State of California
AIR RESOURCES BOARD
State Building
Auditorium
107 South Broadway
Los Angeles, CA
July 29, 1981
10:00 a.m.
AGENDA
Page
81-14-1 CONTINUATION OF Public Hearing to Further Consider 001
Amendment of Title 13, California Administrative
Code, Chapter 3, Subchapter 5 to Add a Regulation
Limiting the Sulfur Content of Diesel Fuel for Use
in Motor Vehicles in California.
81-14-2 Cogeneration Technology and Resource Recovery
Status Report.
81-14-3 Other Business
a. Closed Sessions
1. Personnel (as authorized by the State Agency
Open Meeting Act).
2. Litigation (Pursuant to the attorney-client
privilege).
b. Research Proposals
c. Delegations to Executive Officer
SMOKING NOT PERMITTED AT MEETINGS OF THE CALIFORNIA AIR RESOURCES
BOARD.
ITEM NO.: 81-14-1
Public Hearing to Further Consider Amendment of Title 13,
California Administrative Code, Chapter 3, Subchapter 5 to Add a
Regulation Limiting the Sulfur Content of Diesel Fuel for Use in
Motor Vehicles in California.
SUMMARY AND STATEMENT OF REASONS FOR PROPOSED RULEMAKING
On April 22 and 23, 1981, the Air Resources Board conducted a
public hearing to consider a regulation proposed by the staff to
limit the sulfur content of motor vehicle diesel fuel to 0.05
percent by weight. this would reduce the emissions of oxides of
sulfur due to the combustion of fuels, which contribute
substantially to exceedances of the state ambient air quality
standards for sulfur dioxide (SO2), particulate matter, and
visibility as well as to the national ambient air quality
standard for particulate matter. After listening to testimony
presented at the hearing, the Board deferred action on the
proposal and continued the hearing to July 29, 1981. In
addition, the Board directed the staff to do the following:
prepare an alternative proposal which considers the effects of
limiting the regulation to the South Coast Air Basin (SCAB) and
of exempting small refiners; consider, in detail, the testimony
presented at the April Board hearing by the Western Oil and Gas
Association (WOGA); analyze the effects on affected industries
directly and indirectly; and consider other economic and
environmental impacts of the proposal. The purpose of the
hearing on July 29, 1981, is to continue the original hearing and
to consider the alternative proposal and its associated impacts.
A Summary and Statement of Reasons for the original statewide
proposal was published on February 9, 1981, and is incorporated
by reference herein. It can be obtained from the ARB, along with
a detailed staff report on the original proposal.
The original proposal would limit the sulfur content of diesel
fuel to 0.05 percent sulfur by weight for diesel fuel
manufactured after January 1, 1985, to be sold, offered for sale,
or delivered for sale in California for use in a motor vehicle as
defined by the State of California Vehicle Code. The staff has
estimated that the original proposal would reduce emissions of
sulfur compounds from diesel-powered motor vehicles by greater
than 80 percent in the state, that it is technologically
feasible, and that the after-tax total annualized cost to
affected refiners of implementing the regulation would be 103
million dollars.
In developing the alternative proposal, the staff conducted a
workshop and met individually with representatives of the oil
refiners, and sent a letter to each regional Council of
Governments requesting comments on the proposal and also
requesting that they contact transit operators within their
jurisdictions for their comments on the proposal. The staff also
contacted representatives of the fishing industry, railroad
industry, public and private transit operators, public school
districts, and the food and agricultural industry.
The alternative proposal of the staff limits the regulation to
the South Coast Air Shed and includes a provision for a small
refiner's exemption. Limiting the regulation to the South Coast
Air Shed and including a small refiner's exemption would reduce
the impact on consumers, would reduce the after-tax total
annualized cost to refiners from 103 to 44 million dollars and
would still account for interbasin air mixing and pollutant
transport between the SCAB and Ventura County, where exceedances
of the applicable ambient standards are the most severe and
frequent.
Specifically, the small refiner is defined as any refiner whose
refinery has a crude oil or bona fide feedstock capacity of
50,000 barrels per day or less, and who owns or operates
refineries which have a total combined crude oil or bona fide
feedstock capacity in the United States of not more than 137,500
barrels per day.
To maximize the emissions reductions from the regulation while
still providing sufficient flexibility to the small refiner, the
staff's alternative proposal would impose a limit on the total
amount of diesel fuel produced by small refiners which would be
exempt from the regulation. This limit would be equivalent to
120 percent of the base year diesel fuel production level,
defined as the highest annual diesel fuel production level for
the three calendar years immediately preceding the date of
adoption of the regulation. Any quantity of diesel fuel produced
in excess of this amount would be subject to the regulation.
Under the alternative proposal, the emissions of sulfur compounds
from diesel-powered motor vehicles would be reduced by 60% in the
SCAB, resulting in an overall SO2 emission reduction of 10.2
percent by 1985. This compares to a 13.8% reduction for the SCAB
in 1985 with no small refiner exemption. Under the alternative
proposal, the after-tax incremental cost would be reduced
slightly from 3.1 cents per gallon to 2.9 cents per gallon and
the refinery weighted after-tax cost-effectiveness would be 1.38
dollars per pound of SO2 removed.
Analysis of the impacts on directly and indirectly affected
industries indicates that an estimated increase in diesel fuel
price of 6.2 cents per gallon represents a very small percentage
of the total operating costs of these industries and, as such
would have a negligible impact on the ultimate consumer prices
for goods and services.
The staff report is a supplement to the February 9, 1981 staff
report and contains a detailed discussion of the various small
refiner exemption scenarios investigated by the staff and the
associated impacts, an analysis of the WOGA testimony, a
discussion of the direct and indirect impacts of the alternative
proposal, and the language of that proposal. The February 9,
1981 staff report should be consulted for the underlying factual
and technical basis of the original proposal and its associated
air quality and economic impacts. Both staff reports are
available for inspection at or may be obtained from the Air
Resources Board Public Information Office, 1102 Q Street,
Sacramento, California 95814. Further inquires regarding either
proposal may be directed to Mr. Alan Goodley, (916) 322-6020,
P.O. Box 2815, Sacramento, California 95812