MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, MAY 21, 1998 9:30 A.M. Vicki L. Medeiros, C.S.R. License No. 7871 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 ii MEMBERS PRESENT John D. Dunlap, III, Chairman Joseph C. Calhoun Dr. William Friedman Mark DeSaulnier Lynne T. Edgerton Jack C. Parnell Sally Rakow Barbara Riordan Ron Roberts James W. Silva Staff: Michael Kenny, Executive Director Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Kathleen Walsh, General Counsel Jim Schoning, Ombudsman Bruce Oulrey, Ombudsman PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iii I N D E X --o0o-- Page Proceedings 1 Call to Order 1 Pledge of Allegiance 1 Roll Call 1 Opening remarks by Chairman Dunlap 1 AGENDA ITEMS: 98-5-1 Public Meeting to Amendments to the Airborne Toxic Control Measure for Emissions of Hexavalent Chromium from Chrome Plating and Chromic Acid Anodizing Operations Introductory remarks by Chairman Dunlap 2 Staff Presentation: Mike Kenny 3 Lisa Jennings 7 Bruce Oulrey 14 Peter Venturini 16 Bob Fletcher 16 98-5-2 Public Hearing to Consider Amendments to the Ethylene Oxide Airborne Toxic Control Measure for Sterilizers and Aerators Introductory remarks by Chairman Dunlap 24 Staff Presentation: Mike Kenny 25 Ronald Walter 27 Bill Lockette 33 Public Comment: Cliff McFarland 33 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 iv I N D E X (Continued) Page Public Comment: Kathleen Steilen 40 98-5-3 Public Meeting to Consider a Draft Report: Planned Air Pollution Research Fiscal Year 1998-1999 Introductory remarks by Chairman Dunlap 82 Staff presentation: Mike Kenny 82 Dr. Harold Cota 83 Dr. Stephen Brown 89 Public Comment: Michael Wang 92 98-5-4 Public Meeting to Consider Research Proposals Introductory remarks by Chairman Dunlap 100 98-5-5 Public Meeting to Consider Fiscal Year 1997-98 Grant Awards for the Rice Straw Demonstration Project Staff presentation: Mike Kenny 104 Lesha Hyrnchuk 105 Public Comment: Bob Herkert 114 95-5-6 Public Hearing to Consider the Adoption Amendment and Repeal of Regulations Regarding Certification Procedures and Test Procedures for Gasoline Vapor Recovery Systems Introductory remarks by Chairman Dunlap 116 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 v I N D E X (Continued) Page Staff Presentation: Mike Kenny 117 Cindy Castronovo 118 Bruce Oulrey 126 Afternoon Session 129 Public Comment: James W. Healy 129 Ted Tiberi 145 Jeff Trask 154 Donald L. Leininger 164 Open Session to Provide an Opportunity for Members of the Public to Address the Board on Subject Matters within the Jurisdiction of the Board 176 Adjournment 176 Certificate of Reporter 177 --o0o-- PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 1 1 P R O C E E D I N G S 2 --o0o-- 3 CHAIRMAN DUNLAP: The May meeting of the California 4 Air Resources Board will now come to order. 5 I will ask the audience to rise as we follow Ms. 6 Rakow's lead as we have the Pledge of Allegiance. 7 (Thereupon, all present recited the 8 Pledge of Allegiance.) 9 CHAIRMAN DUNLAP: Thank you, Sally. 10 Will the Clerk of the Board call the roll. 11 MS. HUTCHENS: Calhoun. 12 BOARD MEMBER CALHOUN: Here. 13 MS. HUTCHENS: DeSaulnier. 14 BOARD MEMBER DeSAULNIER: Here. 15 MS. HUTCHENS: Edgerton. 16 BOARD MEMBER EDGERTON: Here. 17 MS. HUTCHENS: Friedman. 18 BOARD MEMBER FRIEDMAN: Here. 19 MS. HUTCHENS: Parnell. 20 BOARD MEMBER PARNELL: Here. 21 MS. HUTCHENS: Patrick. 22 BOARD MEMBER PATRICK: Here. 23 MS. HUTCHENS: Rakow. 24 BOARD MEMBER RAKOW: Here. 25 MS. HUTCHENS: Riordan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 2 1 BOARD MEMBER RIORDAN: Here. 2 MS. HUTCHENS: Roberts. 3 Silva. 4 BOARD MEMBER SILVA: Here. 5 MS. HUTCHENS: Chairman Dunlap. 6 CHAIRMAN DUNLAP: Here. 7 I would like to welcome you all to the Board 8 meeting today. It is the first day of a two day meeting. 9 It is the Chair's view that today should move 10 pretty smoothly, that is my hope. Mr. Kenny, we will count 11 on you and the staff to see that that happens, because 12 tomorrow we are anticipating a little bit of action. 13 I would like to remind those of you in the audience 14 who would like to present testimony to the Board to please 15 check in with the Board Clerk, Ms. Hutchens, and her team, 16 which are to the left. 17 If you have a written statement, please give 20 18 copies to her. 19 The first Item on the Agenda today is 98-5-1, a 20 Public Hearing to Consider Amendments to the Airborne Toxic 21 Control Measure for Emissions of Hexavalent Chromium from 22 Chrome Plating and Chromic Acid Anodizing Operations. 23 The Board adopted the Chrome Plating Reg in 24 February of 1988. The Regulation has been effective in 25 /// PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 3 1 reducing emissions of hexavale and chromium from these 2 plating sources by some 95 percent, and for smaller sources 3 to more than 99 percent for the, excuse me, for the larger 4 small sources at 95, larger sources 99 percent. 5 The Federal requirements, promulgated in January of 6 1995, now require a similar level of control for sources in 7 the rest of the country. 8 The amendments presented today consolidate the 9 State and Federal chrome plating requirements into a single 10 regulation, while maintaining the public health protection 11 goals of both regs. 12 The amendments also clarify and simplify many of 13 the Federal requirements. 14 So, at this point, I would like to ask Mr. Kenny to 15 introduce the Item and begin the staff's presentations. 16 MR. KENNY: Thank you, Mr. Chairman and Members of 17 the Board. Good morning. 18 The proposed amendments to the California Chrome 19 Plating Regulation are the culmination of more than three 20 years of effort by representatives of the ARB, the districts, 21 and particularly the South Coast and the Bay Area district's, 22 the affected industry, the public and U.S. EPA staff. 23 As the Chairman has indicated, the U.S. EPA 24 promulgated a new Federal regulation for chrome platers in 25 January of 1995. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 4 1 Chrome platers in California and throughout the 2 country were required to comply with this regulation within 3 one to three years, depending on the type of facility. 4 The U.S. EPA's action was taken in response to the 5 Federal Clean Air Act amendments of 1990, which mandated that 6 the U.S EPA develop and implement a nationwide air toxics 7 program. 8 The Federal Chrome Plating was the ninth Federal 9 standard issued pursuant to this program. In authorizing a 10 national air toxics program, Congress recognized that many 11 states already had existing air toxics programs and included 12 a provision that allows states to submit alternative rules or 13 programs to substitute for the Federal requirements. 14 In general, the criteria used for approval is that 15 the alternative requirements must be no less stringent than 16 the Federal requirements. 17 The promulgation of the Federal Chrome Plating 18 Regulation in January of 1995 made chrome plating sources in 19 California subject to both Federal and California 20 regulations. 21 To avoid the duplicate requirements, we initiated 22 an effort in June of 1995 to determine what changes could be 23 made to the existing California regulation to make it 24 equivalent to the Federal regulation. 25 As both regulations were similar in the level of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 5 1 control, and the Federal regulation was largely based on the 2 success of the California regulation, we thought that the 3 consolidation of the two into a single regulation would be 4 fairly easy. 5 Unfortunately, it proved to be less easy than we 6 had anticipated. In fact, it has been a long and often 7 frustrating progress. 8 I do not think that any one involved in the process 9 is completely satisfied with what we are presenting today. 10 The ARB and the districts believe that some 11 requirements which U.S. EPA maintains are essential for 12 approving this rule as a substitute for the Federal 13 regulation are unnecessary given the air pollution control 14 infrastructure in the State of California. 15 Industry remains concerned about the complexity of 16 the regulation and the necessity of the extensive record 17 keeping and reporting requirements. 18 U.S. EPA is concerned that providing flexibility 19 may not result in achieving the emission reduction goals of 20 the Federal Regulation. 21 One thing we have learned is that the process for 22 integrating State and local regulations with the Federal 23 requirements needs to be overhauled. It simply doesn't work 24 as it is. 25 We are continuing to pursue these changes through PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 6 1 our Title 3 efforts, but the results of these efforts are 2 longer term. 3 As we pursue change, sources remain subject to both 4 State and Federal requirements. Rather than continue to have 5 industry subject itself to two sets of regulations, and 6 because we believe that we could significantly simplify and 7 clarify the Federal requirements, we have moved forward with 8 proposed amendments to the California Chrome Plating 9 regulations. 10 While not completely satisfactory, we do believe 11 this proposed amended regulation does two important things. 12 First, it maintains the emissions reduction goal of 13 both the State and the Federal regulations, and second, it 14 provides a consolidated regulation that is much easier to 15 understand and more streamlined than two separate 16 regulations. 17 Please note that we are proposing that these 18 amendments be adopted as an emergency regulation. 19 This is because the compliance dates for the 20 Federal regulation have passed, and chrome platers in 21 California are currently subject to two sets of regulations. 22 By adopting as an emergency regulation, we can 23 expedite the submittal process to the U.S. EPA. 24 At this time, I would like to introduce Ms. Lisa 25 Jennings, of the Stationary Source Division, who will make PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 7 1 the presentation. 2 Ms. Jennings. 3 MS. JENNINGS: Thank you. 4 My name is Lisa Jennings. I am an Air Pollution 5 Specialist, with the Stationary Source Division. 6 Good morning, Chairman Dunlap and Members of the 7 Board. Today we are presenting the proposed amendments to 8 the Hexavalent Chromium Airborne Toxic Control Measure for 9 Chrome Plating and Chromic Acid Anodizing Operations for your 10 consideration. 11 This is the Chrome Plating ATCM. 12 Today's presentation will cover the background and 13 the purpose of the Chrome Plating ATCM, staff's outreach 14 efforts, the proposed amendments to the Chrome Plating ATCM, 15 additional suggested changes to improve the regulation and 16 staff's recommendation to the Board. 17 Following identification of hexavalent chrome as a 18 toxic air contaminant, the Board adopted the Chrome Plating 19 ATCM in February of 1998. 20 The Chrome Plating ACTM applies to hard chrome, 21 decorative chrome and chromic acid anodizing facilities. 22 In general, chrome plating provides wear and 23 corrosion resistance to parts. Hard chrome plating is 24 thicker than decorative chrome plating. 25 Parts that are hard chrome plated include PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 8 1 hydraulic cylinders and industrial rolls. Parts that are 2 decorative chrome plated include bicycle parts, auto trim, 3 faucets and tools. 4 Chromic acid anodizing forms a chromium oxide layer 5 that resists wear and corrosion on products such as aircraft 6 parts. 7 Chrome plating operations in California have 8 typically achieved at least 99 percent reduction in chrome 9 emissions and have been achieving those reductions since the 10 early 1990's. 11 This regulation affects approximately 300 12 facilities in California. 13 In January 1995, the United States Environmental 14 Protection Agency promulgated a Federal regulation for chrome 15 plating operations. 16 As a result, chrome plating operations in 17 California are now subject to both the State and Federal 18 regulations. 19 The Federal regulation requires controls similar to 20 those used in California and reduces chrome emissions 95 to 21 99 percent. 22 Since sources in California are subject to two 23 similar regulations, we have worked with U.S. EPA for three 24 years to integrate the Federal and State requirements so that 25 U.S. EPA can approve the State regulation as the replacement PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 9 1 for the Federal regulation. 2 This has been a difficult and time consuming 3 process and has highlighted many problems in the equivalency 4 process for integrating State and Federal requirements. 5 In March, the Board recognized these difficulties 6 by approving a Resolution calling for U.S. EPA to provide 7 greater flexibility to the states to effectively integrate 8 the State and Federal programs. 9 While we have reached an understanding with 10 U.S. EPA on this regulation, we are continuing our efforts to 11 seek a comprehensive solution. 12 The purpose of amending the Chrome Plating ATCM is 13 to consolidate the State and Federal requirements into a 14 single regulation, thus eliminating duplicate requirements 15 and providing certainty to industry. 16 The amendments were designed to simplify and 17 streamline the many Federal requirements that we have 18 incorporated. 19 We have tried to develop a consolidated regulation 20 that U.S. EPA can and will approve. 21 Most importantly, staff has developed a 22 consolidated regulation that maintains the environmental 23 benefits of both the State and Federal regulations. 24 For example, we have incorporated the Federal 25 requirements from decorative chrome plating operations that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 10 1 are more effective than the existing State requirements. 2 This action is consistent with our longstanding 3 commitment to achieve any quantifiable emissions reduction 4 from the Federal Air Toxics Program. 5 Staff began discussions with District U.S. EPA 6 Region 9 and industry representatives, in June of 1995, and 7 have conducted an open interactive process throughout using 8 the District and industry workgroup and numerous individual 9 meetings with interested parties. 10 We held our first two public workshops in November 11 of 1996, and a third public workshop was held in February 12 of 1998. 13 We conducted over 30 meetings, specifically with 14 U.S. EPA, to address equivalency issues, and we have 15 submitted to them two draft chrome plating regulations. 16 Finally, we have notified over 400 individuals 17 about this Board item. The proposed amendments to the Chrome 18 Plating ACTM include changes in the areas shown on this 19 slide, applicability, standards, compliance assurance 20 measures and other requirements. 21 The original Chrome Plating ACTM applies to hard 22 chrome, decorative chrome and chromic acid anodizing 23 operations. 24 We are proposing to expand the applicability of the 25 Chrome Plating ACTM to include trivalent chrome operations PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 11 1 because the Federal regulation includes them. 2 The emission limitations are divided by process, 3 hard chrome, decorative chrome and chromic acid anodizing and 4 decorative chrome using trivalent chromium. 5 We have retained the State's standards for existing 6 hard chrome plating operations. We have established 7 standards for new and modified hard chrome plating operations 8 that are slightly more stringent than for the existing 9 operations. 10 We incorporated an alternative compliance option 11 available on a case by case basis for very small hard chrome 12 plating operations that allows existing hard chrome plating 13 operations to avoid costly add-on control equipment. 14 We have incorporated the Federal standards for 15 decorative chrome plating operations which, as I mentioned 16 before, are more effective than the State standard, and we 17 have incorporated the Federal standards for chromic acid 18 anodizing and for trivalent chrome operations. 19 To make this regulation acceptable to U.S. EPA, we 20 have had to incorporate many additional compliance assurance 21 measures in the areas shown on this slide. 22 When we initially began the process to integrate 23 the State and Federal regulations, we believed that very few 24 amendments needed to be proposed, while the ATCM may not have 25 specified every requirement, we believe that the regulations PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 12 1 were nearly equivalent because field studies indicated high 2 compliance rates and sources were subject to compliance 3 assurance measures through district rules and district 4 operating permit conditions. 5 However, we found that comparing the State and the 6 Federal regulations was much more difficult than we thought. 7 As a result of lengthy discussions with U.S. EPA, 8 we eventually agreed to the minimum compliance assurance 9 measures that U.S. EPA would accept to find the State and 10 Federal regulations equivalent. 11 These agreements form the basis for the proposed 12 amendments for the compliance assurance measures. 13 We have also added provisions to the proposed 14 amendments to address two technologies that the Federal 15 regulation does not address, and we have added a section that 16 addresses approval for alternative requirements. 17 Since releasing the proposed amendments, we have 18 identified several areas where additional changes are 19 appropriate. 20 These additional suggested changes are listed on a 21 handout that you should have. Additional copies are 22 available at the back of the room. 23 The most significant change is in section K, the 24 section that addresses approval for alternative requirements. 25 With these changes, U.S. EPA has indicated in a May PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 13 1 fifteenth letter that they believe that the proposed 2 regulation can be approved to replace the Federal regulation. 3 We agreed to make the changes to simplify the 4 equivalency process, and because the U.S. EPA letter also 5 indicates that U.S. EPA expects to delegate the authority to 6 prove alternatives for many of the provisions in the near 7 future. 8 U.S. EPA also commits, through a memorandum of 9 understanding, to approve or deny submitted alternative 10 requirements within 45 days. 11 This is the first indication we have had that the 12 U.S. EPA is willing to delegate any authority to the states 13 and to act within shorter specified timeframes. 14 We recommend that the Board approve the Chrome 15 Plating ATCM with the additional suggested changes. 16 We also recommend that the Board approve the Chrome 17 Plating ATCM as an emergency regulation. You should have a 18 copy of finding of emergency regulation. 19 We need this because the chrome plating operations 20 are subject to two regulations, and U.S. EPA will only review 21 and approve an adopted regulation as a potential replacement 22 for the Federal regulation. 23 By approving the Chrome Plating ATCM as an 24 emergency regulation, we will be able to submit the 25 regulation to U.S. EPA immediately. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 14 1 Upon U.S. EPA approval, chrome plating operations 2 in California will be subject to only one regulation. 3 Thank you. This concludes my presentation. 4 CHAIRMAN DUNLAP: Very good. Thank you. 5 Mr. Oulrey, from the Ombudsman's Office, is there 6 anything that you want to add, or do you want to talk a bit 7 about the process that this went through to get to the Board? 8 MR. OULREY: Good morning, Mr. Chairman and Members 9 of the Board. 10 As you have heard, the item before you, 98-5-1, has 11 been under development since January of 1995, when the U.S. 12 EPA promulgated its Federal Chrome Plating regulation. 13 Emission control requirements in that regulation 14 were similar to those adopted by the ARB in its 1988 Chrome 15 Plating Control Measure. 16 The proposal that you have before you amends ARB's 17 existing Chrome Plating Air Toxics Control Measure to expand 18 the applicability to trivalen chrome operations in addition 19 to the currently regulated hexavale chrome operations. 20 The proposal also differs from U.S. EPA's Chrome 21 Regulation in that the recordkeeping and reporting 22 requirements are streamlined and less prescriptive. 23 The primary stakeholders involved in the 24 development of the proposal have included the U.S. EPA, the 25 Metal Finishers Association and its members and several PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 15 1 California air districts, namely the South Coast Air District 2 and the Bay Area District, which have the largest number and 3 greatest concentration of chrome plating facilities. 4 The process used in the proposal before you 5 included over 30 correspondences with the U.S. EPA since 6 July of 1995, and three public workshops between November 7 of 1996 and February of 1998, one in Sacramento and one in 8 the South Coast in November of 1996, and one in the South 9 Coast in February of 1998. 10 Workshop notices and copies of the proposed amended 11 Chrome Plating Control Measure were provided to more than 400 12 individuals, including approximately 300 chrome platers 13 throughout the State. 14 As you have heard, or as you will hear, or actually 15 you did hear from staff, the U.S. EPA has a letter on file 16 giving its preliminary approval of the measure. 17 In the opinion of the ARB's Ombudsman's Office, the 18 process used by the ARB staff and the development of this 19 proposal was open and inclusive and did a good job involving 20 and documenting the involvement of stakeholders. 21 Thank you. 22 CHAIRMAN DUNLAP: Thank you, Mr. Oulrey. 23 Any questions of staff on this item? 24 Any letters or any other types of correspondence, 25 staff, do you want to summarize for us? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 16 1 MR. VENTURINI: Mr. Chairman, Bob Fletcher, a 2 Manager of the Emissions Assessment Branch will summarize. 3 I think there are three or four letters that were 4 submitted. 5 MR. FLETCHER: We do have four letters that we 6 received, as Ms. Jennings and Mr. Oulrey indicated. 7 The first one is a letter from the U.S. EPA, dated 8 May fifteenth, and it indicates that the staff expects that 9 the U.S. EPA will be able to approve this package as 10 equivalent. They, of course, have to go through their formal 11 process first. 12 It does for the first time indicate that they're 13 willing to delegate. They believe that the inclusion of 14 U.S. EPA as a concurring agency in the regulation is 15 temporary because they expect to delegate many of the 16 authorities that are outlined in that regulation, and they 17 are willing to approve any request for an alternative that 18 has been submitted and recommended for approval by a State or 19 local agency within 45 days. 20 The second letter is from the Bay Area Air Quality 21 Management District, dated May eleventh, from Ellen Garvey, 22 and indicates that they appreciated the opportunity to 23 participate with us in the process and support the 24 amendments. 25 The third letter is a letter from Barry Walerstein, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 17 1 dated May twentieth, of the South Coast Air Quality 2 Management District, again, indicating they appreciated the 3 opportunity to participate with us, and they support the 4 adoption of the regulations. 5 The final letter that we received this morning is 6 from the Metal Finishing Association of Southern California, 7 who applauds our efforts to eliminate duplicate regulations 8 and to simplify and clarify the Federal requirements. 9 They indicate that there still remains provisions 10 that they don't believe are necessary to ensure compliance, 11 but they appreciate ARB's efforts to minimize the burden 12 of these Federal requirements and realize that we are 13 proposing amendments that represent the minimum requirements 14 the U.S. EPA would accept. 15 They also comment that the process for integrating 16 the Federal and State requirements is far too long and 17 encourages ARB to seek a more expeditious way to integrate 18 these requirements. 19 Finally, they had a number of specific comments on 20 the regulation. The first one having to do with several 21 definitions in the regulation where they ask us to basically 22 eliminate some clarifying language in those two definitions. 23 These basically are definitions that are 24 descriptive and provide the reader with an indication of the 25 types of operations the decorative and hard chrome plating PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 18 1 operations are involved with. 2 Determinations of whether you are a decorative 3 plater or a hard chrome plater are generally made on a case 4 by case basis. 5 In any case, we are not recommending that these 6 definitions be modified. 7 The second comment is to add a clarifying language 8 of controlled emissions in several parts of the regulations, 9 which we agree with and would support that as a proposed 15 10 day change. It simply helps clarify the meaning of the 11 regulation. 12 The next comment has to do with allowing a hard 13 chrome plating tank to comply by the use of a fume 14 suppressant, which is basically an additive to the tank 15 itself. 16 Our ATCM's require collection systems for all hard 17 chrome plating tanks. We have provided an option for small 18 facilities that allow the use of this option in both State 19 law, and the ATCM provide for alternatives provided they 20 achieve the same emission benefits, so we don't believe that 21 it is necessary to include it in the regulation. 22 There is provisions within the regulation and State 23 law, as I mentioned, that would allow a facility operator to 24 come in and request an alternative if they can demonstrate 25 that it achieves equivalent emission reductions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 19 1 The next comment asks us to include a footnote to 2 clarify some options in a table. We agree with this, and we 3 would propose that we would identify exactly what those 4 options are. 5 The tables basically list two options, and it 6 doesn't identify on the table specifically what those options 7 are, so we would propose to add two footnotes to those 8 tables. 9 The next comment has to do with the man power 10 limitation that applies to new and existing hard chrome 11 tanks. 12 Basically, we had a typographical error. It read 13 five million instead of 500,000, so we had already proposed 14 to make that change. 15 Finally, there is a provision in one of the 16 sections that deals with alternative requirements for hard 17 chrome tanks. 18 They believe that it should be taken out. Where it 19 is, it applies to specifically very small hard chrome 20 platers, and it is sort of a unique provision that applies 21 specifically to small hard chrome platers. 22 The commenters would ask that we would extract that 23 from that section and make it generally applicable to all 24 hard chrome platers. 25 We are not proposing to do that because there is, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 20 1 as I mentioned before, alternative to Section K that provides 2 for alternatives for any facility providing they can 3 demonstrate that equivalent emission reductions are included, 4 and this is a unique provision that applies specifically to 5 the small hard chrome plating tanks. 6 Finally, they have asked us to get comments from 7 electrolyzing if we had not already done so. We received the 8 letter this morning, and I am not aware of any comments from 9 electrolyzing, and we simply have not had an opportunity to 10 call them to find out what comments that they may have had. 11 That is all of the comment letters that we received 12 on this measure. 13 CHAIRMAN DUNLAP: The Metal Finishers letter that 14 you just went through, when did you receive that, today? 15 MR. FLETCHER: This morning. 16 It's dated May eighteenth, but it was sent by 17 regular mail, so we received it this morning. 18 CHAIRMAN DUNLAP: I appreciate you running through 19 that. 20 I know that is always a challenge the morning of 21 the Board meeting. 22 I ran into Mr. Fletcher here late last night, so I 23 can attest that he was working hard on this. 24 Would you make sure you get back to the Metal 25 Finishers, if they are not here today, and talk to them about PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 21 1 the action that we took and the fact that you've agreed to 2 some 15 day change items, and let them know about that? 3 MR. FLETCHER: Yes. 4 CHAIRMAN DUNLAP: Okay. I had a question. 5 If I am thinking about starting a chrome plating 6 business, and I want to get a permit, with this fast track 7 item that we are taking to everything, where am I going to go 8 to get it? 9 The individual air district, correct? 10 Do I have to have any interaction with the, Peter, 11 with the Feds, or with us, as long as they have enacted the 12 measures as we have outlined it, correct? 13 MR. VENTURINI: Yes. 14 That's my understanding. Since we are asking the 15 Board to do this as an emergency regulation, once we do that, 16 this regulation then would be applicable so sources then 17 could rely on this. 18 CHAIRMAN DUNLAP: It would be the locals that would 19 be moving the paperwork and go through the review and all of 20 that, so it would be one place to go, correct? 21 MR. VENTURINI: Yes. 22 CHAIRMAN DUNLAP: All right. Very good. 23 Any questions of staff by the Board? 24 BOARD MEMBER CALHOUN: Are all of the proposed 25 changes included in Attachment B? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 22 1 MS. JENNINGS: All except for the one's in the 2 letter that we've agreed to. 3 CHAIRMAN DUNLAP: Well, what I think we will do, 4 Kathleen, when we take up this Resolution in just a moment, I 5 will ask you to just add, if you've tracked it, those inserts 6 so the Board can note those, okay? 7 MS. WALSH: Okay. 8 CHAIRMAN DUNLAP: If there are no other 9 questions -- 10 By the way, no one signed up to testify, as I 11 understand it. 12 All right. I will now close the record on this 13 Agenda item. However, the record will be reopened when the 14 15 day notice of public availability is issued. 15 Written or oral comments received after the hearing 16 date or before the 15 day notice is issued will not be 17 accepted as part of the official record of this Agenda item. 18 When the record is reopened for a 15 day comment 19 period, the public may submit written comments on the 20 proposed changes, which will be considered and responded to 21 in the final statement of reasons for the regulation. 22 Also, we need to disclose any ex parte 23 communications. While the Board may, of course, communicate 24 off the record with outside persons regarding Board 25 rulemaking, we must disclose the names of our contacts and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 23 1 the nature of the contents on the record. 2 This requirement applies specifically to 3 communications which take place after notice of the Board 4 hearing has been published. 5 Are there any communications that the Board needs 6 to disclose? 7 All right. None. 8 We have before us Resolution 98-19, in the package. 9 The Chair would entertain a motion to approve, but what I 10 would like to do, approve with those items mentioned, the 11 staff's agreed to on a 15 day window, I would like those 12 covered. 13 MS. WALSH: Correct. 14 Do you want me to do that now? 15 CHAIRMAN DUNLAP: Is there a motion and a second? 16 BOARD MEMBER FRIEDMAN: I move that we accept this 17 with the -- I move approval with the inclusion of the 18 comments made in response to the Cunningham letter, which was 19 just discussed a moment ago. 20 BOARD MEMBER RIORDAN: I second the motion. 21 CHAIRMAN DUNLAP: All right. 22 Ms. Walsh, do you want to add those Metal Finishers 23 items? 24 MS. WALSH: What will happen is we have the 25 attachment to the Resolution, which includes the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 24 1 modifications that staff described in their presentation. 2 Those will be, again, revised to include the two 3 changes that staff has agreed to in response to the comment 4 letter that is adding the reference to controlled emissions 5 in the one section and adding the footnote that will clarify 6 the options and that language will be included in that 7 Attachment B, which will go out as part of the 15 day package 8 for comments. 9 CHAIRMAN DUNLAP: All right. Very good. 10 Any discussion we need to have before voting on 11 Resolution 98-19? 12 Okay. We will proceed with a voice vote. 13 All those in favor of adopting Resolution 98-15, 14 with the 15 day notice items we just covered, please say aye. 15 Any opposed? 16 Very good. Thank you, staff, appreciate that. 17 Mr. Fletcher, thank you for your long hours. 18 Okay. Let's move to the next item, 98-5-2. 19 Again, I would like to remind those in the audience 20 who would like to provide testimony or any written comments 21 to please check in with the Clerk to the Board and provide 22 the 20 written copies, if you would. We would appreciate it. 23 The next item is a Public Hearing to Consider 24 Amendments to the Ethylene Oxide Airborne Toxic Control 25 Measures for Sterilizers and Aerators. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 25 1 The Board adopted the regulation for ethylene oxide 2 sterilizers and aerators in May of 1990. The regulation 3 requires most operators of these sterilizers or fumigation 4 processes to reduce the emissions of ethylene oxide by at 5 least 99 percent. 6 The staff is proposing the amendments to update and 7 approve implementation of the reg, and in addition EPA has 8 promulgated a Federal regulation that will affect new large 9 sources that are already covered by the State regulation. 10 As with chrome plating, the staff is proposing to 11 consolidate the Federal requirements into the State 12 regulatory package. 13 So, with that, Mr. Kenny, we will have you, again, 14 introduce this item. 15 MR. KENNY: Thank you. The staff is proposing 16 several technical amendments to the Ethylene Oxide Sterilizer 17 and Aerator Regulation. 18 These amendments result from experience gained 19 during implementation of the Regulation and generally 20 involves streamlining and improving the compliance testing 21 requirements, adding provisions for a new control technology 22 and clarifying and improving several miscellaneous provisions 23 of the regulations. 24 These amendments have no effect on the emission 25 reductions associated with the Regulation. In addition, the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 26 1 U.S. EPA adopted a Federal Regulation in December of 1994 2 that affects six facilities in Southern California that are 3 also covered by the State Regulation. 4 The Federal Regulation will become effective in 5 December of this year. We are proposing amendments to the 6 State Regulation to incorporate and simplify the Federal 7 requirements. 8 In general, the Federal Regulation has similar 9 control requirements but has substantially more compliance 10 assurance measures. 11 As with the Chrome Plating Measure, we are not 12 completely satisfied with what we are proposing, but weight 13 that the Regulation is the minimum that the U.S. EPA will 14 accept to approve the State Regulation as a substitute for 15 the Federal Regulation. 16 In this way we will maintain the more stringent 17 limitations in the State Regulation and avoid duplicate 18 regulatory requirements. 19 In developing the amendments, the staff has worked 20 with districts, affected sources, control equipment 21 manufacturers, testing consultants, U.S. EPA and others. 22 At this time, I would like to ask Mr. Ronald 23 Walter, of the Stationary Source Division, to provide an 24 overview of the proposed amendments. 25 Mr. Walter. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 27 1 MR. WALTER: My name is Ronald Walter. I am with 2 the Stationary Source Division. 3 As Mr. Kenny mentioned, this hearing is to present 4 to you the proposed amendment to the Ethylene Oxide Airborne 5 Toxic Control Measure for Sterilizers and Aerators. 6 During today's presentation, I will cover these 7 topics, the background -- 8 CHAIRMAN DUNLAP: Mr. Walter, if we could get you 9 to speak up a little bit. 10 Just pull that thing a little closer to you. I 11 know it's awkward. 12 Thank you. 13 MR. WALTER: During today's presentation, I will 14 cover these topics, the background of the ATCM, the purpose 15 and staff outreach, our proposed amendments, additional 16 changes, issues that have come up and our recommendations. 17 In 1987, the Board identified each of the toxics 18 air contaminants. Following identification, we initiated 19 controls, which indicated that virtually all of the ATO's in 20 California for sterilization or fumigation processes. 21 We worked with the operators, with districts and 22 sterilizer control device manufacturers to develop an 23 Airborne Toxic Control Measure, which the Board adopted in 24 November of 1990. 25 ATCM affected over 300 facilities and have achieved PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 28 1 at least 99 percent reductions in ATO emissions from most 2 sources since 1992. 3 There have been some significant events that have 4 occurred since the implementation of the ACTM. 5 First, controls to recover ATO's were installed in 6 California to meet the ACTM requirements. There are now 7 about a dozen of these systems currently in use in 8 California. 9 Second, the U.S. EPA promulgated the regulation of 10 six large commercial sterilizers in California. The Federal 11 standard has emission standards similar to the ACTM, but 12 less stringent, however, has added significantly more 13 compliance assurance measures. 14 The Federal requirement becomes effective in 15 December of this year. We are proposing the amendments to 16 streamline the test procedures and incorporate criteria for 17 reclamation systems to clarify and simplify requirements 18 based on knowledge gained during implementation of the 19 Regulation and to integrate the Federal requirements and the 20 State requirements into a single regulation so that the U.S. 21 EPA will approve it as a replacement for the Federal 22 Regulation. 23 As with the Chrome Plating ACTM, and as indicated 24 in the slide, we have had an extensive outreach effort. 25 We are proposing to amend in several areas. First, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 29 1 we are proposing to change and modify the test method and to 2 clarify and simplify the compliance determination. 3 In addition, we are addressing the integration of 4 Federal requirements by separating the ATCM into two parts 5 and incorporate a streamlined version of the Federal 6 requirements for the large commercial sources. 7 I will now briefly cover each of these areas. We 8 added a provision which allows the estimating of the amount 9 of ATO delivered to the control system. 10 This is safer for the source testing personnel, 11 achieves the same level of compliance assurance and reduces 12 the cost of compliance testing. 13 We have also added a test procedure to determine 14 the amount of ATO liquid discharge from reclamation systems 15 as we found a significant amount of ATO discharge in the 16 water. 17 We propose to add a limit on ATO liquid discharge 18 from sterilizers and aerators to simplify compliance 19 determination for reclamation systems, and we propose to add 20 a combined sterilizer and aerator efficiency to provide this 21 flexibility in compliance testing of control systems 22 controlled on both the sterilizer and aerator. 23 As mentioned earlier, these proposed changes 24 affects six facilities. We have integrated the Federal 25 Regulation into the proposed amendments by eliminating PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 30 1 duplicate requirements and including more of the State and 2 Federal monitoring requirements and incorporating definition 3 to clarify the additional requirements. 4 Since releasing the proposed amendments 45 days 5 ago, opportunity for improvement and corrections have come to 6 our attention. 7 These additional suggested changes are included in 8 Attachment B in your Board material and available at the back 9 of the room. 10 The major change is the change in a definition of 11 administrator. This change is at the request of the U.S. EPA 12 and follows the same reason as presented in the previous 13 Board item for chrome plating. 14 In the past few days we have received a written 15 comment regarding safety issues related to the use of 16 catalytic oxidizers, one of the available control 17 technologies used to reduce ATO emissions. 18 In the large facilities, the sterilization cycle is 19 complete and the majority of ATO's removed from the chamber, 20 the door is opened and fresh air is introduced into the 21 chamber to reduce the residual concentration of ATO in the 22 chamber. 23 A valve at the back of the chamber simultaneously 24 opens the exhaust screen from the chamber. In our existing 25 Regulation we have max amount of reduction of ATO by PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 31 1 requirement. This exhaust screen would be relative to a 2 control device. 3 If the door is open before the sterilization cycle 4 is complete, the valve would activate and expose a mixture of 5 ATO to the catalytic oxidizer. 6 During the initial implementation of the Federal 7 Regulation there were four explosions at facilities in other 8 parts of the country primarily caused by operator error. 9 In six years of operating facilities in California 10 there has been one explosion, which recently occurred in 11 Southern California and was directly related to operator 12 error. 13 We have discussed this issue with district and 14 facility operators over the last year, and we have concluded 15 explosions can be easily prevented if proper safety 16 procedures are developed and followed. 17 We are aware of the injuries and want the U.S. EPA 18 to continue to investigate this issue, and we will continue 19 to follow this work. However, at this time we do not believe 20 that amendments to our control measure to address the 21 problems are necessary. 22 In conclusion, we recommend that the Board approve 23 the addition of ethylene oxide ATO as presented with the 24 additional changes summarized in your Board package on this 25 item. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 32 1 Thank you. This concludes my presentation. 2 CHAIRMAN DUNLAP: Thank you. I appreciate the 3 overview. 4 Any questions of staff before we hear from the 5 Ombudsman, Mr. Lockette? 6 Bill, do you want to tell us about this regulatory 7 proposal as it relates to the public process and how it came 8 to come to us? 9 MR. LOCKETTE: Mr. Chairman, Members of the Board, 10 as you have heard, this item calls for stricter standards but 11 is more streamlined with less reporting requirements than the 12 Federal standard for ethylene oxide. 13 The ARB staff worked with the U.S. EPA Washington, 14 as well as California stakeholders. In early 1996, staff 15 commenced, with U.S. EPA Washington, to seek approval of the 16 airborne toxic control measure for equivalency to the 17 national emission standard for hazardous air pollutants. 18 As you heard, ARB's outreach has been effective, as 19 EPA staff has indicated that today's proposed amendments are 20 likely to be viewed as acceptable to be enforced as a Federal 21 requirement. 22 While the Federal meetings were taking place, staff 23 was working with stakeholders by visiting 30 facilities, 24 conducting and ensuring evaluations of some 20 facilities, 25 mainly hospitals, testing and measuring actual emissions from PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 33 1 10 facilities and evaluating test data and reports from some 2 20 additional facilities throughout the State. 3 After the mailing of 800 notices to interested 4 parties, there were three public consultations with affected 5 parties. 6 Staff also worked with our sister agency, the 7 Department of Toxic Substances Control, to evaluate and 8 develop the water testing methods cited in the proposed 9 amendments. 10 In summary, the Ombudsman's Office concludes that 11 the staff's outreach work has produced substantial public 12 participation by the various stakeholders. 13 CHAIRMAN DUNLAP: Thank you, Mr. Lockette. 14 Any questions of the Ombudsman? 15 We have two witnesses on the witness list. I ask 16 the two witnesses to come forward and sit in the front row by 17 Mr. Valdez, who will raise his hand and wave to show you 18 where you go. 19 There you are. Cliff McFarland, from Griffith 20 Micro Science, and Kathleen Steilen, also from Griffith Micro 21 Science . 22 So, if could you come up, and if you are a tag 23 team, you can both go up together, if you would like. 24 Good morning. 25 MR. McFARLAND: I think we'll do our presentation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 34 1 serially. We are getting there. 2 CHAIRMAN DUNLAP: You indicate that you don't like 3 this proposal? 4 MR. McFARLAND: In just one aspect. 5 The bulk of the proposal is a good proposal, but we 6 have one suggestion with regard to it. 7 Mr. Chairman, Members of the Board, my name is 8 Cliff Mcfarland. I'm an attorney representing the group of 9 Micro Science, a commercial sterilizer that operates three 10 plants in California. 11 I'm here today to talk about a safety issue related 12 to this air toxics control measure. Together with the 13 Ethylene Oxide Sterilization Association, we have submitted 14 written comments on the safety issue. 15 The comments are bound, and I am going refer to a 16 couple of the exhibits in here. I am just going refer to 17 this package. 18 CHAIRMAN DUNLAP: You have a light on your podium 19 there. 20 MR. McFARLAND: Thank you. 21 As you may know, the staff indicated this morning 22 in its presentation, EPA suspended its own Ethylene Oxide 23 NESHAP for one year, the maximum period allowed by law, as a 24 result of five serious explosions that occurred at ethylene 25 oxide plants beginning in June of last year. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 35 1 EPA fears that these explosions were related to 2 human error in operating the ethylene oxide emission control 3 equipment. 4 Let me say at the outset that human error was 5 involved in each of the five explosions. Human error is part 6 of every industrial accident. 7 The reason that we are here is the downside of 8 human error in this context can be catastrophic. 9 I would direct your attention to Exhibit H, in the 10 bound package, on the third page of Exhibit H, at the bottom, 11 EPA succinctly states its reason for suspending their rule in 12 its totality for one year. 13 In July of 1997, the Agency learned of reports of 14 explosions at ethylene oxide sterilization and fumigation 15 facilities, and EPA does not want matters associated with the 16 December of 1997 compliance date to possibly compromise 17 safety; therefore the Agency is suspending the Ethylene Oxide 18 NESHAP in its entirety for one year, until December of this 19 year. 20 BOARD MEMBER EDGERTON: What page is that? 21 MR. McFARLAND: The third page of Tab H, at the 22 bottom. 23 To give you a little bit of flavor with these 24 incidences I would like to read from two newspaper accounts 25 contemporaneous with the explosions. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 36 1 The first is in Tab A. There was an explosion last 2 June at a commercial sterilizer plant in Richmond, Virginia. 3 On June fourteenth, the Richmond Times Dispatch 4 reported, an ear-splitting explosion and fire yesterday at an 5 eastern Henrico plant that sterilizes medical supplies sent 6 metal fragments shooting hundreds of feet in the air and 7 forced the evacuation of scores of local employees. 8 The 12:45 p.m. explosion mangled a large section of 9 the roof in a building occupied by Sterilization Services of 10 Virginia. Miraculously, only one person was injured. 11 There was a second explosion in Elkhart, Indiana. 12 Tab B, four pages back, starts with byline, Stacy Creasy, and 13 it's datelined, Elkhart, Indiana. 14 About 60 yards from the damaged building, across a 15 parking lot and on the other side of a six-foot chain-link 16 fence, what appeared to be a crumpled sheet of aluminum foil 17 in the tall grass, it was the back door to the Accra Pac 18 facility. 19 Officials from six agencies explored the aerosol 20 packaging plant trying to learn what sparked the blast 21 Tuesday that killed one employee. 22 Authorities on Wednesday revised the number of 23 injured workers to 76. 24 Griffith experienced a similar explosion at its 25 facility in Los Angeles November twenty-eighth of last year, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 37 1 when an operator mistakenly opened a door to a sterilization 2 chamber before the cycle was completed. 3 The accident report itself is contained in Tab I of 4 the materials, and I would like to direct your attention to 5 Tab J, which shows the photographs of the aftermath of the 6 explosion. 7 As you can see, there are significant damage to the 8 ducting that connects the sterilization chamber to the air 9 pollution control equipment. 10 In the bottom two photos you see the ducting was 11 ripped apart in one section and tossed 50 feet in one 12 direction and another section was tossed 50 feet in another 13 direction. 14 The part that is particularly scary is that if this 15 ducting had not ripped apart, thereby allowing a mechanism 16 for the explosive force to dissipate, the explosion would 17 have propagated back into the building. 18 I think that, but for the grace of God, we probably 19 would have had a fatality. 20 After learning of the explosions last summer, EPA 21 recommended to the industry that they disconnect their 22 emission control equipment, and less than three weeks after 23 learning about the explosions, then Assistant Administrator, 24 Mary Nickels, made a decision to suspend the Ethylene Oxide 25 NESHAP for one year, the maximum period allowed by law, to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 38 1 provide the EPA time to investigate the incidents. 2 Finally, I would like to direct your attention to 3 Tab L. EPA has been working with the Safety Subcommittee, or 4 Trade Association of the Ethylene Oxide Sterilization 5 Association, with regard to this safety issue over the last 6 six months. 7 Tab L is a draft proposal that is still circulating 8 inside the Trade Group and inside of industry, and it has not 9 gone to EPA yet. We will get it out the first of June. 10 The Trade Group wanted to get it into this package 11 that is in front of you, so it has been released a little bit 12 early in draft form. 13 This is a proposal to modify the Ethylene Oxide 14 NESHAP at the Federal level in a way that resolves the safety 15 issue and will actually meet or possibly exceed the EPA's 16 initial emission reduction goal. 17 The EPA has committed to give the proposal strong 18 consideration and the proposal may form a basis for 19 modifications to the Federal Rule. 20 The threat of similar explosions in the future is 21 the single biggest safety issue facing the sterilization 22 industry. 23 It's an issue that we take very seriously. Future 24 explosions could result in additional fatalities. Future 25 explosions could also affect the viability of the industry. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 39 1 If this Board were to approach the issue in the 2 same way as the EPA has, it would suspend the entire Ethylene 3 Oxide Control Measure and direct staff to explore the safety 4 issues. 5 We don't believe this type of action is necessary, 6 and we're not asking for anything along those lines. A 7 second option would be to defer the adoption of these 8 amendments today and study the safety issues, and again, we 9 are not suggesting anything along those lines. 10 There are many provisions other than the one 11 particular provision that we will talk about in a few minutes 12 that we think should be adopted. So, we are not suggesting 13 that. 14 What we would suggest is that the single provision 15 that requires the back vents to be connected to the emission 16 control equipment, and Kathleen Steilen will spend time on 17 that, that that provision be suspended for a reasonable 18 period of time to allow staff and industry to work together 19 to study the safety issue and then make a recommendation back 20 to the Board as to how to proceed, and a reasonable period of 21 time, maybe six months, that's about the period of time EPA 22 expects to make a decision. 23 We would like the opportunity to work with staff on 24 the issue in the same constructive way that we are working 25 with EPA on the issue, and we believe that together we can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 40 1 solve the problem. 2 I would like to turn it over now to Kathleen 3 Steilen, who is the Director of Environmental Health and 4 Safety with Micro Science, and who also serves as the 5 Secretary of the Safety Subcommittee for the Trade Group, a 6 presentation on more of the engineering aspects of this 7 matter. 8 Thank you. 9 BOARD MEMBER FRIEDMAN: I have a question. I hope 10 the issue will be addressed what industry proposes to study 11 in the next six months as an alternative to the manifold back 12 vents, quote, solution? 13 MR. McFARLAND: I think that is coming up. 14 MS. STEILEN: Hello. I'm Kathleen Steilen, 15 the Environmental Health and Safety Director of Griffith 16 Micro Science, who is a contract sterilizer. 17 We have, as of last month, a recent acquisition, 11 18 plants in North America. This is an issue not only in 19 California for us but throughout the United States. 20 I'm also the Secretary of the Safety Subcommittee 21 of our Ethylene Oxide Sterilization Association, which is a 22 trade industry group who has been looking at this issue. 23 First, I do want to commend the California Air 24 Resources Board in trying to streamline the process of taking 25 the Federal Regulation, which does have some interesting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 41 1 regulations, and there are some problems with meeting it, and 2 trying to streamline that process for us, and I really do 3 commend you for taking that effort for industry. 4 The only thing that I have a concern with is to 5 make sure that we do address the safety issue associated with 6 this Regulation. 7 Today I am going to try and explain to you really 8 what is the safety issue. It is a little bit of a technical 9 issue, and I will try to go through what is the safety 10 concern, and what is my concerns with the Regulations. 11 I am going to talk about EtO, or ethylene oxide, a 12 little bit, describe our sterilization process and give you a 13 summary of the recent explosions and try to explain them to 14 the best I can, since I have looked at all four in a room, go 15 through the one that occurred here in California in November 16 of last year in LA, that was Griffith's, talk about EPA 17 response and what we are doing with EPA, talk about what the 18 industry has done and how we have been working with 19 California to date, and then also talk briefly of some 20 possible solutions to these safety concerns and what we are 21 doing, and the proposal that I have for the Air Resources 22 Board. 23 First and foremost to understand really what is the 24 safety concern is that we are dealing with a very hazardous 25 chemical, ethylene oxide, which is why the regulations are in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 42 1 place. 2 It is recognized by our industry as a very 3 efficient sterilization gas. We use probably less than one 4 percent of all EtO used in all of industry though. 5 To put it in perspective, we are really a small 6 group of the EtO business. 7 Ethylene oxide is very flammable and explosive. It 8 is also a recognized carcinogen. 9 To get a perspective on the explosive, 100 percent 10 is the upper explosive limit, and three percent, which is 11 30,000 PPM, we will get into that a little bit later, is the 12 lower explosive limit. 13 Again, just as a reminder from a real basic 14 scientific, is to have an explosion, you need a hydrocarbon, 15 oxygen and then ignition source, and any flame or spark is an 16 ignition source. 17 EtO is very easily ignited, a spark, just even 18 scraping of doors, we have had explosions from opening one of 19 our doors if you don't have a proper seal. It is very 20 explosive. 21 A little bit about our process. Again, the 22 sterilization industry contracts sterilizers. For the most 23 part, there are a number of in-house sterilizers, too. 24 We take other people's products, mainly medical 25 products, and sterilize them. Part of this, and I will go PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 43 1 through the next slides, is just, I will describe the 2 process, the back draft valve, aeration rooms and emission 3 control, just to get an idea of what we are talking about 4 briefly. 5 First, here is our process. As you see, it is a 6 very simple from a chemical perspective process. We have 7 drumfulls of EtO hooked up to these stainless steel chambers 8 that are sealed and under pressure, or under vacuum, as well. 9 We have a product flow that goes into the 10 sterilizers. All we do is put pallet loads of customers 11 products, and it is mainly to the medical industry to make 12 sure they are sterile before they go to the hospitals, or 13 consumer use, and we put pallet loads of their product into 14 our chamber, seal it up and run a specific FDA approved 15 sterilization cycle, and then from the sterilizer itself we 16 have the vacuum pump discharge, that is, after we inject EtO, 17 we vacuum it out to empty the chamber and EtO from it. 18 There is a back draft valve, as Ron explained in 19 his presentation, that's the rear vent valve. 20 The only purpose of that is when we open the door, 21 that valve opens. When our operators open the door, and that 22 is on there for an OSHA regulation because we have to keep 23 worker exposure down, then we move the product into an 24 aeration room, which is another control source, and we treat 25 the aeration room vents. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 44 1 Those are very dilute, low concentration streams. 2 The one's from the chamber are high concentration EtO, except 3 for those back draft valves. If all is going right, that's 4 when they first open the door, we have already evacuated the 5 EtO. That should be a low concentration stream. 6 That is a summary of process. 7 Just to put it in perspective, as far as how we 8 typically treat these emissions is from the sterilizer 9 chambers, again, when the vacuum pump is a high concentration 10 stream, typically treated from acid scrubbers, in the low 11 concentration streams, what we have done, Griffith, in many 12 of our facilities, probably a little unfortunately now, we 13 have been typically sending those to a catalytic, or thermal 14 oxidizer, so the low concentration streams would be in the 15 back vent, and the scrubber is not an efficient means. 16 We cannot get even up to 99 percent efficiency on 17 low concentration streams. On the high concentration, we get 18 99.9 plus. 19 So, we have to send the low to a thermal oxidizer 20 to get the required efficiency. To put it in perspective for 21 the emission breakdown of this process, the vacuum pumps, 22 again, are the primary discharge from the chamber, from our 23 estimates, and they are estimates, we estimate about 95 24 percent of all the EtO emissions go through the vacuum pumps 25 into that scrubber, and we get a 99.9 plus percent PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 45 1 efficiency. 2 The aeration, the low concentration streams from 3 the back vent and aeration rooms together make up the 4 remaining five percent. 5 Most of them are from the aeration vents, and 6 remember that's in the room where we allow any product. The 7 product absorbs EtO. 8 Especially in the use of disposable plastics right 9 now, they absorb all of the EtO, and then in the aeration 10 room we allow it to sit for hours, or days, whatever it needs 11 to, to allow that EtO to come off. So, 4.8 percent of them 12 come off in the aeration. 13 This back vent stream, which is, again, what we 14 have to keep the EtO away from our workers who still enter 15 with masks on, but for worker safety we estimate that as 16 about .2 percent of the EtO emissions. 17 Again, on the back vents, the real concern from the 18 back vents is that it's .2 percent of the emissions, but 19 those are the one's that have been causing the concern for 20 our industry, because what happens if there is an operator 21 error, it will open up when there is a high concentration and 22 send it to an open flame abater, which the first thing it 23 sees is a flame. 24 That's where the safety concern has come in. 25 Let me just summarize the four incidents that PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 46 1 occurred in June and July of last year. The first one was 2 Sterilization Services, or SSP. 3 It was an explosion that occurred during the 4 installation testing. They had installed a catalytic 5 oxidizer to control, just as we had, I showed before, the 6 aeration in the back vent, emissions from their process. 7 They just installed this, and they were doing 8 testing of it when the explosion occurred. Again, there were 9 no serious or long lasting injuries. 10 There was some serious property damage, and they 11 did have some extended down-time of months before they could 12 get back into operation. That was the first one. 13 The second one in our industry, and these are just 14 fellow competitors, members of the Ethylene Oxide 15 Sterilization Association, is PCS, that is the Massachusetts 16 one. 17 Again, it was an EtO explosion involving a 18 catalytic oxidizer with back vents. This occurred right 19 after installation when they were doing some testing on it. 20 So, it was somewhat in test mode, but again, the 21 Fire Marshall's report from there does state that the 22 catalytic oxidizer was the cause of the explosion. 23 Operator error, obviously, did help send the high 24 concentration stream to the catalytic oxidizer, because that 25 is not the normal operation, but again, we are lucky, no PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 47 1 injuries resulted, some serious property damage. 2 In that particular, in both of these, the fire ball 3 went back to the chamber and blew apart the chamber. So both 4 of these had some serious down-time. 5 These are the other two. These are somewhat 6 industry related. These are not direct competitors. These 7 are what we call packagers. 8 What they do is they repackage the EtO, and they 9 put it in these little sterilizers, capsules, or little bombs 10 that are used in the small sterilizers in hospitals. 11 So, they just repackage EtO. But from their gas 12 room to control emissions, both of these were using an 13 oxidizer there to control emissions. So they are somewhat 14 related. 15 The most serious one in my opinion is the Accra Pac 16 one, which is the one that happened in Elkhart, Indiana, 17 where there was a fatality. 18 It was an explosion with a fire ball that occurred 19 in the gassing room where they were filling those little 20 containers. 21 This particular place does have several safety 22 monitors. They have LEL alarms throughout. They have 23 interlocks into the system that were in operation at the 24 time. 25 I think if you look through some of the reports PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 48 1 from the papers, what had happened is that the operator 2 silenced those alarms and continued operation, which 3 eventually sent an explosive mixture to the catalytic 4 oxidizer. 5 This is still being very much investigated. There 6 have been no reports out of it, and it's just really from 7 people that I know in the industry that we found that. 8 IKI is a repackager. It is a very similar 9 incident. 10 It has a gas room. The gas room in both of these 11 and the oxidizer were damaged. The buildings were totally 12 destroyed. 13 Little is documented on the IKI one, which occurred 14 in Wisconsin. That is the summary of the recent one's. 15 Let me spend a little bit of time on one that I 16 know the most, the one that occurred in November of 1998, at 17 our own facility at our LA plant. 18 And again, an operator error. He opened the wrong 19 sterilization door when it wasn't a sterilizing product. As 20 the door opened, we do have a nitrogen blanket over the EtO 21 in the sterilizer as a safety precaution, it sent this EtO 22 nitrogen mixture through the back vent to the abater. 23 It did mix with an oxygen stream. The abater flame 24 ignited the combined vent. It did rupture, as you have seen 25 pictures in one of the Tabs there, but luckily the venting PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 49 1 blew apart. No fire ball or pressure pulse went back to the 2 chamber. 3 Really relatively little damage was done from what 4 could have resulted there. It blew apart the venting. It 5 damaged the oxidizer. 6 It still cost a fair amount, but we were back in 7 operation and had not injured any one within a week, so, we 8 were very, very lucky. 9 This shows a little bit of a summary of what 10 happened. The back vents from the chambers is the high EtO 11 source. 12 It mixed with the oxygen from the aeration room, 13 which is, you are talking probably about 10 to 20 PPM levels 14 of EtO in an air mixture. 15 That sent to, again, the first thing past that it 16 sees in our catalytic oxidizers is an open flame and that 17 sends a pressure and explosion pulse back. 18 I don't have to go into great detail, but some of 19 the corrective actions that we have taken from this incident, 20 as I have with all of the incidents that I have investigated 21 here, is to disconnect the back vent at this point from all 22 plants of concern until safer emission controls are 23 installed. 24 We are in the process, as I said, we have got 11 25 facilities in North America, and we want to make sure any of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 50 1 those that are going to a catalytic or thermal oxidizer, we 2 are trying to disconnect the back vents if there are safety 3 concerns. 4 As you see, we have gone through the various 5 processes. Unfortunately, we did have an explosion occur 6 before we were able to do this. 7 We have gone through the various processes and have 8 disconnected the back vents in the LA facility, and we are in 9 the process of doing it, we have one in Ontario, California, 10 as well. 11 There are other precautions that we are taking as 12 Griffith Micro Science, and in the industry, to make sure 13 that we have safe operations with catalytic and thermal 14 oxidizers. 15 These are some of the alternative controls, and we 16 are also studying, if we decide to continue with the 17 catalytic and thermal oxidizer, what type of safety 18 interlocks are efficient enough. 19 CHAIRMAN DUNLAP: Ms. Steilen, in conclusion, what 20 would you have us do? 21 MS. STEILEN: In conclusion, I would like to see 22 California to continue to work with us, as EPA, and suspend 23 the use of that back vent, only the back vent in this 24 regulation. 25 CHAIRMAN DUNLAP: Okay. Let me, if I may, I will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 51 1 ask staff, what is the emissions impact of not installing the 2 back vent? 3 MR. POPEJOY: Essentially, disconnecting the back 4 vent valve would double the emissions. 5 CHAIRMAN DUNLAP: Take it from what to what? 6 MR. POPEJOY: For one of Griffith's facilities, for 7 instance, it would take, our estimate is 400 to 800 pounds a 8 year of ethylene discharged to the atmosphere. 9 CHAIRMAN DUNLAP: All right. 10 Anything else that you would like us to know? 11 MS. STEILEN: No, except for that EPA is continuing 12 to work with it, as you see. 13 I commend the effort of trying to work with EPA and 14 streamline these, and I do commend that strongly, but EPA is 15 considering changing the regulation you are kind of 16 streamlining right now as a moving target. 17 Thank you. 18 CHAIRMAN DUNLAP: Well, one thing I should 19 acknowledge, I think the primary purpose, it seems to me of 20 your business and the folks you represent, is to protect 21 public health ultimately by having this equipment sterilized 22 so it works well and people don't get infections or diseases 23 as a result of using unsterilized equipment, so I appreciate 24 your mission, too. 25 Supervisor Silva. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 52 1 BOARD MEMBER SILVA: I have a question. 2 You mentioned the one explosion happened because 3 the alarm was, did you say, disconnected? 4 MS. STEILEN: The alarm, and this, again, is from 5 the newspaper articles, so the accuracy I question, I have 6 not been into that particular facility. 7 I have been to the facility as a consultant, as a 8 prior life here, and I know they do have LEL monitors and 9 detectors, and from the account in one of the newspaper 10 articles is that the LEL alarm in the interlock had gone off, 11 meaning that it stopped, it stopped the actual filling of the 12 bottles, the LEL activated the interlock and said, something 13 is wrong, we have a high concentration here, shut down. 14 The operator came in and silenced it and restarted 15 the operation, is what from there, I think, occurred, because 16 they do have the interlocks. 17 CHAIRMAN DUNLAP: Maybe ask your colleague to come 18 forward, too, what, back to Dr. Friedman's question about, I 19 mean, surely you can understand, as a regulatory body, a lot 20 of people come here and say, you know, we need more time, we 21 need you to study this more, you know, it's something that we 22 hear fairly frequently. 23 His question was, and I think it is a relevant 24 question here, what would you have us study or do during the 25 six month delay or whatever time period you are talking PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 53 1 about, specifically? 2 What can we do to feel good about any kind of a 3 delay or this exemption that would result in doubling the 4 emissions here? 5 MR. McFARLAND: On the Federal side, they suspended 6 entire rule. 7 Right now, the proposal that we are floating back 8 to EPA, in Tab L, is a proposal that will allow the back 9 vents to be disconnected and will achieve greater emission 10 reductions from one of the other streams so that EPA will end 11 up getting the same amount of emission reductions as they had 12 wanted in the beginning but with the back vents disconnected. 13 We would like to have a period of time to work with 14 staff to try to explore how we can get something similar in 15 the State level. 16 That means that it is going to be harder in 17 California because the efficiencies are set higher than the 18 Federal level, but it is something that I think we have to 19 work together, and we think that maybe a six month period, 20 which is the period left before the EPA goes final. 21 We can report back to the Board in, say, six months 22 as to what the conclusions are. We don't have an engineering 23 solution to offer to you today the way we do have a solution 24 to offer to the Federal EPA. 25 CHAIRMAN DUNLAP: I want to commend you on your PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 54 1 package and presentation and a very fine presentation. 2 A lot of thought went into it, and I appreciate you 3 sharing with us, you know, your investigating these things, 4 trying to understand them, and it seemed to me that you 5 provided us here with the background about what you knew and 6 what you didn't, which I appreciate the even-handed nature of 7 that. 8 Well, let me ask staff, Mr. Kenny, let me try to 9 summarize what I am hearing here. 10 There is a public safety issue that the experts 11 here in the industry claim should kind of override the 12 emission reduction goals that we have in the near term 13 because people could get killed or maimed potentially. 14 Not all of those four incidents were conclusive 15 relative to a consistent theme, which means there is some 16 user error, as Mr. Silva pointed out, and the like. 17 How do you react to that, Mike, what is your 18 counsel to the Board? 19 We pay you guys to get the emission reductions 20 down. That's your job, you know, and I think you put 21 together a package that will do that, but balance this for 22 us. 23 MR. SCHEIBLE: Well, actually I would like to 24 answer this question, because I would like to address the 25 technical issue a bit more. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 55 1 One of the concerns that we are wrestling with 2 here, I think, is the fact that we are hearing this really at 3 somewhat of the last minute from these people. 4 That doesn't diminish the fact that they are 5 raising a safety concern. We did know that there were some 6 safety issues associated with ethylene oxide sterilizers in 7 the past, and when there were some initial explosions we did 8 an investigation to see whether a similar potentiality would 9 exist in California. 10 As we look at what they are proposing today, and as 11 Mr. Popejoy indicated, we would see a doubling of the 12 emissions of ethylene oxide. 13 What that translates to is an increased cancer 14 risk. We are in a situation which we disable the back drafts 15 and have an increased cancer risk associated with the 16 ethylene oxide, or we can leave them in place and continue to 17 try to address the safety issues through the existing 18 processes while the safety risk is out there. 19 I guess I need to understand a little more as to 20 how these particular accidents occurred, and what is being 21 done to address what sounds like the human error that may 22 have been associated with them. 23 CHAIRMAN DUNLAP: Well, the other -- by the way, 24 good presentation, but we are getting it kind of late, you 25 know. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 56 1 We like some of things worked out with the staff 2 and with advocates before we get here so that we don't have 3 to sort through it all here, though we're willing to. 4 I think you need to respond to that, but I will let 5 Dr. Friedman go. 6 BOARD MEMBER FRIEDMAN: Well, I just have a 7 specific question. 8 I want to make sure that I understand, do you not 9 think that the back vent manifolding to the emission device 10 is going to enhance the safety to some degree? 11 MS. STEILEN: Do I think it will enhance safety? 12 No, not to an open flame abater. 13 My concern, it would to some degree if it wasn't an 14 open flame, if we could find an emission control that didn't 15 have a fire concern. 16 Yes, it is, again, controlling an explosive gas. I 17 would rather treat it that way than admitting it to the 18 atmosphere even for safety reasons. 19 BOARD MEMBER FRIEDMAN: But there is not an 20 engineering solution to that? 21 MS. STEILEN: You are right. 22 We have looked at the solutions, and what we are on 23 record, actually with the South Coast, which, with the Air 24 Resources Board, have been working with as well, but we are 25 on record there, is that we have them disconnect it under PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 57 1 variance. 2 What we are doing is investigating our own reliable 3 LEL detectors, which actually, we are manufacturing them with 4 help from a developer in the U.K. 5 The industry, there is nothing reliable now that 6 will warn you in a timely manner reliably that works that an 7 explosive mixture is happening. 8 We are piloting that. If it works, we can put that 9 onto the catalytic oxidizers, but at the same time, I just 10 don't think it is a very safe design that I feel comfortable 11 with having any control of high emissions going into a 12 catalytic oxidizer with an open flame. 13 We are looking at alternative technologies though. 14 CHAIRMAN DUNLAP: Can you connect our technical 15 staff with that work, so they can talk to the folks doing the 16 research there, have you been provided that yet? 17 MS. STEILEN: They are in tune with what we are 18 doing with South Coast. 19 MR. SCHEIBLE: Actually, Mr. Dunlap, one thing that 20 might be of some assistance here is that Mr. Venturini has 21 some additional information that might be of some benefit to 22 the Board. 23 MR. VENTURINI: Mr. Chair and Board Members, maybe 24 I can provide the staff with some additional information that 25 may help you with this. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 58 1 When we became aware of these incidents in other 2 states as EPA was implementing this program at the facilities 3 outside of California, because, of course, in California we 4 have had these facilities under control for a number of 5 years, we were obviously very concerned, as well as the 6 staff, and my staff immediately talked to districts, facility 7 operators in California, and EPA, and as a result of those 8 discussions, it was very clear that there was operator error 9 involved here, and the basic conclusion was that we did not 10 see the need at this time to take the kind of step that EPA 11 had done to delete this requirement for the back draft valve, 12 and we, the staff, have been following very closely these 13 activities, the work that is being done with EPA to identify 14 this, or identify any solution. 15 Our intent would be to continue to follow what is 16 being done to see if there are options or alternatives. 17 I know that this company is under variance 18 currently in the South Coast District for their facilities 19 through, I believe, August of 1999, and one provision of the 20 variance order, they are looking at the interlock system that 21 will probably be tested at their facility in Los Angeles, so 22 that is where in our discussion with all the facilities and 23 the districts came to a mutual conclusion that we should 24 proceed ahead, and we did not see a need to delete or suspend 25 the back draft requirement. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 59 1 I will ask staff if they want to add anything 2 additional to that. 3 BOARD MEMBER CALHOUN: Did I understand, 4 Mr. Venturini, that you said that most of these accidents 5 were based on operator error? 6 You can have operator error in almost any process. 7 MR. VENTURINI: In these facilities where it is 8 very important that operators be well trained in operating 9 this equipment. 10 CHAIRMAN DUNLAP: Okay. 11 BOARD MEMBER CALHOUN: It seems to me that this 12 could happen in almost any plant where the operator makes an 13 error and the question of whether or not you want to 14 disconnect some control equipment because of it. 15 MR. VENTURINI: We are not aware of any other 16 facilities that have asked us to remove this back draft, or 17 are not aware of other facilities that have gone to a 18 district to seek a variance to remove or disconnect the back 19 draft valve. 20 BOARD MEMBER FRIEDMAN: What is the status of this 21 interlocking technology that would prevent that? 22 MS. STEILEN: We have looked at interlocks, and 23 again, we do have some interlocks that we are going to be 24 installing, but they are not as highly reliable, and it went 25 through great in South Coast, but the safest one of using the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 60 1 open flame system that I see is a direct measurement that 2 before you can even allow anyone to open the door, before 3 that valve will even open, is that you measure the 4 concentration of the EtO in there, and actually getting the 5 accurate measurement of the EtO is not a state of the art 6 thing. 7 We don't have a reliable LEL monitor, a source, 8 that can reliably, that I would put on an automatic mode and 9 really trust that it would reading accurately for long 10 periods of time. That is not there. 11 We are actually using a new microwave spectrometer, 12 which is something that we are working with the University of 13 Wales, they are in the U.K., to develop. 14 We are testing it currently in our Santa Theresa, 15 New Mexico plant, a prototype. Actually it is something that 16 we are taking the pain of developing, and we will be putting 17 that into the LA facility, and that is where South Coast has 18 permitted a variance. 19 Until we can prove that it is reliable, we will 20 leave it disconnected. 21 CHAIRMAN DUNLAP: How many of the these facilities 22 are operating, these units are operating in California? 23 MS. STEILEN: California? 24 I don't know. 25 CHAIRMAN DUNLAP: Along the lines of the larger PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 61 1 ones? 2 MR. POPEJOY: There are six facilities operating 3 about five entities in California. 4 CHAIRMAN DUNLAP: And Griffith, you have two in 5 California? 6 Are you headquartered here, by the way? 7 MS. STEILEN: No. 8 We are headquartered in Illinois. There are two 9 facilities, and just from a competitors sake, I think there 10 is another very large unit that had a catalytic oxidizer, but 11 they don't have the back vent because they disconnected the 12 back vent, meaning that they didn't disconnect, they 13 disconnected it from the process. 14 They have a fully automated process where they 15 don't need to worry about the worker exposure. 16 CHAIRMAN DUNLAP: Okay. So, Mr. Kenny, it's 17 staff's reasoned opinion that the Board ought to go forward 18 and adopt this proposal, despite the safety concerns, because 19 of the primary emphasis on user error rather than engineering 20 flaws, and that you guys, staff is going to continue to 21 monitor and work with the industry with the research and 22 engineering issues that are ongoing, you guys are going to 23 provide some linkage, some leadership there; is that correct? 24 And the locals want this to occur, and that EPA, 25 the issues regarding EPA are stabilized to the point where PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 62 1 they are comfortable with us moving forward? 2 MR. SCHEIBLE: I don't know if we have heard from 3 EPA on this, have we? 4 MR. VENTURINI: EPA has sent the letter, which they 5 believe that with the amendments that we are making to the 6 control measures they can find approvable and is equivalent 7 to the Federal max standard. 8 They did not raise the issue to us. 9 CHAIRMAN DUNLAP: Well, what I am getting to is 10 this, that EPA, which you pointed out in your package, 11 suspended this item for a year based upon some on some safety 12 considerations. 13 I'm assuming, EPA is a large bureaucracy, but I am 14 assuming that the same folks involved with this issue were 15 the one's that sent this letter to us telling us to proceed; 16 is that correct? 17 MR. SCHEIBLE: Mr. Chair, the difference though is 18 that what EPA was really addressing was the specific 19 amendment before the Board today with regard to the 20 modifications that would allow this rule to go into place. 21 What the witnesses are addressing is the rule as it 22 currently exists on the books and the fact that there have 23 been safety issues associated with that rule, and that is why 24 they are raising the issue of the accidents. 25 The issue that they are raising really is PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 63 1 completely separate from the issue that we brought to you as 2 a Board today. 3 What we are proposing today was to make amendments 4 that would allow us to combine essentially a Federal 5 requirement for EtO with a State requirement for EtO and 6 thereby present to the State a mechanism by which we could 7 achieve the emission reductions that we needed and do it in a 8 streamlined fashion such that the industries that had to 9 comply only had a single regulatory requirement to comply 10 with. 11 This issue of safety is one that actually goes 12 beyond that and really goes to the heart of the rule itself. 13 It simply says, the EtO rule has a safety issue associated 14 with it. 15 We have been working on the safety issues since the 16 initial explosions were brought to our attention last year, 17 and we have been following that to make sure that, in fact, 18 we can monitor the safety and that we can make sure that, in 19 fact, we can address these as time goes on, but we don't have 20 an answer on that at this point. 21 CHAIRMAN DUNLAP: But this act will not jeopardize 22 the variance that they are operating under in the South 23 Coast; is that correct? 24 So, they will still be able to do that. They still 25 can get some recognition for those extraneous issues beyond PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 64 1 our actions; is that correct? 2 MR. SCHEIBLE: Correct. 3 BOARD MEMBER RIORDAN: Just to follow along on the 4 variance, it appears to me as that we, as Mr. Kenny said, we 5 are dealing with one thing here, but that if you can make a 6 compelling case, or one of your competitors makes a 7 compelling case with the local board, you can be granted that 8 variance, or whatever, and we can still monitor this in a 9 broader scope; am I correct? 10 MR. SCHEIBLE: Correct. 11 BOARD MEMBER RIORDAN: It makes it a little easier 12 for this Board to move forward because the real issues that 13 you are raising really that needs to be done is at the local 14 board to get that variance and allow the local board the 15 discretion to make that decision. 16 MR. SCHEIBLE: According to staff, the variance has 17 been granted, so the relief for this particular plant is 18 already in place, and a change to the overall generic rule is 19 not needed for this plant to address its safety issue and 20 proceed that way, and we are not aware that other facilities 21 in California are in need of such a solution, so that's why 22 staff does not see the need to change the regulation as it 23 stands now. 24 BOARD MEMBER FRIEDMAN: Mike, is that because they 25 don't or are not as savvy about this, I mean, because they PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 65 1 have not experienced an episode? 2 I am having a major problem here, because I would 3 love to see us parallel a process, in other words, integrate 4 the Feds and us, and so forth, and at the same time, my 5 problem is that it takes one explosion, compared to an extra 6 200 pounds of this material, weighing its cancer risk against 7 how many potential people will die suddenly, heaven forbid, 8 if an episode occurs. 9 I've got news for you, I'm not smart enough to know 10 how to weigh both of those things, and I'm having trouble 11 figuring out, I don't know what will happen in six months. 12 I don't think that very much at all is going to 13 happen in six months, and this can't be open ended, open 14 ended all the time, because we have to keep the air clean, 15 and that is why I asked the question earlier, what is really 16 on the front burner in terms of expectation. 17 Maybe that is not a good -- but in terms of an 18 expectation of you coming forward with something that will 19 solve this problem, if the expectation is high, we should 20 wait a little while. If it's not, then we will just have to 21 continue to work the way we are now, everyone motivated, but 22 not a specific end point or hypothesis that is able to solve 23 the problem. 24 MS. STEILEN: I can talk a little bit on what is on 25 our front burners and back burners to solve this issue. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 66 1 Since I have been with Griffith, this has probably 2 been at least 75 percent of my job right now, for both 3 industry and Griffith, solving this, but what we are doing is 4 this interlock solution, but that is, again, to interlock 5 something that is connected to an open flame oxidizer. 6 I still, both the environmentalist in me and the 7 safety person in me doesn't believe that an open flame abater 8 connected to any potential high source, if an operator error, 9 that you should have anything as an operator error causing an 10 explosion. 11 You can do all the safety training in the world. 12 There is still the best probable of one in a thousand that 13 there will be an operator error. 14 I don't want an explosion as a result of an 15 operator error. I am looking at alternative safer 16 technologies. 17 We have got a system going into place in our Willow 18 Brooke, Illinois plant. It is a scrubber system to see if we 19 can get that 99 percent efficiency. 20 The scrubber system is not an effective means of 21 scrubbing this, but we are testing that. That is committed 22 to be in place by December of this year. 23 I don't want to invest another three of these type 24 systems into our other plants if they are not going to work. 25 At the same time, we have a different outfit in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 67 1 U.K., again, looking at two different alternatives. 2 We have another competitor looking at a biofilter, 3 which is using bugs to eat EtO. They are testing that. 4 There is a lot going on, but I can't guarantee that 5 we will be able to meet the existing Federal NESHAP 6 Regulation. 7 CHAIRMAN DUNLAP: Ms. Edgerton, Mr. Calhoun and 8 then Mr. Kenny. 9 BOARD MEMBER EDGERTON: Can you tell me how long 10 you have been with the firm then, how long have you been 11 working on this? 12 MS. STEILEN: I have been with Griffith Micro 13 Science since June of last year, which the explosions started 14 June eighteenth, and I started June ninth. 15 BOARD MEMBER EDGERTON: So, it has been 11 months. 16 When does the one year period of suspension come to 17 an end for the U.S. EPA? 18 MS. STEILEN: It is supposed to go into effect 19 December eighth of this year. 20 I have been working with the OEQPS Federal level to 21 see if we can get more time, because I know from the Federal 22 it is a much, much bigger issue for the Federal because there 23 are a number of my competitors, and ourselves, that we don't 24 even have control on the aerations side, that 4.8, so we are 25 waiting to get guidance yet on what to do here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 68 1 It is kind of a bigger issue yet for my 2 nonCalifornia plants. 3 BOARD MEMBER EDGERTON: It's my understanding from 4 staff said that there are six plants in California, we know 5 one of them, the Griffith plant has obtained a variance with 6 respect to the back draft. 7 MS. STEILEN: We have two. 8 We did get a separate one for the plant in LA, and 9 we have one in Ontario, California, and we were just granted 10 the variance for that particular system to be disconnected, 11 but again, I guess I still question, is that really what a 12 variance process is for from a critical safety issue. 13 BOARD MEMBER EDGERTON: Does that leave four 14 plants, run by competitors, without variances, where there is 15 a risk that emission control technology as designed would 16 blow up? 17 MR. POPEJOY: May I answer that? 18 We have been in touch with all of the facility 19 operators, the large commercial facilities, during the 20 development of the reg. 21 We met with them immediately after we became aware 22 of the incidents, and they were all well aware of the risks. 23 We have been in touch with these facilities since 24 we released this hearing package, and we have heard from no 25 other facility at this level of concern. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 69 1 BOARD MEMBER EDGERTON: Are the others proceeding 2 to obtain variances? 3 MR. POPEJOY: No. 4 Not to my knowledge, and we have been in touch with 5 them on a regular basis, as recently as two or three weeks 6 ago. 7 CHAIRMAN DUNLAP: Has anybody else called for a 8 variance that you know of? 9 MS. STEILEN: No. 10 I don't know all of the one's in California. I 11 wish I did. 12 We may be the only one's with this situation that 13 have a catalytic and thermal. 14 I can speak from our Association level, there are 15 about 60 percent of all of our sterilizers do use, 60 to 70 16 percent, do use the catalytic and thermal oxidizers. 17 BOARD MEMBER RIORDAN: That's nationwide. 18 MS. STEILEN: Nationwide. 19 I don't know in California. 20 I do know of one competitor that is here, and they 21 disconnected the back vent. They don't need it, and they 22 don't have any concerns. 23 BOARD MEMBER EDGERTON: I just wanted to say that I 24 appreciate that it may be individual human error in some of 25 these instances. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 70 1 However, I am concerned, and I don't feel 2 comfortable enough with what may be the level of, or what may 3 be the likelihood of human error in this particular -- it's 4 sort of the building of the risks to ignore this issue. 5 I think we could go forward with the proposal 6 today, and then we could also make an effort, maybe a special 7 committee, or have a motion to work on this, or maybe suspend 8 it for three months to look at it, I don't know. 9 I just don't want to have looked at this material 10 and just sort of bully forward without any sensitivity to the 11 safety. 12 CHAIRMAN DUNLAP: I think that is something that 13 needs to come to a head here. 14 I'm not going to prolong this much longer, but what 15 I would like to do is give Mr. Calhoun a minute to ask a 16 question. 17 Dr. Friedman, Bill, I know I tease you on occasion 18 about the important role that you play on the Board with your 19 perspective, but I am going to come back to you after we hear 20 Mr. Kenny and see if you can help us sort through this, 21 because I know you know how these devices are used in use and 22 their purpose. 23 BOARD MEMBER CALHOUN: My comment relates to the 24 variance and how long the variance has been granted, six 25 months, or three months, or what? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 71 1 MS. STEILEN: It's actually an extended variance 2 for the one facility that had the explosion in LA. 3 They have given us until July of 1999 to have 4 something in place, this interlock prototype system, then at 5 that point we have to make a decision on the other LA 6 facility and the Ontario facility as to, is this a good 7 control there. 8 They are watching what we are doing with this 9 particular installation and also what we are doing in Willow 10 Brooke, Illinois, as far as the scrubber to see if any of 11 those go in at the same time as the alternative. So, we are 12 going to make a decision of whether or not to go forward in 13 July of 1999, which safety controls or which new type of 14 equipment we need to install that is safe. 15 BOARD MEMBER FRIEDMAN: That's July of 1999 -- 16 MS. STEILEN: It's considerable. 17 BOARD MEMBER FRIEDMAN: Yes, it is, and it seems to 18 me that the primary concern is already being taken care of, 19 and I don't see any need to hold off on moving forward with 20 the Regulation. 21 BOARD MEMBER CALHOUN: They can always go back and 22 apply for another variance. 23 MS. STEILEN: I guess I question, is it the 24 regulation, is that what the variance process is for? 25 You're right. We have covered the safety, and I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 72 1 have made sure we have those back vents disconnected. 2 CHAIRMAN DUNLAP: It is what the variance process 3 is for. 4 I know several of us on the Board know Ed 5 Camarilla, who is the Chairman of that Hearing Board, a 6 long-time air quality engineer, a good man, knows his stuff, 7 and if he gave you that length of time, I know he had some 8 rationale for it. 9 Mr. Kenny, why don't you see if you could right our 10 listing ship here on this issue for a moment? 11 MR. KENNY: All right. I actually wanted to echo a 12 fair amount of what Mr. Calhoun just indicated. 13 We are talking about a limited number of facilities 14 in California, and of those facilities, the one's that seem 15 to be having the most concern about this particular issue are 16 the Griffith Micro Science facilities. 17 They are both under variance, and so the safety 18 issue has been addressed at both of those facilities. 19 The other facilities in the State, at least in our 20 context with them, do not seem to have the same level of 21 concern with regard to this issue as these particular 22 facilities owned by Griffith Micro Science. 23 As we continue to work with the other four 24 facilities, which haven't expressed the same level of 25 concern, we will try to work out any safety issues, and we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 73 1 will come back to the Board and address them if, in fact, we 2 do need to propose something to the Board to modify the 3 regulation. 4 To go one step further, the item before the Board 5 today is a very different item. What is before the Board 6 today is really a harmonization of the Federal and State 7 requirements. It is not this issue. 8 We can commit to the Board that we will continue to 9 work with both the witnesses here today, and we will continue 10 to work with the other owners of facilities who have not 11 raised the issue today, and we will come back to the Board 12 and will address it as necessary. 13 But I think today the safety issue is at least 14 covered to the extent that the variance is covered, the 15 facilities of Griffith Micro Science who is concerned about 16 it. The other facilities are not raising the issue to us. 17 They seem to be relatively comfortable with the 18 regulation as it is on the books in terms of the safety 19 elements. 20 CHAIRMAN DUNLAP: So, your argument is to go 21 forward. 22 You guys will monitor it, and if indeed there is 23 another technology that can be employed, you will come back 24 for modification. 25 They have the process and statute provided for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 74 1 them, right, Kathleen, to seek variances? They have been 2 granted them successfully in two cases so far. 3 We have no reason to believe they would not be able 4 to make the case again, and we deal with what we are to deal 5 with today, which is harmonization of the Federal and State 6 requirements; did I get that right, Mike? 7 MR. KENNY: I think you summarized it perfectly. 8 CHAIRMAN DUNLAP: All right. I will come to you, 9 Sally, in just a second. 10 Dr. Friedman. 11 BOARD MEMBER FRIEDMAN: I don't have a problem in 12 approving this for the reasons stated before in terms of 13 integrating Federal and State. 14 I am not convinced that it won't be because other 15 folks have not expressed the same level of concern about 16 safety, that that makes us, we should be sanger about the 17 issue of safety. 18 I mean, these folks have been burned badly, and so 19 have three other places. It only takes one more experience 20 for us to remember just how significant this could be. 21 So, I like the notion of parallel processes, and 22 the little delay, if you will, and when we have to revisit 23 the issue based on continued discussions with everyone in 24 California using this approach, but this is a paramount 25 issue. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 75 1 It's secondary to what is on the table, but it 2 really has to resurface again at some time for us to feel 3 comfortable. 4 CHAIRMAN DUNLAP: The idea of public safety and 5 public health, I think, are essential to what we do and that 6 is why it is troubling, the issues that you are bringing up. 7 BOARD MEMBER RAKOW: The other facilities or 8 members of your Association, what level of operation 9 are they compared to yours? 10 Are they as large, or is it just that they have 11 been lucky so far? 12 MS. STEILEN: I only know of one, the Isomedics. 13 They are a member of the safety subcommittee. They 14 are the one's, I know, after hearing of the explosions 15 disconnected, and they have a fully automated process. 16 I would love to have their process right now. We 17 can't, for OSHA reasons, disconnect. 18 CHAIRMAN DUNLAP: What I think am going to do is I 19 am going to excuse the witnesses, unless you have a question 20 for them, and I want us have a chance to talk about this for 21 a moment, and then we will consider the Resolution before us. 22 It was a fine presentation. The only criticism is 23 that we got it late. 24 BOARD MEMBER EDGERTON: Mr. Chairman, I would like 25 to hear that the effort to make sure that this is not a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 76 1 problem at the other plants is a proactive one. 2 Monitoring, the word monitoring didn't quite sound 3 aggressive enough, or proactive enough to solve my 4 nervousness about this. 5 So, that is something that I would like to ask that 6 there be a prompt, run out and check this and make sure we 7 are not going to have an explosion, and I think that the 8 property damage is significant, too. 9 I'm glad no one has died. 10 CHAIRMAN DUNLAP: We had pictures. 11 We saw the hole in the roof and the material, the 12 ducting, you know, so we have a context. 13 BOARD MEMBER EDGERTON: Thank you. 14 CHAIRMAN DUNLAP: Yes. 15 BOARD MEMBER PARNELL: I don't want to prolong it, 16 but I guess I want clarification. 17 It seems to me that if we are going to vote for 18 parallel process, which is what is on the table before us, 19 and that the safety concerns are, in fact, met through the 20 variance process, and if they agree that they are met, and if 21 we agree that we are going to continue to be sensitive to the 22 safety issues, then we need to move on and vote this. 23 CHAIRMAN DUNLAP: Agreed. 24 MR. SCHEIBLE: If I can make a comment, also, we 25 are not talking about a large number of facilities here. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 77 1 To be somewhat aggressive and very proactive, we 2 can contact each the facilities immediately, and we can 3 provide a response as to what those facilities believe, and 4 we can then follow-up on that. 5 That is, essentially, a way of going forward with 6 the item today that provides for the harmonization while at 7 the same time rapidly responding to the safety issue and 8 ensuring, in fact, we have it under control. 9 BOARD MEMBER PARNELL: I guess that I would like 10 assurance from the witnesses that they feel some comfort that 11 the safety issues are and continue to be handled until we get 12 a resolution and that the sensitivity of our staff is 13 sufficient to move forward on the parallel process. 14 MR. McFARLAND: I think we are comfortable with 15 that. 16 The one thing that I would like everyone to keep in 17 mind is that in terms of the parallel process, the Federal 18 Rule is a little bit of a moving target right now. 19 There may be changes made in the next six months, 20 and we would like to maintain the parallelness. 21 I think that what we would like to see is we would 22 like to work with staff, keep addressing these issues, and we 23 would like to come back here in a reasonable period of time, 24 which may be six months, or before the December deadline, and 25 report back on the status of where we stand. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 78 1 CHAIRMAN DUNLAP: Very good. 2 I appreciate that. 3 Mr. Parnell, that was an apt summary. 4 Any other written comments staff needs to 5 summarize? 6 I hope that there aren't many. 7 MR. FLETCHER: There are a few. There is a letter 8 from 3M that is advocating the use of the portable analyzer 9 to determine ongoing compliance with the requirements. 10 All they are doing is request that we work with 11 them to investigate this option, and we are fully prepared to 12 do that because we are always looking for ways to improve 13 compliance options. 14 There is a letter from the South Coast Air Quality 15 Management District that indicates that they have been 16 involved with us in the development of the amendments and 17 support the amendments. 18 There is, again, a suspension of the presentation 19 and the letter by U.S. EPA, dated May fifteenth, that 20 indicates that their initial approvability review is 21 acceptable, and they are prepared to review and approve the 22 submittal. 23 There is also a letter from the Chemical 24 Manufacturers Association that is commenting on some of the 25 health effect statements that we made in the staff report. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 79 1 They believe that there is new information 2 available. This is sort of outside of the context of this 3 rulemaking, and there is a process available to reconsider 4 any new health information. 5 I believe that is it. 6 CHAIRMAN DUNLAP: All right. Very good. 7 Thank you. 8 I will now close the record on this Agenda item. 9 However, the record will be reopened when the 15 day notice 10 of public availability is issued. 11 Written or oral comments after this hearing date, 12 but before the 15 day notice is issued, will not be accepted 13 as part of the official record on this Agenda item. 14 When the record is reopened for the 15 day period, 15 public comment period, the public may submit written comments 16 on the proposed changes, which will be considered and 17 responded to in the final statement of reasons for the 18 Regulation. 19 Any ex parte communication that the Board needs to 20 disclose on this item? 21 All right. We have before us Resolution 98-20. 22 The Board has had it for a while. We got it at the outset of 23 the meeting. 24 The Chair will entertain a motion to move the 25 Resolution with the following additions, and I will do my PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 80 1 best to add on, and Mike, and Kathleen, you can help me, too, 2 if I miss anything. 3 This, several things that we are going to ask staff 4 to be aggressive on, number one, to survey the remaining 5 operators in the State, the other four facilities, to 6 determine what, if any, need for variances they have and get 7 an impression from them, if the process works for them, to be 8 able to secure one, and I believe it does, but I want you to 9 ascertain that. 10 Secondly that we actively track and participate in 11 any alternative technology uses that could apply here to this 12 industry, and I would ask the industry, though we can't 13 direct them, we don't have the authority to do that, for them 14 to share with us, you know, Peter, to work that out, so they 15 share with us research results, and most importantly, I 16 think, to track operations at those six facilities to ensure 17 that they are safely being operated. 18 If there are any incidents that occur beyond 19 routine problems or shut down, but any explosions, I want the 20 Board to be made aware of it via a memo in real time to the 21 entire Board, at which time accompanying that memo some 22 communication from our Legal Counsel, Ms. Walsh, outlining 23 how we can fast track, bring this item back to the Board for 24 any kind of discussion. 25 MS. WALSH: There is an Emergency Regulation PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 81 1 process that would allow us to bring it to the Board in very 2 short order. 3 CHAIRMAN DUNLAP: Okay. 4 Does that do it for my Board Member colleagues, 5 does that capsulate it? 6 The Chair would entertain a motion on 98-20, with 7 those additions. 8 MR. KENNY: One addition that might be of some 9 benefit, we can basically provide a memo to the Board within 10 the next week to 10 days that gives them our findings, at 11 least preliminarily, in terms of the context with the Board, 12 so that the Board is fully aware and informed. 13 CHAIRMAN DUNLAP: Thank you. 14 Is there a motion? 15 BOARD MEMBER RIORDAN: I will be happy to -- 16 CHAIRMAN DUNLAP: We have a motion from Ms. Rakow, 17 and a second from Mrs. Riordan. 18 Any other discussion? 19 We will proceed with a voice vote. 20 All those in favor of approving Resolution 98-20, 21 with those items amended that we have discussed, please say 22 aye. 23 Any opposed? 24 Very good. Motion carries. 25 Thank you, staff. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 82 1 We will move to the third item. 2 I appreciate the witnesses, again, I know I have 3 said it to you, I don't want to stroke you too awful much, we 4 appreciate the time and effort that went into that 5 presentation and the straightforward manner in which you 6 presented it. It was very, very well done. 7 Research plan, item number three, 98-5-3, a Public 8 Meeting to Consider a Draft Report: Planned Air Pollution 9 Research for Fiscal Year 1998-99. 10 We are pleased to welcome our Research Screening 11 Committee. It is always a pleasure to see them, appreciate 12 them and the time and effort they put in on our Board's 13 behalf. 14 The research projects proposed in the report were 15 reviewed by the Board's Research Screening Committee on 16 April third. 17 I want to welcome them to our Board meeting. They 18 are with us today. We will have the opportunity to introduce 19 the individual members in a few moments, but as most of you 20 know, you the Board established this Committee, it was 21 established by law to advise the Board as we develop and 22 implement our Research Program and to recommend for approval 23 the research proposals that are designed to meet the 24 objectives that we establish. 25 This planned research is developed annually to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 83 1 ensure that it reflects the Board's priorities, and again, a 2 lot of time and effort goes into this, and that's why we 3 have, I believe, a premier Research Program here at our 4 Board. 5 So with that, I'll ask Mr. Kenny to introduce the 6 item. 7 MR. KENNY: Thank you, Mr. Chairman, Members of the 8 Board. 9 Today we want to present for your consideration the 10 Board's proposed research for next fiscal year. 11 This planned research, as you know, is developed 12 over the course of approximately 10 months by the staff 13 with the assistance of the Research Screening Committee. 14 We are very appreciative of the assistance provided 15 by the Research Screening Committee. At this point, I would 16 like to introduce Professor Cota, Chairman of the Research 17 Screening Committee, who will present the Committee to you 18 and provide comments on this year's research highlightS. 19 Professor. 20 DR. COTA: Thank you, Mr. Kenny. Good morning, 21 Chairman Dunlap, and Members of the Board. 22 It is A pleasure for the Research Screening 23 Committee to join you every year, and it is A pleasure to see 24 you. 25 I would like to start by introducing myself, and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 84 1 then asking the rest of the Members to introduce themselves. 2 I am a Professor of Environmental Engineering at 3 Cal Poly, also currently the Director of EPA Areawide 4 Training Center on the west coast, whoSE main mission is to 5 train people in the regulatory agency and industry and 6 continuing education type thing. 7 My research interests are in the chemical 8 engineering side of air pollution and public health. 9 DR. HIGDON: I'm Jim Higdon. I am a Professor of 10 Physics at Clairmont McKinna College. 11 I run our Engineering Program, and my area of 12 research is turbulent mixing of passive contaminants. 13 DR. HOEKMAN: My name is Ken Hoekman, and I have a 14 Ph.D. Degree in Organic Chemistry. 15 I have been employed by Chevron for the past 18 16 years. 17 My areas of expertise involve vehicle emissions and 18 the impacts of those emissions on air quality. 19 DR. ORTNER: I'm Jim Ortner, and I manage air 20 quality and alternative fuel issues for the Orange County 21 Transportation Authority, and also the area of technical 22 services for the Authority. 23 MR. TAYLOR: Tim Taylor, I am an attorney here in 24 Sacramento, and I practice in the area of environmental and 25 natural resources law. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 85 1 MR. ZELDIN: I am Mel Zeldin. I am the Director of 2 Applied Science and Technology Division with South Coast Air 3 Quality Management District. 4 I run our laboratory and monitoring group, and my 5 area of expertise is in meteorology. 6 DR. COTA: To save time, I am going to read a few 7 more comments. 8 Speaking on behalf of the Committee, it is a 9 pleasure to serve the Board and to provide the staff and the 10 Board with the assurance that the research projects brought 11 before you have received careful peer review. 12 This assurance comes from the Screening Committee 13 Members and your Research Division staff, technical expertise 14 and dedication. 15 During the past year, a great deal of research 16 activity centered around the Southern California Ozone Study, 17 airborne particulates, diesel engine emissions and the health 18 impacts of ambient air pollution. 19 The Ozone Study consisted of extensive air 20 pollution monitoring and meteorological monitoring to gather 21 data that will be employed in new generations of air quality 22 models. 23 These models should allow for more refined 24 forecasting and control decisions for oxides of nitrogen, 25 hydrocarbons, particulate matter and toxic air contaminants. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 86 1 The Children's Health Study is entering its sixth 2 year. Approximately 4,000 schoolchildren underwent their 3 annual lung evaluations. 4 These investigations have started to produce health 5 findings related to the prolonged exposures to ambient air 6 pollution. You will hear more about that Study next month. 7 In the upcoming year's plan, you will find 8 continued measured emphasis on particulate matter. There are 9 several important projects planned to investigate the 10 sources, transport measurement and health effects of airborne 11 particles in California. 12 Much of the information from these studies will 13 provide very important information to prepare effective 14 control programs to achieve the Ambient Air Quality Control 15 Standards. 16 I would like to thank Dr. Holmes and his staff for 17 their efforts in providing the Research Screening Committee 18 with timely staff reviews so that we can better evaluate the 19 research projects that come before us for review. 20 I would like to express my respect for your Board 21 and its staff. It's a pleasure to serve you as you steer a 22 course to provide the maximum environmental protection and 23 maximum economic benefit to California. 24 We hope that we will be able to assist you as you 25 make decisions that lead to healthful air quality in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 87 1 California. 2 Finally, our Committee reviewed the report that you 3 are considering today, and we recommend you approve it. 4 I will now turn the meeting or presentation back to 5 Mr. Kenny. 6 MR. KENNY: Thank you, Dr. Cota. 7 I do want to thank the entire Research Screening 8 Committee. Without their assistance, we wouldn't be able to 9 really provide to you the information that we provide to you 10 on a regular basis, so they are invaluable to us. 11 This year we continue the solicitation of research 12 ideas from the public. We received 75 public research ideas, 13 six of which were developed into projects that are included 14 in this plan. 15 The research planning process is as follows, I have 16 established a research team within the staff of the Air 17 Resources Board representing the seven research categories in 18 the plan. 19 These teams meet to develop and review staff 20 research ideas, to review the public's research ideas and to 21 submit priority projects to the Executive Research Review 22 Committee. 23 This Committee, which I Chair, consists of my three 24 deputies, Mr. Cackette, Mr. Scheible and Ms. Terry, and the 25 Research Division Chief, Dr. John Holmes. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 88 1 The task of the Executive Review Committee is to 2 decide which projects to recommend for funding. This year 3 sixteen projects are recommended for funding, and six 4 projects are recommended if funding is available. 5 Eleven of the twenty-two projects in the report 6 address different aspects of particulate matter. The 7 proposed Extramural Research budget for next fiscal year is 8 $2,900,000. 9 The plan shows how the budget would be allocated to 10 the recommended projects in the various research categories. 11 I should note that in addition to the Extramural 12 Research Program, the Board sponsors research under several 13 other programs for which the Legislature has provided more 14 narrowly defined objectives, either in statute or in the 15 Budget Act. 16 These programs, which are periodically reviewed by 17 the Board, are listed for your information on page 4 of the 18 report. 19 A planned research for these programs does not 20 appear in the report before you today. These other programs 21 are carefully coordinated with the Board's Extramural 22 Research Program. 23 The resulting projects are also reviewed by the 24 Board before contracts are awarded. 25 Now I would like to introduce Dr. Steven Brown, of PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 89 1 the Research Division, and he will take us through next 2 year's planned research. 3 Dr. Brown. 4 DR. BROWN: Thank you, Mr. Kenny. Good morning 5 Chairman Dunlap and Members of the Board, and Chairman Cota 6 and Members of the Committee. 7 In accordance with the California Health and Safety 8 Code, the Air Resources Board investigates the causes of air 9 pollution, the effects of air pollution and the solutions of 10 air pollution in California. 11 In planning the research program, we try to look 12 ahead to address the potential environmental problems and 13 regulatory needs. 14 The Mobile Source Control, the Stationary Source 15 and the Technical Support Divisions play major rules in 16 deciding our research program. 17 Each Chair is one of the research teams established 18 by Mr. Kenny. We also work closely with the South Coast Air 19 Quality Management District to coordinate our research 20 programs. 21 In September of last year, we solicited research 22 ideas from the public by mail, and in February of this year, 23 we hosted a public workshop to present staff project 24 selections and to receive comments from the public. 25 The report you are receiving includes a summary, an PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 90 1 introduction that outlines the planning process and 2 descriptions of 22 proposed research projects. 3 As Mr. Kenny mentioned, this year we have 16 4 projects listed as recommended, and 6 listed as recommended 5 if funding available. 6 We have grouped the proposed projects identified by 7 the research teams into four research areas, as shown on this 8 slide. 9 Proceeding by research area, I will go through the 10 proposed projects for next fiscal year. Seven projects are 11 proposed in the first research area, motor vehicles and 12 fuels. 13 Three of these projects involve exhaust emission 14 testing for particulate matter and other pollutants, and the 15 last project on this slide will measure PM emissions from 16 tire and brake wear. 17 This slide shows the remaining three projects in 18 this research area. The first is a demonstration of level 19 three, or high power charging of electric vehicles. 20 The second is the development of an automated 21 system for analyzing motor vehicle activity. Global 22 positioning and a geographic information system would be used 23 to determine the time, distance and purpose of the vehicle 24 trips to improve the mobile source emissions inventory. 25 The last project will determine nonregistration PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 91 1 rate of onroad vehicles. 2 Four projects are proposed in the next research 3 area, toxic air contaminants. The first would add a risk 4 assessment module to the hot spots integrated computer 5 program. 6 The second would examine alternatives to methylene 7 chloride furniture stripping. The third would determine the 8 exposure to crystal and silica and fine minerals near sources 9 of these materials. 10 The last project would investigate air dispersion 11 modeling near pollutant sources. Under the California Clean 12 Air Act, the Board provides technical assistance to local air 13 districts to support their activities. 14 We are proposing nine projects in two of the 15 research categories under this area, stationary sources and 16 regional air quality. 17 The next slide those shows the three stationary 18 sources projects. The first will investigate low reactivity 19 solvents for use in reformulated consumer products. 20 The second project will demonstrate a high volume 21 collection system for measuring hydrocarbon leaks. 22 The final project in this category would estimate 23 ammonia emission factors using a fabric deneuter. 24 Six regional air quality projects are proposed. 25 This slide shows the first three projects, all of which are PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 92 1 designed to improve our modeling capabilities. 2 The last project on this slide is the improvement 3 of a regional ozone model. The next slide shows the three 4 remaining projects in this category. 5 The first project would improve our Ozone Control 6 Program, while the final two projects would help us better 7 understand particulate matter. 8 California Ambient Air Quality Standards are 9 designed to prevent or minimize adverse health and 10 environmental effects. 11 We have two projects in the health effects research 12 category. Both projects are designed to help us better 13 assess the effects of PM exposure and thus provide the Board 14 an improved scientific basis for establishing standards. 15 As Mr. Kenny stated, we anticipate an Extramural 16 Research budget of just under $3 million. This corresponds 17 to the total cost for the 16 recommended projects for next 18 fiscal year. 19 This figure shows the proposed allocation for these 20 projects among the program areas. Air quality standards 21 would receive 21 percent of the funding, the California Clean 22 Air Act would receive 23 percent, motor vehicles and fuels 23 would receive 43 percent and toxic air contaminants would 24 receive 13 percent. 25 I would now like to describe the next steps in the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 93 1 process. The projects that I have mentioned are now in the 2 conceptual stage. 3 These projects, with your approval of this report, 4 will then be developed into either Requests for Proposals, or 5 interagency agreements in consultation with the Research 6 Screening Committee. 7 The resulting proposals or agreements are evaluated 8 for their technical merit by staff and presented to the 9 Research Screening Committee for review before coming to you 10 for approval. 11 This concludes my presentation. Each team is 12 represented here today to answer questions you may have on 13 specific projects. 14 BOARD MEMBER RIORDAN: Let me ask Mr. Kenny if he 15 has any other comments, and then I will open it up to 16 questions by the Board Members for staff. 17 MR. KENNY: Nothing further. 18 CHAIRMAN DUNLAP: Board Members, are there any 19 questions of the staff at this point? 20 We have one speaker, and I will ask Mr. Wang to 21 come forward, please, from WSPA. 22 MR. WANG: Thank you. Good morning. 23 I want to thank you for having the chance to, once 24 again, have WSPA come before you on many different issues. 25 Today we want to thank staff for their response to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 94 1 our comments. We made some suggestions about some programs 2 and projects, and they made two recommendations, which I 3 wanted to note. 4 First, staff agreed to place Nonregistered Onroad 5 Vehicle Project in the recommended, if funding is available, 6 category, and to place reactivity and 3A modeling in the 7 recommended category, and we certainly appreciated that. 8 The classifications, though, brings up some 9 additional comments. We are unclear as to what, if funding 10 is available, meant in terms of the potential for realignment 11 of existing project funds for some initial seed money for 12 starting some of those, if project funding is available, 13 getting those started until the completion of the funds were 14 made available. 15 CHAIRMAN DUNLAP: Do you want us to answer that 16 now, or do you want us to hold you in suspense, Michael? 17 MR. WANG: I can't stand suspense, you know that. 18 CHAIRMAN DUNLAP: Mr. Kenny, or Mr. Barham, what do 19 you mean by that artful phrase you have added there, some 20 kind of windfall coverage, or what? 21 MR. BARHAM: I wish it were that simple, 22 Mr. Chairman. 23 Each year we present to you a plan for research. 24 Until last year, we showed you basically what we 25 were going to fund, up to the dollar amount that we had PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 95 1 available. 2 What we would find over the years, through their 3 co-funding, or through the primary method of competitive 4 bidding on contracts, or a number of other issues, money 5 sources become available to us, projects are sometimes 6 dropped, for example, the money is freed up and we can 7 redirect it into other areas. 8 CHAIRMAN DUNLAP: If you are a tough negotiator in 9 your competitive bid process, we will save a few bucks, 10 Mr. Zeldin goes back to his organization, says, hey, this is 11 really good, we got to get into this, that might provide some 12 dollars, for example, right? 13 Okay. 14 MR. WANG: Can we be put on the top of the 15 contingent list, then? 16 CHAIRMAN DUNLAP: What Mr. Wang probably wanted to 17 ask, but was too much of a gentleman, would there like be 18 enforcement money available or something, and that is not 19 what you are looking at, right? 20 MR. BARHAM: No. 21 MR. KENNY: With the addition of guarantee of 22 matching funds, we could probably be convinced to putting it 23 on the top of the list. 24 CHAIRMAN DUNLAP: We borrow that wallet on 25 occasion, Michael. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 96 1 MR. WANG: We will just continue to work, and 2 hopefully we will have some kind of luck in terms of 3 additional funding. 4 One final comment, it was impressive the package in 5 terms of the research. It is pretty impressive, it shows 6 that there is a tremendous amount of research in a number of 7 different categories. 8 The research projects in this Agenda item, as well 9 as some of the problems before the ARB, whether they be toxic 10 air contaminants, diesel, PM 2.5 criteria pollutants suggest 11 that ARB may want to consider a larger topic in the near 12 future, and that topic would be an integrated study of the 13 effects of indoor and outdoor pollution of overall health 14 risks of individuals. 15 You have almost built that program, if you look at 16 the outline on page 4, you have a tremendous amount of money 17 dedicated to indoor air pollution, you have a tremendous 18 amount of money dedicated to children's health, you could be 19 able to take this and integrate it much in the way the EPA 20 has with the total exposure assessment methodology and you 21 have done is you will have taken the outdoor risk, the risks 22 associated with human health that you have all been working 23 with, the risk of, the reduction regulations at the local 24 district level, you will have integrated it into an approach 25 of, certainly, there are statutory implications for all this, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 97 1 and I think that this is more of a research suggestion, that 2 at some point, I think if California continues to want to 3 lead in this effort, you are going to have to look at the 4 integration of indoor and outdoor and all of the other 5 aspects of risks together, and I just thought that I would 6 put that in there as a potential approach for next year and 7 the years following. 8 CHAIRMAN DUNLAP: All right. Mr. Kenny, why don't 9 you guys, as you explore how to build this, Research 10 Screening Committee consider that. 11 What I am picking up from that Michael, it's more 12 of a framing, how we frame it, and perhaps refer to it, it 13 appears that we have lined things up for stationary source, 14 for example, for mobile, we have not split it up in another 15 way. 16 Does the Research Screening Committee have any 17 issue with that? 18 It seems like a reasonable suggestion. That's it 19 for the witnesses. 20 Anyone else want to speak on this item? 21 All right. 22 Any written comments? 23 It isn't a regulatory item, so we don't need to 24 close the record. We have before us a Resolution, 98-21, 25 which contains the staff recommendations and that of the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 98 1 Research Screening Committee. 2 The Chair would entertain a motion and a second on 3 this item. 4 BOARD MEMBER EDGERTON: I move it. 5 CHAIRMAN DUNLAP: Ms. Edgerton made the motion, 6 Mark seconded it. 7 Any discussion that we need to have? 8 BOARD MEMBER FRIEDMAN: I wonder if, this is fine. 9 I congratulate everyone on their prescience of what we need 10 to be looking for, but it occurs to me, every year a certain 11 amount of funding ends for projects. 12 I have not seen, mainly because I have not been 13 here all the year, a summary of each project funded and the 14 results of that project, and a comment by the staff of the 15 significance, what significance has resulted from 16 accomplishment or completion of the study, and I think that 17 would be immensely helpful, and it should be done yearly. 18 You get bits and pieces in different ways, but a 19 very simple, one or two page summary of the X number of 20 completed research opportunities would be very good for the 21 Board. 22 MR. SCHEIBLE: I was aware of the fact that we do a 23 summary, and so I was just asking Bob whether or not we also 24 have a kind of annotation that are suggesting, and it looks 25 like we may actually have that, and so we will get that to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 99 1 the Board immediately. 2 BOARD MEMBER FRIEDMAN: In a nice concise way. 3 BOARD MEMBER RIORDAN: Isn't there printed 4 something that I have? 5 MR. BARHAM: There is a printed summary. In the 6 past we have attached that to the research plan as an 7 addendum. 8 We just didn't include it in what you have today, 9 but we have it in that form and also as a stand alone 10 document. 11 BOARD MEMBER RIORDAN: I think it is the stand 12 alone's that come to me. 13 MR. SCHEIBLE: We will get that to you right away. 14 CHAIRMAN DUNLAP: I think Dr. Friedman's comments, 15 that we are doing a lot of work, we are spending a lot of the 16 State's resources and there is not a problem at all in 17 trumpeting what has been accomplished, and we all know that 18 in research there are going to be some things that turn out 19 as anticipated and there are some that are not going to, and 20 it is important to be fair in how we present that 21 information. 22 It should be out there. 23 Also, Bob, there probably could be a very nice 24 historical document done about what's happened the last 15, 25 20 years with research, and I encourage you to do something PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 100 1 like that, more of a grand summary. 2 MR. SCHEIBLE: We will give it to you in a 300 page 3 book, no problem. 4 CHAIRMAN DUNLAP: All right. We have a motion and 5 a second, to move Resolution 98-21. 6 If there is no further discussion, we will proceed 7 with a voice vote. 8 All those in favor, say aye. 9 Any opposed? 10 Very good. The motion carries. 11 Thank you, again, to the staff and the Research 12 Screening Committee. 13 We will look forward to our lunch meeting with you 14 in a few moments. 15 How is the Court Reporter doing? 16 Why don't we let folks change their positions. We 17 will go to item number four, and we will give you just a 18 minute to stretch. 19 (Thereupon a discussion was held off the record.) 20 CHAIRMAN DUNLAP: Now we will move to research item 21 98-5-4. The next item before the Board are two research 22 proposals, and I believe that all the Board Members have had 23 the opportunity to review these proposals. 24 Are there any additional concerns or comments by 25 Members of the Board? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 101 1 Mr. Kenny, do you want to just remind us of the two 2 topics right now, would you do that for me? 3 MR. KENNY: Mr. Barham, if you could summarize, 4 that would be great. 5 MR. BARHAM: Very briefly, the first one is looking 6 at resuspension of airborne lead. We have done some 7 monitoring, we would expect to see lead to fall off, it has 8 dramatically over the years, but we still are seeing elevated 9 levels on occasion. 10 This project is designed to try answer why we are 11 seeing that. 12 CHAIRMAN DUNLAP: This deals with inorganic lead, 13 as well, and we took it up as a toxic air contaminant item a 14 year and a couple of months ago, right? 15 MR. BARHAM: Sometime ago. The second project is 16 looking at the air quality impacts of distributed energy. 17 There is a fairly large movement now going toward 18 smaller generated plans on-site to generate electricity, as 19 opposed to tying into large grids and the old way of doing 20 it. 21 We believe there are air quality impacts associated 22 with that, we don't know what they are exactly at this point, 23 but we were able to partner with a DOE project that was 24 underway to put this project together to look at that 25 question. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 102 1 CHAIRMAN DUNLAP: Okay. Mike, this is a similar, 2 we had a visit with some folks about making these small 3 turbines -- 4 Okay. Very good. 5 I personally can vouch for these items. I 6 personally see them as consistent, and Mr. Kenny, and the 7 research team of the staff have followed up, I think, in a 8 proper manner. 9 Yes. Ms. Rakow. 10 BOARD MEMBER RAKOW: I am particularly interested 11 in the distributed generation proposal, and I mentioned to 12 Bob that perhaps my former employee, the Energy Commission, 13 might have some monies to put with this, if need be. 14 MR. SCHEIBLE: Well, actually, just on that real 15 quickly, we have actually been coordinating quite a bit with 16 the Energy Commission and making sure that the two programs 17 are integrated so they can take advantage of each other's 18 expertise. 19 CHAIRMAN DUNLAP: All right. The Chair would 20 entertain a motion to approve Resolutions 98-22 and 98-23. 21 BOARD MEMBER RAKOW: I make that motion. 22 CHAIRMAN DUNLAP: Seconded by Dr. Friedman. 23 Any discussion that we need to have, further 24 discussion on these two items? 25 If not, we will proceed with a voice vote, and can PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 103 1 I merge them, Kathleen, can we do one voice vote for both? 2 MS. WALSH: That would be fine. 3 CHAIRMAN DUNLAP: All those in favor of Resolution 4 98-22 and Resolution 98-23, regarding research, please 5 say aye. 6 Any opposed? 7 Thank you. 8 We have two items left. 9 We have tentatively set for a lunch break around 10 12:30, so I am going to try and be bold here and see if we 11 can finish these up. 12 Mr. Kenny, are you okay with that, can we get 13 going? 14 All right. We will move then to 98-5-5. 15 I would again like to remind those in the audience 16 that would like to provide comments to check in with the 17 Clerk to the Board, Ms. Hutchens, and if you have written 18 comments, please provide her with 20 copies. 19 Next item, 98-5-5, is a Public Meeting to Consider 20 Fiscal Year 1997-98 Grant Awards for the Rice Straw 21 Demonstration Project. 22 Last year the Rice Straw Demonstration Project 23 Fund, which created with the joint support of the rice 24 growers and the environmental community to provide 25 cost-sharing grants to spawn commercial activities that use PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 104 1 rice straw as a raw material. 2 The goal of the Rice Fund is to invest the public 3 money in activities that create a market for Sacramento 4 Valley rice straw, to turn an agricultural disposal problem 5 into a new commodity. 6 Today we have an unique opportunity to take a major 7 step forward to achieving that goal by awarding grants for 8 the first group of projects. 9 I'm delighted that the Air Resources Board has the 10 opportunity to be part of this very positive program. 11 Four months ago, the Board approved the funding 12 criteria and invitation for grant requests for the Rice Fund. 13 As a result, 12 grant requests were received 14 representing a diverse range of projects, and the grant 15 requests were evaluated according to the criteria the Board 16 approved in January, and today the staff is recommending that 17 three projects of the 12 be awarded grants for this fiscal 18 year for a total of $2.07 million. 19 So with that, Mr. Kenny, would you introduce the 20 item, please. 21 MR. KENNY: Thank you, Mr. Chair. Members of the 22 Board, as Chairman Dunlap indicated, the grant requests were 23 evaluated according to the criteria adopted by the Board in 24 January. 25 The evaluation team consisted of four experts in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 105 1 business and economics, three technology experts and three 2 rice straw experts. 3 The staff recommends that the three proposed 4 projects which received the highest rankings be awarded 5 grants from the Rice Fund. 6 Mr. Cackett, Mr. Scheible and Ms. Terry and I, each 7 reviewed the proposals and we agree with staff's 8 recommendations. 9 We believe that the three projects meet the 10 criteria of the Program and offer us the best prospects of 11 succeeding in creating a market for Sacramento Valley rice 12 straw. 13 In its presentation, staff will describe these 14 three projects and explain why we ask that the Board award 15 them grants by passing the three resolutions before you. 16 Lesha Hyrnchuk, of our Technical Support Division, 17 will now make the staff presentation. 18 Ms. Hyrnchuk. 19 MS. HYRNCHUK: Good morning, Chairman Dunlap and 20 Members of the Board. 21 We asked that you consider today staff's 22 recommendations for fiscal year 1997-98 grant awards from the 23 Rice Straw Demonstration Project Fund. 24 This slide shows the outline of my brief 25 presentation. I will first present some background PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 106 1 information about the Rice Fund Program, list the 2 prescreening criteria, discuss the funding criteria used to 3 evaluate the grant requests, describe the application review 4 process and summarize the three projects which staff is 5 recommending for grant awards today. 6 The Rice Fund was created by Senate Bill 318 with 7 the goal of helping to create a market for Sacramento Valley 8 rice straw. 9 The funding criteria used to evaluate the grant 10 requests were adopted by the Board at the January 11 twenty-ninth public meeting. 12 The focus of the Rice Fund is on projects close to 13 commercialization with the best chances of succeeding in the 14 marketplace. 15 Straw collection and marketing projects at early 16 stages of development are also encouraged, since this is area 17 which would benefit future rice straw projects even after the 18 Rice Fund Program has ended. 19 $2,070,000 is available for grants this fiscal 20 year. 21 First, I would like to list the basic criteria used 22 for screening projects. Projects not meeting these four 23 basic criteria were disqualified from further review. 24 First of all, the projects had to use Sacramento 25 Valley rice straw. Second, applicants had to meet two PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 107 1 minimum matching fund requirements. 2 The first was that the Rice Fund could only be 3 asked to fund a maximum of 50 percent of the total projects 4 cost. 5 The second minimum matching funds requirement was 6 the applicant had to contribute a minimum of 20 percent of 7 the total project cost. 8 This requirement was to demonstrate significant 9 personal commitment to the project by the applicant, that the 10 applicant was also taking significant risk in the project. 11 The third basic criterion was the project had to be 12 technically sound, and the fourth was a completed application 13 by the specified deadline. 14 This slide shows the four categories of funding 15 criteria for which grant requests were evaluated after 16 passing prescreening. 17 The area of technical plan review had the following 18 four criteria: A viable technology for utilization of rice 19 straw, reasonable and complete project, stage of technology 20 development and technical competency of the project team. 21 The area of the business plan review had the 22 following four criteria, business merit and commercialization 23 plan, straw apply plan, financial support and credit 24 integrity, business competency of the project team. 25 The area of program goal satisfaction had four PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 108 1 criteria also, potential quantity of straw to be used 2 annually, length of time to self-sustaining operation, 3 project location and replication potential and local 4 community support. 5 The area of policy assessment had two criteria, 6 policy assessment and environmental effects. 7 The application review process, 12 grant requests 8 were received and were screened for the four basic 9 prescreening criteria. 10 Five of these failed the prescreening process, 11 primarily for not meeting minimum matching fund requirements. 12 The remaining seven were evaluated by reviewers 13 with the following expertise, we had technical experts, 14 business experts and rice straw experts. 15 The seven applicants made presentations about their 16 projects at a public meeting in April. All seven applicants 17 met with reviewers in clarification meetings where they 18 responded to reviewers questions and comments. 19 The reviewers evaluated all seven applications and 20 recommended ratings for all applications in their area of 21 expertise. 22 Staff consolidated reviewers ratings and completed 23 the score for each application. This review process resulted 24 in the following three projects receiving the highest scores, 25 which staff is recommending for grant awards. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 109 1 Preprocessing of rice straw for multiple products, 2 submitted by Anderson Hay and Grain Company, Incorporated, 3 Bioboard Plant for Colusa, California, submitted by FiberTech 4 USA, incorporated, Production of Fermented Animal Feed from 5 Sacramento Valley Rice Straw, Prototype and Commercial Pilot, 6 submitted by MBI International. 7 Staff concurs with the reviewers that these three 8 projects have the best chances of success, and together are 9 the best mix of projects for this fiscal year's grant awards. 10 With the next six slides, I will summarize the 11 project proposals and evaluations of these three projects. 12 Currently, only about 8,800 tons of rice straw have 13 been used off-field annually. Anderson Hay and Grain 14 proposed to develop the infrastructure necessary for handling 15 large quantities of rice straw, getting the straw from the 16 fields to the businesses that would use the straw. 17 An Anderson Group Company currently manufactures 18 erosion control blankets from Imperial Valley wheat straw. 19 Based on recent successful trials, this company 20 would use rice straw, creating an immediate market. 21 Anderson proposes to develop the necessary 22 protocols for exporting rice straw to Asia for livestock 23 feed, which would create a very large market for rice straw. 24 Anderson has shepherded on behalf of the national 25 and export forage industry every successful forage customs PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 110 1 protocol through United States and Asian Government channels. 2 Anderson would also determine if rice straw could 3 be processed to end-user specifications for use in the pulp, 4 paper and board industries. 5 Anderson's proposed project would span three years, 6 and after five years would use approximately 205,000 tons of 7 straw per year. 8 This slide summarizes the reviewers evaluation of 9 the Anderson proposal. This project would provide the needed 10 straw infrastructure, which straw users have identified as a 11 common obstacle to launching businesses using rice straw. 12 Anderson's project team was judged to have 13 excellent technical and business competency and directly 14 related experience in all project areas using various kinds 15 of straw. 16 Anderson was judged to have the soundest financial 17 capability and integrity. This project would use significant 18 quantities of straw for exporting livestock feed. 19 Staff recommends that a grant award of $500,000 for 20 the Anderson project. Anderson's matching contribution would 21 bring almost a million dollars to the project. 22 Next, FiberTech USA, Inc., project proposal. 23 FiberTech's project is to manufacture particle board using 24 rice straw. 25 FiberTech already has a 14,000 square foot facility PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 111 1 and eight acres of straw storage in the Colusa Industrial 2 Park. 3 FiberTech plans to be in production by the end of 4 this year, and expects to be commercially viable within six 5 months after start-up. 6 The FiberTech project would last nine months under 7 the Rice Fund. This first facility would use between 25,000 8 to 40,000 tons of straw per year. 9 FiberTech plans to build facilities in the future, 10 and projects using between 125,000 to 200,000 tons of straw 11 per year after five years. 12 Now the evaluation of proposal. The product, 13 called bioboard, looks like wood-based particle board and 14 would be used in similar applications, because of this, 15 reviewers judged the product to have excellent potential for 16 ready acceptance in the large particle board market. 17 FiberTech's project is very close to 18 commercialization and would use a large quantity of rice 19 straw in the near term. 20 This project would be the first significant use of 21 Sacramento Valley rice straw, which would start with the 1998 22 straw harvest. 23 FiberTech has already made significant investments 24 of time and money into the project, and has already 25 demonstrated its ability to procure, store and handle large PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 112 1 amounts of rice straw. 2 For the FiberTech project, staff recommends a grant 3 award of $750,000. FiberTech commits its existing facility 4 and a matching contribution of corporate and borrowed funds 5 of $839,000. 6 The third recommended project was submitted by 7 MBI International, to convert rice straw into a high value 8 animal feed for dairy and beef cattle for the domestic 9 market. 10 The technology is based on the patented ammonia 11 fiber explosion process, which enhances the digestibility and 12 food value of the rice straw. 13 MBI would build a mobile pilot plant, optimize the 14 straw conversion process, perform live animal feeding trials 15 and produce the engineering plans for the first full-scale 16 production facility. 17 This Rice Fund portion of the project would take 18 one year. If commercial operation is feasible, the first 19 full-scale commercial plant would be built in the year 2,002 20 to 2,003, which would consume between 160,000 to 330,000 tons 21 of straw per year. 22 MBI has demonstrated significant commitment to 23 develop a full-scale production facility. If MBI is 24 successful in this endeavor, a very significant quantity of 25 rice straw will be used. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 113 1 MBI was judged to have excellent technical 2 credentials, and through its business developments 3 subsidiary, good business credentials. 4 The product was judged to be priced for easy entry 5 into the domestic feed market, which currently relies on out 6 of state imports. 7 MBI has gained financial support from Federal 8 agencies and commitments from Federal and State agencies and 9 private industry in collaborating on the feeding trials. 10 Staff recommends a grant award of $820,000 for the 11 MBI project. MBI's matching contribution is $820,000, 12 including $328,000 of it's own money. 13 We ask the Board to consider awarding grants to 14 these three projects by passing the three proposed 15 resolutions before you, which direct the Executive Officer to 16 execute all necessary documents to implement the Rice Fund 17 Grant Awards to Anderson Hay and Grain Company, FiberTech USA 18 and MBI International. 19 The three applicants whom we are recommending for 20 grant awards are here today to answer any questions that you 21 may have. 22 CHAIRMAN DUNLAP: Thank you, Ms. Hyrnchuk. 23 I appreciate that presentation. 24 We have one witness, so with the Board's 25 indulgence, why don't we go to the witness, and then we will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 114 1 take questions then. 2 Bob Herkert, from the California Rice Industry 3 Association, otherwise known as CRIA. 4 MR. HERKERT: Thank you, Mr. Chairman. Bob Herkert, 5 I'm the Field Service Manager for the Rice Industry 6 Association. 7 Just briefly, we wanted to compliment you, sir, and 8 your staff, for the very fine work that they did in putting 9 this project together quickly with much credibility, and we 10 are here to ask you to support the staff recommendations. 11 CHAIRMAN DUNLAP: Thank you. 12 Dr. Friedman. 13 BOARD MEMBER FRIEDMAN: I have a small question, 14 and I know I have asked it before, but I can't remember the 15 answer. 16 How many tons per year are produced of rice straw, 17 number one, and number two, how many tons get burned per 18 year? 19 MS. HYRNCHUK: Approximately 500,000 acres of straw 20 are grown, we used a conversion figure of three tons of straw 21 per acre, so we say 1.5 million acres of straw are produced, 22 and currently, 38 percent of the straw is allowed to be 23 burned, and approximately this amount will continue for the 24 next three years. 25 BOARD MEMBER FRIEDMAN: If these projects succeed, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 115 1 and we hope they do, you have made a major inroad, it's 2 another third of the total amount that there may be a real 3 use for, and I think it is terrific, these are really 4 exciting proposals. 5 CHAIRMAN DUNLAP: I would agree with that. 6 I also think this industry has been one that has 7 really worked hard to stay abreast of the law, what we have 8 been working on, Terry and your team, you have been long 9 suffering as you've worked through these things, and I 10 appreciate what you have had to do here, plus the Legislature 11 has recognized this as priority effort and that is where the 12 dollars came from. 13 If there isn't much in the way of discussion, or 14 any discussion, the Chair would entertain a motion to adopt 15 Resolutions 98-24, 98-25, and 98-26, which is move the staff 16 recommendation. 17 I have a motion made by Supervisor Silva, is there 18 a second? 19 A second by Dr. Friedman. Thank you. 20 Any other discussion that we need to have? 21 We will do a voice vote with an abstention put 22 forth by Mr. Parnell. 23 With that, all of the Board Members in favor of 24 approving these three Resolutions, say aye. 25 Any opposed? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 116 1 Very good. Thank you. 2 Again, thank you, to staff. What we will do then, 3 we have two more items. 4 One is a public comment period, which will be the 5 last item. The sixth item, what I will try to do is get 6 through the staff presentation. 7 It is my understanding that Mr. Loscutoff is 8 coming; is that right? 9 Bill, we will pause a moment while you sprint down 10 the aisle there. The next item is 98-5-6, a Public Hearing 11 to Consider the Adoption, Amendment and Repeal of Regulations 12 Regarding Certification Procedures and Test Procedures for 13 Gasoline Vapor Recovery Systems, the 1990 Federal Clean Air 14 Act amendments directed the U.S. EPA to require vapor 15 recovery systems for gasoline dispensing facilities in each 16 of 37 major metropolitan regions in the U.S. 17 This, of course, will be used to assist in 18 attaining the Ozone Ambient Air Quality Standard. 19 However, California was the first to require vapor 20 recovery at gasoline dispensing facilities, with California 21 districts beginning the Program in the early 1970's. 22 By 1977, the ARB adopted the first set of 23 certification test procedures for vapor recovery systems, 24 including those for bulk plants, terminals and cargo tanks. 25 The vapor recovery procedures are periodically PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 117 1 updated to keep up with new technology, the last such update 2 occurring in 1996. 3 We will consider revisions proposed to deal with 4 the interaction of dispensing equipment vapor recovery 5 systems with vehicle of onboard refueling vapor recovery and 6 other new developments. 7 So at this point, Mr. Kenny, would you please 8 introduce the item. 9 MR. KENNY: Thank you, Mr. Chairman, and Members of 10 the Board. 11 The revised procedures we proposed for adoption 12 today have been written by our Monitoring Laboratory 13 Division. 14 They represent the work of the staff of that 15 Division, as well as the efforts of many other groups, 16 including our Compliance Division, which certifies vehicle 17 recovery systems, the businesses which manufacturers sell 18 volume use such systems and the companies that use these 19 systems and the local districts, which have primary authority 20 for permitting the operation of and enforcing the performance 21 requirements for such systems. 22 There are two main objectives for this proposal. 23 One is to adopt a procedure to determine compatibility of 24 vapor recovery systems with onboard vapor recovery systems on 25 vehicles, which were introduced in the 1998 model year. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 118 1 The second is to provide a temporary exemption for 2 airport refueler cargo tanks to allow safe annual leak tests 3 for these tanks. 4 Staff has also taken this opportunity to make 5 several modifications and clarifications to the existing test 6 procedures to improve their effectiveness and safety. 7 At this time, I would like to turn the presentation 8 over to Cindy Castronovo, of our Monitoring and Laboratory 9 Division, who will review the staff's recommendations. 10 Ms. Castronovo. 11 MS. CASTRONOVO: Thank you, Mr. Kenny. Good 12 afternoon Chairman Dunlap and Members of the Board. 13 I am pleased to present our proposed revisions to 14 the Vapor Recovery Certification and Test Procedures. 15 Our presentation will begin with an introduction to 16 the Vapor Recovery Program, then will focus on our proposed 17 revisions to the Vapor Recovery Procedures. 18 After that, I will discuss our outreach efforts to 19 effected parties and finally, provide information on economic 20 and environmental impacts of our proposal. 21 Vapor recovery is a control strategy for reducing 22 hydrocarbon emissions during gasoline refueling and transfer 23 operations. 24 The Vapor Recovery Program was initiated in the 25 early 1970's, to reduce the formation of ozone in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 119 1 nonattainment areas. 2 In 1987, the use of vapor recovery systems was 3 expanded statewide as part of the ARB's Air Toxic Control 4 Measure for benzine emissions. 5 In California, uncontrolled hydrocarbon emissions 6 from gasoline marketing operations are estimated at 450 tons 7 per day. 8 Vapor recovery systems reduce hydrocarbon emissions 9 by an estimated 410 tons per day, or 150,000 tons per year 10 and save 49 million gallons of gasoline annually. 11 Gasoline vapor control systems also reduce exposure 12 to benzine, reducing benzine cancer incidents attributable to 13 gasoline vapor exposure by an estimated 83 percent. 14 Now I will discuss our proposed revisions to the 15 vapor recovery procedures. These test procedures are used by 16 the ARB to certify systems, and some are used by districts 17 for ensuring compliance with performance specifications. 18 We propose to add a new certification test 19 procedure to check for ORVR compatibility, ORVR is Onboard 20 Refueling Vapor Recovery. 21 We are requesting a temporary exemption for airport 22 refueler cargo tanks to allow them to conduct their annual 23 Leak Decay Test safely and legally. 24 A second new procedure, the Tie Tank Test, was 25 requested by the districts to ensure that gasoline dispensing PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 120 1 facility underground storage tanks are connected correctly. 2 Finally, we propose several improvements and 3 clarifications to the existing test procedures, which result 4 primarily from both agency and private tester comments 5 regarding their use. 6 Onboard Refueling Vapor Recovery, or ORVR, was 7 discussed before this Board in May of 1995. At that time the 8 Board decided not to seek a waiver from the Federal ORVR 9 Program, although California already lead the nation in 10 Phase II Vapor Recovery Implementation. 11 ORVR is being phased in over the next several 12 years. This slide shows the implementation of ORVR for 13 light-duty vehicles. Light-duty trucks and medium-duty 14 vehicles will also be subject to this requirement. 15 Using historical vehicle turn-over rates, we can 16 estimate the penetration of ORVR vehicles in the California 17 fleet over the next several years. 18 This chart indicates that five years from now over 19 half the vehicles on the road are expected to be equipped 20 with ORVR. 21 Before we discuss the ORVR Test Procedure, I would 22 like review the Phase II Vapor Recovery Process at a gasoline 23 facilities, or service stations. 24 When fueling a non ORVR vehicle, vapors displaced 25 from the vehicle tank are routed back through the nozzle into PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 121 1 the underground storage tank. 2 The original Phase II Systems were balance systems 3 with booted nozzles, which relied on a seal at the nozzle 4 fill pipe interface to recover the displaced gasoline vapors. 5 The newer Phase II Systems are bootless and use a 6 vacuum pump to draw in vapors into a series of holes in the 7 nozzle. 8 We concerned about the possible increases in 9 overall emissions when using the vacuum assist systems while 10 fueling and ORVR vehicle as we have two devices seeking to 11 control the same emissions. 12 Instead of the vapors being returned to the 13 underground tank, the vapors go into a carbon cannister on 14 the vehicle. 15 As the vapors are no longer available at the 16 nozzle, the assist system will draw air into the underground 17 tank. 18 Gasoline will evaporate into the air leading to 19 vapor volumes exceeding the capacity of the storage tank. 20 These will result in fugitive emissions unless 21 controls are present. The proposed ORVR Test would be added 22 to the existing series of tests required for Phase II 23 equipment certification. 24 The Test Procedure has two options, depending on 25 vapor growth would be controlled. The applicant has the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 122 1 option of either limiting the air injestion while fueling an 2 ORVR vehicle, or by controlling emissions from the 3 underground storage tank. 4 Although we cannot, at this time, quantify the 5 emission impacts of ORVR, we believe that based on our 6 previous analyses and related field studies, that 7 significant potential increases in emissions will occur as 8 ORVR penetration increases. 9 Thus, we are proposing that the new ORVR Procedure 10 be adopted to apply to new and revised certifications at this 11 time, and that we return to you next year with a complete 12 emission and economic analysis, and a recommendation on how 13 to address existing certified systems. 14 We do not feel that we can continue in good faith 15 to certify systems which are not compatible with ORVR based 16 on the limited data we have, however, we also recognize the 17 substantial investment that the service station operators 18 have made for Phase II Systems, and want to carefully 19 consider any action that may require replacement or retrofit 20 of those systems already installed. 21 Our second item proposes a temporary exemption for 22 airport refuelers. An airport refueler is defined as a cargo 23 tank which has a total capacity no greater than 2,000 24 gallons, exclusively transports afgas and jet fuel and is not 25 licensed for public highway use. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 123 1 As part of their annual certification, all cargo 2 tanks must undergo a Pressure Decay Test to check for leaks. 3 However, for safety reasons, gasoline vapors must 4 be removed before the test is conducted. The test procedure 5 prohibits venting vapors to atmosphere and most cargo tank 6 operators can satisfy this requirement by venting to a 7 loading rack control system, or loading with diesel fuel just 8 before the test. 9 Airport refueler do not leave the airports, and 10 most do not meet the Department of Transportation, or Motor 11 Vehicle Code Requirements to travel on public roads. 12 They cannot switch fuel with diesel due to the 13 danger of afgas contamination. Thus, airport refueler must 14 seek variance relief to vent emissions legally before the 15 test. 16 This exemption will expire when at least two ARB 17 Certified, Mobile Vapor Processors are available. 18 These Processors would travel to the airports and 19 thus could be used to degas the airport refuelers of vapors 20 off-site. 21 Several other changes are proposed for remaining 22 procedures. The Tie Tank Test is a proposed new test 23 procedure to check for proper underground plumbing 24 configurations at gasoline dispensing facilities. 25 This procedure was requested by several air PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 124 1 pollution control districts to assist with their inspection 2 of permitting of gasoline dispensing facilities. 3 One test procedure was redesigned to reduce tester 4 exposure to gasoline vapors and reduce the number of test 5 runs. 6 Other improvements include clarifications to the 7 test procedures as requested by private testers, districts 8 and ARB staff, who use these procedures. 9 Some test method issues have not yet been resolved, 10 including the Pressure decay Test used by districts for 11 compliance purposes. 12 Although we are clarifying the language of the 13 present Pressure Decay Test, we are committed to working with 14 the districts to further evaluate this particular test method 15 and to develop accurate methods that will best ensure ongoing 16 compliance of vapor recovery systems. 17 Two workshops were held to solicit input from 18 affected parties. The staff would like to acknowledge the 19 assistance provided by the CAPCOA Vapor Recovery Technical 20 Committee, particularly the Bay Area Air Quality Management 21 District and the San Diego Air Pollution Control District, 22 who provided original drafts of some of the proposed 23 procedures. 24 We also appreciate the comments and suggestions 25 from the equipment manufacturers, independent testers and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 125 1 industry associations. 2 I have already mentioned the limited application of 3 the proposed ORVR Test Procedure to ensure existing certified 4 systems are not subject to replacement or retrofit at this 5 time, however there will be increased testing costs estimated 6 at $5,500 to a vapor equipment manufacturers who choose to 7 submit a new application for certification. 8 This is a one time certification cost to the 9 Phase II equipment manufacturer to conduct the ORVR 10 Compatibility Test. 11 We expect hydrocarbon emissions of a tenth of a ton 12 per year as a result of the Airport Refueler Exemption. 13 We are working to quantify the emissions associated 14 with the introduction of ORVR and will return to the Board 15 next year and recommend further action if warranted. 16 In summary, I would like to point out the 17 consequences of not adopting these proposed revisions. 18 Delaying use of the ORVR Compatibility Test 19 Procedure will allow continued certification of systems which 20 expected to lead to increased emissions, though how much of 21 an increase is not yet known. 22 Denying the Airport Refueler Exemption will force 23 these cargo tanks to discontinue operation or operate in 24 violation of the law. 25 If the method revisions are not adopted, some PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 126 1 confusion will remain regarding method requirements and 2 safety improvements would be lost. 3 As I close my presentation, I would like to draw 4 your attention to the package of recommended 15 day changes, 5 which has been provided to you. 6 We have made several minor technical revisions 7 based on comments received during the 45 day comment period. 8 That concludes my presentation. 9 CHAIRMAN DUNLAP: Mr. Oulrey, do you want to give 10 us an overview of the Ombudsman's view of this effort? 11 MR. OULREY: Yes, Mr. Chairman. 12 Staff proposal was initiated in the first half of 13 1996, and it was developed after months of communication with 14 the effected stakeholders, that is over 800 interested 15 parties, such as owners and operators of service stations, 16 boat plants, terminals and cargo tanks, representatives of 17 trade groups, local air pollution control district personal 18 and vapor recovery equipment manufacturers. 19 Over 800 interested parties were invited to public 20 workshops conducted in Sacramento on October 30, 1997, and 21 January 15, 1998, for all of the proposed procedures that are 22 before you today. 23 The workshop notices were placed on ARB's Website. 24 180 comments were received in association with the first 25 workshop, and ARB's staff comment response document was made PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 127 1 available at the second workshop this past January. 2 Eight comment letters were received in association 3 with the second workshop. Staff also participated in related 4 meetings, such as the ARB sponsored Onboard Refueling Vapor 5 Recovery Working Group in June and October of 1996, in 6 Sacramento, the CAPCOA Subcommittee on Vapor Recovery, April 7 of 1997, in Santa Barbara, and in September of 1997, in 8 Monterey, also in April of 1998, in Fresno. 9 The Society of Automotive Engineers Task Force and 10 two vapor recovery training seminars, March 3, 1998, at the 11 South Coast AQMD, and March 6, 1998, in Sacramento. 12 In conclusion, all stakeholders have had ample 13 opportunity to participate in the development of these test 14 procedures. 15 CHAIRMAN DUNLAP: All right. Very good. 16 What I think I would like to do, if the Board will 17 agree, is take our break for lunch now, 12:30, and we will 18 come back between an hour and an hour and 15 minutes. 19 We will return back at 1:40. Okay. 20 I must apologize. I am going to lose one of my 21 Board Member colleagues, who has an event he must attend, so 22 we are going to lose one Board Member, or otherwise I would, 23 if we didn't have some folks waiting I would just grind 24 through it, but we will break now, be back at 1:40, and we 25 will proceed. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 128 1 We'll have questions from the Board, and we have 2 four or five witnesses. It is also my understanding, Mr. 3 Kenny, that there is some ongoing discussion with some of the 4 witnesses, and if we need to revise the list just let 5 Ms. Hutchens know. 6 We will now take a break until 1:40. 7 Thank you. 8 (Thereupon the lunch recess was taken.) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 129 1 A F T E R N O O N S E S S I O N 2 --o0o-- 3 CHAIRMAN DUNLAP: Okay. If I could get the folks 4 the take their seats. 5 While the Board is taking their places, I think 6 that what I am going to do is run through the witness list. 7 I have four names on this current list, 8 Ms. Hutchens, and I am told there may be some more added. 9 So we will ask Mr. Healy, Mr. Tiberi, Jeff Trask 10 and Don Leininger to come forward, sit in the front row, if 11 you would, and we will run through your testimony quickly. 12 Gentlemen, I know you have probably come great 13 distance to speak to us on this matter, and I appreciate 14 that. 15 However, I ask that you be as efficient as possible 16 with your testimony, so that we might be able to get this 17 item dealt with by our Board. 18 Mr. Healy, could I get you to come forward first, 19 sir. 20 You are with Healy Systems. I think I have seen 21 your System before, maybe in San Diego, a couple of years 22 ago. I think it was on a Beacon station, or Ultramar 23 station, or something. 24 MR. HEALY: Good afternoon, Mr. Chairman and other 25 Board Members. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 130 1 My name is James Healy, and I'm founder of Healy 2 Systems. 3 We are based in Hudson, New Hampshire, and we 4 produce vapor recovery equipment, and that is our sole 5 product. 6 My purpose here today is to address the issue of 7 the application of new test procedures for ORVR vehicles, and 8 the systems that will service them in an attempt to keep 9 Phase II Vapor Recovery at an efficient level. 10 One of the things that happened to our company last 11 year was that the first phase of this evaluation process, ARB 12 was looking at customer convenience, can a customer fuel a 13 vehicle conveniently without any type of difficulty in 14 accomplishing that task. 15 In February of 1997, all of the stationary systems 16 were put through that test using stick cars and those factory 17 items that were available to assess the problem. 18 We went though and had a problem with about 25 19 percent of those vehicles. We were decertified on two 20 nozzles, 200 nozzle and the 400 nozzle, based on premature 21 shut-off. 22 On premature shut-off, it was a direct result of a 23 feature in the nozzle that is a requirement of the Air 24 Resources Board, that is, to provide a safety feature when 25 refueling a vehicle so that you couldn't have excess vacuum. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 131 1 We worked very hard to correct that problem, not 2 only to correct the compatibility side of it, but to look at 3 the efficiency side of it, and based on the then control 4 measures that were in place, that is what we were going to 5 move forward aggressively and have the new tests and have the 6 implications that that would imply. 7 We solved the problem for our own products by 8 looking at the fuel pipe pressures and determining in doing 9 that what type of vehicle we were fueling. 10 So, we had a smart interface developed that could 11 see the difference between a standard vehicle and an ORVR 12 vehicle, and modify the rate of return so that we could have 13 an efficient Phase II operation, so that we would return very 14 little air to the underground tanks whenever we were fueling 15 that class of vehicle. 16 As time went on, and to this year, and we have a 17 much different part of the program in view now, and that is 18 how efficient are these systems? 19 It is pretty well-known, or understood, by people 20 in your Agency, as well as people in the industry, that 21 assist systems will by and large fail the 95 percent 22 efficiency criteria. 23 We were willing at the beginning to sign off on 24 that. We put a great deal of effort and a great deal of our 25 company's resources into solving the problem. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 132 1 Now we are in the situation where the Board is 2 suggesting that the existing systems, all those that are 3 presently set in, will not be required to prove that they're 4 efficient with ORVR refueling. 5 We went through that effort with a lot of expense, 6 on the basis of the Board's position with regard to moving 7 forward on this Program with ORVR, and now it is a dramatic 8 shift away from that. 9 We decided to look into, what does this mean in 10 terms of cost in the service station and cost in terms of 11 tons recovered, because we wanted to put down some sort of 12 information that your Agency, as well as ourselves, could 13 look at to get a picture of how effective was what we were 14 doing from a technical standpoint, to conserve the efficiency 15 at the station level at a reasonable cost. 16 So, to show you what we have done, because we 17 didn't have sufficient information to do an adequate audit in 18 a short period of time, we decided to look at a typical 19 service station. 20 Show me the next slide here. That is a diagram, 21 which perhaps isn't clear enough in the room to have you make 22 out the actual numbers, but what it does is to assess the 23 operation of a service station. 24 In the case of the mathematics and the science that 25 we went through, we took a look at the year 2000, with PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 133 1 approximately 25 percent ORVR penetration, and based on 2 assist systems not recovering the hydrocarbon vapors that 3 were going to be generated by returning air whenever you are 4 refueling an ORVR vehicle, returning that air to the 5 underground tank, what kind of vapor growth will we have and 6 what kind of losses will we have to the environment. 7 We were frankly surprised to see the magnitude of 8 the numbers. The top graph shows from 50,000 to 200,000, 9 which shows the relative tonnage of hydrocarbons lost to the 10 environment progressing from left to right from 1997 to 2009. 11 This is Figure 1 on page 4. Figure 2 is actually 12 just a reference to let you see what the magnitude would be 13 at a thousand service station level, and currently in the 14 State, mu understand is that there are over 2,000 stations 15 with this class of equipment. 16 So, looking at that calculating point, that 17 150,000 through-put, we come out with 1,150 tons of 18 hydrocarbons per year in the year 2000 per thousand stations, 19 so we would be looking at something very close to 2,500 tons 20 of hydrocarbons to the environment in the year 2000, just 21 around the corner, per year, per year, per day would be 22 magnificent. 23 At any rate, it serves to show the magnitude of 24 this problem, and it also serves to show what you are 25 building in as a potential new source of hydrocarbon PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 134 1 pollution by allowing presently designed systems to stand as 2 existing service stations, and a further part of the proposal 3 as suggested in the Hearing Report is that those systems 4 would be forever exempt and there would therefore be no 5 incentive for manufacturers like ourselves, or dispenser 6 manufacturers who have other types of systems, to develop a 7 solution for ORVR. 8 You would have this ongoing source of pollution, 9 which at some future date would perhaps be addressed for 10 correction, but the longer that it goes, the more expense is 11 associated with that and the more hydrocarbon goes into the 12 environment. 13 To address the relative expense level, if you could 14 turn to page 5, this chart will show the cost per ton of 15 hydrocarbons saved. 16 The left coordinate is essentially zero ORVR. It 17 is 1997, and you'll notice in the lower left, there are two 18 figures there where the curve coming our to the right and 19 heading upwards, and the lower line intersect at the zero 20 point, and they have essentially the same numbers associated 21 with them. 22 The one that heads upward is your present day 23 Assist System, and what the cost per ton would be to 24 recapture hydrocarbons by leaving it in place in its present 25 configuration. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 135 1 It is very easy to see how rapidly that cost per 2 ton rises. The reason for it is that not only do you not 3 have the nonORVR vehicles available to recapture 4 hydrocarbons, but you are also throwing it into the 5 environment, the hydrocarbons, that result from air during 6 the refueling process in ORVR vehicles, so it quickly gets 7 out of sight. 8 The lowest of these curves, a straight actually, 9 starting at that same point shows an Assist System 10 implemented with the type of technology that we have 11 developed for our product line, but it will work with anybody 12 else's assist system, as well. 13 It provides a smart interface that enables the 14 system to recognize this is an ORVR vehicle, and it shuts 15 down the vapor flow, or in this case, air flow, and thereby 16 meets the criteria that CARB has set tentatively in place of 17 not exceeding 50 percent by volume pure air return into the 18 underground tanks. 19 These costs rise slightly, but it is due to the 20 fact that we have progressively less and less hydrocarbons 21 and higher concentration to recover from the nonORVR 22 vehicles. 23 The next page, page 6, it shows the relative costs 24 if we net out just the changes that would be required in 25 order to upgrade a system, the current system, to a system PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 136 1 that had this newer technology to be able to identify ORVR 2 vehicles. 3 Therefore, we are looking here at the difference in 4 cost between present day vacuum assist nozzles and a nozzle 5 of the 800 series that Healy is now manufacturing that will 6 work on other systems. 7 That difference in cost is quite slight, and if you 8 will apply the savings that would accrue because you are 9 going to be not dumping these large quantities of 10 hydrocarbons into the environment, you will actually find 11 that your cost per ton, based on a net cost base, is 12 exceedingly small, indeed well below many of the systems that 13 are currently in place and approved by your Board. 14 BOARD MEMBER EDGERTON: Show me where and how much. 15 Is it on the chart? 16 MR. HEALY: If you look at the left-hand curve, 17 that shows costs starting at about $738 per ton in the year 18 1998, and diminishing, and actually crossing the zero cost 19 line in 2000, sometime between 2000 and 2001. 20 That is based on a four year life for the nozzle. 21 There is also another curve which shows the effects on cost 22 of a life of two years per nozzle. 23 I suspect in the real world that somewhere in 24 between those two curves is where we are going to actually 25 come out. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 137 1 What it does tend to illustrate is that rather than 2 having costs that are going to be a significant burden to the 3 end-user, they will, in fact, crossover that zero line and be 4 actually gaining money for the end-user in the form of 5 gasoline saved that would have otherwise have gone into the 6 environment. 7 In view of the savings and tons of hydrocarbons, 8 and in view of the low costs related to this type of answer 9 to the ORVR smart interface problem, we strongly suggest that 10 the Board move in the direction of applying a standard rule 11 of the new tests with a six month window for all systems to 12 apply that hundred car test and the new ORVR test and prove 13 that they have the necessary efficiency to continue to meet 14 the 95 percent recovery rule that you have had in place these 15 many years. 16 We want a level playing field in this regard. We 17 have done our best to respond to the Board's wishes regarding 18 what we thought was their intentions a year ago, and more. 19 With that expenditure of resources, we have a 20 solution, not that there won't be other solutions, we think 21 there will. 22 Unfortunately, at this time there are not 23 apparently signed up very many companies who have a system 24 that they are willing to submit to test, but that doesn't 25 mean that it isn't going to not happen in the next several PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 138 1 months. 2 If the Board would decide to move ahead 3 aggressively, staying to its usual pattern of requiring new 4 testing when the new conditions change for stationary vapor 5 recovery, that new answers for this problem would surface. 6 I will be happy to answer any detailed questions 7 that you may have in this regard. We do have one other 8 slide, if you could bring up the next one. 9 This particular table shows that there are gains to 10 be made when you net out the costs, and it reflects on the 11 chart we viewed earlier, giving you actual numbers that are 12 related to the simple exchange of a nozzle for an existing 13 nozzle, and on that point, I would encourage the Board to 14 give consideration to a policy that I know is not a favorite 15 to consider, but I think in this case, it has the possibility 16 to work to everyone's advantage, and that is to permit mix 17 and match, and in this case, I think, it has a lot of 18 validity. 19 The end-users have spent in good faith a great deal 20 of money to put in place Vacuum Assisted Vapor Recovery 21 System. 22 They are not being adequately used to the point 23 that their capital investment is being effectively used if 24 they are not going to be permitted to use these nozzles until 25 they are worn to the point where they need to be brought to a PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 139 1 factory and rebuilt. 2 The type of technology that we bring to this 3 problem wouldn't permit the use of a nozzle, let's say, on 4 only the regular gasoline in a service station. 5 The customer has a preference for about 80 percent 6 of the fuel that is sold here to be regular gasoline, and in 7 that event, only one-third of the nozzles are being replaced, 8 but since it represents 80 percent of the gasoline, and these 9 nozzles will only return a very small percentage of air 10 compared to the liquid delivered, it provides a great deal of 11 residual space underground to take the air that will be 12 ingested by the other two products when they are refueling. 13 So, for 10 gallons dispensed from an 800 nozzle, 14 less than two gallons of air will return, but 10 gallons 15 dispensed from the existing nozzles they have, there will 16 probably be 11 gallons return. 17 So, the combination of removing 10 gallons of 18 liquid and having the residual eight gallons left from other 19 sales with the 800 style of nozzle, you can cover the vapor 20 growth that is going to result from fueling with the other 21 two product types of nozzles. 22 In this manner, you could allow the service station 23 owner to gradually use the life of the nozzles he currently 24 owns, since they would be decertified, and presumably, would 25 fall within your four year grandfathering provision, and as PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 140 1 they wear out he could replace with the newer technology. 2 In that way, he have maximum advantage for the 3 capital of the equipment that he's purchased. He would use 4 the nozzles to the extent that they were workable, and he 5 would enter into an ORVR compatible technology with extremely 6 low cost. 7 CHAIRMAN DUNLAP: Well, Mr. Healy, I want to move 8 on here. I want to see if we have any questions for you. 9 Ms. Edgerton. 10 BOARD MEMBER EDGERTON: No. I will ask staff. 11 CHAIRMAN DUNLAP: Thank you. I appreciate that. 12 So, based upon Mr. Healy's presentation, staff, 13 where is their disagreement with your proposal and what he 14 has outlined? 15 MR. LOSCUTOFF: We agree with most of Mr. Healy's 16 statements. Many meetings and field studies have been done 17 to evaluate the effects of ORVR compatibility. 18 He, in developing this analysis, he made several 19 assumptions about what the emissions might be and what the 20 costs may be. 21 We have not, we feel, collected enough data to 22 verify those assumptions. We have ongoing research projects, 23 and as we said in our presentation, we would like to wait 24 until that firm emission data is in and that we are able to 25 collect economic data from all effected parties before we PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 141 1 would proceed. 2 BOARD MEMBER EDGERTON: May I ask a question? 3 CHAIRMAN DUNLAP: Sure. 4 BOARD MEMBER EDGERTON: His presentation, Mr. 5 Healy's presentation, did seem like a win, win, in that there 6 would be hydrocarbons, 2,000 tons that would not go into the 7 air per year, and there would be savings for those people, 8 those stations where they replace their systems. 9 I don't understand why your proposal doesn't 10 include his analysis and why -- I don't understand why you 11 limited the proposal before us, and why it didn't take this 12 into account, since you have been working with him all along? 13 MR. LOSCUTOFF: We don't disagree with the 14 analysis. 15 It is the level of data presently available to 16 verify assumptions that have been included in the analysis, 17 and soon as we can verify those assumptions, we fully expect 18 to come back to the Board, and hopefully, the analysis will 19 be confirmed and we will be able to take the appropriate 20 action to get into this win, win situation. 21 BOARD MEMBER EDGERTON: So, if I am understanding 22 you correctly, it is, again, we see this often, it's a 23 problem of timing, to some extent. 24 For example, I left lunch early to come back and 25 try to read the lawyers letter and try to understand this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 142 1 report. 2 It says it was prepared May 21, 1999, and then the 3 letter was delivered to us this morning, so part of it is 4 that there just isn't enough time and it should have 5 considered the information that they had collected prior to 6 the 45 days for the other, for the new systems, is that 7 what's behind the delay in this not being included in it? 8 MR. KENNY: I think that part of the issue here is 9 that as we do our regulatory proposals, what we have to do is 10 make sure that, in fact, we do both the environmental 11 assessments and the economic assessments. 12 Mr. Healy has done an economic assessment in which 13 he is showing that there is a win, win for both parties. 14 That economic assessment may actually bear out, but 15 at this point in time, we have not yet concluded our required 16 economic assessment under State law, so that we can, 17 basically, validate that he is, in fact, accurate. 18 Once we conclude that, we will be prepared at that 19 point to come back to the Board and take advantage of win, 20 win opportunity if, in fact, the assumptions that are in that 21 economic analysis are verified. 22 BOARD MEMBER EDGERTON: Just to follow-up a minute 23 here, he did say that it was his impression that the old, or 24 the existing systems would not ever have to be replaced under 25 our plan. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 143 1 So, if I understand you correctly, that is not 2 true, and you are planning on giving his system the full 3 analysis by the staff, which he has already done, tracking 4 his, verifying his and coming back to this Board with 5 proposals that are appropriate for the existing fuel recovery 6 systems. 7 MR. LOSTCUTOFF: That is correct. 8 We have a study in progress right now that, which 9 hopefully will be completed by this summer, and when we have 10 the data quantifying both the environmental and economic 11 benefits and costs, then we fully intend to come back to the 12 Board as quickly as we can. 13 BOARD MEMBER EDGERTON: When is the research report 14 due? 15 MR. LOSCUTOFF: This summer. 16 BOARD MEMBER EDGERTON: So, would you anticipate 17 coming back to us before the end of this calendar year? 18 MR. LOSCUTOFF: We would want to workshop the costs 19 and the emission benefits, and go through that public 20 process, so it would be very difficult to get back before the 21 end of the calendar year, but we would endeavor to back as 22 quickly as we could. 23 MR. KENNY: I think that in terms of trying to 24 provide some definition to that, assuming that we have the 25 information available to us in mid-summer, I am just going to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 144 1 pick July fifteenth as a representative of that, it would 2 take us at least some period of time to assess that 3 information. 4 Assuming that we could do that in, say a month, or 5 a month and a half, we are then into September. We will have 6 to at least workshop the information so that the public has 7 an opportunity to participate on both sides of the issue. 8 Once that is completed, we then have an 9 opportunity, we actually have an obligation to put together a 10 staff report, which puts forth our recommendations and 11 proposals for the Board. 12 That staff report has to be put out, essentially, 13 two months in advance of any Board hearing, so I think when 14 you run all of those timeframes together, it would be almost 15 impossible to get a proposal to the Board in 1998. 16 BOARD MEMBER EDGERTON: But you are committed to 17 capturing. I thought it was very exciting, what he said, 18 that this was a way to have a win, win, so I appreciate your 19 answers. 20 MR. KENNY: We like win, win. 21 BOARD MEMBER EDGERTON: I know you do. 22 CHAIRMAN DUNLAP: Okay. We have got eight other 23 witnesses. 24 So that the Board is not confused, I am going to 25 ask each of the witness to talk about where they stand on the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 145 1 proposal. 2 Mr. Healy did a fine job, but I personally am 3 having a little bit of time tracking it back to the staff 4 proposal, so I need the rest of the witnesses to be able to 5 specifically identify where they are relative to the staff 6 proposal. 7 Mr. Tiberi and Mr. Trask, next, and then Mr. 8 Leininger, Mr. McDowell, Mr. Hartsell, Mr. Bisker, Mr. Fink 9 and Mr. Kovack. 10 If you would all line up in the front row, we will 11 get you on, soon. 12 MR. TIBERI: Thank you, Mr. Chairman, and ladies 13 and gentlemen of the Board. 14 As an entrepreneur, I'm not really experience 15 addressing a public forum, but I'm happy to come out here 16 from Chicago. 17 I am a founder of the company called ARID 18 Technologies. I started the company five years ago to 19 commercialize membrane technology that was developed 20 initially in Germany. 21 I have served on three CARB subcommittees charged 22 with investigating ORVR Stage II interactions, and I have 23 actively participated in numerous CAPCOA technical sessions. 24 To give you an idea, ARID designs and manufactures 25 membrane base systems for bulk terminals in retail gasoline PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 146 1 stations. 2 Really, I am here today for three reasons. I 3 outlined the discussion items that I wanted to cover, and I 4 think in the discussions that have taken place so far, they 5 have largely been covered. 6 First, I wanted to make some comments that are 7 based on engineering and scientific principles regarding 8 storage tank evaporation losses. 9 I think Cindy did that very well with her graphic. 10 It is well-known that air ingestion into storage tanks 11 creates volume growth, pressure builds and emissions are 12 generated from the tankage. 13 I also wanted to support quantification of 14 evaporation losses using automatic tank gauge technologies. 15 There has been some history of various testing 16 protocols that have been attempted to measure and monitor 17 very accurately, using a mass balance, the emission from a 18 given storage tank system. 19 You look at some of the trends in the industry 20 today, automatic tank gauges were used initially for 21 inventory reconciliation to monitor leaks. 22 Those tank gauges are so accurate that vendors have 23 used those now to schedule deliveries and to do business 24 management, to use these tools as a business management tool. 25 It just so happens that the accuracy of these PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 147 1 gauges are such that they can measure daily evaporative 2 losses from horizontal storage tanks. 3 Our models predict values, that are in your notes, 4 on the various tables, and I won't go through the details 5 now, but the losses that a 150,000 gallon a month station 6 would incur are on the order of eight gallons a day. 7 That would need the measurement of on the order of 8 three hundredths of an inch in an horizontal tank of 10,000 9 gallons at half height. 10 Commercial vendors claim a measurement accuracy of 11 a thousandth of an inch. So, the technology is there, the 12 point is the technology is there to accurately monitor and 13 measure evaporation losses. 14 The third point, I also wanted to get an idea of 15 the timeframe of the Arrow Environment Study. I think that 16 has kind of been covered, as well. 17 The Study has been talked about since March of 18 1993, and here we are in May of 1998. We are still expecting 19 results. 20 That Study would be a key input into the measuring 21 stick of being able to accurately quantify the economic 22 impact of vapor recovery. 23 I also would like to briefly go through some of the 24 points that haven't been covered. I won't go through all of 25 my comments, but just some highlights in the handout that I PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 148 1 have provided. 2 From a fundamental technical level, I think we are 3 all in agreement that air ingestion into tanks causes vapor 4 growth and evaporation. 5 That air ingestion can enter, either through a 6 pumped vapor recovery system, or through natural convective 7 entry through the vent lines. 8 Whether or not the vent lines contain PV valves, 9 pressure vacuum valves were really an artifact of increasing 10 Stage I Vapor Recovery efficiencies, i.e., bulk tank, or 11 balancing during the drop. 12 I made the point also about .8, on page two of 13 handout, automatic tank gauges, I think should be seriously 14 looked at in the future work that is being done. 15 On the .9, I would like to suggest a linkage -- 16 CHAIRMAN DUNLAP: I need you to relate it back to 17 the proposal, because I think, I mean, I think some of this 18 group thinks that the Board is intimate with every small 19 segment of this discussion and that would be a false 20 assumption. 21 So what I need you to say is, staff says this, we 22 think this, that way we can track it, by the way, you are 23 doing very well for a first time testifier, so relax. 24 MR. TIBERI: I am a real testifier here. 25 In terms of the staff proposal, the talk is for PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 149 1 getting the results from the study, which impacts Mr. Healy's 2 presentation and just everyone else's in terms of quantifying 3 what the differential in inventory is. 4 If that study uses rather sophisticated vent 5 sensing technologies that are very hard to figure out what is 6 going on it, it is more difficult than using just a standard 7 automatic tank gauge to take a close look at temperature 8 corrected volumes and getting a real good handle, for the 9 first time, a handle on the inventory balance, the mass 10 balance, measuring what was delivered to the station by 11 tanker, measuring what the meter said were sold and measuring 12 the level, the residual level in the tank, basically doing an 13 inventory reconciliation, a very accurate inventory 14 reconciliation. 15 CHAIRMAN DUNLAP: Okay. 16 MR. TIBERI: I would also like to suggest, there 17 was recent studies done in the San Francisco Bay Area, San 18 Diego County and Monterey Bay Area regarding A over L ratios. 19 A over L ratios, for the Board, are the ratio of 20 air returned by these systems divided by the volume of liquid 21 dispensed. 22 It's a measure of the effectiveness of the pumping 23 system recovering vapors from the vehicle. So, an A over L 24 of a certain number for a certain system means everything is 25 fine, the system is operating properly according to PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 150 1 certification. 2 A random test of systems installed in these various 3 areas revealed a failure rate of 30 to 88 percent, pretty 4 significant numbers, which basically said, these systems 5 weren't performing properly as certified. 6 A lot of those failures are due, indeed, to hanging 7 hardware problems. Hanging hardware means the stuff that 8 comes out of the dispenser, the host, the nozzle, the break 9 away, that is hanging hardware. 10 Some issues there are with condensation, kinkage, 11 not related to this action of the Executive Officer. 12 The reason that I bring that up is that I suggest a 13 linkage between some of those failure rates, the numbers were 14 failing low, the A over L's were below the proper ratio. 15 When you take an increased tank pressure in the 16 storage system and you couple that with a small vacuum pump, 17 or a centralized vacuum pump, the vacuum pump has to fight 18 against a higher back pressure to function, and when that 19 happens, the suction capacity is reduced. 20 So, an artifact of higher tank pressure in addition 21 evaporative losses and fugitive in vent losses, is a reduced 22 suction capacity of the nozzle, which could explain, in part, 23 some of the high failure ratio. 24 I would just like to conclude by talking about a 25 couple of economic issues. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 151 1 The consensus, the feeling is that modifying 2 existing systems, retrofitting existing systems with 3 processing technology is a negative net present value 4 proposition, that there is a cost per ton as opposed to a 5 revenue per ton. 6 I say contrary, I say au contraire, there is indeed 7 a net present value that is positive. In the handout that I 8 have given, Table 1 calculates a 16 percent IRR for a station 9 pumping a 150,000 gallons a month that installs our Membrane 10 Based Vapor Recovery System. 11 The savings in salable product far outweigh the 12 expenses incurred, so there is, indeed, a potential to pay 13 back these systems, and it is a true win, win. 14 The environment is clean, and the end-user is 15 rewarded for their installation by generating a positive NPV. 16 Moreover, the municipalities benefit because they 17 collect higher tax revenue. The evaporate losses for 18 marketers who are reporting meter volumes, you are not 19 collecting taxes on those volumes because they don't have 20 that volume to sell, so that's an increased revenue source, 21 not only for the end-user, but for the municipalities. 22 I would go one step further in terms of some really 23 kind of futuristic, forward thinking programs relative to 24 emission reduction credits and discreet emission reductions, 25 DRS, there is a market for trading these credits. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 152 1 In fact, the State of California just adopted such 2 a market recently, well, in certain areas. There, for $2,000 3 a ton, VOC, the emission reduction credit, IRR's go from 16 4 percent to 100 percent for this type of application. 5 Given the fact that we have six other commenters, 6 and I'm out of gas here, I think that I will conclude my 7 comments. 8 CHAIRMAN DUNLAP: Thank you, Mr. Tiberi. I 9 appreciate your comments. 10 Now, staff, he made some suggestions there. How 11 does it relate to the staff proposal? 12 Are we in synch? 13 Are we not? 14 Plus he seems like he's a pretty good guy. He has 15 been serving on your advisory committees and CAPCOA. He 16 should have some insight. 17 So, are we in synch with what Mr. Tiberi thinks is 18 a priority? 19 MR. LOSCUTOFF: We are interpreting his comments as 20 being supportive of moving more quickly, similar to what Mr. 21 Healy was proposing, and we have the same comments that we 22 made with respect to Mr. Healy's statement. 23 CHAIRMAN DUNLAP: Okay. 24 BOARD MEMBER EDGERTON: May I ask a question? 25 CHAIRMAN DUNLAP: I notice, Mark, that when he was PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 153 1 talking about revenue enhancement at the local level, Mark 2 was rocking in his chair and he was going a little bit 3 faster, is there any -- he had a concept there that he 4 presented about revenues and more efficient system, is that, 5 do you agree with that? 6 MS. CASTRONOVO: I think the point he was making is 7 the more gasoline vapor that you can recover with your 8 system, then the more product that you can have come back 9 into your tank. 10 CHAIRMAN DUNLAP: Okay. 11 BOARD MEMBER EDGERTON: I thought he was actually 12 going a little bit farther in saying that some of our 13 programs could be designed to perhaps give incentives, I 14 wasn't sure if that was it for market credits, as well, I 15 didn't know if that's what he was doing. 16 BOARD MEMBER RIORDAN: He's shaking his head, yes. 17 BOARD MEMBER EDGERTON: Oh good. I didn't make a 18 fool of myself. 19 One question, I was, the staff could help me on 20 this, on the Arrow Environment Study that has been apparently 21 going since 1993, is there a difference in the way that the 22 Study is measuring the disparity? 23 He laid out a very simple way that even I could 24 understand how you would measure what was lost and gained 25 there, and the implication for what he said was that perhaps PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 154 1 the research air that Arrow Environment was doing had a more 2 subtle, but less repeatable kind of measurement system that 3 would not be particularly helpful, or as accurate as what he 4 identified. 5 MR. LOSCUTOFF: We are in the process right now of 6 reviewing the progress of the Arrow Environment Study, and 7 this is something we will take back as we look at exactly 8 what is being done. 9 There is tests that are being conducted right now, 10 as I understand, so we will be considering what he has 11 suggested and comparing it to exactly what is being done. 12 CHAIRMAN DUNLAP: All right. I don't know why it 13 is taking so long for this Study, was it 25 year Study or 14 something? 15 MR. CACKETTE: No. 16 It was protested twice and had to be reissued three 17 times before it was awarded. 18 So the Study has only been underway for less than a 19 year. 20 CHAIRMAN DUNLAP: Arrow Environments, they do 21 terrific work most of the time. Mr. Trask, from API and 22 WSPA. 23 We had a nice visit with Mr. Wang, you aren't going 24 to do anything to impact that, are you, today? 25 MR. TRASK: I wasn't planning on it. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 155 1 I'm Jeff Trask, and I am with the American 2 Petroleum Institute in Washington D.C. 3 I am pleased to be here today to testify on behalf 4 of both the API and the Western States Petroleum Association. 5 Our Associations represent members of market 6 gasoline which use Phase II Vapor Recovery at thousands of 7 retail gasoline outlets in California and across the country. 8 This testimony today supplements written comments 9 that we filed with the staff on the procedures of the April 10 third staff report. 11 We are resubmitting those comments to day for your 12 consideration. I would like to highlight our major concerns 13 with the proposed tests, and starting first with the proposed 14 ORVR Phase II Compatibility Test, TP 201.2D. 15 Just so you know exactly where we are coming, API 16 and WSPA remain strongly supportive of ORVR. Within a few 17 years, ORVR will be included in new cars and trucks sold 18 throughout the country and lead to cost-effective control of 19 fueling emissions throughout California. 20 But as many new technologies, potential problems 21 were identified prior to ORVR phase-in last year. 22 Concerns were expressed that customers could 23 experience fueling difficulties with some ORVR combination 24 Phase II combinations. 25 Your staff were instrumental in developing and PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 156 1 carrying out a test program to identify potential refueling 2 problems between various ORVR configurations and Stage II 3 systems. 4 Staff's testing showed most fuelings would be 5 trouble-free. The Program identified only a few combinations 6 of vehicles and fueling equipment that might cause customers 7 fueling difficulties, and staff worked with effected parties 8 to resolve them prior to the introduction of ORVR equipped 9 cars late last year. 10 Staff is finding that ORVR would not cause fueling 11 difficulties has been verified by new car customers. 12 During the first year of phase-in, ORVR equipped 13 cars have been fueled throughout the country without reports 14 of unusual problems. 15 A similar orderly approach is needed regarding the 16 potential for emissions increases with ORVR Phase II fueling. 17 The proposed compatibility test addresses a 18 theoretical emissions increase that has not been verified. 19 As with potential fueling problems identified 20 before the ORVR phase-in, testing is needed to see if the 21 ORVR in Phase II fueling unacceptably increases the 22 emissions. 23 If so, changes to refueling emissions control 24 requirements should be made only after these three steps. 25 First, quantifying any emissions increase; and second, PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 157 1 evaluating all solutions for minimizing unacceptable 2 emissions increases; and third, determining timing and cost 3 effectiveness of all practical solutions. 4 Now, I would like to address each of these points, 5 first, for quantifying emissions increases. ARB has 6 contracted with Arrow Environmental Services to attempt to 7 determine if emissions increase with the combination of ORVR 8 Phase II fueling. 9 Staff may be able to use data from the Study to 10 estimate any Statewide emissions increase. However, this 11 quantification must take several factors into account, 12 including the ORVR phase-in schedule and differences in ORVR 13 and Phase II System designs. 14 ORVR Phase II compatibility protocol should not be 15 developed until emissions data show a need. However, we 16 strongly endorse staff's proposal to limit the compatibility 17 test being considered today to new or modified Phase II 18 System certifications. 19 If adopted, we understand the test would not apply 20 to an estimated 14,000 gasoline dispensing facilities in 21 California, or to those seeking to install equipment under 22 existing Phase II certifications. 23 If the test proposed today is adopted, ARB should 24 consider modifying the test criteria in the future if data 25 shows emissions are more appropriate than those included in PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 158 1 the proposal. 2 At this point, I would like to move away, just 3 briefly, from my prepared remarks that you have, and I would 4 like to go to the proposed 15 day changes. 5 On page 1, under proposed C P-201, which is 6 basically the first bullet item, Certification Procedure for 7 Vapor Recovery Systems for Dispensing Facilities. 8 The first point there says, language will be added 9 to require the installation of ORVR compatible vapor recovery 10 systems for new or rebuilt dispensing facilities after the 11 date of adoption of this certification procedure. 12 We talked a little bit with some of the staff about 13 what that means, and our understanding is that this proposed 14 15 day change would mean that districts would in effect be 15 prohibited from allowing installation of currently certified 16 Phase II Systems. 17 That is a complete and total surprise to us. 18 Again, from our prepared testimony, we were under the 19 understanding that existing certifications were not going to 20 be affected by this test procedure, so that those who were 21 interested in installing equipment that had a certification 22 in place, could do so. 23 CHAIRMAN DUNLAP: Staff, the charge has been made 24 that you surprised folks at the eleventh hour here, how do 25 you plead? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 159 1 MS. CASTRONOVO: It was a surprise to 2 Mr. Trask. 3 This suggested change was made in response to a 4 comment received during the 45 day period from a district, 5 and we do support that. 6 CHAIRMAN DUNLAP: All right. Now do you need a 7 lecture from me about, you know, the position that advocates 8 find themselves in when they surprised, you know what I mean, 9 and he is here trying to be supportive, but he's telling us 10 he got hit with something at the last minute, so you got to 11 have a rationale for that, so why don't you try it on us 12 right now. 13 MS. WALSH: If I could make one point, the 15 day 14 notice period does gives folks an opportunity to take this 15 back, look at the change and submit written comment. 16 CHAIRMAN DUNLAP: Understood, but it has the force 17 of being a staff recommendation is the point that I think he 18 is making. 19 So, what changed your mind, which district, and 20 what was the argument? 21 MS. JOHNSTON: Well, the district was the Bay Area 22 District, and one of the interesting things about this 23 proposal is that it would incorporate into the test protocol, 24 or the test procedures, a result that would happen by 25 operation of law at any rate, and the way that this works out PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 160 1 is there is a provision in the Health and Safety Code, 2 41956.1A, which provides that when any of the agencies 3 involved in the certification of vapor recovery equipment, 4 including the Board, adopt a revised standard, that those 5 systems and components that are certified and installed have 6 a four year grace period for remaining in the field. 7 So, a system has to be both certified and installed 8 to take advantage of that grace period. So, my 9 interpretation is that under the districts permitting 10 authority, the districts would be able to prohibit the 11 installation of systems that do not meet the revised standard 12 in any case. 13 There is one caveat on that, there is another 14 statute, which is 41960 A, which provides that if a district 15 wishes to prohibit the installation of certified system, that 16 they must get the Board's concurrence. 17 So, what would happen in this situation is a 18 district could come to the Board and say, we want to require 19 that new facilities meet the new certification requirement 20 and the Board could grant that. 21 What staff is proposing would put that option up 22 front so that everybody would be aware of it right from the 23 beginning, rather than having it, which we think would be 24 more a surprise to manufacturers than offering it as a 15 day 25 change. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 161 1 CHAIRMAN DUNLAP: Okay. Does that explain it for 2 you? 3 MR. TRASK: It explains the law to me. We are 4 interested in, of course, what this language is going to look 5 like, because we do not have the language. 6 CHAIRMAN DUNLAP: You do have a period to do what 7 the district did in that 15 day window, you can get in there 8 and file some comments and have the dialogue with the staff. 9 MR. TRASK: Well, I suspect it will be easier to 10 predict the powerball number, that you are going to get some 11 comments on this from our industry, because this is new. 12 We would encourage you to consider the impact of 13 this both within California and outside of California. 14 Your program gets looked at, and we think this is 15 another issue that could raise some questions of concern 16 outside of California. 17 We would, without, again, not having seen the 18 language, but just the concept, that is a concept that we 19 would probably not support. 20 CHAIRMAN DUNLAP: Okay. 21 MR. TRASK: The second point is about evaluating 22 all possible solutions. As staff's refueling compatibility 23 testing last year demonstrated, various ORVR Phase II 24 combinations behaved differently in terms of fueling 25 characteristics. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 162 1 Now, this may also be true for emissions. In fact, 2 there was a recent staff report that showed that there was a 3 significant variation in the vapor concentrations back 4 through the vapor return line to the service station, 5 depending on what the vehicle was, what type of Phase II 6 System it was and how they were operated to date. 7 So, it really does vary, potentially, quite a bit. 8 So, it is possible that in use together, some ORVR and Phase 9 II combinations may not unacceptably affect emissions, but 10 staff should try to identify those combinations considering 11 both the vehicle and service stations. 12 Third, determining the timing and cost 13 effectiveness of solutions. Modifies Phase II requirements 14 for ORVR will likely be expensive, and probably much more 15 expensive than the cost of the staff report's economic impact 16 analysis. 17 In the report, the cost of upgrading and installing 18 vapor recovery equipment to meet the proposed protocol is 19 estimated at up to $1,500 per facility. 20 This cost may be low, because we know of no 21 demonstrated effective and economic technology generally 22 applicable to Phase II installations, and much of this cost 23 will be borne by small business. 24 Some time ago, your staff established a cost 25 effectiveness work group for ORVR Phase II. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 163 1 We understand it was determined that the cost 2 effectiveness of any refueling emission control system 3 modifications for ORVR before regulatory changes would be 4 made. 5 Given the potential cost to vehicle manufacturers 6 and fuel suppliers, it is critical for this group to consider 7 the timing and cost effectiveness of various approaches 8 before new requirements are imposed. 9 I would like to say that I was pleased to see that 10 staff's presentation this morning highlighted the cost 11 effectiveness, the cost issue, for in-place equipment, and 12 broke it out separately, and we will continue to work with 13 staff on issues of cost, cost effectiveness, regarding 14 regulatory changes in this area. 15 We do have some specific comments on the proposed 16 compatibility tests. These are documented in the written 17 comments, but I want to point out that the procedure must 18 include realistic test parameters, and we support the 19 flexibility that is included in the proposed test to allow 20 equipment manufactures some alternative procedures under 21 appropriate conditions. 22 Finally, we have this comment on the proposed 23 amended Vapor Recovery Test Procedure, TP 201.3, API and WSPA 24 support use of the two-inch water column pressure specified 25 in the proposed amended procedure. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 164 1 We believe a two-inch test is effective and limits 2 emissions that could result from the test procedure. 3 That concludes my testimony. Thank you for the 4 opportunity to speak. 5 I will be happy to answer any questions. 6 CHAIRMAN DUNLAP: Any questions of Mr. Trask? 7 MR. TRASK: I already missed my flight home, so go 8 for it. 9 CHAIRMAN DUNLAP: Okay. Mr. Leininger, from OPW 10 Fueling Components. 11 MR. LEININGER: Mr. Chairman, Board Members. Thank 12 you very much for the opportunity to mention the comments 13 that I have. 14 My name is Don Leininger, and I'm an engineer with 15 the OPW Fueling Components. OPW is a manufacturer of 16 gasoline service station equipment ranging from the hanging 17 hardware that you see above ground, the swivels and nozzles, 18 break-away valves, to also the Phase I equipment that you may 19 or may not see, as it is located with the underground storage 20 tank. 21 We have a concern about one of the proposals for 22 changes to the certification test procedures, in particular. 23 The proposed new test procedure, T P 201.2D, the 24 evaluation of ORVR is mentioned that this procedure will 25 apply only to new certifications and modifications to the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 165 1 existing systems that are currently in the market, not 2 existing systems that are only systems that are going to be 3 new for vapor recovery, will they be used and evaluated for 4 ORVR compatibility. 5 This certainly appears to be a prudent approach, 6 not to require existing systems to be subjected to the test 7 at this time, but rather evaluate the results of the tests 8 that are being completed, as has mentioned in the previous 9 testimony, determine the emission question about ORVR, and 10 then move forward. 11 However, it is also our understanding that the new 12 components for existing vapor recovery systems must undergo 13 this ORVR test. 14 As one of several manufacturers of components for 15 the vapor recovery systems currently in use today, OPW feels 16 that this test requirement for components for existing 17 systems will hinder product development and improvement. 18 If these components are subjected to the ORVR test 19 procedure being proposed on the existing systems today in the 20 field and in the marketplace, it is uncertain if these 21 components would meet the ORVR requirements. 22 Component manufacturers do not have any control of 23 the design of the system from which their component operates. 24 Neither do we have any control of what these 25 systems do with the controlled air that they work with. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 166 1 As an example, recently there have been several 2 workshops throughout the State of California to discuss 3 problems involving assist system concern, that also has been 4 mentioned in Mr. Trask's presentation. 5 Improvements of the hanging hardware for these 6 particular components to improve the systems and rectify the 7 identified problems, may have a hinderance if required to 8 undergo the ORVR Test Program before they can be approved and 9 certified for use on their systems. 10 We feel that rather than restricting technology, 11 the improvements of components by requiring this evaluation 12 of components with the 201.2D Test Procedure. 13 I have proposed a provision be added to the Test 14 Procedure that will offer a means to certify components for 15 existing certified vapor recovery systems without requiring 16 the application of this 201.2D. 17 In the letter that I presented to you, and I think 18 you probably should all have a copy, on page 2, my suggestion 19 is that we add the, statement evaluation of new or redesigned 20 components for use on existing certified vapor recovery 21 systems that have not been approved or evaluated for ORVR 22 compatibility, are not subject to this test. 23 However, the approval may include a statement that 24 the component has not been evaluated for ORVR compatibility. 25 I would encourage you to evaluate this PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 167 1 recommendation and include the provision in the adopted 2 procedures, should you choose to adopt it. 3 I think this would afford an opportunity and a 4 means to provide a definitive concrete statement that 5 manufacturers can read and understand and rely on, as to how 6 their development and engineering of product work should move 7 forward to develop and spend money and time to come out to 8 the California, do the test program as outlined by the 9 procedure and then find out that there is a road block that 10 says, well, you need to go through the ORVR Test and the 11 system of which that component has been designed isn't ORVR 12 compatible, so we can't certify your product, certainly 13 doesn't do a lot to encourage further product development and 14 improvements. 15 So, in conclusion, I would strongly encourage you 16 to evaluate this suggestion, and I would hope you would see 17 fit to maybe include in either the wording or similar wording 18 in the Test Procedure so that new products, product 19 improvements for existing systems, can still be developed and 20 marketed in the State of California and other parts of the 21 country. 22 Again, thank you very much for the opportunity to 23 speak to you. 24 CHAIRMAN DUNLAP: Thank you. 25 Staff, how do you react to this suggestion? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 168 1 MS. CASTRONOVO: We agree that improvements in 2 Phase II technology should be approved and implemented as 3 soon as possible. 4 However, our certification procedure specifically 5 states that the procedures are to apply to the entire system, 6 not individual components, thus we would recommend that we 7 continue to apply the certification procedures only to 8 complete systems. 9 BOARD MEMBER RAKOW: Does this mean a component 10 manufacturer cannot have a nozzle business without doing the 11 whole system? 12 MS. CASTRONOVO: When we issued the certification 13 order, it is not for nozzle. 14 It is nozzle, hose, dispenser, everything that goes 15 along with it. 16 So, if they come in with a new type nozzle, 17 normally what has happened is a modification is done to the 18 existing Executive Order, or to the existing certification, 19 and the evaluation of that new nozzle, or that new component, 20 is done using the existing certification procedure. 21 BOARD MEMBER RAKOW: I'm not following you. I 22 don't understand this procedure. 23 Can you just tell me in plain language, if I had a 24 nozzle, and I wanted to sell it to station X, how would I get 25 that approved? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 169 1 MS. McKINNEY: I am Laura McKinney. I am the 2 Manager of the Certification and Investigation Section. 3 When someone applies for certification of 4 something, for example, a nozzle, the application would say, 5 I would like to have this nozzle certified on this particular 6 system, or on these several systems. 7 We then require that the manufacturers install the 8 equipment in a service station in Sacramento where we monitor 9 it for a period of at least 90 days and then we run an 10 efficiency test. 11 So, if you have a nozzle that you would like 12 certified, you would have to go through the efficiency test 13 on each system on which you would like that nozzle certified 14 and then the certification of the system would be modified to 15 add that nozzle to the list of equipment that may be 16 installed with that system. 17 BOARD MEMBER RAKOW: Thank you. 18 CHAIRMAN DUNLAP: Okay. Next witness is 19 Mr. McDowell, from Hasstech. 20 BOARD MEMBER EDGERTON: Back to that point. 21 In terms of bringing Ms. Rakow's nozzle up, in 22 order to get it certified as part of somebody else's system, 23 do they have to go buy somebody else's system, or do you have 24 service stations here that will corporate with the ARB, so 25 that nozzle can be put on somebody else's system, so then the PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 170 1 nozzle is certified as working with the certified system? 2 MS. McKINNEY: Generally the equipment 3 manufacturers work together, for example, the nozzle 4 manufacturer and the system, the holder of the certification, 5 the designer of the system, generally work together and bring 6 it to us together, and we work with them both. 7 If somebody had a nozzle, they would go to the 8 various companies that have certifications and say, we would 9 like to get our nozzle certified with your system, they come 10 in together and they make arrangements with local service 11 stations in the Sacramento area, often they give them the 12 system, or there is some economic incentive for the station 13 operator to allow the testing to be done there. 14 We don't get involved in that. That is done by the 15 applicant. 16 BOARD MEMBER EDGERTON: What if the certification 17 system manufacturer had their own nozzle and did not want to 18 cooperate with the nozzle maker, the separate nozzle maker? 19 BOARD MEMBER RIORDAN: I have got to move to the 20 next one. 21 MR. LEININGER: Just an example of what we are 22 trying to do. 23 OPW currently has a nozzle that is being tested on 24 two different systems here in Sacramento for certification. 25 We go through all the entire testing. We have been PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 171 1 advised that under the current way that the interpretation is 2 being made, we could get all the way up to the starting gate, 3 but we can't go through, approval will not be possible 4 because those systems, if they are not approved to be 5 compatible with ORVR, then we can't get our nozzle approved 6 because it will not be possible that it will pass that ORVR 7 Compatibility Test. 8 This is where our concern comes from, what 9 incentive do we have to develop new equipment for use on 10 these systems when they potentially may not get certified? 11 BOARD MEMBER RAKOW: That is the question that I 12 would like the staff to address. 13 CHAIRMAN DUNLAP: If I might interrupt for just a 14 moment. 15 What I would like to do is, if the Board is okay 16 with it, I would like to hold this thing over for a month. 17 There are some issues here that need to be 18 resolved, it seems to me. I think we could benefit from an 19 extra month. 20 You all have made some good points. The staff -- 21 it appears to me, not to give them too much of a bad time 22 here, but it seems to me that some of the responses are not 23 as crisp as they might be, so what I would prefer to do is to 24 wait another month and give, Mike, give you and your team 25 some time to be able to work through these things, and there PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 172 1 needs to be a process. 2 Bill, I know you have been working with the CAPCOA 3 Committee, and you have advisory committees. 4 It seems to me we ought to get our arms around it a 5 little better. For those who have testified to us, you have 6 some very specific issues that seem to us to be a little 7 fine, you know, I don't want to say small, but a little bit 8 focused, and I think that the Board could benefit from the 9 extra time to have staff kind of encapsulate this, Mike, get 10 your arms around it and see if we can come back with some 11 compromises relative to content and implementation, not so 12 much relative to direction, or anything like that. 13 I don't want to send any false impression to the 14 industry folks that I'm, you know, Monty Hall, and we are 15 willing to "Make a Deal" here, but we are willing to consider 16 some changes if we can get our arms around the issue on this 17 proposal, so I would ask, if my Board colleagues are 18 comfortable with that, let's punt this for a month. 19 MR. KENNY: May I make a request that in the event 20 that we are unable to essentially resolve these things within 21 a one month period, if we could add at the outset, a two 22 month period? 23 CHAIRMAN DUNLAP: Fine. 24 If the industry is okay with it. 25 Is a 60 day delay okay? PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 173 1 Staff, are you comfortable with that? 2 MR. KENNY: I think there are a lot of issues that 3 have been raised today, and I think we would really like to 4 sit down and discuss those issues. 5 CHAIRMAN DUNLAP: Why don't we plan on that. 6 Come back in two months, and if you can get it done 7 quicker, Mike, if you can get it done in a month, you are 8 welcome to -- well, Kathleen, we have to make sure there is 9 notice issues here. 10 MR. KENNY: I think what we want to do is we want 11 to continue this matter so that, in fact, we can avoid any 12 kind of 45 day notice requirements. 13 MS. WALSH: Right. 14 CHAIRMAN DUNLAP: Is there an Association, I know 15 WSPA was represented, and API, but are the rest of you in any 16 kind of an Association? 17 Mr. Healy, are you in an Association? 18 MR. HEALY: No. 19 CHAIRMAN DUNLAP: So, you guys all speak 20 independently? 21 BOARD MEMBER RIORDAN: They are inventors and 22 entrepreneurs. 23 CHAIRMAN DUNLAP: As the industry, you guys are 24 welcome to bob your head up and down if you like this idea. 25 You like this idea. Okay. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 174 1 That is what we will do. Thank you, for your 2 commentary. 3 I'm grateful for it. We will keep the letters and 4 the packages you sent us. We will make sure we, as homework, 5 this Board, will make sure we go through all of that again. 6 Mike, we will look to you to get out some kind of 7 communication to this group telling them what process and 8 what meetings you are going to have and that kind of thing. 9 MR. KENNY: We will do that, and I think also, just 10 simply for the record, what we will be doing then is 11 continuing this matter until the July hearing, which I 12 believe is on July thirtieth or twenty-ninth. 13 CHAIRMAN DUNLAP: Ron, I apologize to you. 14 You just got into town here, and we are surprising 15 him, too. 16 BOARD MEMBER FRIEDMAN: There are at least two or 17 three people, and me included, I would like to know the 18 extent of the disincentive that appears to be imposed on 19 component part makers who could make a major advance in this 20 area. 21 I think that we want to know that, and maybe you 22 could just encapsulate that for us when it comes back. 23 MR. KENNY: Dr. Friedman, I think that is a very 24 reasonable question, and I think the same kind of question 25 that has been going through several peoples minds, so we will PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 175 1 be happy to look at that. 2 MS. WALSH: Probably the way to proceed 3 procedurally here would be to ask for a motion to continue 4 the matter to July thirty-first, the Board meeting in July. 5 CHAIRMAN DUNLAP: Motion by Dr. Friedman, and 6 seconded by Mrs. Riordan to hold this over to the July Board 7 meeting. 8 Let me give a couple of staff directives here. I 9 want some process relative to some meetings. 10 I think I want to see a chart given to the Board 11 about the folks who have testified and supplied the written 12 comments, what people want to see changed about your 13 proposal, what your proposal is relative to their 14 suggestions, so that we can see it on a matrix. 15 I want to acknowledge the folks that have come 16 great distances to be here, the gentleman came from Chicago, 17 I appreciate that. It is not an easy trip to make. 18 We will try to get as many of these things worked 19 out from staff talking to you all rather than having you all 20 fly back here in July. 21 I have a motion and a second. 22 Any discussion about we want to have? 23 Is everybody okay with this? 24 We will do a voice vote. 25 All of those in favor, say aye. PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 176 1 Any opposed? 2 We have one item remaining and that is Open Comment 3 Period. This is a period in which we allow the public to 4 address the Board on items that are not on the Agenda today. 5 We would ask you to limit your comments to five 6 minutes or less individually. I would like it to be within 7 the subject matter jurisdiction of the Board. 8 Does anyone want to testify or comment before the 9 Board? 10 Mr. Kenny, is there anything else that the Board 11 needs to consider? 12 MR. KENNY: Nothing more today. 13 CHAIRMAN DUNLAP: We will adjourn until tomorrow at 14 eight o'clock. 15 Thank you. 16 (Thereupon the Air Resources Board meeting was 17 adjourned at 3:00 p.m.) 18 --o0o-- 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345 177 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, VICKI L. MEDEIROS, a Certified Shorthand 4 Reporter of the State of California, do hereby certify: 5 That I am a disinterested person herein; that the 6 foregoing hearing was reported in shorthand by me, Vicki L. 7 Medeiros, a Certified Shorthand Reporter of the State of 8 California, and thereafter transcribed into typewriting. 9 I further certify that I am not of counsel or 10 attorney for any of the parties to said hearing nor in any 11 way interested in the outcome of said hearing. 12 IN WITNESS WHEREOF, I have hereunto set my hand 13 this first day of June, 1998. 14 15 16 VICKI L. MEDEIROS 17 Certified Shorthand Reporter License No. 7871 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916) 362-2345