 13 for an area to demonstrate that it can maintain the CO 14 standard for at least ten years after redesignation. This 15 demonstration takes into account future growth in population 16 and vehicle travel. 17 We meet this requirement with reductions from the 18 motor vehicle measures included in the 1994 ozone SIP. 19 These measures provide CO as well as ozone benefits. 20 A maintenance plan must also have contingency 21 provisions in the event that violations of the standard 22 occur after the area is redesignated to attainment. 23 Typically, contingency measures are those held in 24 reserve and implemented only if violations of the standards 25 should occur. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 However, the Board's ongoing motor vehicle control 2 program offers the opportunity to offer as contingency 3 measures the adopted motor vehicle measures that will be 4 implemented for ozone purposes. 5 Therefore, we are not identifying any new 6 measures, but merely referencing measures already contained 7 in the State's ozone SIP. 8 We received several letters expressing concern 9 about the inclusion of Cleaner Burning Gasoline as one of 10 the contingency measures. 11 I will address that issue in greater detail later. 12 Another required element of the maintenance plan 13 is to have provisions for continued air monitoring in each 14 area to provide continuous verification of attainment. 15 Next, I will move on to discuss future trends for 16 CO emissions. This graph compares stationary versus mobile 17 source emissions for the ten areas for the years 1990 18 through 2010. As you can see, total emissions are expected 19 to drop by approximately 50 percent by 2010, despite a 20 slight increase in the contribution from stationary sources. 21 Clearly, these areas will remain in attainment 22 into the foreseeable future. 23 To assess the potential impact of continuing 24 increases in vehicle miles traveled, or VMT, we compared the 25 statewide motor vehicle emissions with projected VMT from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 1985 through 2010. 2 On this graph, the yellow bars in the foreground 3 show statewide motor vehicle emissions, and the area graph 4 in the background indicates the projected increase in VMT. 5 As you can see, motor vehicle emissions will 6 continue to decline well into the future, even with 7 increases in population and vehicle travel. 8 I would now like to summarize public comments. 9 The Western States Petroleum Association, or WSPA, and the 10 76 Products Company, which is an operating group of Unocal, 11 expressed a concern over the inclusion of the Cleaner 12 Burning Gasoline regulation in the maintenance plan and as a 13 contingency measure. 14 WSPA and Unocal are concerned that the Board could 15 lose its ability to revise the Cleaner Burning Gasoline 16 regulation without obtaining U.S. EPA approval. 17 WSPA and Unocal want the Board to retain maximum 18 flexibility to change the wintertime oxygen content portion 19 of the Cleaner Burning Gasoline regulation in the future if 20 it could be shown that it was not needed for continued 21 maintenance of the CO standard. 22 The commenters also indicated that in the event 23 reductions from oxygenated gasoline continue to be necessary 24 to maintain the CO standard, there are ways that the program 25 can be refined to ensure maximum flexibility and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 cost-effectiveness. 2 This could involve the use of a winter CO 3 predictive model, shortening the wintertime oxygen season, 4 or establishing requirements specific to certain areas. 5 Let me first say that there seems to be a 6 misconception regarding the status of the Cleaner Burning 7 Gasoline regulation. The regulation has already been 8 approved by the U.S. EPA. Any future changes would require 9 U.S. EPA approval, regardless of the Board's action today on 10 the CO maintenance plan. 11 In short, this is not an issue to be dealt with 12 today. At the same time, we agree that it is important to 13 explore the concepts suggested by the commenters. 14 Appropriate ARB staff will follow up on these 15 issues. 16 I would now like to quickly review other 17 correspondence that has been submitted for this item. We 18 received two letters supporting the Board's approval of the 19 redesignation request and maintenance plan -- one from the 20 Sacramento Air Quality Management District and another from 21 San Joaquin Valley Unified Air Pollution Control District. 22 In closing, the staff recommends the Board approve 23 this redesignation request, maintenance plan, and related CO 24 emission inventories. 25 This concludes my presentation. Thank you for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 your attention, and we'd be happy to answer any questions 2 you may have. 3 CHAIRMAN DUNLAP: Okay. Do the Board members have 4 any questions of staff? 5 All right. Then, what we'll do is we'll hop into 6 the witnesses that we have, unless Mr. Boyd has anything to 7 add. Jim? 8 MR. BOYD: No, thank you, Mr. Chairman. 9 CHAIRMAN DUNLAP: All right. We have two 10 witnesses that have signed up. Mike Kulakowski from WSPA, 11 who has provided written testimony to us, and Jerry Horn, 12 who is also from WSPA, but also Chevron Company. 13 Good morning. 14 MR. KULAKOWSKI: Good morning. Mr. Chairman, 15 members of the Board, my name is Mike Kulakowski. I'm a 16 technologist for Texaco's Refining and 17 Marketing/Environmental Health & Safety Division. And I'm 18 here today representing the Western State's Petroleum 19 Association. 20 Our association consists of over 30 members who 21 conduct the majority of crude oil producing, refining, and 22 gasoline -- 23 CHAIRMAN DUNLAP: They were all here yesterday. 24 We saw each one. 25 MR. KULAKOWSKI: So was I, yes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 (Laughter.) 2 CHAIRMAN DUNLAP: You know, you're the only one 3 they left behind. 4 MR. KULAKOWSKI: Actually, I went home and came 5 back. 6 CHAIRMAN DUNLAP: I see. 7 MR. KULAKOWSKI: Was actually chagrined to hear 8 that the hearing was starting at about the same time as my 9 flight arrived, so. . . 10 Petitioning for attainment for designation of the 11 CO standard is a significant success for California's quest 12 for clean air. The efforts of both the ARB and the 13 regulated industry need to recognized for this 14 accomplishment. 15 We note that since the State and Federal standards 16 for CO are nearly equivalent, it's likely that demonstration 17 of the attainment of the State CO standard will follow 18 shortly. 19 Regulations on our industry have contributed to 20 attainment of this standard. Recall that WSPA supported 21 ARB's original adoption of the wintertime oxygenated 22 gasoline program, and also supported the ARB in its request 23 for a waiver from the federally mandated 2.7 percent oxygen 24 minimum in wintertime gasoline. 25 As a part of its redesignation request, California PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 must submit a maintenance plan which demonstrates continued 2 attainment of the standard for at least 10 years. This plan 3 will include both contingency and control measures to assure 4 continued attainment. 5 Ten years is a long time. Consider how our world 6 has changed since 1986. Since no one will forecast what 7 will happen in ten years, it makes sense to include 8 flexibility in the maintenance plan. This will help 9 California keep control of its air quality program without 10 the need to gain approval for regulatory changes from the 11 Environmental Protection Agency. 12 Once this flexibility is included in the plan, it 13 makes sense for ARB to evaluate whether existing regulations 14 can be optimized or modified if the need for CO emissions 15 reductions are reduced. 16 An example is the oxygenate requirement for 17 Cleaner Burning Gasoline. It's likely that someday the 18 carbon monoxide reductions from oxygen in gasoline may not 19 be necessary to maintain the CO standard. In fact, that day 20 may be today. 21 Cleaner Burning Gasoline will provide incremental 22 carbon monoxide reductions over the prior oxygenated 23 gasoline program. If these reductions are taken into 24 account, there may be no need for the periodic oxygen 25 minimum in Cleaner Burning Gasoline. Elimination or PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 shortening of the periods in which oxygen is mandated will 2 allow refiners to exercise flexibility in the Cleaner 3 Burning Gasoline program to its maximum extent. 4 We respectfully make the following two requests: 5 that the staff assure that the plan includes language that 6 will allow ARB the flexibility to revise its winter oxygen 7 content without future EPA approval; second, that the Board 8 direct the staff to investigate the potential for rescinding 9 or optimizing the wintertime oxygen requirement in Cleaner 10 Burning Gasoline regulations. 11 We look forward to working with the staff on this 12 issue. And based on their presentation, they are interested 13 in doing the same. 14 That concludes my comments. Thank you. 15 CHAIRMAN DUNLAP: Thank you, Mr. Kulakowski. Can 16 I ask Mr. Scheible a question about the oxygenate matter 17 that was just raised. 18 What's your take on that? 19 MR. SCHEIBLE: Well, several issues. One is, the 20 complete Cleaner Burning Gasoline reg has already been 21 approved by EPA and is part of the SIP. It was submitted 22 under ozone, but all provisions of it are in effect. 23 We'll have to deal with EPA no matter we do today 24 because of that prior history. 25 CHAIRMAN DUNLAP: Right. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 MR. SCHEIBLE: Second, we care about the results, 2 not the method, per se. We have the oxygenate requirement, 3 quite frankly -- one, because it reduces CO; and, second, we 4 have to have an oxygenate requirement to meet Federal law. 5 We've got flexibility in attainment areas to go 6 and deal with that. So, if we can substitute a performance 7 result, a performance measure for a specification, we'd like 8 to do that. 9 CHAIRMAN DUNLAP: So, there is a possibility that 10 could occur? 11 MR. SCHEIBLE: Right. That was on our staff 12 agenda to start dealing with as soon as we successfully 13 launch Cleaner Burning Gasoline. The same people would be 14 working on it. And, obviously, we have a little bit more 15 work to do in that effort. 16 MR. BOYD: There is a quid pro quo here. 17 MR. SCHEIBLE: The last point is, when we look at 18 the CO readings, in several areas, we just barely make it. 19 CHAIRMAN DUNLAP: Which areas? 20 MR. SCHEIBLE: Like Sacramento and Fresno. 21 CHAIRMAN DUNLAP: How about San Diego? How are we 22 doing down there? 23 MR. SCHEIBLE: San Diego, there's a little bit 24 more of a margin. 25 SUPERVISOR ROBERTS: A significant margin. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 CHAIRMAN DUNLAP: Watch that. Watch San Diego. 2 MR. SCHEIBLE: The trouble is that the gas in San 3 Diego comes from L.A., where there is the negative margin. 4 CHAIRMAN DUNLAP: Right. 5 MR. SCHEIBLE: And it's hard to separate it out. 6 So, we would look at it. And it's quite likely, if the 7 programs we have in place work, we'll have enough margin so 8 that you won't need the explicit margin provided by the 9 oxygenate. 10 So, consumers would like it and refiners would 11 like it, it would save money; we'd just have to achieve the 12 air quality results. So, it sounds like something we ought 13 to pursue. 14 CHAIRMAN DUNLAP: Now, nationally, what's not been 15 said, there's a whole lot of inertia going with oxygenates 16 nationally. 17 Trend breakers, right, Jim? 18 MR. BOYD: I was going to point out -- well, 19 that's a good expression. We already have a long history of 20 being trend breakers, and everything the witness says is 21 certainly true. We don't disagree with the concepts, the 22 philosophy, the idea. We think a lot of the actions we've 23 taken in the past embody that approach. 24 We have been engaged in the uncomfortable, 25 sometimes even nasty, dialogue on this issue of oxygenates PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 and how much we've sought and obtained approval to have 2 different ratios than the Federal law requires. So, I think 3 they're good points, and I think the agency has shown that 4 it leans in this direction, and certainly has shown a desire 5 for performance standards rather than prescriptive 6 approaches. 7 CHAIRMAN DUNLAP: On the point about oxygenate, 8 though, Jim, I'd like to ask that you ready -- maybe in 60 9 days -- a little piece to the Board outlining -- obviously 10 continue to be confused about it, considering CBG, what's 11 been going on with Cleaner Burning Gasoline and with the 12 points he's making, because it's a vital component to not 13 just the seasonal gasoline but our new fuel. 14 So, Jim, if you could get a little piece out to 15 the Board members, including myself -- maybe a couple pages 16 outlining the debate clearly, and what you plan to do, I 17 think it would be certainly educational and of value. 18 MR. BOYD: That would be fine. 19 MS. EDGERTON: May I ask a question? 20 CHAIRMAN DUNLAP: Sure, Ms. Edgerton. 21 MS. EDGERTON: Is it correct that, with the 22 reformulated gas, that we won't need to have the oxygenates 23 in Southern California? 24 MR. BOYD: Well, no, in that -- I mean gas 25 involves oxygenates. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 MS. EDGERTON: It's already in there. 2 MR. BOYD: Right. 3 MS. EDGERTON: Okay. 4 MR. BOYD: What we tried to do is substitute our 5 gasoline for all the -- you know, the California Phase 2 6 gasoline be the acceptable all-around gasoline. We still 7 have some difficulties with EPA on the issue of a separate 8 gasoline for Los Angeles, and maybe now some parts of 9 Northern California vis-a-vis the California version. And 10 we've been working, frankly, with the oil industry and the 11 EPA to try to resolve that difference. 12 But we will still need oxygenates in our fuel to 13 deal with the CO issue. And we have substantial oxygenates 14 in the Cleaner Burning Gasoline. 15 MR. SCHEIBLE: In the noncarbon monoxide season, 16 our Cleaner Burning Gasoline rule allows in the predictive 17 model anything from zero percent to 2.7 percent oxygenates, 18 as long as you get the emission reductions. That's 19 constrained in Southern California at least and in 20 Sacramento in the summertime by the Federal requirement that 21 Congress put in that says you have to have a 2 percent 22 average oxygenate. 23 So, that needs to be debated at another level, the 24 necessity of having again a specification in the law as 25 opposed to an emissions reductions performance specification PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 that could be used in lieu of a specific criteria. 2 CHAIRMAN DUNLAP: Mr. Lagarias? 3 MR. LAGARIAS: I would encourage the staff to work 4 with the oil industry in trying to make sure that the CARB 5 gasoline is accepted in lieu of the Federal gasoline in the 6 South Coast. 7 I think it just complicates things. And this 8 might be a year that EPA maybe responsive to simplifying our 9 situation in California. 10 MR. SCHEIBLE: I think we've accomplished that for 11 most of the things where EPA has discretion under their 12 enabling legislation. There are one or two issues where the 13 Act is pretty explicit and EPA doesn't have a lot of 14 discretion. 15 MR. KULAKOWSKI: If I might add, we stood shoulder 16 to shoulder with staff on these issues. And we've had a 17 very cooperative and a very supportive relationship, Mr. 18 Lagarias. I hope that continues. I know that it will, 19 because we're all seeking the same goal. 20 MR. LAGARIAS: While I'm supportive of the oil 21 industry in this regard, I was very disappointed yesterday 22 in their performance. 23 CHAIRMAN DUNLAP: Mr. Kulakowski, do you have any 24 other comment you want to add? 25 MR. KULAKOWSKI: No, sir, except to say that we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 look forward to working with staff on these issues. 2 CHAIRMAN DUNLAP: Very good. Thank you. 3 Is Mr. Horn present? Mr. Horn, do you have 4 anything different to say? 5 MR. HORN: I just have two things different to 6 say. I'll just state for the record, my name is Jerry Horn. 7 I'm a fuels technologist with Chevron Products Company, and 8 I am here representing Chevron, since Mr. Kulakowski did 9 make it from the airport in time. 10 I'd like to add two things. One is, we've had our 11 technical folks use some ARB software where they predict 12 what's called the expected peak day concentrations of 13 ambient air pollutants. This uses historical data to look 14 out into the future. 15 We've looked at the various air basins on a very 16 preliminary basis here. And it looks, except as staff had 17 noted, that things are pretty good for everywhere, except 18 perhaps Sacramento and Fresno. 19 However, this relies on historical data to predict 20 the future. It does not take into effect (sic) the 21 incremental impact that you'll get from other aspects of 22 Cleaner Burning Gasoline, specifically the sulfur reduction, 23 nor does it really take into account the enhanced IM program 24 which is being implemented in the State. 25 CHAIRMAN DUNLAP: So, the results not oriented in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 this software are more modest than they otherwise would be. 2 MR. HORN: Well, they don't really account for the 3 future programs that are coming in. And we see, just based 4 on historical data, things are looking pretty good. 5 CHAIRMAN DUNLAP: Okay. 6 MR. HORN: Even for Sacramento and Fresno, they 7 may start looking good once these programs come into place. 8 CHAIRMAN DUNLAP: All right. 9 MR. HORN: The other point that I would like to 10 add is, with respect to wintertime oxygen requirements, the 11 trend's already been established, and it's set, and it is 12 going forward. There are a number of areas in the Eastern 13 U.S. that removed their winter oxygen requirement last year. 14 The State of Washington just submitted maintenance plans 15 which would remove the winter oxygen content requirement for 16 both the Seattle and Vancouver, Washington areas. And the 17 Portland area is considering similar action at this time. 18 CHAIRMAN DUNLAP: Okay. Very good. Any questions 19 of the witness? 20 Thank you. 21 MR. HORN: Thank you. All right. We've covered 22 the written comments. There doesn't seem to be anything 23 from staff. Since it isn't a regulatory item, we don't need 24 to close the record. 25 We have a resolution that's prepared for us that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 outlines the recommendations by staff. That's 96-13, and 2 after you get a chance to review it, I would entertain a 3 motion and a second to adopt the staff recommendation. 4 Supervisor Roberts. 5 SUPERVISOR ROBERTS: Mr. Chairman, I'd like to 6 move approval of the resolution that approves the staff 7 recommendation. 8 MAYOR HILLIGOSS: Second. 9 CHAIRMAN DUNLAP: Second by Mayor Hilligoss. Any 10 discussion? 11 All right. With that, I think we'll do a voice 12 vote. All those in favor, say aye? 13 (Ayes.) 14 CHAIRMAN DUNLAP: Any opposed? All right. The 15 motion passes unanimously. 16 Thank you. Staff, good job on the presentation. 17 Appreciate it. 18 Let's move to the fourth agenda item, which is 19 96-3-4, a public meeting to consider the approval of 20 guidelines for the generation of mobile source emission 21 reduction credits through the conversion of off-road diesel 22 cycle engines at or above 50 horsepower to low-emission 23 configurations. 24 This item is the consideration of additions to the 25 previously approved mobile source emission reduction credit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 guidelines. 2 In February of '93, the Board approved the first 3 guidelines for developing rules for generating emission 4 reduction credits based on mobile source emission 5 reductions. 6 Since then, the Board has approved additional 7 mobile source emission reduction credit guidelines to be 8 included in the original document. The guidelines being 9 presented for our consideration today are further additions 10 to the previously approved piece, and they address the first 11 off-road mobile source emission reduction credit program 12 that enables districts to develop such programs. 13 Mr. Cackette, it's good to see you. 14 MR. CACKETTE: I'm joining in on the most exciting 15 part of the Board meeting. 16 CHAIRMAN DUNLAP: And we thought wherever you 17 trod, controversy followed. But Mike Scheible has 18 surpassed even anything you've worked on lately. 19 Mr. Boyd, Mr. Cackette, will you introduce the 20 item, please. 21 MR. BOYD: Thank you. I'm afraid you'll notice 22 the coincidence that I'm here for all of them. 23 (Laughter.) 24 CHAIRMAN DUNLAP: That's right. 25 MR. BOYD: Maybe the black cloud is following me PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 around. Anyway, thank you, Mr. Chairman. 2 The guidelines that we are presenting today 3 identify additional -- I'd like to underscore "additional" 4 procedures that the Board would recommend to districts that 5 choose to implement a so-called mobile source emission 6 reduction credit program. 7 In developing these additional guidelines, we held 8 a workshop and had an open comment period for the interested 9 public. We considered all the comments received in the 10 formulation of these additions to the already existing 11 guidelines. 12 In particular, these guidelines address procedures 13 for generating credits through the conversion of off-road 14 diesel cycle engines to so-called low-emission 15 configurations. The guidelines are an extension of those 16 previously approved by the Board for the generation of 17 credits from on-road mobile sources as you may recall. 18 Specifically, these guidelines discuss hardware 19 certification, credit calculation, credit life, enforcement 20 procedures, and the types of engines that would be eligible. 21 As you know, such credits may be used to meet the 22 need for emission offsets for new and expanding commercial 23 and industrial facilities or, as we hope, to meet air 24 quality goals and regulations. 25 Adding these guidelines for low-emission off-road PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 diesel cycle engine credits to the mobile source emission 2 reduction credit guidelines will provide yet an additional 3 opportunity for industry to meet our air quality 4 requirements. 5 By using these guidelines to develop mobile source 6 credit rules, local districts will help ensure that their 7 rules are approved by the Air Resources Board. 8 Today's staff presentation will provide an 9 overview of the guidelines as we propose them. And with 10 that, I'd like to introduce Ms. Jackie Lourenco of the 11 Mobile Source Division, who's no stranger to you now, to 12 present the proposed guidelines. 13 Ms. Lourenco. 14 MS. LOURENCO: Thank you, Mr. Boyd. I'm going to 15 pass it on to Ms. Raida Abachi from the Off-Road Controls 16 Section staff. 17 MS. ABACHI: Thank you, Jackie. 18 Good morning, Chairman Dunlap and members of the 19 Board. You'll be hearing an abbreviated version of today's 20 presentation. 21 The proposed guidelines for the generation of 22 emission reduction credits through the conversion of off- 23 road diesel cycle engines at or above 50 horsepower are an 24 extension of the main guideline document entitled, "Mobile 25 Source Emission Reduction Credits," most recently approved PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 by the Board on October 26th, 1995. 2 Today's presentation will include a brief 3 background of mobile source credit programs, a discussion of 4 the main points, and then I'll conclude with a summary and 5 staff's recommendation. 6 Although there is no direct air quality benefit, 7 mobile source emission reduction credits offer industry the 8 flexibility to meet air quality goals by offsetting 9 increases. As long as there is no net emissions increase, 10 the primary criteria for generating credits for mobile 11 sources are that the deductions be surplus, real, and 12 quantifiable. 13 The proposed guidelines are a nonregulatory item 14 and, if approved, will be incorporated into the main 15 guideline document, "Mobile Source Emission Reduction 16 Credits" first approved by the Board at a February 18th, 17 1993, public meeting. 18 At that time, the Board approved credit programs 19 for accelerated vehicle retirement, low-emission urban 20 buses, and early zero-emission vehicle purchases. 21 Other programs that have since been added include 22 the on-road vehicle retrofit and new heavy-duty vehicle 23 guidelines. 24 So far, the Sacramento Metropolitan AQMD, Santa 25 Barbara APCD, and the South Coast AQMD have developed mobile PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 source credit programs. Credits are currently being 2 generated through car scrapping, cleaner buses, and ZEV 3 purchase, and by repowering commercial fishing vessels. 4 An off-road diesel cycle engine category comprises 5 off-road engines at or above 50 horsepower which are subject 6 to regulations adopted by the Board and the U.S. EPA. 7 The category includes engines used in 8 construction, farming, mining, forestry, and industrial 9 equipment. The guidelines are not meant to address other 10 off-road engine categories, such as engines used in marine 11 vessels, aircraft, and locomotives. 12 The proposed guidelines use the same basic 13 procedures for generating credits as the already approved 14 on-road guidelines. The magnitude of the emission 15 reductions should be calculated based on the difference 16 between the ceiling standard and the low-emission or credit 17 level. 18 The ceiling standard should be the most stringent 19 Federal, State, or local standard for the engine equipment 20 under consideration at the time of credit application. The 21 credit level should be based on the certification or 22 emission level of the replacement engine or conversion. 23 The credit level for an electric vehicle would, of 24 course, be zero. 25 The credit application is expected to demonstrate PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 the reduced emission standards of the conversion. This may 2 be accomplished with periodic inspections and regular 3 maintenance. It is incumbent on the district issuing the 4 credit to ensure this is done. 5 It's also important to note that participation in 6 the credit program is strictly voluntary. 7 Staff recommends that credits be limited to oxides 8 of nitrogen, or NOx, emissions, since NOx is the primary 9 pollutant of concern for the off-road diesel category. 10 However, nothing in the guidelines precludes the 11 districts from generating credits for other pollutants as 12 long as the credit generation criteria are met. 13 It's expected that most conversions will use 14 on-road certified engines and alternate fuel retrofits for 15 credit generation. Other methods include rebuilding 16 existing engines and the purchase of zero-emission engines 17 and equipment. 18 In summary, the off-road diesel credit guidelines 19 are the first off-road mobile source credit program and are 20 modeled after the on-road mobile source credit guidelines. 21 Issues raised during the workshop and the public 22 comment period were addressed in the proposed guidelines. 23 The proposed guidelines allow flexibility for 24 industry to meet air quality requirements and offer 25 guidance for districts in developing their own credit PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 programs. 2 Participation in the off-road mobile source credit 3 program is strictly voluntary. 4 Staff recommends the Board approve the addition to 5 the existing guidelines and direct staff to forward the 6 enhanced guidelines to the districts. 7 Thank you. And I'll be happy to answer any 8 questions. 9 SUPERVISOR RIORDAN: Board members, are there any 10 questions for the staff? 11 Mr. Cackette, do you have anything to add? 12 MR. CACKETTE: No. 13 CHAIRMAN DUNLAP: Nothing else to add, Tom? 14 SUPERVISOR RIORDAN: And there's no one wishing to 15 speak. 16 MR. CROSS: We have a letter. 17 MR. CACKETTE: We have, I guess, one letter here 18 to put into the record. 19 CHAIRMAN DUNLAP: All right. Please, Mr. Cross, 20 jump in anytime. 21 MR. CROSS: This letter is from Sacramento Air 22 Quality Management District. And we're -- it's a bit of a 23 surprise, actually; we just got it. 24 They have three issues which concern them. The 25 first is that they don't want the credit guidelines to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 implicitly have any link to the SIP in terms of how the 2 calculations of emissions benefits are done, because there 3 are constraints that are on emission benefit calculations in 4 the guidelines that the district doesn't want carried over 5 to SIP calculations. And that's okay with us. 6 The second issue is similar, but we disagree with, 7 and that is that the guidelines have a ceiling standard for 8 the uncontrolled engine, which is the upper bound of what 9 you can use to figure out how much credit you get. And the 10 district is asking that the emission inventory numbers, 11 which are substantially higher, be used than the ceiling 12 standard. And that's an issue that we've gone over in the 13 previous on-road guidelines. And there's a great deal of 14 uncertainty about what these, quote, "uncontrolled" engines 15 really meant. 16 And I think there's a substantial risk that we 17 would be giving away more emissions than we would get back 18 if we use the emission inventory numbers for a ceiling 19 standard. 20 Their third issue is that the guidelines -- they 21 want the guidelines to clearly state that the district is 22 not responsible for testing certified engines. In other 23 words, if someone chooses to take an on-road certified 24 engine and put it in an off-road piece of equipment, the 25 district doesn't want to be responsible for doing compliance PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 testing on that engine. 2 And that's okay with us, except we would want the 3 district to ensure that the engine isn't tampered or 4 otherwise modified. In other words, somehow the district 5 has to take responsibility for maintaining the engine 6 through its permit applicant for maintaining the engine in 7 its certified configuration. 8 And I might add that the district is very busy on 9 off-road credits issues right now, and the staff will be 10 happy to work with them further on these issues, following 11 whatever action the Board takes today. 12 CHAIRMAN DUNLAP: Okay. Very well. Thank you, 13 Mr. Cross. Well, we have before us the off-road diesel 14 cycle engine low-emission credit scheme to be added to the 15 "Mobile Source Credit Guidelines." 16 And I would entertain a motion that these 17 guidelines be forwarded to the districts; that they be 18 approved and added, and that they be forwarded to the 19 districts for use in developing rules and regulations 20 governing off-road mobile source emission reduction credit 21 programs. 22 MS. EDGERTON: I so move. 23 SUPERVISOR RIORDAN: I second it. 24 CHAIRMAN DUNLAP: All right. There's been a 25 motion and a second to approve the guidelines, as I've PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 stated, and forward them to the districts. 2 Any discussion? All right. Very well. Can we do 3 a voice vote again? I guess we can. All those in favor, 4 say aye? 5 (Ayes.) 6 CHAIRMAN DUNLAP: Any opposed? All right. 7 Unanimous. 8 Okay. The fifth agenda item, 96-3-5, public 9 meeting to consider a status report on the State 10 Implementation Plan. 11 What I would like to do, I think, Mr. Cackette, I 12 think I'd like to put these two items -- not to cause 13 turmoil, but there's a possibility that Mr. Silva might be 14 able to join us in a few moments. I'd like to hold the SIP 15 update till he arrives. 16 Mr. Boyd, are you flexible on this point? 17 MR. BOYD: Yes, sir. 18 CHAIRMAN DUNLAP: So, why don't we go to the sixth 19 item, 96-3-6. Mr. Cackette, are you ready for this item? 20 SUPERVISOR VAGIM: Which item would you like us to 21 go to, Mr. Chairman? 22 CHAIRMAN DUNLAP: Just the last one. Research 23 item. 24 SUPERVISOR VAGIM: Don't you need the crew in 25 here? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 CHAIRMAN DUNLAP: Yeah, but it's under Mr. 2 Cackette, so I'm going to ask if his team's ready. 3 Tom, can you handle the research item if we go to 4 that? 5 MR. CACKETTE: We can, depending on what your 6 questions are. We'll run and get John Holmes. It should be 7 pretty basic. 8 SUPERVISOR ROBERTS: Mr. Chairman, I just want to 9 let you know that I like the Forestry Service overhead 10 rates, and I'm ready to go. 11 CHAIRMAN DUNLAP: All right. Mr. Cackette, it 12 appears that you're going to get to go on this pretty quick. 13 We might not need Holmes. 14 SUPERVISOR RIORDAN: Actually, I was briefed, Mr. 15 Chairman, and I'd be willing move the entire package. 16 SUPERVISOR ROBERTS: I'd second that. 17 CHAIRMAN DUNLAP: All right. Any other discussion 18 that needs to occur? 19 MR. LAGARIAS: Yes. The second item, the study of 20 Cleaner Burning Gasoline, I think is a very important study 21 and should be accelerated to the extent feasible, even 22 though it calls for studies in the Caldecott Tunnel this 23 year and next, and we can't do much about that. But it 24 gives us the information on how well clean burning gasoline 25 is doing in the ambient air, which we are all very PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 interested in learning. 2 CHAIRMAN DUNLAP: Okay. 3 Well said, thank you. Well, then, the motion and 4 the second and discussion is centered around approval of 5 three resolutions supporting these research projects, 96-15, 6 96-16, 96-17. 7 With that, we'll do a voice vote. All those in 8 favor, say aye? 9 (Ayes.) 10 CHAIRMAN DUNLAP: Opposed? All right. Unanimous. 11 SUPERVISOR VAGIM: Mr. Chairman, a question to Mr. 12 Lagarias, who was on the Advisory Committee for the low- 13 emission fuel. We had talked about at one time a study was 14 going to happen on the performance. 15 And you, basically, asked for that. Is that going 16 on right now? 17 MR. LAGARIAS: When you say performance -- 18 SUPERVISOR VAGIM: Mileage performance? 19 MR. LAGARIAS: I'm going to have to defer. I 20 don't know. 21 CHAIRMAN DUNLAP: Let me stop for a moment. The 22 subject is CBG, Cleaner Burning Gasoline. There's an 23 informational request. Mr. Scheible? 24 Perhaps we can do it off mike. Get to Supervisor 25 Vagim, if you would, Mr. Scheible, and Mr. Lagarias about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 any mileage data relative to the new fuel, latest studies or 2 anything along those lines. 3 Okay. Then we'll go -- I had hoped Mr. Silva 4 would be here to hear this, but he has some pressing county 5 business he's dealing with at the hotel. But I'd like to go 6 to the last item, which was our fifth agenda item, and 7 encourage those audience who wish to comment to please see 8 the Board Secretary. 9 But it's a public meeting to consider a status 10 report on the State Implementation Plan. This is another in 11 our series of regular updates on the status of the State 12 Implementation Plan, or SIP, for ozone. 13 Since the last report to the Board, the U.S. EPA 14 its intent to approve the SIP, and we've made progress on 15 implementation as well. 16 In signing the proposed approval notice for the 17 State and local plans, U.S. EPA Region IX Administrator, 18 Felicia Marcus, called them, quote, "comprehensive 19 strategies designed by Californians for Californians," end 20 quote. 21 And, as we well know, this was the key factor in 22 developing a feasible, flexible plan that will achieve our 23 clean air goals while maintaining California's economic 24 viability. 25 I'm encouraged by the U.S. EPA's statements PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 regarding the need for national controls. Ms. Marcus 2 acknowledged that emission reductions from Federal sources 3 are important to attainment and committed to work with the 4 State to identify and implement solutions that make sense 5 for everyone. 6 The staff will provide further information on this 7 consultative process, as it's become known, as it develops. 8 The SIP provides a framework for our actions to reduce ozone 9 pollution over the next 15 years. I know you know this 10 well, because I wasn't on the Board at the time you 11 struggled with packaging this and getting it to the Federal 12 Government, but it's a very complete document. And the 13 signal from this EPA is certainly positive. 14 But it is a living document and subject to 15 revision as needed. U.S. EPA recognized this flexibility, 16 saying -- again, I quote, "As conditions change, we expect 17 that some of California's specific strategy may also shift, 18 but it is imperative that they continue to add up." 19 And I'm aware that it has taken a lot of activity 20 at the staff level to keep the SIP approval process moving. 21 I want to thank the staff today for their successful 22 efforts. And I mean this sincerely. I know that Ms. Terry 23 and Mike Scheible spent a lot of time on other high profile 24 issues to come before us. 25 But they are keeping the plan train moving down PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 the tracks, and they certainly don't get enough credit, 2 except when we have to go through this stretch run drill 3 like we expect as we develop a SIP document, and which we'll 4 be going through shortly for particulate matter. 5 So, with that, Mr. Boyd, introduce your team, and 6 we'll move on this item. 7 MR. BOYD: Thank you, Mr. Chairman. And let me 8 just add -- I appreciate your comments about the staff team, 9 and let me thank also Mike Scheible, Mike Kenny and staff, 10 and Lynne Terry, particularly on her staff. There's so much 11 that goes on below the scene on this it's hard to 12 comprehend. The shuttle diplomacy in this thing has been 13 significant. I am so tired of driving to San Francisco, 14 that I can't tell you. 15 And I have to thank a couple of people in EPA. 16 I'm pleased that California somehow or other manages to 17 still have a reasonably significant impact on U.S. EPA, in 18 spite of itself sometimes. And I have to point that Dave 19 Howekamp in Region IX almost alone has helped significantly, 20 almost in defiance of his own staff, I hate to say, 21 sometimes, and the Air Administrator, Mary Nichols, has been 22 the recipient of a host of phone calls and appeals for some 23 sense on some occasions, and has stepped in and helped us 24 with getting down this long path to find -- having EPA say 25 they will approve the California SIP without totally PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 encumbering with so many chains and anchors that it would 2 have sunk of additional requirements. 3 So, I think we are all grateful and appreciative, 4 and very hopeful that we'll thus be able to move on with 5 this plan. As you know, it was the first in the nation to 6 address these issues of serious and severe ozone, and it 7 does appear we now will be the first to receive this Federal 8 approval, and this reflects on all the stakeholders, not 9 only your staff but the folks at the local level, and the 10 industry people with whom we slugged out a lot of this, but 11 who, you know, once having a plan, hard working with us to 12 try to implement it. 13 We've received their notice of approval, EPA's, 14 and we're in the process of drafting -- doing an analysis 15 and drafting formal comments to iron out a few last details. 16 We find it's always wise to read the fine print. And 17 wouldn't you know it, we found a few things in the fine 18 print. 19 But I have no concern that we won't work these 20 out. Also, this is another one, but it's beginning to get 21 more significant. I promised you we would have progress 22 against plan discussions with the Board on the SIP, more 23 than you'd ever seen before, because, as the Chairman 24 indicated, it is a dynamic document. We told the public it 25 was dynamic. It's changeable. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 And by the same token, as Mr. Lagarias can 2 painfully remember, we don't want to get sued, or be 3 involved in any suits that say we didn't change the plan to 4 reflect current status of things, thus, you're in violation 5 of this, that, and the other. So, we will be keeping it up 6 to date, current, and on target always. 7 And it also is our strategic plan for many years 8 into the future and has to be viable. We've just this past 9 week, the staff -- I was unable to go, because of the fuel 10 issue -- met with our counterparts for Region IX, 11 representatives of the South Coast District, and 12 environmental groups to begin defining the process that is 13 related to the issue of the Federal measures and the Federal 14 controls that we included in the SIP, which, as you know, 15 was very unique and difficult for EPA to deal with. 16 It did seem as though we were dictating to the 17 U.S. EPA what they had to do. While we weren't dictating, 18 we were indicating. Nonetheless, it is very hard for them 19 to receive delegation upward or commands upward from a 20 State, and they had a difficult time dealing with how to 21 handle that. 22 But we have agreed upon a consultative process, 23 which you'll hear more about thanks to the foresight of the 24 Air Administrator, and we have begun that process. 25 So, I've asked the staff to update you on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 specifics of the approval and highlight some of the 2 activities occurring. 3 And with that, I'll call upon Cynthia Marvin, who 4 you have seen before, from the Office of Air Quality and 5 Transportation Planning to provide the presentation. 6 If you would, Ms. Marvin. 7 MS. TERRY: I'll surprise you, Jim. Cynthia 8 couldn't be with us today. 9 CHAIRMAN DUNLAP: That's two strikes. 10 MR. BOYD: She was here last night. 11 MS. TERRY: She was here last night. 12 It's a pleasure to be here to speak to this issue 13 of the proposed approval of the SIP. To be quite honest, I 14 hoped it would have been a year ago. But we're now to that 15 point. So, I'd like to begin with just a very brief update 16 on the proposed approval itself. 17 The last time we had an update on the SIP for the 18 Board, EPA had approved or proposed approval on several 19 specific individual SIP measures, but not the SIP in its 20 entirety. 21 On March 4th of this year, EPA proposed approval 22 of the 1994 ozone SIP as part of the action, as Jim 23 mentioned, the critical element which we hoped to see was 24 there. The agency committed to develop national standards 25 for some types of Federal sources and to define the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 consultative process to work out solutions for the remaining 2 sources that we identified in the SIP as being critical to 3 our attainment demonstration. 4 The consultative process, as proposed, would be 5 completed in mid-1997. It would involve U.S. EPA, ARB, 6 South Coast District, and other stakeholders. 7 U.S. EPA published its official Federal Register 8 notice on March 18th, and will be accepted public comments 9 through May 2nd. And we expect a final approval from the 10 U.S. EPA sometime this summer. 11 The proposed approval covers all the key elements, 12 the first being all of the attainment demonstrations. This 13 includes the modeling, the inventories for the SIP, six SIP 14 areas -- South Coast, South East Desert, Venture, 15 Sacramento, San Joaquin Valley, San Diego, as well as the 16 moderate area plan for Santa Barbara. 17 The rate of progress plans for all areas, except 18 Sacramento and South East Desert, will be dealt with 19 separately. But most of those plans were proposed for 20 approval as well. 21 All of the State and local commitments for new 22 measures were proposed for approval. That includes 23 scrappage and pesticides. And, in addition, all the 24 improvements to Smog Check were proposed for approval. As 25 part of the national highway bill, at the end of an 18-month PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 demonstration period, we will need to confirm that the Smog 2 Check program is achieving the reductions we claimed in the 3 SIP. 4 There are no major issues raised in the proposed 5 approval. We are clarifying many, many technical aspects of 6 the SIP, the multiple numbers, and commitments -- want to be 7 sure are accurate, and are providing those kinds of details 8 to EPA staff. 9 In terms of issues, however, there are no major 10 problems. EPA has asked for two follow-up items. One is 11 related to the South Coast rulemaking schedule, and the 12 second relates to our participation in the consultative 13 process. 14 And they have asked for these two items before 15 they will proceed with final approval on the South Coast 16 attainment demonstration. We expect to provide both of 17 these items very shortly. 18 South Coast did revise their rule adoption 19 schedule in March. And, as soon as we receive that, we will 20 formally submit it to U.S. EPA. 21 The district was somewhat behind on their 22 rulemaking schedule due to the resources spent on the VOC 23 RECLAIM program. But they have -- the board has already 24 adopted an ambitious rulemaking schedule for this year and 25 many new measures will be considered in the next few months. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 The second item related to ARB's commitment to 2 participate with other stakeholders in the consultative 3 process and is an item easily delivered. This commitment 4 falls within the Board's direction to the Executive Officer 5 in the 1994 resolution on the SIP, which directed staff to 6 continue to work with the EPA on the needed Federal measures 7 until they're developed, adopted, and implemented. 8 In parallel with our efforts to secure final 9 approval of the SIP, we continue to make progress on SIP 10 implementation. Today, I'll just briefly touch on some of 11 the accomplishments in 1995, 1996, and some of the items 12 that will be before the Board in the short term. 13 As Mr. Boyd mentioned, we'll be back often to 14 talk about progress against plan and future SIP related 15 activities. 16 There were many activities in 1995 in support of 17 the SIP. On the mobile source side, the Board accelerated 18 low-emission standards for medium- and heavy-duty vehicles; 19 to support the SIP's incentives for clean trucks, the Board 20 adopted optional standards for certifying new or retrofit 21 truck engines, and expended mobile source credit guidelines 22 to include heavy-duty engines. 23 The Bureau of Automotive Repair finalized 24 regulations for improved Smog Check. BAR also began 25 operating a pilot testing station in Sacramento and placed PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 remote sensing devices around the State. 2 1996 legislation, SB 501, authorized a statewide 3 vehicle scrappage program to work in concert with the scrap 4 component of the Smog Check program. 5 On the national scene, as you're all aware, a 6 statement of principles was signed with ARB, U.S. EPA, with 7 engine manufacturer participation, that commits to 8 development of a tighter national emissions standard for 9 heavy-duty trucks, effective in 2004. 10 U.S. EPA also proposed a national marine standard 11 that would reduce emissions from pleasure craft and captive 12 fleet vessels, like harbor tugs and ferries. 13 Continuing the 1995 accomplishments, the Board 14 adopted the aerosol paints SIP measure, and made revisions 15 to offer more flexibility in the existing consumer product 16 regulations last year. 17 The Board approved the first alternative control 18 plan for consumer products, along with 11 applications for 19 innovative products, and there are more in the pipeline. 20 The Department of Pesticide Regulation completed 21 its pesticide data call-in program, which provided 22 information on the VOC content of about 2,000 pesticides. 23 Although its early in 1996, there are several 24 accomplishments already providing additional emission 25 reductions counted in the SIP. I don't need to add anything PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 about Cleaner Burning Gasoline. So, I'll move on to low- 2 emission vehicle standards, manufacturers' track in meeting 3 the early fleet average standards in the program. About 4 one-quarter of these vehicles today meet the Board's 5 transitional or low-emission standards. 6 Other standards being implemented include those 7 for buses, off-road equipment, consumer products, and 8 aerosol paints as I mentioned. 9 Next, I'd like to identify any programs that the 10 staff is expected to bring before you in 1996 to fulfill 11 their support of the SIP commitments. 12 You just approved off-road credit guidelines. 13 I'll move on to the next item. A credit methodology for 14 local emission reduction trading programs. That's a key 15 element, particularly in the South Coast, as they move ahead 16 with their rulemaking schedule. A marketable credit trading 17 program is being developed in parallel to ensure maximum 18 compliance flexibility in meeting these new SIP 19 requirements. 20 The Board has also got several research projects, 21 new proposals in supporting the SIP. For example, relating 22 to los-Nox engines and others looking at reactivity factors 23 for consumer products. 24 Later this year, staff will present a report on 25 manufacturers' progress in meeting '97 and '98 consumer PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 product standards, along with any recommended changes. 2 There are quite a number of other activities 3 occurring this year to develop the rest of the midterm SIP 4 commitments which are due in 1997. 5 To highlight other 1996 activities -- the vehicle 6 scrappage program, a lot of work is going on there. The 7 first workshop was held in March, and the next workshop is 8 planned for June. 9 There's a technical advisory committee that's 10 chaired by Board Member Calhoun with the auto manufacturers, 11 mechanics, and dismantlers, as well as representatives from 12 the oil industry, environmental groups, local government. 13 Incentive script for clean trucks, a key program, 14 particularly in the Sacramento region. We're working on a 15 program to get cleaner trucks on the road in California in 16 advance of the national requirement anticipated in 2004. 17 ARB staff are continuing to work with the 18 California Trucking Association and others in the ad hoc 19 working group to fulfill their SIP commitment. 20 The Bureau of Automotive Repair will continue 21 operating its prototype Smog Check testing facility in 22 Sacramento to iron out bugs in the new program before it's 23 phased in elsewhere in the State. Major staff activity is 24 involved in the midterm measures to consumer products due in 25 1997. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 Over a hundred people are participating in the 2 consumer products working group, has met several times. A 3 subgroup is considering exploring reactivity. ARB staff 4 held the first workshop on midterm measures earlier this 5 month. 6 ARB staff are also working behind the scenes to 7 ensure U.S. EPA's expected '96 proposals for national 8 standards for trucks and locomotives will meet California's 9 SIP needs. 10 Our other national priority this year is to 11 develop a follow-up agreement on the off-road -- with the 12 off-road engine manufacturers and U.S. EPA that would 13 parallel the statement of principles developed for on-road 14 trucks last year. 15 We're making considerable progress at the State 16 level in implementing -- in SIP implementation and the news 17 on the Federal front is encouraging. 18 With that, I'd like to briefly turn to the status 19 of local SIP efforts. I'll just highlight efforts in the 20 major SIP regions. 21 I'll begin with South Coast. As I mentioned 22 earlier, the district has updated its SIP rule schedule, and 23 that will be provided to ensure full approval of the South 24 Coast attainment demonstration. As I also mentioned, in 25 parallel with this rule development is a development of a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 market program to provide compliance flexibility. 2 The district is pursuing specific stationary rules 3 and supporting mobile area source credit programs. 4 Another major planning activity in the South 5 Coast, as our Chair mentioned, is PM10. The district is 6 revising its air quality management plan to meet the 7 February, '97 PM10 Federal requirement, and will be revising 8 the ozone portion of the plan at the same time. 9 Moving on to San Joaquin Valley, the Valley 10 District has several things under development, including 11 some draft rules that are being circulated for review. 12 Seven new measures are scheduled for board consideration 13 this year. 14 The district recently initiated its Spare the Air 15 program modeled after the Bay Area's, which encourages 16 voluntary reductions in driving and industrial activity when 17 poor air quality is forecast. 18 In addition, the district continues to implement 19 its REMOVE program. This program is funded by motor vehicle 20 registration fees and includes a broad array of strategies 21 to reduce transportation related emissions, vehicle 22 scrappage, alternative fuel conversions, and so on are 23 examples. 24 In the Sacramento region, there are several 25 districts that had many rules to be adopted and commitments PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 in the SIP. The smaller districts in the region have 2 adopted -- making some progress and, in total, over half the 3 region's rules have been adopted. 4 Uniformity is a continuing challenge, and the 5 districts are working closely to ensure uniformity in the 6 rules. 7 The Sacramento District is lagging somewhat in 8 activity and, as a result, now plans to adopt 10 rules this 9 year to catch up. 10 As we've mentioned many times, the critical 11 measure in the Sacramento region is the joint State and 12 local incentive program to accelerate low-NOx technologies 13 in trucks and off-road equipment. 14 ARB staff's working very closely with the district 15 on that program. The district itself, as part of its 16 efforts, has recently signed an agreement with the United 17 Parcel Service to provide incentives for retrofit of about 18 100 delivery vans to natural gas. 19 Moving on to Venture, a minor update to their 20 schedule in 1995, the district is on track to meet its SIP 21 commitments to rulemaking. The district has already adopted 22 six measures, which is about a third of the total needed. 23 Refined modeling confirmed the attainment in 24 Venture with the SIP strategies. This was a follow-up 25 activity after the SIP was submitted. The modeling was done PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 to take a look at the issue of impact of offshore emissions 2 from shipping lanes, because that was a measure in the SIP 3 with the refined modeling. It turns out that that measure 4 is not needed, and that additional modeling documentation 5 has been provided to EPA and is taken into account in their 6 proposed approval. 7 That covers the status of the local efforts to 8 implement the SIP. Districts are working hard, as are ARB 9 staff, to move ahead with their responsibilities. 10 To conclude, I simply would like to say that the 11 proposed approval established the California SIP is our 12 roadmap for clean air, and a key point is that U.S. EPA has 13 acknowledged its responsibility and authority to regulate 14 Federal sources. 15 Thank you. 16 CHAIRMAN DUNLAP: Thank you, Ms. Terry. Any 17 questions of the staff? 18 MS. EDGERTON: I have one. First, I'd like to 19 tell you that I thank you for the perspicuity of your 20 presentation. 21 CHAIRMAN DUNLAP: It's her word a day, using a new 22 word a day. 23 Are you going to define it for us? Or are you 24 going to let us guess? 25 MS. EDGERTON: You're not supposed to tell people PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 I do that. Anyway, perspicuity, the quality of being 2 perspicuitous, clearness and lucidity. Thank you for the 3 lucidity and clearness of your report. 4 MS. TERRY: You're quite welcome. 5 MS. EDGERTON: So, let's try to be as 6 perspicuitous as we can. 7 Have you heard whether the -- I keep hearing that 8 there's rumblings of litigation against U.S. EPA for 9 approving our SIP. Is there any information that you can 10 provide on that? 11 MS. TERRY: Just my observations as a result of 12 our meeting last week. We had a very productive meeting 13 with South Coast, ARB, U.S. EPA, and environmental groups. 14 And tom did a wonderful job of explaining our mobile source 15 program. And the environmentalists were quite enlightened 16 and really became aware of the firmness of our commitments 17 in many respects, and that there are many well-defined 18 measures in our SIP. 19 I think that has been a concern with the 20 environmental community, and that's maybe part of the 21 context of the rumors and rumblings about litigation. 22 So, from my personal standpoint, we -- I think we 23 were successful in getting them to rethink that issue. And 24 we have further committed to spend time with them in a 25 detailed way to go through the SIP details, the commitments, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 and so on. And so I have committed to go and take another 2 trip down there, and go through the details of the SIP with 3 them. And I'm hopeful that that will make them more 4 informed about the substance of the SIP. 5 And do you want to add to that? 6 MR. BOYD: Well, just let me make a comment of the 7 continuing education one always gets of the value of 8 education and communication. People with whom you work at 9 arm's length maybe and not on a constant basis, and who you 10 think are intimately familiar with and involved in details 11 of compliance, sometimes you discover don't know all the 12 particulars until you have an opportunity to do a close-talk 13 about it. 14 And, as we've learned historically about people's 15 knowledge of things, it sometimes isn't there when you 16 assume it is. 17 And so, again, as Lynn said, upon learning the 18 intensity and depth of detail of some of the plan, perhaps 19 we've reached yet another plateau of understanding and maybe 20 that will bear some fruit. 21 I'd like Tom or Mike Kenny to elaborate a little 22 bit. 23 CHAIRMAN DUNLAP: Go ahead, Mr. Cackette. 24 MR. CACKETTE: I think just one comment. Since we 25 approved the SIP, there's been a lot of discussion about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 whether it would be approvable. There's been a lot of 2 viewpoints about whether EPA would honor their obligations, 3 whether it was acceptable from a policy standpoint for the 4 State to tell them what needs to be done, where they have 5 specific responsibilities for reducing emissions. 6 There's been a lot of sort of procedural, legal, 7 SIP approval uncertainty going on, which has fortunately now 8 come to the point where there's -- it's quite certain that 9 we'll have the program approved. 10 I think what many parties, including some of the 11 environmentalists, missed was that underlying all that is 12 that the technical and regulatory staff were not sitting 13 around worrying about whether or not things get approved or 14 not, and both at EPA and ARB, you know, it was full-steam 15 ahead to implements many these measures. 16 So, while there was, for example, uncertainty 17 about the legality of EPA accepting an assignment by the Air 18 Resources Board to do certain regulatory activities, their 19 technical staff was blazing away. They've been completely 20 cooperative, and collaborative with us. You saw the SOP for 21 the -- the statement of principles for the on-road truck 22 national rule, which I think is an example of that. 23 Of course, this Board's moved ahead with the M3 24 measure, and getting legislation for the scrap program, and 25 so forth, and so on. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 So, I think the environmentalists perhaps got a 2 different perspective and a new perspective that we are 3 totally committed to implementing the elements of the SIP, 4 and you know, there was a lot of concern about shortfalls. 5 But I think we -- at least I tried to convince 6 them that, you know, we're serious about getting the tons 7 per each measure. And while we may fall short in one 8 measure or another, we're going to make it up somewhere 9 else. We understand that the numbers have to balance out in 10 the end. And EPA does as well for their responsibilities. 11 MR. LAGARIAS: Mr. Chairman? 12 CHAIRMAN DUNLAP: Mr. Lagarias. 13 MR. LAGARIAS: I'd like to reassure Ms. Edgerton 14 that history shows us that regardless of what we do, there 15 will be lawsuits, that lawyers will not have nothing to do. 16 We can expect a lot of litigation regardless. 17 MS. EDGERTON: Thank you for the reality test. 18 The national standards I assume are being adopted 19 or accepted for all the States and all their plans? 20 (Thereupon, two speakers spoke simultaneously.) 21 MS. EDGERTON: That the U.S. EPA going along with 22 us? One of the stumbling blocks was that they didn't want 23 to set the precedent. Everyone took in breath. I guess 24 that's not solved. 25 MR. KENNY: II may be able to help here a little PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 bit. And, essentially, with regard to the assignment that 2 was made to the Federal Government, EPA hasn't yet quite 3 acknowledged that assignment. 4 What they are doing basically is engaging in this 5 consultative process in the hope, basically, that the 6 consultative process will arrive at a solution in which 7 basically all the parties agree that the emission reductions 8 associated with particular sources are appropriate for the 9 SIP. So, that's still an ongoing discussion. 10 MR. CACKETTE: That's the point I want to clarify. 11 While that policy and SIP approval uncertainty is there, 12 they have made implementing, for example, the heavy-duty on- 13 and off-road rules, which we assigned to them, as one of the 14 two or three highest priorities of the Office of Air at EPA. 15 And so, there are literally dozens of people 16 working on it, negotiations going on, and rulemaking is 17 being prepared. 18 So, there's these two levels of activity. And 19 it's much firmer and much more positive and progressive on 20 the actual technical level of getting these rules in place. 21 They're committed to doing them from what I can see. 22 MR. BOYD: Well, let me reinforce what was said 23 earlier, that people aren't sitting around waiting for 24 resolution on some of these issues. We've all had too much 25 experience with that. And we're traveling parallel tracks. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 We need an approved SIP, not only symbolically, but legally. 2 And we have moved down that path. It's not been easy. The 3 initial reaction, of course, was instant rejection, because 4 of the terrible precedent of assigning things to the U.S. 5 EPA, but we were able to reason with them and frankly show 6 them the way of saving face, if I might add, and 7 establishing a process whereby we can continue to negotiate 8 and resolve the issues. 9 This has allowed them to proceed down the path of 10 approval, while allowing work to progress. And I do need to 11 point out that Mr. Cackette has done a marvelous job first 12 on the on-road and now these indications show diplomacy with 13 regard to the off-road standards issue in working with EPA 14 to provide a national program. And we say, at the staff 15 level, things have been moving very, very well. 16 It's been kind of a new era of working together 17 again at the staff level to solve technical problems. And 18 it's been the policy that at the highest level people 19 understand the need to approve the SIP. 20 CHAIRMAN DUNLAP: Ms. Terry, there is no higher 21 priority program that we have than the smooth 22 implementation, in our view, of the SIP for ozone. 23 MS. EDGERTON: Well, I wanted to say -- excuse me. 24 CHAIRMAN DUNLAP: I was just going to say, just to 25 continue to monitor. I know you're doing that. And make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 sure that we don't get any glitches. 2 I am certainly surprised that how smooth the 3 working relationship has gone relative to them taking on the 4 assignment, Tom, of what -- 20 percent of our California SIP 5 on the Federal shoulders. 6 So, continue to work with them. And you know how 7 the administration feels, obviously, about calling the U.S. 8 EPA's Administrator on anything that you feel is short of 9 the best work or most comprehensive review. 10 So, carry on. It sounds good. 11 MS. EDGERTON: Well, I think it's a compliment. I 12 just wanted to say I think it's a compliment to the 13 tremendous of you there, plus everyone else who's supporting 14 you. I think it's a tremendous compliment to the extent 15 with which your work is regarded in the nation that the 16 administration has moved in the direction that they have. 17 And I compliment you on that. And I'm grateful for it. 18 I wanted to ask one more question about the 19 particulate SIP. Well, I wanted to ask ticking clocks. Are 20 there any ticking clocks? 21 MS. TERRY: That's an easy one. No ticking 22 clocks. 23 MS. EDGERTON: Okay. No ticking clocks. Okay. 24 Because, when I came on the Board, there were ticking 25 clocks. That is one of my obsessions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 MR. SCHEIBLE: We've beat the clocks almost 2 incessantly. And finally, they're all off without ever 3 going "binggg." 4 MS. EDGERTON: I always check the clocks. 5 In the particulate draft, and that whole ozone 6 SIP, now what months should we block off in our calendars 7 for that if that's coming up next here; is that right? 8 MR. BOYD: This a different. We've been talking 9 about the ozone SIP. Yes, you're correct. There is 10 another, yet another activity underway that some -- 11 CHAIRMAN DUNLAP: Can I preclude the oral 12 interplay on that point? 13 Could we get a written schedule up to the Board in 14 the next week or so, so that we can physically hold it and 15 we could block off some parts of our calendars for hearings 16 and what not? 17 But we have to deliver the SIP to U.S. EPA what 18 month next year? 19 MS. TERRY: February. 20 CHAIRMAN DUNLAP: February. 21 MS. EDGERTON: That's less than a year. Thank you 22 for your perspicuity on that, John. 23 CHAIRMAN DUNLAP: Supervisor Vagim. 24 SUPERVISOR VAGIM: Thank you. We talked about it 25 jokingly just a few minutes ago. I want to ask how much is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 the Title 5 discussion involved in the SIP? 2 MR. BOYD: Well, I guess they're joined at the hip 3 in some sense of the word, but this issue really is 4 traveling yet another parallel path. 5 Implementing Title 5 has been the issue, and it 6 really hasn't -- and correct me if I am wrong here -- but it 7 really hasn't been an issue on whether or not we get SIP 8 approval. It's been an issue of whether or not we can agree 9 on a proper way to implement this regulatory provision of 10 the law. 11 And you've probably heard about the White Papers, 12 White Paper 1, White Paper 2, and what have you. And 13 they're heralded nationally, and I find it interesting to 14 read in the media about who is responsible for these White 15 Papers. 16 My gosh, you'd think the truckers association did 17 it all by themselves sometimes. However, your staff has 18 been instrumental in causing this task force to take place. 19 And it's a long tortuous history -- two and a half years 20 ago, we went to EPA with industry and local districts and 21 said, you know, we'd like to negotiate a better way to do 22 this for California while still meeting the law. And we'll 23 make some changes in California law to comply. 24 We don't want total equivalency, but we want to 25 tweak it and get on with it. Well, nothing happened. I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 mean, things happened, but we made no progress. And so, 2 frankly, I went to the Administrator of EPA a better part of 3 a year ago, and said, "We've got to get this solved or it's 4 going to blow up on everyone, and I ask you to dedicate Dave 5 Howekamp to chair a working group to resolve this issue." 6 And the working group, which Peter Venturini's 7 staff has been instrumental in, but other -- they have 8 really generated with the Federal EPA people -- they've 9 basically been the genesis of the White Papers that are 10 helping solve this issue nationally with its -- we see a 11 light at the end of the tunnel. It's going to be 12 successful. 13 It should never have taken this number of years, 14 but that's life. And I think we see Title 5 being resolved. 15 And, as I've said for almost two years, we don't want to go 16 through this torture on Title 3. And we've been trying to 17 figure out some way to speed that up. 18 And Mr. Scheible can clarify for me the ties to 19 the SIP, but like I say, joined at the hip, but not totally 20 dependent on each other. 21 SUPERVISOR VAGIM: Well, Mr. Chairman, I remember 22 when we were visiting with the folks at EPA and the Air 23 Administrator, Mary Nichols, if I remember correctly, was 24 not quite aware of all the impediments that we had before 25 us. And I think we had a very fruitful meeting when the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 Governor's staff joined us with industry and enlightened 2 them to the problems, and also to the fact that California, 3 where it was, head and shoulders above everyone else, and 4 they needed to meet us halfway. 5 I hope we are making progress on that and not just 6 delaying it through a series of task force meetings. 7 MR. BOYD: You're exactly correct. It was 8 virtually a year ago this month that we had that meeting in 9 Washington and that provided the impetus and the ability to 10 further discuss with Ms. Nichols the need to do something 11 better and different. And she wasn't aware of how painfully 12 slow things had moved, and that how progress wasn't being 13 made, and how volatile the issue had become. 14 So, even though we have to go through this task 15 force process, it -- they have stayed the course. They have 16 been persistent in working with everyone on it. And I think 17 that was the genesis of getting the problem finally solved. 18 SUPERVISOR VAGIM: Thank you. 19 CHAIRMAN DUNLAP: Okay. Any other questions or 20 comments from the Board or staff on this item? 21 All right. Very good. Mr. Boyd, we don't have 22 any other business to take up today? 23 MR. BOYD: No, sir, that exhausts the agenda. 24 CHAIRMAN DUNLAP: All right. Very good. This 25 meeting of -- oh, Mr. Roberts, did I cut you off? I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 apologize. 2 SUPERVISOR ROBERTS: Can I make one quick comment? 3 Yesterday, the revelation that, at our expense, those in 4 this meeting were receiving an inordinate number of traffic 5 tickets because of street cleaning. Is there a way to talk 6 to the city to work out a plan where, if we're going to have 7 our meetings on Thursday, they could, you know, switch their 8 street cleaning day? 9 CHAIRMAN DUNLAP: Was that realized yesterday, 10 Jim? 11 MR. BOYD: Well, we don't do that in this town, I 12 don't think. But if you're talking about the fact that all 13 the parking meters out front were bagged, it was done by the 14 security people. 15 MR. SCHEIBLE: In the neighborhood on Monday 16 through Thursday, there is an A.M. prohibition on parking on 17 one quarter of the streets, and Friday's the free day where 18 they don't have that for street cleaning. 19 We can see whether we can do something with the 20 city. I'm not going to guarantee it. 21 SUPERVISOR ROBERTS: The explanation given was 22 that Thursday was a street cleaning day in this specific 23 area. 24 MR. SCHEIBLE: No, Thursday is one quarter of the 25 parking on the street. It rotates what side of the street, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 and whether it's a north/south or an east/west street. In 2 the A.M., if you park there, chances of getting a ticket are 3 excellent. 4 SUPERVISOR RIORDAN: Was it posted? 5 MR. SCHEIBLE: Yes, it is clearly posted on signs. 6 SUPERVISOR ROBERTS: My comment would remain. 7 Having recently got a ticket for a street cleaning posted 8 sign, which aren't too readily apparent when you pull up. 9 But the fact of the matter is that we're dependent on these 10 spaces -- and if there was any truth to that number that we 11 heard, that that person had counted 75 tickets given in this 12 immediate area, it seems to me that's too big a thing to 13 just sort of take in stride as part of our normal operation. 14 MR. BOYD: I'm sorry. I must have missed that 15 comment yesterday. We will look into it. 16 CHAIRMAN DUNLAP: I think Mr. Boyd and I have a 17 meeting with Mayor Serna at some future point here in the 18 next or two. We'll see if perhaps we can find a course of 19 action that will work without losing respect for traffic 20 management systems within our city limits. 21 We shouldn't put people in a situation where they 22 get tickets inadvertently. All right Is there's nothing 23 else, we'll adjourn this, the April meeting of the 24 California Air Resources Board. 25 (Adjourned at 10:40 a.m.) PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 CERTIFICATE OF SHORTHAND REPORTER I, Nadine J. Parks, a shorthand reporter of the State of California, do hereby certify that I am a disinterested person herein; that the foregoing meeting was reported by me in shorthand writing, and thereafter transcribed into typewriting. I further certify that I am not of counsel or attorney for any of the parties to said meeting, nor am I interested in the outcome of said meeting. In witness whereof, I have hereunto set my hand this 7th day of May , 1996. Nadine J. Parks Shorthand Reporter PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345