MEETING BEFORE THE CALIFORNIA AIR RESOURCES BOARD BOARD HEARING ROOM 2020 L STREET SACRAMENTO, CALIFORNIA THURSDAY, SEPTEMBER 23, 1999 9:30 A.M. Vicki L. Ogelvie, C.S.R. License No. 7871 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 ii MEMBERS PRESENT Alan C. Lloyd, Ph.D., Chairman Joseph C. Calhoun Dorene D'Adamo Mark DeSaulnier Dr. William Friedman C. Hugh Friedman Matthew R. McKinnon Barbara Patrick Barbara Riordan Ron Roberts Staff: Michael Kenny, Executive Director Tom Cackette, Chief Deputy Executive Officer Mike Scheible, Deputy Executive Officer Lynn Terry, Deputy Executive Officer Kathleen Walsh, General Counsel Kathleen Tschogl, 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 Lloyd 2 AGENDA ITEMS: 99-7-1 Public Hearing to Consider the Adoption of Portable Fuel Container Spillage Control Regulations; and Portable Gasoline Container Emissions Inventory Introductory remarks by Chairman Lloyd 16 Staff Presentation: Mike Kenny 16 Ron Haste 18 Dean Bloudoff 24 Kathleen Tschogl 48 Public Comment: Todd Campbell 62 John Kowalczyk 64 Ron Raboin 105 Don Peters 115 Afternoon Session 120 Verl Law 120 Dana Bell 124 Harold Soens 128 Dave Oakleaf 129 Janet Hathaway 133 Thomas Schmoyer 137 Bill Brown 141 Michael Poirier 146 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 iv I N D E X (Continued) --o0o-- Page John Evans 146 99-7-2 Public Meeting to Consider an Update on California's Mobile Source and Fuels Program Introductory remarks by Chairman Lloyd 167 Staff Presentation: Mike Kenny 168 Sarah Carter 170 Dean Simeroth 181 99-7-3 Public Meeting to Consider a Status Report on Ozone SIP Implementation SIP Revision Process Introductory remarks by Chairman Lloyd 193 Mike Kenny 193 Sylvia Oey 194 Open Session to Provide an Opportunity for Members of the Public to Address the Board on Subject Matters within the Jurisdiction of the Board 213 Adjournment 213 Certificate of Reporter 214 --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 LLOYD: Good morning. 4 The September 23, 1999 public meeting of the Air 5 Resources Board will now come to order. 6 Joe, would you please lead us in the Pledge of 7 Allegiance. 8 BOARD MEMBER CALHOUN: Please stand. 9 (Thereupon the Pledge of Allegiance was recited.) 10 CHAIRMAN LLOYD: Will the Clerk of the Board call 11 the roll. 12 MS. HUTCHENS: Calhoun. 13 BOARD MEMBER CALHOUN: Here. 14 MS. HUTCHENS: D'Adamo. 15 BOARD MEMBER D'ADAMO: Here. 16 MS. HUTCHENS: DeSaulnier. 17 BOARD MEMBER DeSAULNIER: Here. 18 MS. HUTCHENS: Professor Friedman. 19 BOARD MEMBER C.H. FRIEDMAN: Here. 20 MS. HUTCHENS: Dr. Friedman. 21 BOARD MEMBER FRIEDMAN: Here. 22 MS. HUTCHENS: McKinnon. 23 BOARD MEMBER McKINNON: Here. 24 MS. HUTCHENS: Patrick. 25 BOARD MEMBER PATRICK: Here. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 2 1 MS. HUTCHENS: Riordan. 2 BOARD MEMBER RIORDAN: Here. 3 MS. HUTCHENS: Roberts. 4 BOARD MEMBER ROBERTS: Here. 5 MS. HUTCHENS: Chairman Lloyd. 6 CHAIRMAN LLOYD: Here. 7 Good morning, everybody. First of all, it gives me 8 pleasure to introduce a new Board Member today. 9 It is the first meeting of our newest Member, Dee 10 Dee D'Adamo. Governor Davis appointed Ms. Adamo on August 11 third, and I can personally attest that she is off to a 12 running start. 13 She earned her undergraduate degree from the 14 University of Davis, her law degree from McGeorge School of 15 Law, and she is presently serving as Congressman Gary 16 Condit's legal counsel. 17 I am delighted to have Ms. D'Adamo on the Board and 18 would like to call on her at this time to say a few words. 19 BOARD MEMBER D'ADAMO: Thank you. 20 I'm very delighted to be here and excited about the 21 appointment and challenges that meet me ahead. 22 For those of you that don't know me, I have worked 23 as legal counsel to Congressman Condit and have been serving 24 in that capacity off and on since 1989, since elected to 25 Congress. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 3 1 I have worked on a variety of air quality issues 2 since that time, mostly issues that affected his 3 Congressional District in the San Joaquin Valley. 4 I spent the last month getting up to speed on 5 issues that affect the entire state and have had the 6 opportunity to speak at a symposium on air quality issues 7 last week and didn't have much to say because I have had only 8 a brief tenure of a month. 9 I look ahead for the challenges ahead and think 10 there are tremendous opportunities before us. 11 So, thank you very much. 12 CHAIRMAN LLOYD: Thank you very much. We look 13 forward to working with you. 14 Today is also the first Board meeting and eighth 15 day on the job for our new Ombudsman, Kathleen Tschogl, who 16 was appointed by Governor Davis to this position on September 17 first. 18 Kathleen came to us from Raley's Supermarket, 19 where she was their Environmental Affairs Manager and 20 personally convinced Raley's to convert several of its 21 delivery vehicles to cleaner burning natural gas. 22 In the not too distance past, Kathleen also 23 acquired real on-the-road experience as a truck driver 24 herself. 25 Madam Ombudsman, would you also like to say a few PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 4 1 words at this time? 2 OMBUDSMAN TSCHOGL: I am proud and honored to be 3 part of this State agency. 4 Since I come from the business community, I look 5 forward to continuing relationships with my former 6 colleagues. 7 One of my top priorities will be to help them have 8 a deeper understanding of the air quality issues that we are 9 facing and what modest steps they can make to help us reach 10 our air quality goals. 11 Another aspect of the job is to serve as a resource 12 for the regulated community when they feel that their issues 13 are not being addressed or heard by staff. 14 On those occasions, my office will closely research 15 the situation and provide an objective analysis of it, and 16 when it's appropriate, I will intervene and advocate on their 17 behalf. 18 I will be happy to do that. As a life-long 19 environmentalist, I will promote policies to help improve the 20 environment and look forward to working with all of you. 21 CHAIRMAN LLOYD: Thank you, Kathleen. 22 Today we are honored to have the Secretary of 23 Environmental Protection Agency with us, Winston Hickox. 24 We are delighted to have you here. 25 MR. HICKOX: Good morning, Mr. Chairman and Members PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 5 1 of the Air Resources Board. 2 I would like to offer words of welcome to Dee Dee 3 and Kathleen. I had a chance to meet Dee Dee last December 4 when the Governor asked me to serve on a Transition Task 5 Force for air and water. She is a qualified addition to the 6 Board. 7 I looked at the Agenda this morning, and I was 8 tempted to say, don't mess with my gas can, but there are 9 other items that I would like to offer a word or thought 10 about. 11 I'm sure some you had the chance to read The Bee 12 this morning, and once again, our favorite subject, MTBE, is 13 on the minds of some folks, like the press, that is a 14 controversy you would not like to see run, given it was 15 likely to be covered, it is not that bad. 16 I worked to get a quote in and managed to in the 17 third to last paragraph, innocuous as possible. 18 You know that I believe that the work that you have 19 done for cleaner burning fuel strategy is important to 20 overall cleaner air in California. I applaud you for what 21 you have done. 22 We are going to make strides this year in 23 Washington to move toward implementation of the Executive 24 Order on MTBE. 25 All that you do here serves that. Some of you know PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 6 1 that on more than one occasion when we have met with the oil 2 companies to deal with the Clean Air Act requirements, we 3 have made it clear that working forward on RFG 3 is an 4 overall strategy. 5 So, in addition to welcoming the new Board Member 6 and new key staff person, I wanted to thank you, again, for 7 the good work that you have done here and keep it up. 8 I do this often. 9 Any questions? 10 This is like lighting a match, pulling a pin on a 11 grenade. 12 Any questions or thoughts? 13 We have gone through the budget process. We are 14 finishing a Legislative session. I think, it has been a very 15 good one. 16 I will say one more thing. I am particularly 17 pleased with the effort of your staff when we worked on 18 Legislation to find compromise and to follow the leadership 19 of the Governor in trying to find a path down the middle and 20 resolving differences. You were great. 21 We have very few bills that we are asking for veto 22 on. That's a good thing. 23 Thoughts? Comments? 24 Have a good day. 25 Leave my gas can alone. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 7 1 CHAIRMAN LLOYD: Again, thank you, Mr. Secretary. 2 Thank you for your dedicated leadership, particularly on the 3 MTBE issue. 4 The amount of hours you have put into that and the 5 amount of time you spent in Washington to try to help 6 California, is much appreciated. 7 It gives me great pleasure at this time to 8 introduce the next item. I have mixed emotions, to be quite 9 honest with you, because the person we are talking about, 10 Terry McGuire, I've worked with on and off, and I have had 11 the pleasure to work with him at the Air Board here. 12 Two weeks ago, on September the ninth, Terry 13 decided that he would like to retire on 9/9/99. 14 He spent 30 years with the Air Resources Board, 15 spending many of his earlier years here on stationary source 16 control and eventually becoming Chief of the Technical 17 Support Division. 18 He has made numerous contributions to the agency 19 and community by providing sound technical advice and 20 leadership in the field of air quality. 21 Terry will also be remembered for his guidance, 22 mentoring and friendship that he provided to so many of us at 23 ARB, particularly his staff. 24 He built a fantastic team by allowing each of them 25 to grow and reach their greatest potential, challenging and PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 8 1 inspiring them to attain the highest standards. 2 Terry, I am pleased if you would come up, to 3 present you with this Executive Order, which apparently I 4 have to read, so bear with me. 5 I think this is created by Terry's staff and others 6 here. 7 Executive Order G-99-065, whereas Terry McGuire, 8 has contributed blood, sweat and tears to 30 years of air 9 quality accomplishments, joining the Air Resources Board in 10 1969, as an Associate Engineer and ascending to Chief of 11 Technical Support Division, in December 1983, abandoning the 12 development of air resource control measures to modeling, 13 inventory and analyzing their success in reducing air 14 pollution statewide and providing high quality technical 15 advice and assistance to the ARB and California's Air 16 Pollution Control District. 17 Whereas, Terry's well reasoned and practical 18 response to air quality questions initially rose from his 19 expansive engineering expertise, which once exhausted lead 20 him to practice further and respond with, I may have already 21 told you more than I know. 22 Whereas, Terry was one of the few original staff 23 members of ARB, having begun State service with the 24 Department of Water Resources in the 1960's -- and as an 25 aside, I remember Terry way back, meeting with Governor PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 9 1 Brown, on the famous NOx retrofit issues, so, I know he has 2 been serving at the highest level for a long time. 3 Having begun State service with the Department of 4 Water Resources in the 1960's, where he utilized his 5 knowledge of water delivery systems, gained from work on 6 Indian reservations to help put Sherman Island underwater 7 while fighting the floods of the late 1960's. 8 Whereas, Terry has been a leader in the development 9 of certain ARB technologies, having perfected the art of the 10 fly report guarded from the information gleaned by staff 11 insects resting quietly on strategic walls. 12 Whereas, Terry's crew cut, hard shell, blue suited 13 exterior hides a warm heart, expansive nature and an 14 endearing good judgment, providing support and entertainment 15 to many of his numerous staff, including those who on 16 occasion have been a pain in his very lower back. 17 Whereas, the Board and the staff remember Terry for 18 coolly guiding the ARB from days of COBAL and the big iron to 19 the complex Information Systems Internet environment that, 20 will compliantly if not docilely into the next millennium. 21 Whereas, under Terry's direction in developing a 22 sophisticated burn allocation and management system, the 23 smoky skies of Sacramento are largely a spector of the past 24 as some of our best air quality days coincide with days of 25 agricultural burning. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 10 1 Whereas, having lost all the seconds one is allowed 2 in a career and having perfected the trick of nailing jello 3 to a wall, Terry is moving on to a life full of challenges, 4 including more time with his wife, Pat, his family and his 5 granddaughter, Sydney, and the pursuit of America's blue 6 highways in his Corvette, he assured us it is not a high 7 polluter. 8 Now, therefore be ordered that the Board sincerely 9 honors Terry's many years of service and wishes him a 10 productive, exciting and enriching retirement and a long one. 11 Be at further ordered that the Board requests Terry 12 to keep his cellphone on as he cruises past, so we may seek 13 his advice on his many continuing clean air projects, 14 executed in Sacramento, California, this twenty-third day of 15 September, 1999. 16 Terry. 17 MR. MCGUIRE: Chairman Lloyd, Members of the Board, 18 this is undoubtedly my most enjoyable and least stressful 19 Board presentation in 30 years. 20 Usually they don't start with accolades. They 21 usually start off with a little more stress. 22 Well, I do have a few remarks that I, too, would 23 like to offer, and first I want to compliment whoever put 24 together the dossier, that you just went through. 25 It was pretty complete. A couple of things that I PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 11 1 was afraid may have came up obviously were missed, but I 2 appreciate that discretion, too. 3 Actually, last June, I realized I had spent about 4 half of my life at the ARB. If you don't do the math, I will 5 tell you, I have been with the ARB for 30 years. 6 I began, as Alan pointed out, in 1969. The Air 7 Resources Board was then a fledgling agency that had begun 8 its life just a year earlier. 9 When I started there were 183 employees, and of 10 course, your staff is now somewhere around the thousand mark. 11 During the last 30 years, I have had the 12 opportunity to serve all nine ARB Chairmen, including Dr. 13 Gary Hogensmith. I have had a chance to serve all six 14 Executive Officers, five Governors and about 40 Board 15 Members. 16 During this time, very few staff members have been 17 here longer than I have, and a couple are older than I am, 18 and they know who they are, so I will not point that out. 19 But I do have some observations after being here 20 for 30 years. 21 The first observation is the Air Resources Board 22 itself has typically been a group of extraordinarily 23 committed and effective and competent people. The one's that 24 I have worked with, the 40 some odd, many of you, those that 25 have gone before, you have been, in my opinion, sincere, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 12 1 honest and devoted to doing what they do. 2 There are new Members here that I am sorry that I 3 have not had a chance to meet you and work with you, and that 4 will be my loss, but I am sure you will carry on in the fine 5 tradition of those that have gone before you. 6 During the last 20 years or so, the Air Resources 7 Board Executive Office has maintained a cooperative culture 8 that has been extremely conducive to not only very high 9 professional standards but to a very successful completion of 10 the Board's mission. 11 I think that is a tradition that the Board can be 12 proud of and certainly strive to continue. 13 I think that the crown jewel of the ARB is your 14 staff. I have some remarks about your staff that I would 15 like to leave as my legacy to you and to them. 16 Since I am no longer a member of that staff, I feel 17 that I am not bound by the constraints of humility, and I 18 think I am able to tell you things that you probably already 19 know but need to be said anyway. 20 First, I have had the opportunity to see just about 21 everybody on this staff from when they first came, many 22 cases, as their first job after college. I have seen them 23 grow. 24 This has been an organization where over 30 years 25 turnover has been extraordinary low. Most of us in middle PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 13 1 management have grown up together. 2 Sometimes I say have grown older together, but some 3 of my younger colleagues take some umbrage with that, so I 4 will not say that. The organization has a strong sense of 5 team. 6 People here have worked together for so long, I 7 have often said it is like a long marriage where people begin 8 to finish each others sentences and, God help me, even begin 9 to look alike. 10 The staff members that you have here are often here 11 because they want to be, because they are here because they 12 believe in what they are doing and in the merit of it. 13 They are often here, in many cases, an example that 14 I know of, at substantial salary sacrifices, but they are 15 here because, as Governor Brown said in the 70's, they are 16 here for the psyche rewards, and in some cases, transcend the 17 financial rewards. 18 The staff is bright, hard working and committed. 19 The organization is truly an example of government 20 gone right, and I'm personally most proud to have been a part 21 of it. 22 Having said that, I will tell you just a little bit 23 about what my plans are. I think Alan had pretty well had 24 them covered in his dossier, that even, not only did my 25 dossier know what I have done but obviously knows what I am PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 14 1 going to do. 2 My plans are to some extent a career change rather 3 than a retirement. By that I mean I want to see a little bit 4 about what's happening in the consulting engineering world, 5 not necessarily in air pollution, but other things as well. 6 However, one of my objectives is to not work as 7 hard as is expected as an employee of the Air Resources 8 Board. 9 For my first six months or so, I am looking forward 10 to a better sabbatical and an opportunity to complete some 11 deferred chores, some projects, some hobbies, books that I 12 haven't read for a long time, to spend some time with my 13 wife, Pat, perhaps pulling our fifth wheel across some of the 14 country and seeing more of the country that I haven't had a 15 chance to see. 16 I will certainly be looking for the lowest 17 pollution vehicle that I kind find to pull 14,000 pounds 18 around the country. 19 Finally, I will look forward to having an 20 opportunity to, perhaps, even for a while, be a nuisance to 21 my two children, to my two sons and soon to be my two 22 grandchildren. 23 As the Chairman said, I have a granddaughter, and 24 we are expecting our second grandchild, which will be a 25 grandson, in December. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 15 1 So, I will spend some time imposing on them. 2 So, having said that, all I can say is it has been 3 great at the Air Resources Board for 30 years. It has been a 4 great ride. 5 Thank you all. Thank the staff and those that I 6 have worked with, interacted with, conflicted with and 7 whatever else. It still, on balance, it has been fun. 8 Just as a personal note, Chairman Lloyd, I think 9 one of my sincere reservations is or my regrets is not having 10 had a longer opportunity to work with you as Chairman. 11 I am looking forward to watching the Air Resources 12 Board continue in its great tradition, probably even excel in 13 it. 14 Thank you all again. 15 CHAIRMAN LLOYD: Thank you very much, Terry, and I 16 think there is no one that will epitomize the very qualities 17 that you identify in the staff. 18 I think your leadership, the way you have conducted 19 yourself, I think has been a tremendous tribute to both you 20 and the staff. 21 Thank you. 22 I would like to remind everybody who wishes to 23 testify on today's Agenda Items to please sign up with the 24 Clerk of the Board. Also, if you have a written statement, 25 please give 20 copies to the Clerk. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 16 1 The first Item on the Agenda today is 99-7-1, 2 Public Hearing to consider the adoption of Portable Fuel 3 Containers, Spillage Control Regulations and Portable 4 Gasoline Container Emissions Inventory. 5 Today, the staff will present a control measure for 6 reducing emissions from portable fuel containers, more 7 commonly referred to as gas cans. 8 Most of us have used these containers at some time 9 to refuel portable equipment, such as lawn mowers, chain 10 saws, motorcycles and marine pleasure craft. We have all 11 experienced spills when refueling equipment using portable 12 gas cans. 13 About three weeks ago, I had an opportunity to try 14 some of the spill-proof portable containers that you see 15 today, both behind here and outside. 16 After getting acquainted with these products, I 17 found them to be functional and easy to operate. I encourage 18 Board Members, if they have not already done so, to try out 19 some of the spill-proof containers on display here today. 20 Despite our best efforts, emissions from mobile, 21 stationary and area sources, California still has the 22 nation's worst air quality. 23 Therefore, we must look for emission reductions 24 from previously unregulated sources. This is necessary if 25 California is to attain and maintain Federal and State PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 17 1 health-based ambient quality standards, as well as 2 encouraging the continued economic growth that the Governor 3 is seeking as well. 4 For the first time, staff has estimated evaporative 5 and spillage emissions attributable to gas cans. The 6 proposed inventory for gas cans employs the most recent data 7 available. 8 Staff will be seeking approval of the inventory as 9 part of the Agenda Item today, as we have two items. Today's 10 staff proposal also represents the first effort to regulate 11 portable fuel containers and spouts for air quality purposes. 12 At this point, I would like to ask the Executive 13 Officer, Mr. Kenny, to introduce the item and begin the 14 staff's presentation. 15 MR. KENNY: Thank you, Mr. Chairman and Members of 16 the Board. 17 In 1990, the Board adopted the world's first 18 emission standards for small off-road engines used in 19 equipment, such as lawn mowers and weed whips. 20 In 1998, while reviewing the small engine 21 regulations, we found that gasoline spillage from gas cans 22 was a potentially significant source of unregulated 23 hydrocarbon emissions. 24 This was confirmed as staff developed the emissions 25 inventory attributable to gas cans usage, transport and PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 18 1 storage. 2 In preparing the emissions inventory, staff 3 gathered the latest information available and corresponded 4 with industry representatives. 5 This was a process which we believe has resulted in 6 the most accurate inventory possible. 7 Today, you will hear two presentations. 8 First, we will discuss the portable fuel container 9 emissions inventory, and then you will hear a presentation 10 describing the regulatory proposal. 11 At this time, I would like to turn the presentation 12 over to Ron Haste, who will provide you with a description of 13 the proposed portable fuel container emissions inventory. 14 Following that will be Dean Bloudoff, who will 15 present the staff's regulatory proposal. 16 Mr. Haste. 17 MR. HASTE: Mr. Kenny, thank you. 18 Good morning, Chairman Lloyd and Members of the 19 Board. 20 Today, staff will present the proposed portable 21 fuel container or gas can emissions inventory and the 22 portable fuel container spillage control emissions regulation 23 and the related test procedures. 24 This proposal represents a joint effort of staff, 25 of the Mobile Source Control Division and Monitoring and PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 19 1 Laboratory Division and the Office of Legal Affairs. 2 First of all, I will discuss the ARB staff's 3 experience in estimating the emissions inventory of various 4 sources, then I will explain how the population activity and 5 emission parameters were obtained to derive the proposed 6 final baseline 1998 emissions inventory of gas cans. 7 At the end of my presentation, I will turn over the 8 microphone to Mr. Dean Bloudoff, of the Monitoring and 9 Laboratory Division. 10 He will address the need for the proposed 11 regulation, the staff's proposal for reducing emissions, 12 implementation and the cost-effectiveness associated with the 13 proposed gas can regulation. 14 The Air Resources Board is required, by Section 15 39607.3 of the California Health and Safety Code, to develop 16 and update the emissions inventory for various sources. 17 Staff then seeks Board approval of the proposed or 18 revised inventory. Accordingly, and for the first time, the 19 gas can emissions inventory consisting of evaporative 20 hydrocarbon emissions has been developed and is being 21 presented here today for the Board's consideration. 22 The emissions inventory that is being presented 23 establishes the 1998 calendar year as the baseline, and it is 24 used to assess the proposed portable fuel container spillage 25 control regulation. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 20 1 Emissions from gas cans containing fuel can be 2 created through five different processes. 3 The first process, fuel evaporation, results when 4 fuel vapors escape out of any possible opening in a can while 5 the can experiences the daily increase in ambient 6 temperature. 7 A second process, transport spillage, is due to the 8 vapors that form after any fuel has spilled out of a can 9 while the can is being transported. 10 The third process, spillage, occurs when vapors 11 form from gasoline that is spilled while the equipment is 12 being refueled. This is the fuel that comes out of a can, 13 but doesn't make it into an equipment fuel tank. 14 The fourth process involves vapor displacement, 15 which is caused when vapors contained in the equipment fuel 16 tank are pushed out as fuel is poured in from a can into the 17 fuel tank. 18 The fifth process, permeation, involves defusion of 19 the gasoline molecules through the can lining. 20 Developing an emissions inventory requires 21 gathering information about the emission sources statewide 22 population, and its activity levels are usage patterns and 23 determining the rates of emissions for the specific type of 24 activity. 25 Accordingly, and in order to develop a gas can PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 21 1 emissions inventory, the staff used different methods to 2 collect the appropriate information. 3 Surveys were conducted to obtain population data. 4 Activity and usage data was also derived from surveys and 5 from the Air Resources Board off-road emissions estimation 6 model, and then the gas can emission factors were determined 7 from extensive in-house emissions testing, as well as data 8 found from literature searches. 9 Two separate surveys were conducted, one, for gas 10 cans used in residential activities, and a second survey for 11 cans used in commercial activities. 12 The residential survey was mailing of a form 13 soliciting gas can information, and it was sent to randomly 14 selected households throughout California. 15 The commercial survey involved the ARB's staff 16 visiting businesses that use gas cans in their normal 17 operations. 18 The survey recipients were requested to provide 19 specific information about their can. The questions on these 20 surveys included simple, straight forward requests, such as 21 how many cans do you own? 22 The cans, are they metal or are they plastic? How 23 do you store your cans, and what is your cans typical 24 capacity? 25 Analyzing the data from the surveys produced some PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 22 1 very specific information. We learned that 46 percent of the 2 households and 80 percent of the businesses with potential to 3 use gas cans have at least one gas can. 4 We learned that the average number of cans per 5 business is four times higher than the average number of cans 6 in a household and 70 percent of the gas cans are always 7 stored with some amount of fuel in them. 8 The average capacity of residential gas cans is 9 smaller when compared to the commercial gas cans. 10 Over 70 percent of the gas cans are made of plastic 11 and one-third of the residential cans, and one-half of the 12 commercial cans are stored with open vents or spouts. 13 In order to determine the residential gas can 14 population, staff used a number of occupied housing units 15 estimated by the California Department of Finance 16 Demographics Unit for January 1998. 17 The Department Finance data for the years 1990 18 through '98 were also used to extrapolate gas can populations 19 beyond 1998. 20 The commercial population estimate was determined 21 using a similar method, except that the number of businesses 22 were identified using Info USA, which is an electronic phone 23 directory database. 24 Using these factors, using a residential gas can 25 population of over 9 million and a commercial gas can PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 23 1 population of over half a million, thus, the staff estimates 2 close to 10 million gas cans were in the State of California 3 in 1998. 4 Using extensive in-house testing and information 5 from the literature, staff developed emission factors 6 associated with each of the processes that I have discussed 7 previously. 8 Note that the gas can emissions are strong 9 functions of the can material, plastic versus metal, and also 10 that the storage condition is also a function of the open or 11 closed storage condition. 12 Also note that the emissions contribution due to 13 the evaporation from an open can and due to spillage during 14 transport of the can and equipment refueling is significant. 15 This table shows the baseline evaporative 16 hydrocarbon emissions inventory in tons per day for various 17 processes. 18 Staff is estimating that 86.5 tons per day of 19 hydrocarbon emissions are released into the atmosphere. As a 20 comparison, the same number of older cans, as a total number 21 of gas cans with fuel in California, will produce 83 tons per 22 day of evaporative hydrocarbon emissions. 23 Since the initial statement of reasons for the 24 proposed fuel container spillage control regulations was 25 issued, staff has revised the emissions inventory estimate PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 24 1 from 93.4 to 86.5 tons per day. This resulted in an 2 emissions inventory estimate that is 7 percent lower. 3 There are four reasons for the revised inventory. 4 One, the staff initially used the 1999 housing unit 5 data instead of the 1998 data. 6 Secondly, the final analysis of the survey data, 7 which wasn't completed until after the regulatory proposal 8 was issued, indicated that the amount of gas cans stored with 9 fuel was 70 percent instead of 75 percent. 10 Third, the final analysis of the open gas can 11 diurnal emissions rate, which also was not completed until 12 after the proposed regulations were issued, resulted in an 13 emission rate that was slightly higher. 14 Lastly, the staff's reanalysis of refueling 15 frequency for determining transport spillage emissions 16 indicated a much lower frequency number. 17 This concludes my presentation. 18 However, in closing, I would like to state that the 19 proposed gas can emissions inventory represents the best 20 available estimate, and staff is committed to evaluating the 21 accuracy of the inventory on an ongoing basis. 22 At this time, I would like to turn the presentation 23 over to Mr. Dean Bloudoff. 24 MR. BLOUDOFF: Thank you, Ron. 25 Good morning, Chairman Lloyd and Members of the PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 25 1 Board. 2 My portion of today's presentation will focus on 3 the proposed portable fuel containers spillage control 4 regulations. I will begin by reiterating the need for 5 proposed regulations, and then I will discuss the various 6 sources of emissions associated with the use of portable 7 containers, our proposal to reduce these emissions and its 8 anticipated effectiveness. 9 I will also identify the costs associated with the 10 proposal and our suggested implementation schedule. Finally, 11 I will discuss the issues that have been identified during 12 the development of staff's proposal, and proposed changes 13 based on these issues and comments received since the staff's 14 proposal was issued on August 6. 15 As you heard earlier, portable fuel containers or 16 gas cans are significant source of reactant organic gas 17 emissions in California, and one that is currently 18 unregulated. 19 These 10 million gas cans are estimated to 20 contribute approximately 87 tons per day of reactant organic 21 gas emissions to California's air. 22 With no control, these emissions will grow to over 23 96 tons per day by 2010. 24 Approximately, 43 percent of these emissions occur 25 in the South Coast Air Basin alone. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 26 1 So, while the emissions from one gas can may appear 2 small, about a tablespoon of fuel per day, in aggregate they 3 significantly impact California's air quality. 4 To illustrate the significance of over-filling 5 spillage, we have collected the following video footage, 6 which is not staged, these were actual end users of 7 conventional containers, refueling various types of off-road 8 equipment. 9 As you can see, if the users of conventional 10 containers are attentive and careful, no spillage of any kind 11 takes place. 12 The majority of this footage was collected at 13 several equipment rental yards around the Sacramento area. We 14 selected these businesses for two reasons. 15 The first, it's a great way to get refueling 16 footage of a wide variety of off-road equipment in one or two 17 locations, and the second is, since these employees are 18 refueling this equipment on almost a daily basis, we assume 19 that they would be more experienced in the use of 20 conventional containers. 21 This second set of events illustrates how difficult 22 it can be to perform a refueling event using conventional 23 portable fuel containers without any fuel loss whatsoever. 24 As you can see, refueling of off-road equipment can often 25 result in small amounts of spillage. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 27 1 Sometimes it occurs when the spout is removed from 2 the equipment fuel tank. That last bit of fuel just refuses 3 to cooperate. 4 I think it would be difficult to find users of 5 conventional containers who have not experienced this type of 6 spillage to some extent. 7 While this amount of fuel spillage may seem 8 trivial, when multiplied by 10 million containers, it becomes 9 rather significant. 10 This third and final set of refueling events shows 11 what occurs all too often during off-road equipment 12 refueling. 13 Sometimes, no matter how hard we try, we end up 14 spilling significant amounts of fuel all over the portable 15 equipment. 16 Remember, these scenes of over-filling spillage are 17 being performed by employees who use conventional containers 18 to refuel this equipment on almost a daily basis. 19 The point I am trying to make is that these people 20 have a lot of experience performing these refueling events 21 and yet over-filling spillage is still occurring. 22 The reason for the spillage is as varied as the 23 equipment itself. For example, many types of hand-held 24 equipment have small fuel tank openings, and it can be 25 difficult to judge when to stop fueling, as you can see. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 28 1 Significant spillage also occurs as a container 2 spout is placed into the equipment fuel tank, manipulating 3 the combined weight of the container and the fuel is often 4 difficult. 5 As Ron previously indicated, there are five sources 6 of emissions that are associated with the use of gas cans. 7 The following chart illustrates each source's contribution to 8 the total emissions associated with the use of these 9 products. 10 As you can see, evaporative emissions make up the 11 overwhelming majority and account for 74 percent of the total 12 emissions. 13 The remaining sources are transport and storage, at 14 seven percent, permeation, with eight percent, refilling 15 spillage, with eight percent as well, and displaced vapors, 16 which account for the remaining three percent. 17 To address the sources of these emissions, we put 18 together a set of six performance standards that new gas cans 19 must adhere to. 20 Four of the performance standards are designed to 21 reduce emissions from the five sources that we have 22 identified, and two are designed specifically to promote 23 consumer satisfaction with the new products. 24 If adopted, the performance standards would reduce 25 the emissions associated with the use of gas cans by 73 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 29 1 percent, applied to gas cans sold after December 31, 2000, 2 replace conventional gas cans with spill-proof systems and 3 assist in promoting consumer acceptance of both spill-proof 4 systems and spill-proof spouts. 5 Let me begin by discussing these four performance 6 standards that deal specifically with reduction of emissions 7 from gas cans. 8 The first is automatic shut-off. We are proposing 9 that new products be equipped with an automatic shut-off 10 feature that stops the fuel flow before the equipment fuel 11 tank over flows. 12 This will substantially reduce the incidences of 13 over-filling spillage that was shown in the video. 14 There are several products on the market with this 15 feature. It is currently accomplished by venting only 16 through the spout, in short, by directing the displaced 17 vapor, in air, from the equipment fuel tank into the portable 18 container. 19 When there is no more air in the equipment fuel 20 tank to displace, then there is no more air to transfer back 21 into the portable fuel container, and the fuel flow stops. 22 The second performance standard is automatic 23 closure. We are proposing that the new products 24 automatically close and seal when removed from the equipment 25 fuel tank and remain completely closed when not in use. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 30 1 The automatic closure requirement will reduce 2 transport and storage spillage and substantially reduce 3 evaporative emissions. 4 The automatic closure requirement ensures that the 5 spout remains closed without any interaction on the part of 6 the end user. 7 Also, this requirement allows the user to invert 8 the container without any fuel spillage. 9 As we have shown in the video, this will assist the 10 user in eliminating refilling spillage that occurs before the 11 spout is placed into the equipment fuel tank opening. 12 The third performance standard is designed to 13 reduce gas can emissions, is the one opening requirement. We 14 are proposing that, containers have only one opening for 15 filling and pouring. 16 This requirement removes the secondary vent found 17 on most conventional containers. By eliminating the 18 secondary vent, we ensure proper operation of the automatic 19 shut-off spout and remove another source for evaporative 20 emissions in transport and storage spillage. 21 Recent surveys have shown that approximately 17 22 percent of the residential containers in California are 23 stored with the secondary vent open. 24 The final performance standard that deals 25 specifically with gas can emissions is a permeation standard. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 31 1 We are proposing that plastic portable fuel containers not 2 exceed a permeation rate of four-tenths of a gram per gallon 3 per day, as determined by Test Method 513. 4 Adherence to the proposed permeation standard will 5 reduce average permeation rates from plastic gas cans by 6 approximately 75 percent. 7 Staff conducted extensive tests to determine the 8 average permeation rate of plastic gas cans as well as the 9 effectiveness and feasibility of several barrier service 10 treatments. 11 While staff's proposal does not mandate a specific 12 control technology for the reduction of permeation, we have 13 identified two such processes that could be used to meet this 14 performance standard. 15 One, called fluorination, uses fluorine gas to 16 produce a barrier on the interior surface of the container. 17 The other, sulfonation, uses sulfur trioxide to 18 create the barrier surface. 19 These technologies have been used to control 20 permeation losses from plastic automotive fuel tanks. 21 My associate, Ken Louis, will present you with 22 samples of actual containers used in our barrier feasibility 23 study that have undergone these treatment processes. 24 To summarize, the performance standards designed to 25 reduce emissions from the use of gas cans which automatically PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 32 1 shut would reduce over-filling spillage by stopping the fuel 2 flow before the equipment fuel tank overflows, automatic 3 closure which would reduce transport and storage spillage and 4 evaporative emissions by maintaining an enclosed gas can, the 5 one opening requirement which would assist in reducing 6 transport and storage spillage and evaporative emissions, as 7 well as ensure the proper operation of this automatic 8 shut-off feature by removing the secondary vent, and the 9 permeation standard, which would reduce permeation emissions 10 from plastic gas cans. 11 To provide you with a better understanding of the 12 effectiveness of the performance standard, shown by this 13 slide, we have another video segment that we would like to 14 present. 15 After filming the conventional container footage, 16 you've previously seen, we provided the rental yard staff 17 with currently available containers that had automatic 18 shut-off, automatic closure and no secondary vent features. 19 We wanted to get their opinion and feedback on the 20 effectiveness of these products. 21 I want to point out that these containers are not 22 fully compliant with all of the proposed performance 23 standards. We revisited each business two weeks later and 24 filmed the following. 25 Notice how cleanly this hand-held equipment is PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 33 1 being refueled. Remember that last footage of the 2 over-filling of a chain saw using a conventional container? 3 With the automatic shut-off feature, that 4 over-filling is eliminated. 5 Also, with automatic closure, the user can move 6 from one piece of equipment to another with a container 7 slightly inverted without fuel spillage. 8 This also illustrates the significance of automatic 9 closure. Notice how he picked up the container by the rear 10 handle and held it in almost an inverted position over the 11 fuel tank opening. 12 Compare this with the previous footage where 13 spillage occurred as the user tried to position the spout 14 into the fuel tank opening. 15 Since the container remains closed when not 16 actually dispensing fuel, this problem is eliminated. 17 Without automatic shut-off, the fuel flow will 18 automatically cease when the tank fills. Removing the spout 19 from the fuel tank causes the automatic closure feature to 20 engage and refueling is accomplished without any spillage. 21 These products can also be used to effectively 22 top-off larger equipment fuel tanks as shown here. 23 With the automatic shut-off feature, the tank will 24 be filled without overflowing. Again, the spout is removed 25 from the fuel tank, and the automatic closure feature closes PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 34 1 and seals the container. 2 The system shown here requires the user to manually 3 vent the container prior to refueling event. That is why we 4 just saw this gentleman quickly open the slide valve on the 5 spout before inserting it into the equipment fuel tank 6 opening. 7 This is done to release any positive pressure that 8 may have built-up in the container due to changes in ambient 9 temperature. 10 As you can see, these products adequately 11 demonstrate the effectiveness of the automatic shut-off 12 feature, the automatic closure feature and the importance of 13 the one opening requirement. 14 Once again, as the equipment fuel tank is filled, 15 the fuel flow from the container stops as the spout is 16 removed from the fuel tank opening, and it closes and seals 17 the container until the next refueling event. 18 Now that you have seen how the first four 19 performance standards can effectively deal with container 20 emissions, I would like to discuss what we can do to ensure 21 that new products are well received by consumers. 22 As I previously stated, we have included several 23 performance standards designed to promote consumer acceptance 24 of spill-proof systems and spill-proof spouts. 25 The remaining performance standards deal with PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 35 1 acceptable fuel rates, equipment fuel tank fuel levels and 2 warranty requirements for the new products. 3 The first performance standard for consumer 4 acceptance specifies minimum acceptable flow rates based on 5 container capacity. 6 Venting only through the spout tends to decrease 7 the overall flow rate when compared to conventional 8 containers and spouts. Therefore, we feel it is necessary to 9 specify minimum acceptable flow rates to ensure that 10 consumers purchase products that best meet their individual 11 refueling needs. 12 We are proposing three flow rate standards. They 13 are a minimum flow rate of one-half gallon per minute for 14 containers with capacities less than or equal to one and a 15 quarter gallons; one gallon per minute for containers greater 16 than one and a quart gallons but less than or equal to two 17 and a half gallons; and two gallons per minute for containers 18 with capacities greater than two and a half gallons. 19 I want to point out that these are minimum 20 acceptable standards only, and as such we fully anticipate 21 manufacturers developing products that exceed these 22 requirements. 23 In order to eliminate unnecessary refueling of 24 equipment fuel tanks, we are also proposing that the 25 spill-proof systems and spill-proof spouts meet a minimum PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 36 1 acceptable fuel level standard. 2 Our concern is if the new systems do not fill the 3 equipment fuel tank to a sufficient level because of the 4 automatic shut-off feature, this could actually cause an 5 increase in the amount of refueling events. 6 We are proposing the products fill equipment fuel 7 tanks to a level not to exceed one inch from the top of the 8 opening. 9 Again, I want to point out that this represents the 10 minimum acceptable level, and manufacturers are free to 11 design products that surpass the standard by filling 12 equipment fuel tanks to a level less than one inch from the 13 top of the tank opening. 14 We have received several comments regarding this 15 performance standard. At the end of my presentation, I will 16 discuss a modification of this standard as a proposed 15-day 17 change. 18 Finally, we are requiring manufacturers to warranty 19 their products for a period of at least one year. Since, the 20 new containers and spouts are expected to be more expensive 21 than their conventional counterparts, this will ensure that 22 only quality spill-proof systems and spill-proof spouts find 23 their way into the marketplace and should help promote 24 consumer confidence. 25 The performance standards in our proposal are PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 37 1 designed to reduce the emissions associated with the use of 2 portable fuel containers. 3 To determine the effectiveness of the performance 4 standards, extensive tests were performed using conventional 5 containers and several currently available products, which we 6 demonstrated at the beginning of today's meeting. 7 Each of these products have features that meet 8 several of the performance standards, though none of them can 9 be considered fully compliant with staff's proposal. 10 Based on these tests, staff has determined 11 adherence to the performance standards will reduce 12 evaporative emissions by 70 percent, reduce transport and 13 storage spillage by 90 percent, reduce permeation emissions 14 from plastic containers by over 74 percent and reduce 15 over-filling spillage by 90 percent. 16 Also, since spill-proof systems vent through the 17 spout, they will collect at least 40 percent of the vapors 18 displaced during the refueling event. This will also reduce 19 the gas can user's exposure to harmful fuel vapors. 20 In the initial statement of reasons, staff reported 21 adherence to the performance standards would eliminate 22 over-filling spillage and transport in storage spillage, 23 placing the control efficiency for each of these emission 24 sources at 100 percent. 25 Staff received comments from stakeholders and other PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 38 1 effected parties questioning the assumption that these 2 sources of emissions could be completely eliminated. 3 The comments indicated that in the real world 4 manufactured products of these types will occasionally fail. 5 Therefore, staff has revised these efficiencies to 90 6 percent. 7 This revision is based on an assumed failure rate 8 of 10 percent. 9 The portable fuel container spillage control 10 regulations will provide significant reductions of reactive 11 organic gas emissions. 12 This chart compares statewide emissions reductions 13 in tons per day for the proposal in four other major emission 14 control strategies. 15 As shown here, the emissions reductions 16 attributable to the portable fuel container refueling 17 spillage control regulations are estimated at 68 tons per 18 day, compared with 15 tons per day for consumer products, 24 19 tons per day for small off-road engines, 70 tons per day for 20 low emission vehicles and 110 tons per day for marine engines 21 and personal watercraft. 22 Staff's proposal specifies an implementation date 23 of January 1, 2001. The proposal includes provisions to 24 allow manufacturers of containers and spouts a one-year 25 sell-through period for products dated and manufactured prior PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 39 1 to the proposed January 1, 2001 implementation date. 2 Containers sold after January 1, 2002, must comply 3 with the proposed regulations. Implementation will be 4 accomplished primarily through attrition as conventional 5 containers wear out, are lost or destroyed. 6 The replacement options presented to consumers will 7 be the new spill-proof systems and spill-proof spouts. Based 8 on industry's sales data, we have identified the average 9 useful life of conventional portable fuel container at five 10 years. 11 Therefore, with the proposed 2001 implementation 12 date, the one-year sell-through provision and an average 13 useful life of five years, full compliance with the proposed 14 regulations is expected by 2007. 15 The regulations will potentially increase the 16 retail price of a portable fuel container by about $6 to $11 17 per container based on container size. 18 While this does seem significant, remember that 19 this amounts to a retail price increase of about $1.20 to 20 $2.20 per year over the container's useful life. 21 If we look at the annual emissions from a 22 conventional container in residential use, it amounts to a 23 fuel loss of approximately one gallon. 24 With gas prices hovering at about $1.50 per gallon, 25 and a control efficiency of 73 percent, that's an annual PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 40 1 savings of about $1.10. 2 The same comparison for a container in commercial 3 use would result in annual savings of about $2. 4 These analogies show that spill-proof systems could 5 very well pay for themselves in fuel savings alone. 6 The proposed regulations will cost California 7 consumers approximately $20 million per year during the 8 five-year implementation period. 9 Since the proposed regulations will result in a 10 total reduction of roughly 25,000 tons of reactive organic 11 gas emissions annually when fully implemented, the cost 12 effectiveness or dollars to be spent per pound of reactive 13 organic gas reduced is $2 per pound. 14 The cost-effectiveness presented in this slide has 15 been adjusted to reflect the corrected emissions inventory. 16 For comparison, here is a list of recent ARB 17 regulations. The cost-effectiveness figures displayed in 18 this table represents the upper values of the range of cost 19 of compliance for these regulations. 20 As you can see, at $2.01 per pound of reactive 21 organic gas reduced, the portable fuel container spillage 22 control regulations are extremely cost-effective. 23 To better illustrate the emissions benefits of 24 staff's proposal, I would like to present the following 25 chart. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 41 1 The uncontrolled emissions currently associated 2 with the use of portable fuel containers are approximately 87 3 tons per day. 4 Without control by 2007, these emissions will 5 increase to 94 tons per day. Adoption of the regulations 6 would result in a 73 percent reduction of these uncontrolled 7 emissions. 8 As previously mentioned, full compliance is 9 anticipated by 2007, which would result in statewide reactive 10 organic gas emission reductions of over 68 tons per day. 11 Testing is necessary to determine end compliance 12 with the performance standards. Staff's proposal includes 13 four test methods that are, Test Method 510, Automatic 14 Shut-off Test Procedure; Test Method 511, Automatic Closure 15 Test Procedure; Test Method 512, Determination of Fuel Flow 16 Rates; and Test Method 513, Determination of Permeation 17 Rates. 18 As previously stated, the goal of staff's proposal 19 is to reduce refueling emissions from equipment that are 20 predominantly refueled with portable fuel containers. 21 Therefore, the proposed regulations would apply to 22 all new portable fuel containers and spouts manufactured for 23 sale and use in California. 24 We want to make it clear that the proposed 25 regulations are not intended to apply to single trip PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 42 1 pre-packaged containers nor portable containers that by their 2 design or labeling are intended primarily for use with 3 products or liquids other than fuel. 4 During the development of the proposal, staff 5 identified several products used to dispense fuel that were 6 determined to fill specific needs within the refueling 7 community. 8 Therefore, staff proposes to exempt these products 9 from compliance with performance standards. 10 These proposed exemptions extend to containers with 11 capacities of one quart or less, certain containers used in 12 off-road motorcycle competitions that perform rapid fuel 13 transfers, portable gas tanks connected to and used for 14 operating outboard engines, safety cans and containers and 15 spouts intended for shipment and use outside of California. 16 Staff's proposal also requires manufacturers of 17 containers and spouts to identify the new products as either 18 spill-proof systems or spill-proof spouts by means of a 19 labeling requirement. 20 This will help consumers differentiate the new 21 products from their conventional counterparts during the 22 sell-through period. 23 The labeling requirement is extended to include a 24 date code and a code indicating compliance with the 25 performance standards, the products expected fuel flow rate, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 43 1 and, for spouts, identification of compatible portable fuel 2 containers. 3 To encourage the development of new and better ways 4 to store and dispense fuel, included in the proposal is an 5 innovative product exemption provision. 6 Products that may not adhere to all of the 7 performance standards but due to their design, delivery 8 system or other factors, would result in substantially 9 equivalent reactive organic gas emissions, may be classified 10 as innovative. 11 Products considered innovative can be exempted from 12 compliance with the performance standards. 13 Finally, in the event that staff's proposal results 14 in extraordinary economic hardship to any person or 15 manufacturer, the affected parties may apply in writing for a 16 variance from the proposed regulations. 17 This concludes our discussion of the staff 18 proposal. 19 I would now like to discuss significant issues and 20 proposed 15-day changes. 21 The significant issues shown in this slide were 22 identified in staff's initial statement of reasons. 23 The first two issues are emissions related, and the 24 final three deal specifically with issues of consumer 25 acceptance. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 44 1 You will be hearing testimony on the issue of 2 permeation. 3 Based on comments recently received, staff have 4 identified three areas of concerns as expressed by the 5 various manufacturers. These are the costs associated with 6 the various treatment options, the technical feasibility of 7 meeting the proposed standard and issues regarding our 8 proposed test procedure. 9 Staff presented an analysis based on the best 10 available information in the initial statement of reasons and 11 believe our original proposal is both cost-effective and 12 technologically feasible. 13 The automatic closure requirement is currently 14 supported by a majority of the manufacturers. As shown in 15 staff's presentation, automatic closure is necessary to 16 achieve significant reductions in the evaporative and 17 transport and storage spillage in emissions categories. 18 We have performed a cost-effectiveness analysis for 19 this particular feature and continue to believe that it 20 provides significant emissions reductions at a reasonable 21 cost. 22 The remaining issues, fuel level, flow rates and 23 automotive refueling are addressed in staff's proposed 15-day 24 changes, which I would now like to discuss. 25 Staff received comments regarding the ability of PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 45 1 new containers and spouts to refuel motor vehicles. Of 2 specific concern is consumers ability to identify products 3 that can be used to dispense fuel into motor vehicles, should 4 the need arise. 5 Significant changes in container design could make 6 this identification more difficult. 7 To eliminate this problem, we are proposing the 8 following 15-day change. Spill-proof systems that cannot be 9 used to dispense fuel into a motor vehicle due to the 10 product's size, design or other factors are required to 11 display the phrase, "cannot be used to refuel motor 12 vehicles," on the product. 13 Staff proposes the following changes to the fuel 14 flow rate performance standard for spill-proof systems and 15 spill-proof spouts. 16 The half gallon per minute flow rate is extended to 17 include containers with nominal capacities of one and a half 18 gallons or less. Containers with nominal capacities of two 19 and half gallons or less may be offered for sale with either 20 a half gallon per minute spout or a one gallon per minute 21 spout. 22 Staff received comments from stakeholders pointing 23 out that dual use of the one and a half to two and a half 24 gallon capacity containers, often they are purchased 25 specifically for the refueling of hand-held equipment, and as PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 46 1 such, the higher flow rate spout can pose certain 2 restrictions on fuel tank opening capability, and for 3 hand-held refueling is probably not required. 4 This proposed 15-day change will address the dual 5 uses of these containers. 6 The proposed 15-day change also requires 7 manufacturers to label containers with nominal capacities 8 between one and a half and two and a half gallons offered for 9 sale with the half gallon per minute flow rate spout with the 10 phrase, low flow rate, to ensure consumers are aware of the 11 difference. 12 Staff proposes to modify the fill level requirement 13 by basing the proposed standard on flow rates rather than 14 container size. 15 Staff proposes a one-inch requirement for flow 16 rates of one-half gallon per minute. This flow rate is best 17 suited for refueling of hand-held equipment, which correlates 18 directly with the half gallon per minute flow rate. 19 Therefore, with smaller volume fuel tanks, it 20 becomes important to ensure that the new products fill to a 21 level of at least one inch from the top of the opening. 22 This will eliminate partially filled equipment fuel 23 tanks. 24 Staff proposes that products with flow rates of one 25 gallon per minute filled to at least one and a quarter inches PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 47 1 from the top of the opening, these products will be used to 2 refuel increasingly larger fuel tanks, and this should ensure 3 a sufficient fill level while providing the manufacturers 4 some design flexibility. 5 As with staff's original proposal, these are 6 minimum acceptable standards. 7 Finally, staff proposes no fill level standard on 8 products with flow rates of two gallons per minute. This 9 flow rate will likely be used on large containers, usually 10 five to 6.6 gallons in capacity. 11 These containers are generally used to refuel 12 larger capacity equipment fuel tanks. This larger fuel 13 volume in the equipment fuel tank makes filling to within one 14 inch from the top of the opening less critical. 15 Also, due to their design, these larger containers 16 could require substantial modifications to adhere to this 17 performance standard with little perceived benefit. 18 Therefore, staff has proposed this 15-day change. 19 This concludes our discussion of the proposed 20 regulatory item. 21 In conclusion, we ask that you approve the proposed 22 portable fuel container refilling spillage control 23 regulations and the accompanying test procedures. 24 CHAIRMAN LLOYD: Thank you very much. 25 Mr. Kenny, does that conclude the presentation? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 48 1 MR. KENNY: Yes, it does, Mr. Chairman. 2 CHAIRMAN LLOYD: Ms. Ombudsman, would you please 3 address the process prior to today by which this item came 4 before us and share any concerns or other comments you may 5 have with the Board at this time. 6 MRS. TSCHOGL: Again, for the record my name is 7 Kathleen Tschogl, Last name is spelled, T-s-c-h-o-g-l. 8 I would like to take a moment to thank two staff 9 members, Bruce Oulrey and Kathleen Reed, for their fine work 10 in tracking this project, and many others, while ARB was 11 between Ombudsman. 12 I really can't take the credit for the work, having 13 only been on the job for eight days. So, thank you very much 14 to them. 15 As you have heard from staff, before you is 16 consideration of a regulatory control and a non regulatory 17 inventory item for spillage from gas can refueling. 18 For the development of the regulatory items, staff 19 conducted three public workshops, two ASTM technical 20 subcommittee meetings, over 100 telephone calls and two 21 demonstrations for the Natural Resources Defense Council and 22 the California Environmental Dialogue. 23 All workshop notices and staff reports were made 24 available on ARB's website, which received an average of 87 25 hits per month, between August 1998 and July 1999. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 49 1 The workshops were held on August 6, 1998, January 2 28, 1999 and June 28, 1999. 3 The announcements for the workshops were sent to 4 over 2,500 people, including gas can manufacturers, retailers 5 and distributors, utility rental and repair facilities, yard 6 equipment manufacturers and retailers, off-highway vehicles 7 and golf cart manufacturers, marine vessel distributors, 8 environmental organizations and local air pollution control 9 districts. 10 A total of 81 people participated in the workshops, 11 including representatives from Envirocan, Incorporated, 12 Enviro, Incorporated, Fluoro-Seal, Phillips Chemical Company, 13 Rubbermaid, Incorporated, Vemco, Incorporated, American 14 Motorcyclist Association and others. 15 Notice this for today's hearing and the staff 16 report were posted on ARB's website and mailed on August 6, 17 1999. 18 Meetings of the ASTM Technical Subcommittee were 19 held in El Monte and by teleconference on June 27 and August 20 11, 1999, respectively. The Members of the ASTM Subcommittee 21 include Blis US, Briggs and Stratton, Chilton Products, 22 UnoCal and Wedco Molded Products. 23 For the non-regulatory inventory portion of the 24 item before you, staff conducted a workshop on November 20, 25 1998, presented the survey results of the June 28, 1998 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 50 1 regulatory item workshop and made available on the website 2 and mailed the draft inventory with the staff report on 3 August 6. 4 The Board Hearing Notice and the proposed inventory 5 was mailed on September 8, 1999 to 1,450 interested 6 stakeholders. 7 In conclusion, staff provided ample opportunity for 8 and received substantial stakeholder participation in the 9 development of the regulatory item before you now. 10 CHAIRMAN LLOYD: Thank you very much. 11 I would like to throw it open to the Board for 12 questions at this time. 13 BOARD MEMBER FRIEDMAN: If I may, Ron, when you 14 provided us with the survey results, I may have missed it, 15 but what were the absolute, the oral numbers were in 16 percents, so what would the absolute numbers for the 17 responses for the survey, because the survey formed the basis 18 of a whole sequence of comments and data driven assumptions? 19 MR. CARLOCK: You're correct, the presentation just 20 did include percentages. 21 The residential survey, we mailed out approximately 22 1,500 individual surveys -- pardon me, while I get -- and we 23 received 333 responses -- pardon me, while I find the exact 24 information. 25 As I had mentioned previously, the total number of PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 51 1 solicitations that we sent out was approximately 1,500. Of 2 these 1,500, 333 were returned by the post office because 3 they were undeliverable. 4 So, the effected number of the solicitations by 5 mail was 1,067. The number of responses to the mail survey 6 was 261. 7 Within the in-house ARB staff survey, which is the 8 same survey, but it was done among members of the ARB staff, 9 we distributed 77 surveys. We received 63 responses. 10 The total number of survey responses was 324, which 11 represents a survey response rate of 26 percent. 12 BOARD MEMBER FRIEDMAN: I guess -- let me just free 13 associate with you for a second. 14 As you know, a statistician can provide the 15 statistics, making a living, telling us what an appropriate 16 number would be upon which to make conclusions. 17 I don't want to see us over-sell. I think this is 18 an important issue, and I am convinced that there is a 19 substantial saving in terms of reductions in pollution by 20 approaching this issue, but I don't want us to over-sell what 21 we expect and will be disappointed a few years from now if we 22 didn't get 80 tons. 23 I am a little bit concerned that the survey may be 24 off by as much as 50 percent or 60 percent. That is still a 25 big savings, but I don't know about the validity of those PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 52 1 numbers to be applied to the whole state. 2 I just, again, my comment only is that this is a 3 good idea. Let us not over-sell the idea so that our numbers 4 are questioned all the time, and we are made to look as 5 though we have exaggerated what we hoped to accomplish. 6 MR. CARLOCK: Dr. Friedman, without question the 7 response rate was smaller than we would like. 8 We actually offered an economic incentive to get 9 people to participate, and although the response rate was 10 low, there is no reason for us to believe that either the 11 data that we received back was skewed or that the results 12 were somewhat biased in the result. 13 When comparing the in-house survey to the responses 14 that we got back from the field, we received similar results, 15 and therefore, we were heartened to find that we think we are 16 using a valid number. 17 BOARD MEMBER FRIEDMAN: I don't disagree, but this 18 is a homogeneous group you are talking about, and the State 19 is not homogeneous. 20 MR. CARLOCK: No, I mean it is comparing the 21 homogeneous group to the non independent variable. 22 We got similar results. 23 BOARD MEMBER FRIEDMAN: I don't want to make a big 24 deal out of it. 25 It's just a word of caution. This is an important PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 53 1 issue. I think it's an easy issue to subscribe to, but I 2 don't want us down the pipe to fail to achieve certain 3 savings because some of the data that we employed at the 4 beginning were not quite on target. They we were off by some 5 magnitude. 6 MR. CARLOCK: Again, this represents the best 7 estimate we have available, but we are charged to come to you 8 whenever we have better information that would result in a 9 different inventory. 10 CHAIRMAN LLOYD: Mark, could you just identify 11 yourself for the reporter? 12 MR. CARLOCK: I am sorry, Mark Carlock. 13 CHAIRMAN LLOYD: Just a quick question, on the 14 survey with staff, was that El Monte and Sacramento? 15 MR. CARLOCK: Yes. 16 MR. KENNY: If I could add one thing before I 17 forget, which is on the emissions estimate, these are the 18 staff's best estimates of what we think we would receive in 19 terms of reduction from the implementation of this particular 20 measure. 21 At the same time, these are not SIP tons, in the 22 context of our existing SIP. 23 What we will do, as we basically go forward in the 24 next year and the prepare the newest iterations of the SIP, 25 we will continue to look at the inventories, and we will PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 54 1 continue to modify and refine them as more accurate 2 information becomes available. 3 It will be at that time that we actually have an 4 inventory that will actually be part of the SIP and will have 5 far more accountability associated with it from a standpoint 6 of, we will have to achieve the numbers there. 7 All the emissions reductions associated with this 8 measure are essentially off the inventory. When we 9 originally put the inventory together back in 1994, we did 10 not know there were really any tons associated with this 11 measure. 12 It was simply not part of the mix. So, we will 13 continue to look at this and follow-up on. 14 CHAIRMAN LLOYD: Professor Friedman. 15 BOARD MEMBER C.H. FRIEDMAN: Just a couple of 16 questions. 17 I think all of this goes primarily if not entirely 18 to the 10 million cans, right, or containers in that figure, 19 whether it's 10 million or 5 million, you based it on an 20 average based on the response right down from business and 21 residential or individual. 22 Would it make a difference if there were 5 million 23 little red cans instead of 10 million in the state in January 24 of 1998? 25 MR. CACKETTE: It would not make a difference in PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 55 1 terms of the cost or cost-effectiveness that we showed. 2 There would still be a large amount of emissions. 3 The cost-effectiveness would be $4 a pound instead of $2; $4 4 is still within the normal range of control measures. 5 BOARD MEMBER C.H. FRIEDMAN: But the total 6 emissions would be reduced? 7 MR. CACKETTE: It would still be a large amount. 8 It would be half but a large amount. 9 BOARD MEMBER C.H. FRIEDMAN: I guess my other 10 question, just for my own understanding, is I thought I saw a 11 statement that there would be 73 percent overall reduction 12 estimated in emissions by adopting these recommendations when 13 they fully kick in in the year 2007, but the Agenda, and I 14 hope it is not nitpicking, but the Agenda says 71 percent for 15 the description, the summary with the Agenda, and I am just 16 wondering whether this is revised? 17 MR. CACKETTE: The reason is that we made further 18 improvements based on the input data and just relooking at 19 some of the data in the inventory after the staff report came 20 out. 21 So, what you are seeing, I think, is the version 22 that was based on the staff report. As we listed on that one 23 table, some of the population estimates changed, the 24 emissions rates changed a little bit, the usage changed, and 25 it was about an overall 7 percent less emissions than we had PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 56 1 originally estimated and probably affected that 71 percent. 2 BOARD MEMBER C.H. FRIEDMAN: Did the inventory 3 allocate between these identified sources what they each 4 respectively are emitting or contributing to the emissions? 5 MR. CACKETTE: Yes. 6 The largest source is the evaporation that occurs 7 from the can while it sits in your shed in the summer time 8 going through diurnal change of temperature every day. 9 That was, I think, was almost 70 percent of the 10 emissions. The other sources were on the seven or eight 11 percent, either. 12 BOARD MEMBER C.H. FRIEDMAN: Then the estimated 13 reduction results when we implement the proposal would be, as 14 I understood, at 70 percent reduction in the emissions? 15 MR. CACKETTE: Right. 16 BOARD MEMBER C.H. FRIEDMAN: From the cans or the 17 containers sitting there? 18 MR. CACKETTE: Right, from 90 tons -- not just the 19 cans. 20 It was these different processes you get emissions 21 from the can. 22 BOARD MEMBER C.H. FRIEDMAN: You had an overall 23 average of 73 percent reduction, which said 71 somewhere 24 else, but of that you broke it down, the reductions, as I 25 recalled it? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 57 1 MR. CACKETTE: Yeah. There were some that were 2 some 90 percent reductions. 3 BOARD MEMBER C.H. FRIEDMAN: Instead of evaporation 4 at 70 percent, if my notes are correct, and it said transport 5 and spillage 90 percent, and then permeation 75 percent. 6 BOARD MEMBER FRIEDMAN: Spillage and transport was 7 90 percent. 8 MR. CACKETTE: Right. 9 So that transport is, the cans are open in the back 10 of the vehicle. They splash around. 11 BOARD MEMBER C.H. FRIEDMAN: If you take 70, 90, 12 and 75, I don't think you get 71. 13 MR. CACKETTE: Well, you have one in there that is 14 40 percent, also. 15 The vapors in an empty gas can, what is in there is 16 saturated vapors. It was like before we had Stage 2 Vapor 17 Recovery at the gasoline stations, when you put your nozzle 18 in there, you can see the fumes coming out. They are being 19 displaced by the liquid going into the tank, and right now 20 those just go to the air, and these systems will capture 21 about 40 percent of that. 22 So, 60 percent will go in the air and 40 percent in 23 the red can itself. 24 BOARD MEMBER C.H. FRIEDMAN: Again, I don't know 25 how 40 percent, 70 percent, 90 percent and 75 percent give PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 58 1 you an overall 71 or 73? 2 MR. CACKETTE: 70 some percent of the emissions 3 come from the source that is being reduced by 70 percent, 4 that is how you end up getting the number about the same. 5 BOARD MEMBER C.H. FRIEDMAN: Okay. As long as 6 these are good numbers. 7 MR. CACKETTE: I think it is correct. 8 CHAIRMAN LLOYD: Could I just get back to one point 9 on the inventory, did you also do a cross-check on the gas 10 cans with the manufacturers to see how many were sold? 11 MR. CACKETTE: Yes. 12 CHAIRMAN LLOYD: Yes, Dorene. 13 BOARD MEMBER D'ADAMO: As I understand it, the 14 reduction in emissions is 84 or 87 tons? 15 MR. CARLOCK: No. 16 The total inventory is about 86. 17 BOARD MEMBER D'ADAMO: Okay, 86. 18 That seems quite high, just as a comparison to 19 other control measures like smog. Just to get an idea what 20 sort of progress we will see with this as compared to other 21 control measures. 22 MR. KENNY: It is significant in comparison to 23 other control measures. 24 Smog Check 2, for example, is 112 tons in the 25 existing SIP. So, you get a sense there that this has the PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 59 1 potential for about two-thirds of Smog Check or 2 three-quarters of what Smog Check is achieving. 3 Now, there is a difference there a little bit, too, 4 which is that Smog Check 2 is getting 112 tons of reductions. 5 This is 86.5 ton inventory, and we are getting 6 approximately 73 percent reductions off that inventory. So 7 the actual emissions reductions are probably in the range of 8 73 percent of 86.5. 9 So, I guess that is around 65 tons. So it is 10 approximately half of what Smog Check would get. 11 CHAIRMAN LLOYD: Any other questions? 12 BOARD MEMBER CALHOUN: Let me go to the proposed 13 exemptions. I have two questions. 14 One, why would you exempt portable gas cans, I 15 guess you said in the outboard engine? 16 MR. CACKETTE: Yes, I can answer that. 17 There is a very good example of one back behind you 18 there, with the long hose wrapped around it. Those are 19 portable fuel tanks. 20 They are actually portable gas tanks that are 21 connected directly to an outboard engine in a boat. For 22 example, a small, shallow bass boat, with no permanently 23 fixed fuel tank. 24 Those can't be used to pour, dispense fuel, not 25 very successfully. They are not used for that, and they are PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 60 1 quite expensive. 2 That is way they are exempted. Unfortunately, the 3 way that definition reads in our proposal, if we didn't 4 specifically exempt them, those would be included under the 5 proposed regulations. 6 They are now sold with a fixture on it and a hose 7 that attaches to the outboard motor as they were designed 8 for. 9 If we didn't exempt them, the manufacturers would 10 be required to place a spill-proof spout on that, and that 11 was never our intentions. 12 BOARD MEMBER CALHOUN: The second question that I 13 have pertains to the enforcement mechanism. 14 You also are supposed to exempt the products from 15 out-of-state. 16 How do you visualize this being enforced? 17 MR. CACKETTE: We visualize enforcing this similar 18 to our consumer products enforcement strategy. 19 It will be at the point of sale. For example, to 20 ensure that products are complying with the proposed 21 regulation, if it is adopted, staff will go out and purchase 22 portable fuel containers. 23 We will bring them back in-house and test them to 24 ensure that they meet the performance standards. That is why 25 we also are trying to adopt some proposed test methods. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 61 1 If they don't, the manufacturers will be contacted. 2 BOARD MEMBER CALHOUN: If I live on the border 3 between California and Arizona, maybe Arizona or Nevada, and 4 if I went and bought a can, I suppose the dealers there would 5 carry both the non-California certified system and California 6 certified system. 7 Do you see that as being a problem? 8 MR. BLOUDOFF: Not significantly. 9 I would imagine that you can look at that the same 10 way as the introduction of unleaded fuel in California, when 11 people were going across the border to buy regular fuel. 12 I would assume that eventually we are going to see 13 spill-proof systems and spill-proof spouts purveyed in the 14 United States rather than just California. 15 Initially, yes, people, to be quite honest with 16 you, people near the border could run over to Nevada and buy 17 their conventional container and come back to California. 18 CHAIRMAN LLOYD: Any other questions? 19 No more questions. 20 Oh, I had a question for staff. A little bit more 21 on the innovative design, what consequence suits that and who 22 decides whether there is an innovative design? 23 MR. BLOUDOFF: As we set that up in the proposed 24 regulations, that would be on a case-by-case basis by the 25 Executive Officer. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 62 1 The manufacturer of the product or the designer of 2 the product would be responsible for providing the Executive 3 Officer with sufficient data and the test methods used to 4 generate the data to prove that is substantially equivalent 5 or actually produces less reactive organic gas emissions than 6 the highest emitting representative product. 7 CHAIRMAN LLOYD: Thank you. 8 With that, I would like to call on the first 9 witness who signed up to speak on this issue, and the first 10 one is Todd Campbell, Coalition for Clean Air, and after that 11 we have John Kowalczyk, Ron Raboin and Don Peters. 12 MR. CAMPBELL: Chairman Lloyd and Members of the 13 Board, it is a pleasure to be here today and speak on this 14 good measure. 15 Although the Coalition for Clean Air is a little 16 bit skeptical on some of the numbers in this proposed rule in 17 reductions of RFG or reactive organic gases, the Coalition 18 for Clean Air is in support of staff's proposal on the 19 portable fuel containers. 20 We are supportive because of the spillage and 21 evaporation gasoline poses as a significant threat to both 22 our air and water quality. 23 The Coalition also supports staff's proposal 24 because of the increased difficulty in capturing the reactive 25 organic gas emissions in our State and is essential for us to PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 63 1 aggressively pursue the reductions of reactive organic gases 2 so that we meet our attainment goals by 2010. 3 The Coalition is skeptical, and I will clarify why 4 we are skeptical about some of the numbers. We just think 5 that the turn-around or the turn-over of the containers 6 probably isn't around five years. 7 I still own my container, and I bought it when I 8 was 16. So, just on personal experience, and hopefully this 9 will provide an opportunity for me to buy a new one, but 10 there are some questions. 11 Nevertheless, something must be done. The 12 Coalition hopes that the staff will continue to look for ways 13 to eliminate gas cans completely, but I would also like to 14 take this opportunity to remind the Board that portable gas 15 or portable fuel containers provides us just with another 16 reason why we need to push forward with engine technology 17 moving away from our dependency on fuel and moving to 18 strategies that are zero emission strategies. 19 That is why it is so important for our staff as 20 well as our Board Members to continue with strong support for 21 the zero emission vehicle mandate. 22 With that said, the Coalition looks forward to 23 smarter fuel containers in the near term and hopes California 24 has no need for a portable container in the near future. 25 CHAIRMAN LLOYD: Thank you, Todd. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 64 1 I look forward to you being one of the first out 2 there to get one of these new containers so you can set an 3 example. 4 Any questions from the Board? 5 Next is John Kowalczyk. John is with Envirocan, 6 Inc. 7 MR. KOWALCZYK: Thank you, Mr. Chairman and Members 8 of the Board. 9 My name is John Kowalczyk. I represent Envirocan, 10 Inc. 11 This is a small company that I founded several 12 years ago. This company is in the business of manufacturing 13 and marketing a spill-proof gas can nozzle. 14 Let me just show you what the product looks like. 15 I have actually marketed this product prior to ARB even 16 thinking of actually developing and adopting regulations. 17 This product is designed to stop spills 18 automatically. It is designed to be consumer-friendly, that 19 is to fit all the ranges of types of gas tanks that are out 20 there. 21 It is durable. There are no moving parts to wear 22 out or break, and it is relatively low cost. 23 I highly support you adopting regulations to 24 control spillage. Without regulations, I am convinced that 25 there will be little market penetration of these devices. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 65 1 The public is just used to buying very cheap gas 2 cans, and these systems will cost more. 3 Your regulations are also very important to 4 California's air quality. I think, as you saw the emission 5 reduction, at least the VOC emission reduction from this 6 technology will be more than your LEV 2 automobile standards. 7 That is really huge. 8 In terms of all the provisions in your regulations, 9 I support the automatic shut-off requirement. I support the 10 permeation control requirement. 11 I support your fill level requirements, even before 12 you modified them. I support your fuel flow requirements, 13 even before you modified them. 14 I support your warranty requirements, and I support 15 your implementation dates. 16 However -- you knew there was a however coming. 17 I must oppose one particular portion of your 18 regulation, and that has to do with the automatic closure 19 provision. I really believe that is not technically 20 justified. 21 I believe it is not incrementally cost-effective, 22 and I believe it is going to result in real world emissions 23 that are greater than what your staff is showing. 24 The bottom line is, if you go ahead with that 25 particular provision, my company will probably dissolve and PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 66 1 go bankrupt. 2 So, it means a lot to me to deal with this thing. 3 Although I do market this product in other parts of 4 the country, I think you heard your staff say that this type 5 of regulation will permeate, to use a word that you are 6 familiar with, across the country, and it will be almost 7 impossible to sell a product anywhere else that does not 8 comply with your requirements. 9 I am not going to make an emotional plea to you 10 today, and I am going to ask you, and I am going to underline 11 the word, not, do not consider any statements that I make or 12 any feelings or postulations that I make or manufacturers 13 make or your staff makes about this issue, what I am simply 14 going to ask you to do is consider the technical facts. 15 Consider the technical facts and the evidence that 16 I will present to you today, because I believe, I really 17 believe that you should be making your decisions on a sound 18 scientific basis. 19 So, I am going to go through my presentation. It 20 is lengthy. 21 Please bear with me. I think you will find it at 22 least interesting, because I will use some demonstrations and 23 some Power Point presentations. 24 There are just three manufacturers in the market 25 now that are actually selling spill-proof systems. There is PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 67 1 the Briggs and Stratton, which is this. There is the Vemco, 2 which there is a large and a small of this thing, and then 3 there is my product. 4 So, there are three products, two of which will 5 possibly comply with your requirements. At least at this 6 point, mine clearly won't. 7 I would just like to show you that my product does 8 work, and it will take me a second to do that. 9 Spillage was the main issue to deal with, and this 10 will show you that this will stop spillage. Fills it up to a 11 nice fill level, and you are done. 12 Now, ARB, your staff has actually tested these 13 devices, these three systems in the laboratory using a fume 14 hood over a gas tank. 15 They followed the manufacturer's directions and 16 measured emissions that would include the spillage and the 17 vapors displaced, and I am going to go through and show you 18 some of the results of that testing. 19 The results actually showed -- that is my 20 particular device, which is called the Safe Spout, was the 21 most efficient at 87 percent collection efficiency. 22 The Smart Fill, Briggs and Stratton, was at 86 23 percent, and the Vemco Large System was 44 percent. 24 Now, these tests would show if there was spillage, 25 if there was dripping and how much vapors were displaced, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 68 1 because they were all collected under the fume hood. 2 So, here you see that my particular product 3 actually did the best. 4 Now, there are going to be some folks who say that 5 this test is just representing the displaced vapors and that 6 those vapors would just be blown to the atmosphere when the 7 can is opened again. 8 Well, I provided your staff with a letter, dated 9 February 9, and it is in your packet, that went through some 10 perfect gas log calculations that showed that at least 80 11 percent of those vapors that are pulled into the can will 12 remain there and can be recycled at a Stage 2 equipped 13 gasoline station. 14 So that these numbers are significant in terms of 15 the environment, the staff never did respond to that 16 particular point in the letter that I sent. 17 Now, let's talk about the spout closure issue. You 18 heard that your staff did do a survey to get information 19 about gasoline cans. 20 Before that survey was done, I asked your staff to 21 design into that survey a statistically sound survey to 22 determine how many cans are left open with tether caps on 23 them. 24 Now, it's clear that some cans are left open by the 25 public, and a majority of those are because they haven't lost PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 69 1 their cap. 2 Here is an example of a Rubbermaid spout. It just 3 has this little cap that's easy to lose. 4 Here is an example of an Eco-can. This is probably 5 the first manufactured gas can in the United States. 6 They have got this little thing here that's easy to 7 lose. 8 There is a canadian can. They don't even supply a 9 cap to their spout. They expect you to put this thing back 10 in the can and put the cap on. 11 Well, some people don't do that. 12 So, what I am saying is the majority of the cans 13 that are left open, and there are cans left open, are because 14 either there is no cap or they have lost the cap. 15 My particular product has a tether cap on it, and I 16 did ask your staff to specifically ask that particular 17 question to find out how many people leave a tether cap open. 18 I have to report to you, unfortunately, that your 19 staff did not do that. They did not ask that question in the 20 survey. 21 Let me show you the survey results, because there 22 is still some way to salvage some information from the 23 survey. 24 What the survey showed was that of all the cans 25 surveyed, 35 percent of the cans were stored in an open mode. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 70 1 Now, there was at least one container that I could 2 find or at least one brand that was identified, 3 unfortunately, that had a tethered cap, and as expected, the 4 tethered cap only had 15 percent of its cans open. 5 That is less than half. That is actually 6 consistent with data from another survey that I am aware of. 7 When you have a tether on your cap, the majority of 8 the time it is going to be closed. 9 Now, before getting into that issue a little bit 10 more, I want to talk about some real world problems with the 11 current generation nozzles, like this, that have a so-called 12 slide valve. 13 There are numerous problems with these types of 14 things that are going to cause real world emission problems. 15 The first is an obstructed fill pipe problem. 16 None of these so-called complying spouts with the 17 automatic closure will fit some automobile fill pipes. As 18 you know, some these cans at least at some time or another 19 are used in an emergency when a person runs out of gasoline. 20 They won't fit some of the fill pipes, and I am 21 going to demonstrate that. Here is a fill pipe from a Ford 22 Taurus. 23 You will notice it has got an angle on it, has got 24 a recessed flapper valve way down inside, about three inches 25 or so down inside, very similar to my Toyota Camry. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 71 1 Not all of the cars in the country are like this, 2 but they are fairly typical. 3 These spouts with the slide valves won't get down 4 into that flapper valve. 5 The staff has recognized, and in your staff report, 6 if you have read it, and I presume you have, they say, well, 7 use a funnel. 8 Okay. Well, this is on a car mounted, on the 9 vertical side of a fender. You put a funnel in there, and I 10 tried to get a funnel that would have a long end there, it 11 does not reach. 12 Now, if you can find a funnel that reaches, I am 13 going to show you what happens. 14 Maybe I could have one of your staff come over here 15 and hold this. You can probably tell what is going to 16 happen. 17 You are going to get a spill. Just the angle there 18 is wrong. So, the funnel is not the answer. 19 So, how many people are going to run into this type 20 thing when they run out of gas, and what are they going to 21 do? They are not going to be very happy. 22 There also are some other issues. 23 Let's get down to this. There are also several 24 types of lawn and garden equipment engines that have -- 25 CHAIRMAN LLOYD: John, could I just ask a question? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 72 1 You use the example of the Taurus and the Camry as 2 the type of filling mechanism of the examples of gas tanks 3 and filling mechanisms there, but you just used one funnel. 4 Now, we all know there are various funnels of all 5 shapes, sizes and lengths. So, you picked a pretty extreme 6 example on the funnel. 7 MR. KOWALCZYK: I don't think so, Mr. Chairman. 8 I tried to find a funnel that would fit. A small 9 one will not even get down in there. This is the one that 10 came the closest. 11 I mean I could not find a funnel that would fit 12 down there. 13 CHAIRMAN LLOYD: Okay. Can I ask staff to respond? 14 MR. BLOUDOFF: Yes. 15 Pretty much where we have looked in and around the 16 Sacramento area, anywhere that you can find a Blis USA can 17 for sale, you are going to find a long neck funnel that can 18 be used in fuel restricted automotive fill pipes. 19 We purchased some and tried them. They work rather 20 well. They are about two feet long, with a slight curve to 21 the end, so they can do exactly what Mr. Kowalczyk is trying 22 to demonstrate here. 23 They cost approximately right around a dollar. 24 MR. KOWALCZYK: Mr. Chairman, if there are some, I 25 haven't seen them. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 73 1 But the fact is, what about the angle? Will it 2 spill? 3 Are they going to be available everywhere? 4 I don't think that is going to be the case. Let's 5 look at some of the slides. I will show some slides of lawn 6 and garden equipment engines that have obstructed fuel pipes. 7 MR. CROSS: Excuse me. Bob Cross, from the staff. 8 Can I respond to the funnel question? 9 There are a number of funnels that are sold 10 through, quote, auto supplies, which are sold as transmission 11 funnels, which would work perfectly. 12 In other words, they have long necks. Many of them 13 are about -- the funnel is usually about that big, and then 14 the neck curves and comes down, and then it tappers at the 15 end to a fairly small diameter, because they are designed to 16 fit through the end of the transmission dip stick tube, which 17 is also small, and some of those have a flexible part in the 18 middle, so you can bend them, so you can fill them without 19 having to tip them. 20 So, those things are commonly available. They 21 would be available at any of the places where you would buy 22 gas cans. 23 CHAIRMAN LLOYD: The other part, for staff, also 24 indicated those cans were clearly not appropriate, and there 25 were labeling requirements so the public is not going to run PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 74 1 five miles to get a can filled up and go back to their car 2 and then they can't be refilled. 3 MR. KOWALCZYK: Mr. Chairman, I don't want to get 4 into a debate on this issue, but when you run out of 5 gasoline, you are going to go to a gas station, like an Arco 6 station. 7 I am not aware that Arco stations carry Blis type, 8 two-foot long funnels. I mean that is the type of issue you 9 are going to run into. 10 BOARD MEMBER D'ADAMO: Excuse me. I just have a 11 question. 12 You have several different devices there. Do any 13 of them work? 14 MR. KOWALCZYK: No, not on this particular fill 15 pipe. 16 BOARD MEMBER D'ADAMO: It was my understanding that 17 most of the devices would work for refueling of motor 18 vehicles. 19 MR. KOWALCZYK: This is a gas tank of a car, on a 20 particular type of car. 21 BOARD MEMBER D'ADAMO: Could staff respond to that, 22 please? 23 MR. BLOUDOFF: It may just be on that one 24 particular type. 25 We did investigate this issue. We used a Chrysler PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 75 1 product, General Motors product and a Ford product. All 2 vans, all mini vans and larger vans, obviously we are 3 precluded to use State vehicles for the most part, because we 4 are a State agency, but we checked many of the State 5 vehicles, the spouts that we had told you that were capable 6 and could be used to dispense fuel, that is what we found. 7 Maybe on this one particular fill pipe, it is 8 difficult. 9 There are probably automobiles with restricted fill 10 pipes. In that case, several conventional containers I might 11 suspect wouldn't also work without the use of a funnel. 12 MR. KOWALCZYK: Let me show you some lawn and 13 garden engines that have obstructed fill pipes. 14 Generally, they seem to have the air filter system 15 that can kind of cover the fill pipe. I presume you can see 16 where the cap is on this particular rototiller. 17 Could I have the next slide. 18 Here is a power washer. It has the same situation. 19 Third slide, and here is, I think it is a leaf grinder or 20 something like that. 21 It is not a very good picture, but the fill pipe is 22 underneath that air filter. Certainly some of these and 23 maybe all of these devices that are currently marketed are 24 going to have a difficult time, if not an impossible time 25 filling these type of systems. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 76 1 Let me move on now to another issue, so-called puff 2 problem. When these systems are set in the sun and they are 3 closed, they are going to build up pressure. 4 You heard staff say that there are instructions to 5 relieve their pressure. You have to pull the slide valve 6 down and relieve the pressure. 7 Well, we heard at one of the workshops a small 8 manufacturer of a, I believe it was a weed wacker, a string 9 trimer, say that he was very concerned that everybody isn't 10 going to do that all the time, particularly because you don't 11 build up that pressure all the time. 12 You really have it on a hot day, and you have to 13 have it in the sun. So, you are going to be surprised 14 sometimes when that pressure is built up and you have a puff 15 and gasoline is going to come out. 16 Staff says one manufacturer of spouts says they 17 have sold thousands of these things, and they haven't had any 18 problems. ARB says the label will tell people to relieve 19 their pressure. 20 I can say the label will tell people to put my cap 21 on the spout. You know, same type of thing, but I am 22 admitting that some people won't put the cap on it, and I 23 would also feel you would be convinced that some people are 24 not going to always open and relieve their pressure. 25 I would like to show you what happens. Another PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 77 1 point is that there are 9 million gas cans, 9.6 million, you 2 are going to effect not just a few thousand, and so the 3 probability of these type of things happening is going to be 4 really increased. 5 The problem can and will occur, and my particular 6 device will not cause that problem. I shouldn't say -- 7 I am just going to back up. In terms of fitting 8 into a gasoline can, I have an adjustable vapor seal on here 9 that adjusts the fill level. You can just slide this back 10 and easily fit it into a CARB gas tank. 11 There is absolutely no problem with that. 12 Now, the puff, I have a can here that I have 13 pressure at about five PSI. That's a pressure that's easily 14 obtainable if you set this in the sun on a 110 degree day, 15 and I am going to show you what happens. 16 This a small weed wacker fuel tank, about a quarter 17 of an inch of water in there, you are going to have residual 18 water, because you can't pump anything out, and I will show 19 you what happens. 20 Now, I lost two votes. 21 I have liability insurance, but it is water. 22 It is a problem that will occur, and it's something 23 that you know could be dangerous, obviously. 24 I have put on here like one and a half turns of 25 thread on this thing. When you open this up, you cannot pull PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 78 1 the cap off. It will vent that pressure backwards away from 2 you and away from any engine that has a hot muffler. 3 Let's talk about some other problems. Fill level 4 and shallow tank problem, I think we heard at a workshop, and 5 this was a staff testimony, that they gave one of these 6 devices, I thought it was to their relative to use, trying to 7 fill a lawn mower, and they were unhappy that it did not fill 8 the lawn mower properly, so they lifted it up, pulled the 9 slide valve back so they could fill it, and they spilled 10 fuel. 11 I mean, this was your staff's testimony. 12 These systems that are so-called compliant will not 13 meet your performance specs for fill level, but the staff 14 recognized this problem and did propose criteria, and I 15 compliment them for that to try to ensure that there is a 16 consumer-friendly product out there. 17 They are proposing to modify that criteria. My 18 product will meet this criteria. 19 In fact, it is an adjustable thing. 20 I mean, if you have got a deep tank, you can move 21 this down. If you want to have a shallow tank, you can move 22 this all the way up to the top and fill it to whatever level 23 you want so that you are going to be happy. 24 You are not going to try to refill it or do 25 something that causes a spill. As I mentioned, the compliant PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 79 1 tanks I can't see them even meeting the revised standards. 2 I have tested them. They are the one-quarter, one 3 and a half inches, they are not meeting that. If you try the 4 smallest available nozzle now into this particular tank, you 5 will not fill it half full. 6 Okay. 7 Flow rate problem. Most current gasoline cans are 8 filling at a rate of about three to four gallons a minute. 9 When you put these slide valve systems on there, they are 10 dropping the flow rate to about a half to 1.4 gallons a 11 minute. That's really quite a reduction. 12 Consumer Report, I have attached the article from 13 Consumer Report in my testimony to you, has tested these 14 things, and they say of those low flow rates, there are going 15 to be some people who are annoyed and uncomfortable with 16 holding a can out there for five minutes waiting for it to 17 fill when it is a 30-gallon can. 18 We even had one manufacturer of these spouts, and 19 their instructions say you can open the vent of the can so 20 that you can get a better flow. 21 The fact is that they recognized there was a 22 problem, and when you open the vent in the can, you defeat 23 the automatic shut-off provisions. 24 ARB has proposed for these large cans a two gallon 25 per minute standard. I do not believe any of these slide PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 80 1 valve systems will meet that. 2 My system will. If none of these meet it, you have 3 no product on the market that will deal with these larger 4 cans, the five and six gallon cans. 5 You are adopting regulations without a product that 6 is going to serve jet skis and motorcycles and those types of 7 things. 8 Other flow rate issues, I am excepting maybe you 9 will even hear some more concerns from the manufacturers 10 about those flow rate affects, and there are a lot of large 11 cans out there. 12 Your inventory shows that there are 900,000 large 13 gas tanks that are above 2.5 gallons in size, so there is a 14 lot of equipment out there that needs these big gas tanks to 15 fill quickly, and consumers are going to circumvent the 16 problem if they are not happy with the flow rate. 17 They could use the funnel approach. You know 18 funnels are going to, even on a vertical system, you cannot 19 tell when a funnel has filled a can, and it is going to 20 overfill. 21 My system will not have that problem. 22 Let's talk about costs. They are a lot of poor 23 people in this State. Your staff is saying that it is going 24 to take a $3.79 can all the way up to $12. That is quite a 25 bit. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 81 1 My system is probably 70, 79, probably less than 2 that when you mass produce it in a higher quantity. That is 3 twice as cost-effective, if you look at the emissions 4 reductions, and we will get to that in a moment. 5 Just to summarize real world issues, there is going 6 to be puff problems. The other systems automatic closures 7 have, on my system doesn't obstruct the fill pipes, same 8 thing, fill level problems, shallow tank problems, flow rate 9 problems, all the others, complying systems have them, my 10 system will not, and the sticker-shock issue. 11 Now, I asked your staff to give you a full 12 disclosure of the alternatives for non automatic closure 13 systems, and this was, I believe, in a July 12 letter, and 14 that is attached. 15 I asked them to give you a full disclosure of what 16 the alternatives were, and I am sorry to say that they have 17 not done that. So, I am going to provide that alternative to 18 you. 19 I still probably need the lights. We are going to 20 show some things. 21 Your staff did provide some alternatives and what 22 the current proposal, and they have used some new numbers, 23 which unfortunately they did give me on Sunday, so I was able 24 to use the latest numbers that are available, too, but their 25 numbers for current proposal was 73 percent, and there is a PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 82 1 proposal in the staff report for spillage only, which I think 2 was their attempt to show what would happen if you didn't 3 have automatic closure and 8 percent. 4 Well, that looks terrible. Obviously, if I was 5 sitting in your place, I would not be adopting that type of 6 the program either. 7 I would go for the better one. However, when you 8 use your staff's numbers, your staff's test data and you 9 apply the tethered cap system with permeation control, you 10 get 70 percent collection efficiency, you are only three 11 percent different than what your current proposal is, and you 12 can avoid all these problems that I am talking about. 13 Now, you might wonder what are the basis for these 14 calculations. I will summarize them. 15 For your staff's proposal, I understand they are 16 assuming a 10 percent failure rate for mechanical and 17 spillage. That is reasonable. 18 If you read the Consumer Report information in that 19 article, when they tested these things, they apparently 20 pulled the slide valves back a few times and let them go. 21 They broke two of these nozzles. 22 It is right in the Consumer Report. 23 So, I mean there are valves, there are springs, 24 things are going to break. 25 For the spillage alternative that the staff PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 83 1 presented to you, which only had eight percent effectiveness, 2 they are assuming that 35 percent of the cans are going to 3 remain open. 4 That means all the cans -- most of them are not 5 going to have tethered caps, well, I asked staff to provide 6 an alternative analysis for a tethered cap system. 7 These are the assumptions I used. I have assumed 8 no mechanical failure. There are no moving parts. I have 9 got a lifetime basic UV package on here to protect against 10 plastic deterioration. 11 So, there is no mechanical failure. I did use a 10 12 percent failure for spillage, as ARB, assuming some people 13 are going to spill. 14 I used a 79 percent vapor control, which I 15 calculated and gave to the staff, and I assumed 15 percent of 16 the cans will not close their spout even if they have a 17 tethered cap. That is based on the survey data. 18 I have used your staff's data to calculate the 19 percent reduction. So, what is the possible responses from 20 the staff based on what I have said? 21 Well, they may say, why don't you apply for an 22 innovative products provision. Well, I cannot calculate that 23 I am going to have more reductions than you are going to have 24 with an automatic closure, and that is what your provision 25 requires me to do. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 84 1 I get to within three percent of it, but I can't 2 show it's going to be better than that, just cannot do that. 3 So that is really not an issue. 4 It would take years to gather data to show how many 5 of these in-field problems are going to occur, and you have 6 to put these compliant units out in the field and let them 7 wear and tear a little bit and then do surveys. 8 I cannot wait that long. I cannot spend that type 9 of money to gather that type of information. 10 They might say, why don't you apply for an 11 innovative clean air technology grant, which you all do 12 provide and incorporate a self-closing spout cap in your 13 product. 14 I actually did that. I applied for that grant, and 15 that process has been really delayed. As I understand, now I 16 probably won't have a decision until early next year. 17 That is really going to be too late for me to get a 18 product on the market and compete with everybody else. So, 19 that really isn't the solution either. 20 I do have two recommendations for you. The first 21 is to drop the self-closing requirement in Section 22 2472(a)(2). This is for the can, and substitute the 23 following, that would be within five years, have your staff 24 report back to you with a statistically valid data survey on 25 the real world emission reductions from the automatic closure PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 85 1 versus the tethered spout cap systems and whether universally 2 usable automatic closures have been developed which would 3 justify their sole allowance. 4 That is recommendation one. 5 Recommendation two, and I even feel stronger about 6 this one, this has to do with removing the automatic closure 7 requirement on retrofit spouts. 8 You also, in your regulations, are going to be 9 regulating just the spout-only systems. I understand you do 10 not want to do that. You don't want these real old type 11 spouts going on these new products. 12 However, keep in mind there are 9 million cans out 13 there that are not high technology cans. They are going to 14 have vents on them, and if you are concerned about people 15 putting a spout like mine on an old can and not closing it, 16 if people are negligent in closing cans, they are going to 17 leave their vent open. 18 So, basically what you are doing is requiring, you 19 might say, an LEV type catalyst on a 1960 Oldsmobile. 20 I mean, you are requiring a high tech nozzle on a 21 low tech can, and that is going to have a lot of problems. 22 You are going to be upsetting those people that have existing 23 cans. 24 So, what are advantages? Let me get back to that. 25 I have a similar proposal that you would add in PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 86 1 place of the automatic closure requirement, and that would be 2 to require retrofit spouts within five years to have an 3 automatic closure if technology has developed that these 4 retrofit spouts do have a universal application, that is they 5 can avoid all these problems that I have pointed out to you. 6 So, what are the advantages of my recommendations? 7 First of all, it would allow reasonable time to gather good 8 data and would allow reasonable time to develop products that 9 universally work. 10 It would also possibly result in real world 11 emission reductions that are even greater than what you are 12 projecting. I mean, within three percent now, if you get 13 some of these failures and these problems and circumvents 14 people going to Nevada to buy cheap cans, if you have a good 15 product that serves all those needs, you may not have those 16 problems. 17 I think this is important. I am sure it is 18 important to the staff. 19 If you use the calculations, and I believe they are 20 accurate, you still get your paper calculations SIP reduction 21 credits, which I think you ultimately want to do, to deal 22 with a lawsuit that you have in Los Angeles, you would get 23 very close to all of the SIP reduction credits you need, you 24 know, 70 versus 73 percent, you are not going to lose hardly 25 any SIP reduction credits. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 87 1 You are going to have less consumer backlash, and 2 you are going to have a more cost-effective program. 3 So, I am finally going to conclude, and I really 4 appreciate your patience, and I think you understand why I am 5 trying to take this amount of time to give you a full 6 picture. 7 In conclusion, I see yourself in a position 8 somewhat analogous to imposing the first regulations on an 9 uncontrolled automobile. 10 I see what your staff is doing is really jumping 11 right to an electric vehicle mandate. You are going from a 12 no control to an ultimate control. 13 The technology has not developed to the point that 14 it is going to serve everybody's basic needs. So, I hope 15 that with my presentation you will be convinced to try to 16 take a technically justified and more practical approach. 17 I thank you for your time. 18 CHAIRMAN LLOYD: Thank you very much, John. 19 Could I ask a couple questions? 20 How many of these units do you sell in California 21 now? 22 MR. KOWALCZYK: I have not sold any in California. 23 CHAIRMAN LLOYD: Have you tried to sell any? 24 MR. KOWALCZYK: No. 25 CHAIRMAN LLOYD: So, they are not marketed in PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 88 1 California? 2 MR. KOWALCZYK: Not at this point. 3 I was working on that, working through True Value 4 and Ace Hardware and waiting to see what these regulations 5 do. 6 CHAIRMAN LLOYD: Where are you selling them? 7 MR. KOWALCZYK: I have sold in the Northwest and 8 the East Coast. 9 CHAIRMAN LLOYD: Do you have a feeling of how many 10 people prefer your nozzle over others? 11 MR. KOWALCZYK: There is no way to tell. 12 It sells well. It sells well in the stores that it 13 gets into. It is not selling in huge quantities. It is not 14 going to make a lot of money, because when you can go and buy 15 a dollar replacement nozzle. 16 People do not generally go to the store to buy a 17 nozzle unless it is broken, and then they generally would try 18 to buy their equivalent part. 19 People do see it, and it is attractively packaged, 20 and I have had no complaints. All the people who have used 21 it are very happy with it. 22 They wish that something was on the market sooner 23 like that. 24 CHAIRMAN LLOYD: Well, see, your point about five 25 years, what was magical about five years? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 89 1 MR. KOWALCZYK: Five years is when you are going 2 to have your own turn-over of cans. 3 I mean, you are putting these units out there now, 4 at least theoretically. You have gotten rid of the old cans 5 then. 6 Then you probably do not need spouts to deal with 7 old cans. You are dealing with new cans. Then you should 8 have only the nozzles that are made for those new cans. 9 So, I am going on the lifetime. Although we have 10 heard, and I certainly believe that, I think there are cans 11 that are out there a lot longer than that. 12 CHAIRMAN LLOYD: Any other questions from Board 13 Members? 14 BOARD MEMBER CALHOUN: Where are you located? 15 MR. KOWALCZYK: Portland, Oregon. 16 BOARD MEMBER CALHOUN: What are your thoughts about 17 imposing the closed cap requirement and give you five years 18 to, just reverse what you have proposed to do, have the 19 automatic closing system be a requirement, but several years 20 down the line? 21 MR. KOWALCZYK: Well, I think that is basically 22 what I am saying. 23 BOARD MEMBER CALHOUN: I do not view the two -- 24 MR. KOWALCZYK: Well, if you feel more comfortable 25 that way, I would be happy with it as well. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 90 1 At least give some time to see if we can develop 2 something different. I think you should have a provision 3 note not to lock that in then. 4 There may be some problems here that just cannot be 5 solved by technology. So, I was trying to keep the door open 6 to say, look, it is a study, and see what happens, and then 7 if you can really prove, demonstrate that you need to go to 8 this extreme control requirement, then go there. 9 So, I would be more comfortable with that. I would 10 hope you would. 11 BOARD MEMBER CALHOUN: Well, the staff has had a 12 history of proposing requirements that they are certain will 13 be met, and they follow the progress over the years, and if 14 it gets to a point where they don't think that the 15 manufacturers will indeed meet the requirement, they will 16 come back and propose changes. 17 So, I can see them possibly doing the same thing in 18 this case. 19 MR. KOWALCZYK: Yes. 20 But then you are going to be risking a lot of 21 consumer problems, and I think this is something you want to 22 avoid. 23 I mean, your Smog Check problem, as you realized, 24 created a lot of consumer fear almost to the point where your 25 Legislature overturned your program. You don't want that to PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 91 1 happen here. 2 I mean, you want to come out of the chute and have 3 a program that is satisfying consumers. If you have a lot of 4 people who cannot refuel their cars, they are going to have 5 gasoline spit in their face, you are going to have a hard 6 time holding on to your program. 7 So, I think it makes more sense to try and come out 8 of this as consumer-friendly and as cautious about the 9 program as you can and then tighten it with time. 10 CHAIRMAN LLOYD: Yes, Supervisor Roberts. 11 BOARD MEMBER ROBERTS: I do not know if Mr. Calhoun 12 is through. 13 What kind of cost increase would you expect if 14 those recommendations that you made were part of this? 15 MR. KOWALCZYK: Right now, my product would add 16 roughly, retail, $4, and that is at a low value production. 17 I. 18 Think you can drop that price to an incremental $3, 19 maybe even $2.50, $2. 20 BOARD MEMBER ROBERTS: So, we might see half the 21 increase, less than half the increase? 22 MR. KOWALCZYK: It could be a quarter, definitely 23 half, possibly a quarter. 24 BOARD MEMBER ROBERTS: Two of the items that you 25 mentioned that you would need some special funnel for, you PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 92 1 will need some funnel, the Camry, if I recall is probably the 2 best selling car in the United States, and Taurus is very 3 close to it? 4 MR. KOWALCZYK: That is why I chose those. 5 BOARD MEMBER ROBERTS: Mr. Chair, I have to tell 6 you, if the rest of you are uncomfortable, I would never have 7 thought that if I ran out of gas and I got a tank of gas that 8 I would have to ask for a funnel but I would have to ask for 9 the exact funnel that staff in a laboratory would know would 10 work for the car. 11 CHAIRMAN LLOYD: I never thought that a Supervisor 12 would run out of gas. 13 BOARD MEMBER ROBERTS: It would not be the first 14 time. 15 The point is, if you take some of the largest 16 selling cars in the United States, and you better think about 17 this, it seems to me that I think you are going to have 18 people that discover that in a way that is not going to be 19 fun, and I just wonder, if the rules require that with the 20 self-closing, that you invariably have a nozzle that will not 21 work, that is not an acceptable solution if that is the case. 22 MR. KENNY: If I can respond, what we proposed is 23 that the conditions that could not be utilized would have a 24 label on that and point out that if someone ran out, notice 25 is given to the gas station and consumer and incentive for PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 93 1 those to actually design the can and nozzle to be compatible 2 with refueling cars. 3 BOARD MEMBER ROBERTS: Are you saying, Mike, that 4 there are going to be systems that work for all cars? 5 MR. KENNY: What we think by putting the labeling 6 requirement, the cans and manufacturers will not want to put 7 on the label, and before the implementation, redesign the 8 cans so that they do not have to, so that they work for all 9 cars. 10 BOARD MEMBER ROBERTS: If it does not work for all 11 cars, you have to put the label on? 12 No exception? 13 MR. KENNY: That's correct. 14 BOARD MEMBER ROBERTS: Let me think about that. 15 CHAIRMAN LLOYD: Any other questions? 16 BOARD MEMBER DeSAULNIER: Mike, why not require 17 them to design it during the five years? 18 MR. KENNY: We could do that, but we wanted the 19 short implementation schedule to get the cans out. 20 We have cans and nozzles that meet most of the 21 performance standards, and not all of them. They have to do 22 additional design, but if we give them more time, we will not 23 see them for whatever the additional time is. 24 BOARD MEMBER C.H. FRIEDMAN: I have a question. 25 What is your response to existing product, which is PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 94 1 a nozzle, and assuming it went on a compliant container -- 2 MR. KOWALCZYK: I do not make containers. 3 BOARD MEMBER C.H. FRIEDMAN: You have a nozzle that 4 does everything. 5 If that is right, if that is true, but the 6 automatic shut-off? 7 MR. KOWALCZYK: It has automatic shut-off but not 8 self-sealing. 9 BOARD MEMBER C.H. FRIEDMAN: But better than what 10 is out there in the old cans to the extent that it has a cap 11 that is tethered, that is better than what I have seen, and 12 he is asking for more time. 13 Isn't there room for accommodation? 14 MR. KENNY: The difficulty here, we feel automatic 15 shut-off is important. 16 People leave the cans open, and we get emissions 17 out of that and the shut-off eliminates that. To have a 18 system out there that eliminates those emissions, those are 19 for where we are going for others in the SIP. 20 BOARD MEMBER C.H. FRIEDMAN: I know it should be -- 21 should not be indefinite, even with that kind of cap, but he 22 is recognizing that. 23 MR. KENNY: Possibly the easiest solution, we are 24 looking at implementation date January first, 2001, we have 25 considered extending that date by a year as providing some PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 95 1 additional time. 2 I do not know if that additional time is sufficient 3 for Mr. Kowalczyk to address that shut-off issue, but the 4 tethered cap is needed for shut-off. 5 BOARD MEMBER C.H. FRIEDMAN: I'm not convinced that 6 it would, and he is not claiming that it would or should, but 7 he has a nozzle that is universal, that will work, 8 apparently, with everything, and others with automatic 9 shut-off will require for some vehicles some kind of funnel. 10 MR. KENNY: One thing that -- 11 BOARD MEMBER C.H. FRIEDMAN: Until they redesign. 12 MR. KENNY: We were thinking of the primary usage 13 is essentially not for refueling of the cars. 14 It is for all the different utilities, equipment 15 and that is where we get the vast emissions. 16 When cars run out of gas, they need to refuel, and 17 we have proposed but not designed a system to deal with that 18 small percentage of times when people need to have their cars 19 refueled, and we thought there were economic funnels 20 compatible for a car to be refueled. 21 The vast majority of situations really is for this 22 regulation one in which all of the other ultimate equipment 23 needs to be refueled in large numbers and redesign was 24 substantial if we discounted the inventory to later 25 refinement of information, we see the inventory large in PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 96 1 comparison to all of the others sources, and we are trying to 2 achieve it as quickly as we can. 3 BOARD MEMBER ROBERTS: I would like to pursue this 4 for a minute. 5 Mr. Kenny, help me. Are you largely in agreement 6 or disagreement with Mr. Kowalczyk's statement that he talked 7 about, the three percent? 8 MR. KENNY: I was going to ask the staff to give -- 9 I thought it was greater disparity. 10 Mark or Dean. 11 MR. BLOUDOFF: Disagreement. 12 MR. KENNY: The 70 percent, 73 percent. 13 MR. BLOUDOFF: We did it with automatic closure, 14 and we took the product, and the price of his product and 15 another product, both of the products had automatic shut-off, 16 stops the fuel flow. 17 BOARD MEMBER ROBERTS: I'm talking about tons. 18 MR. BLOUDOFF: The emission remodel, the current 19 emissions from the current inventory, 34.4 tons a day closure 20 requirement, you need to remember that pie graph, 74 are 21 evaporative, that is a huge number. 22 Compare that to refilling spillage that is the 23 differences between automatic closure and shut-off, remember 24 that automatic shut-off, 34 percent of the cans are being 25 left open in a way. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 97 1 I'm not misrepresenting that. Could be a spout or 2 vent or anything, and with automatic closure that will not 3 happen because no -- 4 BOARD MEMBER C.H. FRIEDMAN: The question if you 5 have a cap that is tethered, is it true, do you degree it's a 6 half or 15 percent, that is what I heard? 7 BOARD MEMBER ROBERTS: His statement did not seem 8 unreasonable that you might have half. 9 MR. KOWALCZYK: The staff did calculations. 10 I went with 15 and 70 percent, not 73. I will be 11 happy to go over it. 12 I do not see an error. If I point out the error, I 13 believe that is what the numbers are. 14 MR. KENNY: I was trying to get a simple straight 15 answer for the Board. 16 The answer is not 70 or 73 versus 44 percent. 17 BOARD MEMBER C.H. FRIEDMAN: Would you explain? 18 MR. KENNY: Mark Carlock will provide that. 19 MR. CARLOCK: Using the percentage of cans left 20 open, from the survey, 44 percent, and assuming with the 21 tethered that you would have 15 percent, you go through 22 emissions associated with the open can and apply that ratio 23 to it, so you get reduced -- 24 BOARD MEMBER ROBERTS: You cannot go from 73 to 40. 25 That cannot work. How much of the total picture is PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 98 1 due to automatic closing? 2 What was the total percentage of this hole problem? 3 MR. CARLOCK: Most is from open systems, about 70 4 percent. 5 BOARD MEMBER ROBERTS: 70 percent. 6 Okay. Now, we are saying this affects roughly 20 7 percent. He is saying there is 20 percent reduction in 8 number of cans left open? 9 Excuse me. 10 MR. CARLOCK: Well -- 11 MR. CACKETTE: It is 34 percent to 15. 12 MR. KOWALCZYK: I would be happy to provide the 13 calculations and provide you to look at the transport, the 14 vapor displacement and apply the appropriate factors for all 15 those and sum them up and compare the two. 16 I would hate to make a rash -- 17 BOARD MEMBER ROBERTS: Put our pie chart up on the 18 screen. 19 CHAIRMAN LLOYD: Mr. Kenny, we are going to, after 20 this witness, we are going to take a break for the court 21 reporter and ask staff to come back with comments after that 22 five minute break. 23 MR. CACKETTE: The chart is up there now. 24 BOARD MEMBER ROBERTS: Green is evaporative. 25 Is that coming from the open cans then? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 99 1 MR. CACKETTE: Vast majority, that is one or more 2 vents on the can left open is gasoline exposed to the 3 atmospheric temperature around it, and that evaporates. 4 If the can is closed, it goes down as it cools 5 down. If they have the vent, either a spout or other vent, 6 each day some of that goes out, and the emission factor 7 table, you see it was 20 grams a day if it was open versus 8 one or two if it is closed. 9 That is a lot of emissions. A lot of emissions 10 come from having the system sealed up when not in use. 11 When Mr. Kowalczyk says, if it is tethered, they 12 are the screw cap on the top, more people put that on than if 13 it is lose, his assumption, 34 percent of the people lead to 14 15 percent, and you have a -- 15 BOARD MEMBER ROBERTS: Half of that, Mr. Kowalczyk, 16 half of that by emissions would be there. 17 MR. KOWALCZYK: First of all, that is not all from 18 open conditions. 19 Part of that is from closed cans. You have to go 20 through individual calculations. 21 I would be happy to go through the calculations 22 with the staff. 23 BOARD MEMBER ROBERTS: When we first had the 24 presentation, there were a number of components in the green. 25 If that is the case, I would like to resolve this. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 100 1 That leaves me uncomfortable. 2 Mr. Kenny suggests we might have considered putting 3 it after a year. We have a -- you have a year loss of 73 4 percent. 5 If you lose three percent, that is 15 percent loss, 6 that is 73 percent loss, that somehow might be that the staff 7 feels is okay, the math tells me that it might be better not 8 to do it the way that they recommend. 9 You need a component of the green part. 10 BOARD MEMBER C.H. FRIEDMAN: I thought I heard 74 11 percent is not just from the spout but any other opening in 12 the can. 13 I am assuming we are not talking about a waiver or 14 elimination of the requirement that there only be one 15 opening. 16 MR. CACKETTE: Once there is one opening, the 17 damage is largely done. 18 Today's cans have a little yellow plastic vents to 19 pour faster, and the spout, and we are eliminating the vents, 20 but if the spout is open, you have an evaporation problem. 21 You have to have them both shut off and drop it 22 from 21.8 to -- that is what the data shows. You can see 23 that there is impact, and other sources that have to be 24 located -- it has to be smaller. 25 Then if you go to the sloshing of fuel that comes PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 101 1 out when you transport it from the back of a trailer for lawn 2 and garden people, that depends on whether the spout is open 3 or closed, it turns on whether the cap is put on or not, and 4 if you assume that everyone is going to do it, we don't need 5 the system. 6 It would be in compliance. You assume that Mr. 7 Kowalczyk has assumed that the frequency is leaving it off 8 half, there is a large emission, a chunk of 74 percent. 9 We'll lose tons a day of emissions reductions from 10 the 15 percent of the people that do not put the tethered cap 11 on. 12 My experience is that they will not put it on. 13 There are other problems that the closure solves. 14 I may have to pay him for the nozzle. We are friends, and we 15 have worked together for years. 16 I have used the nozzle for a year and a half on my 17 equipment. I told John, I spill gas with it. 18 The reason is that it is a flexible nozzle. You 19 have a take the can like this and bend it over before you 20 tilt the can and put it in the neck of the lawn mower. 21 He held it near the can and was able to tilt it 22 that way, but what he was demonstrating was not a lawn mower. 23 If you pull it back out, pull the spout of the lawn 24 mower, you have to push the can. If you pull it out like 25 this, it dribbles. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 102 1 It was one of the reasons we felt strongly, from my 2 personal experience of using that type of nozzle, that you 3 get spillage as well. 4 The big issue is the green chunk of the pie and how 5 much reduction do we lose if we have one, five, ten, fifteen 6 percent of the screw caps left open. 7 It is above a trivial amount of people. If we take 8 a break, we will sort this out and make a table that allows 9 us to continue the discussion without having to point to 10 different charts. 11 BOARD MEMBER C.H. FRIEDMAN: Evaporation of 74 12 percent, does that include what is coming from the container? 13 MR. CACKETTE: Into that is the permeation. 14 BOARD MEMBER C.H. FRIEDMAN: I got it. 15 BOARD MEMBER D'ADAMO: I wonder if staff would 16 respond to the puff issue. 17 That is great concern, if that in fact would be 18 occurring. 19 MR. CACKETTE: One of the manufacturers, Vemco, has 20 a system that has instructions on it, vent it before you put 21 it into the equipment. 22 They have told us that over many years of selling 23 the product they have had no complaints about what you saw 24 there. 25 I'll leave it for them to testify. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 103 1 BOARD MEMBER DeSAULNIER: I may need an attorney. 2 MR. CACKETTE: We do not think so, because you do 3 not have five PSI built up in the can. 4 Sometimes you do. We were very concerned, but 5 their testimony or comments that they have had no consumer 6 complaints about this, despite the fact that they have sold 7 it for years, so listen to the testimony and hear what they 8 say. 9 BOARD MEMBER D'ADAMO: Obstructive pipes, fill 10 pipes, perhaps either one of you could respond to this, what 11 sort of -- how often have you seen equipment that the pipe is 12 obstructed that you could not get in, and has staff inquired 13 into that? 14 MR. KOWALCZYK: For the lawn and garden equipment, 15 10 to 20 percent may be like that. 16 Many of the things are not the majority. You start 17 adding a few cars, few obstructed fill pipes and shallow 18 cans, I am not going to portray half of the equipment is not 19 and brand new equipment is. 20 MR. BLOUDOFF: There are tank restriction options. 21 We have not quantified those. I do not think it is 22 possible, but there are some of -- when we presented the 23 proposal, there are going to be different products available 24 to meet refueling needs, and for example, the pictures that 25 John showed you, you take the product and refuel with, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 104 1 because you are allowed to go in at an angle, and John's 2 would do that because of the flexible spout. 3 There are products that meet the needs. 4 CHAIRMAN LLOYD: Thank you very much. 5 MR. KENNY: If I could add a piece of information 6 for the Board to know, I mentioned a one-year delay as a 7 possibility, but there is a flip-side to that. 8 As part of the SIP settlement, we agreed that one 9 thing we would try to do as an organization is implementation 10 of tonnage within specified time frames. 11 One of the time frames that we agreed was January 12 first, 2001 and achieve that by January 1. We anticipated 16 13 tons from the measure. 14 If the Board provides an additional year, we have 15 to look for another measure to achieve the full 16 tons. 16 CHAIRMAN LLOYD: Thank you very much, Mr. Kenny. 17 I would like to take issue with the part, for the 18 Board, the characterization of no control to essentially SEV. 19 That is unfair. You see we are going from 74 to 20 73, and maybe it should be 98 percent. 21 For the Board, there is a difference. 22 We will take a five-minute break and give the court 23 reporter a chance to shake out her fingers, and then staff 24 will come back to answer the questions. 25 (Thereupon a brief recess was taken.) PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 105 1 CHAIRMAN LLOYD: I would like to continue the 2 hearing, please. 3 Mr. Kenny, would you report to your seat, please. 4 Before we hear staff's response to some of the 5 questions from some of the Board Members, in view of where we 6 are heading, we are going to break at approximately 12:30 for 7 lunch and reassemble about 1:30. 8 However, before that, I understand that the next 9 two witnesses do have flight constraints, so we will make 10 sure that we hear their testimony, and that is Mr. Raboin and 11 Mr. Peters. 12 So, we will take both of those at least before we 13 do break. 14 So, I think staff was going to come back with some 15 response. 16 Tom, are you leading that? 17 MR. CACKETTE: We need a few minutes to make sure 18 we get the slide right, and we are addressing the issue. 19 So, maybe if we could wait until these couple of 20 testifers are done, or maybe after lunch. 21 CHAIRMAN LLOYD: After lunch, maybe that will give 22 you some extra time. 23 So, the next person to testify must be Mr. Raboin 24 from ASTM - Chilton Products. 25 MR. RABOIN: I was prepared to say good morning, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 106 1 but it is afternoon. 2 So, good afternoon, Mr. Chairman and Members of the 3 Board and the staff. 4 I'm Ron Raboin, speaking on behalf of the portable 5 fuel container industry and employed by Chilton Products that 6 manufacture fuel containers and currently serve as 7 Chairperson for the ASTM Subcommittee on Flammable Liquid 8 Containers. 9 We appreciate the opportunity to converse with the 10 Air Resources Board and staff this morning. I have the 11 following comments which I will keep brief. 12 The fuel container industry fully supports the ROG 13 emission reduction initiatives taken by the State of 14 California. 15 As contributors to this effort, the industry, along 16 with associated material and service providers, have 17 participated in the development of ASTM standards. 18 For those that are not familiar with ASTM, that is 19 the American Society for Testing of Materials, and ASTM has 20 drafted standards for fuel containers over the last few 21 decades, and that basically is what governs the construction 22 and the performance of fuel containers sold in the country 23 today. 24 The standard when completed is intended to reflect 25 the same requirements of fueling system products that are PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 107 1 compliant with the proposed Air Resources Board Spillage 2 Control Regulations. 3 In this regard, the old standing issue before you 4 is the proposed permeation limit of .4 grams per gallon per 5 day for products sold starting January the year 2001. 6 While the industry has had sufficient time to 7 accurately assess most other performance criteria described 8 in the proposed regulations, the permeation limit is a 9 relatively recent requirement and with little consistent 10 information available with which to base an accurate cost or 11 a feasibility study. 12 The industry's finding indicate, for instance, the 13 total projected cost increment, the total cost for 14 permeation-related reduction processes, in this case 15 sulfonation, which is claimed to provide an effective barrier 16 against permeation, is actually several times over that 17 projected in the proposal. 18 It was also found that very little or no 19 documentation consists relating to the consistency and 20 durability of such processes. 21 The industry is requesting more time to evaluate 22 all possible means of permeation reduction in portable 23 containers and to determine whether the proposed limit can be 24 achieved at reasonable cost and maintained on a consistent 25 basis. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 108 1 The industry has proposed an increment permeation 2 limit, effective January 2001, of one gram per gallon per 3 day, which is attainable with increased container wall 4 thickness. 5 This represents a full one-third reduction in 6 permeation losses compared with products that are sold today. 7 That is the conclusion of my statement, and I will 8 be happy to answer any questions that there may be. 9 BOARD MEMBER C.H. FRIEDMAN: Could I ask a quick 10 question? 11 Are you satisfied on the other points that you 12 raised in your earlier letter? 13 I take it they are no longer an issue? 14 MR. RABOIN: On what specific points? 15 BOARD MEMBER C.H. FRIEDMAN: There was flow rate. 16 I am referring to the letter of September 14. It's 17 apparently on behalf of the industry and ASTM Subcommittee 18 Members, and Chilton is listed among the signatories. 19 There was to have two minimum flow rates instead of 20 three, and I gather that has been accommodated, or you are 21 not raising that point? 22 MR. RABOIN: I must say that at this point we have 23 just very recently ran into some difficulty in trying to 24 resolve those issues of flow rate and fill level. 25 BOARD MEMBER C.H. FRIEDMAN: I don't want to raise PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 109 1 something that you don't want to raise. 2 MR. RABOIN: I am not prepared to raise those 3 issues at this point, but we are in the process of trying to 4 resolve them. 5 My intent here this morning was to address 6 permeation limit, and that was the extent of what I was 7 prepared to address. 8 BOARD MEMBER FRIEDMAN: Okay. Thank you. 9 Would someone on staff help me understand, if we do 10 a phased reduction instead of an immediate reduction, say to 11 a gram and then to the goal, tell me what that means in terms 12 of tons? 13 The permeation is what, 8 percent? 14 MR. CACKETTE: It is 7.2 tons per day, and that 15 occurs over a five-year period, when you totally turn-over 16 the can market. 17 So, the question, I think, is what happens if we 18 give a one-year delay or year and a half delay, and you 19 accept the proposal of cutting the permeation rate in that 20 18-month period down to one gram instead of .4 grams -- it 21 will take a minute for the exact calculation, but I think you 22 can see that it is going to be a relatively small fraction of 23 7.2 tons -- 24 BOARD MEMBER FRIEDMAN: Actually, I thought it 25 would be a fairly significant fraction. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 110 1 MR. CACKETTE: We will do the exact calculations, 2 but I guess, obviously at 18 months, after 2007, it won't 3 have any effect, because they will be turned over. 4 So, if we look at 2007, which is roughly a 5 five-year turn-over period, one year of that would be roughly 6 one-fifth, so, it will be a little bit under a ton, would be 7 my best guess, but we will do an exact calculation, if you 8 want, during the lunch break. 9 So, we would lose about one ton or so out of the 10 seven, would be my back of the envelope calculation. 11 CHAIRMAN LLOYD: Thank you. 12 Any other questions from the Board Members? 13 BOARD MEMBER CALHOUN: I would like to ask one 14 question about the permeation. 15 That has been the problem with the autos also in 16 the past. That doesn't appear that was a big problem in 17 trying to resolve it. 18 MR. CACKETTE: No. 19 We did present to you the LEV 2 program last 20 November. We went through some of the technologies that were 21 available for plastic gas tanks for cars, and the technology 22 there was actually a higher technology than we are proposing 23 here. 24 They actually laminate several plastics with a 25 barrier put in between the plastics. This is just a coating, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 111 1 transformation of the inner liner, I think, would be a 2 correct way of saying it. 3 MR. RABOIN: Yes, that is correct. 4 The process you are referring to, Mr. Calhoun, has 5 to deal with what turns to be multi-layer, blow molded or 6 excursion technology. 7 It is a very sophisticated process requiring very 8 expensive equipment and specialized training, and in the case 9 of the Jerry-can, the technology that has been developed in 10 the automotive community is not necessarily readily adaptable 11 to the Jerry-can, due to the configuration of the container 12 and the performance that is required of the container. 13 MR. CACKETTE: The terminology that Mr. Campbell 14 proposed was the SEV for the LEV 2 program, and what we are 15 proposing here is a much less stringent, lower cost approach. 16 CHAIRMAN LLOYD: Thank you very much. 17 BOARD MEMBER FRIEDMAN: Is the sulfonation that you 18 use more expensive than the permeation of the other model 19 that you showed, someone passed around? 20 MR. RABOIN: We are not in the process nor I am 21 aware of production of sulfonation process currently under 22 way with a Jerry-can. 23 There may be some similar products holding similar 24 materials that may have been treated with that process. 25 In terms of the fuel container industry as it PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 112 1 exists today, we are not in the process of barrier treating 2 or treating surfaces in any of the facilities that I am aware 3 of. 4 The costs are difficult to zero in on at this 5 point. As we understand it, there are no production 6 facilities capable of doing high volume sulfonation. 7 If that is determined to be the preferable process, 8 of course, we won't have actual costs that are involved with 9 that process until a full-fledged operational system is 10 actually in place. 11 CHAIRMAN LLOYD: Yes, Mr. McKinnon. 12 BOARD MEMBER McKINNON: In your proposal to just 13 increase the thickness of the walls, is that something that 14 doesn't require any change in manufacturing other than 15 adjustment of the machine? 16 MR. RABOIN: For the most part, an increased wall 17 section can be done without a whole lot of, say, new 18 technology or major revisions to the current technology. 19 There are some concerns with wall sections because 20 of the geometry of the containers and so forth and the 21 existing performance requirement of polymeric gas cans. 22 We do not feel that an increase in wall thickness 23 will have an adverse effect on the supply of the containers. 24 Perhaps if it is going to effect the cost to some extent 25 because there is more material involved, but I think by and PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 113 1 large it can be done with a minimum amount of change in the 2 current processes. 3 BOARD MEMBER McKINNON: Do you have any idea why 4 there is such a disparity? 5 My understanding is that it would involve adding a 6 new process to your factories. By the way, are any of the 7 factories that produce the cans, are any of them in 8 California? 9 MR. RABOIN: There may perhaps be some. 10 I think the staff could address that more 11 accurately than myself. 12 I am not aware of a high volume producer in the 13 State of California, although there may be, but I am not 14 aware of it. 15 BOARD MEMBER McKINNON: Can you, do you have any 16 explanation for what the difference in estimate of cost of 17 adding a process would be? 18 It seems to be a large difference between the 19 manufacturers and staff? 20 MR. RABOIN: I did make that statement that our 21 preliminary findings, if we were to adopt or implement the 22 sulfonation process into our production facilities, that we 23 find that when all the costs are determined, this has to do 24 with transportation costs, these processes are not always 25 done, and in this case probably would not be done, on-site, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 114 1 would require transfer of these fuel containers elsewhere to 2 be treated and transferred back to the factory or the 3 distribution point. 4 We just don't have at this point in time enough 5 information to put together all of the costs involved, but 6 from what we see and what we preliminarily have determined, 7 that we are talking about an increment of somewhere between 8 $6 to $8 perhaps on an average size container due to that 9 type of process. 10 That is what we are seeing at this point in time. 11 BOARD MEMBER McKINNON: Does the industry have some 12 concern that someone else may go into the business and come 13 up with a lower price for doing that work? 14 MR. RABOIN: That possibility always exists. 15 As I pointed out, what we are in the early stages 16 of analyzing in this entire subject, and we have not, unlike 17 some of these other elements of the California regulations, 18 we have had some time to consider them, such as the spout 19 configuration and features, but this permeation issue has not 20 been on the table for that period of time relative to these 21 others. 22 So, we just haven't had the time, and we are asking 23 for more time so that we can have accurate answers to the 24 questions that you are asking. We do not have those answers 25 at this time. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 115 1 BOARD MEMBER McKINNON: No further questions. 2 Thank you. 3 CHAIRMAN LLOYD: Thank you very much. 4 Staff, do you have a response on the manufacturing 5 in California? 6 MR. BLOUDOFF: Yes. 7 We have identified two container manufacturers in 8 California, and one manufacturer that only makes a spout 9 located in California. 10 CHAIRMAN LLOYD: Thank you. 11 The next witness we have is Mr. Peters. 12 MR. PETERS: Good afternoon, Mr. Chairman and the 13 Board. 14 Can you hear me okay? 15 I'm Don Peters, Principal Engineer of Blow Molding, 16 from Phillips Petroleum Company. 17 As you can see just by looking, I have been around 18 there for a while. I have been working with the automotive 19 fuel tank industry for about 37 years. 20 My comments will be brief, because my prepared 21 notes flew out the window someplace. 22 Phillips agrees with the ideal of reducing 23 permeation results, and my talk is going to be primarily on 24 the permeation through the wall of the Jerry-can. We are for 25 that. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 116 1 By way of background, I have been involved in 2 design, mold design, part design, processing and many joint 3 barrier programs to reduce the permeation of fuel tanks in 4 the automotive industry. 5 I have endured more than I care to remember 6 actually. 7 My comments are going to be almost entirely on 8 permeation, and by that I mean through the wall of a sealed 9 container of a polyethylene container. 10 I want to make it clear that it is a material, the 11 plastic material of choice, for Jerry-can. There is no other 12 plastic material on the horizon that will take the place of 13 the high density polyethylene Jerry-can, and that is because 14 of the combination of chemical resistance, price, very 15 important, toughness, good impact, good stress resistance, 16 those things have resulted in the Jerry-can being around for 17 30 years probably. 18 In fact, I still have one of the first thirty, but 19 there is a small amount of fuel permeation that goes through 20 the wall of a plastic Jerry-can. 21 Of course, that is the subject of my talk. 22 It is a very small amount, and I think it amounts 23 to about, according to your calculations, 7.2 tons as 24 permeation, and if you reduce that a third, that would be two 25 tons. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 117 1 But there are some processes that reduce that 2 permeation, fluorination, sulfonation, co-excursion, extra 3 heavy walls will reduce it. 4 I am just going to just very briefly touch on each 5 one. Fluorination will reduce it, but there are some 6 questions on durability. How long will it last? 7 Sulfonation has some of the same questions and 8 possibly a question on design. 9 Heavy wall will reduce permeation. If you double a 10 wall, you can probably expect, according to our calculations, 11 about a third reduction, maybe even a half, probably a third 12 reduction in permeation rate, but you would think that, as 13 resin is moving before the heavy walls, so we can get more 14 material out, but up to a point that might be okay. 15 We do not think heavy wall is a solution. 16 If you take a heavy wall, you take a penalty. So, 17 the increased cost, they had a three pound Jerry-can, the 18 weight of it, three pounds, there is probably a $1.50 more 19 material. 20 More important than that or just as important 21 probably, is the increased cycle time, which means you got a 22 decreased production rate. 23 The machines are worth $100, $200, or more like 24 $200 an hour. That is going to be a significant addition to 25 the cost of the Jerry-can, also. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 118 1 So, we don't think that going up in wall thickness 2 will be the total answer. You are going to have some help 3 from a barrier. 4 Co-extrusion has been adopted by the automotive 5 fuel tank people that, I guess, they threw the wall 6 permeation down to a very low amount away. 7 It does have a few problems in Jerry-cans. To make 8 a fuel tank, co-extrusion requires you have a rip around the 9 part of the seams, so at least part of the plastic comparison 10 and that has its problems of making a nice handle that 11 doesn't cut into your hand. 12 So that problem would have to be resolved, if you 13 can make one without that seam. 14 There is also the problem, I think, in determining 15 exactly how to determine the permeation amount, the testing 16 method and how heavy. 17 We are working with a joint program with CARB maybe 18 to resolve some of those problems. So, we will have a 19 simpler and less costly method of determining the permeation. 20 In summation, there is enough unknowns out there 21 and enough refinement, the process has to be sulfonation, 22 fluorination, even co-extrusion, that there is more time 23 needed to resolve those technical problems. 24 There are also some other things out there that 25 might have them, there are some blips, nylon things that have PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 119 1 not worked so far, even barrier coatings, things like that, 2 given a little time, somebody might develop and might make 3 this proposed standard. 4 So, we support the efforts to reduce the permeation 5 of the Jerry-can and get it out of the atmosphere, but I do 6 support what Ron Raboin just said, more time is needed to do 7 a cost-effective method that would reduce permeation. 8 Thank you, and I will glad to answer any questions 9 that somebody might have. 10 CHAIRMAN LLOYD: Thank you very much. 11 Any questions from Board Members? 12 Thank you very much indeed. 13 I think with that, unless there is any other 14 witnesses that have a time constraint that they will not be 15 able to come back after lunch, I propose that we take a 16 one-hour break and reassemble at 1:30. 17 Thank you. 18 (Thereupon the lunch recess was taken.) 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 120 1 A F T E R N O O N S E S S I O N 2 --o0o-- 3 CHAIRMAN LLOYD: I would like to continue the 4 hearing, please. 5 I understand that Mr. Verl Law has to depart, so I 6 would like to take him as the next witness. 7 Okay. 8 MR. LAW: Thank you, Mr. Chairman, Members of the 9 Board, staff and other concerns citizens. 10 I appreciate the opportunity to address you today. 11 We are a manufacturer for Sure-Pour, have been manufacturing 12 nozzles in excess of ten years. 13 Over that period of time, we have learned quite a 14 few things. We have made some changes in our product. 15 We have gone through Underwriters Laboratory 16 testing, and we have learned quite a bit about the pouring 17 and spilling of fuel. 18 First, I would like to talk a little bit about, we 19 have some very satisfied customers. I have a file here that 20 I brought with me that I will leave with the clerk. I assume 21 that is where I leave it, with some letters. 22 These letters are a sampling of a file that is 23 probably near two inches thick, entitled, problems and 24 complaints, and these people have commented not about their 25 complaints but how well they are satisfied with the nozzle, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 121 1 even though they have had a problem with breakage or warranty 2 or something of that nature. 3 I would like to address since I came up earlier a 4 little bit about the automotive issue. 5 The fuel tanks that are manufactured today for fuel 6 injection engines, most of them have fuel pumps inside of the 7 tank. 8 If you run these cars out of fuel, you stand a 9 chance of damaging the fuel pump within the tanks, and 10 because it is by the fuel, when it runs empty, it has 11 possibilities of burning up the fuel pumps. 12 It is not advisable in today's world to run cars 13 out of fuel, not only for the damage that can be done to the 14 automobile, but also for safety reasons along the highways 15 and freeways. 16 I will say, though, that you could take a Ford 17 Taurus today, take either one of our nozzles and pour gas in 18 an emergency into that tank. It does not have to penetrate 19 the little unleaded flap on the inside. 20 The fuel will run through the other openings or 21 vent holes that are around that in an emergency situation. 22 It is not necessarily a good situation, but then running out 23 of fuel isn't either, that type of thing, I'm sure, with a 24 little planning. 25 It has been a long time since I have seen a car PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 122 1 along the road anywhere carrying fuel, so there is somebody 2 packing fuel to it. 3 It was brought up earlier concerning the puff 4 issue, as it was termed. I have left gas cans out in the 5 sun, empty, half full, full, they do create a positive 6 pressure within the container. 7 I have yet to see one ever reach over three pounds 8 of pressure. Out of approximately 250,000 nozzles sold, I 9 have yet once to hear anyone complain about having to or not 10 doing it, either one, release the pressure before they start 11 the initial pouring of fuel into a small engine tank or 12 anything else. 13 I think that is something that is blown way out of 14 proportion. In fact, as far as I am personally concerned, I 15 of course use a nozzle of that nature at home, both for line 16 trimmers, rototilers, chain saws, I have a riding lawn mower 17 I use at least once a week, not necessarily that I like to 18 but I do, but I very seldom needed to vent one, but then 19 being familiar with the nozzle, I can usually tell when the 20 container has a positive pressure, which a venting situation 21 would be necessary, but then I store my gas cans in a shed, 22 and they build very little positive pressure. 23 If that positive pressure does occur, you can vent 24 the opening. I know that Briggs and Stratton has a 25 container, and they may be set up to testify, I am not sure, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 123 1 that you can open theirs to pour until you do vent, theirs is 2 set up so as soon as you turn the spout to put it in a 3 position so you can open it, it does automatically vent that 4 pressure. 5 I thought it was interesting that the slide that 6 was shown of a rototiler that supposedly we weren't going to 7 be able to pour into with it automatically closing and 8 automatically preventing overfill on nozzles, was the very 9 one I use at home all the time. 10 The same engine on my rototiler was the one that 11 was shown on the slide, and it does, the tank fits partly 12 under the air cleaner, and that is the reason I appreciate 13 the Sure-Pour nozzle that I can put under there and fill it 14 without having to see whether it is full or not. 15 It shuts off automatically. 16 Another thing that I hesitate a little to mention, 17 but since I was, I felt like I was attacked so severely 18 earlier, it is almost impossible to take a container, 19 particularly with a five-gallon can, and raise it with one 20 hand and pour fluid out of it and maintain any kind of 21 control of it. 22 I think gasoline weighs eight something pounds per 23 gallon, and five-eighths of 40 pounds, I think we are looking 24 at a situation where we would probably have a lot of people 25 unhappy if that is the kind of nozzle that we required, that PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 124 1 you lift the container with one hand to pour out of it. 2 The Sure-Pour nozzle, and I think also the Briggs 3 and Stratton that was shown with it, one hand picking it up 4 by the back of it, you can rest the container on the piece of 5 equipment while you are pouring. 6 It is a simple, easy, convenient process, and I 7 have got document letters here of customers that have done 8 that and appreciate the use of it. 9 Thank you. Are there any questions? 10 CHAIRMAN LLOYD: Thank you very much. 11 Questions from the Board? 12 Thank you very much indeed. 13 Our next three witnesses all come from the American 14 Motorcyclist Association. Dana Bell, Harold Soens and Dave 15 Oakleaf, then after that we will have Janet Hathaway. 16 MS. BELL: Mr. Chairman, ladies and gentlemen of 17 the Board, my name is Dana Bell. 18 I am the Western States representative for American 19 Motorcyclist Association, and I do have grave personal 20 concerns, because I am also a native Californian and intend 21 to stay in the state. 22 What we are asking, we have worked with staff, and 23 I would like to recognize the assistance and cooperation we 24 have gotten with staff in addressing our concerns, what we 25 are asking is for the exemption for rapid fill devices, is PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 125 1 that it be, that we add to it design to seal against a stock 2 target tank with full control of fuel flow that prevents 3 spillage prior to and following fuel release. 4 The reason we are asking this is we have two rapid 5 fueling devices that are typically used in competition. One 6 of them has a fixed receiver in the receiving tank. 7 These units run, they are up in the $800 range. We 8 also have a unit slightly less expensive. It's around, it 9 can go from about $250 to $400, and it does not have a 10 permanent attachment in the receiving tank. 11 However, it is controlled so that there is very 12 little if any spillage. 13 The reason that were asking for this exemption is, 14 first of all, we feel that there is a very insignificant 15 number of these devices out of there because of the cost of 16 the unit. Even the low price one at $250 is certainly more 17 than the general public is going to be interested in paying. 18 Also, the specialization of the unit and the need 19 for this rapid flow, because what we have looked at in the 20 units previously is they are talking about 2.5 to 3 per 21 minute, the rapid fueling devices release their full load of 22 two plus gallons in two to three seconds, and this is what 23 the competitive rider driver is looking for. 24 Concern has been expressed by staff that if this 25 exemption is allowed of a unit that did not have the PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 126 1 permanent attachment within the refueling device, that as 2 time went on, people might develop a unit that would meet 3 that language but not prevent the spillage. 4 In addressing that, I think we have to look at 5 first of all the size of one of these units. They are rather 6 large, and it is not something you are going to typically 7 want to put in the back of your car to try to get around a 8 regulation. 9 Also, whatever unit is designed must meet the 10 desires of the public, if they are going to purchase it, and 11 for a racer it is extremely important that all of that fuel 12 go in the tank, they do not want it on the machine. They 13 certainly do not want it on themselves, and they do not want 14 to waste the fuel being dumped on the ground. 15 In addition to the general public, even the racing 16 public does have concern about dumping fuel on the floor. 17 So, again, what we are asking is that the exemption 18 include the language that we have proposed. We have 19 submitted this to the staff, and we would very much 20 appreciate our concerns being addressed. 21 Thank you. 22 CHAIRMAN LLOYD: Thank you. 23 Any questions? 24 BOARD MEMBER C.H. FRIEDMAN: Yeah. I have a quick 25 question. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 127 1 If I understand correctly, the staff has 2 accommodated much but not exactly what you are proposing? 3 MS. BELL: What they have accommodated is the very 4 high range unit, which I said is about $800 plus. 5 BOARD MEMBER C.H. FRIEDMAN: That is the permanent 6 installation? 7 MS. BELL: Yes. 8 What it does, it has a permanent fixture within the 9 tank. 10 Now, the other device is Mr. Harold Soens, who is 11 also going to be testifying, can actually describe one of 12 these units to you. 13 I have done a lot of refueling of my motorcycle 14 during 15 years of racing, but I always had to use the cheap 15 one's. 16 BOARD MEMBER C.H. FRIEDMAN: Also, the original 17 staff proposal deals or limits this to off-road competitions. 18 Is that, you deleted those words for some reason in 19 your -- and you have added ATV? 20 MS. BELL: Yes, that is correct. 21 Because there typically is, both in motorcycles and 22 ATV, and I think the language we put in was off-highway, 23 because that is typically the way that these vehicles are 24 referred to. 25 They may be operating off of highways, but they PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 128 1 sell them, operate off of roads or trails. 2 BOARD MEMBER C.H. FRIEDMAN: I just wanted to make 3 sure I understand it. 4 Thank you very much. 5 CHAIRMAN LLOYD: Any other questions? 6 Yes, next speaker, Mr. Soens. 7 MR. SOENS: Thank you. 8 I can describe the can. My name is Harold Soens, 9 from South Southern California, as far south as you can get. 10 I am the Direct Legislative Officer for District 38 11 AMA. 12 The can is shaped like a pear. It has a filler cap 13 on the top screwed on. It has two handles, and it has one 14 like a bicycle brake lever on one handle with a wire going 15 down to the bottom. 16 It has a hose coming off the bottom, going back 17 into the top of the tank, and that is why it fills so fast. 18 You put it on the gas tank. The regular gas tank 19 that is not just the one with the gas cap on it. It seals 20 around the gas tank. 21 There is no way you can spill it. You pull the 22 handle. As soon as it fills, you see this pipe fill up, you 23 shut it off. 24 That stays in the pipe. You pull it off, and that 25 gas never reaches the ground. There are no vapors. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 129 1 The vapors are pushed back into the top of the 2 tank. So, that is how it works. 3 That is why we need that exemption, because that is 4 the cheaper model. It's the early model. It's the way that 5 they originally made them, but now that all the racers and, 6 especially the race car drivers, that is so that the fuel 7 doesn't spill back on the new one's, that is the only reason 8 why they have got the double thing in the tank. 9 Thank you. 10 CHAIRMAN LLOYD: Thank you. 11 Any questions? 12 Thank you very much. 13 Mr. Oakleaf. 14 MR. OAKLEAF: Mr. Chairman, Members of the Board 15 and staff. 16 You probably remember me from the two-stroke issue. 17 I represent Southern California District 37 of the AMA, 18 Legislative Officer of the Competition Riders, and just to 19 kind of piggy-back on what Dana and Harold have said, the two 20 main things that competition riders are concerned with is 21 speed of filling the tank and filling to the top. 22 I know on numerous races, the recent Baha 1000, a 23 1000-mile race, 22-some hours, won by eight seconds, so you 24 can see a guy is not going to wait two minutes for one gallon 25 to go into his tank, or typically, as they said, we can fill PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 130 1 a six gallon tank in about six seconds, six to eight seconds 2 using these dry brake can filling systems. 3 Now, I think one of the points that has been missed 4 is these are strictly used for filling. They are not used 5 for storage. 6 We fill them at the race site. We fill the bikes. 7 When the bikes are filled, when the bikes have all gone 8 through there empty and go back, we carry the gas in 50 9 gallon drums and fill these. 10 They are not stored in these. So, I think there 11 just needs to be an exemption for off-road competition 12 motorcycling, because the systems that we are talking about, 13 as they said, there are two or three, there is the quick fill 14 or the dry brake, some of them have a tube on the side. 15 There is a way to look. As soon as it is filled, 16 the gas comes up to the tube. You pull it out, and there is 17 no spillage. 18 The gas goes back into the tank, and they are non 19 polluting. 20 Not to exempt these, I think, it would be a big 21 mistake. They will go back to the old systems, and they have 22 to go to a 7-11 and get a Big Gulp plastic cup, fill that 23 with gas to top off their tanks, because sometimes it is a 24 matter of half a mile or a tea-cup full of gas, the 25 difference between finishing and not finishing. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 131 1 So, definitely, they are going to want their tanks 2 filled. Especially when it is down in Baha or wherever in 3 California when you are 50 miles or 60 miles between pits, 4 you have to have your tank filled. 5 So, filling it an inch from the top is not going to 6 work, and what will happen is that there will be more 7 spillage because they are going to have to go to some other 8 system of just pouring it in and getting that tank filled 9 real quick. 10 I appreciate the opportunity to speak, and any 11 questions? 12 CHAIRMAN LLOYD: Thank you. 13 BOARD MEMBER CALHOUN: Staff, would you comment on 14 the request that he just made? 15 MR. CACKETTE: I think what we would like to 16 propose is that we work with them on the 15-day comments to 17 make sure that the language that they proposed doesn't create 18 any kind of loophole that ends up with $20 cans that 19 extensively are used for competition motorcycle racing and 20 end up being in yours or my shed. 21 So we can ensure that there is not a loophole here, 22 I don't see any reason why we can't address their concern. 23 We had tighter language that maybe they are suggesting is too 24 tight for the exemption, and we can see if we can work 25 something out. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 132 1 BOARD MEMBER FRIEDMAN: Tom, excuse me, is there a 2 need to test this assurance that there is no spillage or 3 whatever using their approaches? 4 When I watch television, I watch those cars zinging 5 around and see some of them skid on gasoline, I do not know 6 what the system is exactly, but I suspect that there are 7 multiple ways -- 8 MR. OAKLEAF: I think with the cars it is a little 9 different. 10 BOARD MEMBER FRIEDMAN: I understand that, but if 11 the assumption is correct that there is no way to spill with 12 sealed approach that you described a moment ago, I would feel 13 a lot more secure if we gave that assurance to ourselves. 14 MR. CACKETTE: We can certainly talk and make sure 15 we understand and check for that. 16 Even in that situation, there is not that many 17 off-road motorcycle racers, and I think the spillage would be 18 very small compared to the overall tons we are talking about 19 for doing your lawn mower and weed whip and other things like 20 that. 21 I wouldn't personally be concerned about the 22 emissions from it. 23 MR. OAKLEAF: For one thing, the gasoline, $8 a 24 gallon, so we don't want to spill it. 25 There is only two places they can go and spill it. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 133 1 One is in your lap, but that is not much fun, and the other 2 is on the red hot engine, which can easily burn your bike up. 3 So, believe me, we don't want spillage. 4 CHAIRMAN LLOYD: Any other questions? 5 Thank you very much. 6 Next is Janet Hathaway, and then after that Thomas 7 Schmoyer and Bill Brown. 8 MS. HATHAWAY: Hello, Mr. Chairman and Members of 9 the Board. 10 My name is Janet Hathaway. I'm representing the 11 Natural Resources Defense Council. 12 We are strongly in support of the proposal from the 13 staff. I submitted to you a letter for NRDC and also signed 14 by Sierra Club, the Planning and Conservation League, the 15 Pacific Gas and Electric, Union of Concerned Scientists and 16 the Coalition for Clean Air. 17 The letter is that we need these tons very, very 18 much, and that it is important to keep in mind that what may 19 sound like a small amount of tonnage, three here and five 20 there, is actually very, very hard to come by through other 21 programs. 22 You know who have struggled over setting 23 regulations over the years how difficult it is to, in fact, 24 achieve a regulation that can get an additional three tons, 25 so be very cautious about giving away any tonnage. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 134 1 I would strongly urge you to use caution here. It 2 does concern me that one of the elements of this regulation 3 is to assume that in five years we will have turn-over, 4 because it is so important to get old gas cans out of 5 people's sheds and replace them with these newer gas cans, I 6 would really hope that the ARB would work with the California 7 Environmental Dialogue, of which I am a member, and see if we 8 find a program, a way of incentivising people to return their 9 gas cans, that otherwise they would be storing in their homes 10 and replace them with these. 11 I think a coupon that gives a few dollars off of 12 these newer cans or whatever might really spark a lot of 13 people to dig back in their sheds and find these old cans 14 that are really very problematic. 15 So, I would urge that we think about those 16 possibilities as well. I think that could even add a few 17 tons, perhaps, to a very good rule. 18 Finally, I think it is very important to think of 19 this in terms not just of the ozone forming potential but the 20 air toxics. 21 When gasoline is evaporated in people's attached 22 garages, it is a very bad place in terms of its effect on 23 indoor air quality. 24 The benzene levels that result in people's homes 25 can be very high. It is very alarming to me that we find PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 135 1 that such a large inventory of hydrocarbons are being vented. 2 It seems to me very important that we not do too 3 much in the way of assuming that people will do the right 4 thing, because for many reasons and often it's just 5 inadvertence and lack of attention, people do leave caps off. 6 I noticed it a lot since I have had presentations 7 by your staff about this rule, that many people who work in 8 gardening businesses seem to be especially lax about putting 9 caps on their gas tanks. 10 So, I think it is very important to use caution and 11 if possible try to use the technology that is available to 12 prevent that problem from happening. 13 Finally, I want to commend the staff for what I 14 think is a very reasonable sell-through period. I think that 15 you have heard some concerns about this being too aggressive 16 a standard. 17 In many ways it seems to me that it is 18 extraordinarily cautious about giving manufacturers time to 19 make changes and enabling them to sell even beyond the period 20 of when the regulation starts to become effective, they can 21 sell their inventory for one more year. 22 So, from my point of view, there is a lot of 23 flexibility in this rule. It is related, designed to give 24 equivalent systems better innovative opportunity to prove 25 themselves. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 136 1 I do think that if it can be combined with a better 2 effort of public education about the hazard of gas cans and 3 these monetary incentives, or maybe not even monetary, but 4 some kind of a community gathering, where people can bring 5 these old cans, sort of like the hazardous waste turn-in 6 days, it might just sort of grow, and I think a lot of the 7 businesses that are part of the California Environmental 8 Dialogue expressed an interest in following up. 9 I think we could work with some of the districts, 10 but it would be important for me to know that ARB supports 11 those efforts to communicate just how important retiring your 12 old gas can is. 13 Finally, I just want to say that I felt that the 14 report was very rigorously put together. I think it was a 15 credit to your staff how much testing went into it, and even 16 though there are uncertainties about any of these kind of 17 regulations, I do think that it is an opportunity to make a 18 very big dent in the hydrocarbon inventory and one that is 19 extraordinarily cost-effective. 20 So, I urge you to adopt the rule, and while I 21 appreciate the concerns that have been raised, I think that 22 most of those can be accommodated and hopefully will be 23 accommodated through the exemptions that you allow for 24 innovative products or for special applications. 25 Any questions? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 137 1 CHAIRMAN LLOYD: Thank you very much, Janet. 2 Next is Thomas Schmoyer and Bill Brown. 3 MR. SCHMOYER: Good afternoon, Mr. Chairman and 4 Members of the Board. 5 I am Tom Schmoyer, with Enviro, Inc. 6 Enviro, Inc., had a technology that was developed 7 by Dow Chemical Company for the use of sulfa trioxide for 8 service modifications of polymers. 9 I have been working with originally Dow Chemical 10 Company, and then Enviro, Inc., since 1989, on automobile 11 fuel tanks and also on Jerry-cans. 12 Dow originally licensed the sulfonation technology 13 to Coleman Plastics, and over six million automotive fuel 14 tanks had a sulfonated barrier to those tanks. 15 The cost for those tanks for Coleman was initially 16 $1.80 a tank, and then after they wrote off the equipment it 17 was reduced down to a $1.27 a tank. 18 I think the issue for cost that have been addressed 19 are a little bit vague to me. I do not know where these 20 costs are coming from. 21 I have talked personally to a blow molder of 22 containers here in the State of California. They are 23 interested in getting into the sulfonation of Jerry-cans, if 24 the regulations are passed. 25 The cost to them for sulfonation, as best as we can PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 138 1 figure, is going to be approximately 93 cents a container. 2 That is on the high end, if they only manufactured 300,000 3 containers a year. 4 That cost will go down as they manufacture more 5 containers. 6 Dow Chemical Company has extensively tested the 7 barrier treatment. We pulled five automobiles back into Dow 8 that had 90,000 miles of usage on the cars. 9 We tested the barriers, and after that 90,000 10 miles, the sulfonated barrier was as full a barrier as it was 11 initially when put on the fuel tank. 12 I think the cost issue should be looked at. I'm 13 not sure how we get the mark-ups that we do, where all of a 14 sudden someone are saying sulfonation is going to cost $8 a 15 container. I realize the manufacturer is going to want to 16 take a mark-up on maybe the technology once it is applied, 17 and I know the retailer is going to take a minimum of 30 18 percent mark-up on the container, but where we get some of 19 these numbers, I do not know. 20 I think the interesting question is going to be, 21 competition is going to dictate whose technologies out there, 22 whether it's fluorination, sulfonation, co-extrusion, Selar, 23 when you pass the regulations, things happen. 24 I have been through this with the auto industry. 25 When we started off with the automotive and we first put PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 139 1 emission standards on the automobile, we did extensive work 2 with barriers on the automobile. Then all of a sudden you 3 gave the auto industry a year extension, and everything 4 stopped for a year. 5 Now, all of a sudden we are rushing through right 6 now to put another barrier on the automotive fuel tank for 7 2002. 8 While I am not saying that maybe Jerry-can industry 9 doesn't need a year extension, they may. But I think I could 10 have a sulfonation tank out there by January 2001 that will 11 meet your requirements. 12 I think it would be at 93 cents a container, and it 13 would drop, and I believe, I know sulfonation, I mean I have 14 been doing to for a while, so I think that is part of the 15 issue. 16 The other one is, I started talking to CARB in 17 1990, when we first started dealing with the automotive fuel 18 tank, and I sent some correspondence to CARB. I believe the 19 review Board made a decision that they were going to need 20 regulations for the Jerry-can. 21 I believe that was 1991, 1992. Somewhere in that 22 area. When I talked to several manufacturers in the 23 Jerry-can industry, I was not well received, and I am going 24 1991-92. 25 I'm not any more well received, I don't think, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 140 1 today, because the last thing the Jerry-can manufacturers 2 want to do is put a barrier on their tanks, and I don't blame 3 them. 4 Without regulations, it is not going happen. I 5 just went through these, the regs that you passed on diesel 6 emissions, and I happen to have a processing facility in 7 Iowa for heavy metals, and I'm now meeting car regs in Iowa 8 for my diesel emission, and I also do some research with 9 Detroit Diesel Navistar, and you have never seen so much 10 technology now being introduced on a daily basis, because of 11 your regs. 12 It may not be sulfonation or fluorination, this 13 guy's spouts and that guy's spouts that is going to end up in 14 your marketplace in one year, two years, three years, because 15 the guy with the best technology and the best tanks is going 16 to end up winning the spout. 17 So, I encourage you to go forward with the regs. 18 Whoever has got the best product, best technology will be out 19 there. 20 CHAIRMAN LLOYD: Thank you very much. 21 When you talk about these challenges, is that also 22 translating into job creation? 23 MR. SCHMOYER: Absolutely. 24 CHAIRMAN LLOYD: I think your comment on cost is 25 also very viable. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 141 1 I know Mr. McKinnon might want to say something. 2 BOARD MEMBER McKINNON: That's in California, 3 right? 4 MR. SCHMOYER: That is all across the United 5 States. 6 BOARD MEMBER C.H. FRIEDMAN: May I ask a question? 7 When you say sulfonation will work, applied here, 8 will that reduce the permeation to the level, the standard 9 that is now proposed, at .4 gram gallon per day? 10 MR. SCHMOYER: The 93 cents that I pulled, that 11 will give you a 90 percent plus barrier. 12 You are asking for, if I am correct, somewhere 13 around a 60 percent. The tanks that we have tested show that 14 level. 15 CHAIRMAN LLOYD: You give more for less. 16 MR. SCHMOYER: Well, I don't want to say that, but 17 we give what we give. 18 Thank you. 19 CHAIRMAN LLOYD: Thank you very much. 20 Next we have Bill Brown, Fluoro-Seal. 21 MR. BROWN: Thank you, Mr. Chairman and Board 22 Members. 23 I appreciate the opportunity to be here today. I'm 24 with Fluoro-Seal. I am one of the founders of the company. 25 It's a company that has been in existence since PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 142 1 1983. Our business is almost exclusively fluorination of 2 polyethylene. We fluorinate about 100 million containers a 3 year in the United States. 4 We do this at 12 locations. One of these locations 5 is here in California. It is in Ontario. 6 We have been a California business since 1987, and 7 we enjoy doing business here. It is a good state for us to 8 do business in for us. 9 All of our business is driven by permeation of the 10 100 million containers we have here. That is what most 11 people want. They want to stop permeation. 12 There are about 30,000 customers, which about 2,000 13 are located here in California. People do not want to have 14 it done, but they're having to have it done if we are going 15 to have a clean environment. 16 We are one of the companies that benefit from this, 17 from your type of legislation, and we thank you. 18 We do business with -- let me say first, we 19 submitted some samples to your staff. We had no idea of what 20 you folks had in process, and we submitted what we call 21 substandard levels of fluorination, Substandard levels of 22 fluorination 1, 2, 3, 4, 5, 5 being the highest, about 20 23 percent of our customers require higher levels of 24 fluorination than that. 25 Major companies that we custom design fluorination PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 143 1 levels to give the standards of permeation that they were 2 looking, people like Johnson and Johnson, BASL, American Home 3 Products, BMW, the German car manufacturer, General Motors, 4 Clorox, Monsanto, MFC, Colgate, Palmolive, and Estee Lauder, 5 these are all companies that are very environmentally quality 6 driven. 7 The standard that you are recommending here of .4 8 grams per gallon per day is easily attainable with just a 9 little bit of cooperation from the gas tank manufacturers 10 with some very minor modifications in the resin package that 11 they presently use. 12 We could fluorinate the two million containers a 13 year that is required in California that we have heard of 14 replacing the existing tanks. We could be set up to do that 15 in 90 days, and all of that 90 days is the process of really 16 just qualifying the process. 17 We have the equipment in place here in California. 18 We have the people in place here in California. Actually, we 19 would have to put on more people to take on two million 20 containers, but we wouldn't have to put on additional 21 equipment. 22 Cost wise, I also agree with Tom, I do not know 23 where the figures have been coming from that we have heard 24 about, but we could fluorinate containers for the gas tank 25 manufacturing companies without them making any additional PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 144 1 capital investments. 2 They send the containers to us. We fluorinate 3 them. We would put on the nozzles. We would do the labeling 4 for them and drop ship to their customers here in California. 5 To me this is like just one of our other 30,000 6 customers that we do business with. We don't see this as a 7 major thing. 8 Cost runs 35 cents to 37 cents per gallon, in that 9 neighborhood. So, on a five-gallon tank, whatever, five 10 times, take the highest, 37 cents, it would be the additional 11 cost to the gas tank manufacturers. 12 So, we have got a system in place. I think it is 13 economical. I think it can be done in a timely matter. 14 I might say the technology is also proven. People 15 like BMW and General Motors also have a 10-year service life 16 for their fuel tanks. We did our first fluorination of fuel 17 tanks in 1987, in France. 18 Those tanks are being tested as we speak. Our 19 actual customer on that is called Plastic Omni, that makes 20 the fuel tanks, and then sell them to the French automotive 21 companies, but our consultation with the French automotive 22 gas tank manufacturers, there have been no failures. 23 That is going back and testing tanks ten years 24 after they were originally fluorinated. 25 So, I see this as a no-brainer. It is something PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 145 1 that can be done. 2 In my opinion, we are not going to wind up with all 3 of those varied treatment business. I think Tom's technology 4 has some merit to it. We will wind up with some of it. 5 We may wind up with co-extrusion, because once the 6 regs are in place, everybody is going to scramble, and they 7 are going to do what it takes to get the business. 8 That is what business is all about. 9 That is all I have to say. If you have any 10 questions. 11 CHAIRMAN LLOYD: Thank you very much. 12 Any questions or comments? 13 Yes, Mr. McKinnon. 14 BOARD MEMBER McKINNON: I should have asked Tom the 15 same question. 16 Let me ask you, is there any other factor that 17 somehow we are missing that is the difference between the 37 18 cents or one dollar and change in the eight-dollar figure? 19 Is there a shipping between manufacturing and then 20 treating? 21 MR. BROWN: I am sure the figures that came up from 22 the gas tank manufacturers took into account shipping the 23 bottles to us and then shipping them back to their place. 24 I might add that we do, most of our business is 25 stand alone plant, like our plant in California. We drop PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 146 1 ship from our place to customers. 2 If there is any modification to the bottles that we 3 treat in Southern California, we offer those services to do 4 them ourselves. I do not know where the extra numbers came 5 from. 6 I might add when we first bid this business, we bid 7 a much higher price, because we did not know the volumes were 8 this great. We formerly quoted only two of the gas tank 9 manufacturers, and they were the prices that I just gave you 10 a moment ago. 11 CHAIRMAN LLOYD: Thank you very much. 12 I guess the last witnesses are Michael Poirier and 13 John Evans, from WEDCO. 14 MR. EVANS: Mr. Chairman, Members of the Board, my 15 name is John Evans, with WEDCO. 16 We wanted to make some additional comments 17 following Ron Raboin's comments concerning permeation. 18 Some of the cost emissions, there seemed to be some 19 questions about what the real cost of meeting the .4 grams 20 per gallon per day. 21 MR. POIRIER: My name is Michael Poirier, from 22 WEDCO. 23 We used the ARB numbers regarding emission of tons 24 per day that will be occurring in 2007. Of course, I 25 understood this morning that some adjustments have been done, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 147 1 so those figures that you had on your documentation of the 2 September 14 reflects the information that we received on 3 August 6. 4 To readjust those numbers, in my mind, that should 5 not be a significant difference. So, here in this situation 6 permeation, additional permeation, will only reduce by 3.8 7 tons per day, that is what we found out in the ARB reports. 8 In this situation, Ron, this morning, talked about 9 increased wall thickness that can provide us one-third of the 10 reduction. Also, the gentleman, from Phillips, also 11 mentioned about it, that will be true. 12 I should raise the point that we need to understand 13 that current test has been done with current Jerry-cans that 14 exists on the market, and those may not work very well with 15 spill-proof system. 16 So, this would require heavy wall thickness to make 17 it work properly, because the side wall moving, we discussed 18 about that this morning, side wall will move in and more 19 product will be, the capacity will be larger, and the effect 20 if we build to compensate this effect, the wall thickness 21 needs to be increased. 22 We have no choice. That is a matter of fact. 23 Due to that, we estimated that anyway the reduction 24 will provide an additional reduction about one-third of what 25 it is actually, and this is done with some product that we PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 148 1 have. 2 We will take a wall and some lower wall 3 thicknesses, and we did some variation tests on it, so that 4 we have some data, so that is based on that. 5 Due to that, the only additional reduction of 6 permeation that would occur with this new requirement, the 7 bars will be something around 3.3 percent. So, it's not a 8 lot compared to the costs involved here and to be able to 9 address this issue, of course, on September 14 document, we 10 listed here a lot of detail about costing, and I understood 11 that many questions have been raised about how come the 12 difference between those numbers and maybe some other 13 treatment numbers mentioned, those numbers didn't agree with 14 most of the people in the industry, those should be good 15 numbers, and we added some other numbers. 16 Of course, we need to take into consideration 17 capital cost, because it's going to have a better treatment 18 in-house, but we need to expand those regarding the increase 19 building, to add those equipment, also to supply energy, 20 electricity, gas, all the requirements regarding to that. 21 So, this is the numbers that take care of that. 22 Regarding the fluorination of off-site fluorination barrier, 23 then of course, we had to add transport cost, we added the 24 special packaging, as Fluoro-Seal mentioned, it has been 25 added to, and we use their figures regarding cost of PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 149 1 fluorination. 2 Of course, again, we need to take into 3 consideration that we have a price for a low volume, and we 4 have a price for a high volume, so we took the average of 5 those two numbers to provide a specific number, because we 6 are going to be in between. 7 MR. EVANS: Just a quick comment, the numbers were 8 generated from quotes that we have received from sulfonation 9 and fluorination. 10 These are not numbers that we came up with 11 ourselves. 12 MR. POIRIER: We believe that through the heavier 13 wall thickness that the industry will need to do anyway, we 14 can meet the requirement that we ask was one gram per gallon 15 per day instead of .4 grams per gallon per day, and we can 16 achieve that by adding a significant reduction of about 94.64 17 percent reduction without adding a specific barrier that will 18 require a lot, on our side, a lot of capitalization and 19 investment. 20 This is for the larger barrier. 21 MR. EVANS: Does anybody have any questions or 22 comments? 23 CHAIRMAN LLOYD: Questions or comments? 24 Thank you very much. 25 Well, that concludes the public testimony. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 150 1 Are there any other written comments that need to 2 be submitted to the record? 3 Mr. Kenny. 4 MR. KENNY: A couple of quick comments. Staff is 5 looking for the Board's approval of this item. 6 One of the significant aspects of this item is that 7 it is very large in terms of hydrocarbon reductions that we 8 would achieve. 9 As we look at where we are going over the next 10 couple years and bringing different measures to the Board, 11 one of the things that the Board will see is that we will be 12 looking for hydrocarbon emission reductions, and that is 13 going to be difficult to find in any significant quantities. 14 This is a measure that has a great opportunity for 15 substantial emission reductions, and so with that in mind, we 16 do request the Board's approval of this item. 17 At the same time, there is also emission inventory 18 associated with this item, and so the Board will need also to 19 approve the emissions inventory as part of its action in 20 addition to its deliberation and decision on the regulatory 21 item. 22 CHAIRMAN LLOYD: Thank you. 23 I will now close the record on this Agenda Item. 24 However, the record will be reopened when the 15-day notice 25 of public availability is issued. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 151 1 Written or oral comments received after this 2 hearing date, but before the 15-day notice is issued, will 3 not be accepted as part of the official record on this Agenda 4 Item. 5 When the record is reopened for a 15-day comment 6 period, the public may summit written comments on the 7 proposed changes, which will be considered and responded to 8 in the final statement of reasons for the regulation. 9 Also, just to remind the Board Members of our 10 policy concerning ex parte communications, while we may 11 communicate off the record with outside persons regarding 12 Board rulemaking, we must disclose the names of our contacts 13 and the nature of the contents on the record. 14 This requirement applies specifically to 15 communication which takes place after the notice of the Board 16 here has been published. 17 Are there any communications which you need to 18 disclose? 19 Seeing none, Mr. Kenny, I think you were done. 20 MR. KENNY: Yes, Mr. Chairman. 21 There is one other matter that we would like to 22 bring to the Board's attention and that is, we do have some 23 letters from individuals and companies that did not testify 24 before the Board today, so we thought it would be appropriate 25 to summarize those for the Board's interest. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 152 1 CHAIRMAN LLOYD: Please, and also we might want to 2 come back to the issue of, Mr. Kowalczyk mentioned, so we can 3 wrap that up -- 4 MR. HASTE: Yes. 5 We received a total of 12 letters during the 45-day 6 comment period, four letters from the gas can manufacturers, 7 three letters from associations, American Motorcycle 8 Association, California Council for Environmental Economical 9 Balance and a letter signed by the Natural Resources Defense 10 Council, two letters from government agencies, South Coast 11 Air Quality Management District and the California Regional 12 Water Quality Control Board, two letters from oil companies 13 and a letter from Environmental Fuels Controls, Incorporated. 14 I will summarize the letters of those who haven't 15 testified here today. 16 On September 30, we received a letter from Scott 17 Alderton, of Briggs and Stratton. Mr. Alderton commented on 18 staff's proposed maximum fill level is inconsistent with 19 Briggs and Stratton's recommendation for safe operation of 20 small engines. 21 He recommended that we modify our proposal by 22 specifying a maximum fill level of one and a quarter inches 23 from the top of the tank opening. 24 Mr. Alderton recognized that this requirement may 25 not be consistent with other small engine and outdoor pour PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 153 1 equipment manufacturers recommendation. 2 Our response is we can't support Mr. Alderton's 3 proposal. The basis for staff's fill level proposal is to 4 assure that the equipment fuel tank is filled to the maximum 5 level. 6 This is crucial in small hand-held equipment where 7 maximum fill levels of an inch and a quarter as proposed by 8 Mr. Alderton could mean a half empty fuel tank. 9 Staff believes that the revised proposed 15-day 10 package of making the fill height as a function of fuel flow 11 rate represents the best compromise. 12 We got a letter dated September 20, 1999, from 13 Joseph Collins, of Environmental Fuel Control. Mr. Collins 14 markets a device which is installed to the car's fuel system. 15 This device can be used to refuel any off-road 16 equipment. In his letter, Mr. Collins, alleges that the 17 proposal discriminates against his device, since it could 18 make portable fuel containers obsolete. 19 Mr. Collins wanted to know whether his device is 20 subject to the proposed regulations. Staff evaluated the 21 device and found that is does a good job of refueling 22 off-road equipment with little or no spillage. 23 However, the device costs between $100 to $150. In 24 response to Mr. Collins questions, where his device is 25 subjected to the proposed regulations, the answer is no, as PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 154 1 it is not considered a portable fuel container. 2 We believe that our analysis and proposal are fair 3 and practical and do not discriminate against Mr. Collins 4 device. 5 MR. CROSS: To speed this up, I will take a couple 6 of them. 7 We had letters from Chevron, California Council for 8 Environmental and Economic Balance, Arco, South Coast Air 9 Quality Management District, California Regional Water 10 Quality Control Board, North Coast Region and the San 11 Bernadrino Mountains Group, San Gorgonio Chapter, Sierra 12 Group, these letters were in general support of the concept 13 of the original proposal and the concepts that we have 14 discussed today in terms of the 15-day changes. 15 MR. HASTE: We just have one last letter from 16 Justrite, the can manufacturer, and it's just a letter of 17 support for the proposal. 18 CHAIRMAN LLOYD: Thank you very much. 19 Maybe the issue that was raised by Mr. Kowalczyk. 20 MR. CACKETTE: As you can see from the slide, the 21 answer is not going to be one simple answer, which is 22 unfortunate. 23 We do appreciate the time that you gave us, because 24 we were able to talk to Mr. Kowalczyk, and I believe he 25 agrees with the data that is up here. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 155 1 Let me premise it by explaining where the 2 miscommunication was between us and him. 3 We have in our staff presentation, we had assumed 4 that these positive closures are 100 percent effective, and 5 we received criticism that nothing is perfect and that some 6 of these nozzles will fail. 7 We largely arbitrarily revised the calculations to 8 include a 10 percent failure of these auto-close nozzles. I 9 do not know what it will be. 10 We are requiring a warranty on them. It applies 11 that 10 percent all the time will fail, that must mean 30 12 percent at five years and a low percentage at new, but that 13 is what we assumed in the staff report, and we are living by 14 that. 15 The issue was, is that he is saying that the non 16 positive closing spout does not have a failure mechanism. 17 So, if there were 10 percent of those spouts to be left with 18 the tethered cap unremoved, there would be no loss of an 19 emission reduction. 20 It would be the same as having 10 percent of the 21 positive closing kind of failure in use. 22 So Mr. Kowalczyk presented data which he believes 23 that 15 percent of tethered caps would be left off. 24 In that case, the effect of removing the positive 25 closure requirement is we would lose 2.8 tons per day of PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 156 1 emission reduction. Now, none of us of course know what 2 percentage of people will leave the tethered caps off. 3 The data that was referred to was not a direct 4 survey of how many tethered cap equipped cans had their caps 5 off. It was an attempt to look at one brand that some 6 tethered caps and see whether they are off or not. 7 So, it was just the best estimate that I guess was 8 available from the limited data we had. 9 So, what we did on the rest of the chart was show 10 what would happen if 20 percent of the tethered caps were off 11 instead of 15 percent and that would loose 6.6 tons and if 12 all of them are left off, which is the 34 percent that we 13 found, now would open vent or cap or spout, you would loose 14 17.2 tons. 15 So, the truth lies somewhere in between. It 16 appears, I think, that it will be more than zero loss, but we 17 can't, the best estimate I guess would be 2.8 on the 18 optimistic side and could be more if more people leave the 19 caps off. 20 We simply do not know what people will do as a 21 practice. I could try to put the 2.8 in context. It is a 22 number percentage wise, because there is so much emissions 23 from these cans. It is a number that is like three or five 24 percent as it was discussed. 25 It is also equal to or greater than all of the PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 157 1 emission reductions that the Board approved when we adopted 2 the on-road motorcycle regulations late December of last 3 year. 4 So, that puts it in some context. It is not a real 5 large number, but it kind of fits in the rule that we usually 6 worry about a ton or more. 7 At the bottom, I put down what the staff's 8 calculations was of the incremental cost of the positive 9 closure and what benefit it provides based on our 10 assumptions. 11 Ineffectiveness, which is the 10 percent failure 12 rate, and it comes out $3.81 a pound. So, from the 13 incremental standpoint, adding the positive closure, in our 14 judgement would be cost-effective. 15 For the newer Board Members, the boogie is 16 typically $5 a pound is typical, and $11 a pound is on the 17 upper limits. So, this falls in the range of kind of typical 18 not cost-effectiveness. 19 I hope that answers the question. I apologize it 20 couldn't just be one number. 21 I have to leave the judgment to you as to where you 22 think it might fall. 23 CHAIRMAN LLOYD: Thank you very much, Tom. 24 Further questions from the Board on this issue? 25 Open for discussion. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 158 1 BOARD MEMBER C.H. FRIEDMAN: Just this issue. 2 CHAIRMAN LLOYD: No. 3 BOARD MEMBER C.H. FRIEDMAN: The entire matter, if 4 I may, I think in my own analysis, threshold matter to be 5 addressed and acted on is the inventory because everything 6 else flows from it. 7 I see there is a letter from J.C. DeLaney 8 Consulting, questioning the methodology, and as Dr. Friedman 9 earlier did in our questioning, I take it the staff is 10 satisfied that this was a valid statistically significant 11 enough sample, using an appropriate and valid methodology to 12 get to the inventory numbers that we are operating with, and 13 I just wanted to reconfirm that. 14 MR. KENNY: That's correct. 15 BOARD MEMBER C.H. FRIEDMAN: So, based on that and 16 that representation, I'm not a statistician, and I will 17 accept that, and I will move that we accept the inventory as 18 presented. 19 BOARD MEMBER McKINNON: Second. 20 CHAIRMAN LLOYD: Any other discussion on the 21 inventory part of this? 22 If not, all in favor, say aye. 23 Now, we will move on to the other part of it on the 24 regulatory side. 25 Any questions? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 159 1 BOARD MEMBER C.H. FRIEDMAN: I have only a couple. 2 We have been talking about, from my perspective, it 3 seems to me that I'm torn on permeation. 4 I'm not sure why there is such a disparity in the 5 numbers, and I'm not sure how adding in capitalization, if 6 manufacturers of containers want to build their own, build up 7 their own capacity to do their own sulfonation or whatever 8 method is chosen, by that means, they would then be avoiding 9 the transportation cost backward and forward and extra 10 packaging. 11 So, it seems to me that it is either one or the 12 other. Maybe I'm wrong, but I see a great variation in cost. 13 We are dealing with estimates and unknowns. 14 Am I correct in understanding that if, as in the 15 case of other regulations that we have adopted before I 16 joined the Board, if it eventuates the manufacturers have a 17 legitimate problem complying timely, but are on the right 18 course and there is ever hope and optimism that they will be 19 able to do something, that we could grant a waiver or an 20 extension if that is the case? 21 Maybe you could answer that, Mr. Kenny? 22 MR. KENNY: I will be happy to, Mr. Friedman. 23 That is the case. There is a variance provision 24 that is actually part of the regulation, and so there is an 25 opportunity. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 160 1 At the same time, the staff with all regulations 2 monitors compliance, and to the extent that we actually see 3 that there is a reasonable rationale for why a manufacturer 4 or sector of the manufacturing industry cannot meet the 5 compliance time frames, we will come back to the Board and 6 propose modifications. 7 That has been a historical approach we have taken, 8 and we try to work very closely with industries to assure 9 that in fact compliance occurs reasonably. 10 BOARD MEMBER C.H. FRIEDMAN: Well, my own thinking 11 on addressing Mr. Raboin and Mr. Peters concerns that they 12 testified to here about meeting the staff's permeation 13 recommendation of .4 gram gallon day standard, its seems to 14 me their concern was the cost, and they are not sure which 15 way they want to go, and I understand that they are in 16 different routes, none of which are terribly appealing, 17 apparently, but it seems to me that we could hold to that, 18 adopt it today as aspirational. 19 Afterall, it does not go into effect until January 20 of 2001. That is a year plus, and I am just wondering, would 21 the staff, obviously you have indicated the staff would be 22 open, and I hope it would be open to addressing that again if 23 we had to. 24 I think this is a very important step that we take, 25 and I think we need to indicate what our standards should be, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 161 1 and hold to those as long as we can. So, with that, that is 2 my take on that question. 3 It seems to me that even if the consequences of 4 this, if we went to the one gram per gallon per day, we would 5 lose -- there would be greater emissions, we would loose the 6 reduction in emissions of something like 60 plus tons. 7 MR. KENNY: Actually I don't think it is quite that 8 high. 9 If, in fact, what we are talking about in terms of 10 what was proposed with that one gram standard is a difference 11 with a 18-month delay essentially, or probably right around a 12 ton, maybe even less than a ton. 13 BOARD MEMBER C.H. FRIEDMAN: So, less then a ton. 14 Okay. 63 tons, that the permeation -- 15 MR. KENNY: So, tonnage is not substantial, but at 16 the same time it is important because these are hydrocarbon 17 tons, as you will see over the next several months, every 18 time we bring emission to you, the hydrocarbon tonnage is 19 going to be very difficult to get. 20 BOARD MEMBER C.H. FRIEDMAN: Well, my own feeling 21 is that we might be better off, looking at it, it has been 22 either arises and extending the time at that time and the 23 only other concern I have is about the motorcyclist, the AMA, 24 and I am not clear whether the language that we can adopt at 25 this time, that has been collaboration -- PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 162 1 MR. KENNY: I am not sure we have language at this 2 time. 3 I mean, I think it is one of those situations where 4 we -- 5 BOARD MEMBER C.H. FRIEDMAN: Is that a 15-day 6 notice? 7 MR. KENNY: I think it is better to do it in the 8 15-day time frame. 9 We are more than willing to work with them. 10 BOARD MEMBER C.H. FRIEDMAN: It seems to me that 11 that should be resolvable. 12 MR. KENNY: We think so, also. 13 BOARD MEMBER RIORDAN: Mr. Chairman, if I might, on 14 the issue of permeation, perhaps, Mr. Friedman, you would 15 feel a little bit more comfortable, there is on the record 16 testimony that I found somewhat compelling by those who can 17 perform the service now for the manufacturers. 18 It is not as if there is no other alternative that 19 they have. They do have an alternative, and I am going to 20 hope that what was represented to us today is accurate, and I 21 think it was testified to that that was certainly shared with 22 those who are the manufacturers. 23 So, I think I feel very comfortable that there is a 24 solution out there. 25 To move forward with our requirements, I'm very PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 163 1 comfortable with that, especially with the record showing as 2 it does. 3 BOARD MEMBER DeSAULNIER: Staff, could you respond 4 to Ms. Hathaway's suggestion of, some kind of buy-back 5 program. 6 It seems that if this develops the way we hope it 7 would, it would be good for us to try to work with the 8 districts to provide that kind of incentive. 9 MR. KENNY: We agree with Ms. Hathaway, and in 10 fact, we are already looking at that, and we will be working 11 with both the California Environmental Dialogue and others to 12 try to implement such a program. 13 BOARD MEMBER DeSAULNIER: One thing that I am 14 interested in that Supervisor Roberts mentioned, while it's 15 not a big part of this potential for criticism on the 16 organization, on the refueling issue and labeling, if over 17 the course of time you find that the desire that you hope 18 will come about by that isn't happening, I think we should 19 revisit that and just provide some other form of motivation. 20 MR. KENNY: All right. 21 BOARD MEMBER DeSAULNIER: Then you are going to 22 deal with motorcycles, I just want to say that I think staff 23 has done a great job other than the shock of hearing that Mr. 24 Cackette uses gasoline-powered garden equipment. 25 I feel like you and I should go down to Home Depot PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 164 1 after this, and I will buy you an electric lawn mower, but I 2 think you are all to be commended, and I think within the 3 ability to work with the people who are concerned, and I am 4 very supportive of staff's recommendation. 5 CHAIRMAN LLOYD: Thank you, Supervisor. 6 Mr. McKinnon. 7 BOARD MEMBER McKINNON: I am knocking the 8 microphone off here. 9 I have to tell you, a few weeks ago I started out 10 pretty far from ready to vote for this, because I was 11 concerned about the cost and what it was going to cost Joe 12 six-pack out there to replace his fuel cans. 13 I have since been convinced, and I think that the 14 incidents of people using a fuel can to deal with the 15 situation where they have run out of gas is probably not one 16 of the larger uses for fuel cans. 17 It is mostly for fueling things other than cars. 18 With that in mind, it seems to me that this is 19 going to work just fine. It would be kind of nice if there 20 was a way of getting to auto manufacturers so that they made 21 the fueling a little more simple, or they provided people 22 with appropriate nozzles that fits their tank, but I think by 23 and large what this is going to impact is gardeners and 24 people who leave cans around in the garage, I am as guilty as 25 anyone else, I think I have three of them leaking in my PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 165 1 garage or into the air. 2 So, I think you all worked very hard. I can see 3 where this could have led to some controversy and may yet. 4 My only kind of remaining concern is that if it does look 5 like the cost factors are really going to balloon, I think we 6 should hear about it. 7 If it really does turn out that it is $8, I think 8 that is not going to be the case, but I have been around a 9 lot of manufacturing in my lifetime, and I had a hard time 10 with all that. 11 So, if that does happen, I think we need to talk 12 about it, because it will have a big impact. 13 MR. KENNY: We will monitor it, and if there is any 14 substantial problem here or any problem at all, actually 15 without it being substantial, we will let you know. 16 CHAIRMAN LLOYD: Yes, Supervisor Patrick. 17 BOARD MEMBER PATRICK: Thank you, Mr. Chairman. 18 I too have a very high comfort level with this, and 19 I think that staff has done a very good job of showing us 20 that there are folks in California who can be partners with 21 us and help us meet this change, and change I think is always 22 difficult for the industry. 23 We have seen it with every industry that comes up, 24 you know, there are members that tell us that they cannot do 25 it, and there are members that tell us they can. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 166 1 I am wondering if six months into this, six months 2 from now, it would be appropriate for the staff to give us 3 some kind of an update or something about where we are with 4 this. 5 There are enough outstanding issues that there was, 6 a couple of hours ago, there was a great deal of concern that 7 this proposal was quite unfair, and so I am wondering if it 8 would be appropriate to have some kind of a staff report back 9 to us on some of these outstanding issues, because even 10 though it's January of 2001, that is right around the corner 11 from a manufacturer's perspective. 12 So, it seems to me that we certainly cannot wait 13 until December 1 of the year 2000 to say, oops, this is not 14 going to work. 15 It seems to me that that would be an appropriate 16 thing to alleviate concerns that we have that this will be an 17 impossibility for people to be successful. 18 MR. KENNY: We will be happy to do that. 19 CHAIRMAN LLOYD: Any more discussion? 20 I'll entertain a motion. 21 BOARD MEMBER RIORDAN: I would like to move the 22 Resolution 99-33, with the inclusion of the report back. 23 BOARD MEMBER PATRICK: Second. 24 CHAIRMAN LLOYD: We are working on the issues for 25 the 15-day comment period? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 167 1 BOARD MEMBER RIORDAN: Yes, and also for some sort 2 of an incentive program. 3 CHAIRMAN LLOYD: Second? 4 Oh, I'm sorry Ms. Patrick. 5 BOARD MEMBER PATRICK: I'm so quiet and demure over 6 here that you didn't notice me. 7 CHAIRMAN LLOYD: All in favor, say aye. 8 Against? 9 Passed unanimously. 10 Thank you very much again, and thank all the staff 11 for an excellent job. 12 MR. KENNY: On behalf of the staff, thank you. 13 CHAIRMAN LLOYD: As soon as staff moves, we will go 14 into the next item, which is a public hearing to consider an 15 update on California's Mobile Source and Fuels Program. 16 If we could continue with the next item, please. 17 This item is an informational report by the staff 18 on California's Mobile Source and Motor Vehicle Fuels 19 Programs. 20 Reducing emissions from mobile sources is the 21 center of California's strategy for attaining the national 22 and state ambient air quality standards. Progress has been 23 made to dramatically reduce emissions from mobile sources and 24 similar progress is needed over the next ten years. 25 Today the staff will provide an overview of PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 168 1 California's mobile source and motor vehicle fuels programs 2 and will discuss some of the challenges that this Board will 3 be facing in the upcoming years. 4 At this point I would like to ask Mr. Kenny to 5 introduce the item and begin the staff's presentation. 6 MR. KENNY: Thank you, Chairman Lloyd and Members 7 of the Board. 8 For more than three decades, California has taken 9 the leadership role in adopting tough but cost effective 10 measures to achieve helpful air quality for it business. 11 This is because of the unique air quality challenge 12 we face in California, particularly in the South Coast Air 13 Basin. The central focus of our efforts has been to reduce 14 emissions from mobile sources, since they are a major 15 contributor to poor air quality. 16 Furthermore, we have long recognized the need to 17 treat mobile sources and the fuels on which they operate as a 18 system. 19 Clean Fuels Act enable many of the technologies 20 that we use to reduce emissions from motor vehicles. This 21 can be traced back more then 20 years when a need for 22 gasoline became apparent. 23 Since then emission control technology and fuel 24 quality have improved together such that emissions from motor 25 vehicles have been reduced over 90 percent from uncontrolled PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 169 1 levels, the success of LEV 1 program and the adoption of the 2 LEV 2 and other mobile source measures will assure that we 3 continue to make significant progress toward our clean air 4 goals. 5 In regard to motor vehicle fuel, the staff has 6 closely worked with industry, the U.S. EPA and others in 7 establishing motor vehicle fuel specifications that require 8 fuel producers to manufacture some of the cleanest fuels in 9 the world. 10 The use of these fuels have accounted for 11 tremendous reductions in criteria pollutants and toxic 12 emissions. In the future we must look to further 13 improvements in fuel quality as part of out comprehensive and 14 motor vehicle and control strategy. 15 Lower sulfur levels in gasoline will increase 16 catalyst efficiency and therefore, lower tail pipe emissions 17 from light duty vehicles. 18 Lower sulfur in diesel fuel will enable the use of 19 an advance exhaust on heavy duty vehicles in order to achieve 20 a much needed emission reductions from the sector of the 21 vehicle fleet. 22 In addition, new transportation technologies such 23 as fuel cell vehicles will benefit from the availability of 24 these clean fuels. Consequently as you know, staff is 25 currently working with stakeholders to develop phase 3 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 170 1 modifications to our reformulated gasoline regulations. 2 I will now turn the presentation over to Sarah 3 Carter, who will provide us with an overview of California's 4 Mobile Source Programs. 5 Following Ms. Carter's demonstration, Dean Simeroth 6 will provide an overview of California's Motor Vehicles Fuels 7 Program. 8 Ms. Carter. 9 MS. CARTER: Thank you, Mike. 10 Good morning, Chairman Lloyd and Members of the 11 Board. Today I will be presenting an overview of 12 California's Mobile Source Program. 13 California's position as an environmental leader 14 stems from an unique air quality needs. As you can see, many 15 areas of California currently do not meet the health phase 16 State and Federal air quality standards for ozone. 17 Many areas of California are also out of compliance 18 with ambient air quality standards for other pollutants. 19 However, because ozone attainment is typically used to gauge 20 the seriousness of an area's air problems, it is shown here. 21 A particular concern is the South Coast Air Basin, 22 which Los Angeles is a part. This area has the worst air 23 quality in the nation, and is, in fact, the only area of the 24 country classified as extreme nonattainment for ozone. 25 Particulate matter, or PM, and toxic emissions are PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 171 1 also a great concern in the South Coast Air Basin, as well as 2 the rest of the state. 3 In order to bring the South Coast Air Basin in 4 attainment for ozone, large reductions of emissions of 5 reactive organic, or ROG, and NOx are needed. 6 Here you can see as a result of ARB's regulatory 7 efforts to date, ROG emissions in the South Coast Air Basin 8 will be reduced significantly from 1999 to 2010. 9 However, despite the progress, it is expected that 10 ROG emissions in the South Coast Air Basin in 2010 will still 11 be above the level required to meet the national ambient air 12 quality standard for ozone based on the 1990 for State 13 Implementation Plan or SIP. 14 Another reason it is important to control ROG 15 emissions from mobile sources is to reduce toxic emissions. 16 While these particular emissions are the largest, are the 17 largest source of toxics, ROG emissions also contain toxic 18 compounds such as benzene. 19 Reductions in ROG emissions also result in a 20 reduction of these toxic emissions. 21 In addition to reducing ROG, the reduction of ozone 22 also requires us to control NOx emissions. Mobile source 23 programs are already in place with significantly reduced NOx 24 emissions in the South Coast Air Basin between 1990 and 2010. 25 However, as the case with ROG emissions, NOx PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 172 1 emissions must also be further reduced in order to meet the 2 national ambient air quality standard for ozone in 2010. 3 Furthermore, NOx emissions are a secondary source 4 of particulate matter. That is NOx reacts in the atmosphere 5 to form particulate matter. 6 Therefore, reductions in NOx will be crucial to 7 meeting existing state and federal particulate standards, or 8 PM 10 standards, as well as the new federal standards for 9 fine particulate matter or PM 2.5. 10 In order to achieve further reductions of mobile 11 source emissions of ROG, NOx and PM, ARB needs to focus on 12 controlling the sources that offer the greatest contribution 13 to the problem. 14 In the case of ROG, the light-duty sector remains 15 the largest source of emissions, while off-road sources and 16 heavy duty diesel vehicles are the greatest producers of NOx 17 and PM. 18 Minimizing diesel particulate matter is very 19 important, not only to meet ambient standards for PM, but 20 also because it has been identified as a toxic air 21 contaminate by ARB. 22 The inventory for PM from off-road mobile sources 23 has not been finalized, and therefore, is not represented on 24 this slide. 25 However, staff presented update on the PM inventory PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 173 1 for this source to the Board next month. It should also be 2 noted that PM emissions presented in this chart are only 3 exhaust emissions and do not include tire wear. PM from 4 emissions for tire wear are significant and strategies to 5 reduce the source of emissions will need to be examined in 6 the future. 7 I will now discuss the progress which has been made 8 in reducing emissions from the light duty vehicle fleet. 9 Since the 1960's, great strides have been made to reduce 10 emissions from the light duty motor vehicle fleet. 11 The introduction of unleaded gasoline in 1975 had 12 the single most important influence in the development of 13 success of emission control technology because it made 14 possible use to catalytic converter as an emission control 15 device use. 16 Other noteworthy technologic developments which 17 enabled great strides to be made in emission control include 18 the use of exhaust gas recirculation or EGR in the emissions 19 control strategy in the 1970's, the incorporation of the 20 three-way catalytic converter and on-board computer in the 21 early 1980's, the use of advance computers fuel injection and 22 oxygen sensors a few years later and on-board diagnostics two 23 introduced in the mid 90's. 24 Many of these advances had the added benefit of 25 improving engine performance in addition to reducing PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 174 1 emissions. We continued to rely on the Smog Check program to 2 assure low emissions are maintained and used. 3 California's low emission vehicles program was 4 first adopted by the Board in 1990. This program now 5 referred to as LEV 1 was designed to significantly reduce the 6 exhaust emissions from new light and medium duty vehicles, up 7 to 14,000 pounds, while providing great compliance 8 flexibility to vehicle manufacturers. 9 One of the key elements of California's LEV 1 is 10 the establishment of the emission standards, which look at 11 the vehicle and the fuel as a system, thereby establishing a 12 level playing field on which all fuels may compete on an 13 equal ozone forming potential basis. 14 It is important to note that the cleaner 15 characteristics of phase 2 gasoline or cleaner burning 16 gasoline have not only helped new vehicles to achieve low 17 emissions but significantly reduced emissions from older 18 vehicles. 19 Because of the unique approach taken by the LEV 1 20 program to reduce emissions, hydrocarbon and NOx emissions 21 will be reduced by about 75 percent between 1994 and 2003. 22 The LEV 1 program is currently being successfully 23 implemented with 39 percent of the 1999 model year light duty 24 vehicles being certified as transitional low emission 25 vehicles or TLEV's, 48 percent of the fleet has low emission PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 175 1 vehicles or LEV's and 4 percent of the fleet has ultra low 2 emission vehicles or ULEV's. 3 The LEV 1 program will be fully implemented by 4 2003. LEV's are also being sold in several Northeast states 5 and it will be sold nationwide soon after the turn of the 6 century. 7 Last November the Board adopted the changes to 8 lower emission program which among other things extended the 9 program through 2010. These new regulations subbed LEV 2 and 10 included several major modifications to the LEV 1 tail pipe 11 regulations including implementation of lower tail pipe 12 standards for all light and medium duty vehicles. 13 The goal of the LEV 2 program is to reduce 14 emissions from new emissions to near zero by 2010. EPA has 15 recently proposed adopting a similar program for the rest of 16 the nation. 17 December of this year the Board will be asked to 18 consider adoption of specifications of phase 3 gasoline. 19 Introduction of phase 3 gasoline, which likely would have 20 lower sulfur and will eliminate MTBE, will come into play 21 with the implementation of the LEV 2 program. 22 Any discussion of strategies to reduce NOx and PM 23 from the motor vehicle fleet must emphasize the importance of 24 controlling emissions from heavy duties and equipment. 25 This is due to the overwhelming use of diesel fuel PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 176 1 in this segment of the vehicle population. 2 This graph illustrates the modest decline in 3 hydrocarbon plus NOx emissions from heavy duty trucks prior 4 to 1998, due to emission control measures. 5 Particulate emissions are not shown here, even 6 though they are of concern because there was no regulations 7 in place during that time which addressed them. 8 Since 1988, efforts have been stepped up to further 9 reduce both HDV plus NOx emissions as well as PM emissions 10 from new, heavy duty vehicles. 11 Current heavy duty diesel engines emit nearly 70 12 percent less NOx and 90 percent less PM than their 13 pre-controlled counterparts. 14 Recently, ARB and US EPA, reached an agreement with 15 heavy duty engine manufacturers to reduce H C plus NOx 16 emissions from these engines by 50 percent in 2002. 17 While this is an important step, more needs to be 18 done. Heavy duty vehicles still contribute a 19 disproportionately large percentage of the NOx and PM toxic 20 emissions to be inventoried. 21 Further emission reductions are achievable with the 22 application of exhaust at the treatment, which may reduce NOx 23 emissions by another 50 percent or more and reduce PM 24 emissions by an even greater percentage. 25 These steps will create a level of emission PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 177 1 reductions that begins to approach that of current gasoline 2 cars. 3 In January of 2000, the Board will be asked to 4 consider new regulations for buses, which will preview some 5 of the after treatment technologies needed for future heavy 6 duty vehicles. 7 The further PM control will be addressed next 8 summer, at which time the toxics work group will present the 9 Board with a toxics control plan, which will reflect what we 10 can do to further reduce PM emissions. 11 The control of emissions from heavy duty vehicles 12 is more challenging than from other types of vehicles, due to 13 the use that many of these vehicles in interstate 14 applications. 15 For example, while catalyst technologies can reduce 16 NOx emissions and traps can reduce PM emissions to levels not 17 currently feasible with current technology. 18 In order for these technologies to be effective, 19 sulfur levels in diesel fuels must be very low. Therefore, 20 wide spread use of these types of after treatment 21 technologies would require national diesel fuel 22 specifications that provide the needed sulfur reductions. 23 The EPA has recently proposed removal of sulfur 24 from diesel fuel, and we are urging them to finalize this 25 requirement as soon as possible. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 178 1 In addition to heavy duty diesel vehicles, off road 2 mobile sources are also significant producers of NOx and PM's 3 similar in magnitude to on road diesel trucks. 4 Reduction of emissions from off road mobile sources 5 is therefore critical for achieving compliance with air 6 quality standards. 7 Toward this end, ARB has already adopted several 8 regulations to reduce emissions from off road mobile sources 9 and we continue to develop future control measures. 10 We are also working with the U.S. EPA to address 11 emissions from off road sources, such as, locomotives, which 12 are out of our jurisdiction, yet, contribute to California's 13 air quality problems. 14 Fortunately, many of the same technologies used to 15 control emissions from on road vehicles can also be used to 16 control emissions from the off road sector. 17 Consequently, cleaner gasoline and diesel, also 18 play an important part in reducing emissions from the off 19 road vehicles segment. 20 As emissions from the new vehicle fleet are pushed 21 toward zero, future vehicle technology play an increasingly 22 important role in attaining California's air quality goals. 23 In spite of the emission reduction which will be 24 achieved due to the implementation of increasingly stringent 25 motor vehicle standards, the expected increase in the number PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 179 1 of vehicle miles driven each year, or VMT, is expected to 2 eliminate some of those gains. 3 In order to offset some of the laws in emission 4 benefits due to an increase in VMT, emissions from the 5 vehicle fleet must continue to be pushed towards zero. 6 To this end, the low emission vehicle program 7 requires that 10 percent of the cars and small trucks 8 produced by all but the smallest automobile manufacturers be 9 zero emission vehicles, beginning 2003. 10 Currently manufacturers are making electric 11 vehicles available to consumers as part of an agreement with 12 ARB to demonstrate advanced batteries and advanced zero 13 emission vehicle technology. Staff will provide the Board 14 with a progress report on manufacturers progress in September 15 2000. 16 This slide shows just a few of the electric vehicle 17 models which are currently available to consumers as part of 18 the agreement between automobile manufacturers and ARB. 19 They include GM's EV 1, Toyota's electric RAV4 and 20 Nissan's Altra EV. They are all high quality cars that are 21 fun to drive. 22 Fuel cell vehicles are another technology capable 23 of achieving zero emissions with on board storage of hydrogen 24 or near zero emissions if the vehicles use an on board fuel 25 performer. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 180 1 This technology has exciting implications for both 2 the light and heavy duty vehicle sectors, the automobile 3 industry is expending a considerable effort to develop and 4 commercialize this technology as rapidly as possible. 5 The California fuel cell partnership is a 6 public/private partnership created to prepare the market for 7 fuel cell vehicles in California. Members include two 8 vehicle manufacturers, DaimlerChrysler and Ford, a fuel cell 9 developer, Ballard, and three oil companies, Arco, Shell and 10 Texaco, and two state agencies, ARB and the California Energy 11 Commission. 12 Other members will be joining in the near future. 13 The goal of the California fuel cell partnership is 14 to place 50 vehicles in operation within the 2000 to the 2003 15 time frame. Fuel cell vehicles are very track of means of 16 producing global warming emissions because of their high 17 efficiency. 18 In summary, California's Mobile Source Program is a 19 long-term success story. Historically ARB has been 20 aggressively pushing lower mobile source emissions and we are 21 well on our way to achieving near 0 emissions for the light 22 duty fleet. We also continue to make progress toward 23 achieving ozone attainment through out California in reducing 24 toxic emissions from mobile sources despite the VMT growth. 25 In the future, we can expect light duty vehicles to PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 181 1 become even cleaner as new programs such as LEV 2 are 2 implemented. As we approach our goal of near zero emissions, 3 future technology such as zero emissions electric vehicles, 4 hybrid electric vehicles and fuel cell vehicles will play an 5 increasingly important part in California's emission control 6 strategy. 7 These types of vehicles may also be important in 8 reducing green house gases, which are becoming a greater 9 concern. 10 Still dramatic reductions in PM and NOx emissions 11 from heavy duty diesel vehicles as well as from off-road 12 mobile sources will be needed if our ultimate goal of clean 13 air is ever to be achieved. 14 Last but not the least, the role of cleaner 15 gasoline and diesel must be recognized as integral part of 16 our emission reduction plan. 17 Thank you. 18 CHAIRMAN LLOYD: Thank you very much. 19 Any questions from the Board on this part of the 20 presentation? 21 Thank you very much. Is Dean giving the next one? 22 MR. SIMEROTH: Chairman Lloyd and Members of the 23 Board, I will continue with the California fuels program and 24 an overview, and I should warn you, mine won't be quite as 25 polished in terms of me making the presentation as the PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 182 1 previous one. 2 Give you an overview of our programs and divided it 3 up into diesel, alternative fuels and gasoline and what the 4 Governor's Executive Order is doing to our phase 2 5 reformulated gasoline. 6 California Clean Air Act charged the Board with 7 achieving maximum emission reductions, for basically all 8 pollutants coming from cars including toxics and this was to 9 be done in the combination of motor vehicles standards and 10 fuel specifications. 11 We are talking about the days of fuel specification 12 part. As you have heard trading vehicle fuel as a system and 13 that has been a very effective approach. 14 We established motor vehicles standards in 15 conjunction with those motor vehicle standards provide 16 complimentary motor vehicle fuel specification including 17 specifications for alternative fuels. 18 This has been happening as you heard for quite some 19 time, starting back in 1971, including some amendments that 20 occurred this year and will occur later this year. 21 Diesel fuel program started in the early 80's for 22 the South Coast, but the statewide program was adopted in 23 1988 and implemented in October 1993. 24 One of the things that the program does is, we have 25 to introduce concepts of allowing certifications equivalent PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 183 1 to point of ovulations. 2 The motor vehicle fuels, in this case, for diesel. 3 The basic specifications are for large refiners. 4 There is a 10 volume percent aromatic hydrocarbon 5 specifications for small refiners to put them on the same 6 economic basis at a less stringent 20 volume percent standard 7 for aromatics. 8 Both us and the federal EPA had a 500 parts per 9 million sulfur standard. The federal program had no 10 equivalent for the aromatic hydrocarbon standard, they had a 11 minimum cetane requirement, which we had since the early 12 80's. 13 The actability on California fuel is for both on 14 and off roads and the Federal is for on road vehicles only. 15 As you might expect, emission reductions are 16 different as a result. The difference in the SO 2 is the 17 difference between the on and off road provisions between the 18 two sets of regulations. 19 PM is the directly emitted from the sulfur 20 reduction, and California also includes a fairly significant 21 reduction and organic based hydrocarbons from the reduction 22 of aromatics, also, we enjoyed a seven percent reduction in 23 NOx from the aromatic standard. 24 In terms of future activity, we will come to the 25 Board next year with a specification for diesel locomotives PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 184 1 fuel, possibly in the second quarter. We are participating 2 and looking at new cleaner diesel technologies and also 3 looking at Arco's CCD, their cleaner diesel, very low sulfur 4 diesel, very lower aromatic diesel as well as looking at 5 other formulations of diesel. 6 We are also tracking EPA's advance notice 7 rulemaking for lowering the national diesel sulfur standard, 8 trying to follow that closely, and we sent letters supporting 9 their adoption. 10 Alternative fuels program, I assure that low 11 emission vehicles sign off and operate on alternative fuels 12 at commercially available fuels that will result in them 13 having the excepted emission performance, basically it will 14 match the fuel that they will burn with the certification 15 fuel. 16 We set specifications for methanol above the 100 17 percent and 85 percent, the same thing for ethanol, 18 compressed natural gas, liquefied petroleum gas and 19 interesting enough hydrogen specification. 20 Clean fuels infrastructure program was adopted in 21 1990, in conjunction with the LEV program, the LEV 1 now, I 22 should say. Alternative fuels are publicly available. 23 This was updated this year, it provides additional 24 flexibility and increase the number of outlets. 25 We are also participating in test programs looking PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 185 1 at the LPG and CNG specifications and are expected to come 2 back to the Board with some recommendations on both of those, 3 the LPG more of the compliance issues, CNG for some actual 4 new specifications. 5 The gasoline programs, we, again, adopted in 1971 6 for RVP, and then in the mid 70's for sulfur and lead content 7 and then 1990 we adopted what is referred to as phase 1, 8 which further reduced the RVP, required deposit control 9 additives and finally eliminated leaded gasoline and was 10 implemented in January 1, 1992. 11 Emission reductions were quite good, 210 tons a day 12 of hydrocarbon emissions, primarily from the RVP reduction. 13 September 1998, we modified the deposit control 14 additives and a specification for a combustion chamber 15 deposits and also made the other specifications more 16 stringent. 17 Winter time program for carbon monoxide, required 18 by the Federal Clean Air Act amendments, mandated for the CO 19 nonattainment areas in 1991, those virtually. 20 CHAIRMAN LLOYD: Dean, can I just ask you a 21 question? 22 It seems to me that prior one, in view of your 23 requirement there, is there any need to add an additional 24 additive? 25 MR. SIMEROTH: It's not so much an additional PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 186 1 additive, it eliminated some of the additives that had been 2 used for the intake valves and carburetors. 3 They were actually additives that resulting in 4 increased deposits in the combustion chamber, our cleaner 5 burner gasoline with the reduced aromatics and 90 percent 6 desolation temperature, in combination with the more modern 7 or more effective deposit control additives did quite well, 8 so we did not really change what they were adding for this, 9 now something changes in our gasoline this protects against 10 any increase in combustion chamber deposits and also got rid 11 of several obsolete technologies for additives. 12 The winter time resulted in oxygen content of 13 approximately two percent. It was fairly effective reducing 14 carbon monoxide emissions, however the attainment status 15 during the time period, since 1991 has changed. 16 One of the success attainment for sealed virtually 17 except for the Los Angeles and Imperial County, in August 18 1998, we rescinded in the attainment areas. 19 In June 1999, we ended one year. They programed 20 for the Lake Tahoe basin and it remains in effect in the 21 South Coast and Imperial County. 22 Phase 2 was adopted in 1991, implemented in March 23 1996. The reason for the difference in the implementation 24 date, this one required about $4 billion investment in 25 modifications to the California refiners, whereas the phase PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 187 1 1, was almost no investment. 2 Specification for the eight properties of gasoline, 3 shown here, sulfur being one of them. What those 4 specifications look like here, if you like numbers there are 5 a lot of numbers there for you, being an engineer, I like 6 numbers. 7 Here are more numbers. This is what phase 2 looks 8 like in 1998. Revapor pressure is relatively low, sulfur is 9 way below the 40 flat limit, we set, it is almost half of 10 that. 11 Benzene is down. Olefins are slightly. Oxygen is 12 about the two percent, we thought, T90 is up slightly, 13 aromatics is up slightly and the T50 is about where we set 14 the standard. 15 This phase 2 was done with the compliance options 16 we allowed a per gallon limit, that is the flat, flat on the 17 average over a 90 day rolling average time period and we 18 allowed emission test and option which nobody has used 19 because it is too expensive. 20 A predicted model which almost everyone is using, 21 almost all the gasoline sold in California is sold in 22 compliance with a predicted model. 23 What I summarized early, were sums were higher and 24 lower, that is because they have been using the predicted 25 model and they have been reducing sulfur to raise T90, for PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 188 1 example, but it reserves the emission benefits for VOC, NOx 2 toxics in doing this. There is a price. 3 Predicted model, I just mention, it's more of the 4 details, basically flexibility. Reduced the compliance cost 5 about $1 billion, originally estimated to be about $5 billion 6 and it came in about $4 billion, so it was significant. 7 Benefits, equivalent taking about 3.5 million cars 8 off the road, 15 percent reduction and ozone forming 9 emissions, benzene emissions were cut in half or slightly 10 more, and it was one quarter of our SIP reductions for the 11 1996 plan. 12 There is a Federal reformulated gasoline program 13 and it also was in two phases. One of things that it does do 14 it set a minimum option requirement, a two way percent in the 15 federal RFG areas, Sacramento areas, one of those, and almost 16 all of Southern California is also a Federal RFG. 17 So, about 70 percent of the State's gasoline falls 18 under that two-way percent minimum, the rest of the 19 requirements were more stringent. 20 In response to the controversy over MTBE, that 21 arose since MTBE was oxygenate of choice to provide that 2 22 percent oxygen content. Over 90 percent of the State's 23 gasoline has MTBE. 24 The Governor's issued its Executive Order of March 25 of this year. It was based on a UC study and public PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 189 1 hearings. 2 The Governor found that MTBE presents a threat to 3 groundwater, surface water and drinking water. Primarily, 4 the drinking water has a potential but not a proven health 5 problem and interestingly enough, it is not essential to 6 produce California reformulated gasoline. 7 The Governor took some direct action, requested a 8 waiver from the Federal oxygen requirement and then 9 supporting the legislative action, the part of Senator 10 Fienstein and Congressman Bill and other activities of the 11 Board, directed to phase out accomplished as early as 12 practical, necessary, December 31, and some other specific 13 activities, CEC was to see if the time table could be done 14 faster and the hearing was June this year that was the right 15 time table. 16 ARB to evaluate the needs and we had that hearing 17 in June last year. CEC has been working with us in getting 18 MTBE gasoline 75 to 80 percent sold in Lake Tahoe is MTBE 19 free. 20 Finally to adopt regulations to require labeling, 21 those are going to Office of Administrative Law or having 22 recently, we will send letter out advising the companies that 23 we have add -- also ask to adopt and touch on that later, and 24 ARB and State Water Control Board, ethanol will be hailed to 25 look at CEC to an evaporativeness of biomass. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 190 1 All of these things underplay, CEC is ontrack for 2 December report on the appropriateness of biomass and other 3 ontrack for December. 4 In terms of recent activities, as I mentioned 5 earlier, we rescinded the winter time you adopted the 6 labeling requirement, you did both of those things not us. 7 The phase 3, we have had seven public workshops to 8 do it, and the next one is scheduled next week. We are 9 headed for Board meeting, this December for phase 3 10 reformulated gasoline. 11 Phase 3 gasoline we are designing it for removing 12 MTBE and real world benefits an intended to proceed 13 predictive models, and specifications that go with predictive 14 models. 15 We add evaporative models and new vehicle group and 16 CO credit to recognize the value of oxygenates that still 17 will be allowed to be used, namely ethanol, and looking to 18 get emission reductions in doing all this. 19 As long as it is technologically reasonable, we can 20 do that. We are planning the support in the Board on that. 21 We have had one workshop. The second workshop is 22 completed October 4. 23 The Air Resources Board is ontrack for having that 24 report done this year. 25 Finally, as you heard the fuel program is one of PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 191 1 the keys of implementing the Clean Air Act, and the key for 2 motor vehicles program matching the fuel with the vehicle 3 standards. 4 We are actively implementing the Governor's 5 Executive Order and pursuing the waiver and the Federal 6 oxygenate requirement. 7 That concludes the presentation. 8 CHAIRMAN LLOYD: Thank you very much, Dean. 9 Any other comments from the staff, Mr. Kenny? 10 MR. KENNY: No, there aren't. 11 CHAIRMAN LLOYD: Board Members, any questions. 12 BOARD MEMBER CALHOUN: What is status EPA low 13 emission diesel fuel sulfur. 14 MR. SIMEROTH: In the advance phase of this and the 15 comment period is waiting to end, just ended and waiting to 16 see what they do next, Bob may supplement me, they are 17 looking zero parts per million, on-road sulfur diesel and 18 taking the off-road to present standard of 500 PPM for 19 sulfur. 20 They are looking for more things than that and next 21 phase is the rulemaking. 22 MR. CACKETTE: We have invited them to come to the 23 technology symposium first of October, and they will bring us 24 a status for diesel fuel and tail pipe standards for trucks 25 NOx and particulate. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 192 1 CHAIRMAN LLOYD: Any other questions? 2 BOARD MEMBER McKINNON: The zero to 50 parts per 3 million sulfur, low enough to get to the point to get to the 4 technology that they are predicting the future, zero is low 5 enough, is 50 too high? 6 MR. SIMEROTH: I need to turn to Bob Cross. 7 MR. CROSS: 50 is on the fence. 8 It depends on the specific technology. 9 There are some that you want well below, and some 10 that can accept 50, I think that it will probable, and that 11 is part of the purpose of the meetings that we are having and 12 additional dialogue that let in the most technology the first 13 time around. 14 I would say 50 is high. 15 MR. KENNY: I see that as asking for five. 16 BOARD MEMBER McKINNON: For catalytic or diesel. 17 MR. CROSS: That is the problem. 18 It is the technology on the engine. Some of the 19 after treatment devices are more sulfur tolerant and 20 depending on the manufacturer, you talk to and what they plan 21 to do with after treatment. 22 The engine manufacturers seek to get a sulfur level 23 that permit anything that you want to do, which is 45, and 24 then EPA is going to weigh that as to what things would not 25 work if they went higher than five. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 193 1 BOARD MEMBER McKINNON: Thank you. 2 CHAIRMAN LLOYD: Any other questions or comments? 3 Again, no one signed up from the public to testify 4 on this issue. 5 Any other comments that need to be submitted for 6 the record. 7 No. Any further comments, Mr. Kenny? 8 This is not regulatory. It is not necessary to 9 close, and we will take a couple of minutes and start on the 10 lost item on the SIP issue. 11 (Thereupon a brief recess was taken.) 12 CHAIRMAN LLOYD: Next item on the Agenda is 99-7-3, 13 public meeting to consider a status report on ozone SIP 14 implementation and SIP revision process. 15 The California SIP is an important driver for ARB's 16 programs to reduce air pollutant emissions. Today we will 17 hear from staff on our progress in implementing the ozone 18 portion of the SIP with an emphasis on issues in the South 19 Coast Air Basin. 20 It's important to note, however, that the Board's 21 emission reduction programs are essential to meeting all our 22 health based standards throughout California. For example, 23 rapidly growing and economically important areas such as the 24 San Joaquin Valley rely heavily on ARB control strategies for 25 both ozone and particulate matter. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 194 1 As far as the SIP process itself, this report is 2 timely because of the current SIP litigation in the South 3 Coast and its relationship to ozone SIP revisions that the 4 Board will consider beginning next year. 5 At this point, I would like to ask Mr. Kenny to 6 introduce the item and begin the staff's presentation. 7 MR. KENNY: Thank you, Mr. Chairman and Members of 8 the Board, this is to update number activity related to ozone 9 stipulation. 10 We update the SIP including the February 1999 11 settlement of the SIP litigation. Staff moved ahead to meet 12 the commitment and action by the Board is consistent and 13 moves us along in the progress of adoption and implementation 14 studies, is in the different situation no settlement for 15 their portion of the lawsuit. 16 The court ordered South Coast, staff will describe 17 regarding the commitments, one of the issues raised by 18 litigation need to keep the SIP current, ozone with the 19 regulation on the new information. 20 I would like to introduce Ms. Sylvia Oey. 21 MS. OEY: Good afternoon, Mr. Chairman and 22 Members of the Board. 23 To set the stage, I will first present a brief 24 overview of the State Implementation Plan which we 25 affectionately know as SIP. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 195 1 Then I will discuss the ARB's in the South elements 2 of the 1994 Ozone SIP. Finally, I will discuss what this 3 implies for the new work that the Board is undertaking in the 4 next few years. 5 The SIP is sometimes thought of as a single 6 document or as a series of rules and regulations, but 7 actually it is much more than that. 8 Conceptually, the SIP is a major part of 9 California's plan for achieving healthy air quality 10 throughout the state. It addresses our understanding and 11 assessment of air quality and identifies the steps we commit 12 to take to achieve the Federal ambient air quality standards. 13 Legally the SIP is required by the Federal Clean 14 Air Act. Local air districts and transportation agencies 15 developed the plans for their specific areas. 16 Those plans define the needed local controls and 17 reflect commitments made by the ARB and other state agencies. 18 The local plans are submitted to the Board for approval and 19 forwarded to U.S. EPA as a revision to the California SIP. 20 Once a revision is submitted by this Board is 21 approved by EPA, it becomes part of what we call the 22 applicable SIP, that is it becomes the plan that the state 23 and local and agencies are held responsible to implement and 24 against which our progress is measured, the individual rules 25 that are adopted to implement a SIP, but also be submitted to PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 196 1 the U.S. EPA as SIP revisions. 2 Although the Clean Air Act does generally does not 3 establish a requirement or time schedule for SIP amendments, 4 the SIP is and must be subject to periodic reexamination and 5 change to reflect new information. 6 Much of our attention is focused on the attainment 7 demonstration plan within the SIP. The plans develop to 8 bring those areas of the state that exceed the federal 9 standards into attainment. 10 This slide illustrates the components of an 11 attainment demonstration plan. 12 The control strategy is built on a foundation of 13 air quality monitoring, emission inventory and modeling, that 14 utilizes our knowledge of how emissions affect air quality. 15 The control strategy itself reflects an evaluation 16 of the technically feasible cost effective controls that are 17 available at the time that the plan is developed and in 18 assessment of how technology is expected to advance over the 19 life of the plan. 20 These components change overtime, so the SIP is 21 updated to assure that it's based on the best possible 22 information. This pyramid illustrates how each layer is 23 built on the next. 24 We cannot modify the emissions inventory for 25 example, without reexamining both the modeling and the PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 197 1 control strategy. 2 The attainment demonstration, illustrated in the 3 last slide, are part of our plans for non attainment areas. 4 Currently, California is implementing nonattainment 5 area plans in one or more areas of the state for ozone, PM 6 and carbon monoxide. The rules that brought us into 7 attainment throughout the State for lead, nitrogen dioxide 8 and sulfur dioxide remain in the SIP. 9 We are looking ahead to future SIP revisions 10 address the new Federal eight-hour ozone and find particulate 11 matter, or PM 2.5 standards, as well as the new regional haze 12 requirements to improve this ability. 13 The Federal Appeals Court has put a hold on U.S. 14 EPA's implementation of the eight-hour ozone and PM 2.5 15 standards. 16 However, because the court questioned the standard 17 setting process and not the underlying health effects data, 18 we believe that these standards will ultimately be 19 implemented. 20 Much of our current regulatory effort is based on 21 commitments made in the 1994 Ozone SIP to attain the Federal 22 one-hour ozone standard. 23 The 1994 Ozone SIP, includes attainment 24 demonstrations for six Federally defined nonattainment areas. 25 The greater Sacramento metropolitan area, which includes all PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 198 1 or part of five air districts within this region, the San 2 Joaquin Valley, which also includes the current desert area, 3 the Southeast Desert, Ventura County, San Diego County and 4 the South Coast Air Basin. 5 California had the distinction of being the only 6 state to summit a comprehensive attainment demonstration plan 7 for ozone by the November 15, 1994 deadline in the Clean Air 8 Act, and Mrs. Riordan probably remembers that hearing and 9 what it took to get that plan to U.S. EPA on time. 10 EPA's approval of that plan makes the 1994 ozone 11 SIP Federally infractible, the Clean Air Act also includes 12 provisions for citizens to file suits in Federal court to 13 compel implementation of an approved SIP. 14 The SIP concludes, control measures and commitments 15 for both State and local agencies as an integral part of the 16 attainment demonstrations in the '94 SIP, we also assigned 17 responsibilities to the Federal Government to achieve 18 specific technically feasible emission reductions from the 19 interstate sources that California cannot legally or 20 practically control. 21 These include planes, trains, ships and long haul 22 trucks. 23 From a legal standpoint EPA rejected the notion 24 that any state can assign and hold the Federal Government 25 accountable for specific emission reductions, the SIP. From PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 199 1 a practical standpoint EPA and ARB staff have worked together 2 very effectively, using the 1994 ozone SIP as leverage to 3 fashion joint, state, and national agreements with 4 manufacturers for cleaner engines in trucks, off-road 5 equipment and local motives, joint efforts on strategy to 6 reduce emissions from air crafts, airport, ships and ports 7 are still underway. 8 Early in 1997, the South Coast District adopted 9 revisions to its portion of the attainment demonstration in 10 the '94 SIP, because the air quality data and inventory used 11 in this update demonstrated attainment in 2010 with few 12 emissions reduction this plan included fewer new local 13 measures. 14 The State's commitments from the '94 SIP were 15 carried forward in this update without change. 16 ARB approved this plan as an interim update and 17 forwarded it to EPA for consideration as a SIP revision. 18 However, EPA has not approved the 1997 revisions as a SIP 19 revision, so the 1994 SIP remains the enforceable SIP for the 20 South Coast. 21 In September 1997, a coalition of environmental 22 groups filed to suit to force implementation of specific 23 commitments in the 1994 ozone SIP for the South Coast. 24 This coalition included the Natural Resources 25 Defense Council, the Coalition for Clean Air and Communities PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 200 1 for Better Environment. 2 The suit was filed against the U.S. EPA, the Air 3 Resources Board and the South Coast Air Quality Management 4 District. Both EPA and ARB settled with the three 5 plaintiffs. 6 The court has approved the EPA's consent decree, 7 at the request of the parties the court dismissed the case 8 against the Air Resources Board consistent with the 9 settlement agreement. 10 The parties went to court in the suit against the 11 district and final court order is still pending, I will 12 describe the judges proposed order later presentation. 13 ARB's settlement agreement acknowledges ARB's 14 dedicated efforts for its attaining every feasible emission 15 reduction, a tradition that you continued this morning. 16 Including a very productive Board calendar in 1997 17 and 1998. As we have implemented the SIP some measures, such 18 as LEV 2 have delivered more reductions then anticipated, 19 while others have delivered few reductions due to technical 20 feasibility or economic factors. 21 Ongoing evaluation has determined that some 22 strategies in the '94 SIP are infeasible or would be 23 ineffective in reducing emissions. 24 The emissions reductions for these commitments will 25 be achieved through alternative measures. The settlement PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 201 1 covers rules developed through 2001 to make up shortfalls in 2 our near term emission reduction commitments to the South 3 Coast plan. 4 The agreement obligates staff to bring specific 5 proposals to you for your consideration, but it does not 6 infringe on the Board's decision to accept, alter or reject 7 staff's proposal. 8 In the addition to the development of specific 9 proposals, the settlement contains annual emission reduction 10 targets, it specifies that the Board must adopt some 11 combination of measures in '99, 2000 and 2001, that will 12 produce specified levels of emission reductions in the South 13 Coast in 2010, the attainment year. 14 The minimum emission reduction targets are, 12 tons 15 per day of reactive organic gases for measures adopted in 16 '99, 14 tons per day of ROG and 2 tons per day of NOx for 17 measures adopted in 2000, and 16 tons per day of ROG for 18 measures adopted in 2001. 19 While staff have identified measures for the 1999 20 and 2000 deadlines, we don't yet have measures on our rule 21 development schedule for 2001. 22 When we revisit our long range control strategy, 23 staff will evaluate what measures to propose to the Board in 24 2001. 25 If we should find ourselves unable to identify PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 202 1 enough feasible cost effective sources of emission 2 reductions, the settlement provides for a technical 3 feasibility review and mechanism for arbitrating differences 4 of opinion with the plaintiff concerning this issue. 5 We have aggressively pursued every feasible 6 emission reduction measure over the last four years to meet 7 our near term commitments to the South Coast and other areas. 8 To date the Board has achieved nearly all of the 9 NOx reductions and over half of the near term ROG reductions 10 for the South Coast. 11 These deductions coupled with our settlement 12 commitments, will ensure that we meet all of our near terms 13 SIP obligation. 14 One of the complexities of the SIP and the 15 settlement agreement is the need for an emission inventory 16 accounting system that is frozen in time by the approved SIP. 17 Emission reductions used to measure progress 18 against our 1994 SIP, must be translated into what we call 19 the 1994 SIP currency to maintain the integrity of the 20 attainment demonstration that was illustrated in the SIP 21 pyramid. 22 When staff brings you a regulatory proposal for 23 consideration, we appropriately use inventories that have 24 been updated, of course the next comprehensive SIP revision 25 will incorporate all of the new inventory and control PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 203 1 information available at that time and will also create a new 2 SIP currency. 3 Considering the need to measure progress in SIP 4 currency, I will take a quick step through the status of 5 ARB's 1994 SIP measures. 6 The SIP includes two measures aimed at reducing 7 emissions from passenger cars and light duty trucks. 8 Information we gained following the adoption of the SIP and a 9 lack of funding, led us to realize that a voluntary scrappage 10 approach cannot achieve the emissions reductions anticipated 11 in the 1994 SIP. 12 We will make up these reduction through the 13 adoption of alternative controls as reflected in the 14 settlement agreement. 15 The low emission vehicle regulation, achieved more 16 NOx reductions than were expected in the 1994 SIP, we applied 17 the additional reductions as a down payment on our long-term 18 advanced technology commitment for mobile sources, which is 19 referred to as the black box. 20 The first 1994 SIP measures of heavy duty trucks 21 and buses called for incentives to accelerate the 22 introduction of cleaner engines. 23 We are currently implementing this measure through 24 the Carl Moyer program administered by ARB and the local 25 districts. In the initial year of implementing this program, PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 204 1 the requests for incentives were three times, the available 2 $25 million in funding. 3 ARB received 19 million for the Carl Moyer program 4 this fiscal year, we are working to secure continued long 5 term funding for this valuable program. 6 In 1998 the Board also acted to formally withdraw 7 and replace a third SIP measure for truck scrappage with a 8 long term commitment to reducing emissions from heavy duty 9 diesel engines through end use compliance programs. EPA has 10 not yet formally approved this substitution. 11 The 1994 SIP also calls for substantial emission 12 reductions from off-road sources, because ARB and EPA share 13 authority over these sources the off-road measures in the SIP 14 were structured as a parallel state and national measure. 15 The staff is currently developing tighter standards 16 for several off-road diesel engines, as you heard earlier 17 today. 18 Under the terms of a 1996 agreement between ARB, 19 U.S. EPA and the engine manufacturers, emission standards for 20 off-road diesel engines will be phased in the beginning of 21 2001, four years earlier than anticipated in the SIP. 22 In 1998, ARB adopted new emissions standards for 23 off-road equipment powered by gas engines, such as forklifts. 24 The Board also adopted three measures that were not 25 envisioned in the '94 SIP, but which provide creditable PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 205 1 reductions towards our SIP commitments. 2 These measures, covered marine pleasure craft and 3 on road motorcycles and the requirement for gasoline 4 formulations to reduce combustion deposits and the resulting 5 emission reductions that you heard about recently. 6 The regulation of consumer products is proving to 7 be very challenging. To date the Board has adopted 8 regulations covering over 100 consumer product categories and 9 over 30 aerosol coatings categories. 10 In October, staff will present to you a proposal 11 called mid term measures, two that will revisit some 12 categories and further lower allowable emissions. 13 We believe that the additional reductions from the 14 consumer products are achievable, but at a lower level of 15 effectiveness than envisioned in the '94 SIP. 16 As a result, we are looking to other source 17 categories to help supplement the needed emission reductions 18 as reflected in the settlement agreement. 19 With that status report on our SIP measures, I 20 would also like to outline some of the regulatory items that 21 you can expect to see through the end of 2000 which will help 22 us meet this obligation. 23 The only item on the 1999 regulatory calendar that 24 we have not already discussed is new specifications for 25 cleaner burning gasoline. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 206 1 If the Board adopts all of the measures on this 2 list, we expect at least 12 tons per day of ROG emission in 3 1999 SIP currency. 4 The minimum requirement in the settlement 5 agreement. You have already heard about many of these 6 measures that the Board, that staff expects to propose to the 7 Board in 2000. 8 The only one that you haven't heard about yet today 9 is architectural coatings requirement, that would involve 10 adopting a suggested control measure for architectural 11 coatings, which would then need to be adopted and implemented 12 by the local air pollution control districts. 13 These measures are expected to provide significant 14 reductions towards a settlement target for next year, which 15 is 14 tons per day of ROG and 2 tons per day of NOx. 16 That completes our discussion of ARB's element of 17 the 1994 SIP. 18 So, I will now turn to the South Coast portion of 19 ozone SIP. As we mentioned the 1994 ozone SIP is the 20 applicable for the South Coast, despite a subsequent plan 21 revision. 22 For the past two years, the South Coast rule 23 adoption activities have been based on commitments made in 24 the less restrictive 1997 plan. 25 This is the crux of the environmental lawsuit PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 207 1 against the district. 2 U.S. EPA has proposed to disapprove the 1997 3 update, primarily due to concerns, that was scope and pace of 4 the district rulemaking for near term measures under the 5 amendment. Although the court had previously found the South 6 Coast District liable for not implementing the '94 SIP as 7 written, the district was not able to reach a settlement with 8 the plaintiffs on the remedy. 9 As a result, that portion of the lawsuit proceeded 10 to a hearing, before a judge appointed by night circuit 11 court. Judge Hud, heard the case in June and issued is 12 intended decision at the end of August for comments by the 13 litigants, to our knowledge, the judge has not yet rendered a 14 final decision. 15 The judges preliminary ruling rest on his 16 assessment that the applicable SIP must be fully implemented 17 until the SIP is revised by the state or local agency and 18 approved by U.S. EPA. 19 Accordingly, the judge's preliminary decision 20 issues an ambitious time table for the districts adoption of 21 the 31 local measures in the 1994 SIP, that the district has 22 eliminated or deferred in its 1997 update. 23 At a recent stakeholders meeting at the district, 24 district staff indicated that although the district would 25 consider an appeal to the courts decision it is also PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 208 1 initiating work on control measures consistent with the 2 courts decision. 3 The district has also indicated that it will seek 4 EPA approval for its 1997 ozone plan by submitting a revised 5 rule adoption schedule to address EPA's concern about the 6 deletion of short term measures. 7 District staff plans to propose this targeted SIP 8 amendment for district Board adoption in December or January. 9 The district will then ask this Board to approve the proposed 10 amendment and submit it to U.S. EPA as a SIP revision. 11 To meet that schedule, the district staff is 12 preparing to issue a draft revised plan, sometime next week. 13 If EPA approves the 1997 AQMP as a result of the 14 targeted SIP amendment, the 1997 AQMP would replace the 1994 15 plan as the applicable SIP and provide a basis for removing 16 the court order. 17 This is targeted SIP amendment is just to stop that 18 measure, however, the district is also working with us on a 19 comprehensive SIP revision for 2000. 20 Our experience with the 1994 ozone SIP illustrates 21 why SIP's must be kept current. It represented our best 22 understanding of the steps needed to meet the Clean Air Act 23 requirements, five years ago. 24 Meanwhile ARB and the District continued to improve 25 information that changes our assessment of what that plan PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 209 1 should contain. In other words the 1994 SIP no longer 2 represents our best science. 3 Work is underway to develop a comprehensive 4 revision with significant updates to every level of the SIP 5 pyramid as part of the districts triennial air quality 6 management plan or AQMP. 7 The next AQMP will also utilize the results of the 8 Southern California ozone study, which included an intensive 9 air quality monitoring study conducted in 1997. 10 This data once we finish analyzing it, will provide 11 a very rich basis for reviewing and revising our air quality 12 models, those models will be used to set a new emissions 13 target, or carrying capacity for the basin, ultimately the 14 models will also be used to test potential control 15 strategies. 16 The updated inventory that is being developed for 17 this plan will include emission estimates developed with the 18 new impact 1999, mobile source emissions model, which will be 19 considered by the Board at your November hearing. 20 Meanwhile we will be working with the other 21 affected agencies to develop revisions to the control 22 strategies in the 1994 SIP. 23 The 2000 AQMP, will also assess the effectiveness 24 of control strategies for new the Federal eight-hour ozone 25 and PM 2.5 standards. PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 210 1 To close up my presentation, I will mention our 2 plans to develop a revised long term control plan with new 3 measures for your consideration. 4 As you heard earlier, the adoption of near term 5 measures is guided by our settlement agreement. Our schedule 6 for revisiting ARB's long-range SIP commitments was developed 7 with the South Coast 2000 AQMP in mind. 8 We will be kicking off this effort with our second 9 new technology symposium. This one focused on zero and near 10 zero emission technologies for both mobile and stationary 11 sources. 12 This symposium will be held in the Beckman center 13 in Irvine on October 5 through 7. Like the first symposium 14 in 1997, that spent a tremendous and successful regulatory 15 effort in 1998, we will use input from this event to the 16 define additional SIP strategies. 17 We anticipate on holding workshops on a revised 18 control strategy through next summer, for Board consideration 19 in the fall, although the needs of the South Coast continue 20 to define both the scope of the new programs needed, the 21 revised control strategy will also be incorporated into the 22 attainment demonstration plans for other areas of the state 23 as those plans are revisited. 24 In conclusion, ARB's schedule for 2000 and 2001 is 25 shaped largely by the near term commitment in the SIP's PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 211 1 settlement agreement. 2 We are ontrack to fullfil our near term commitments 3 by 2001. Early next year this Board will probably be asked 4 to approve the targeted for SIP revision to the South Coast 5 1997 plan. 6 This revision would only address the district's 7 control strategy, with intention of superceding a court order 8 rule adoption schedule. 9 You will be asked to revisit ARB's long range 10 strategy in the fall of 2000. ARB's revised strategy would 11 then be used in the South Coast comprehensive air quality 12 plan revision. 13 The comprehensive plan should come to this Board 14 for review and summit it as a former SIP revision in late 15 2000 or early 2001. 16 So, I would like to leave you with a few final 17 thoughts about the SIP. The SIP is a blue print for 18 attaining the Federal air quality standards based on our best 19 understanding at the time that it is develop. 20 It is a commitment to evaluate and develop the 21 controls needed to meet the standard. The SIP is a forcing 22 function, compelling us to work towards those commitments 23 even when the going gets rough. 24 Forcing Government, scientific community and the 25 private sector to continue to work together and to continue PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 212 1 to seek better solutions. 2 The SIP is a living document, which you will need 3 to revise periodically to reflect change in realities. With 4 that, I would like to say particularly to the new Board 5 Members, welcome aboard. 6 We hope you enjoy the ride. 7 CHAIRMAN LLOYD: Thank you very much. Any comments 8 or questions from the Board? 9 BOARD MEMBER RIORDAN: I think, Mr. Chairman, the 10 challenges are many. 11 For my new colleagues, staff remind me the SIP was 12 contained and the appropriate documents, in how many cartons 13 and weighed how much? 14 MR. KENNY: 21. 15 BOARD MEMBER RIORDAN: 21 and those cartons 16 probably each weight, what? 17 MR. KENNY: Typical large carton. 18 BOARD MEMBER RIORDAN: Legal carton, so if you 19 wanted to review this document, you would find it very 20 interesting. 21 MS. OEY: That was just the 1994 ozone portion 22 of the SIP. 23 MR. KENNY: We will give it to you. 24 CHAIRMAN LLOYD: Any questions or additional 25 comments? PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 213 1 No. We have no public testimony. 2 So, I guess we will close that item. 3 So, I do not think there are any items for public 4 comment period. 5 So, we will officially close this Board meeting. 6 Thank you very much. 7 (Thereupon the Air Resources Board meeting 8 was adjourned at 4:5 p.m.) 9 --o0o-- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345 214 1 CERTIFICATE OF SHORTHAND REPORTER 2 3 I, VICKI L. OGELVIE, 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 Ogelvie, 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 sixth day of October, 1999. 14 15 16 VICKI L. OGELVIE 17 Certified Shorthand Reporter License No. 7871 18 19 20 21 22 23 24 25 PETERS SHORTHAND REPORTING CORPORATION (916)362-2345